Video Of The Week: Is Crypto the Future of Early Stage Funding?

A lot of people in the crypto sector have suggested that ICOs and tokens are the future of early stage investing and highly disruptive to my business (venture capital).

In this video (yet another from the Upfront Conference), VCs and other investors discuss why that may not be the case.



USV TEAM POSTS:

Albert Wenger — February 16, 2018
The Power of Continued Innovation: MongoDB Adds Transactions

Bethany Marz Crystal — February 16, 2018
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How To Think About Selloffs

The crypto markets had a good day yesterday but have been down a lot since peaking in early January. Bitcoin peaked at almost $20,000USD in mid December and has gone down by roughly 60% since then. Ethereum peaked at almost $1400 in mid January and has gone down by roughly 40% since then.

A chart that I like to look at, the total market cap of all crypto tokens, has made a classic head and shoulders pattern and is now retracing on the downside:

The total market cap of all crypto tokens peaked at roughly $825bn and is down roughly 50% since then.

But most of you know all of this.

The more interesting question is what, if anything, to do about it.

In times like this, I like to turn to the fundamentals to figure out where things stand and how I should behave.

So how do we do

Continue reading "How To Think About Selloffs"

Video Of The Week: The Upfront Summit Crypto Video

The annual Upfront Summit took place in LA this past week. I attended day two and enjoyed it very much.

Prior to the summit, the Upfront team interviewed a bunch of investors in the crypto sector and put together this video.

I think it captures the current investor sentiment very well.

An Addition To The AVC Comment Policy

Yesterday I went to see what the community was talking about and found this at the top of the comment threads:

I thought to myself “oh shit, the token scammers have arrived” and immediately deleted those comments and left a reply saying that I am going to update the comment policy.

So I did that this morning.

There will be no token promotions in the AVC comments, period.

I am fine with discussing the merits of various blockchain/crypto technologies and tokens, but outright promotion is not cool and I won’t allow it.

I hope this is clear and everyone understands why it is necessary.

Beyond The Bitcoin Bubble

My friend Steven Johnson has penned a long and wonderful piece exploring what lies beyond the speculative market in crypto tokens.

This essay, which will run in Sunday’s New York Times Magazine, but is online now, could not have come at a better time.

All most people know about Bitcoin, Ethereum, ICOs, and alt-coins, is that you can trade them and make (and lose) money on them.

But that is not what interests me about crypto tokens and blockchain technology and it is not what interests USV and the folks in this sector we work with.

What interests us is that “crypto” could well be the architectural breakthrough that we need to move beyond the current Internet market dominated by a few large tech companies.

And Steven, as is his gift, explains this beautifully and easily in roughly 9,000 words.

This is a piece that requires sitting down with

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Points and Figures 2018-01-11 02:29:11

My friend Nilesh posted this:

I remember walking back from a conference at the European Central Bank in late 2008 accompanied by the then Head of Risk Management for the ECB. We discussed what the long-term impact of the Global Financial Crisis that we were experiencing was likely to be. My comment was that regulation would take centre stage post-crisis, particularly since the major private financial institutions had both sought and been granted support from their regulators. My prediction proved correct as, in fact, the banking business has been beaten up and dumbed down by the regulators post-GFC. The banking community has been fined and restructured almost out of existence, forced to ‘pay the piper’ or lose its future…

As the phenomenon that is Crypto rages around us, I cannot help but reflect on that conversation. It’s only a matter of time before the gravity-defying Crypto bubble collapses back to Continue reading "Points and Figures 2018-01-11 02:29:11"

Things That Make You Go Hmmmmm

Kodak. Kodakoin.

Utilizing blockchain technology, the KODAKOne platform will create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform. With KODAKCoin, participating photographers are invited to take part in a new economy for photography, receive payment for licensing their work immediately upon sale, and for both professional and amateur photographers, sell their work confidently on a secure blockchain platform. KODAKOne platform provides continual web crawling in order to monitor and protect the IP of the images registered in the KODAKOne system. Where unlicensed usage of images is detected, the KODAKOne platform can efficiently manage the post-licensing process in order to reward photographers.

KODK Chart

KODK data by YCharts

From Kodak’s last earnings call:
In the third quarter, revenues were $379 million with operational EBITDA of $15 million. On a constant-currency basis year-over-year, our revenues were down $35 million or 9%, and operational

Continue reading "Things That Make You Go Hmmmmm"

boldstart in 2017, enterprise tech in 2018

2017 Recap

2017 was another year of growing, learning, investing and partnering with amazing founders. Once again, we are grateful to have the opportunity to work with so many amazing founders, advisors, co-investors, and other collaborators to bring the boldstart family together.

Before diving into yet another year and list of predictions for enterprise in 2018, we’d like to recap a few thoughts and moments from 2017.

  1. We were first check leads in 8 founding teams including Wallaroo Labs, MState (fka hyperfab), blockdaemon, and 5 in stealth.
  2. Thematically our new investments include 4 targeting the “Rise of the Developer,” 3 in “Intelligent Automation,” and 1 in “Decentralized Computing;” geographically 4 are in NYC, 3 in Bay Area, and 1 in LA (more on our themes)
  3. 6 portfolio companies raised Series A financings including ManifoldHypr, and 4 unannounced, 1 raised a Series B (unannounced), and Security Scorecard raised a $28mm Series C.
  4. 2 exits including yhat (sold to Alteryx — AYX NYSE) and init.ai, one an early investment in a data science platform and the other on NLP for developers.
  5. We co-founded MState (fka hyperfab, read Coindesk article) with Rob Bailey to help bring enterprise company building expertise and Fortune 500 connections to the blockchain community. Our partners include IBM and one unannounced Fortune 50.
  6. We built out our CXO advisory board and further cemented our Fortune 500 relationships to help our portfolio cos scale from “founder-market” fit to product market fit in an accelerated timeframe (meet our advisors). This resulted in tons of collaboration with large enterprises ranging from product feedback to pilots and customer relationships.

Enterprise Tech in 2018:

“The Law of Accelerating Returns” by Ray Kurzweil is truer than ever before: the rate of change in a wide variety of evolutionary systems (including but not limited to the growth of technologies) tends to increase exponentially.

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In other words, today is the slowest rate of technological change you will ever experience in your life and doing nothing is worse than doing something. Keep this in the back of your mind as you think about the biggest transformation in enterprise tech; the re-platforming of corporate America from legacy to cloud/hybrid cloud and monolithic software apps to microservices driven development. With this pace of change accelerating, everyone will have to move earlier in the food chain; corporates will need to work with earlier stage startups (we are experiencing that phenomenon in our portfolio) and VCs will have to go earlier to invest Continue reading "boldstart in 2017, enterprise tech in 2018"

What Is Going To Happen In 2018

This is a post that I am struggling to write. I really have no idea what is going to happen in 2018.

  • Will the crypto markets continue in their bull cycle? I have no clue. I was showing my daughter’s friend an app that helps people save and invest and he said to me “I don’t need that, I just buy some ETH every week.” I said “that’s a good plan until it isn’t.” I just don’t know when buying crypto will stop being a good idea. It was a great idea in 2017.
  • Will the economy extend its eight year expansion? I have no clue. The longest post WWII economic expansion was 10 years from 1991 to 2001. Can this one beat that one? Maybe. Will this one also burst over the collapse of another tech bubble? Maybe. But again, I have no idea when that might
    Continue reading "What Is Going To Happen In 2018"

Personal Reflections on 2017

As 2017 comes to a close, I think of it as the year of validation and gratitude, personally and for so many people around the world who have been marginalized and silenced in so many different ways. A year of validation for those who have lived as minorities in a world that has valued and listened to the majority voice –the status quo, the male, the white person.

 

What happened this year was a reckoning, when collectively minorities decided to voice their experiences so that they could no longer be ignored or viewed as one-offs.  Every professional woman I know has been sexually harassed.  Many to the point of giving up on their careers.  The amount of lost talent and productivity from this is staggering to think of.

 

I was lucky – I was born to persevere and grew up with parents who told me Continue reading "Personal Reflections on 2017"

What Happened In 2017

As has become my practice, I celebrate the end of a year and the start of a new one here at AVC with back to back posts focusing on what happened and then thinking about what might happen.

Today, we focus on what happened in 2017.

Crypto:

I went back and looked at my predictions for 2017 and I completely whiffed on the breakout year for crypto. I did not even mention it in my post on New Year’s Day 2017.

Maybe I got tired of predicting a breakout year for crypto as I had mentioned it in my 2015 and 2016 predictions, but whatever the cause, I completely missed the biggest story of the year in tech.

If you look at the Carlota Perez technology surge cycle chart, which is a framework I like to use when thinking about new technologies, you will see that a frenzy develops when

Continue reading "What Happened In 2017"

Video Of The Week: Token 1.0 vs Token 2.0

AVC community member William Mougayar sent me a video of a talk he recently gave in Moscow.

I really like the framework he articulates about half way through the talk regarding token 1.0 (where we are now) and token 2.0 (where we need to be before we will see real sustainable disruptive value creation with blockchain technologies.

Here is that bit:

If you’d like to watch the entire talk, you can do so here.

A Fun Way To Learn To Create Dapps In Solidity

One of the reasons I am rooting for the Ethereum community to address many of its current issues (scalability being the big one) is that there is a clear developer platform opportunity for Ethereum. The Ethereum programming language Solidity is relatively easy to learn and Ethereum was designed from the ground up as an application platform. Ethereum applications, called Dapps (for decentralized apps), are starting to launch pretty regularly.

If you want to learn how to create a Dapp in Solidity, you might try out this interactive coding game called Cryptozombies:

CryptoZombies is an interactive code school that teaches you to write smart contracts in Solidity through building your own crypto-collectables game.

Thanks to AVC community member William who showed this to me yesterday.

There is a lot of naysaying out there suggesting that public blockchains and crypto aren’t good for anything other than speculating on token prices.

That

Continue reading "A Fun Way To Learn To Create Dapps In Solidity"

Video Of The Week: The Token Summit Conversation

As I start thinking about 2017 and what happened this year in the world of startups and tech, I am going back and watching and reading things that stayed with me this year.

This talk between William and me at Token Summit captures much of what I have been thinking about the blockchain/crypto sector this year (and beyond).

It was fun to watch it again six months later. It is about 30mins long.



USV TEAM POSTS:

Albert Wenger — December 22, 2017
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