By Keith Teare • Issue #306 • View online
- The Battle for Twitter
- Venture Week
- All Change for Ethereum
- Web3 and the Crypto Universe
- Essay of the Week
- Startup of the Week
- Tweet of the Week
There is almost no prior period in human history where the desire to allow free speech would be considered right-wing. Elon Musk’s pursuit of Twitter is widely believed to be driven by his desire to support open discussion in a “public square” like platform. Yet his opponents are almost entirely self-identifying as “left-wing”.
Of course, the fact that Twitter gave a permanent ban to Donald Trump, added to the likelihood of Musk rescinding that ban, which now means that anybody who wishes to see Trump’s ban continue (mainly the “left”) is an opponent of Musk. And so Musk must be “right-wing” – right?
There are some well-established truths in this space.
- Twitter is a private company and can do whatever it wishes within the law. Banning Trump is not illegal.
- By the same token, if Twitter decided to allow all legal points of view, that would not be illegal.
- A Twitter owned by Musk, ending all bans on individuals’ right to Tweet, would be acting entirely correctly.
As such, let’s avoid all discussions of Twitter’s rights. It can do as it wishes. That handily moves the debate to what it should do, not what it can or cannot do.
Musk believes Twitter should be an open platform for all points of view. This is similar to a human society where all points of view exist and are free to be expressed. Comparing the USA’s first amendment rights to a dictatorial society, we easily prefer the first.
Once we move into the digital realm, many who favor open societies become fans of censorship or outright bans. Musk disagrees.
And the views that most want to be banned or censored are right-wing views. Racism, Sexism, and Homophobic or anti-Trans views are most likely to be the target of this approach.
This movement sees a defense of free speech as being “right-wing” because it is defending the right of right-wing views to be uttered. However, the reality is the opposite.
The illiberal side of this argument is a desire to ban open discussion on digital platforms. That the goal is to deny right-wing ideas makes it no less illiberal or autocratic.
By contrast, the defenders of free speech, especially libertarians like Musk, but all defenders of open discourse, are the real “left” or “liberals.” That it would make it possible for right-wing ideas to be uttered is not a reason for depicting it as right-wing itself. Free speech is an absolute right, and not contingent on the views being protected.
Musk is not right-wing. He is principled. The video in the following Tweet shows the confusion.
We can all agree that religious bigotry, racism, sexism, homophobia, and anti-trans ideas are among the most obnoxious ideas. The real issue is how to marginalize those ideas. The best answer is more speech. These ideas as fed by hatred, prejudice, misinformation, political goals, and more. But to ban an idea is to show fear of it. A better approach is to show it to be wrong. And where bigots move beyond ideas to attacks, we, of course, should meet force with force.
I really don’t know if Musk will own Twitter. I don’t know if he will turn it into a distributed service on the blockchain. I don’t know if crypto will be part of his plans. But I know that his support for open discourse is not a reason to be against him.
Here is Musk speaking yesterday on the topic.
The Battle for Twitter
ELON MUSK HAS offered to buy Twitter for $41 billion, according to a regulatory filing on Thursday. The surprise move has been labeled by some experts as a whim to gain attention, while others think it’s a game changer that will end with him taking over the entire company.
The Tesla CEO, who owns 9.2 percent of the social media site and is its biggest shareholder, has offered to buy the remaining percentage of the company for $54.20 per share — a 38 percent premium on the price before his investment in the company was announced on April 5.
In a letter to Bret Taylor, chair of Twitter’s board, Musk said he had invested in Twitter because “I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.” However, Musk wrote, “I now realize the company will neither thrive nor serve this societal imperative in its current form.” His answer to that is to take the company private.
Should his offer, which was presented as final, be rejected, Musk has threatened to reconsider his position as a shareholder. “This is not a threat, it’s simply not a good investment without the changes that need to be made,” he said. Musk did not respond to emailed and tweeted requests for comment.
Twitter’s response was swift. Spokesperson Brenden Lee directed WIRED to a statement saying the company would “carefully review the proposal to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.” Twitter’s share price rose to $48.70 before trading opened on April 14, up more than 6 percent from the day before. The stock opened up, trading at $48.36.
Tech entrepreneur makes offer of $54.20 a share in cash to ‘unlock potential’ of social media site
Elon Musk has launched an audacious bid to buy Twitter for more than $40bn, saying he wants to release its “extraordinary potential” to boost free speech and democracy across the world.
The Tesla chief executive and world’s richest person revealed in a regulatory filing on Thursday that he had launched a hostile takeover of Twitter. The news came just days after he bought a 9.2% stake in the social media company and was subsequently offered a seat on the board, but then refused to take up the position.
Analysis: Musk’s past musings about Twitter show desire to reshape essence of its business model
It turns out he wasn’t in “goblin mode” after all. Last week Elon Musk, in his characteristically antic manner, tweeted a series of suggestions for improving Twitter after he was revealed to have become its largest individual shareholder. They ranged from asking if the site’s HQ should be turned into a homeless shelter to whether advertising should be removed from the platform’s premium service.
Many of these tweets were subsequently deleted, including one sharing a meme depicting the attorney Saul Goodman from the series Breaking Bad with the words: “In all fairness your honor, my client was in ‘goblin mode.’”
Twitter adopts poison pill in bid to thwart Elon Musk takeover
Why it matters: The “poison pill,” as it’s called in corporate terms, gives Twitter’s existing shareholders time to purchase additional shares at a discount, thus diluting Musk’s ownership stake.
How it works: The move is designed to make it difficult for anyone, including Musk, to build a stake worth more than 15% of the company.
- A poison pill gives existing shareholders the ability to purchase additional shares in the company at a discount, which in turn dilutes the stake of the person or party seeking to buy the company.
When ZhenFund CEO Anna Fang was new to venture investing, her mentor told her that the right entrepreneurs to back are the ones who made her feel like the world could be different because of the way they saw it. She took this advice to heart. Eleven years later, she lands in the top spot of the debut Midas Seed list as the most successful seed investor in the world.
Venture capital was never the plan for Fang, who started her career as an investment banker at J.P. Morgan after earning her MBA at Stanford’s Graduate School of Business in 2010. She later went into business development at General Electric, but was soon approached by former Stanford classmate, Dan Hu, about a different opportunity.
Hu, who is now the founder and CEO of Shanghai mobile credit startup Omni Prime, had been asked to help prolific Chinese angel investor Xiaoping (Bob) Xu — known for backing companies like online cosmetic company JuMei and edtech 17zuoye — launch a new fund. Hu had just started as a vice president at global venture capital firm Sequoia, and thought Fang would be a good fit for the role.
“I find myself to be extremely lucky that someone thought of me to help Bob, to help ZhenFund,” Fang tells Forbes. “I was 29 at the time. I’m super lucky that this job, that I sort of landed on, turned out to be something that I truly love and plan to do forever. I realized minute one that this is something I couldn’t believe they were paying me to do.”
Seven firms took part in a dozen or more funding deals to U.S.-based startups in March, including big names such as Tiger Global, Andreessen Horowitz and Insight Partners. While that seems like a significant number, it is off from 13 firms participating in a dozen or more deals in March 2021.
Let’s look at the most active investors in U.S.-based startups last month:
Angel programmes aren’t the rare thing they used to be. Now it seems every VC under the sun — from Blossom Capital and Ada Ventures to Backed VC and Sequoia — are running scout and angel programmes, making it pretty tough to stand out.
Atomico, however, seems unphased. The London-headquartered VC firm is today announcing its fourth angel programme — and this one, it says, is going to be very different from its previous efforts.
Last year, Atomico recruited 18 new angels and gave them $100k each to invest in European startups. It also brought back eight angels from previous cohorts and gave them a fresh $100k to continue investing.
This time, Atomico has switched things up.
“Last year, the programme lasted for 12 months, so we brought on a cohort at the beginning of the year,” explains Terese Hougaard, an investor at Atomico and the leader of the firm’s angel programme.
“But the issue we ran into is if we suddenly found someone incredible who would want to be an angel with us — say, in March or April — we’d have to wait an entire year to actually onboard them. When actually, we want to get started with them as soon as possible.”
To get around this issue, Atomico has built an initial cohort of eight angels, and it will bring on one or two angels every month in what Hougaard calls “a rolling admission”. This means that the team has the “flexibility to bring on amazing people” as they meet them.
As with previous cohorts, each new angel will be allocated $100k to spend on startups of their choice.
All Change for Ethereum
Ethereum, the blockchain running the world’s second most valuable cryptocurrency, is finally taking its next big step toward Ethereum 2.0, a major upgrade to a different technology which will have big implications for miners, software developers and climate advocates.
Developers this week started testing the new mechanism for verifying blockchain transactions, known as proof of stake, through a “shadow fork” or test version of the network. The Merge, as the switchover is being called, will change how the network is run and who makes money off of it, and will dramatically reduce its energy use. It could come as soon as this fall.
Proof of stake is a major test for the industry. The existing system that runs bitcoin and ether transactions alike is known as proof of work, and that work — running complex computations — is what uses up so much electricity.
- Proof of stake is far less energy-intensive. That’s because the process of validating the network’s transactions will no longer depend on miners with vast racks of hardware. Instead, it will rely on users who stake — essentially, pledge — their ether tokens.
- Green is gold, potentially. “There have been a lot of NFT creators and artists who have shied away from launching on Ethereum because they feel like they want to associate themselves with a green chain,” said Anand Iyer, founder and general partner at Canonical Crypto.
- Even nonprofits might benefit. The Mozilla Foundation, which faced an outcry over its acceptance of cryptocurrency donations, said last week that it would soon resume accepting crypto, but only coins that used proof of stake. The Wikimedia Foundation is facing a similar outcry over its crypto donation policy, but hasn’t made any changes yet.
- Other blockchains use proof of stake, but Ethereum’s adoption of the system will offer proof that an environmentally-friendly consensus system can work at massive scale.
Ethereum’s economics will change, too. Ethereum 2.0 could have a deflationary effect, which favors current ether holders.
Haseeb and I interview Vitalik Buterin about Ethereum and blockchains Transcript Welcome back to the podcast. We have with us Haseeb Qureshi, who is a partner at Dragonfly and someone I used to work with back when I was more active in crypto-land. More
Haseeb and I interview Vitalik Buterin about Ethereum and blockchains. Also see Part 1. Protocol Politics The elder statesman of smart contract blockchains Vitalik, I want to ask you a little bit about how your role has evolved since it began at Ethereum. More
Web3 and the Crypto Universe
Regular listeners to Decoder know I’m pretty skeptical of crypto. But I want to come by that skepticism honestly, so I talk to people who are actually investing in and building crypto startups and technology. There is a lot of money, attention, and energy — both literal and metaphorical — in crypto, and I think it’s important to ask the questions and really listen to the answers. We’ve done a few of these episodes now, but this episode is a conversation I’ve wanted to have from the very beginning.
Chris Dixon leads crypto investing at the storied Silicon Valley venture capital firm Andreessen Horowitz, or a16z. He’s responsible for leading funding rounds for Coinbase, which went public about a year ago, the NFT marketplace OpenSea, and Yuga Labs, which is behind the Bored Ape Yacht Club, among others. He is also a prolific user of Twitter, where he posts lengthy threads about crypto and web3. He is at once one of the biggest investors in the space and its biggest booster.
Chris is a smart guy who has been around the industry a long time and has seen a lot of tech hype come and go. This episode gets way into the weeds and, while we do talk over each other here and there, I think excited but respectful disagreement is in too short supply these days, so we wanted to keep all of that in the episode.
Everyone wants to know how crypto funds are raising so much money.
- Multicoin Capital announced that it raised $250 million for its third crypto fund in October.
- Variant announced its second crypto fund, totaling $125 million, in October.
- Paradigm announced that it raised $2.5 billion in November.
- Haun Ventures announced an inaugural $1.5 billion fund last month.
- Electric Capital closed a $1 billion fund last month.
- Bain Capital Ventures announced a $560 million crypto fund last month.
- Pantera Capital reportedly plans to close a $1 billion fund this month.
- Blockchain Capital is in the process of raising a $400 million fund VI and a $400 million opportunity fund, according to an investor presentation that I got my hands on.
- Andreessen Horowitz is in the process of raising a $3 to 3.5 billion fourth crypto fund and a $750 million to $1.5 billion crypto seed fund.
And it’s not just a matter of big fundraising hauls. Some of these firms are building up massive pools of assets under management as they reinvest their returns.
I reported last week how Paradigm’s assets under management have climbed to $13.2 billion and rival Andreessen Horowitz’s dedicated crypto funds have about $9 billion in AUM.
Crypto company Circle announced a $400 million funding round. The company behind stablecoin USDC entered an agreement to conduct the round that is expected to close in the second quarter of the year, according to a press release. Related Reading | Circle Doubled Its Value To $9 Billion With New SPAC Deal The round will see […]
The crypto investment firm has $5.8 billion in assets under management.
Pantera Capital plans to close the Pantera Blockchain Fund, its first blockchain fund, in the next three to four weeks with about $1.3 billion in committed capital, according to an investor conference call.
The fund was launched during a record-setting period for crypto investment vehicles, including a $2.5 billion fund from Paradigm that also begun in November.
Pantera also outlined its near-term road map, including plans for a second blockchain fund in 2023. Franklin Bi, director of portfolio development at Pantera, said the follow-up will have essentially the same objectives as the initial fund — new deals in early-stage, private tokens and venture capital.
Essay of the Week
As companies contemplate adjustments to their global strategies, it is important to recognize how much continuity there still is even in a period of wrenching change. The idea of a world where economic efficiency alone drives patterns of international flows was always
Russia’s invasion of Ukraine has led to a new round of predictions thatthe end of globalization is nigh, much like we saw at the beginning of the Covid-19 pandemic. However, global cross-border flows have rebounded strongly since the early part of the pandemic. In our view, the war will likely reduce many types of international business activity and cause some shifts in their geography, but it will not lead to a collapse of international flows.
To understand why — and to help you think through consequences for your company — it’s essential to start with a baseline of how global flows were trending before the war. The DHL Global Connectedness Index, which our team develops at the NYU Stern Center for the Future of Management, measures globalization based on international flows of trade, capital, information, and people. We look here at the latest trends across those four categories of flows — and consider early signals of how the war might alter their trajectories moving forward.
1. Trade Flows
After plummeting at the onset of the pandemic, world trade in goods bounced back to above pre-pandemic levels before the end of 2020 and was setting new records by early 2021. The main reason trade roared back so decisively, despite disruptions to global supply chains, was a surge in demand for traded goods.
Startup of the Week
This morning FIFA, the global governing body for world soccer, announced the launch of its own streaming service. FIFA+ offers subscribers live streams of men and women’s matches, as well as a raft of original series and documentaries. The platform will also play host to a vast archive of older games from previous World Cups, as well as news, statistics and its own fantasy league.
But what’s likely to be the major draw for users is the live games, with FIFA saying that it’ll show the “equivalent of 40,000 live games per year.” At launch, we’ll see around 1,400 matches a month, with that figure “rising rapidly” until we get closer to 4,000 a month. Original series, including documentaries about Ronaldinho, Dani Alves and Lucy Bronze will help bulk out the reasons for users to hang out on the platform.
FIFA+ is, at launch, ad-supported and free, and so users shouldn’t expect to see live streams from any of the major football leagues. After all, European football is big business, and FIFA doesn’t have the ability (or cash) to start streaming games from England, Spain, Germany, France and Italy. Instead, it will focus on less well-represented competitions where the streaming rights aren’t tied up. The Hollywood Reporter suggests that domestic games from Mexico, Denmark, Poland and Angola will all feature.