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Series F - Issue #40: The Future of Venture Capital


Series F

December 17 · Issue #40 · View online

The Future of Venture Capital

👋🏻 Happy Sunday! 
Thank you to the 50 (!!) or so who reached out to me last week with thoughts, suggestions and encouragement. I was honestly touched by just how many of you took the time to email me, I promise to never moan about subscriber numbers again 😬
Your feedback was clear: Shorter, more focused curation + more analysis. 
The first two should make the latter possible, so I will be attempting this properly from the new year after I (hopefully) feel more refreshed after the Christmas break (and attempting the former today)
Also, a reminder that this will be the last Series F until January 7th.
I hope you all have a good holiday and thanks for reading, let’s get to it! 🚀
Curated by @neilswmurray

Upsetting the Apple Cart 🍎
Positive performance for venture capital funds in recent years has sparked attraction from investors, resulting in an increasing number of first-time and spin-off managers entering the industry ~> Up and Away: Launching a first-time venture capital fund 
Firms are using algorithms to uncover potential investments ~> Artificial intelligence is guiding venture capital to start-ups
Three places outside of traditional venture funding where Peter Diamandis is seeing an growing abundance of capital ~> Abundance of Capital
Here’s a running list of all the funding rounds the Vision Fund has participated in ~> This is where SoftBank’s $98 billion Vision Fund has invested so far
“Since Steve Cohen quietly launched Point72 Ventures last year, he has invested a small fraction of his $13 billion fortune in 13 early-stage fintech startups. But it’s not VC returns the hedge fund billionaire is most interested in, according to three people who have worked with his VC partners” ~> Behind Hedge Fund Billionaire Steve Cohen’s Fintech Investments
Raising the Ratio 🙋🏾
“The bottom line is that the VC community is an increasingly predictable and lookalike bunch that just seems to follow each other around from one trivial idea to another. That was confirmed by an analysis we published today with The Information. My conclusion is that we need to improve decision-making or change the decision makers within our industry” ~> Bros Funding Bros: What’s Wrong with Venture Capital
“2017 is the year our industry realised we can and need to change for the better” ~> Announcing the Women in VC Blog
New Funds and Models 💸
Bitwise Asset Management closes a $4 million funding round backed by investors including Keith Rabois, David Sacks and Naval Ravikant. Bitwise’s Hold 10 index fund, the world’s first crypto-index fund, is now taking on investors. Hold 10 is another way to get in on the cryptocurrency craze ~> Some well-known PayPal veterans just invested in the world’s first crypto index fund
Almost exactly two years ago, the venture firm Andreessen Horowitz took the wraps off a $200 million “biofund” that aimed to invest at the intersection of biology and engineering and was being led by its (then) new general partner, Vijay Pande. Pande argued at the time that it was finally possible to invest in software-enabled biotech ideas — without having to wait eons for them to pan out — thanks largely to the growing ubiquity of machine learning and the falling cost of computing. Evidently, that experiment is playing out as planned. Now, the firm is announcing a $450 million second fund led by Pande — formerly a Stanford chemistry professor — and Jorge Conde, a serial entrepreneur who officially joined the firm a few months ago as a general partner ~> Andreessen Horowitz has a new, $450 million bio fund
Emerging Markets 🌏
Deep tech, such as AI and robotics, and solving environmental problems could drive European tech into the stratosphere ~> Has European tech captured Silicon Valley’s momentum?
Crypto-Crazy 🤑
Cryptocurrencies and initial coin offerings have become almost ubiquitous in 2017. According to blockchain media outlet CoinDesk, companies have raised over $2 billion via ICOs this year. By comparison, the total amount raised between 2014 and 2016 was just $295 million ~> The crypto factor: Experts weigh in on tokenisation and venture capital
Those without working projects did best in first trading month, almost two-thirds of coin sales with testable projects slumped ~> The Hottest ICOs Are the Ones That Have Done the Least Amount of Work
Compelling Visions 🔮
“The problem arises when multiples are inferred from incomplete data. It’s quite rare that anybody but the fund manager actually knows the dollars out and dollars returned by a specific investment. And if you have incomplete data, there are usually a number of things that go into calculating or estimating the return. Here are a few other things to think about” ~> How Hard Is It to Generate a 10X Return on an Investment?
“Moats protect you from competition, but they also cut you off from the outside world. To create a defensible business today, your product needs to be a utility. You have to build something that solves a user pain, and then scale until it’s so fundamental that it becomes a feature of other products” ~> Units of Time are the New Currency
Today’s boom in blank-check companies is driven by the same thing as 2007: vast sums of money chasing any kind of half-decent returns ~> Another Sign of Frothy Markets: Blank-Check Boom
Bill Gurley’s firm is sitting on about $8 billion worth of Uber stock and has been at the centre of the boardroom drama ~> When $8 billion is yours to lose: How Uber’s top investor suffered through the wildest tech drama of the year
Bilal Zuberi: Learning as a VC
Trinity Ventures: 2018 Predictions 
Always Be Closing ☕️
All feedback (still) gladly received on or @neilswmurray and see you all in 2018! 🔥
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