VNTR Capital News April 6, 2023 - News, Events, VC Reads
Venture Capital, Web3, and Private Equity - April 6 News, Events, and VC Reads
VNTR Capital Newsletter is delivered to 30k+ investors weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
VNTR Weekend Summer Retreats — Looking for exciting summer plans? Join us for VNTR Weekend Summer Retreats! We're organizing 3-day weekend retreats in top European beach destinations so our community can come together and have some fun in the sun. Apply to join
Lisbon — Our Lisbon Chapter will gather for an Investors Roundtable on April 18.
Silicon Valley — For those in Silicon Valley, we're thrilled to announce our VNTR Investors Roundtable on April 25th. Since the pandemic began, this will be our first event in Silicon Valley, so we're excited to be back.
Austin — If you're heading to Consensus by Coindesk in Austin, join us for our official side event, VNTR Investors Roundtable Austin, on April 27th.
Dubai — We will be back in Dubai in early May. Stay tuned for the exact day of the next Investors Roundtable.
VNTR Membership — This week, we hosted our bi-weekly VNTR Mastermind Session, where VNTR PRO Members worldwide met to share their current activities, goals, and obstacles. VNTR Masterminds serve as a sounding board and place to get support from other investor peers. Join VNTR Membership and be part of the next Mastermind on the 18th of April.
Featured New PRO Members:
Dariia Vasylieva - Founding Partner at FD CAPITAL, Founder of GETVISION multi-family office, and founder of tech community Founders to Founders
Mark Feldman - Chairman and CEO Standard Capital Group, Co-founder EverX Labs and FlexDEX
Thank you to our partners:
Crypto Hunters TV Show is an innovative adventure-reality series that uniquely explores cryptocurrency and the blockchain world. The show provides an exciting combination of action, education, and entertainment as contestants embark on a thrilling global adventure to uncover the secrets of the crypto world. With a focus on accessibility and entertainment, the show aims to make the excitement of cryptocurrency accessible to a broader audience. To complement their strategy for untapped markets, the Crypto Hunters Mobile Game App will also be available. The game will be directly connected to the Crypto Hunters TV show and advertised prominently. Learn more and contact HK.
Changex is a unique personal finance mobile app that connects crypto and DeFi to the real world via in-wallet banking. The company is building a swiss knife financial solution by providing access to multi-chain crypto trading, proprietary products such as Leveraged Staking to leverage any POS asset, and a Crypto Debit Card for unprecedented utility. Learn more and contact Gary.
Paypolitan is offering an all-in-one payment app: users can add various wallets or existing bank accounts to the app and pay. Paypolitan is a non-custodial solution aggregating existing sources of funding. The users’ funds stay where they are and the Paypolitan app simply initiates the payment from the source of funding to the destination account. Paypolitan is therefore using Open Banking APIs (EU directive PSD2 compliant) and is one of the first movers adopting it in Europe. Learn more and Contact Marco.
Consensus is the world’s largest, longest-running and most influential gathering of the many, differing elements that make up the crypto community, Consensus has always sought to live up to its name. It brings this disparate, freewheeling, innovative community together to confront its differences, grapple with its challenges, and find agreement on how to best seize the opportunities this technology presents.
Upcoming VNTR Capital events:
Apr 27 VNTR Investors Roundtable Austin (During Consensus, 25% discount with C23VNTR code)
May Events to be announced: Dubai, Belgrade, Cannes, Monaco, Bucharest
Jun 1 VNTR Investors Roundtable Marrakech (During GITEX Africa)
Jun 8 VNTR Investors Roundtable Madrid (During South Summit)
Jun 8 VNTR Investors Roundtable Lisbon (During Epic Web3 Conference)
Jun 13 VNTR Investors Roundtable London (During London Tech Week)
Jun 15 VNTR Investors Roundtable Paris (During Viva Technology)
Jun 27 VNTR Investors Roundtable Toronto (During Collision)
Jul - Aug VNTR Weekend Summer Retreats (exact dates and places to be announced)
RSVP to Upcoming VNTR Capital Events
The VNTR Capital Investors Community has a growing membership of 360+ qualified investors, actively investing in high-growth technology companies as VC/Crypto Fund managers, angel investors, and family offices.
Follow us on Social media: Instagram, LinkedIn, Facebook, and Twitter.
UPCOMING VC EVENTS
Apr 11-12 Startup Grind, Silicon Valley, USA
Apr 19-20 Bloomberg New Economy Gateway Europe, Dublin, Ireland
Apr 20-23 Emerge Americas, Miami, USA
Apr 26-28 Consensus by CoinDesk, Austin, USA (25% discount with C23VNTR code)
Apr 27-28 TechChill, Riga, Latvia
May 9-10 OMR Festival 2023, Hamburg, Germany
Ma 12-14 TMRW Belgrade, Serbia
May 15-19 AIBC Americas, Sao Paolo, Brazil
May 16-18 SALT New York
May 16-27 Cannes Film Sestival, Cannes, France
May 18-20 Bitcoin, Miami, USA
May 19-20 Glitch Korea, Seoul, South Korea
May 24-25 Next Block Expo, Warsaw, Poland
May 25-28 Monaco Grand Prix, Monaco
May 28-29 Emerge Dubai, UAE
May 30-Jun 4 Tech Week San Francisco, US
May 30-Jun 2 Innovex, Taipei, Taiwan
May 31-Jun 2 GITEX Africa, Morocco
Jun 5-Jun 11 LA Tech Week, Los Angeles, US
Jun 7-9 South Summit, Madrid, Spain
Jun 9-10 Epic Web3, Lisbon, Portugal
Jun 12-13 Metaverse Summit, Paris
Jun 14-17 Viva Technology, Paris
Jun 25-25 Silicon Valley Comes to Tel-Aviv
Jun 26-29 Collision, Toronto, Canada
July 6-7 Block3000, Lisbon, Portugal
July 19-22 AIBC Manila, Phillipines
Oct 7-8 DeGameFi, Tbilisi, Georgia
Oct 15-18 Expand North Star Dubai Harbour, UAE
Oct 16-20 GITEX Global, Dubai, UAE
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
Do you need a deck to raise from VCs? Not always
For all the focus on pitch decks you’d think that it’s impossible for startups to raise from angels or institutional investors without one. That’s not entirely correct. Here’s why. Going far enough back into the history of investing, you needed a comprehensive business plan to raise funding from institutional investors. The Harvard Business Review has a great guide to how to create one. The exact details of what goes into a business plan vary but often include history, market analyses, strategy, product and service descriptions, org charts, competitive analyses, management team, financial plans and projections, along with all the research to back up each section.
New Book: Adventures in Venture Capital: A Practical Guide for Novice Angels and Future Unicorns
Becoming a startup founder or investor may seem glamorous, but the field is surrounded by misconceptions. As a high-risk industry, venture capital often suffers from too much hype and too few results—and in order to succeed, understanding the principles of both investing and startup building is essential.
Fortunately, angel investor, founder of VC firm AltalR Capital and author Igor Ryabenkiy offers a path forward in Adventures in Venture Capital, a comprehensive guide to help investors and founders alike avoid common pitfalls and achieve explosive growth in the startup world.
The World Of Venture Capital Has Changed: Venture Capital Must Pivot
Just one more narrative about the decline in the role that venture capital is playing in our current world. Michael Casey, the founder of Portico Advisers, writes in the Financial Times: "Venture capital blossomed from an artisanal strategy into a behemoth over the past decade, raising $163 billion last year in the U.S. alone." Here again, I put the Federal Reserve right out there in front when we talk about the "financial bubbles" that blossomed for us in the 2010s and beyond. The last decade, the last 15 years or so, were amazing to me. I had never seen anything like it when talking about the VC world...and the world of Angel finance. Money seemed to be present all over the place. And, the results in different sectors of the financial world were game-changing.
The Open Letter to Stop 'Dangerous' AI Race Is a Huge Mess
The letter has been signed by Elon Musk, Steve Wozniak, Andrew Yang, and leading AI researchers, but many experts and even signatories disagreed.
More than 30,000 people—including Tesla’s Elon Musk, Apple co-founder Steve Wozniak, politician Andrew Yang, and a few leading AI researchers—have signed an open letter calling for a six-month pause on training AI systems more powerful than GPT-4.
The letter immediately caused a furor as signatories walked back their positions, some notable signatories turned out to be fake, and many more AI researchers and experts vocally disagreed with the letter’s proposal and approach.
VCs Plow Money Into Indoor Farming, But Open Fields Might Be More Ripe For Innovation
When a hurricane in Florida and a virus in California killed a promising lettuce bounty late in 2022 and earlier this year, some hobbyists turned to indoor farms to supply their winter fuel of hearty salads. Indoor farming is something venture firms have deemed the future of agriculture. Armed with temperature control, hydroponics and controlled environments, indoor farms can better shield crops from weather disturbances and pests. With its potential to disrupt one of the oldest of human endeavors, indoor farming has emerged as a venture capital cash crop in recent years. Indoor farming startups alone captured around 20% of the total $4.5 billion venture investors plowed into agtech startups in 2022, Crunchbase data shows.
Capitol Hill's SVB autopsy spotlights risks of tech and 'nontraditional' banks
This week, members of Congress from both sides of the aisle lobbed questions, and outright accusations, at regulators who they claim dropped the ball as Silicon Valley Bank took on a reckless risk profile in the years preceding its collapse in March. A critical takeaway from these hearings is that regulatory systems are ill-suited to sufficiently assess the niche banking practices of lenders like SVB and Signature Bank, which enabled mismanagement and reckless risk-taking by members of the leadership teams at both banks. Regulators' inability to adapt their processes to modern banking practices is a piece in the puzzle of why the Fed's playbook failed.
Startups Turn To New Metrics To Measure Traction
Every money-making company describes its bottom line in the same way: profitable.
Every unprofitable company, however, seems to have its own metrics for putting the most positive spin on financial results. A perusal of recent earnings reports reveals some of the standby favorites. There’s adjusted EBITDA profitability, dollar-based net retention rates, non-GAAP gross margins, non-GAAP net earnings … and the list goes on. Not everyone’s a fan. Berkshire Hathaway Vice Chair Charlie Munger once famously advised: “Every time you see the word EBITDA, you should substitute the words “bullshit earnings.” Luckily for startups, he’s not a venture capitalist. And for investors who really do focus on startups, some of the more unusual metrics do play a role in vetting companies that may be a ways from profitability. These days, as startup backers shy away from high cash-burn, high-growth models, favored metrics are in flux. Companies are under more pressure to show they can get to break-even on comparatively modest capital infusions.
The Future of Payments is… Red?
Visa and Mastercard currently facilitate more than three-quarters of all credit card transactions in the United States, at a time when post-pandemic Americans are now using credit or debit cards for roughly 57% of all transactions (in 2016, it was only 45%). Given the two companies’ long-standing dominance in the payments-processing space, what would it take to disrupt this duopoly and start a new payments Goliath
High rates, investor-friendly deals, and bad news for regional hubs: What the end of the bull run means for venture capitalists and entrepreneurs
In recent years, the low cost of capital allowed record amounts of dry powder to be raised and dispersed into the venture capital and startup ecosystem. As the landscape began shifting last year, we started to see a course correction by investors who had been freely pouring money into VC-backed startups. The recent bank failures introduce another hurdle into a rapidly shifting environment and dramatically highlight the challenges of our high-interest-rate, inflationary climate. For many VCs, these recent events solidify a transition from a growth focus toward a cash flow breakeven or profit perspective on their investments. For years, there was almost unlimited cash available for startups offering hyper-growth opportunities to those on a quest to swoop up market share. Growth was to be achieved at all costs, a trend common in the technology sector.
The NFL Is Quietly Investing Millions Into Its Venture Capital Fund, 32 Equity
A new committee supervising the NFL’s expanding 32 Equity venture arm has been formed, with four owners and a club president appointed by Commissioner Roger Goodell. In the world of venture capital, the NFL has its own company known as 32 Equity.
Let’s go through the basics of 32 Equity, including when it was created, how much money the owners put in at first, and the returns they’ve already experienced.
The Unbundling of “Growth” Equity
The largest wealth transfer in the history of venture?
Over the last decade, subscription and subscription-like business models have become pervasive. Business models have shifted to allow customers to grow into their lifetime value rather than commit to large upfront payments: this was manifested in the move to “pay-as-you-go” pricing structures. This includes business models as diverse as: paying one-time for DVDs to streaming on-demand; purchasing a computer game upfront to in-app purchases; perpetual licenses to SaaS; and the list goes on. This model came to dominate because it works: companies can widen their net and capture more initial customers, who over a period of time become much more valuable than the set of customers willing to engage in a lump-sum upfront purchase. Companies noticed this, as did investors. But this shift creates deferred cash flows that can inadvertently consume much more capital than before.
Nearly half of PE firms, portfolio companies doubt current management in survey
Having the right executives in place to turn around private equity-backed companies is proving a more urgent challenge than the pressures of a potential recession, according to a new survey of PE firms and portfolio companies. Nearly half of respondents weren't confident in their current leadership, and more portfolio company executives ranked talent recruitment and retention among their top concerns they face over the coming year, management consultant AlixPartners found in its annual survey. Among PE firm respondents, 54% said they have the right leadership in place at their portfolio companies; only 53% of portco executives believe the same, AlixPartners found. "The industry needs to offer reasons to come and reasons to stay that amount to more than the promise of a big payoff in five years," AlixPartners says in summarizing the survey. "That means bringing culture, engagement, career pathing, and other issues into the management repertoire of portcos—and ensuring that PE firms understand the importance of these initiatives."
Unidentified Multibillionaire Makes $10.5B Tax Payment – The Biggest In History
Nothing is certain except death and massive surprise tax receipts...
Move over Elon Musk: there’s a new high-roller in town who just made a jaw-dropping tax payment. An unidentified multibillionaire has paid a whopping $7 billion USD in taxes, making it the biggest tax payment in US history. So huge that it caused a stir in the financial world, experts are scratching their heads, wondering who this mystery billionaire could be and how they went under the radar for so long…
A difficult pivot looms for venture capital
Venture capital blossomed from an artisanal strategy into a behemoth over the past decade, raising $163bn last year in the US alone. But the run on Silicon Valley Bank is raising questions about the industry and its prominent voices. While levitating on the vapour of tantalising valuation mark-ups, many of these leaders mistook the advantages of low interest rates and globalisation for their skill, and anointed themselves prophets of innovation. In truth, the wall of cash in recent years led many VC funds to rely less on discrimination and judgment and more on playing a numbers game, investing in an array of start-ups in the hope that one delivered a vertiginous return. This has always been part of the VC playbook but it became more gamified, descending into an undisciplined play on the momentum of industry and market trends. The standards of due diligence deteriorated.
Little Evidence Of Frozen IPO Market Thawing Out
It’s been more than a year since the IPO pipeline’s shutoff valve was turned on, and so far the market has shown few drops of a comeback. While in the last half year or so huge private companies like Instacart, Navan (formerly TripActions) and Stripe have made overtures they would go public, none seem very close — and those who watch IPOs don’t expect much action for at least the next several months and maybe much longer. “For 15 months there has been no ability to bring a company to market,” said Jerry Serowik, managing director and head of capital markets at investment bank Cohen & Company Capital Markets. “Right now there is no ability to price a traditional IPO.”
Funding gap: Africa is rich with women entrepreneurs, but…
Despite being the continent with the highest proportion of women entrepreneurs globally, African women receive less than 7% of all venture capital investment. Jessica Blake, associate at Spear Capital, suggests investor solutions that can help drive greater levels of investment in women-owned businesses. Africa is rich with women entrepreneurs. In fact, the continent has the highest proportion of women entrepreneurs in the world, with more than a quarter of all businesses either started or run by women. In Europe, by contrast, the rate of entrepreneurial activity among women is just 5.7%. Yet, despite those high levels of entrepreneurial activity, African women draw the short straw when it comes to funding.
US crackdown will push crypto ‘center of gravity’ to Hong Kong: Kaiko CEO
The United States government’s frosty approach to cryptocurrency regulation could ultimately see the industry’s “center of gravity” shift to Hong Kong, says Ambre Soubiran, the CEO of Paris-based institutional crypto market data provider Kaiko. The U.S. has been at the forefront of the crypto sector for quite some time. However, with the government seemingly adopting a regulation-by-enforcement approach, there is a growing feeling by some that a significant amount of companies, developers and investors will soon flock elsewhere to work in friendlier environments.
GPs tap co-investments as debt capital dries up and fundraising lags
Co-investments are on the rise as fund managers turn to new sources of capital and their investors look to reduce fee burden. The growth of co-investments—whereby LPs make direct investments alongside their fund managers—comes amid a difficult fundraising market, an industry wide pullback on debt financing in PE transactions, and a rise in independent sponsors looking for investment partners. Total capital raised for co-investments with PE investment managers grew from $6 billion in 2015 to $10.3 billion in 2022. While fundraising declined from 2021 to 2022, levels still remained historically elevated, according to PitchBook data. So far this year, PE firms have raised three funds with a total of $100 million for co-investment transactions.
3 Strategies Crypto Firms Can Use to Land a New Banking Partner
There is high value in ensuring that the controlled elements of your business are front and center. Crypto is the least trusted of financial services subsectors, according to the 2023 Edelman Trust Barometer, which in November surveyed more than 32,000 respondents across 28 countries. That’s a big reason why it’s critical that licenses, registrations and compliance standards are included in a prominent place on your website. Consider making them central to your “about the company” message. Highlight any compliance or financial health measures your company takes. Ensure your risk management officer or chief financial officer is featured on the website along with their bios.
The Four Developments Propelling AI Forward: A Conversation With General Catalyst’s Deep Nishar
There are four distinct developments that propel artificial intelligence forward today, said Deep Nishar, a managing director at venture capital firm General Catalyst. And Nishar would know. The investor co-led the firm’s recent $350 million funding in Adept AI, a year-old company with a founding team that hails from OpenAI and Google Brain. The firm has also led investments in AI talent platform Eightfold AI and AI health care company Aidoc. While the promise of AI has percolated for decades, the sector has only heated up fairly recently with the launch of ChatGPT-3 in November and the fast iteration of GPT-4 last week. “ChatGPT is a meaningful step forward,” said Nishar. More important than the technology, “it has fired up the imaginations of nontechnical people. It’s probably the fastest thing that ever got 100 million users using it all at once.”
The hurdles women-founded startups face in venture capital — and advice to overcome them
Don’t be scared to pitch big. That’s the advice Graham & Walker Founder and Managing Director Leslie Feinzaig said she would give to women looking to navigate the world of venture capital. “We tend to want to under promise and over deliver,” she said, speaking at the Female Founders Showcase hosted last week at the Amazon headquarters in Seattle’s South Lake Union. “Venture capital is not the place to do that.” Just 2.1% of total capital invested in U.S. venture-backed startups in 2022 went to companies founded solely by women, according to a report by PitchBook. That’s down from the 2.4% invested in all-women founding teams in 2021.
VC dealmaking in climate tech slows dramatically
VC funding for climate tech startups has slowed to its lowest pace in nearly three years, a worrying sign for an industry which had, until recently, brushed off the tech market downturn.
In Q1, climate tech startups raised $5.7 billion across 279 VC deals, according to PitchBook data. That's a 36% decline in deal value and a 31% decline in deal count from the previous quarter. From its peak in Q3 2021, quarterly deal value has fallen more than 50%. The data, though still early, sends a concerning signal to an industry critical to developing technologies for the energy transition. The world faces a catastrophic warming threshold within the next decade, UN scientists warned in a report this month. The report, which estimated that the Earth will exceed a 1.5 degrees Celsius (2.7 degrees Fahrenheit) warming target by the early 2030s, urged "deep, rapid and immediate action."
Stress test? What Biden’s bank bailout means for stablecoins
A major stablecoin depegging event raised concerns about the stability of these assets amid a U.S. banking crisis. The result may have been an improvement in their position in traditional finance. The collapse of Silicon Valley Bank (SVB), which suffered a bank run after revealing a hole in its finances over the sale of part of its inflation-hit bond portfolio, led to a depegging event for major stablecoins in the crypto sector, leaving many to wonder whether it was a simple stress test or a sign of weakness in the system. The second-largest stablecoin by market capitalization, the Centre Consortium’s USD Coin USDC $1.00,saw its value plunge to $0.87 after it was revealed that $3.3 billion of its over $40 billion in reserves was held at SVB and was, as a result, possibly lost. Coinbase seemingly exacerbated the crisis when it, a member of the Consortium, announced it was halting USDC-to-dollar conversions over the weekend.
How you invest your time is just as important as how you invest your money
One night, a policeman is doing his typical evening neighborhood walk. The sun has set, and he’s on high alert for any potential danger as he strolls slowly down the street. Soon, he comes across a professionally dressed man frantically pacing beneath a streetlight, periodically dropping to his knees to look between the cracks of the sidewalk. He is desperately offering $100 to any passerby who can help him find his misplaced keys. Relieved at the sight of law enforcement, he asks for the policeman’s help and explains that he urgently needs to get home to his family. Together, they search every inch of the sidewalk, the gutter, and the road beneath the light and come up empty. Anyone they have enlisted for help similarly gives up after finding nothing beneath the streetlight.
A new technology boom is at hand
Conventional wisdom tells us the technology boom is over. The collapse of Silicon Valley Bank has sent a chill through the investment community, and the tech sector has seen a correction as interest rates have risen. But I’d argue we may be about to enter a new golden age of technological innovation and investment. The difference is that this time around, it won’t be about consumers, but industry.
Three-quarters of the world’s $100tn in gross domestic product is made up of traditional legacy industries — such as manufacturing, transportation, logistics and healthcare — that have yet to be deeply transformed by technology. That’s now changing, as part of what venture capitalist Greg Reichow, a partner at Eclipse Ventures, a Palo Alto firm that has $3.8bn invested in the digital transformation of physical industries, calls “industrial evolution”.
Why Crypto Philanthropy Continues to Outperform the Market
In 2022, crypto news coverage sometimes felt like a 1970s made-for-TV movie, complete with cliffhangers, cartoonish villains and escapist melodrama. “Could one supervillain kill crypto’s glorious rise? Tune in next week to find out …” To those on the outside looking in, the industry was getting pummeled. After months of prices trending downward, as the market felt like it was getting its sea legs back, Sam Bankman-Fried swooped in with the FTX debacle for one last kick to the knees. Uncertainty like this is nothing new for crypto. We all know the cycle. Every few years, crypto is declared dead as prices drop. Traditional players stop paying attention and a silent growth phase begins as more investors and more developers enter the ecosystem.
The continued rise of European venture
I’ve long been fascinated with the European venture ecosystem. I vividly remember sitting in a library at the London School of Economics, where I did my undergrad, reading about the launch of Passion Capital’s new Seed fund in 2011. An operator like Eileen Burbidge, who was an early employee at Skype, starting a Seed fund focused on Europe? It was exciting — and it seemed like the dawn of a new era.
Many founders from the prior eras started their careers in banking or consulting. Not so anymore — much of the European startup ecosystem is now defined by alumni from top European companies, who skipped their stint in banking or consulting and instead joined the likes of Skype, Wise, Spotify, Revolut, Criteo, Delivery Hero, Deliveroo, N26, BlaBlaCar, Glovo, Adyen, Klarna, GoCardless, Zalando, Rocket Internet, Checkout, UiPath, Sorare, amongst others, to build their skills for a career as founders.
As Virgin Orbit Woes Mount, Spacetech Funding Hasn’t Crashed
A couple years ago, it seemed like funding was skyrocketing for every startup sector on Earth — and some looking beyond our planet, too. Investment in spacetech, spanning satellite networks, launch technologies and even space travel offerings, was running high. That coincided with some closely watched public market exits, including SPAC offerings from commercial spaceflight provider Virgin Galactic and launch services provider Virgin Orbit in 2019 and 2021. Unfortunately for public investors, things haven’t worked out as hoped. On Thursday, Virgin Orbit announced it is cutting 85% of its workforce, or about 675 employees, after failing to secure new funding to support continued operations. Shares plunged to around 23 cents on Friday, down about 98% from their post-offering peak.