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The Bears Have it Wrong, More Fundraising Pain, Improving Innovation, and The Next Disney is in the Metaverse

The Bears Have it Wrong, More Fundraising Pain, Improving Innovation, and The Next Disney is in the Metaverse

Social Leverage Letter | Issue #73

Pete Weishaupt
January 22, 2023

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3 articles, 2 podcasts, and 1 video.

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READING

Our GP Howard Lindzon sat down with Business Insider to discuss investing strategies in a higher interest rate environment and shaky economy. Pessimism is already priced into the markets and there are still opportunities to make money. He believes the US will enter a recession in 2023, which is a contrarian reason to be bullish.

A veteran investor says the bears have it all wrong, and pessimism is already priced into markets. Here's where he's putting his money now that the time-tested playbook for investing in tech stocks has fallen apart.

Venture capitalist Howard Lindzon shared why he changed his investing strategy after the Federal Reserve hiked rates, and where his money is now.

https://www.businessinsider.com/how-to-invest-tech-stocks-recession-risk-federal-reserve-lindzon-2023-1

AngelList and Silicon Valley Bank's annual report on the state of early-stage startups and venture capital shows Series B valuations fell 50% from the first quarter of 2022 to the fourth quarter, with a smaller percentage of early-stage startups raising new money and more of them raising down rounds than in previous quarters. Despite this, venture capital firms still have a record $289B of dry powder to deploy. However, this year is expected to be a tough one for startups, as the valuation crunch continues to flow down to early-stage startups.

New AngelList Data Shows Startup Fundraising Pain in Second Half of 2022

Series B valuations were cut in half from the first quarter of 2022 to the last

https://www.newcomer.co/p/new-angellist-data-shows-startup

Research shows setting ambitious goals, often seen as the key to success, can actually be an obstacle to innovation and sap motivation. Research by Nobel Laureates and other innovators suggests pursuing curiosity and embracing serendipity can be more effective than solely focusing on goals.

If you want to be massively successful, do NOT set ambitious goals, according to studies

This is why Steve Jobs said “You can’t connect the dots looking forward”…

https://medium.com/accelerated-intelligence/if-you-want-to-be-massively-successful-do-not-set-ambitious-goals-according-to-studies-affa9cd39f5d

LISTENING

Pranav Kanade - Moving from TradFI to Web3 and Building a Digital Assets Alpha Strategy (EP.237)

Listen to this episode from Panic with Friends - Howard Lindzon on Spotify. In today’s episode I’m talking to a friend of mine, Pranav Kanade, who happens to work for another really good friend of mine, Jan van Eck. Pranav was in the financial industry for a while, and like many, went down the crypto rabbit hole a couple of years ago. Jan, who’s a good friend, mentor, and a legend in the financial industry, went down the crypto rabbit hole himself and has been forever trying to do a Bitcoin ETF — doing the good work of dealing with the red tape and corralling the regulators. Jan’s tasked Pranav with building a crypto fund; and I’ve been trying to learn all this since forever, so I wanted to check in with Pranav. 2022 was obviously one of the most wild, fraud-ridden years in financial history, so I wanted to continue learning from someone who now makes his full living from this – and find out how he’s reacting in the bear market. As we try to dissect the industry here on Panic with Friends, I’m asking the same type of questions I ask him each month after reading his analysis. And you can be certain Pranav will be a regular on the show. Let’s learn together as new entrepreneurs and investors continue to build out the future of the web. Enjoy! Guest - Pranav Kanade, Portfolio Manager at VanEck Digital Assets Alpha Fund howardlindzon.com, vaneck.com Twitter: @howardlindzon, @pkan90, @PanicwFriends, @knutjensen linkedin.com/in/pkanade1 #fintech #invest #investment #venturecapital #stockmarket #finance Show Notes: Introduction (00:38) Welcome Pranav (04:50) 2022 Crypto deleveraging (06:34) U.S. crypto regulation outlook (08:29) Which layer needs regulation? (09:08) 2023 outlook for crypto (10:05) The crypto ‘bottom’? (11:04) Underlying tech (11:36) Transitions take time (14:43) Stablecoins (15:57) Tim Cook owns crypto (18:56) Self-custody assets (20:43) Venture funding (24:06) Genius of Bored Apes (27:28) Potential NFT use case (29:30) Coinbase web3 wallet (31:22) Dealing with liquidity (32:35) Moving from web2 (33:02) Speculation became community (35:04) Incentivizing tokens (36;52) The inflection point (37:44) Picking the right blockchain (40:02) Building on Polygon (41:31) Micropayments (44:24) NFTs for artists/creators (52:56) Wrapping up (54:17) Closing thoughts (55:53)

https://open.spotify.com/episode/5A6LF5vPfR6I7lpVRSNhCk?si=mYn49UG2SfuuRZ39_vRqHA

Alienware: Frank Azor and Nelson Gonzalez

Listen to this episode from How I Built This with Guy Raz on Spotify. With no formal training in business or computer design, Nelson Gonzalez and his cofounders decided to do what almost no other company was doing in the mid-1990’s: make personal computers specifically for gaming. They started as a tiny custom shop in Miami, and eventually began building PC’s for avid gamers, who were willing to pay top dollar for higher speed, better graphics, and a brightly-colored chassis that looked like the head of an Alien. Despite ongoing challenges with sourcing parts and getting loans, Alienware became one of the fastest-growing private companies in the U.S. In 2006, it was purchased by Dell for an undisclosed amount, and remains one of the most popular gaming PC’s in the country.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

https://open.spotify.com/episode/37oNF2s7yAqZCqJVDgxJz4?si=UAy97fgVSVu3wa7UvPxBuA

WATCHING

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Affiliate Disclosure: Social Leverage Group, LLC ("SLG"), Social Leverage Capital Fund I, LP ("SLC"), Social Leverage Capital Fund II, LP ("SLCII"), Social Leverage Capital Fund III, LP ("SLCIII") and Social Leverage Capital Fund IV, LP ("SLCIV") are all distinct entities from Social Leverage, LLC ("SL"). Social Leverage is not a registered investment advisor. SLC, SLCII, SLCIII, SLCIV, SLG and SL have used the logo and branding of Social Leverage with the permission of Social Leverage Group, LLC.