UNICORN MANIA, The Real Facts About Post-Money Valuation

Post-Money Valuation; The Facts

• It is absolutely NOT the market capitalization or market value of a tech unicorn company;
• PM Valuation completely ignores all the prices paid, preferences, and rights granted, for ALL prior rounds – a major flaw and a farce;
• Thus, a completely distorted picture of value is created by actually assuming that all of these past preferred rounds of equity, plus common, are all magically worth the same price as the round just completed.  This is insanity;
• To make matters worse, The derivation of the PM Valuation is cloaked in secrecy – it´s a black box - you don´t get to see the calculation!
• Remember, from the Stanford Study, ALL 135 Unicorn companies evaluated were overvalued using the PM Valuation AND, 65 lose their Unicorn status!  
• This is a ‘Houston-we-have-a-problem’ moment.  If these statistics aren’t an indicator that something is terribly wrong with the PM Valuation...well…then you are in Unicorn land.

A Unicorn Index Fund is a Sham

Given the above facts, the concept of a Unicorn Index, then, is a sham based on this faulty method of valuation.  The indexes, in fact, do not have visibility into the requisite information and data actually needed to return a market value or market capitalization (i.e., financial statements).  That´s why they use the inappropriate and discredited PM Valuation and then try to sell it to you as some rigorous and proprietary methodology.  Complete BS.

• Since these index funds have very limited information in these private companies (again, no fin. statements), they are trying to triangulate a valuation from incomplete information and back-of-the-envelope approach. 
• It turns out, based on the research, the PM Valuation is a very bad proxy for determining value.  It cannot even be considered a derivative of value.  It’s far worse.  At a minimum, a derivative security actually derives its underlying value from another asset or group of assets
• PM Valuation is far riskier and worse than a derivative because there are well-documented, glaring flaws in the methodology;  that all prior rounds with different economics are suddenly worth the same as the last round.  It’s messed up and it’s improper, as the Study indicates.
• In fact, let me let you in on a key piece of information, a key fact:  I’ve known about the concept of PM valuation for more than 20 years, during my time as a venture debt lender.  The PM valuation was never intended to be used for this purpose (trying to determine a market value for private companies).
• EXPLAIN:  In 90% to 95% of all the deals, loans we did for VC-backed tech companies, they typically had to raise an additional round or two of capital before we were paid out on the loan.  When they raised a new round, the Loan & Sec. Agr. required full reporting.  And, Many times company mgt and investors would tell us the PM valuation after this round was X.
• We knew how it was calculated and always knew this was not the real market value for the company, b/c of all the terms and conditions of prior rounds of capital.  It was always considered a rough, back of the envelope way to look at the company as a very rough approximation of perhaps its future potential value – but in no way did it represent its market value.

The idea that index funds, the financial press, and the analytics companies have been trying, for years now, to use this as a representation of value is insane and it’s fraudulent.

Btw, Why would anyone invest in an index fund that can´t provide investors with a true picture of value?  Any index fund should be required, and investors should demand, full disclosure of the valuation methodology.  One would think disclosing your valuation methodology would be a strength, a positive, to show investors you do have rigor in your analysis and determination of value.  Transparency should be an asset.  Instead, these so-called index funds use stealth because they don´t want you to know that they don´t really have visibility and the tools normally utilized to actually determine real market value for these private tech firms.  

Why the secrecy and black-box approach if the index funds are asking investors to pony-up vast sums of money to get exposure to private tech company deals?  

The risks of a private, early-stage technology company are already significantly high enough; and their performance is not proven nor is it disclosed.  To gain exposure to this high-risk asset category via an index fund with a completely improper, bogus notion of value is insane.

Stay Far Away from any Index of Unicorns

So, let´s understand what is really going on here.  The facts are these regarding any index comprised of so-called Unicorn tech companies.  They possess none of the following key pieces of financial statement information necessary and normally used to properly value a firm:

• Firm’s Actual Revenue and its revenue run rate.  Thus, no sense of what aggregate monthly and annual revenues are AND, the growth rate of revenue month-over-month;  i.e. How fast are revenues growing?
• More importantly, no sense of a firm’s gross margins and net operating margins – Is there a path to profitability anywhere in the future?  Is the firm even generating positive or meaningful gross margins?  A firm’s gross margins reflect basic survivability?
• Firm’s Performance to Plan or against the monthly Forecast;
• Firm’s monthly cash burn rate;  to understand when they run out of cash, in number of months;  to ascertain when they need to raise another round of capital from investors 

Each of the above financial metrics would normally be used to value a firm and measure its financial health and trajectory.  These so-called index funds do not have access to any of this information and therefore operate in a vacuum when it comes to relying on real financial metrics normally used to value a company.

Investors should be informed as to just how flimsy and flawed these valuations are based on the PM Valuation.  The Stanford Study conclusively proves there is a serious problem with the PM Valuation methodology.  Further, the Study has developed a methodology that works and clearly demonstrates how to calculate a value for these private tech firms.  

Tech Unicorn Valuations are Fake

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  My mission is to cut through and go beyond the hype that tends to dominate the tech landscape.  And provide you with information you can use.
• It is your podcast for Fintech, DeFi, Blockchain and smart contracts, digital banking and all the frontier Web 3 technologies changing the financial landscape globally.

Hello everyone – it´s been a couple of months since my last podcast episode – I took some time off...It´s great to be back with you again.

After some thought, consideration and a couple defining events, and an announcement by Pitchbook, one of the so called data analytics firms in the VC space, I decided it was imperative that I do an episode in my Unicorn Mania series.  I´ll fill you in on the PB announcement I am referring to in a moment – it´s insane!

Before we jump into the episode though, I wanted to pay recognition and acknowledgement to a wonderful Brazilian singer and artist, Gal Costa.  My intro music and exit music is Aquarela do Brasil by Gal Costa.  Gal Costa passed away on Nov. 9, 2021.  A makpr talent in Brazil, I thoroughly enjoyed her music.  She will be missed. 

So, let´s jump into this edition of Unicorn Mania:

If you´ve followed this podcast in the past, you are aware that in the UnicornMania series I highlight the largely fake, deceptive valuations of VC-backed private technology companies – Which are Fondly called Unicorns...Isn´t that cute?  

For background, I refer you to my first episode in the UnicornMania series, March of 2020.  Episodes 5 and 6 also deal with this twisted freak show perpetrated by VCs, the tech & financial press and others that engage in all of this Unicorn nonsense.  I encourage you to go back to Episode 1 for insights and valuable background information as to why I categorically state and prove that tech Unicorns, a VC-backed tech company allegedly with a $1B or more valuation, are indeed mostly fake…

Let´s start off with some levity and have a little fun, shall we, at the expense of Sil. Valley VCs?  I read this a couple years ago in a CrunchBase piece;  

There´s an old joke about a new bar in Sil. Valley.  On opening day, 6,000 people showed up.  No one buys a drink.  The business is declared a roaring success!   [This joke will hopefully make perfect sense by the time we finish this episode.  Only in SV culture would the above be considered a success!  In Sil. Valley, comedy often becomes reality

To briefly review, let´s start with some basics I will get into in this episode:

• So, as I just mentioned, the definition of this tech unicorn we hear so much about is:   A private VC-backed tech company with an alleged valuation of $1B or more;  I say allegedly b/c  these valuations are largely fake;  I´ll demonstrate that with conclusive evidence in just a moment;
• VCs and others arrive at this distorted value using a completely improper, simplistic method known as the Post Money Valuation – In a moment, I´ll walk through how the Post-Money Valuation is calculated and explain why it is a completely erroneous notion of value;
• On what basis do I call it fakery and deception?  Largely b/c it has been conclusively proven beyond a doubt based on the research;  The body of evidence comes from a Stanford Univ. GSB study called, ``Squaring VC Valuations with Reality.``   The results were originally revealed at a Silicon Valley Open Doors conf. in 2016 and then officially published in April 2017.  It´s been updated since, as late as Dec. 2019.  It also has been published in peer-reviewed journals like The Journal of Financial Economics in 2020.
• There are links to both the 2016 video and to the research report in the description of this video
  • Links:

Squaring Venture Capital Valuations with Reality

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455

Video presentation to the Silicon Valley Open Doors conf., 2016

https://youtu.be/k4OtGWZ3iYI

Why a return to this topic?  Several reasons;  

1. Because it continues to be an absolute freak show that is out of control.  It is a twisted and a deceitful exercise that, as I mentioned, VCs, the tech and financial press and others engage in to ascribe and hype a false value to priv. tech companies;  Further, It is an insult to those of us who have an interest in discovering the true value of these tech companies;  And Finally, b/c many of the largest mutual fund companies have been investing in the high-risk asset category since at least 2015 (think of Fidelity, T. Rowe Price, Vanguard, JH) – so I view it as a consumer protection issue, well.   Where is the SEC??  Where is FINRA?  They claim to be interested in protecting the consumer.
2. My mission, as I´ve always stated, is to cut through the BS that tends to dominate the VC & tech landscape to inform you and make you fully aware of what´s going on in this freak show;
3. I stated at the open, one of the defining events that motivated/prompted me to do a Unicorn Mania episode was a recent announcement by Pitchbook, which is owned by Morningstar, btw (acq. in 2016)

That is Morningstar, the venerable, well-known mutual fund rating company founded in 1984.  Its star rating system has been considered the gold std in rating mutual funds, ETFs, etc.,  for years…

1. What is The announcement:   I get a daily feed in my email inbox called the Daily Pitch.  In the last 30-45 days or so, PB announced they are creating a new index fund for, are you ready for it?;  An index of unicorn tech companies.  When I saw this I thought, I couldn’t  think of anything more ridiculous and useless.  

B/C an index that begins with garbage valuations, yields garbage!  I will get into that and demonstrate how this alleged index fund is deceiving to investors and should be scrapped immediately…IMO

1. 1. So, when I received this announcement, I immediately downloaded the Whitepaper at the PB website;  It is called, ´Harnessing Unicorns;  ``Demiystifying the venture capital Market with the Moringstar-Pitchbook Global Unincorn Indexes.``
   2. I´ll share some of the key findings and takeaways in a moment – truly a fraud, in my view, to be avoided at all costs – I´ll explain

1. Finally, there was one other event that was a motivating factor.  That is, in the wake the FTX implosion, the crypto exchange company that blew up in November 2022, caused by a liquidity crisis of the company's token and fraudulent use of investors funds.  As investors all tried to get their money out at the same time, the whole thing collapsed.  

Why do I bring up this event?  B/C prior to its collapse, FTX would have surely been, no doubt, a part of this bogus index fund.  [Just like Wework before, only a couple years ago.  Remember them?]  WeWork was valued at $47B before pulling its IPO around Sept. 2019 when many entities called BS on its S-1 filing.   I devote all of Episode 6 (Aug. 5, 2020) to exposing the Wework fraud and breaking down their bus. model – something, unfortunately, Firms like Pitchbook, CB Insights and the tech press failed to do;

In fact, they continuously published fawning articles prior to Wework´s collapse and implosion, slobbering all over themselves about WeWork´s amazing valuation ($47B)!   And now, they want you to trust them with an index of Unicorns based on fake valuations – right!  That´s messed up, IMHO.

So, let´s get into this PB announcement, shall we?

Whitepaper Takeaways:    It´s a complete mishmash of deceptive jargon, in my view;

• Under, ``Clearly defined eligibility rules:``  The Whitepaper clearly states at the outset it uses the post-money valuation
• Under, ``Quarterly Rebalancing;``  It states, All companies attaining unicorn status in the preceding qtr are eligible for inclusion. [That would have meant FTX, Wework, and other failed, overvalued companies!]  Get the picture?
• Under, ``Weighting Methodology:``  It states, ``companies are, weighted using their latest post-money valuation or estimated worth after latest round of outside financing.``  There´s that term again…
• And,  ``The model prioritizes a company´s most recent VC deal.`` i.e.,  post-money valuation;
• Further, it emphasizes, and I quote, ``Past Deals (post-money valuation) is arguably the most important data point used to value unicorns because it reflects real world deals and valuations.``  Are you kidding me?!  How about NO, it does not.  Completely erroneous statement!
• And, here is one of the real head-scratchers in the Paper under `´Index Calculation`´  - It states, the index is ``calculated once a day at the close of public markets in the US.``  Huh?  These are private companies with no reporting of financial results or any other fin. info., for that matter, to the public.  There is no correlation b/c of all the private equity rounds of preferred stock are not public either;  Each round has its own exclusive rights, protections, economics and terms that usually suck value from prior rounds, especially from common shares.  

There is no daily determination of value like in most all mutual funds and ETFs!  And Morningstar knows this!   

The terms and conditions of these priv. preferred stock financings are not reported to the public and there is no correlation whatsoever to US public markets – there is no repricing daily based on this information.  

• This is nothing more than a fake, window-dressing comment to give the false impression that there is some rigorous analysis going on and is correlated to public markets –

Prime Unicorn Index

BTW, in preparing this episode, I discovered there is already an existing Unicorn Index Fund, created in 2017, called Prime Unicorn Index.

On their website they describe it as, ``A modified market cap price return index that measures the share price performance of private companies valued at $1B or more….

I take issue with the term, ``market cap return``   It is not the market cap.  Prime reveals that they also use the flawed post-money valuation as one of the factors in calculating value – but the don´t say so on their website!  

[Dig into the key highlights and takeaways of the Stanford/Strebulaev Report]

Conclusions

I´ve seen what I would characterize as three major frauds during my professional lifetime where the major institutional entities that we normally rely on to provide us with independent, unbiased assessments and analysis, were all compromised:

1. Dotcom Bubble (2000 – 2001):  The Major investments banks were peddling bogus research and analysis on tech company IPOs that had little to no revenue – this helped fuel outrageous valuations;
2. 2008 Financial Crisis:  This was a real estate crisis and bubble.  The rating agencies were compromised (S&P, Moodys, etc.) and part of the problem and fraud.  They erroneously rated packages of low-grade and subprime mortgages as investment grade quality – and you know the rest of the story…

I view Unicorn Mania as, perhaps, just another iteration or vector of the dotcom bubble only with a different twist or flavor.  In the dotcom fraud, it was the I-Banks peddling nonsense and hype, unsupported by company fundamentals.  

In the Tech Unicorn fraud, the complicit entities are the VCs, tech press, financial press and perhaps accounting firms.  They Used a black-box approach, protected by non-public reporting of financial transactions (i.e. Pref. Stock rounds with unique, exotic, and complicated structures).  They then peddled a completely useless and inappropriate notion of value via the post-money valuation.  This is fraud IMO.

Again, the research supports this conclusion… And this one is inexcusable b/c the hard data and research exists.  It is being ignored.  

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger;
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  It is your podcast for Fintech, Decentralized Finance, Blockchain and Smart Contracts, Digital Banking and all the frontier technologies that are changing the financial landscape globally. 

Episode Introduction:

• Welcome back everyone.  We have a fantastic program for you today.  I am excited about today´s conversation because I have the pleasure of welcoming to the podcast Jonathan Hung;
• Jonathan is a successful and accomplished angel investor based in Los Angeles.  He is considered one of the most active angel investors in Southern California.  In addition, he serves as Co-Managing Partner at Unicorn Venture Partners and Senior Venture Partner and Head of Due Diligence at Expert Dojo.  We´ll get into that and a lot more. 
• Jonathan, thank you for making the time to be on the podcast today;

• So, before we dig into the meat of your work as an angel investor and venture partner, we typically begin by having you provide your background and details about your journey, more broadly, that led you into technology and angel investing…

• In addition to providing venture capital funding and advisory support, Jonathan also provides business mentorship based on his experience running U.S. and China offices as the President of United Overseas Textile Corporation.  Jonathan was also a Managing Member for his family office fund, J Heart Ventures, which made investments in start-up companies such as Gyft, ChowNow, Miso Robotics, Clover Health, Bitmain, etc.  

He also leverages various degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.

Topic Areas Covered with Jonathan

• Your investing history in So. Cal and types of sectors, companies you look for;
• Jonathan and his team target investments in US companies that have global market potential with a focus on long-term growth expansion to East Asian markets.
• I´d like to highlight some of the Blog topics you cover on your website with respect to:
  • Covered liquidity runway (cash) and monthly cash burn rate
  • Gross Margins
  • Monthly Recurring Revenue
  • Operating Income/Net Income
  • Web 3.0 and its role in future of startups; touching on blockchain, smart contracts, DeFi etc. 
  • 10 key metrics you look for in evaluating prospective investment
  • Alternative funding strategies
  • SPACs and SPVs;  Distinguish between the two.  Also, particularly since SPACs were all the rage in 2020-2021 but as a sector haven´t done well as public companies
• Your views on Leadership and Successful team building
• Other areas you would like to cover;

Closing Remarks:

Jonathan, thank you very much for joining me today on the program…

Jonathan, how can those who are interested in learning more about you and your practice in So. California get in touch?

Contact Information

• Website:  jonathanhung.com
• Social Media (if applicable):  
• Or, Linkedin: Jonathan Hung

Thank you for joining me for this edition of DVC.  I hope you found today’s discussion with Jonathan Hung interesting and it gave you some additional insights into the state of angel investing in So. California and beyond.  

Stay tuned for my next Episode of DVC…thank you.

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger;
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  This is your podcast for Fintech, Decentralized Finance, Blockchain and Smart Contracts, Digital Banking and all the frontier technologies that are changing the financial landscape globally.

Episode Introduction:

• Welcome back everyone.  We have a fantastic program for you today.  Today, I have the privilege welcoming back to the podcast Sturgeon Capital, when we did an interview early part of 2021
• Sturgeon Capital is a London-based investment firm with a very interesting, and successful, I might add, geographic strategy;
• Sturgeon was established in 2016 to specifically to tap into vast opportunities its team has identified in Central Asia;  So, think of Kazakhstan, Uzbekistan, and in adjacent regions such as Bangladesh, Egypt, Turkey; 
• We´re going to get into all of that and a lot more.  To help me do that I have the pleasure of welcoming Alex Branton, a Partner at Sturgeon.  Alex, thank you very much for making the time to be on the program today.
• Before we get into the meat of what Sturgeon Capital is doing, I find it useful for listeners if you could provide your background, and your journey, more broadly, that led to the founding of Sturgeon; 

Alex Branton Bio:  Over a decade of investment industry experience with a blend of direct investment experience and fundraising expertise. Studied, lived and worked in emerging markets (most significantly China and Central Asia) on and off for 15 years. Whilst maintaining a vital role on the investment team, spends significant time working with companies on their fundraising and strategic partnerships. Before Sturgeon, part of a 4-person team, that helped build a tech-focused asset manager called Columbus Point with the co-founder of Cantillon in the capacity of head of business development, raising approximately $200m, building the operational infrastructure and working with the investment team. Prior to this, was an Associate Investment Director at Cambridge Associates working in the emerging markets team, advising on direct co-investment deals, economic consulting, financial modelling, and portfolio advisory and discretionary management.  Alex holds a BA in Industrial Economics from the University of Nottingham (during which time he also spent time studying finance at Hong Kong University) and an MSc in Development (specialism in Development Economics) from the London School of Economics. He is also a chartered alternative investment analyst (CAIA) and is fluent in Mandarin Chinese having studied in a post-graduate in Shanghai and has taken R programming courses at UCL.

• History of Sturgeon, why founded with this vision for frontier markets in Central Asia? 
• What is a “frontier market” according to Sturgeon?  Your website indicates “we reject traditional definitions of ‘frontier markets’ – expand on this… 
• Sturgeon invests at an early stage (Seed and A round) in technology across huge untapped geographies ~$275m AuM across our venture fund and inaugural growth equity mandate Raising our second early-stage VC Fund Sturgeon Opportunities II ($50m)
• The TAMs in our addressable markets are so big you don´t need an Excel spreadsheet.
• Our companies target massive addressable markets that are highly fragmented or otherwise dominated by bad (or often non-existent) incumbents that are not capable of technological innovation.  We don’t speculate on “frontier technologies”, rather we focus on tried and tested business models in ``frontier`` markets.
• You are now raising capital for the Sturgeon Emerging Oppor. Fund II.  Target of $50MM
• 80% of the portfolio will be comprised of companies from emerging tech capitals in Pakistan, Bangladesh, Egypt & Central Asia representing well over 500 million people. When including adjacent countries, our geographies of interest represent over 1 billion people.
• We will keep our funds small and are not afraid to double-down on winners.  We want to keep our “low denominator” advantage and optimize for returns by matching fund size to the opportunity set.  Although we see ourselves as a smart index, we also believe in concentration and follow-on heavily in our winners.
• We are filling the ``funding gap.``  We focus on entering at Seed and then leading Series A and Series B.  Beyond Series B we support our companies to raise growth capital from strategic co-investors.
• The funding gap:  Our target countries represent some of the last truly enormous digitally unaddressed markets.
• How do you source deals, what you are looking in an investment in a co. in this geographic mkt (game-changing tech, solving major pain points, etc.)

• Network Effect:  Genuine local and global networks that inform us as investors and create value for portfolio companies. 
• A huge % of our value add to Founders comes from our Global + Local positioning.  If there is a company worth knowing in our region, we will know about it. 
• Experience - Highly experienced team with a wealth of crosssector experience in developing markets. We understand and can help companies navigate risks/bottlenecks. 
  • Diversity of opinion is prized and we have a reputation for hiring the best VC talent 
  • We work with companies to help them articulate and realise their long-term vision.
  • Fintech for inclusion - Deep understanding of the needs of underserved consumers.
  • Local markets are aware of how seriously we take impact:  from rigorous measurement to the provision of local scholarships/fellowships.

• Portfolio Highlights:   ZoodPay’s success exemplifies Sturgeon’s approach to backing the best management business models and operating teams;
• ZoodPay - The largest Payments, Marketplace and Fintech ecosystem in Central Asia Markets : Pakistan, Uzbekistan, Jordan, Iraq, Lebanon
• ZoodPay is a FinTech Super App targeting 330m people in untapped countries, delivering the highest quality service to merchants and shoppers.  The team has created an innovative ecosystem combining offline and online commerce, payments, credit solutions and logistics to empower buyers and sellers.

Closing Remarks:

Alex, how can those that are interested in learning more contact you or the Company?

Contact Information

• Website:  sturgeoncapital.com
• Or, Linkedin

Alex, thank you very much for joining me today on the program…It would be great to do a follow-up some time to get an update…And, if you and Kiyan want to have a conversation sometime about Brasil, I am all over the Brasil Fintech and DeFi sectors, so would love to do that.

Thank you for joining me for this edition of DVC.  I hope you found today’s discussion with Alex Brandon and Sturgeon Capital interesting.  If you’re looking for alpha, and who isn´t, and you hadn´t thought of Central Asia, Sturgeon Capital is the go-to Fund with the regional expertise and successful track record.  Stay tuned for my next Episode of DVC…thank you.

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger,
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  This is your podcast for Fintech, Decentralized Finance, Blockchain and Smart Contracts, Digital Banking and all the frontier technologies that are changing the financial landscape globally.

Episode Introduction:

• Welcome back everyone.  I am really excited about today´s conversation because we`re going to chat with a very innovative investment firm, known as Fuse Capital, based in Rio de Janeiro, that is changing the Inv. Fund Model for investing in early-stage and growth stage technology companies with an interesting approach, and has also created a new fund that provides dedicated exposure to DeFi (Decentralized Finance) for institutional investors.  We´re going to get into all of that and more…
• To help me do that, I have the pleasure of welcoming to the program, João Zecchin, Founder at Fuse Capital.   João, thank you very much for making the time to be on the podcast today…

• So, before we dig into the meat of all the innovative structures Fuse Capital is offering to its investors and the market, I usually find it useful for our listeners to understand a bit about your background and your journey, more broadly, that ultimately set the stage for founding of Fuse Capital.  Tell us a bit about your journey that led you into technology, investing in tech companies…  

Topic Areas Covered 

• Talk about the origins of Fuse Capital and then the how you arrived at the strategy that led to Fuse Capital I Fund – 1st hybrid fund, offering not only equity to early stage companies but a venture debt product, as well.  This a unique approach to someone like me who spent 20 years+ in the venture debt space.
• Can you give some examples of venture debt deals you´ve done?  I understand most or all of the debt deals you´ve done are not portfolio companies where you have an existing equity investment, correct?
• Mix in the Fund - When one looks at Fuse Capital I Fund, what is the % of Fund assets are made up of Venture Debt vs Equity?
• What´s the typical structure of a venture debt deal?  Term Loan, advance based on multiple of MRR?
• Return profile for venture debt deals?  Provides current income to investors thru monthly P&I pmts.?
• Risk management and portfolio management processes for the debt deals?
• Target sectors, target geographies for venture debt deals?  For debt deals, talk about that deal process and how you credit underwrite and diligence deals

• Let´s talk about the newly created fund, The Wasabi Fund, which provides exposure to DeFi for Inst. Investors; 
  • When was the Fund launched?  Thinking/Strategy that led to the offering?
  • Tell us how you define DeFi and what does exposure to DeFi mean or entail? 
  • Mechanics, details of how the fund is structured and works…
    • You don´t actually provide exposure directly to stable coins themselves, right?
  • Main Strategies Offered;  Liquidity staking, Lending, Futures, Leverage;
  • Anticipated yields – Examples (20% - 40%)
  • Risk mitigation features and strategies?
  • I had a question about one of your Regulatory Risk mitigation strategies:  
    • Underweight allocation to centralized stable coins;  Is this referring to USDT, USDC? 
• Given the some of the negative blowups recently (e.g., Terra-Luna; UST debacle), how do you assess and diligence what projects to include in terms of DeFi projects and protocols?   Because this blow-up has broken trust in the sector – even though there are many solid projects that are decentralized…
• The DeFi Fund is structured such that it does not necessarily include direct exposure to the underlying stable coins of projects, is that correct?

Closing Remarks

• What is a good way for those seeking additional information about Fuse Capital to get in touch? 
  • Website – www.fuse.capital
  • Social media?
  • Other contact methods?

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with João Zecchin and Fuse Capital interesting and it gave you new insights about how the venture capital and venture debt landscape is evolving in Brazil.  I look forward to joining you on my next edition of DVC.  Thank You…

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger,
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  This is your podcast for Fintech, Decentralized Finance, Blockchain and Smart Contracts, Digital Banking and all the frontier technologies that are changing the financial landscape globally.  

We will start here -

Episode Introduction:

• Welcome back everyone.  I am really amped and excited about today´s conversation because I have the pleasure of welcoming to the program Slater Victoroff, Founder and CTO of Indico.
• Indico is the leading machine learning, and AI platform that has developed technology to unlock the value of unstructured data, about 85% of all data, providing enterprises with the ability to automate heavily time-consuming tasks and derive value from unstructured docs like emails, images, texts and more.
• The Indico Platform uses AI and ML technology to automate the intake and understanding of unstructured documents, emails, images, videos, audio files, and much more, giving structure to this unstructured data. As a result, enterprises get much more value from their existing structured data only software and technologies — including RPA, CRM, ERP, Analytics, and more.

• We´re going to get into that and more…Slater, thank you for making the time to be on the show today…

• Before we dig into the meat of what Indico is really all about, I thought it would be useful if you could tell us a bit about your background and about your journey, more broadly, that ultimately set the stage for founding of Indico…

Topic Areas Covered with Slater Victoroff 

• Talk about your training, background and work in SW and computer engineering that led to the development of the technology and Indico
• Talk about the technology development from SW engineering standpoint to achieve this breakthrough related to being able to analyze, automate unstructured data. 
• In the past (2016), you previously stated that Indico is `` like a co-pilot in some ways`` indicating ``We´re not automating away the person but taking the grunt work out of processes, allowing them to do much more what they enjoy doing, which is critical thinking.``   Expand upon what you mean by that.

• Let´s talk about some of the actual use-case applications of the technology.  You serve major, marquis customers in the Insurance, Financial Services, Real Estate, Legal, Marketing, Retail, and other huge verticals.  Discuss some client use cases.  MetLife, etc.
• Why have you succeeded where others have failed?  How has Indico been able to beat out juggernauts such as IBM, Google, AWS, that spend billions on projects?

• I wanted to talk for a moment about your martial arts training and background.  In the past you indicated that Entreprenuership and martial arts training have parallels.  What do you mean by that?
• At the end of 2020 Indico closed a $22M Series B round.  You´ve raised about $34M in total.  How do you view or see the need regarding additional capital?

Closing Remarks

• Slater, what is a good way for those seeking additional information about Indico to get in touch? 
  • Website – www.indicodata.ai
  • Other contact methods?

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with Slater Victoroff and Indico interesting and it gave you new insights and things to think about regarding machine learning, AI and its application to unstructured data.  I look forward to joining you on my next edition of DVC.  Thank You…

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger,
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  This is your podcast for Fintech, Decentralized Finance, Blockchain and Smart Contracts, Digital Banking and all the frontier technologies that are changing the financial landscape globally.

We will start here -

Episode Introduction:

• Welcome back everyone.  I am really excited about today´s program because I have the pleasure of welcoming to the program Jeremy Neilson, Co-Founder and CEO of Assure
• Assure specializes in Special Purpose Vehicles (SPVs) and Fund Administration for the private investment marketplace, simplifying the deal process and fund administration so funds can focus on finding deals and building relationships.  We´re going to get into that and more…Jeremy, thank you for making the time to be on the show today…

• Before we dig into the meat of what Assure is really all about, I thought it would be useful if you could tell us a bit about your background and about your journey, more broadly, that ultimately led you to co-founding of Assure.

Topic Areas Covered with Jeremy Neilson

• Talk about the Assure business model, when and why it was created, how it has evolved over the years, etc.
• Talk about the service offerings, SPVs, etc.
• Why SPVs?   What is it, how does it work, who utilizes SPVs?
• Expand on your competitive advantages and differentiation in the marketplace;  
  • No other service provider can match Assure’s expertise, speed or cost-effectiveness in delivering SPVs to the private investment community. 
  • How do you assess or look at the competitive landscape for Fund services?   Who else is doing this…?

• Assure acquired BoomStartup and also launched both Glassboard Technology and Assure Syndicates.  
  • When were the acquisitions done?
  • What is the function of each entity?
  • How do they broaden your services and offerings?

Jeremy, in addition to Assure and its services I´d love to hear your thoughts and remarks on other topics in the VC and priv. investment landscape in general if you are open to opining on them;

• How do you look at SPACs and explosion of SPAC activity over the last 18-24 months
• How has the VC model and landscape evolved and changed over the last 10-15-20 years?
• How do you see what´s going on in DeFi broadly affecting the VC model?   
  • In terms of the many options for how start-up companies can raise capital today, ?
• Other opinions and remarks you have on DeFi are welcome.  
• Open to other areas you would like to discuss that are important to describing Assure and the industry.

Closing Remarks

• Jeremy, what is a good way for those seeking additional information about Assure to get in touch? 
  • Website – www.assure.co
  • Other contact methods?

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with Jeremy Neilson and Assure interesting and it gave you insights into SPVs, fund administration services and their importance in the marketplace to VCs and private equity.  I look forward to joining you on my next edition of DVC.  Thank You…

Episode Introduction:

• Welcome back everyone.  I am really excited about today´s program because we are going to do a deep-dive and explore DeFi – Decentralized Finance, a topic you hear much about but may have little insights into what this frontier technology is all about and what its true impact will be on the future of global finance.
• To help me do this I have the pleasure of welcoming to the show Jim Bianco who is the President and Founder of Bianco Research, LLC in Chicago.  Jim is someone I consider a visionary thought leader on the DeFi sector.   Jim, thank you so much for making the time to be on the podcast today…
• So, before we dig into the meat of what DeFi is really all about, I thought it would be useful if you could tell us a bit about your background and about your journey, more broadly, that ultimately led to take a bullish stance toward DeFi.  Mainly because you have this traditional Wall Street, I-bank research background.  Tell us how the long-time, traditional finance guy goes actively pro-DeFi…

Topic Areas to be covered

After introduction and you provide your background, I´d like to get into the following…

• In prior commentary, you stated you came to the realization that DeFi is a `brand new financial system.´  Expand on this revelation and what drew you to this conclusion.
• You have previously stated, Existing financial system is slow, cumbersome, has way too many permissions required,  ´I basically have to beg my broker to do stuff´, it´s a series of toll booths´
• ´Current system is in trouble.  Many in financial world don´t get it and they don´t want to get it.´
• ´You are going to look like a bunch of taxi drivers in a ride-sharing world.´
• I tell people about DeFi;  ´It will come here and completely flatten you.´        
• Jim:  DeFi is also about fairness…You and I don´t get the Warren Buffet deals.  With DeFi we get exactly the same deal
• Jim discusses ´qualified investors´ if you have over $1M net worth, `what an insult´
• You´ve previously segmented your clientele in two broad categories, ´Young and Old´ discuss what you mean by this with respect to understanding the impact of DeFi.
• Why does Warrant Buffet call crypto rat poison squared?
• Regulatory issues: 
• Impact of central bank´s own digital currencies…expand on what you see going on here and why it´s not really DeFi…
• Jim:  ´A CBDC, if done correctly, presents a financial threat to the existing financial system´…and in the end, they won´t do that b/c it bypasses the current banking system all together
• Jim:  ´It´s not about technology or whether we have the design right – it´s about policy – how much do we want to disrupt the current banking system?´
• Regulation:  Problems regulators have, they don´t understand what´s going on in the DeFi industry…´It´s a Cambrian explosion of ideas
• End of the day, I don´t know what regulators can do except regulate the ´On-and-Off Ramps´ (Uniswap, Kracken, etc.)  i.e. – how do I get dollars to crypto and crypto back to dollars
• To the Regulators, ´what are you trying to do?´  
• I see where we are going and it´s exciting and an explosion of ideas…

Closing Remarks

• James, what is a good way for those seeking additional information about Bianco Research to get in touch? 
• • Website – www.biancoresearch.com

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with Jim Bianco interesting and it gave you better insights into what DeFi is really all about and what it means for the future of finance globally.  I look forward to joining you on my next edition of DVC.  Thank You…

Introduction

• Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  My mission is to cut through and go beyond the hype that tends to dominate the tech landscape.  And provide you with information you can use.

Episode Introduction:

• Welcome back everyone.  I am excited about today´s program because I have the pleasure of welcoming to the show James Giancotti who is the Founder and CEO of a really interesting company called Oddup.  
• Oddup is a provider of a data-driven, intelligence platform that helps users more efficiently evaluate and understand the startup ecosystem and for digital assets it includes a proprietary Cryptocurrency Rating System.  Oddup provides users with powerful tools and proven methods of data collection and insights for making investment decisions in a more efficient manner…[My attempt at describing the co. and what you do…feel free to give me the succinct, company-preferred version]
• And, we´ll get into all of that in greater detail….
• James, thank you for making the time to be with me on the podcast today…
• So, before we dig into the meat of what Oddup is and its key offerings, I thought it would be useful if you could tell us a bit about your background and about your journey, more broadly, that ultimately led to the formation of Oddup…

Topic Areas Covered:

• AI and data driven approach, what was the impetus, thesis for developing this into a company in the first place?
• What is the end-product offering actually and how has it evolved over time?
• Is it investment research on steroids…or how would you best describe it?
• Talk about the offerings in more detail;  What is the Startup Rating System, other offerings and services, i.e., Crypto-custody? 
• Talk about major Customers:  Thomson Reuters, Bloomberg, Google, etc.
• Key Partners?
• How would you assess the competitive landscape?  There seems to be a number of newer startups entering this space in different ways
• Competitive advantages of Oddup offering…Key Value proposition?
• • ´Our main advantage is we have been right often on our valuation assessments which has given our tools and platform credibility as a go-to source.´  Particularly, more recently, we have been very accurate at assessing and valuing crypto and digital asset sectors.
• How do you get access to all of the detailed information and analysis for what are mostly private companies?
• Let´s discuss Forge Global, a major private exchange allowing investors to trade shares and evaluate secondary offerings of innovative private companies.  They also offer custody, tools and data in addition trading.  They announced a public offering via a SPAC in September.   Do you view them as an enabler, competitor or other?
• Is there an interesting story behind the company name?
• Discuss your recent equity round - $12.8MM Series C 
• • We actually raised the round a year ago.  COVID and pandemic related factors kept us from announcing it until recently.  However, we used the proceeds to build really innovative and quality data analytics tools, especially in the crypto and digital asset sectors.
• Future plans for capital?

Closing Remarks

• James, what is a good way for those seeking additional information about Oddup to get in touch? 
• • Oddup website:  www.oddup.com
  • Other contact methods you would like to include;

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with James Giancotti and Oddup interesting and it gave you things to think about regarding your ability to evaluate, analyze and invest in new economy companies.  I look forward to joining you on my next edition of DVC,  Thank You…

Bio:

James Giancotti, CEO and Co-founder OddupJames Giancotti is the founder and CEO of Oddup, an early-stage startup ecosystem rating system. James began his career in investment banking and research roles at Goldman Sachs and J.P. Morgan. After nearly a decade of researching companies’ financials to determine their value and assessing investment risks and opportunities, he saw firsthand the challenges that most institutional investors constantly confronted. The biggest obstacle was a lack of reliable, collated analyst insights that overcome subjectivity, so he created Oddup to address this problem by giving investors more transparency and objective insights to make the most informed investment decision. 

James holds both a Bachelor of Commerce in Business Intelligence and a Bachelor of Law in Intellectual Property from La Trobe University.

Introduction

Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger

Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  My mission is to cut through and go beyond the hype that tends to dominate the tech landscape.  And provide you with information you can use.  

Episode Introduction:

• Welcome back everyone.  Today, we have a really interesting program for you b/c I have the pleasure of welcoming to the show Tigran Nazaryan, who is the CEO of 10Web, a  
• Tigran, thank you for making the time to be with me today on the podcast.
• I am super excited about today’s conversation after learning about the company b/c 10Web has created a really interesting business model and is changing the game around the area of Web design and hosting, and is doing that through automation of an old but very reliable tool and ecosystem many of us are familiar with have used, WordPress.  
• 10Web has a very interesting history and story and what I believe is a huge addressable market.  Tigran, I thought it would be useful for you to provide us first, with some of your background, and then we can get into the interesting story around the origins of 10Web as a company
• Five years before founding the company in 2017, a small team of engineers were building WordPress plugins.  This helped you identify the biggest problems in web development, leading to the formation of 10Web.  With vision to create a platform for hosting for professionals and agencies.  
• We built an advanced, modern type of hosting technology.   Allows automatic creation of WordPress websites and powered by AI algorithms and neural networks.   We also created our own tools for optimizing websites
• We are getting a lot of momentum, growing really fast…
• Hear is a quote from a press release after your raised your Seed round last month where you stated, "Tens of millions of WordPress websites are built every year, and an average website launch takes 5 weeks!  We wanted to bring automation to WordPress development to facilitate and speed up this process," can you expand on this?
• Why did you choose WordPress automation as opposed to, say, building your own website builder tools?
• Tigran:  Old school platform, but WordPress powers 45% of all websites built.  It is really flexible and workable.  Yet, we found the experience of creating WP websites was really painful.  Flow is time-consuming and requires some deep knowledge where many web developers don’t go that deep.
• Our vision was to solve these problems for web developers.  Huge potential for automation because WordPress 
• Here is a quote from your investor at AI Fund;  “10Web has built an innovative, no-code solution utilizing artificial intelligence to automate website porting and creation.” (Perry Wu, General Partner, AI Fund)
• We spend greater than 2 years with a team of machine learning engineers to create the solution.  Not a simple undertaking.
• You use Google Cloud as infrastructure, why?  
• Tigran:  We use Google Cloud for hosting.  Clients’ websites are stored.  We also use AWS, MS Azure.   There is no fundamental difference between these 3 solutions, only difference is in details.
• Talk about achieving 90+ Google Page speed score.
• Tigran:  Page Speed score is a metric defined by Google.  Important metric.   Affects conversion, effectiveness of ads, for all web pages of the site.  Technically very challenging.  Not a single plug-in or solution.  Also, WP websites are not all the same.  Helps professionals streamline website development.
• We offer a full, complete, turn-key solution for agencies
• Discuss target market and go-to-market strategy. 
• Tigran:   Our current focus is on develpers, agencies and free-lancers
• You recently closed a $2MM Seed Round.  Where are you in terms of traction in the marketplace?
• Tigran:  Priority is to grow.  We have thousands of customers today.
• How are you rolling out in terms of launch strategy for customer acquisition?
• Tigran:  We don’t have any specific geographical limitations.  It’s popular with web builders globally and WP is translated into hundreds of languages.  We focus on US and western Europe right now.
• Can you discuss the subscription-based revenue model?
• How do you view the competitive landscape given your value proposition of top class hosting and automation of WordPress?
• Tigran:  Many provide hosting and site building tools.  Competition not only within WP community but also between WP and other platforms
• Your competitive advantage is in the pricing and the automation, right?
• Tigran:   Yes, and none of the others provide a specific, customized solution to cover agency site development needs with simplicity through automation.
• Want to shift back to the technology.  We hear a lot about artificial intelligence (AI)…    Do you think AI will replace traditional web development or is it supplemental technology?
• Discuss additional capital needs and process…
• Capital efficient business model;  recurring revenue, high gross margins with major expenses being development and people…
• Tigran:  AI Fund and Sierra are Seed investors so we will consider other investors, as well

Closing Remarks

• Tigran, what is a good way for those seeking additional information about 10Web and its products to get in touch? 
• • Obviously, there is the 10Web website:  www.10web.io
  • Invite agencies to sign-up 10Web, we will invite you to our Slack platform for more detailed, closer conversations.
  • Linkedin

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with Tigran Nazaryan and 10Web interesting and it gave you things to think about regarding how you go about building and creating high-quality websites in the future.  I look forward to joining you on my next edition of DVC,  Thank You…

Introduction

Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger

Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  My mission is to cut through and go beyond the hype that tends to dominate the tech landscape.  And provide you with information you can use.  

Episode Introduction:

• Welcome back everyone.  Today, we have a really fantastic program b/c I have the pleasure of welcoming to the show John Zic who is a Partner and Founding Member of EQUIAM, a San Francisco based firm that provides access to VC investments in a 
• John, thank you for making the time to be with me today on the podcast.
• I am really excited about today’s conversation about EQUIAM for a couple of reasons:  One, because it represents a true, analytics and data-based approach to investing in a basket of VC-backed private tech companies, and we’ll get into that;
• Also, b/c as a venture lender, the team I worked with spent many hours , days and years developing a risk assessment and risk rating model for the VC-backed companies we were providing debt commitments to.
• John, to begin the conversation, I thought it would be useful for you to provide us some of your background and then discuss how EQUIAM came to be…
• Talk about the early stages of creating this company because it’s not a new endeavor or venture, relatively speaking.
• Talk about the two Funds under management;  Recently closed (June 2021) the Private Alpha Fund of $50M – and you have the Private Tech 30 Fund that closed Feb. 2019;  Describe these funds and investment thesis behind them
• Why 30 to 35 companies in a Fund?
• Talk about the proprietary data-driven approach that EQUIAM has developed; not only for picking the companies in the funds, but also the ongoing evaluation and monitoring processes to make adjustments, including potentially removing an investment from the basket of stocks?
• Known as the Equiam Systematic Ranking (ESR), which applies a suite of proprietary algorithms to distill approximately 10,000 private companies and 10 million data points into a ranked list of approximately 30 investment targets.
• You’re CEO, Ziad Makkawi, believes the VC industry “should embrace the kind of AI tools it invests in.”   Expand on that…
• How are you able to get access to preferred shares?  What if you want to reduce no. of shares held in a co. in the Fund – how do you sell them?
• Use of secondary market platforms like Forge, allows EQUIAM to readily participate in private offerings of technology companies; access has not really been a problem overall…
• Forge used to be Equidate.  Forge is actually a minority shareholder-owner of EQUIAM, LLC
• According Makawi, CEO and Founder of EQUIAM, The business operates on the assumption that there is enough data out there on firms that can be analyzed and used to manage a portfolio of VC investments quantitatively.
• In the past, most people didn’t have access to the data or hadn’t put in the effort to find it.  
• We have taken a data-driven, risk-based approach to mitigate the froth that we see in the market right now;   e.g. Over-valued unicorns…
• Introduces a more tech-driven way of investing in VC deals.  
• Are you still accepting new investments in the Private Alpha Fund?
• How does the process work?  Accredited investors, minimum investment, etc?
• Potential to begin offering smaller investment sizes to non-accredited?

Closing Remarks

• John, what is a good way for those seeking additional information about EQUIAM or perhaps have an interest in making an investment, get in touch? 
• • EQUIAM website:  www.equiam.com

Thank you for joining me for this edition of DVC.  I hope you found our discussion today with John Zic and EQUIAM interesting and it gave you things to think about regarding your ability to invest in a fund of private tech companies.  I look forward to joining you on my next edition of DVC,  Thank You…