You can frequently read articles referencing VC "dry powder" and inferring that these large dollar amounts are "burning a hole" in someone's pocket & will imminently find their way to the market. I totally understand the assumption, but things don't really work this way. [cont]
First and foremost, undrawn VC dollars are not on the IRR clock. There is no urgency to draw them down. The money isn't actually at the VC firm, they are still sitting in the coffers at the LPs. No VC firm I have ever been exposed to feels "pressure" to "get dollars to work."
Mar 14, 2023 • 6 tweets • 2 min read
Some (below) are arguing US capitalism would be better off if SVB had completely failed (also wiping out depositors). History suggests that out gov't treated big banks (2008) & big airlines (2020) FAR BETTER than SVB - in both cases fully protecting EQUITY shareholders. (cont)
In 2008, during the GFC, our gov't bailed out most of the major money center banks. Equity shareholders & bondholders kept whole. GS received help AFTER they received a preferred investment from Warren Buffet. Here is the real kicker (cont). investopedia.com/insights/too-b…
Jan 17, 2023 • 9 tweets • 3 min read
As people come to terms with the weight of our new environment, they are slowly beginning to realize how radically things have changed. One area in particular that has changed - the required level of "corporate performance" needed to simply survive (let alone thrive). 🧵
2/ Building startups WAS a historically difficult endeavor (see chart). The past 5 years things have been "much, much easier." Cash was easy to come by (round frequency unprecedented), & no one was held to any profit goals, yet many companies still received high valuations.
Dec 13, 2022 • 4 tweets • 2 min read
Many people are sharing great @Coach_Leach videos of his funny quips, but there are three things about him that in my mind stand above his unquestionably great humor. First he touched many lives 1-1. He took the time. Great stories like this abound:
Second, his coaching tree is immense. Many that learn an art/skill hide their secrets deep. But none of us learn if there are no teachers. Mike's willingness to give back to the sport he loved is nearly unprecedented. A great sign of a life well lived. hailstate.com/news/2022/10/1…
Dec 4, 2022 • 4 tweets • 2 min read
Enjoyed e106 of @theallinpod. On FTX, I think they nailed a few important things: 1) Contradiction between smartest man in the room (pre) & "aw-shucks I don't know much" (post) 2) Sophistication of the corporate org (in size, scope, etc) also inconsistent with "aw-shucks" (cont)
3) Agree that SBF has built confidence in talking his way out of things. That said, doing voluntary depositions is a really bad idea. 4) One thing I don't think enough people mention - he intentionally created/discouraged proper governance. He insisted on no board, etc. (cont)
Jun 15, 2022 • 12 tweets • 3 min read
Having survived two previous market resets (2001, 2009), people frequently ask me how this 2022 market reset is different and how it is the same. The obvious similarity is that valuation multiples have collapsed. We went from a "glass very full" mindset to one with many concerns.
Alternatively, the window of ultra-low interest rates that fueled the rise (now rising) was unprecedented in business history. This led to ample speculation. It also created valuations we are quite unlikely to revisit. People will have a hard time letting go of those prices.
Jun 11, 2022 • 5 tweets • 2 min read
Harrowing and detailed story about the state of San Francisco from @NellieBowles. Everyone with a stake in SF should definitely read it. Recently I was at an event where a gentleman name Khalil Rafati was speaking. Someone asked him how he would attack homeless problem... (cont).
The reason that Khalil was asked this question is that his own story is one of being both homeless and an addict for many years in LA. He eventually made it out and has become successful as a entrepreneur & a speaker/activist. nytimes.com/2016/10/23/fas…
Apr 4, 2022 • 6 tweets • 2 min read
Thoughts on how Twitter can use "more speech" instead of "less speech" (de-ranking /deletion). The key is to use the "wisdom of crowds" as an editorial function. This form of "distributed authority" would be much more scalable than trying to ascertain "truth" (impossibile).
Step 1 - create a new class of users that are "reputable" editorial departments at the world's top newspapers and periodicals. To qualify, they have to publicly disclose their editorial process/philosophy. This new "user type" will have a unique badge to signify their authority.
Jan 13, 2022 • 6 tweets • 2 min read
The big winner of the 2021 Xmas was @Shopify. Why? because millions & millions of customers were introduced to their amazing "Shop Pay" product offering. Basically it's a singular eWallet across all Shopify stores storing addresses, CC#s, etc. This enables 1-click for all. (more)
The idea for a universal eWallet has been around almost as long as the commercial Internet. In the late 1990's, Microsoft introduced Passport with this exact problem in mind. Over 2 decades we have watched the best & brightest at every large Internet company attempt to solve it.
Oct 13, 2021 • 12 tweets • 3 min read
While many in Washington seem quite determined to "regulate" social media platforms, the "how" part of the execution is proving to be quite difficult. Both this WP piece, & another from Techdirt highlight the many challenges (cont). techdirt.com/articles/20211…washingtonpost.com/technology/202…
For me, the last thing we want is to hold the platform accountable for determining what is "misinformation." Why? 1) "Truth" is very hard to discern, especially on the issues that are most discussed. This is WHY they are being discussed. No one cares if I post 2+5=6. (cont)
Aug 16, 2021 • 4 tweets • 1 min read
What if there were a outrageously cheap generic drug that was super impactful against Covid? Wouldn't that be an awesome? Really great? I have no idea if Ivermectin works against Covid. But I really hope it does (cont). wsj.com/articles/fda-i…
If Ivermectin IS effective isn't that like 1000X better than if it isn't? It costs like $0.01, and Remdesivir is $3K. So here is my question. Shouldn't the government, the media, & all of us citizens "hope" that the news is true? Let's go optimistically find out... (cont)
Apr 14, 2021 • 5 tweets • 2 min read
Congrats to @brian_armstrong & @coinbase on historic Direct Listing on @Nasdaq. As Mike Moritz noted, the choice of a direct listing or a traditional IPO has become a test of two attributes: courage and intelligence. Applaud Brian's courage in leading us to a modern approach.
Using their archaic non-market based pencils, bankers would have recommend the reference price for a traditional IPO. This $250 price is off 50%/$34B from actual market price. Why we continue to allow a non-market approach with intentional limits on participants is baffling.
Apr 13, 2021 • 5 tweets • 5 min read
Working w/ @kmlake has been one of the most rewarding experiences of my career. As such, when we first discussed the idea of a new CEO, I had mixed feelings. That said, as I have grown to know @ElizSpaulding, I am remarkably optimistic/excited about what lies ahead. [more]
@ElizSpaulding is a powerhouse leader. One of the smartest strategic thinkers & most ambitious leaders I have ever met. And she intersects with @stitchfix at an opportune time. I have never worked with a company where at year 10, I see WAY MORE opportunity ever before.
Jan 31, 2021 • 4 tweets • 2 min read
Many say $GME/RH situation is a "problem in the plumbing," implicating the structural integrity/complexity of our financial systems. If the SEC/government wants to "fix the plumbing" the number one thing they should do is ban Payment for Order Flow. [more] en.wikipedia.org/wiki/Payment_f…
PFOF is a practice that "smells bad" the moment you hear about it. Only through contorted mental gymnastics can one come up with "pro" arguments, but never in a clear enough way that you could pass it along yourself. UK outlawed it in 2012. Illegal in Canada. Why...? [more]
Jan 16, 2021 • 5 tweets • 3 min read
In 2009, I wrote "However, if a disruptive competitor can offer a product or service similar to yours for 'free,' and if they can make enough money to keep the lights on, then you likely have a problem." This is why Signal vs Facebook is so interesting. abovethecrowd.com/2009/07/15/bil…
Signal has two things most non-profit efforts lack. First, in @moxie, a talented, technical-capable, ambitious, & mission-driven leader. Second, in @brianacton, @jankoum, & likely @jack as well as @elonmusk, you have an endless supply of funding. That's a powerful combination.
Dec 22, 2020 • 5 tweets • 2 min read
A wonderful 2020 Xmas present to the founders, employees, & investors at VC-backed startups. SEC just APPROVED the ability to add primary capital (fundraise) to a direct listing. It's very exciting to see the SEC enable innovation in this way. (more) sec.gov/rules/other/20…
This is HUGE & will hopefully end 40 years of mispriced IPOs through an old antiquated process that failed to match supply/demand & wasn't open to all investors. 2018:$6B in underpricing. 2019 $7B. 2020, new record => $34B in one day gains for i-bank customers with allocation.
Sep 30, 2020 • 4 tweets • 3 min read
Congrats to @moskov & team @asana as well as Alex Karp & team @PalantirTech on their respective Direct Listings today. Also thanks to team at Morgan Stanley (big supporter of DLs), @stacey_cunning & team @NYSE who make this work so well, & Citadel (DMM).
Fixing the IPO problem was first championed by icons like Pierre Omidyar (Ebay), & Larry/Sergey (Google) who all felt IPOs should be "open to all." Then Barry McCarthy/@eldsjal (@Spotify) broke open the DL door (w/ tons of hard work), & @stewart (@SlackHQ) widened that doorway.
Sep 23, 2020 • 6 tweets • 2 min read
Been meaning to make this recommendation for some time, & as with "Range," I am several months late. I really, really loved "How Innovation Works" from @mattwridley It is a very elegant follow up to "The Rational Optimist" - read both if you can. (more) amazon.com/How-Innovation…
One of the most amazing things about both books is Matt's ability to connect the dots across very long time horizons. Very few can. He also has the ability to combine thinking from many fields - most notably science, technology, psychology, & a heavy dose of microeconomics.
Sep 16, 2020 • 8 tweets • 3 min read
Some encouragement to comment on $SNOW IPO. While it would be easy to do normal post wrt mispricing, it is important to understand what is different here from other IPOs. The most important data is broad (40 years of underpricing, 2020 worst year yet), vs. 1 company. [cont]
First, its important to acknowledge that @SnowflakeDB is an amazing outlier, & proof of the innovation that develops from this great place we call Silicon Valley. Hats off to the employees, Frank Slootman, @laserlikemike, @altcap, @carl_eschenbach, & all those involved. [cont]
Aug 14, 2020 • 4 tweets • 2 min read
For those of you on the AB5 beat, important to know that the #1 driver behind this legislation is organized labor. "However, the reality is that AB5 was drafted by a union organizer, and this bill was designed as a way to grow union membership." latimes.com/socal/daily-pi…
Today no drivers are unionized, but the SEIU and others want them to be. Vox has a deeper dive here, outlining decades of history behind this push. vox.com/2019/9/11/2085… Important to know that its not actually coming from a large % of the actual drivers themselves.
Aug 10, 2020 • 12 tweets • 2 min read
Are those that are evaluating AB5 aware of all the carve outs? Is this an attack on ride-sharing & food delivery specifically? The list is so long it's comical. Tweet storm needed (due to length of list). nfib.com/content/legal-… [next tweet]
We will start with "Occupational Exemptions"
AB-5 exempts the following industries:
Doctors, surgeons, dentists, podiatrists, psychologists, or veterinarians performing professional or medical services provided to or by a health care entity;
Lawyers, insurance brokers...
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