March 12, 2022
Hello and welcome to Pipeline. This week: Bessemer goes for the DAO, startupland in wartime and a little Tiger in your funds.
Venture firms have been trying to reinvent themselves lately, in an era where founders have an edge with capital aplenty and, at least for now, still-high valuations. It’s no longer enough to be a good adviser, board member and cheerleader. VCs are pushing services like marketing, recruiting, design and data, and broadening their investing stages from seed to growth.
But with the clear arrival of Web3, is that enough? Bessemer is asking that question with a new initiative it’s calling BessemerDAO. The move is part of the firm’s allocation of $250 million of its $2.5 billion fund to Web3 sectors including consumer crypto, infrastructure and DeFI.
BessemerDAO is a statement about crypto. In a world where crypto-focused firms are raising billion-dollar funds, traditional firms need to show a little street cred.
Can DAOs disrupt portfolio services? Andreessen Horowitz and GV popularized the idea of delivering structured services with dedicated teams, but that idea is now old enough to deserve some disruption of its own.
But the ultimate disruption would be a DAO making investments. BessemerDAO could potentially raise money and take stakes in startups, though the regulatory and legal issues would have to be hammered out, Kurzweil said.
VC has historically been about small teams of investors working closely together. Decentralization is a big pill of change for the industry to swallow. But classically, VCs have recruited from the ranks of successful founders. As crypto startups enjoy success, a new generation of investors will arise who expect decentralization — and know how to capitalize on it.
Haystack’s Semil Shah is hearing warning signs. “VC friend last night estimated U.S. endowments & foundations exposed to VC have likely lost ‘multiple hundred of billions’ in private book value so far in 2022, but it will take many months for the marks to hit. They suggested this will greatly impact those raising new funds,” he tweeted.
There’s definitely an “RIP Good Times 2.0” vibe floating around. Mainstreet’s Doug Ludlowwrote: “Founders — if you haven't already started on a path to break-even, start immediately.”But OpenSea’s Alex Atallah was here to remind everyone of the opportunities in Web3: “There are now more NFTs on OpenSea than there were websites on the internet in 2010.”
If you’re a CEO these days, odds are that your CIO understands something you may not: Your company’s cybersecurity strategy is fundamentally flawed, and has been ever since your organization began using cloud-based services.
With tech stocks down and war in Europe, Micah Rosenbloom says startups should prepare for the worst in case fundraising becomes harder. Shoring up oversight of financial reporting is a good place to start.
The Russian war in Ukraine could have significant impacts on the crypto market, from the decoupling of bitcoin from other risk assets to an increasing call for regulation, wrote Future Perfect’s Jalak Jobanputra.
Tiger Global wants you to take its cash. The firm shook up the startup funding world. Now individual Tiger partners are getting into funding early-stage venture funds. To be fair, individual GPs at other firms have long used this strategy to keep in touch with early-stage deals.
Alex Iskold’s network is donating $1,000 each to Ukraine refugees. The co-founder of 2048 Ventures previously set up a network to donate for the pandemic.
A public market slide, lower startup valuations and layoffs are all early signs of perhaps a bigger downturn coming in the startup market.
In memoriam: Interlace Ventures announced the unexpected death of Managing Partner Joseph Sartre. Our deepest condolences.
From Protocol: “Buy now, pay later” company Sezzle laid off 40-50% of its global staff as it merges with larger rival Zip.
Also on Protocol: With the war in Ukraine escalating, enterprise AI companies are signing military contracts, despite the potential PR risks.Your weekend reading: Ukraine planned to send six companies to this week’s South By Southwest conference. Then came the war.
As a business leader, you need to understand that zero-trust is not just another buzzword. It’s a fundamentally different mindset that you will need to embrace — and the sooner you do so, the better.