Glenn's Weekly Digest - 12/8/23
Your Weekly Guide to the Startup Universe: Navigating the World of VC & Startups for Students
I'm thrilled to introduce you to the inaugural edition of Glenn’s Weekly Digest, your go-to source for a weekly exploration of the exciting and ever-evolving world of venture capital and startups. As a firm believer in the power of knowledge-sharing, I've embarked on this journey to provide students, especially those pursuing MBAs and undergrad degrees, with a comprehensive and digestible overview of the dynamic landscape of entrepreneurship.
Why am I doing this? Because I understand the challenges students face when trying to stay abreast of the latest trends, stories, and opportunities in the startup ecosystem. Whether you're a budding entrepreneur, a future investor, or simply someone fascinated by the innovation and disruption happening around us, this newsletter is crafted with you in mind. With that onto the content…
Story of the Week
Big Week for Elon Musk
Whether he was telling Bob Iger to “go f*** himself” or revealing the new Cyber truck for Tesla, Elon Musk had quite a week.
Elon Musk to Advertisers Who Left X: “Go F*** Yourself” [Hollywood Reporter]
Interviewed by Andrew Ross Sorkin, or “Jonathan” as he’s commonly known, Musk said “What this advertising boycott is going to do is, it is going to kill the company. And the whole world will know that those advertisers killed the company.”
Elon Musk hypes Tesla Cybertruck at deliveries event in Austin [CNBC]
Tesla CEO Elon Musk has said that the company hopes to start delivering the Cybertruck, its battery-powered electric pickup, in the “middle of next year” during a call for investors.
Musk said the Cybertruck’s hard steel body was bulletproof, and that its windows were “rock proof.” He said it could tow over 11,000 pounds, accelerate from 0 to 60 miles per hour in 2.6 seconds and features a “super-tough” composite bed that is six feet long and four feet wide. He added that the vehicle would “change the look of the roads” and that the “future finally looks like the future.
Elon Musk announces low-cost Tesla is advanced, manufacturing is going to be revolutionary [ElecTrek]
After numerous price cuts on Tesla vehicles, Musk commented on the upcoming low cost Tesla, often referred to as $25k Tesla. He said in a recent interview, “We are working on a low-cost electric vehicle that will be made in really high volume. We are quite far advanced in that work. I review the production line plans for that every week. I think that the revolution in manufacturing that will be represented by that car will blow people’s minds.”
Tale of Two Fundraises
Big changes are coming on the venture front as Boston based VC fund OpenView will be winding down their fund, just a few months after raising a $570M vehicle [The Information]
The fund laid off most of its staff and will no longer make investments as it enters a “voluntary” suspension period. There is speculation that the departure of some partners may have triggered a clause that allows limited partners to restrict investment when certain senior leaders leave.
Canapi has a reputation for its ties within finance, and it counts nine of the top 25 largest US banks by assets as its LPs. This is particularly interesting as the raise comes as fintech valuations have fallen dramatically.
What are realistic return expectations for Limited Partners? (X - David Clark, VenCap & Meghan Reynolds, Altimeter)
Meghan & David lifted the veil on returns expectations for VC funds. According to the latest Cambridge US VC benchmarks, since 1998, the threshold for being a top quartile DPI fund has only exceeded 3x once.
David took the analysis one step further looking at DPI data on Pitchbook. They’ve tracked 1,186 funds from 2000 to 2015 and only 181 (15.3%) have DPI of 2x or better, 70 (5.9%) have DPI of 3x or better, and just 25 (2.1%) have returned more then 5x DPI. TVPI data is not substantially different - 32.7% are at 2x+, 16.3% are at 3x+ and 5.2% are at 5x+ with private company marks still to fall (across 1,274 funds). All to say, its much harder to find consistently high performing managers then most expect.
Top Reads This Week
Tech funds adopt private equity strategies in race to return cash to investors [Financial Times]
FT is reporting that dozens of tech investors - including NEA, Insights Partners, and other major funds - are establishing “continuation funds” which are secondary investment vehicles that allow them to reset the clock on some assets by selling them into a new vehicle they also control.
This strategy, alongside the renewed interest in secondaries, has created an interesting management question on how investors should manage their funds. As the VC market continues with headwinds, it’s interesting to see how different funds decide to react.
From 1% - 100%: Tallying the Impact from Okta’s Data Breach [TechWire Asia]
Multiple outlets are reporting that after Okta initially said that there was no unauthorized access to the Okta customer data, the compnay now states that all customer support system users are affected.
In an interesting tidbit, Okta blamed the intrusion on an employee who saved their credentials on their personal Google Account, which was later breached. For a company as focused on security as Okta, it seems a bit reckless that a transgression from a single employee breached their entire network.
Top 5 Deals of the Week:
Mistral AI, which makes open-source software that powers chatbots and other GenAI tools, is in the final stages of raising roughly $487M at a valuation of about $2B from Andreesen Horowitz, Nvidia, Salesforce, and others.
Together AI, a San Francisco based cloud platform for building and running generative AI, raised $102.5M in Series A funding led by Kleiner Perkins with participation from NVIDIA, Emergence Capital, Lux Capital, and others.
Pika, an idea to video platform that brings creativity to motion, raised a $35M Series A round led by Lightspeed Venture Partners.
Kognitos, a San Jose based company that allows businesses to automate processes and manage exceptions in intuitive English, raised $20M in Series A funding led by Khosla Ventures.
Second Front, a public benefit company that accelerates the delivery of mission-critical software to the government, announced a $40M Series B led by NEA.
Venture Jobs of the Week
Senior Investment Associate, M13 (San Francisco)
Investor, Mucker Capital (Chicago)
Investment Associate, Underscore VC (Boston)
Manager, Okta Ventures (San Francisco)
Associate, Equal Ventures (New York)
Investment Partner, M12 (San Francisco)
Investment Principal, Galaxy (New York)
MBA Fellow, Collide Capital (Remote)
MBA Fellow, Necessary Ventures (Remote)
Venture Capital Intern, Trust Fund (Remote)
Investment Intern, 186 Ventures (Boston)
Thank you for joining us for another edition of Glenn’s Weekly Digest! We hope you found valuable insights into the dynamic world of venture capital and startups. If you have any feedback or suggestions, feel free to reach out. Stay tuned for more exciting updates next week!
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The material presented on Glenn Borok’s website and blog are my opinions only and are provided for informational purposes and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Any analysis or discussion of investments, sectors or the market generally are based on current information, including from public sources, that I consider reliable, but I do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. My views and opinions expressed in any website content are current at the time of publication and are subject to change. Past performance is not indicative of future results.