This is probably one of the worst weeks since 2008 for venture capital, startups and crypto. Anyone can be a hero when things go well. This is the time to show your founder's chops and leadership that you team & community need when things are falling apart. Hang in there everyone!
Here's 5 great reads for this week:
📺 Edith on Bloomberg - I had a very frank conversation with Bloomberg's Caroline Hyde on the tech stock sell off and crypto downturn.There is still much more to be built in the Web3 infrastructure space in terms of #storage, backup and recovery and #communication.We are long term believers. That’s why Race Capital focus on investing early all things infrastructure Watch on Blooomberg
💰 Crypto Armageddon - The Crypto market lost $400 billion in market cap this past week when a massive sell-off caused TerraUSD to decouple from the dollar, dropping as low as $0.18 with people put their life savings into Anchor which was advertised with 20% interest rates on the dollar. Terra Luna token price went spiraling and dropped to $0 from over $100 in less than 45 days. Many traders are devastated and talked about suicide attempts. Do Kwon (founder of Terra) issued a public apology while Vitalik supports coordinated refund of 99.6% of the low cap anchor wallet users. Did Terra just set off the Crypto Cash 2022 similar to the Dot.com crash?
⭕ Cycles are Neither Good nor Bad - Peak euphoria provides the opportunity for the world to dream about the future. Rock-bottom communal despair and disillusionment forces practicality and clarity. It shouldn’t be a surprise that crypto would be a more extreme example as it begins to redefine multiple large, global markets: money, financial services, and the internet itself. Good reminder by Paradigm.
📉 Tech Stocks are Falling. VCs are Hurting. Then Startup Valuation. - SoftBank racked up more than a $26 billion net loss. Of Andreessen’s 17 IPOs last year, all but Airbnb are trading below their offer price. Median public company software valuations have dropped from 12x forward revenue to 5x or less since highs in October 2021. Valuations of private startups will be at risk of sharp declines. Read a16z and Craft Ventures on the topic of how to deal with the downturn.
⭐ Nailing Your North Star Metric(s) - Nailing the top-line metrics that all company priorities are aligned around — is so crucial. Whatever companies choose as their guiding metric, all energy and brainpower will flow in that direction. There are six categories of North Star Metrics - revenue, customer growth, consumption growth, engagement growth, growth efficiency and user experience. https://future.a16z.com/north-star-metrics/
This week a total of 29 startups raised $1.32B in funding, 2 M&As:
$705M goes to 12 Enterprise startups
$41.5M goes to 4 FinTech startups
$250M goes to 1 HR Tech startup
$62.5M goes to 1 Retail Tech startup
$9M goes to 2 Marketplace startups
$11.5M goes to 2 Gaming startups
$45M goes to 1 Construction startup
$68M goes to 1 AgTech startup
$31M goes to 1 Renewable Energy startup
$48.3M goes to 3 Healthcare startups
$47M goes to 1 BioTech startup
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