svd
3635
androidsixteen
@androidsixteen.eth·
Uphill battle right now to get quality LPs to back crypto funds
Founders should expect this to "trickle down" and impact your ability to raise (if it hasn't already)
There's a massive overhang from the '22 war chests though, so strong teams will still be able to command good terms
https://x.com/QwQiao/status/1846513855142211779
Founders should expect this to "trickle down" and impact your ability to raise (if it hasn't already)
There's a massive overhang from the '22 war chests though, so strong teams will still be able to command good terms
https://x.com/QwQiao/status/1846513855142211779
3
Dan Romero
@dwr.eth·
The issue with Facebook Platform was the company had an existential crisis right around the time of the IPO in 2012.
Company had to go all-in on mobile and an app platform on top of early generation smartphone wasn't going to work.
Also turned out that displaying ads for mobile games was a far better business than taking a cut of on platform payments to Zynga.
cc @antonio
Company had to go all-in on mobile and an app platform on top of early generation smartphone wasn't going to work.
Also turned out that displaying ads for mobile games was a far better business than taking a cut of on platform payments to Zynga.
cc @antonio
3
Dan Romero
@dwr.eth·
I missed this — a new tech newsletter from og tech blogger @ommalik
https://crazystupidtech.com/archive/the-why-of-crazy-stupid-tech/
https://crazystupidtech.com/archive/the-why-of-crazy-stupid-tech/
3
Dan Romero
@dwr.eth·
Excellent long-read on SpaceX / Tesla approach to building scalable hardware.
I think Karpathy is underrated (albeit, potentially biased) observer here now that's he's post-Tesla (and OpenAI).
I also fundamentally believe that Waymo engineers are not incentivized to be entrepreneurial enough to have hardware / cost breakthroughs for mass market. $200K a car doesn't scale.
Technical brilliance != scaled production brilliance
https://stratechery.com/2024/elon-dreams-and-bitter-lessons
https://www.youtube.com/watch?v=hM_h0UA7upI&t=230s
I think Karpathy is underrated (albeit, potentially biased) observer here now that's he's post-Tesla (and OpenAI).
I also fundamentally believe that Waymo engineers are not incentivized to be entrepreneurial enough to have hardware / cost breakthroughs for mass market. $200K a car doesn't scale.
Technical brilliance != scaled production brilliance
https://stratechery.com/2024/elon-dreams-and-bitter-lessons
https://www.youtube.com/watch?v=hM_h0UA7upI&t=230s
3
Dan Romero
@dwr.eth·
Pointing out a good example of cognitive bias for smart, online people is Venmo vs. CashApp thinking that Venmo is a good business.
CashApp is now the primary business at Block (nee Square). It's no longer a new age cash register company, it's a bank, used by 50M+ Americans.
But because Venmo penetrated elite American colleges, most knowledge workers think Venmo is the important app. Payments itself is a bad business. And knowledge workers have other financial services (who do you know that uses the Venmo debit card).
Contrast to CashApp which effectively is the bank for many of its users. And it monetizes *way* better than Venmo.
(Not a dunk on the original cast, figured I would bubble up in /svd)
CashApp is now the primary business at Block (nee Square). It's no longer a new age cash register company, it's a bank, used by 50M+ Americans.
But because Venmo penetrated elite American colleges, most knowledge workers think Venmo is the important app. Payments itself is a bad business. And knowledge workers have other financial services (who do you know that uses the Venmo debit card).
Contrast to CashApp which effectively is the bank for many of its users. And it monetizes *way* better than Venmo.
(Not a dunk on the original cast, figured I would bubble up in /svd)
3
Dan Romero
@dwr.eth·
In case you missed it, started a new channel today. Give it a follow!
/svd
https://warpcast.com/dwr.eth/0xc8328edb
/svd
https://warpcast.com/dwr.eth/0xc8328edb
3
Dan Romero
@dwr.eth·
"How does VC fund math work"
1. $400M fund
2. 2% and 20% means 2% a year for ~10 years gets paid to the fund GP as fees (to be used to run fund but also as compensation)
3. So 400 * 0.02 = $8M a year x 10 years = $80M in fees, so roughly 20% of fund
4. Investor has to pay that back as a hurdle in the 20% ("the carry").
5. So if you don't return the fund, you walk away with $80M * taxes * spend running the fund.
6. So $20M-$40M post-tax, might be low!
Simplified a bit (i.e. management company vs. GP). And could be budget-based so not paying 100% of fees to himself. Could also be using fees to invest in the fund himself (cashless).
Boosting because it's a good question.
1. $400M fund
2. 2% and 20% means 2% a year for ~10 years gets paid to the fund GP as fees (to be used to run fund but also as compensation)
3. So 400 * 0.02 = $8M a year x 10 years = $80M in fees, so roughly 20% of fund
4. Investor has to pay that back as a hurdle in the 20% ("the carry").
5. So if you don't return the fund, you walk away with $80M * taxes * spend running the fund.
6. So $20M-$40M post-tax, might be low!
Simplified a bit (i.e. management company vs. GP). And could be budget-based so not paying 100% of fees to himself. Could also be using fees to invest in the fund himself (cashless).
Boosting because it's a good question.
3
Dan Romero
@dwr.eth·
This basically doesn't exist today, because a company like Uber would be $54M post money valuation, not $5.4 million (like Uber was).
Would still be a great outcome for all of these investors (just remove a 0), but Facebook, Airbnb, Stripe, Uber, Coinbase seed investors were in a special era.
Fun fact: Jcal only got a <30% of that amount since the money actually came from Sequoia.
Would still be a great outcome for all of these investors (just remove a 0), but Facebook, Airbnb, Stripe, Uber, Coinbase seed investors were in a special era.
Fun fact: Jcal only got a <30% of that amount since the money actually came from Sequoia.
7143
six
@six·
Praxis raises $525M:
@dwr.eth you participated, great opportunity to add some color from your perspective in this channel :D
https://x.com/drydenwtbrown/status/1846271355182109017?s=46
@dwr.eth you participated, great opportunity to add some color from your perspective in this channel :D
https://x.com/drydenwtbrown/status/1846271355182109017?s=46
3
Dan Romero
@dwr.eth·
I don't know Harry, but skeptical that jumping from $8M fund in 2020 to $400M is going to work, especially if he's based in London. Hard enough not being in SV trying to compete with Bay Area based investors.
Venture firms like Founder's Fund and CRV are giving LPs back money because of a lack of well-priced opportunities.
Hard to believe he's going to be able to deploy the requisite sized checks ($10M+) into outlier companies to return the fund 2-3x.
The steelman is his media channels gets 50 million views a month and he can sneak in as a co-lead for a great company that wants distribution?
All that said, he's sort of willed himself into existence through sheer force of personality and a podcast, so maybe that translates to investing.
https://techcrunch.com/2024/10/15/20vc-closes-new-400m-fund-to-make-europe-great-again-says-harry-stebbings/
Venture firms like Founder's Fund and CRV are giving LPs back money because of a lack of well-priced opportunities.
Hard to believe he's going to be able to deploy the requisite sized checks ($10M+) into outlier companies to return the fund 2-3x.
The steelman is his media channels gets 50 million views a month and he can sneak in as a co-lead for a great company that wants distribution?
All that said, he's sort of willed himself into existence through sheer force of personality and a podcast, so maybe that translates to investing.
https://techcrunch.com/2024/10/15/20vc-closes-new-400m-fund-to-make-europe-great-again-says-harry-stebbings/
3
Dan Romero
@dwr.eth·
Wild to think that Apple’s iPad business ($25B+) would make it a top 20 technology company.
Pretty good for a “niche” product.
Pretty good for a “niche” product.
3
Dan Romero
@dwr.eth·
Google is buying nuclear power.
1. Hell yeah—more nuclear is great. Energy independence <> decarbonize energy people overlap.
2. This is still blocked by the NRC—"independent" federal regulator that lacks any incentive to approve new nuclear (was put in place after 3 Mile Island and killed all nuclear energy progress in the US).
3. Even if approved, they are still a decade out. So critical view is this is just a headline.
4. All that said, a big issue for nuclear startups (my wife is a co-founder of one) is nuclear upfront construction costs are super high relative solar (which is massively subsidized). Tech companies signing long term power agreements at above market rates helps make the economics make sense for the duration / regulatory risk.
https://www.wsj.com/business/energy-oil/google-nuclear-power-artificial-intelligence-87966624
1. Hell yeah—more nuclear is great. Energy independence <> decarbonize energy people overlap.
2. This is still blocked by the NRC—"independent" federal regulator that lacks any incentive to approve new nuclear (was put in place after 3 Mile Island and killed all nuclear energy progress in the US).
3. Even if approved, they are still a decade out. So critical view is this is just a headline.
4. All that said, a big issue for nuclear startups (my wife is a co-founder of one) is nuclear upfront construction costs are super high relative solar (which is massively subsidized). Tech companies signing long term power agreements at above market rates helps make the economics make sense for the duration / regulatory risk.
https://www.wsj.com/business/energy-oil/google-nuclear-power-artificial-intelligence-87966624
3
Dan Romero
@dwr.eth·
Trying a new channel experiment around daily tech news:
Silicon Valley Daily
/svd
Topics will be sourced from techmeme.com — the website I've been visiting multiple times a day for 15+ years (can't think of any other non-app website I visit as frequently).
My promise is to try to provide a bit more context or inside baseball when I can.
Will be adding members slowly to the channel. I'm going to be the one seeding topics for a while.
Replies are open to everyone of course.
Silicon Valley Daily
/svd
Topics will be sourced from techmeme.com — the website I've been visiting multiple times a day for 15+ years (can't think of any other non-app website I visit as frequently).
My promise is to try to provide a bit more context or inside baseball when I can.
Will be adding members slowly to the channel. I'm going to be the one seeding topics for a while.
Replies are open to everyone of course.
3
Dan Romero
@dwr.eth·
👀