Tag: Venture Capital

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Finance Startups

Day 1286 and Halfway There, Living 2024 On A Prayer

An estimated 50% of the global population is participating in elections across 60 countries. That includes as supra-national entities like the European Union holding major elections. Naturally this made anyone who has to do any type of planning anxious.  

Concerns about access to compute and adequate energy, overbearing and inconsistent regulatory regimes impacting exits, growth and liquidity events, and the post-ZIRP monetary policy driving up cost of capital have been in the foreground of startup communities.

I see this reflected in my H1 investments. Access to energy, access to compute, and decentralization of both compute & energy are directionally the major trends that I believe will matter over the next decade. 

CapEx concerns and hyperscaling may grip the Magnificent 7 and worry analysts at Goldman Sachs but I’d encourage students of economic history to look to Carlotta Perez and her theory of deployment in previous economic innovation cycles for a more nuanced take. I think simple reads of over-investment are for suckers. 

From where we stand, capital serves the founders who make things of real value. That takes time. Regular builders have simpler needs while they do it: the freedom to make what they want with readily accessible tools without interference. 

We originated #FreedomToCompute as a tagline that shows our values. Not only has it driven me deal flow, but the coalition of e/acc, crypto, and El Segundo hardware/deep tech autists even changed a political party’s platform.

I’ll admit that I was surprised by the Republican Party’s adoption of innovation in crypto, artificial intelligence, and space as a core policy plank. They must really be courting startups as a constituency but I’m happy to have as many as possible aligned with us.

Science and progress are values traditionally associated with liberalism’s left leaning parties, but it seems the axis of “the best is yet to come”  is a wide coalition. My heuristics have thusly been updated so we can remain up and to the right. 

Anna Gat’s Axis of Hope

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Culture Startups

Day 1278 and Follow On

I’d like to think I’ve got a talent for understanding how hype and momentum are built.

I learned this skill set by doing. I picked it up simply by being a cool kid working in the trenches of the business of style.

How does hype turn into capital? Well it’s complicated. Consider two significant trends from my youth. Was Indie Sleeze a real cultural moment or manufactured? Did we get taken in by the HypeBeast? Ask Glenn Youngkin in his Caryle Group era about his Supreme investment. Get Gavin McInnes and James Jebbia to go a couple rounds about their relative wealth. and come back to me. Still unsure? Ask Barbara Kruger about the clusterfuck of uncool jokers.

The original culture and the commodification of the culture is a spectrum and the Tommy Hilfiger Event Horizon is infinite. Who makes culture, who money and who only brings money can be challenging to calculate.

The thing about cool, it’s sine qua non, is that it grapples at every stage of its existence with its own validity. Cool thrives as a grounding process to what’s actually happening in reality.

Cool is a relational experience between someone or something authentically popular amongst a group that relates well with each other.

And that relational power is validated by some wider need in the world for their belief, innovation, art, product or philosophy. Sometimes this can be quite irrational surely but consensus is hard to come by. One of the classic essays in validation of cool is geeks, mops and sociopaths in subculture evolution.

The validation of something “cool” eventually reaches a point of opportunistic acceptance by those merely into a thing for the capital. Sometimes it’s social and sometimes literal currency.

These so called “sociopaths” who follow the momentum often do not realize that they are just in it to capitalize on cool. I don’t want to suggest anyone in a thing for money or cachet is a sociopath just that incentives for status are significant drivers for people.

Often we need the people in it for the money. It’s wonderful that angel investing exists and momentum investors have perfectly rational incentives. Sometimes you will even see significant self awareness about this. If you put resources into a community and don’t cause trouble you are often welcome.

Now you can refer to this type in startup investing as dumb money. The follow-on capital that is riding on the work of others who authentically believed before a thing was cool is a necessary part of the ecosystem.

I don’t at all mind when someone is a follower. You can be “a cringe follower late adopter” or whatever terminology we are now using to describe laggards in the adoption curve.


 Everett Rogers in his book Diffusion of Innovations

Unless you are a pain in the ass, actively predatory, or making your contribution more trouble than it’s worth, you should go ahead and lend your support if you can take the risk.

Don’t take it personally when hipsters sneer. They may have been earlier than you but it’s fine to back winners. Just don’t expect the founders to give you special dispensation for getting on board when it was safe to do so. It’s right that the alpha premium applies. I personally love it when not only am I right but I got paid more for the privilege.

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Startups

Day 1257 and Other People’s Labor

I am laying prone in bed hopped up on DayQuil and the good codeine cough medication. I have Covid and apparently this bout will be no picnic.

Being sick can feel vulnerable. I imagine to most eyes I am economically and socially unproductive in this condition. I am not able to labor.

When I am sick I am grateful I get to be capital. I feel capitalism should appeal anyone with a disability (as I do) simply because comparative advantage allows us to exist without being at of the mercy of the state. Illness being disabling doesn’t mean low productivity.

My ability to be capital relies on the comparative advantage of specializing in startup kinda of startups. Practically it means I got to play a part in helping further the labor of others looking build a company.

Today was a big day on that front for me. One of my investments (humble brag I was their first commitment) Squads announced their Series A today.

They have come a long way since when I wrote about them on day 301 to where they are today on day 1257. A lot happened between fall of 2021 and Summer 2024. Now they are the market leading multi-sig wallet on Solana thanks to their Squads protocol.

They began with a vision of DAO tooling and ended up simply dominating code Solana primitives. They are doing the work of developing smart account technology and products that make it easier for businesses and individuals to securely manage and own digital assets. And they continue to make crucial tooling like Fuse.

For all the mania of meme coins and tokens, we can forget it’s real companies making real infrastructure.

These things have to be built for grander vision to exist in crypto and Squads has clearly been the team to do it. They have worked relentlessly shipping tools people want to use and build with.

When first met their CEO Stepan in Twitter DMs I had the privilege of seeing their early days upfront. There was never a moment that they were not listening to the market and adapting. I spent much of the summer of 2021 on DAOs because of their influence.

Everyone on the team practically wanted to do the work of building out what was needed for us to transact and govern in a trustless environment as individuals and as groups. I was inspired by their commitment to execution.

I am just a small part of their journey. But being able to provide the kind of specialized capital that could understand what they wanted to build from the start is a huge source of pride for me. Without early stage oddity investors like me it would take just a little longer for the entrepreneurs like Stepan, Deni and Sean to get to market. And the market deserves a company like Squads. Their hard labor built something of value.

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Startups

Day 1255 and Venture Nurture

I sometimes wonder why venture capital hasn’t coded more feminine. The cynic in me say because it makes money and money accords status. Where there is status there are men competing for it. Which is a good thing in my book.

I just happen to find the kind of investing I do to be so feminine in character. I’d never really thought of my gender when I got into startups simply because I was a founder with a problem and technology solved it for me. I was a nerd about a few very specific things and the market agreed with me.

But now as the wider world has forced me reconsider gender and how my identity gets used by others in how I do business. And I do see that I approach my investing in traditionally feminine terms. I wasn’t that kind of founder. But I am that kind of investor. 

I nurture. I love finding a weirdo working on something in a weird corner of the internet. Nothing makes me happier than telegraphing out that I am weird and getting back other weirdos. I like to listen. I like to learn. I don’t mind unpolished or outlandish or even absolutely crazy. My best deals all started in DMs

Nerds aren’t a polished people. They may lack all kinds of social graces. They will often not care about anything but the thing they are obsessing over. And I happen to find this to be a good thing.

Not everyone agrees that we should work with their lack of graces. Ruxandra Teslo discussed how weird nerds are being pushed from institutions like academia.

Weird Nerds are being driven out of academia by the so-called Failed Corporatist phenotype”

Ruxandra Teslo

I am just absolutely here for the weird nerds. They are my tribe and I see it as part of my path to help bring more of them up behind me. To nurture is a feminine virtue. I am happy to bring it to my founders. They should all feel safe coming to me because they know that I am one of them and my goal is to see them thrive.

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Startups

Day 1254 and Zipppp

I hadn’t expected to have a busy day. I’m really not enjoying having Covid. It’s an inconvenience and it sucks.

But suddenly I was getting all good news from all sides. A startup with a round. Another founder preparing to go out for an enviable raise with exceptional traction. An SPV for a round everyone wants in on. A colleague who had been thinking of taking action on a thesis is going to run an experiment. It’s just all very much my investments and my ecosystem thriving.

I felt like I was in William Gibson’s Jackpot. Incredible things are happening across so many industries and the world is an absolutely chaotic mess. It’s nothing but wars, gerontocracy and resource constraints out there. But here we are working.

Chaos pulls acceleration out of us because we must solve the problems in front of us. War and geopolitical turmoil and climate change require us to shoulder more.

We have real engineering challenges in compute, nuclear, decentralized systems, artificial intelligence and open source to solve to get to meaningful breakthroughs.

The problems are not easy. But our tools are getting better and the compounding effect of this renaissance in intelligence is that we might be able to build for bigger things.

Doomerism wants to focus on how bad things are. And I am the last person to disabuse you of a realistic model of what we are up against. I live off grid in Montana, I own crypto and I like my freedoms.

Humans are resourceful. Given ingenuity and incentive incredible talent has the will to say that I will take on this piece of the future for all of us.

It’s such a privilege to be woven into the ecosystem that is getting us through the Jackpot. And dare I say maybe the application of our ingenuity gets a better result and we can improve on Gibson.

The fictional “jackpot” described in the novels is an “androgenic, systemic, multiplex” cluster of environmental, medical and economic crises that begins to emerge in the present day and eventually reduces world population by 80 percent over the second half of the 21st century

The Jackpot Trilogy.

Maybe we can improve on these numbers. We’ve got the doomer version in our imaginations so now we can find a solution. Life, as Jeff Goldblum reminds us in Jurassic Park, finds a way.

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Startups Travel

1241 and Catching My Breath

Next week I’ll be flying to Austin for what’s become an annual crypto pilgrimage to Consensus. I am excited as it’s like summer camp.

I’ll be participating in a few private sessions but I’ll be a speaker in public town hall forums as well. If you will be in Texas for the event (or are simply in the city) drop me a note on Twitter and perhaps we can overlap.

Given the intensity of the travel I have ahead of me I’m trying to take it easy today and tomorrow. I’ve been doing laundry and organizing myself.

I am not a hot weather person so I worry about events in hot climates in the summer. Heck, I worry about hot climates even in mild seasons. Last year I found myself struggling with Frankfurt in May so summer in Texas isn’t exactly my easy season.

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Internet Culture Startups

Day 1239 and @ Consensus 2024 Next Week

I’ll be in Austin Texas next week for Consensus 2024. I’ve really enjoyed my last couple of years attending. The entire crypto industry gathers for it giving it a summer camp feel. Or as Coindesk says “10 years of decentralizing the future” which undersells their role in reporting the industry.

The conference coincided with the annual Coincenter dinner which is an industry wide non profit effort to work towards policy goals for decentralized computing like Bitcoin & Ethereum and the wider cryptocurrency.

Our mission is to defend the rights of individuals to build and use free and open cryptocurrency networks: the right to write and publish code – to read and to run it. The right to assemble into peer-to-peer networks. And the right to do all this privately.

In that vein, I’ll be discussing the intersection of artificial intelligence as the #FreedomToCompute at Consensus as this is THE issue for everyone who uses compute as a tool to solve problems.

It’s an opportunity to discuss the big public goals around the future of machine money and machine intelligence.

I’d argue this includes the entire software industry and by default anyone who is reading this post. Our most important rights will be decided by how we handle policy on these issues. Math is leverage.

One of the town halls I’ll be participating in at Consensus (a format I love to dig deep into topics) is about how artificial intelligence can be a tool for our efforts to decentralize and not end up as a master of big government or big tech.

Crypto has the basic problems facing artificial intelligence. Both spaces rely on open, available and trustless compute. Both are under intense scrutiny and face significant regulatory capture risks.

It’s never been a better time to get involved in these topics. We need open protocols and interoperability standards far more than we need fretting about safetyism and hysterics about science fiction.

Doom solves no problems but software does. We need safe harbors and policy sandboxes so we can continue to nurture algorithmic innovation for us all.

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Emotional Work Startups

Day 1193 And Peak Performance

I was really struggling yesterday so I didn’t expect to jump right onto a flow state today. I went into town to eat a hamburger.

“You may not like it but eating a burger in the back of a casino in a strip mall in Montana while reading an economics lecture by Deidre McCloskey is actually female peak performance”

Maybe it was the positive effect of a bunch of fat and protein but I was in the zone afterwards. I was able to pull together a bunch of disparate connections on a specialty niche where I’ve had some very promising investments.

I, for a brief shining moment, realized I was almost certainly one of the most expert and well connected people on the planet for something.

So much of not getting eaten by change is simply accepting that you feel absolutely bonkers an enormous amount of time. Learning to live with it isn’t as easy as it looks

If you are lucky and smart and open minded a straight line can appear through what was other completely disparate things. It’s funny that we call putting a line through things regression right? Simplifying things is funny like that.

Learning to act when you see a through line is almost all of the battle. “Noticing things” is only useful insofar as it something you take action on.

I felt as if I had no clear path at all yesterday on anything and then today I did. I didn’t see some kind of perfect Delphic vision of the future. I just realized that work I’d set in motion three or four years ago has yielded results and if I was able to keep going with other people who saw it too then I had done what I could.

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Finance

Day 1180 and Renting Picks and Shovels by The Hour

The board needs to see that we are doing “something” and so management consultants have done a lot of paddling aggressively. Everyone is making money of artificial intelligence right? Well, wrong.

My belief is that this is a result of not having adequate developer tools at the enterprise level so no processes are repeatable or simple yet. Not for lack of trying in a frenzy of weird media panics around whether chat bots are gods or just malign spirits. Which like lol.

This isn’t something that gets solved overnight. Value accrues in strange ways to very particular forms of automation. Whether that gets bought up in bidding wars over core technologies over time or in simple breakout solutions isn’t actually as predictable as you’d imagine it. It’s very much about people who build things that other people want in reasonably reliable ways.

But right now a lot of software is being built in silly and not terribly repeatable ways. It reminds me a little bit of having been at a specialty retailer trying to figure out ecommerce and making a bunch of mistakes. Eventually the market solves it and then it demands a return on investment.

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Startups

Day 1163 and Women in Tech

A lot of emotional energy has been directed at the “problem” of “women in technology” in the last decade or two. Stupid campaigns get run with degrees of condescension in which it’s insinuated the only way women could see the value in crypto is if we make a perfume. It’s the rankest form of sexism and extremely effective. And I’ve proudly worked in cosmetics. Chemistry is cool.

So today on International Women’s Day I’d like to remind myself that I’ve l been “in tech” since the moment I fell in love with a personal computer as a young teen. I’m on that edge of elder millennial that did things in the real world as children but had access to the virtual early.

Plenty of men mistakenly assume that because I worked in fashion, beauty and ecommerce. I was early before the ease of hosted Shopify accounts or even Heroku instances for an app. It was a lot more roll your own.

And yet some think my experience doesn’t count. Despite it being a clearly sign of capital markets having underpricing occasionally. Ifs a good thing. You go where market rewards you and you learn to learn skills along the way.

I think so much less about my gender now. Almost resent ever having been talked into it. You do it right then you, like an anyone else in the market, can benefit when someone misallocates.

If you are lucky enough to steward your own capital, then get to be part of the investor bases to build the next generation. I do that now. I am still a woman.

I’m proud to use the resources I have to invest in what I believe in based on my experiences and the thesis I invest under. Not as some smoothed over marketing narrative with a gender hook. No I price like an actor you can do business with. I am willing to show my revealed preference.

I learned in previous eras so I may serve the generation that is coming up. And I’m happy to invest in the ares I believe in most. I am happy as a woman to invest in men as I am in women.

The focus I see in founders I have invested in across energy, artificial intelligence and crypto are ones I believe in. I believe in them as people. I believe in them as founders. I believe in them as men.

I am lucky to be seen as an individual with capital and insights that can help them carry a better future forward. I hope all founders are seen as individuals.

Technology innovation has been the driver of improved human life. Material prosperity is good for women. It’s good for men. So I’ll celebrate doing stuff for the boys on international women’s day.

Alex Miller visiting with me at one of our favorite portfolio company Valar Atomics. I believe in Isiah and his team.