Apple held one of its 3–4 annual launch days this week and showed us the M1-Ultra. And a new 27″ Screen. @Om has a top-end Apple display but still lusts after the less expensive new one. What gives?
- Apple Sucks?
- More Crypto, More of the Time
- Venture DAOs and Seed Fund Investing
- Big Tech is Sanctioning Nation-States
- Startup of the Week
- Tweet of the Week
The biggest development in my world this week (assuming we do not want to talk about the Russian massacre of innocents in Ukraine) is that Tiger Global partners Scott Shleifer and Chase Coleman announced that they were planning to put $1 billion of their own capital into Seed Funds as Limited Partners. $300 million or so every year.
But, in Om Malik’s world, it was the announcement of the new Apple Display. Once I read his piece I put my Apple XDR Display up for sale on eBay and ordered the new display plus the M1-Ultra version of the Apple Studio. I could not resist. And that is the thing about Apple. It is streets ahead and can reliably release new innovations every year that leaves you unwilling to resist. Read Om’s piece. It leads this week’s newsletter. And try to resist 🙂
But back to seed funds. It is a very big deal that Tiger’s partners are investing in seed funds. A far smaller operation is also investing in Micro-VCs as they are also called. The seed stage of the venture value chain is fundamentally important. If anybody asks where Unicorns come from, they come from the best seed managers. And getting ahead of the game by being an investor in the best funds is very smart compared to fishing only at the B round or later.
On a personal note, this is close to what we did at ADV in 2016–20. Lee Straford, David Carr, Michael Dimelow, and the rest of the team set out to partner with the UK’s leading seed investors. We focused on twenty-one funds and invested as an LP in seven of them. We soon realized that LP investments were only a good plan B. Our product offerings to seed funds soon grew and the best performing product was able to grow far faster than the seed fund investments themselves and return more value to the fund managers than a simple LP investment would have done alone. I think Tiger may have 3–4 years of learning in this space before they arrive at their final offering for seed managers. But it is great that they are starting that learning process.
As for the rest of the venture space, it seems the organization of a DAO-like structure is being embraced by Bessemer Ventures and also by Bain Capital (but as an investor into them). This is the same week that Joe Biden announced a deep dive by the government into the role crypto might play for the US Dollar and Jack Dorsey predicted the end of the US Dollar as a reserve currency for the world, replaced not by China but by Bitcoin.
A lot to discuss in this week’s video
Peek Into The Future — On my Om
et Another Apple Event, also known as an opportunity for The New York Times columnists to mock it, is in the rearview mirror. Unlike the Times, I was impressed that Apple created a machine (Mac Studio Ultra) that is about the size of three hard drives and is 25 percent as powerful as IBM’s Watson Supercomputer. 21 Teraflops for about $8000 — sounds like a pretty big deal to me.
None of the products announced by Apple’s CEO came as a surprise — the show, as I said on Twitter, is “the video form of all the rumors and leaks that emerge a few days before the event itself.” As expected, Apple announced a new iPad Air (with an M1 chip), a Pine-colored iPhone 13 Pro, and a new iPhone SE.
I can’t stop thinking about it and obsessing about it. And that is despite the fact that I currently edit my photos on Apple’s top-of-the-line XDR Display. With 1600 nits of brightness and a 32-inch 6K screen, it allows me to get to the thin fine line between ‘black and white’ and ‘color” that I seek in my artistic interpretation of reality. And despite that, I am feeling a little jealous of this new Studio Display that costs between $1600 and $2300.
More Crypto More of the Time
President Joe Biden today issued an executive order that could lead to the US creating a digital currency.
“My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC [Central Bank Digital Currency],” the executive order said. “These efforts should include assessments of possible benefits and risks for consumers, investors, and businesses; financial stability and systemic risk; payment systems; national security; the ability to exercise human rights; financial inclusion and equity; and the actions required to launch a United States CBDC if doing so is deemed to be in the national interest.”
Biden’s order said a US-issued digital currency could be used to “support efficient and low-cost transactions, particularly for cross‑border funds transfers and payments, and to foster greater access to the financial system, with fewer of the risks posed by private sector-administered digital assets” such as bitcoin and other cryptocurrencies. But there are “potential risks and downsides to consider,” and Biden ordered federal agencies to prepare a report within six months analyzing the implications. Over 100 countries are already “exploring or piloting” CBDCs, the White House said.
Biden also ordered government agencies to develop policies for managing cryptocurrencies that already exist. “The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk,” the White House said. Biden’s order “encourages regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.”
“Money” will never be the same again after the Ukraine war, writes Pozsar, and Bitcoin may benefit.
Former Federal Reserve and U.S. Treasury Department official, and now Credit Suisse (CS) short-term rate strategist, Zoltan Pozsar has written the U.S. is in a commodity crisis that is giving rise to a new world monetary order that will ultimately weaken the current dollar-based system and lead to higher inflation in the West.
“This crisis is not like anything we have seen since President [Richard] Nixon took the U.S. dollar off gold in 1971,” wrote Pozsar.
Negotiated by 44 countries as World War II was winding down, the Bretton Woods agreement (named for the conference location in Bretton Woods, New Hampshire) pegged gold as the basis for the U.S. dollar, with other currencies then pegged to the greenback. This structure began to fray in the 1960s as U.S. trade deficits became too large to ignore, and it fell apart completely in 1971 when the U.S. abandoned the link between the dollar and gold.
After dropping bitcoin in 2018, Stripe is once again supporting cryptocurrencies — this time with broad support for a range of crypto businesses, including exchanges, on-ramps, wallets and NFT marketplaces.
The payments giant’s APIs will let crypto businesses “process payments for fiat currencies globally through a single integration with fraud prevention and authorization optimization built in,” according to its website.
In 2018, Stripe wrote, bitcoin had “evolved to become better-suited to being an asset than being a means of exchange.” But once-high transaction costs have fallen, and Stripe started rebuilding its crypto team last fall.
The toolkit for crypto businesses include API integrations like Stripe Connect, which allows users to pay out fiat currencies in over 45 countries, and Stripe Identity, an identity-verification system to mitigate fraud.
The payments giant partnered with FTX to improve payments processing and build a fiat-to-crypto on-ramp for the crypto exchange. The partnership builds on an existing relationship: FTX had previously integrated Stripe Identity to improve its know-your-customer processes.
FTX saw “greatly increased speed of KYC processing” with Stripe, FTX president Brett Harrison tweeted in November.
Complying with KYC, anti-money laundering, FinCEN’s Travel Rule and other requirements has become an increasing area of focus for the crypto industry this year, as regulators around the world seem determined to bring crypto operations under the same umbrella as other financial firms.
Just four months after the launch of American CryptoFed DAO, which planned to create a crypto payments system, the Securities and Exchange Commission in November effectively shut it down, saying the enterprise was “materially misleading” the public with contradictory filings that failed to disclose key information such as audited financial statements . The concept has been embraced by individual crypto investors and some of the biggest industry players alike, including the Silicon Valley venture capital firm Andreessen Horowitz, which has billions of dollars backing blockchain projects.
Venture DAOs and Seed Fund Investing
Venture capitalists’ efforts to earn the respect of sought-after cryptocurrency entrepreneurs have reached a new peak: The biggest firms are now starting decentralized autonomous organizations, communities that pool cryptocurrency tokens and vote collectively on the group’s activities.
Bessemer Venture Partners is one of the first to make the leap. The San Francisco–based firm on Thursday is unveiling BessemerDAO, a group for discussing trends in the crypto industry and sharing resources, as part of a larger effort to showcase its crypto investing ambitions. The firm has also earmarked $250 million of its new $2.5 billion fund for crypto deals, partner Ethan Kurzweil said in an interview with The Information.
Other venture firms are also forming DAOs, which exploded in popularity in the crypto industry last year. Redpoint Ventures in February teamed up with Maverick Ventures, the VC arm of hedge fund Maverick Capital, to jointly create a healthcare-focused DAO, Maverick’s managing director, Ambar Bhattacharyya, told The Information.
- Bain Capital Ventures on Tuesday announced a new dedicated crypto team, Bain Capital Crypto, backed by a new $560 million fund.
- BCC will invest in pre-launch projects and eventually liquid tokens.
- It will also focus on backing companies that offer services to DAOs
The constellation of crypto-focused venture capital funds grew this week with the launch of a dedicated team within Bain Capital Ventures.
Bain Capital Crypto, which counts the $155 billion Bain Capital as its largest limited partner, is in the process of deploying $560 million across the crypto ecosystem with an emphasis on early-stage companies, according to a conversation with the team conducted Tuesday evening.
According to partner Stefan Cohen, Bain Capital Crypto has been in the works for about a year. Bain Capital Ventures is no stranger to crypto; among the industry’s firms in its portfolio are BlockFi, Zero Hash, Risk Harbor and CoinDCX.
But according to Cohen, who has been a partner at the firm since 2016, Bain Capital Ventures felt like it needed “a dedicated team” in order to compete in an increasingly active field.
In a sense, the firm is following in the footsteps of a16z, which spun out its own dedicated unit. Elsewhere, BCV has to compete for space on cap tables with large crypto-native venture firms like Paradigm and Multicoin as well as VCs like Sequoia and Tiger. The post Bain Capital Crypto execs explain why they’re setting their sights on DAO services appeared first on The Block.
Tiger Global Management, the world’s most active startup investor last year, is trying a new way to get the inside track.
Partners at the firm, known for its big bets in companies including Coinbase and Roblox, have committed $1 billion of their own cash to invest in seed funds that focus on backing the youngest startups, said a person with direct knowledge of the matter. Under the initiative, the partners would invest a little over $300 million in the funds every year, the person added.
The commitment, unprecedented for its size, would allow Tiger Global to become the largest investor in dozens of new seed funds that would want its cash. The firm would then get exposure to more early-stage startups it could invest in later. So far this year, Tiger Global has already backed or agreed to back funds for more-established firms including Better Tomorrow Ventures, Moxxie Ventures and Chapter One Ventures, a separate person with direct knowledge added, as well as less well-known funds such as Maple VC.
AngelList is a Miracle of A Company and Getting Better With Age…And Vertical Remains a Great Way to Go Horizontal
Good morning everyone.
Yesterday was one of those long days of New York running around to meetings. It was fantastic.
For dinner, Rachel, Ellen and I got to hang with our good friends Mike and Kass Lazerow and we had a great Italian meal at Babbo Ristorante.
Today I have Stocktwits board meeting and a fun dinner with friends.
During the day it was announced that AngelList closed on a new financing from Tiger Global of $100 million at a $4.1 billion valuation (full disclosure — my partner Tom and I are AngelList seed investors back in 2011 and will be investing again in this round).
howardlindzon.com • Sharehttps://cdn.embedly.com/widgets/media.html?type=text%2Fhtml&key=a19fcc184b9711e1b4764040d3dc5c07&schema=twitter&url=http%3A//twitter.com/Maren_Bannon/status/1501513590918025219%3Fs%3D20%26t%3DO42rIEl3N7bfS-Ij_CI0rQ&image=
The future winners in venture capital won’t just be the investors on Sand Hill Road — if today’s market is any indicator. Founders are increasingly looking to bring on investors with specific skill sets to compliment their VC backers. This trend has led entrepreneurs to seek out commitments from operators, celebrities and athletes. It’s also made the question of who can be a value-add venture investor more open-ended than ever.
Alexis Ohanian noticed this change last year when it occurred to him that there were significantly more investors — each with a strategic purpose — on his companys’ cap tables now compared to just a few years ago. He wanted to make sure his firm Seven Seven Six (776) could capitalize on this trend, but he wasn’t sure how at first. Finding and hiring these experts and one-off investors as operating partners seemed counterintuitive. Then he realized he didn’t need to be the boss of these individuals for 776 to lure them into the market.
The Palm Beach, Florida-based firm is launching 776 Titans Fund, a cohort of micro funds led by individuals who are new to venture but bring a network, an operational background or domain expertise. Ohanian’s firm is writing an initial $500,000 check to each new fund and giving them access to Cerebro, 776’s inhouse operating system that contains data and the contact information of a network of more than 40,000 people. The program is also partnered with fintech company Series, which will provide the back-office infrastructure for the funds.
Big Tech is Sanctioning Nation-States
A growing number of tech and financial services companies have cut off service or paused sales to Russia following the country’s invasion of Ukraine last month.
Meta will temporarily amend its policy on hate speech, allowing some Instagram and Facebook users to post calls for violence against Russian soldiers in the context of its invasion of Ukraine, Reuters reported.
The company will allow users in some countries to call for the death of Vladimir Putin and Belarusian President Alexander Lukashenko, the company said in emails to its content moderators, seen by Reuters. The policy changes apply to Latvia, Lithuania, Estonia, Poland, Slovakia, Hungary, Romania, Russia and Ukraine.
These types of posts, however, do have limits: They can’t name other targets, and they can’t include multiple indications of credibility, such as where and how those deaths might happen. They can also only be in the content of the invasion of Ukraine.
Meta also will not allow for “credible calls for violence against Russian civilians,” Andy Stone, Meta’s policy communications, tweeted on Thursday.
“As a result to the Russian invasion of Ukraine we have temporarily made allowances for forms of political expression that would normally violate our rules like violent speech such as ‘death to Russian invaders,’” Stone tweeted in response to New York Times reporter Ryan Mac.
Startup of the Week
Amazon’s board has approved the company’s first stock split in more than two decades.
Subject to shareholder approval, the 20-for-1 split would revalue Amazon’s individual shares, aiming to make them more affordable for individual investors, recognizing the long-term increase in the company’s share price.
The change will take effect in June if shareholders approve the split at the company’s annual meeting in May.
Amazon’s board also authorized a buyback of up to $10 billion of its common stock. The new authorization replaces a prior $5 billion buyback plan, approved in 2016. Amazon bought back $2.12 billion of its shares under that prior plan.
The company has split its stock three times before, all of them in the late 1990s, prior to the dot-com bust: a 2-for-1 split in June 1998; a 3-for-1 split in January 1999; and a 2-for-1 split in September 1999.
Amazon’s share price has risen from $62.44 after the last split to close at $2,785.58 on Wednesday.
Tweet of the Week
A conversation with Miami University professor Megan Gerhardt on benefiting from generational differences.