VNTR Capital News Dec 4, 2022 - News, Events, VC Reads
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VNTR CAPITAL COMMUNITY NEWS
Weekly Highlights
We have chosen our first target top-tier VC fund, where we will invest as a syndicate. Investors who would like to join as an LP can apply here.
We completed our 2022 events series with 54 events where we enabled thousands of connections between active investment decision makers:
40 offline investor roundtables in 24 cities which included Algarve, Austin, Baku, Belgrade, Bengaluru, Berlin, Cascais, Davos, Dubai, Helsinki, Istanbul, Lisbon, London, Los Angeles, Malta, Miami, Monaco, Mumbai, New York, Paris, Singapore, Tbilisi, Tel-Aviv;
4 online VC expert sessions (Taxes with Vladimir Gidirim, Networking with Gil Petersil, Longevity with Garri Smudze and SPVs/Funds with Ulrich Musset);
6 online Investment Committees to review startups with community members;
4 online Growth Roundtables to connect VNTR global investors community.
We scheduled our initial 20 offline Investor Roundable events in 2023 with a target to host 40+ offline events with an updated format that will include a 30 minute session with a keynote speaker in each event. All VNTR Investor Roundtables will be a side event for major tech/startup/web3 conferences/summits/expos.
VNTR Annual Sponsorship Program is currently accepting applications from relevant companies and brands. Companies that wish to partner with VNTR can apply and connect with investors and their portfolio companies through 40+ VNTR events in 2023, and the VNTR Weekly Newsletter.
Thank you to our partners for their valuable collaboration and support:
Flowdesk is a digital asset service and technology provider. It has developed a low-latency trading infrastructure that integrates more than 80 centralized and decentralized exchanges. Flowdesk provides a wide range of crypto-financial services to token projects such as market-making, OTC & brokerage, custody, and treasury management. The company currently has offices in Paris and Singapore and is registered as a digital asset service provider with the French authorities (AMF).
BitDegree is the leading Web3 Learning Hub, helping 20 million learners annually start their journey in crypto and discover awesome Web3 projects.
Cudos provides highly scalable decentralized cloud computing capacity, powering metaverses and the web3 economy.
Wois is a wisdom-sharing platform for speakers, thinkers, and thought leaders. Wois collects diverse opinions from experts in all sorts of different fields and gives them the possibility to share their opinions on important user-generated questions. You can download their beta apps to view opinions on iOS or Android.
Upcoming VNTR Capital events:
Jan 14 VNTR Breakfast Roundtable Zurich (during World Crypto Conference 2023)
Jan 17 VNTR Breakfast Roundtable Davos (during WEF 2023)
Feb 16 VNTR Breakfast Roundtable Tel-Aviv (during OurCrowd Summit 2023)
Feb 28 VNTR Investors Roundtable Barcelona (during Mobile World Congress 2023)
RSVP to Upcoming VNTR Capital Events
The VNTR Capital Investors Community has a growing membership of 320+ qualified investors, actively investing in high-growth technology companies as VC/Crypto Fund managers, angel investors, and family offices.
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UPCOMING VC EVENTS
Dec 20 3rd Annual Miami Gala with Andrea Bocelli by United Hatzalah of Israel
Jan 5-8 CES 2023, Las Vegas, USA
Jan 12-14 DLD Munich 23, Munich, Germany
Jan 11-13 Crypto Finance Conference, St. Moritz, Switzerland
Jan 16-20 World Economic Forum, Davos, Switzerland
Jan 16-19 AIBC Africa, Nairobi, Kenya
Feb 9-11 World Artificial Intelligence Cannes Festival, Cannes, France
Feb 27 - Mar 3 Mobile World Congress, Barcelona, Spain
Mar 10-19 SXSW, Austin, USA
Mar 13-16 AIBC Eurasia, Dubai, UAE
Mar 19-20 Crypto Expo Europe, Bucharest, Romania
Mar 20-24 Paris Blockchain Week, Paris, France
Mar 23-25 Art Basel Asia, Hong Kong
Mar 29-30 WOW Summit Hong Kong
Apr 11-12 Startup Grind, Silicon Valley, USA
Apr 26-28 Consensus by CoinDesk, Austin, USA
May 15-19 AIBC Americas, Sao Paolo, Brazil
May 31 - Jun 2 GITEX Africa, Morocco
Jun 26-29 Collision, Toronto, Canada
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
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Check out VNTR Capital upcoming events
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VC READS
Luck’s Role In Venture Capital
Pablo Ventura, the general partner at K Fund, believes that luck has a significant influence. His personal retrospective provides a fascinating opportunity to look at the philosophy behind venture capital and early-stage startup investment. Winning a high-stakes poker tournament as a beginner requires luck. Making a comfortable living as a professional poker player requires ability. Of those two scenarios, it’s the second we’re likely to identify with venture capital, given the shared focus on analytical thinking and consistency. The first is a better reflection of a founder’s journey.
We all know the stories about VCs taking risky bets on early-stage companies with big ideas. Surely that’s evidence of a major luck component? The greatest hurdle to understanding venture capital is that VCs expect most of the companies they back to fail. That sounds unintuitive, but it’s the simple and natural trade-off against potential.
Tech’s reality check: How the industry lost $7.4 trillion in one year
It seems like an eternity ago, but it’s just been a year.
At this time in 2021, the Nasdaq Composite had just peaked, doubling since the early days of the pandemic. Rivian’s blockbuster IPO was the latest in a record year for new issues. Hiring was booming, and tech employees were frolicking in the high value of their stock options.
Twelve months later, the landscape is markedly different. Not one of the 15 most valuable U.S. tech companies has generated positive returns in 2021. Microsoft has shed roughly $700 billion in market cap. Meta’s market cap has contracted by over 70% from its highs, wiping out over $600 billion in value this year.
There are only two accelerators European VCs care about
There are, according to 20-odd top-tier European VCs, just two accelerators really worth getting into: Entrepreneur First and Y Combinator.
VCs flagged these programs as the only ones “still able to attract amazing talent” with one investor going as far as to suggest that all others are “a waste of founders’ time”.
Over half of the VCs Sifted spoke to had a good word to say about London-founded “talent investor” Entrepreneur First (EF): “[It has] been brilliant in providing an actionable pathway both in terms of enabling founders in meeting prospective cofounders, but also commercializing academic research,” Carlos Eduardo Espinal, partner at Seedcamp, says.
VCs and red flags
Renowned VC Bill Gurley put together a list of the many “red flags” that VCs should have paid closer attention to when funding FTX, suggesting in a tweet that this summary of warning signs might help keep VCs “out of the investor hurt locker” going forward. Gurley includes such no-nos as “unique financial data presentations,” “aversion to audits,” “large secondary transactions” and “lack of a legitimate board.”
N26 alumni have created more startups than those from Wise, Revolut, and Klarna
Undeterred by the current market conditions, Europe’s founder factories keep fuelling the next generation of startups
N26, the Berlin-based neobank, has seen more former employees go on to launch startups of their own than any other private European unicorn.
Other fintech unicorns — including Klarna, Revolut, and Wise — have also seen dozens of employees begin businesses, a strong sign that startup success spawns more startup success.
FTX collapse exposes power imbalance between founders and investors
The sudden collapse of crypto exchange FTX has unleashed one of the biggest scandals in the venture world. What exactly transpired has yet to be revealed, and may never come fully to light, but the broad strokes are that the company has a murky relationship—to say the least—with its trading firm, Alameda Research, whose heavy losses founder Sam Bankman-Fried tried to patch up with FTX client funds. The scandal, just the latest in a long string of mishaps, bankruptcies and improprieties to hit the crypto world, has left many uncertain about the industry's future. And—in ways that some of the other shocks to hit crypto have not—the FTX implosion has forced investors to confront the question of how such a massive fraud could seemingly pass right under the noses of some of the world's most sophisticated venture capitalists. Could the much-criticized backers of FTX have done better? The short answer is yes. There were obvious issues with due diligence—new boss John Ray put it succinctly, saying "never in my career have I seen such a complete failure of corporate controls." (And that's from the man who oversaw Enron's bankruptcy.) Backers including Sequoia have apologized and promised to do better next time around.
PE firms may slow down hiring in 2023, but layoffs are unlikely
Executive recruiters and compensation consultants are anticipating a slowdown in private equity hiring in 2023, but mass layoffs aren't in the cards. Amid declining fundraising figures and a difficult dealmaking environment, PE hiring will likely wind down moving into the new year, but the asset class's strategic insulation from market turmoil means it won't grind to a halt. With ample dry powder, longer-term investment horizons, and income from management fees, PE firms may slow down growth, but they won't stop it. In its financial services compensation Q3 trends and year-end projections report, compensation consulting firm Johnson Associates said it anticipates firms across financial services will reduce hiring plans and initiate some layoffs as cost-cutting pressures mount at the end of 2022. Alan Johnson, managing director of Johnson Associates, said this trend should extend to PE, but to a lesser extent than big banks and traditional asset managers. PE firms spent the last three years building out their teams at a rapid pace, and now they're fully staffed, Johnson said. Because these firms are no longer building teams to keep up with growing workloads, they're naturally slowing down hiring, regardless of the market downturn.
How to keep your cryptocurrency safe after the FTX collapse
The fall of the FTX crypto exchange forced many to reconsider their overall approach to investments - starting from self-custody to verifying the on-chain existence of funds. This shift in approach was driven primarily by the lack of trust crypto investors have in the entrepreneurs after being duped by FTX CEO and co-founder Sam Bankman-Fried (SBF). FTX crashed after SBF, and his accomplices were caught secretly reinvesting users' funds, resulting in the misplacement of at least $1 billion of client funds. Efforts to regain investor trust saw competing crypto exchanges proactively flaunting their proof-of-reserves to confirm users' funds' existence. However, community members have since demanded that the exchanges show their liabilities to safeguard the reserves. With SBF, the self-proclaimed “most generous billionaire,” committing fraud in broad daylight with no visible legal implications, investors must maintain a defensive stance when it comes to protecting their investments. To safeguard assets from fraud, hacks, and misappropriation, investors must take certain measures to keep total control of their assets - often considered as best crypto investment practices.
By the end of last year—a decade after Andreessen Horowitz, or a16z, was founded—the firm was riding high with $55 billion in assets under management, more than three times the amount in 2020. That sum, massive by the standards of Silicon Valley venture capital firms, represented an accumulation of shares in startups and crypto tokens during the best time for tech investing since the dotcom boom.
Nearly a year later, Andreessen Horowitz is navigating the worst market for tech since the firm was founded. Coinbase, the company that generated the highest return ever for the firm, is down about 80% so far in the stock market this year. Share prices of other now-public a16z investments, such as Airbnb and Affirm, are also down sharply. And a few of its still-private companies, including Instacart, have cut their valuations significantly. Meanwhile, one of the largest exchanges in the crypto industry has collapsed, throwing the fate of the entire digital asset industry, where a16z has pledged billions, into question.
The Age of Acquisition
The reality of the macro economic environment is that the music has very much stopped. Publicly traded tech companies are, on average, down ~48% YTD. Companies like Okta, Twilio, and Asana are down over 75% YTD.
The reality of the game on the field has been endless access to cash. With rates low, providers of capital were desperate for yield. So, many flooded into funding tech companies that could use that cash to push towards extreme growth. In the startup world, this often meant that certain attractive categories could have a dozen companies, all effectively the same, but that are getting funded to tackle the same market.
But what happens when all that money suddenly gets sucked out of the room? Lit on fire? Those categories that have been, in some cases, over-funded, start to wither. They all start to look for every dollar they can get, and more often than not 1-2 players start to emerge as the dominant player. In a world that funded 12+ companies, only a few might survive.
OpenAI’s new chatbot can explain code and write sitcom scripts but is still easily tricked
AI chatbot ChatGPT has been trained to provide conversational answers to users’ queries. It’s fantastically talented but still prone to producing cogent waffle and misinformation.
OpenAI has released a prototype general purpose chatbot that demonstrates a fascinating array of new capabilities but also shows off weaknesses familiar to the fast-moving field of text-generation AI.
Beef, Pork, Chicken, Fish: Where The Money Is Going In Alt Meat
While venture funding has slowed this year, one area that remains hot is alternative proteins, and in particular cell-grown meats. Funding in the cultivated meat space has reached close to $700 million so far in 2022, per Crunchbase data. Meanwhile, copious investment also continues to flow to plant-based protein startups. Collectively, founders working on everything from faux foie gras to shelf-stable mock goat meat are pulling in millions. But not all meats are equally sought-after. To get a sense of how beef, chicken, pork, seafood, and other categories rank, we pulled together a dataset of top-funded companies in the alternative meat space. Not all funded companies have products to sample. In the cultivated meat space, in particular, goods aren’t likely to reach store shelves for a few years. Still, most faux meat companies are actively promoting their brands. For a sense of who’s making what, we’ve put together lists below of funded companies in each meat category.
Why Silicon Valley is so hot on nuclear energy and what it means for the industry
Venture capitalists in Silicon Valley and other tech hubs are investing money in nuclear energy for the first time in history. That’s changing its trajectory and pace of innovation. “There’s not been a resurgence of nuclear power, ever, since its heyday in the late 1970s,” Ray Rothrock, a longtime venture capitalist who has personal investments in 10 nuclear startups, told CNBC.
Now, that’s changing. “I have never seen this kind of investment before. Ever.” Jacob DeWitte, CEO of micro-reactor startup Oklo, says the landscape has changed dramatically since he started raising money in 2014, when he was a part of the Y Combinator startup incubator.
“More investors are interested, more investors are excited by the space, and they’re getting smarter to do the diligence and know what to do here — which is good,” DeWitte told CNBC.
This surge of private investment will be a positive for the industry, agrees John Parsons, an economist and lecturer at MIT. “I think having fresh perspectives is really good,” Parsons told CNBC. Nuclear energy is “a very complex science, and it’s been supported by the federal government and at these national labs. And so that’s a very small circle of people. And when you broaden that circle, you get a lot of new minds, different thinking, a variety of experiments.
BYJU’s, Zomato, Dream11 among India’s most valuable PE/VC-funded companies as per Hurun
The second edition of the Burgundy Private Hurun India 500 report featured India’s 500 most valuable companies with combined sales of $820 billion. While many large startups have raised public funds last year, many new-age companies also feature in the list of most valuable companies funded by private equity and venture capital investors. “In the long run, start-up value creation is going to significantly increase the velocity of companies entering the future editions of the Burgundy Private Hurun India 500,” said Anas Rahman Junaid, MD and Chief Researcher, Hurun India. He also added that public markets listing, which is considered a litmus test for valuations, has ended up becoming a poisoned chalice for a few. Some of the biggest value shedders in the list are start-ups such as Policy Bazaar, Paytm, Zomato and Nykaa which lost 68%, 59%, 50% and 48% respectively in value since last year.
Your Creativity Won’t Save Your Job From AI
Robots were once considered capable only of unimaginative, routine work. Today they write articles and create award-winning art.
In 2013, researchers at Oxford published an analysis of the jobs most likely to be threatened by automation and artificial intelligence. At the top of the list were occupations such as telemarketing, hand sewing, and brokerage clerking. These and other at-risk jobs involved doing repetitive and unimaginative work, which seemed to make them easy pickings for AI. In contrast, the jobs deemed most resilient to disruption included many artistic professions, such as illustrating and writing.
Why VCs Explaining “It Was Only 4% Of Our Fund” Is Misleading Minimization When a High Flying Startup Implodes
As MultiBillion Dollar Private Companies Shrivel, What Their Investors Aren’t Saying About These Losses
As more high-flyer private companies find their shine tarnished, investors (or adjacent VC explainers) remind us that it’s unfortunate but actually a non-issue, so please, let’s move on and not rubberneck the pileup. Wait, what? Losing tens of millions of dollars (or more) is no big deal? Don’t people get fired for that?
The basic math suggests they’re, well, correct, at least if you’re just looking at first order impacts. In most cases, any single company represents a very small percentage of a venture fund’s total size (hold aside this is also because firms have been increasing their AUM at astonishing velocity). In fact, losing money on a meaningful percentage of startups isn’t just expected, it’s potentially evidence that you’re taking enough risk to hit some of the power law winners which will pay back your LPs many times over!
Investment in agri-tech startups jumps 2-fold to $4.6 bn in FY22
Investment in technology startups in the agriculture and food sector jumped over twofold to $4.6 billion during the last fiscal on the back of higher inflow in restaurant marketplace and e-grocery, according to a report by AgFunder and Omnivore. "Total investment in agrifood tech startups for India’s fiscal year (FY) 2022 stood at $4.6 billion, up 119% from FY2021. Deal volume also increased to 234 in FY2022 as compared to 189 deals in FY2021," according to the report titled 'India AgriFoodTech Investment Report 2022'. AgFunder is foodtech and agtech venture capital firm, while Omnivore is a venture capital firm, based in India, which funds entrepreneurs building the future of agriculture and food systems. "Downstream investments continue to boost overall funding into the agri-food tech space. Downstream startups raised $3.8 billion in FY2022, a 115% increase from $1.77 billion in FY2021. This significant growth is due to Swiggy, which raised $1.2 billion, accounting for 26% of total investment in the agri-food tech space," the report said.
Google’s AI Could Check For Breast Cancer
Google announced this week it will partner with iCAD, a cancer detection company, to bring its AI-enabled mammography software into the world of breast cancer detection. Through the licensing partnership, iCAD will integrate Google’s AI platform with its suite of AI solutions for breast imaging and potentially improve the company’s ability to screen for breast cancer at earlier stages. It’s the first time Google’s mammography platform will be tested out in the real world, but it’s far from the only technology of its kind. In the past few years, artificial intelligence has made its way to the forefront of health care for its promise to solve perhaps the largest problem: finding the disease. The effects of this kind of infrastructure are far-reaching. Not only could patients access parts of the health care system faster, but it could also mean less turnover of medical professionals, catching the disease earlier, and in general, lowering health care spending in a country that, quite frankly, spends a lot for little return. In a post-pandemic healthcare system, those effects cannot be ignored. Though AI in diagnosis has been a popular concept for a while, it wasn’t until the past couple of years these startups got some serious funding.
From Minuscule To Mainstream: Why Micro VCs Are Gaining Prominence In The Indian Startup Ecosystem
Traditional venture capital funding in the Indian startup ecosystem has been on a tear for nearly a decade. But with thousands of new companies entering the ecosystem every year and macro disrupters like the pandemic, geopolitical unrest and a funding winter impacting the world of business at large, the VC game and funding playbooks have seen significant changes.
One such phenomenon is the rise of the micro VCs whose small-ticket funding into pre-seed and seed-level startups have grown markedly in the past couple of years, taking the investment ecosystem by storm. For context, more than 20 micro VC funds announced their debut in 2021 and 2022, and the overall number reached more than 80. This growth is fuelled primarily by the rising demand for seed funding in the ecosystem.
Brands Will Save Crypto? Be Careful What You Wish For
As the rapidly widening contagion from the FTX exchange’s collapse was thrusting crypto into an existential crisis, shoemaking giant Nike launched its bold new Web3 platform, SWOOSH. The initiative, which will allow Nike sneaker fans to buy and sell the brand’s digital wearables and to create their own collectibles powered by non-fungible tokens, is one of many such projects from household brands that are powering along as if nothing has happened in the wider world of crypto. These include Starbucks, the National Football League and its players, Instagram, Budweiser, Adidas, Dolce & Gabbana and Time. The list goes on. It’s why a common refrain I heard, during conversations with the NFT crowd during Art Basel in Miami this week, was that crypto will be saved by brands. That may be the case, and it’s all well and good that spending on such projects will help offset the big pullback in expenditure by native crypto companies. But it also evokes concern among many who were drawn to this industry’s rebellious, disruptive appeal and by its promise to level the playing field by giving creators and users greater control over their money, content and data.