Where have I been?
Yes, my last transmission was at the end of June. Life got very busy ramping up with Asymmetry Ventures and going on summer vacations post-COVID vaccine. And I was invited to join a proptech SPAC as a founder (more on this later). I’m switching up the format of this newsletter a bit to make it shorter and more standardized. But first, a special update on my summer of futuristic deals with Asymmetry:
Special Sci-Fi Summer
Here’s a partial list of deals I led this summer for Asymmetry Fund II and its affiliated AngelList syndicate:
PipeDream Labs is building robots to deliver packages through underground tunnels at blazing speeds in minutes. Latest update here.
Quantum Designed Materials demonstrated the first room temperature superconductor at regular pressure (if you’ve read about other teams with room temperature superconductors recently, that was only under crushing pressures that are not commercially viable). This impacts so many industries (data centers, fusion reactors, quantum computing), but for starters, they’re going to make wire for electric utilities that will deliver 10X the current transfer per dollar per mile (and 100X the energy storage potential). Sizzle reel here. This tech can drive massively positive environmental effects by reducing “dirty” inputs to electric energy production.
Corvus Robotics has the first level 4 autonomous drones for inventory management in warehouses. See the video. And some industry context from TechCrunch.
With unspun, you can scan yourself with a smart phone and then purchase 3D printed jeans that fit perfectly and are manufactured “just in time”. There’s tremendous landfill waste from the incumbent fashion industry - this is a step towards solving it.
iMicrobes offers a platform of programmable microbes that eat greenhouse gases and convert them to other valuable chemicals. The founder is committed to reducing global warming - here’s a nice video presentation on it.
Pirouette Medical has reinvented the hypodermic needle, starting with disrupting the Epipen.
SFA Therapeutics discovered a new and generalizable treatment pathway for auto-immune disorders, by regulating dendritic cells without generally suppressing the immune system, and already demonstrated strong results for curing psoriasis in Phase 1 trials.
Industry Trends - Seed Inflation
The seed stage investing industry is changing fast. In the past, I’ve written about the fast growing number of sites that allow non-accredited investors to invest in early stage startups under the JOBS Act (commonly called crowdfunding). And now, the biggest VC funds are coming to join the party too.
This summer, NFX raised a $450M pre-seed/seed fund, a16z raised a $400M seed fund, and Greylock raised a $500M seed fund that they say is the industry’s largest. Given average seed lead check sizes, and typical follow-on reserve sizing, this implies potentially more than 100 investments per fund! So per my thesis, we’re seeing more diversification.
Crunchbase has some great data about the stunning growth in the size of seed rounds over the last decade from $200K to $1.5M (433%).
In a word, this means inflation for startup valuations. Does it also mean compressed returns for seed stage investors? No! There’s inflation at every stage all the way through to the exit. It’s the relatively recent possibility of exits in the $10B-$100B valuation range for the biggest winners that justifies bidding up the valuations at the seed stage.
Increased competition also drives faster deal cycles, which means less diligence and more potential for, let’s call it, unexpected surprises. Two weeks of diligence for a six figure investment at the seed stage often feels rushed to me. Softbank is doing late stage investments ($100M+) with only two weeks of diligence now!
This means investment firms must develop super efficient processes for diligence and evaluation, which is now my number one focus as a venture partner for Asymmetry.
Little Thoughts - Recent News
AngelList announced Stack - company formation services. AngelList wants to become Carta faster than Carta can become AngelList. More generally, although commonly thought of as focused on investors, AngelList has primarily focused on founder services in more recent years (see also RUVs and increased support for founder secondary offerings), which leaves an interesting opening for newer competitors like Allocations and Assure to come in and differentiate.
People are getting loans securitized by NFTs, with predictably terrible default rates. I hope this represents the peak of the NFT mania, but it probably doesn’t. Repeat after me - NFTs are just a decentralized list of pointers to urls. A great Twitter thread hilariously compared this to star registries from the 90s. As a thought experiment, if the DNS registrars rebranded themselves as NFT marketplaces, what would you do?
Current Deals / Requests for Help
I’m working on a deal for Daanaa, which appears to be a quantum leap forward in wireless energy transfer infrastructure. The patent is heavy reading. Anybody interested in the deal with an EE background, please let me know.
For some time, I’ve been looking for a volumetric video startup to back that can produce live transmissions (think the “holograms” from Star Wars). One later stage startup, Leia, just came to market with a tablet, and 8i also looks intriguing. Any experts in imaging/graphics who would like to team up on diligence, please reach out.
If you’d like to follow my latest investments, join my syndicate on AngelList.
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