VNTR Capital News Oct 8, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – Oct 8 News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Capital Newsletter is delivered to 50k+ investors weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
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Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
Spotlight
VNTR Speed Networking — The October Investors Speed Networking event is scheduled for October 23rd. VNTR LITE and PRO members will have the opportunity to engage in one-on-one networking sessions, fostering valuable connections with their peers.
Flagship Events — sponsor slots available at our flagship events:
Companies can Apply as a sponsor to connect with investors and receive a personalized data-driven plan to achieve their goals.
We are recruiting Chapter Directors in key locations such as Dubai, Riyadh, Berlin, and Los Angeles to collaborate with us in expanding the VNTR Capital community. These individuals will serve as vital gateways to the global Venture Capital community. Interested candidates can apply here.
This week
London — We hosted another engaging VNTR Investors Roundtable in London on Oct 5 as a side event to Zebu Live (view pictures).
Tbilisi — Today, we hosted our VNTR Investors Roundtable Tbilisi on Oct 8 as a side event to DeGameFi Web3 annual conference.
Dubai — Join us on Oct 11 at VNTR Investors Cocktail Dubai as a side event to Future Innovation Summit (Complimentary investor passes for VNTR PRO members; use FIS2023VIP for a 50% discount for VIP tickets).
Upcoming
Dubai — International and local investors will gather on Oct 17 at VNTR Investors Roundtable Dubai, a side event to GITEX Global and Expand North Star. Apply for the Investors Program and get complimentary investor passes.
New York — We are launching the VNTR New York Chapter during NY Tech Week with our 2nd VNTR Investors Roundtable NY on Oct 18 at The Penn Club, #2 City Club in New York.
Miami — The launch of the VNTR Miami Chapter with Investors Cocktail will take place on Oct 20.
Las Vegas — Our first VNTR Investors Roundtable in Las Vegas will take place on Oct 23 as a side event to Money 20/20 (Member discounts available), sponsored by Stellar Foundation. We have an additional 2 sponsor slots available.
Barcelona — VNTR Barcelona Chapter will gather international investors visiting the European Blockchain Convention on Oct 25.
Hong Kong — VNTR Investors Roundtable on Nov 1 will mark the launch of Hong Kong chapter as a side event to Hong Kong FinTech Week.
Thank you to our Partners:
Stellar is a decentralized, fast, scalable, and uniquely sustainable network for financial products and services. It is both a cross-currency transaction system and a platform for digital asset issuance, designed to connect the world’s financial infrastructure. Financial institutions worldwide issue assets and settle payments on the Stellar network, which has grown to over 7 million accounts. The Stellar Development Foundation (SDF) is a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world’s financial infrastructure.
Lingo is a Web3 start-up poised to disrupt the loyalty rewards programs of the vacation industry by leveraging blockchain and real estate. Lingo is easy to understand: Buy Lingo, Receive loyalty points, and Claim points for rewards in real life (vacations, flights, shopping etc). Lingo's unique ecosystem is backed by Real World Assets, and its utility is integrated with 100,000+ hotels worldwide. You can contact Hassam-Moussa Rawat to learn more.
Upcoming VNTR Capital events:
Nov 3 VNTR Investors Roundtable Istanbul (During Istanbul Tech Week)
Nov 14 VNTR Investors Roundtable Lisbon (During Web Summit)
Nov 16 VNTR Investors Roundtable Singapore (During Singapore FinTech Festival)
Dec 1 VNTR Investors Roundtable Helsinki (During SLUSH)
Dec 10 VNTR Investors Roundtable Miami (During Art Basel Miami)
RSVP to Upcoming VNTR Capital Events
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UPCOMING VC EVENTS
Oct 10-11 Future Innovation Summit, Dubai, UAE (50% Off for VIP tickets with FIS2023VIP code)
Oct 12 LetsIgnite, Bengaluru, India
Oct 15-18 Expand North Star Dubai Harbour, UAE (free for qualified investors)
Oct 16-20 GITEX Global, Dubai, UAE (free for qualified investors)
Oct 16-22 NY Tech Week, New York, USA
Oct 19-20 Bitcoin Unleashed, London, UK
Oct 19-20 CoinAgenda, Dubai, UAE
Oct 19-21 VC Weekend, Dubai, UAE
Oct 20-23 Plan B Forum, Lugano, Switzerland
Oct 22-23 Share Algarve, Vilamoura, Portugal
Oct 22-24 Money 20/20, Las Vegas, USA
Oct 23-24 SOCAP23, San Francisco, USA
Oct 24-26 Digital Nigeria, Abuja, Nigeria
Oct 24-25 Blockchain Life 2023, Dubai, UAE
Oct 25-26 Urban Tech Forward, Warsaw, Poland
Oct 30-Nov 3 Solana Breakpoint, Amsterdam, Netherlands
Oct 30-Nov 5 Hong Kong FinTech Week, Hong Kong
Oct 30-31 AIM Summit Dubai, UAE
Oct 31-Nov 2 Singapore Week of Innovation and Technology
Nov 7-10 Nearcon, Lisbon, Portugal
Nov 8-9 Wolves Summit, Vienna, Austria
Nov 11-12 Australian Crypto Convention, Melbourne, Australia
Nov 13-16 Web Summit, Lisbon, Portugal
Nov 13 Europas, Lisbon, Portugal
Nov 13-17 AIBC Europe, Malta
Nov 14-16 SALT iConnections Asia, Singapore
Nov 15-17 Singapore Fintech Festival, Singapore
Nov 30-Dec 1 SLUSH, Helsinki, Finland
Nov 30-Dec 1 TechEx Global, London, UK
Dec 4-5 Next Block Expo, Berlin, Germany
Dec 4-8 West Tech Fest, Perth, Australia
Dec 8-10 Art Basel, Miami, USA
Dec 12-13 New England Venture Summit, Boston Dedham, MA, USA
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
Check out VNTR Capital upcoming events
VC Reads
View curated VC news and articles on the VNTR Platform
Global Venture Funding In Q3 2023 Falls Again Despite Late-Stage Rebound Led By Huge AI Deals
Global venture funding in the third quarter of 2023 reached $73 billion — up a bit quarter over quarter and down 15% from the $86 billion invested in Q3 2022, Crunchbase data shows. Despite the uptick quarter over quarter, this is the second lowest quarter since funding started to slide in 2022. The startup world is now five to six quarters into the current funding decline, Crunchbase data shows. Seed and early-stage funding continued to decline year over year, a clear signal that the venture markets are not opening up yet. Late-stage funding was up by close to 10% year over year and 30% quarter over quarter, as companies in strategic sectors — including semiconductors, AI, electric vehicles and sustainability — raised large fundings.
First Cut — State of Private Markets: Q3 2023
Every quarter, Carta releases information on the startup ecosystem in our State of Private Markets report. It can take a few weeks for rounds to be recorded on our platform, so we produce a full analysis after we get the final numbers.
However, we publish a “first cut” of data as close to the end of the quarter as possible. This initial work focuses on startup valuations and cash raised across venture stages.
VCs hope plunging IRR is behind them
After about half a decade of registering double-digit percentage returns in nearly every quarter, venture capital's performance has reversed dramatically. US-based venture capital funds' IRR fell to -16.8% in Q4 2022, according to PitchBook's latest Quantitative Perspectives report. That's the worst quarterly return the asset class posted in a decade. Venture capital funds were forced to mark down their late-stage portfolio companies in line with comparable public companies that tanked last year amid rising interest rates.
The era of lean unicorns
All hail the era of svelte unicorns. As higher interest rates and macroeconomic uncertainty have made VCs more cautious, the message to founders is now: use your cash wisely. Get lean. “2020 and 2021 were certainly the peak years of gluttony, where the abundance of cheap capital provided an opportunity for a lot of people to hide behind a wall of capital” — and hide inefficiencies, says Evgenia Plotnikova, partner at Dawn Capital. “What I’m certainly seeing today is people being a lot more thoughtful, especially around unit economics.”
The promise of AI: A guidebook for policymakers to navigate in the flat world.
New Book by Sanjiv Goyal, VNTR Member and Chapter Director in Las Vegas.
This thought-provoking book delves into the captivating significance of AI in policymaking for governments as we navigate a flat world. Unlock the boundless potential of AI-driven transformations in public governance and services. Explore captivating fictional references where AI-powered virtual assistants empower citizens, making government systems efficient, responsive, and citizen-centric. Discover how AI's data analytics capabilities provide governments valuable insights, shaping evidence-based policies for sustainable development. Embark on a visionary journey where integrating AI and human governance fosters a future where public services are optimized and tailored to citizens' needs. Immerse yourself in the transformative possibilities of AI in policymaking, and join the quest to unleash the untapped potential of a flat world empowered by AI.
Web3 Product Development with Ryan Jones from Consensys
Watch to learn about every aspect of product development in Web3 and ultimately how to build a winning Web3 product. Ryan Jones is a Director of Product Management at Consensys leading such products as MetaMask and ConsenSys Staking. Consensys is the leading blockchain and web3 software company with main products such as MetaMask, Infura, Linea, Diligence. The interview covers such topics as security, product metrics, product development cycles, regulation, building in public and how to get the first users.
Crypto VC funding falls to 3-year lows as market rout continues
Startup funding in the crypto industry has fallen back to Q4 2020 levels amid the ongoing bear market. According to an Oct. 5 report by blockchain analytics firm Messari, a total of $2.1 billion was raised by crypto startups across 297 deals in Q3 2023, down 36% from the previous quarter and nearly 70% from Q3 2022. Seed funding accounted for the largest fundraising category, with $488 million raised over 98 deals. “Trends in deal counts show a significant shift away from later-stage projects and into early-stage projects over the last three years,” researchers wrote. Less than 1.4% of deals involved companies at the Series B round or later.
The five deadly sins of VC
A nice pair of sneakers, Brunello Cucinelli vest, an expensive car and a cry for help in their eyes — that's how I'd describe a typical venture capitalist on their path to becoming a partner one day. In public, we position ourselves as superheroes supporting world-changing startups. In reality, it's a male-dominated, materialistic culture marked by burnout and cynicism. We have only ourselves to blame for the misery we suffer and spread. We are sinners, and here are our gravest sins.
Employee liquidity isn’t a myth, but it isn’t easy to provide either
Startups have traditionally used employee stock options to attract strong talent who could otherwise likely land a higher salary at a more-established company. But pitches that promise significant upside don’t always live up to their potential grandeur. As 2021’s lofty valuations have come crashing back down to earth, many employees are slowly realizing that the stock options they have been banking on are essentially worthless. Those who have seen their company continue to grow aren’t always impressed by their outcomes either. So, is the potential upside a myth?
The global VC market continues to stumble
The global venture capital market is in a slump. There was some hope that the potential halo effect of several long-awaited tech IPOs in the United States trading well and slowing interest rate hikes could spur VCs to be freer with their checks, but venture investment trends instead dipped, per preliminary data from PitchBook. It isn’t entirely surprising — web3 investment is similarly not doing well. And in most of the world, it’s currently harder for startups to raise capital than it has been in years.
Regardless of SBF Verdict, Crypto And Venture Have Significantly Changed
Sam Bankman-Fried’s trial kicked off this week in a Manhattan federal courthouse. The disgraced crypto wunderkind faces seven counts involving fraud and conspiracy charges related to the implosion of crypto exchange FTX. The spectacularly colossal nature of SBF’s downfall has impacted not only the crypto startups and venture funding in the sector, but also venture capital in general. FTX’s collapse is the greatest startup and investor failure of all time. For perspective, Theranos had raised about $1.3 billion in funding and had a $10 billion valuation at its peak before the walls came tumbling down on Elizabeth Holmes and Sunny Balwani. While that infamous debacle gave us a movie, Bankman-Fried’s FTX and its U.S. exchange, FTX US, had raised a combined $2.2 billion at a $32 billion valuation and $8 billion valuation, respectively, before everything fell apart.
How will CBDCs be used for political oppression in your country?
Central bank digital currencies (CBDCs) have emerged as a prominent topic in the financial world. They promise elevated stability, security, efficiency, and reduced corruption. Central banks, the International Monetary Fund, the World Economic Forum, and the World Bank tell us CBDCs are a panacea waiting to cure all that ails our financial system. Unfortunately, those claims may not match reality, because there are two characteristics of CBDCs that their proponents don’t often mention. First, they offer an eternal trail of data about how you’re spending your money. Secondly, they are subject to “programmability,” which means political leaders will have the ability to dictate whether you’re even allowed to spend your money.
A Better Way to Distribute Crypto Ecosystem Grants
The blockchain ecosystem today stands at a crossroads. It's an industry built on the backs of those who work relentlessly to create the future of finance, identity and more. However, it's also a space where recent financial constraints have pushed many stakeholders and businesses to exit prematurely. The long-term sustainability of this ecosystem may depend on one crucial lifeline: crypto grants. These initiatives already play a pivotal role in providing the necessary resources to Web3 builders, especially during bear markets when liquidity is scarce.
Nearly half of crypto users invest to boost living standards
Approximately 50% of crypto users are investing in digital assets to improve their everyday living standards. According to a new survey by crypto exchange Bitget published on Oct. 5, 46%, 44% and 41% of respondents in South Korea, Canada and Turkey, respectively, said improving their living standards is their most significant financial goal when investing in digital assets. Meanwhile, around 36% of respondents in Malaysia and Taiwan said enhancing their family's quality of life was more important than other aspirations.
Wheels Of Justice Slow To Accept Legal Tech As Funding Falls
After a couple years of robust growth, legal tech funding is on pace to have its slowest year since 2017. Venture funding to legal tech startups is pacing this year to hit about $725 million, per Crunchbase data. That’s a steep decline from the past two years, when funding to such startups was around $2 billion each year — even last year as overall venture capital started to slow. While it is true venture is down nearly everywhere this year — except when it comes to AI — it’s still striking to see legal tech funding on pace to decline approximately 65% year to year. While the legal industry has been slow to adopt new technologies for a variety of reasons — which include regulations — the industry did seem to make strides during COVID to integrate cloud and other new tech tools involving filings and communications
'Built on lies': Case against FTX founder Sam Bankman-Fried kicks off
Opening arguments in the biggest federal fraud case in recent history, United States v. Samuel Bankman-Fried, kicked off Wednesday in the Southern District of New York's Pearl Street Courthouse. Prosecutors told jurors that the government would aim to prove that Bankman-Fried, the founder and former CEO of bankrupt cryptocurrency exchange FTX, lied to customers, lenders and the VC firms that invested in the company, to allegedly steal $10 billion in customer funds. VCs including Sequoia, SoftBank and Insight Partners had to write down their stakes in FTX to zero after the exchange collapsed in November 2022.
Private market investors say capital influx 'changing the game' of sports
On the first day of the Greenwich Economic Forum, an annual gathering of institutional investors and asset managers, panelists predicted big returns and growing sophistication in the financing structures of professional sports investments. In an afternoon panel discussion inside a sun-drenched room overlooking the harbor in Greenwich, Conn., George Pyne, CEO of Bruin Capital, a sports and media PE firm, and Wyc Grousbeck, owner and CEO of the Boston Celtics, said the sports ecosystem is ripe for continued investment from fund managers in private equity, venture and other asset classes.
AI is the Key To DeFi Liquidity
Decentralized finance (DeFi) has been nothing short of a miracle. For the first time ever, anyone with a simple internet connection can build wealth digitally. People in all parts of the world, regardless of their financial status or location, are bettering their lives through DeFi by making the same kinds of investment decisions previously limited to professionals. Not to mention that DeFi is cheaper and more transparent than traditional methods of financial transactions. Former U.S. Federal Reserve Board Chairman Paul Volcker once famously quipped that the only financial innovation he could think of that actually improved people’s lives was the ATM. I would add DeFi to that short list.
AI, quantum, semiconductors and biotech on EU’s list of critical tech
The European Commission has released a list of 10 critical technologies it aims to protect in a bid to bolster economic security amid increasing concerns over China’s global rise — many of which are areas in which European startups are innovating. Technologies on the Commission’s list, published Tuesday, will receive special attention from policymakers, with the aim of avoiding intellectual property theft by hostile states and nurturing their development through a range of potential measures, including extra support and partnerships with like-minded allies.
Adapting to a world with higher interest rates — a guide for startups
Startups have more things to worry about than they have time — product-market fit, whether to invest in performance marketing or not, how much inventory is too much inventory, whether to hire that staff engineer from Google, just to name a few from a list that usually runs longer than the most well-funded startup’s runway. One thing that rarely makes this list is thinking about the balance sheet. After all, no great company was founded on the bedrock of capital efficiency. And CFOs have better things to think about (see monthly burn and runway). Does it really matter if working capital is efficient? If the startup is running a positive cash conversion cycle? If it’s capturing market yields?
When Is A Startup Not A Startup Anymore? And Why Does It
Recently, I was reading Crunchbase News’ analysis of the declining volume of M&A deals involving VC-backed companies, which are still technically referred to as startups. This led me to ask myself: When we talk about startups, what do we really mean? Is a startup still a startup after it has acquired enough capital to buy another company for hundreds of millions of dollars? This notion created a dissonance for me. I invest in startups for a living, and to me, the word startups evokes images of enthusiastic founders who are working hard to get an idea off the ground — not of corporations that have a huge market capitalization. We are all aware of the tendency to call organizations startups because of the allure associated with that word. But being creative and innovative is different from being a startup.
How To Win Investor Support For Your Startup Pivot
The word “pivot” can strike fear into the hearts of entrepreneurs, especially those embarking on this journey for the first time. One reason changing the course of your business can be daunting is potential investor perception. But investors are no strangers to pivots. They’ve seen it all before, and their reactions can vary greatly depending on how you handle it. Here are five strategies to help you gain investor support when navigating pivots. They can also help you increase additional investor interest.
The Value Chain of Capital
Andrew Stanton, one of the filmmakers at Pixar known for directing Finding Nemo, WALL-E, and more, gave a TED Talk in 2012 where he talked about storytelling. At the beginning he tells a story about how an old Scottish man came by his colorful nickname. Now, I won't repeat the story, cause my Mom reads this blog. But give it a listen. And just think about what's in a name, and the story behind it.
That's how I felt as I was reading the Wikipedia entry for the term "Ponzi scheme." I always forget that the term comes from a specific person; Charles Ponzi in 1920. His scheme of paying back his first wave of investors with the cash from his second wave of investors earned him $220M in today's dollars. It wasn't the first known Ponzi scheme (that happened in 1869) and it wasn't the biggest (that probably goes to Bernie Maddoff, who caused the loss of $20B in cash and $65B on paper.) But Charles Ponzi's name would forever be attached to the scheme.
China’s evolving global tech expansion – a lens from the Middle East
As a global venture investor – focused mostly on early-stage tech startups - the worlds I’m in are very different, but not utterly distant, from traditional conversations in Washington, DC on China, and the world.
Here, in my nation’s capital, the discussions are appropriately very top down. The machinations of big government, financial institutions, NGOS and corporations are assuredly key drivers of the world as it is.
In the world of tech startups and innovation, conversations are invariably bottom up. New generations and their enterprises are setting the agenda for the world that is coming.
The Mobile Revolution vs. The AI Revolution
The iPhone came out in June 2007; Uber was founded in March 2009.
I’ve been thinking a lot about past technology revolutions and what they can teach us about our current AI revolution. If mobile offers any lesson, it’s that applications take time to develop. ChatGPT came out 10 months ago; this means we probably still have another six to 12 months before killer apps really start to emerge. And the same pattern will likely hold again when Apple launches its Vision Pro next year.
Here’s a chart of U.S. smartphone ownership after the iPhone came out—I’ve overlaid the foundings of WhatsApp (2009), Uber (2009), Instagram (2010), and Snap (2011).