What Elon Musk's first day as Twitter's owner looked like

Hope you have a spooktacular weekend, all. If you have 30 minutes to spare and you're trying to better understand what all the fuss is about when it comes to "generative AI," you would do worse than listen to this week's StrictlyVC Download interview with serial founder-turned-venture capitalist James Currier, who is among a growing number of industry participants who see generative tech as the biggest thing since the shift to mobile. (Yes, he said this.) We learned a lot about why it's all the rage right now -- hope you enjoy it. (We also have print excerpts from the chat below.)

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What day one of Elon Musk's Twitter ownership looked like. 

Most critically, he said he's forming some kind of content moderation council. No one knows quite what this means yet or who would be part of this oversight body, but hopefully it's a sign that Twitter really won't become a "free-for-all hellscape." 

For its part, General Motors said it's pausing its paid advertising on Twitter until it obtains more information about the site’s direction under its new ownership. The Detroit automaker, which competes against Musk’s Tesla, characterized the move as a normal step when a media platform undergoes a significant change. “We are engaging with Twitter to understand the direction of the platform,” GM said in a statement today, with an exaggerated wink.

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If you've been closely following the progress of Open AI, the company run by Sam Altman whose neural nets can now write original text and create original pictures with astonishing ease and speed, you might just skip this piece.

If, on the other hand, you've only been vaguely paying attention to the company's progress and the increasing traction that other so-called "generative" AI companies are suddenly gaining and want to better understand why, you might benefit from this interview with James Currier, a five-time founder and now venture investor who cofounded the firm NFX five years ago with several of his serial founder friends.

Currier falls into the camp of people following the progress closely -- so closely that NFX has made numerous related investments in "generative tech" as he describes it, and it's garnering more of the team's attention every month. In fact, Currier doesn't think the buzz about this new wrinkle on AI isn't hype so much as a realization that the broader startup world is suddenly facing a very big opportunity for the first time in a long time. "Every 14 years," says Currier, "we get one of these Cambrian explosions. We had one around the internet in '94. We had one around mobile phones in 2008. Now we're having another one in 2022."

In retrospect, we wish we'd asked better questions, but we're learning here, too. Excerpts from our chat follow, edited for length and clarity. As mentioned at the top of the newsletter, you can listen to our longer conversation here.

There's a lot of confusion about generative AI, including how new exactly it is, or whether it's just become the latest buzzword.

I think what happened to the AI world in general is that we had a sense that we could have deterministic AI, which would help us identify the truth of something. For example, is that a broken piece on the manufacturing line? Is that an appropriate meeting to have? It's where you're determining something using AI in the same way that a human determines something. That's largely what AI has been for the last 10 to 15 years.

The other sets of algorithms in AI were more these diffusion algorithms, which were intended to look at huge corpuses of content and then generate something new from them, saying, 'Here are 10,000 examples. Can we create the 10,001st example that is similar?'

Those were pretty fragile, pretty brittle, up until about a year and a half ago. [Now] the algorithms have gotten better. But more importantly, the corpuses of content we've been looking at have gotten bigger because we just have more processing power. So what's happened is, these algorithms are riding Moore's law -- [with vastly improved] storage, bandwidth, speed of computation -- and have suddenly become able to produce something that looks very much like what a human would produce. That means the face value of the text that it will write, and the face value of the drawing it will draw, looks very similar to what a human will do. And that's all taken place in the last two years. So it's not a new idea, but it's newly at that threshold. That's why everyone looks at this and says, 'Wow, that's magic.'

So it was compute power that suddenly changed the game, not some previously missing piece of tech infrastructure?

It didn't change suddenly, it just changed gradually until the point where our, the quality of its generation got to a point where it was meaningful for us. So the answer is generally no, the algorithms have been very similar. In these diffusion algorithms, they have gotten somewhat better. But really, it's about the processing power.

More here.

(Photo above of James Currier taken by Christopher Michel.)

OpenWeb, a eight-year-old Israeli startup that helps publishers engage readers and target them with ads, raised a $170 million Series F round at a $1.5 billion valuation. Georgian Partners was the deal lead. The company has raised a total of $393 million. The WSJ has more here.

Versa Networks, a 10-year-old startup based in San Jose, Ca., that connects users to apps in the cloud or data centers with security layered on top, such as data loss prevention tools and gateway firewalls, raised $120 million in a mix of equity and debt led by BlackRock, with participation from Silicon Valley Bank. TechCrunch has more here.

Canary Technologies, a five-year-old San Francisco startup that creates guest management software for hotels, raised a $30 million Series B round led by Insight Partners, with additional participation from F-Prime Capital, Y-Combinator, Thayer Ventures, and Commerce Ventures. The company has raised a total of $45 million. Hotel Technology News has more here.

Cinchy, a five-year-old Toronto startup that states it provides companies with instant visibility into their organizational data without the need for separate application databases, raised a $14.5 million Series B round led by Forgepoint Capital. SiliconANGLE has more here.

Classera, an 11-year-old San Francisco startup that develops online learning and training programs for the education and corporate sectors, raised a $40 million Series A round. Sanabil Investments, which is owned by Saudi Arabia's sovereign Public Investment Fund (PIF), was the deal lead; other investors included Global Ventures, Endeavor Catalyst, 500 Global, Sukna Venture, and Seedra Ventures. The company has raised a total of $40 million. Reuters has more here.

CloudPay, a 26-year-old startup based in Andover, UK, that offers companies integrated payroll and payment services, raised a $50 million. Runway Growth Capital and Olayan Group co-led the deal. PYMNTS has more here.

Cruz Foam, a five-year-old Santa Cruz, Ca., startup that claims to produce "regenerative, earth-digestible protective packaging foam, raised an $18 million Series A round led by Helena, with One Small Planet, Regeneration.VC, At One Ventures, and SoundWaves also pitching in. More here.

Fox Robotics, a four-year-old startup based in Austin, Tex., that manufactures autonomous forklifts, raised a $20 million round led by BMW i Ventures, with additional investment from Zebra Technologies, Japan Airlines & Translink Innovation Fund, and Foothill Ventures as well as previous investors Menlo Ventures, ENIAC Ventures, and SignalFire. The company has raised a total of $38 million. The Robot Report has more here.

ForeVR, a two-year-old Los Angeles startup that develops VR casual games for bowling, darts, and cornhole, raised a $10 million Series A round led by Lobby Capital, with Bessemer Venture Partners and Galaxy Interactive also contributing. The company has raised a total of $18.5 million. TechCrunch has more here.

Fun, a San Francisco startup that is looking to develop crypto wallets that have multi-chain interoperability, raised a $3.9 million pre-seed round led by Tinder co-founder Justin Mateen’s JAM Fund, with SOMA Capital, NOMO Ventures, and Great Oaks Venture Capital also throwing in. The Block has more here.

Fursure, a two-year-old Miami startup that provides a marketplace to make it easier to find and compare pet insurance policies and a debit card that helps pet parents save for their pet’s healthcare, raised a $3 million seed round. The round was led by MaC Ventures, with participation from Sure Ventures, Scrum VC, Western Tech Investment, Slope Fund, Winklevoss Capital, Streamlined Ventures, and Upside Partnership. The company has raised a total of $6 million. Fortune wrote about the company last month.

Gabbi, a two-year-old Portland, Or., startup that aims to help users detect breast cancer at its earliest possible stages, raised a $4.4 million round led by Bread and Butter Ventures and including Female Founders Fund, WR Hambrecht, Phoenix Rising, Claridge Ventures Advisors VC, Coyote Ventures, and Gaingels. The company has raised a total of $6.2 million. GeekWire has more here.

Martian, a 23-year-old New York startup that has built a crypto wallet for the recently launched Aptos blockchain, raised a $3 million pre-seed round involving equity and a simple agreement for future tokens (SAFT). The deal was led by Race Capital, with additional investment provided by FTX Ventures, Superscrypt, Jump Capital, and Aptos Labs. The Block has more here.

Onward, a two-year-old Los Angeles startup whose goal is to help divorced and separated parents more easily manage their shared expenses, raised a $9.7 million Series A round led by TTV Capital; additional investors included Lerer Hippeau, Citi Ventures, Correlation Ventures, and Gingerbread Capital. The company has raised a total of $12.7 million. TechCrunch has more here.

Oxford Medical Simulation, a five-year-old London startup that helps to train healthcare workers through virtual reality simulations, raised a $2.4 million round led by ACF Investors. EU-Startups has more here.

Smart Things, the newest startup formed by Android cofounder Andy Rubin (The Information reported on this yesterday), has received backing from Andreessen Horowitz, reports Semafor. The amount of the investment is not yet known (hence, the section title). More here.

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Twitter’s stock will be delisted from the New York Stock Exchange on November 8, according to a new filing with the U.S. Securities and Exchange Commission. TechCrunch has more here.

Twitter's top two executives are likely to collect severance packages totaling just over $100 million following their firing by the company’s new owner, Elon Musk. Under previously disclosed terms, former CEO Parag Agrawal is likely to receive $57.4 million, including $56.4 million in equity that vests on an accelerated schedule, according to an estimate from Equilar, a compensation data and analysis company. Departing CFO Ned Segal’s exit package is likely to total $44.5 million, including $43.8 million in accelerated equity, Equilar said. The WSJ has more here.

In total, 1.5% of all venture dollars so far in 2022 have been allocated to Latin American-founded companies, a drop from 2.5% last year, according to a Crunchbase analysis. Minorities and women overall are seeing dramatic dips in venture funding this year, observes TechCrunch. More here.

Who killed the social media ad boom?

Welcome to hell, Elon. 

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