Here are the 100 best early-stage investors, according to data analysis from Tribe Capital

Hello everyone!

Welcome to this weekly roundup of stories from Insider’s Business co-Editor in Chief Matt Turner. Subscribe here to get this newsletter in your inbox every Sunday.

What we’re going over today:

seed 100 thumb 2x1
Left to right: Alfred Lin, Kaitlyn Doyle, Michael Seibel, Kirsten Green, Sheel Mohnot, and Ruchi Sanghvi.

Here’s what’s trending this morning:

The best early-stage investors

From Margaux MacColl, Melia Russell, Candy Cheng, and Michael Haley:

The venture capitalists who write the earliest checks – known as seed investors – take the biggest risks. But when they choose well, they also reap the biggest rewards. With huge profits at stake, thousands of institutions and individuals are active seed investors.

But seed investing is more an art than a science and only a few succeed regularly. Tribe Capital, a seed venture-capital firm and an investor in other funds, set out to find the top investors by analyzing data on about 1,000 of them. The result is this list of the top 100 as well as the Seed 25, a list of the top female seed investors.

Read the full story here:

Also read:

Republicans are unloading on Rep. Matt Gaetz

Matt Gaetz
Rep. Matt Gaetz.

From Warren Rojas, Adam Wren, Robin Bravender, Dave Levinthal, Camila DeChalus, Darren Samuelsohn, and Tom LoBianco:

Matt Gaetz was looking for a scandal.

It was March 25, and the Florida congressman responded to a tweet from the billionaire entrepreneur Elon Musk, who had asked no one in particular, “If there’s ever a scandal about me, *please* call it Elongate.”

“I want Gaetzgate,” the Florida Republican tweeted.

On Tuesday, Gaetz got exactly that as reports surfaced that the 38-year-old congressman was a subject of a sex-trafficking investigation.

Not long after the news broke, “Gaetzgate” was trending on Twitter. And former Trump White House and GOP officials who loathe the loquacious Gaetz were gloating.

Read the full story:

Also read:

Nike’s tech transformation

Nike Beijing
Customers lined up outside the Nike flagship store on the opening day at Wangfujing Street on January 20, 2021 in Beijing, China.

From Shoshy Ciment:

In January 2020, just days before the coronavirus pandemic would engulf the world, John Donahoe took the helm at Nike.

The former eBay and ServiceNow CEO had a bold mission to transform Nike from a marketing-first company into a technology juggernaut. Instead of selling shoes primarily in stores, Nike would up its innovation in a push to sell more products online and on smartphones.

Early signs point to success: In its latest quarterly earnings report, Nike said it grew online sales by 59%.

But some worry that transforming Nike from a marketing company into a technology brand is too ambitious.

Read the full story here:

Also read:

A new understanding of Alzheimer’s disease

alzheimers research 2x1

From Allison DeAngelis:

In January, at the World Economic Forum’s annual gathering of some of the globe’s richest and most powerful leaders, Andrea Pfeifer was promoting her biotech company and a new global initiative to treat Alzheimer’s.

During a Q&A session, George Vradenburg, the entertainment lawyer turned philanthropist, asked her a question about her work: “Is Alzheimer’s not one disease?”

“It’s definitely not one disease,” she replied.

The once controversial idea that Alzheimer’s is in fact a highly varied disease, if not multiple distinct but related conditions, is gaining traction and could unlock new approaches to treating it.

Read the full story here:

Also read:

ICYMI: Big Law burnout

From Sam Stokes and Jack Newsham:

From M&A deals to IPOs to bankruptcy proceedings, Big Law associates are busier than ever.

For some, their jobs advising financial firms and corporations just got a lot more lucrative. At least 25 Big Law firms are awarding special bonuses up to $64,000 to high-performing associates in 2021.

Recruiters and other industry experts say the payouts are an effort to keep burned-out associates from leaving after a grueling year of high-volume remote work. And some associates Insider spoke to said that, while the money is nice, what they’d really like is to see the workload lighten.

Read the full story:

Also read:

Lastly, don’t forget to check out Morning Brew – the A.M. newsletter that makes reading the news actually enjoyable.

Here are some headlines you might have missed last week.

– Matt

Read the original article on Business Insider

A startup fever is sweeping Silicon Valley

Hello, and welcome to this week’s edition of the Insider Tech newsletter, where we break down the biggest news in tech, including:

I’m your host Alexei Oreskovic. Hit me up with your thoughts, tips, rants and raves at

Did someone forward this newsletter to you? Sign up here.

Soundtrack: This week’s newsletter has been specially designed to be consumed while listening to Stan Getz & Charlie Byrd’s “Samba Triste”

This week: Startup fever in Silicon Valley

Spring is here, arms are getting jabbed across the country, and in Silicon Valley the mood is feverish.

Every day brings news of big-ticket startup funding deals, eye-popping valuations, and fresh stock listings. It’s not as if Silicon Valley was struggling to attract capital before. But with the tech business having proven surprisingly impervious to the pandemic, an emboldened industry now seems convinced that the re-opening will bring only more good times.

silicon valley VC speed funding 4x3

A bad case of FOMO has gripped investors, super-charging the pace and value of dealmaking.

  • As Becky Peterson reports: “When a startup raises a smaller round at a lower valuation, whether it’s out of necessity or just a strategic choice, fast moving investors can interpret that decision as a sign of weakness.”
  • MindPortal, a startup working on a brain computing interface, received reach-outs from more than 100 VCs and angel investors during the week of Y Combinator’s Demo Day; six wanted to wire cash after 30 minute conversations.
  • Due diligence – the process by which VCs vet the companies they’re considering investing in –is not always very diligent in this overheated of environment.

And SPACs are blooming. The proliferation of blank-check companies have opened up a new pathway for startups to reach the public markets.

And because the funding frenzy means such a big range in the quality of startups and investors, Insider has embarked on a big project to separate the wheat from the chaff. The result is the Seed 100, in which Insider’s VC/startups team worked with Tribe Capital to analyze data on 1,000 seed-stage investors to identify the 100 VCs who have mastered the art of early stage investing.

Read the full story here:

The Seed 100: The best early-stage investors

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From the curious file…

The Putin bundle: Russian smartphone users will now have the privilege of using software produced by their comrades. A new law stipulates that phones, TVs and laptops sold in the country must come pre-installed with a selection of Russian-made apps alongside foreign apps. Some locals have apparently taken to calling it the “law against Apple.”

Elon’s Space Junk: Stargazers in Seattle and Portland recently were entertained with what seemed like a surprise meteor shower. It turns out the bright lights streaking across the sky were debris falling off of a SpaceX Falcon 9 rocket that launched earlier in March.

Hold the confetti: Stock trading app Robinhood has been criticized for the animated on-screen confetti explosions that occur after users make a trade, with critics saying it turns investing into a gambling-like game. Robinhood strenuously disagrees, but says it will indulge the critics by replacing the confetti with “new, dynamic visual experiences that cheer on customers through the milestones in their financial journeys.

Snapshot: Buckle up for Suborbital flight

Virgin Galactic unveiled a shiny new spacecraft on Tuesday. The VSS Imagine is the latest version of a spacecraft that will eventually carry tourists into suborbital space. Virgin Galactic said it will begin ground testing and glide flights this summer.

Virgin Galactic VSS Imagine
Virgin Galactic VSS Imagine

Hundreds of people have already paid Virgin Galactic between $200,000 and $250,000 for tickets to suborbital space, though the company recently pushed back the expected departure date for these trips to “early 2022.” Virgin’s first spacecraft, the VSS Enterprise, was destroyed in a fatal crash in 2014.

Recommended Readings:

Developers say that the firestorm over controversial developer Richard Stallman is a moment of reckoning for the open source industry

Amazon’s new cloud CEO is in the perfect position to strengthen AWS’s friendship with Salesforce, his former employer

Deliveroo goes ‘from hero to zero’ after tanking 30% at its London IPO as investors get tough on gig-worker rights

VC Keith Rabois has a new side hustle in Miami as a Barry’s Bootcamp instructor

After gaining millions of followers for videos poking fun at Silicon Valley culture, this woman quit her tech job to be a comedian full-time

Not necessarily in tech:

Famed lawyer Tom Girardi and ‘Housewives’ star Erika Jayne flaunted their life of excess. Now, with accusations of a Ponzi scheme, they may lose it all.

Thanks for reading, and if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.

– Alexei

Read the original article on Business Insider

How Tribe Capital selected and ranked Insider’s Seed 100 and Seed 25 lists of the best seed VCs

Jake Ellowitz
Jake Ellowitz, a partner at Tribe Capital.

  • Tribe Capital developed a model to discover the best seed-stage VCs.
  • It was designed to notice investors with consistent extraordinary skill.
  • Tribe used it internally to find partners, and it became the basis of Insider’s lists of top VCs.
  • Read the Seed 100 list of the best seed VCs and the Seed 25 list of the best female seed VCs.

There are tens of thousands of institutions and people who are early-stage investors in the US.

Despite such vastness, seed investors are a tight-knit, interwoven community. They work together to find and support young startups, work that we see as a highly skilled vocation: From our research, we know that the best VCs perform a lot better than the average ones, and they have repeat success.

Our team at Tribe Capital is a group of technologists and engineers who harness data science every day to identify the most significant companies of our generation. We look for what we call the “N of 1” opportunities, where a company is capturing a new atomic-size unit of value – such as oil, idle cars, equity, or the friend graph – that, when captured, has the potential to catalyze an immense wave of innovation. These opportunities are easy to spot in retrospect, but very difficult to predict.

So, we wondered, out of all the investing partners available, which ones consistently spot those “N of 1” opportunities? Those are the relationships we should develop and how we should spend our time. But how do we find them?

These questions drove us to develop a model for ranking the performance of the seed community. This methodology is how we determined the Seed 100 and Seed 25 lists.

We sought out VCs whose seed investments:

  • have performed well as indicated by initial public offerings or exits meaningfully above liquidation preference, meaning returns were achieved because the companies became more valuable, not because they raised a lot of money.
  • showed early signs of future success because their portfolios have cured well at the early stage, but have not yet exited.
  • tended to reach growth stage as indicated by Series B+ follow-up rounds.
  • had well-rounded success, showing well across all attributes we measured even if they didn’t have a single strength.

Our search began with a review of Crunchbase and PitchBook, two representative databases that track venture deals. The model analyzed each person’s performance in about 25 areas. The total population of people who met our criteria was about 1,000. (We excluded all members of the Tribe Capital investing team.)

Of the 1,000, about 450 had enough indicators across many areas of our criteria to produce a strong level of confidence in their estimated investing proficiency.

Then, once we narrowed the list, we did our own due diligence.

Everyone has different strengths, and our model is designed to notice when an investor possesses extraordinary skill and shows a high likelihood of continuing to be outstanding.

That said, many great investors aren’t on either list.

Because our model looks at funding and exits, it typically takes a few years to gauge the quality of seed investments. So we eliminated from contention any investor who is no longer active and those who had fewer than five investments between 2007 and 2020.

Women and diversity

Venture capital has historically been entirely driven by who you know, not what you know. That’s one of the problems our models are designed to change. (Read: How Tribe Capital’s Arjun Sethi uses data, not feelings, to choose the startups his fund backs.)

For that reason, the venture industry has been, for decades, dominated by men and has largely overlooked people of color. As a result, historical data on the performance of investors by gender or racial diversity has been difficult to measure.

By including historical analysis in our model, our list reflects the still somewhat lacking diversity in the industry today, which we expect may evolve over time. In the set of 450 people who met our criteria, the ratio of male to female was about 12-to-1. Racial data on investors was not available.

There are many excellent seed investors, particularly from a growing rank of newly funded investors from diverse backgrounds, who simply didn’t have a long enough track record as of yet on enough deals, with data that could be validated, to be in contention. In future years, these successes could be expressed in our model, and we expect our list to grow more diverse over time.

All of this motivated us to share our work so that entrepreneurs at the early stage have more resources and guidance when choosing whom to partner with.

We’re excited to see how the entire industry engages with the Seed 100 and Seed 25, as well as for the partnerships that are created by what we have to share with you.

Jake Ellowitz is a partner at Tribe Capital and the data scientist who pioneered Tribe’s startup- and venture-capital-industry mathematical models.

Read the original article on Business Insider

Two UK-based venture capitalists weigh in on whether the investing industry has improved its diversity in Europe

PAULA GROVES   bycompany

Following the deaths of George Floyd and Breonna Taylor-and the resurgence of the Black Lives Matter movement, which inspired racial justice protests around the world-businesses across corporate America and Europe spoke out against racism and discrimination last spring.

Venture capital funds were no different. Silicon Valley behemoths, from Sequoia and Bessemer to Kleiner Perkins, tweeted about doing better on diversity. But as the anniversary of Floyd’s murder approaches, has anything really changed in the investing world?

“I think we have, absolutely, [seen change],” said Paula Groves, a general partner at the venture capital firm Impact X, which invests in underrepresented entrepreneurs across Europe. “You see a number of companies and corporations…start to allocate funding to Black entrepreneurs. … All of these corporate giants have been spurred by the momentum of the Black Lives Matter movement, and I applaud their efforts.”

Groves-who began her career on Wall Street in the 1980s, then worked in private equity before spinning out her own VC fund focused on women- and minority-led tech companies-said that regardless of what investors may say about diversity, what really matters is where they put their money.

“Getting capital in the hands of [diverse] entrepreneurs is going to be so important from a wealth creation standpoint,” she said.

Supporting Black entrepreneurs has broader implications beyond just their individual companies, Groves said. Studies show that Black entrepreneurs typically support other Black businesses, such as restaurants. They’re also more likely to employ Black people in their own companies. It’s called the virtuous circle, and leads to wealth creation, which then leads to more entrepreneurship.

Funding Black founders also makes good business sense for investors.

“Mainstream entrepreneurs are getting most of the capital, as we know, and certain deals are oversaturated,” said Groves. “When deals become oversaturated, they become overvalued. … If we can find these hidden gems, we can take advantage of a valuation arbitrage, if you will, providing capital at a lower valuation, working with businesses to grow, and creating strategic value.”

Boosting diversity from within

Andy Davis, the founder and general partner of the 10×10 fund in London, said he is optimistic about progress being made inside venture capital firms themselves.

“On the VC side of things, we’ve seen a lot more Black VCs not only get interviews but get hired,” he said. “We’re seeing more people get to the final stages of interviews and get offered funds-so the VC industry is moving, in my opinion, though it’s moving slowly.”

Davis has worked in the past with the London-based firm Atomico, which he said is making a concerted push to hire more Black investors. That said, many of the roles being offered to Black candidates are entry- or mid-level. That’s below the seniority level at which real investment decisions are made.

“There is an issue at the check-writing level,” Davis said. “We do need to progress the careers of those who are at mid-level.”

He said there are only a few Black venture capital partners in the UK, and those that exist are partners at their own funds. In other words, there are no Black partners at non-Black firms.

Davis, who began his career as a startup founder before moving into angel investing, created a network of Black British founders in 2015. A few years later, he started a similar community for Black venture capitalists and angel investors. Those efforts have culminated in the 10×10 venture capital fund, an early stage fund to invest in Black founders, announced last July and launching next quarter. It will begin with about £3 million ($4.2 million).

Europe vs. the US

So far, both Davis and Groves work primarily with British startups. In some parts of continental Europe, investing in diverse entrepreneurs is complicated by a lack of data. In France and Germany, for example, the governments do not collect racial statistics at all.

Even in the UK, a recent study by Extend Ventures-a not-for-profit for diverse entrepreneurs-found a dearth of data on diversity in venture capital.

“We must be prepared to shift the status quo significantly on race with the same determination that we’re tackling gender disparity,” wrote industry expert Patricia Hamazhee in the report. “Without data, we cannot marshal the evidence that is demanded before change can be made.”

Groves said there is a handful of European investors starting to build out the Black entrepreneurial ecosystem, and that she believes it will grow.

“I would say that the European ecosystem is probably about 20 years behind the US ecosystem,” she said, adding that that’s true of the VC space in general, not just in terms of VC diversity.

Davis agreed that American VC funds tend to have more capital-and that the US has more of a startup culture.

“In the UK we are traditionally conservative, and in the US they are a lot more open to risk and the idea of entrepreneurship,” he said.

What next?

“In the wake of Black Lives Matter and the George Floyd movement, I think other people are starting to wake up to what I believe is an opportunity-not just to right a societal wrong, but also to maximize results and bring equality,” said Groves. “I believe that economic inclusion and the economic domain is the next place for equality in our society.”

For her, the key to getting Black entrepreneurs better access to capital is to prove that investing in them makes good business sense.

“Oftentimes people feel like the solution is to get a bunch of really smart people in the room and sit down and talk about strategy, and brainstorm what’s broken and how do we address these needs, and write a report,” she said. “We’ve done that for years. We have the data, we have the information, we’ve proven the business case-so let’s start to deploy the capital.”

Impact X, which has raised money from high-net-worth individuals in the UK and US, has so far invested in more than 20 transactions. The firm has had one exit-a fintech company, which it exited at a 7x markup in valuation from its initial investment. Groves hopes to have two more exits by June.

“So we’re proving the thesis,” she said. “[We’ve got], not just the data as to why it makes sense from an academic standpoint, but now we have actual financial results that we can point to.”

When it comes to finding diverse European entrepreneurs to invest in, Davis said there are plenty to choose from. “Every month I see about 120 companies and end up investing [personally] in 0.8 percent,” he said. Of those 120 diverse startups, about 100 are founded by Black entrepreneurs. “So,” he said, “when they say there’s a pipeline problem, it’s not on the founder end.”

Read the original article on Business Insider

David Dobrik’s troubled startup Dispo didn’t get the full $20 million from its Series A round – and now $8 million of that is ‘on pause’

David Dobrik
Dispo cofounder David Dobrik.

  • Some $8 million of Dispo’s recent Series A round is now “on pause,” a source tells Insider.
  • Last week, Insider reported that a former member of cofounder David Dobrik’s Vlog Squad was accused of rape.
  • In response, Spark Capital and several other investors cut ties with the company.
  • See more stories on Insider’s business page.

Dispo has lost favor with investors, and now some of its funding may be at stake.

Just last month the camera-app startup cofounded by YouTube star David Dobrik had one of the hottest funding rounds in Silicon Valley, a $20 million Series A round led by Spark Capital that valued the company at $200 million. But Spark severed ties with the startup after a former member of Dobrik’s YouTube Vlog Squad was accused of rape, as reported in an investigation last week by Insider’s Kat Tenbarge.

And then other investors began distancing themselves.

As it turns out, $8 million of that funding hasn’t yet landed in the bank, and that amount is now “on pause,” a source familiar with the situation tells Business Insider.

An SEC filing from Tuesday shows that Dispo has received about $16.1 million in funding. That amount includes $4.1 million in converted SAFEs, a type of funding structure that gives investors shares after the company has raised additional funds from, for instance, a seed round.

The remaining $8 million, which accounts for the rest of Dispo’s Series A round, is listed as “remaining to be sold.” The source told Insider that investors have not abandoned the deal and that Dispo doesn’t expect its $200 million valuation to change.

Spark’s portion of the funding was about $12 million, Axios’ Dan Primack reported, and it had closed, but other investors, who have not yet cut their checks, could still seek to renegotiate Dispo’s valuation. It’s not clear which investors may be seeking to do this, but Dispo has a handful of prominent investors, many of whom have not yet publicly commented on the controversy.

Spark declined to comment, while Seven Seven Six and Unshackled did not respond to inquiries from Insider.

Since Spark cut ties with Dispo, the company has announced that Dobrik has stepped down from its board. Two of the company’s investors, Seven Seven Six and Unshackled Ventures, have said they would donate any returns from their investment in the startup to organizations working with survivors of sexual assault. Another investor, Lime CEO Wayne Ting, said he would not invest in any of the company’s future funding rounds.

Read the original article on Business Insider

Investor Chris Sacca highlights the key risks of betting on startups – and offers 3 tips for amateurs

chris sacca
Chris Sacca.

  • Chris Sacca highlighted the risks to amateur investors of backing startups.
  • The billionaire venture capitalist pointed out that professionals often lose money.
  • Sacca advised casual investors to spread their bets, avoid debt, and expect to fail.
  • See more stories on Insider’s business page.

Investor Chris Sacca praised new rules allowing more people to bet on startups in a Twitter thread this week. However, he told amateur investors to exercise caution given the significant risks.

“Mom & Pop shouldn’t be shut out anymore,” Sacca said, after regulators expanded the definition of “accredited investor” and loosened restrictions on how much people can invest in crowdfunding rounds.

Yet early-stage companies rarely succeed, the Lowercase Capital founder and former “Shark Tank” star warned.

“Most startups shit the bed,” he said. “Don’t invest money that you can’t afford to lose.”

Sacca – an early investor in Uber, Twitter, and Instagram – pointed out professional investors back dozens of businesses to boost their chances of finding a winner.

“The real danger is when everyday folks put money into one of these companies, but can’t afford to place multiple bets,” he said. “Letting it all ride on one venture stacks the odds against you.”

Amateurs shouldn’t get cocky and expect to outsmart the pros either, Sacca cautioned.

“I’ve shattered the market, put up silly numbers, and have an insanely high hit-rate,” he said. “Yet I’m here to tell you that we still have companies go to zero.”

Angel investors and venture capitalists stomach losses even though they can help their portfolio companies find a buyer, execute a turnaround, or raise more money, Sacca continued.

“We have the paddles and can yell ‘Clear!” he said. “And yet, we still have patients flatline on the table.”

Sacca dismissed the idea that betting on startups should be “reserved for the rich.” Yet he felt compelled to offer some tips to help casual investors avoid being the “inevitable horror story.”

“Only invest what you can lose. Don’t borrow,” he said. “Spread it around multiple investments. And, overall, assume you are going to lose your money and be pleasantly surprised if you get back more than you put in. Good luck.”

Sacca offered similar advice to day traders earlier this year. He warned them not to borrow money to make trades, highlighting his experience of turning his student loans into $12 million, only to wake up $4 million in debt after his debts soured.

Read the original article on Business Insider

Twitter’s surprise counterattack to hold politicians accountable

Hello, and welcome to this week’s edition of the Insider Tech newsletter, where we break down the biggest news in tech.

Wait, this is Saturday, you say. Doesn’t this newsletter come out on Wednesdays? Not anymore. We’re changing things up and moving to weekends, so you can have more time to enjoy all the great articles with your morning coffee – including:

I’m your host Alexei Oreskovic. Hit me up with your thoughts, tips, rants and raves at

Did someone forward this newsletter to you? Get Insider Tech straight in your inbox by subscribing here.

Soundtrack: This week’s newsletter has been specially designed to be consumed while listening to William Onyeabor’s “Ride on baby”

Twitter’s surprise counterattack, or, when Big Tech tried to hold politicians accountable

jack dorsey

For more than a year now, tech companies have been America’s favorite political punching bags; attractive targets for politicians on the left and the right to blame for all manner of misdeeds, both real and imagined.

So what happened on Monday was both unexpected and ironic: Twitter sued Texas Attorney General Ken Paxton. Twitter alleges Paxton abused his power in launching an investigation into the social network’s decision to ban Donald Trump.

  • Paxton issued investigative demands to Twitter, Google, Facebook and others in January, stating that the seemingly coordinated de-platforming of Trump after the Capitol riots, were a violation of the First Amendment.
  • Twitter’s lawsuit against Paxton points out that the First Amendment does not proscribe private businesses from censoring undesirable speech, it prevents the government from controlling speech – as Paxton, a government official, appears to be doing by interfering in Twitter’s moderation policies.

Twitter’s riposte against the Texas AG follows a fusillade of lawsuits from voting machine companies in response to election rigging claims.

It’s an amusing turn of events in the wake of all the – often very legitimate – criticism of the tech industry’s role spreading falsehoods and misinformation. Who would have thought tech companies would now be the ones fighting to keep others in check about sticking to the facts?

Speaking of the MyPillow guy, it seems the mustachioed CEO is expanding into the tech market and launching his own social network. It will be called Vocl (not to be confused with Völkl, the famous German skis), and according to Lindell, will be a cross between Twitter and YouTube but also “not like anything you’ve ever seen.”

Stay tuned over the next few months as we witness the birth of a new breed of right-wing, personality driven social media networks.

Zuck’s Money Man – and Travis’ new urban warfare

travis kalanick chicago disruption 4x3

We’ve got two great reads for you to sink your teeth into this weekend. The first is a look at former Uber CEO Travis Kalanick’s latest venture into so-called ghost kitchens, the shared kitchen facilities focused exclusively on takeout and delivery orders. As Meghan Morris reports:

For Kalanick, who served as Uber’s CEO until 2017, CloudKitchens is a remarkable second act, cementing his reputation as someone with a unique understanding of how technology can transform business. It’s also already causing clashes with local politicians and other groups, who see a repeat of the controversial playbook that Uber used to succeed.

Read the full story here:

iconiq divesh makan connections 2x1

When Silicon Valley’s elite need someone to manage their money they go to Divesh Makan, the founder of Iconiq Capital. The secretive firm’s clients include everyone from Mark Zuckeberg and Sheryl Sandberg to Eddy Cue and Chamath Palihapitiya. Rob Price and Meghan Morris spent months reporting on Iconiq, looking at its expansion into venture capital and real estate, its vaunted list of clients, and its mysterious founder.

“He wants to be the most influential person in the world,” one former colleague said of Makan. “If you think ‘The Wizard of Oz,’ he wants to be the guy behind the curtain that nobody sees … the person controlling the pieces.”

You can read the full story here, including a list of Iconiq’s celebrity clients and internal documents detailing all of the startups it’s invested in:

Quote of the week:

“Our long-term investors are free to sell if they want. So we immediately launched into this very balanced market space.”

Roblox CEO David Baszucki

– Roblox CEO Dave Baszucki tells Insider why the firm chose to list its shares on the NYSE via a direct listing instead of by doing a traditional IPO.

Snapshot: This is not a banana

When you’re a video game console maker, everything looks like a controller.

That seems to be the case for PlayStation maker Sony, which recently was awarded a bizarre patent to turn bananas into game accessories.

Screenshot of Sony's patent

The patent envisions using a system of cameras to magically turn plantain into peripheral.

Why would you want to use a banana when your PlayStation comes with a perfectly good controller?

According to Sony: “A limited number of peripherals may limit a player’s ability to access all of a video game’s features (e.g. multiplayer, VR, etc.). Even if a player is in possession of multiple peripherals, each of these may need to be charged regularly in order to be usable.”

The solution is to grab a banana, or really, any nearby household object. The patent describes using a pair of oranges (one in each hand), and suggests that mugs and pens could also benefit from the technology.

Recommended Readings:

We identified the 175 most powerful people at Microsoft. Here’s our exclusive org chart.

Amazon has over 800 people working on its secretive ‘Vesta’ home robot – but insiders are worried that it’s a niche, gimmicky product that could fail

I’m a cofounder of a Silicon Valley startup that pays everybody what we’re paying ourselves: a flat $180,250. Here’s why it’s right for us.

Nikola founder Trevor Milton convinced the world he was the next Elon Musk. Insiders say a history of lies brought the billionaire down.

Zego is Europe’s newest unicorn, valued at $1.1 billion after a $150 million round led by DST Global and General Catalyst

Not necessarily in tech:

She voted for Obama and died for Trump. How QAnon turned Ashli Babbitt, an Iraq veteran, into a domestic ‘terrorist.’

Thanks for reading, and if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.

– Alexei

Read the original article on Business Insider

Why every major entertainment company will get into NFTs, according to the VC behind NBA Top Shot

David Pakman VC
David Pakman.

  • NFTs are digital assets exploding in popularity and value right now.
  • David Pakman is a VC backing NBA Top Shot, one of the most successful mainstream NFTs.
  • Pakman says fans of IP like Star Wars are built-in NFT customers.
  • See more stories on Insider’s business page.

Non-fungible tokens, or NFTs, have jumped into the mainstream recently.

NFTs are digital assets that have been around since 2017, and in 2020 they became a $250 million market. Creators are already realizing the potential to make millions in the relatively new space. Grimes sold her digital collection for $5.8 million in a 20-minute auction. A Miami art collector sold a 10-second video for $6.6 million.

The NBA Top Shot online marketplace has done over $65 million in sales in just the last week.

Venture capitalist David Pakman is a partner at Venrock, an investor in the company behind NBA Top Shot. Pakman told Insider that consumers should expect to see other brands selling crypto-collectibles too.

Read more: Here are 4 NFT startups transforming the way we buy art and sports memorabilia

“I’m sure you’ll see Star Wars, Harry Potter, all super popular global IP,” will eventually get into digital collectibles. “Those brands have touched hundreds of millions of people” he notes, and as long as they have internet access they’re all potential customers.

So far this is already starting to come true. Taco Bell just became the first fast-food restaurant with NFTs, and several athletes including Patrick Mahomes and Rob Gronkowski have jumped in too, and Lil Pump and Kings of Leon are bringing NFTs into the music world.

For fans, digital collectibles can have more staying power than physical objects like a plush toy or trading cards. Because NFTs are software, they can change and improve, Pakman says. Pieces can evolve and change based on factors like who the owner is and where they’re located.

Right now, NFT owners are limited to buying, selling, and displaying their collectibles, but as more companies enter the space and build new technology, their utility will increase, Pakman says.

“You could have hundreds or thousands of other companies creating experiences around a collectible,” for example, he says there are up to 50 games in development right now that would use NBA Top Shots moments.

Creating digital collectibles is a smart money decision, too. Digital collectibles, compared to analog items, are software, so the creator can continue to make money as it is resold.

“In the physical world, you get a percent of revenue when the plush is sold the first time, but if it goes up in value and people sell it at a flea market, you don’t get anything on downstream sales,” Pakman said as an example.

Creating digital scarcity like NFTs then becomes a compelling business model to giant companies like Disney, so more of them will create in the space. Creating an ongoing economic relationship, rather than a one-time sale, is very interesting to companies with popular brands.

“You’ll get paid forever,” as Pakman puts it.

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VC VIEW: Seed VCs who rely too much on a startup’s numbers are being dangerously myopic

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NEA, Ben Narasin
Ben Narasin

  • Introducing Ben Narasin’s column “VC View” about life as a venture capitalist.
  • He’ll share lessons learned over his decade as an early-stage investor backing companies like Dropcam, Lending Club, Kabbage and more.
  • In this column he discusses the secret to picking winning companies.
  • See more stories on Insider’s business page.

I had a thank-you coffee recently with a late stage investor, someone I had introduced to a deal where her firm led an over $100 million round. (An introduction to a hot company in venture earns you a coffee and a croissant.)

While we sipped, she told me an interesting tale of two bosses. Her first boss was a generalist, a “metal detector looking for gold,” and she told me that when investing at the late stage (in established startups doing well) that this approach was very hard for her. It can be hard just to get a meeting with the most interesting entrepreneurs if the investor doesn’t have a lot of experience in the startup’s field, she said, regardless of the significant size of her checkbook and power of her firm’s brand.

But her new “boss” is thesis driven and has her focussed on a small number of categories which allows her to dig deep, get cogent, and become an expert ahead of the rounds she decides to pursue. She prefers this because when investing in later stage startups it is hard to get the entrepreneurs attention if you don’t have a thesis in their space.

I found the conversation fascinating as the best description I’ve heard for the way I pursue my investing is that of the metal detector. I am a generalist, though I tend to avoid cyber security and med-tech as both require very explicit expertise I’m not willing to dedicate my life to, but even that’s not a hard-and-fast rule: I have one great company in the first category and two in the second and two of the three of them are doing exceptionally well.

All of this means I summarize my focus as searching for founders that make me say, “WOW!”

I’ve always believed venture is a blend of art and science: the earlier the stage the more art, the later the stage the more science. It never goes to 100% in either direction but it probably starts at 70/30 favoring art and ends at 70/30 favoring science.

This does not mean early stage investors don’t study, analyze and learn. The best of them (Mike Maples comes to mind in seed) are constantly striving for new knowledge on topics they have not considered before and are diligently analyzing their own performance looking for trends and learnings. They also tend to make a study of successful investing icons – prior and present – for traits of excellence.

Several of the best investors I know have admitted to me that “at the end of the day they are stock pickers.” The stocks they are picking are the founding teams, ideas and opportunities – or as I have said for years about my own criteria: people, people, people, a great idea and a huge market if it works.

Some of the worst investors I know spend all their time in the spreadsheets of the company looking to justify unjustifiable revenue multiples or find some magic in virtually-non-existent numbers. This may be appropriate in late stage investing but is inadequate and dangerously myopic in early-stage, particularly in the consumer segment where there’s seldom adequate supporting data, but only enticing glimpses of behavior.

Those tiny glimpses can turn into something huge with amazing speed (Clubhouse comes to mind recently) and gut trumps raw numbers here more than anywhere else, as one is often required to pay truly stunning prices (Clubhouse did a $100 million valuation Series A and a $1 billion Series B just a few months later) for nascent businesses. Paying those prices can be justified when your gut turns true.

The downside of being wrong is losing the money you invested. While the upside of being right can be virtually unlimited returns, as well as the satisfaction of helping entrepreneurs build successful companies.

Ben Narasin a Venture Partner at New Enterprise Associates (NEA) as well as a prolific entrepreneur. His career spans 25 years as an entrepreneur and 10 years as an early-stage investor. His knack for spotting emerging trends led him to make seed investments in companies like Dropcam, Lending Club, TellApart, Kabbage and Zenefits. He founded several consumer companies before launching his investing career, including, one of the first e-commerce companies, which he launched in 1993 and led to a successful IPO in 1999. Narasin frequently writes and speaks about technology and investing, as well as food and wine, a lifelong passion.

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Saudi-backed $2 billion health firm Babylon is selling its Canada operations as part of a $70 million licensing deal

Ali Parsa CREDIT Jack Lewis Williams for Tailor Made London
Babylon Health CEO Ali Parsa.

  • $2 billion health-tech firm Babylon Health is selling its Canada operations to telco Telus.
  • The two launched an app, Babylon by Telus, in 2019 that offers Canadians virtual consultations with doctors.
  • Babylon will license its tech to Telus as part of a new long-term partnership.
  • Insider took a deep-dive into Babylon’s business amid SPAC speculation, which you can read here.

$2 billion, Saudi-backed health-tech startup Babylon Health is to sell its Canadian operations to telecoms firm Telus in a change-up to an existing partnership, Insider can reveal.

Babylon Health partnered with Telus’ health division, Telus Health, in 2019 to launch a free app that gives Canadian users the ability to schedule virtual appointments with doctors, as well as run any symptoms of illness through a “chatbot” symptom checker. The Babylon by Telus Health app is somewhat similar to Babylon’s app in the UK, called GP at Hand.

The partnership saw Babylon set up operations in Canada, hiring on-the-ground clinical operatives and physicians.

Insider understands that Telus is set to acquire Babylon’s operations in Canada, and has signed a new multi-year deal to continue licensing its technology. The deal is thought to be worth around $70 million.

Insider learned of the new deal after Babylon CEO Ali Parsa hinted at it during an all-hands meeting.

babylon by telus health
The Babylon by Telus Health app

A spokeswoman for Babylon Health told Insider: “We are delighted to have signed a new long-term strategic partnership and multi-year licensing agreement with Telus.

“With Babylon’s focus on the delivery and deployment of our high-quality AI-powered technology platform, Telus will take on operational control of Babylon Canada, while still leveraging Babylon’s service delivery expertise and experience.”

While Telus has praised uptake of the app in Canada, it has faced local concerns over its privacy policies, and reportedly from clinicians.

The privacy commissioner for the province of Alberta launched an investigation in April 2020 into the app’s privacy policies, which state that a “video recording of patient visits is copied and stored on Babylon’s servers, and that the video may be shared with corporate partners and entities outside of Canada, including foreign governments.”

A spokesman for the Office of the Information and Privacy Commissioner of Alberta told Insider the report was due soon but declined to give a timeline.

Telus and Babylon welcomed the investigation at the time and said they were confident that the privacy requirements were up to scratch.

Read Insider’s full deep-dive into Babylon Health’s disruptive rise to become a $2 billion company, including conversations with Parsa, investors, critics of the company, and analysts.

Read the original article on Business Insider