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ready? Let’s talk money, startup and spicy IPO rumors.
With Robinhood, it’s a bizarre few weeks Increasing the edge of new funds To maintain its zero-cost trading model during turbulent market conditions, other newly traded houses Changing your business model even more. But among all the tricks in startup-land, there is some itching in the back of my head: Why are many rich people pumping up unsightly assets?
It is okay for a retail investor to share trading ideas among themselves; It has happened, will happen, and always will. But we have seen that people like Elon Musk and Chamatha Palihipitiya use their broad market impression to encourage regular people – directly and indirectly – to buy into some very silly trades that give the retail crowd plenty of Money may be lost which they may not be able to afford. .
Think of Elon coming back to Twitter Pump doge, A cryptocurrency joke that is highly volatile and mostly worthless. Or pour it Public money in GameStop, A trick by which it is best to get in and out. Which he did. And earned money. Most people who have played GameStop Casino are not as lucky, and many have lost more than they can afford.
Caveat Emptor and all that, but I don’t love people with mover and capital, who regularly lead in risky trades or in assets that are not backed by long-term fundamentals, but instead near-term returns A small shot at. Yoof.
Finally, maintaining the theme of general annoyance, Senator Hawley is back in the news this week with a focused announcement of an idea to stop big tech companies from buying smaller companies. As you would expect from a rebel-friendly senator, this is not an incredibly serious proposition, and it is written so vaguely as to be almost humorous.
But as i wrote here On my personal blog Regarding all of this, the irony in general is that there is a bipartisan interest in limiting the ability of large tech companies to buy smaller companies. For startups, this is not good news; M&A exits are important liquidity events for startups, and large companies have the most money.
There is no shortage of my onions when startup valuations decline, but I think a lot of attention has been given to the fact that some Democrats and some Republicans in the US want to reduce top-down tech M&A, and this There is not nearly enough information about what the effort might be. Startup Valuation and Funding. And if they dip the metrics, there may be less volatility in the market to actually pick up the giants.
food for thought.
Exchange caught once again Unity CFO Kim Jabal. We didn’t just make jokes with her about games we like or don’t like, but Jabal as the financial head of a company thinks of when she joined, and is now in public, this To keep an eye on. Some observations:
- GAAP vs. Non-GAAP: I Asked About Integration Recent Q4 net income, Usually measured using accepted accounting principles or GAAP. This was influenced by some share-based comp numbers. Jabal was clear that his team and investors are more focused on non-GAAP numbers. Why? They snatch non-cash charges such as share-based comps and provide a different perspective in corporate performance. This is standard startup practice, but his comment suggests that if your company is growing rapidly after the IPO, you can stick to the adjusted matrix and have no problem. If growth slows down, I am sure change happens.
- COVID: Will COVID hit the gaming stick? Jabal, when his company has historically seen preoccupation, does not return results to former plateaus. I wonder if this will be the case for all COVID-boosted parts of the startup and big-tech landscape. If so, this is very good news.
- Know Your Metrics: Jabal said its key metrics are non-GAAP operating margins and free cash flow – in addition to growth, I would add. It is super clear and easy. Startup CEO, please create a similar distillation when we talk about your latest round.
And speaking of startups, let’s talk about a company I recently raised more capital on: DeepGram. I covered Company Series A, A $ 12 million round in March 2020. Now has Raised $ 25 million more, Led by Tiger, so it’s a fun case of big money investing in the early stages, I think. Regardless, Deepgram was a prerequisite on a particular model for speech recognition, and, again, its market. Its new investment means that both bets came out correctly.
And i was Recently a conversation with the CEO of Databricks ()More on his latest megaround here), Which noted the huge gains made in AI, and in particular around the Genetic Adverse Network (GAN) NLP, and more. Our read that we should expect to see more dipgram-ish rounds in the form of AI in the future as similar methods of AI and data make their way into workflows.
And fintech player Payoneer is going public. Through a SPAC. You can read the investor presentation here. Payoneer is not a pre-revenue firm going out through a blank check; It expected $ 346 million in the 2020 rev. I am bringing this to you for two reasons. One, read the decks, and then ask yourself why all the SPAC decks are so ugly. I did not get. And then ask yourself why this is not a traditional IPO? Numbers 32 and 40 are on page. I can’t figure it out. Let me know if you have one. Elon gets Dogcoin for best response.
Various and varied
And if you need a new tune, you can do worse this one. Have a great weekend!