A meeting with MBS, the rock star litigator taking on Elon Musk, and VC trends in five charts

Friday! Two quick programming notes: next week's issues may be a little more economical(?) is the word we want to use, as we'll be on the road, and the two weeks after that, we're shutting down the works for our annual Two-Week Summer Hiatus™. We'll be back at full speed in early August, though. (We're going to start planning a fall event when we get back, so if you're interested in partnering with us, let us know.)

Before we unplug for the weekend, we leave you with this week's StrictlyVC Download, featuring Jess Lee of Sequoia Capital. We caught up with Lee recently to talk about a new program Sequoia is using to pull more founders into the fold, but we also talked more broadly about the market, including whether the valuations of 2021 were rational and why. Hope you enjoy the conversation.

Giant thanks to Synaptic for sponsoring this week's episode. Synaptic is a no-code platform that provides insights by unifying a wide range of datasets like web traffic, employee data, hiring data, product reviews, and more. If you're looking to leverage alternative data in your investment research, Synaptic says it can help. More here.

President Biden talked with Saudi Crown Prince Mohammed bin Salman about the killing of journalist Jamal Khashoggi during a "politically fraught meeting today intended to reset relations with an oil-rich nation the U.S. believes it can no longer afford to shun amid high energy prices," writes the WSJ. The Kingdom has showered money on Silicon Valley and startups more broadly via its Public Investment Fund and other vehicles; tech leaders and startups with its backing said nothing in the aftermath of Khashoggi's gruesome murder. More here.

Elon Musk filed a motion today opposing Twitter's request to expedite a trial over his intention to terminate his $44 billion takeover. Twitter has asked the court to expedite the proceedings, citing risks from the recent economic downturn and being held in limbo by a buyer. Musk's lawyers argued today that the court should reject Twitter’s “unjustifiable request to rush this," saying the “core dispute over false and spam accounts is fundamental to Twitter’s value. It is also extremely fact and expert intensive, requiring substantial time for discovery.” More here.

Inflation + rate hike + volatility = profit? With tech darlings tumbling more than 21%, and inflation rising, the Financial Times has declared one investment potentially “bulletproof”– fine art. In 2022, the art market is up 25% compared to 20% losses for the S&P. With this investing platform, you can access this market in a few clicks. They handed a +30% net IRR to their investors THREE years in a row. StrictlyVC readers get instant access with this private link. (See important Reg A disclosures.)

If you're feeling confused about the state of startup investing, join the club. Public company shares have been relentlessly hammered in recent months amid rising fears of a recession, yet startup funding seems as brisk as ever and, more surprising, to us, VCs are still routinely announcing enormous new funds as they have for many years.

To better understand what's going on, we talked this week with Index Ventures cofounder Danny Rimer, who grew up in Geneva, where Index has an office, but who now splits his time between London and San Francisco, where Index also has offices. (It just opened an office in New York, too.)

We happened to catch Rimer -- whose bets include Discord, 1stdibs, Glossier, and Good Eggs, among others -- in California. Our conversation has been edited lightly for length.

This week, Lightspeed Venture Partners announced $7 billion across several funds. Battery Ventures said it has closed on $3.8 billion. Oak HC/FT announced almost $2 billion. Usually when the public market is this far down, institutional investors are less able to commit to new funds when the public market is down, so where is this money coming from?

It's a great question. I think that we should remember that there have been extraordinary gains for a lot of these institutions over the last few years -- call it actually the last decade. And their positions have really mushroomed as well during this period. So what you're seeing is an allocation to funds that most likely have been around for a while. . . . and have actually provided very good returns over the years. I think that investors are looking to put their money into institutions that understand how to allocate this fresh new money in any market.

These funds keep getting bigger and bigger. Are there new funding sources? We've obviously seen sovereign wealth funds play a bigger role in venture funds in recent years. Does Index look farther afield than it once did?

There certainly has been this bifurcation in the market between funds that are probably more in the business of asset aggregation and funds that are trying to continue the artisanal practice of venture and we play in the latter camp. So in relative terms, our fund sizes have not become very significant. They have not grown dramatically, because we've been very clear that we want to keep it small, keep our craft alive and continue to go down that route. What that means is that when it comes to our institutional investor base, first of all, we don't have any family offices, and we don't take sovereign wealth fund money. We really are talking about endowments, pension funds, nonprofits and funds of funds that make up our base of investors. And we're fortunate enough that most of those folks have been with us for close to 20 years now.

You do have quite a bit of money under management. You announced $3 billion in new funds last year. That's not a tiny amount.

More here.

Monolith Materials, a 9.5-year-old, Lincoln, Neb.-based company that claims it cleanly produces hydrogen and carbon black via a proprietary breakthrough in commercial-scale methane pyrolysis, has raised more than $300 million in minority equity funding co-led by TPG Rise Climate and Decarbonization Partners, which is a joint venture of BlackRock and Temasek. More here.

Nyobolt, a three-year-old, Cambridge, England-based maker of ultrafast battery chargers, has raised £50 million in Series B funding led by H.C. Starck Tungsten Powders. Axios has more here.

Apiture, a five-year-old, Wilmington, N.C.-based maker of front-end software for smaller banks, has raised $29 million in funding led by Live Oak Ventures. The company has now raised $69 million altogether. More here. 

Hero, a seven-month-old, French B2B payments startup, raised €12.4 million from Paua Ventures, Embedded/Capital and Rapyd Ventures. FinTech Magazine has more here.

Nucleus Genomics, a New York-based genetic testing company focused on calculating a patient’s risk of certain diseases, is adding $14 million to its initial seed funding round. With this round, the company has raised $17.5 million altogether. This “seed plus” funding round was led by Alexis Ohanian's Seven Seven Six, and was joined by Shrug Capital and Founders Fund. TechCrunch has more here.

Robin, an eight-year-old, Boston-based workplace platform used by business to manage hybrid work, has raised $30 million in Series C funding led by Tola Capital, with participation from Firstmark, Accomplice, Boldstart and Allegion Venture. TechCrunch has more here.

UnCaged Studios, a web3 gaming studio founded last year in Tel Aviv, has raised $24 million in Series A funding from Griffin Gaming Partners, Vgames, Maverick Ventures Israel, Drive by DraftKings and 6th Man Ventures. TechCrunch has more here.

Medusa, a e-commerce platform for Javascript developers founded last year in Copenhagen, has raised $8 million in seed funding co-led by LocalGlobe and Dawn Capital. TechCrunch has more here.

Super Mojo, a New York-based buy-now-pay-later NFT financing platform (this sounds like guaranteed trouble, no?), has raised $6 million in seed funding from BH Digital, DRW VC, Intersection Growth Partners and Neuberger Berman. The Block has more here.

Pebble, a 1.5-year-old, Cambridge, Ma.-based personalized investment startup, raised $5 million in seed funding from Jump Capital, NextView Ventures and Cendana Capital. More here.

Xage Security, a Palo Alto-based zero trust cybersecurity startup, raised $2m in Series B extension funding from Chevron Technology Ventures. The five-year-old startup had separately raised a $6 million Series B extension from SCF Partners and Overture Climate Fund back in May. The company has raised a total of $62 million. More here.

Isn’t it time your fund administrator actually helped you raise your next fund? Juniper Square builds best-in-class tools that link your fund administration data with customizable digital subscriptions, data rooms, and more. More than 1,400 firms including Haun Ventures, GSV Ventures, and more trust Juniper Square to give LPs a unified experience and give GPs real-time access to their fund data. Learn how you can raise more money faster with Juniper Square.

Collaborative Fund, the 12-year-old, New York-based seed- and early-stage venture fund, says it has raised $200 million for its first climate-focused vehicle, Collab SOS. More here. 

Fifth Wall, the nearly six-year-old, L.A.-based venture firm, has more than tripled commitments to $495 million for its early-stage climate technology fund, while also securing fresh funding for its inaugural late-stage technology Fund, Axios reports. More here.

New Age Capital, a six-year-old, Dallas-based seed-stage  firm focused on startups led by Black and Latinx founders, has raised $25m for its debut fund. Dallas Innovates has more here.

Section 32, the San Diego-based health tech venture firm led by Bill Maris, is raising $500 million for its fifth fund, per an SEC filing first flagged by Axios (though we wonder if that number will ultimately be bigger). The outfit closed its fourth fund with $740 million in capital commitments late last year.  

Vektor Partners, a two-year-old, London-based venture firm focused on sustainable mobility startups, raised €125 million in capital commitments for its debut fund, says TechCrunch. More here.

Swedish telecom-equipment giant Ericsson says the Committee on Foreign Investment in the U.S. has authorized its $6.2 billion proposal to buy Vonage Holdings, clearing the way for the deal to be completed next week. One of the world’s biggest makers of 5G cellular equipment, Ericsson announced plans to buy New Jersey-based Vonage in November in a bid to expand into new businesses. The WSJ has more here.

The IPO market’s slow summer is set to continue with one IPO scheduled to price in the week ahead. Renaissance Capital has more here.

Marty Chavez, a former Goldman Sachs CFO (and CIO) and current partner with Sixth Street, has joined the board of Alphabet.

TikTok announced today that its head of global security, Roland Cloutier, is stepping down effective September 2. The organizational change comes as the popular ByteDance-owned app has been facing increased scrutiny from U.S. officials. TechCrunch has more here.

Pete Davidson is the new face of venture-backed Manscape, which has also reportedly given him equity in the company. 

Bill Gates announced on Twitter this week that he’s donating $20 billion to the Gates Foundation, while reiterating his pledge to give away “virtually all of my wealth to the foundation” and  eventually drop off the list of the world’s wealthiest people altogether.

Alan Howard, notes the FT, is an "influential figure in the hedge fund industry thanks to the success of Brevan Howard Asset Management, the $23 billion macro trading firm he co-founded. In recent years though, he has been slowly relinquishing some of his roles at the firm to become a major force in crypto venture capital in both Europe and the US. The FT has compiled a list of 43 investments by Howard in crypto companies and projects — ranging from well-known businesses like exchange FTX, to a start-up incubator and smaller NFT projects — based on information from venture capital databases Crunchbase, PitchBook and Dealroom and public announcements." 

Tariq Trotter -- best known as Black Thought, lead MC of hip hop group and "The Tonight Show" house band The Roots -- just became a general partner with Impellent Ventures, a firm that looks to back startups in the so-called Rust Belt. Axios has more here.

U.S. venture capital trends in five charts.

In an SEC filing today, Twitter told investors that approving the company’s sale to Elon Musk is the only remaining step in satisfying the merger agreement. Twitter reminded investors that the purchase price of $54.20 marked a 38% premium to where the stock was trading prior to Musk disclosing his initial stake. CNBC has more here.

Relatedly: The rock star litigator who hopes to bring Elon Musk to heel. (Really, this story involves a Fender Telecaster.) Courtesy of the Financial Times.

Meryl Streep's one weird trick.

The secret art of the family photo.

The return of giant jewelry. 💎

Wordle board game. "Get ready to start the party!" 🎉 🥳

Earnout is often used to bridge “purchase price gaps” between buyer and seller in a M&A transaction. Allied Advisers has developed a quick read on topics to watch out for in earnouts to make it a win-win for both buyer and seller. We view earnout as icing on the cake and would generally recommend that sellers pursue a transaction ONLY IF the upfront purchase price is appealing.