Happy First Week of July!

😊 What Would John Wooden Look for in a President? 

Silicon Valley admires founders who exhibit strength, ambition, and high energy, often viewing these traits as indicators of strong leadership. If that is my only yardstick to pick a President, Trump did win the Presidential Debate last week.

As venture capitalists, it’s our job is to look beyond the surface when choosing the right founders to invest in. This same vigilance should be applied when choosing a President.

It’s not easy to spot a person’s character and true accomplishment - integrity, compassion, selflessness, resilience, generosity, humility, trustworthiness, self-control. These qualities are often subtle and receive far less public celebration. The journey to building a successful company is long and hard; building a strong country is a hundred times harder. We need a leader who can make us proud to call ourselves Americans.

We should never assume that loudness equals strength and quietness equals weakness. Let’s keep our hearts open and remember these quotes from the “Wizard of Westwood” John Wooden:

• Character is what you are. Reputation is what others think you are.

• Never lie, never cheat, never steal.

• Strive to be better than yourself - everyday. Never strive to be better than someone else, because you have no control of that.

Mark Cuban, Reid Hoffman and Vinod Khosla tend to agree. David Sacks and Bill Ackman are probably not.

👓 How to Read a Founder?  I enjoyed listening to Lenny’s interview with Jessica Livingston - co-founder of Y Combinator. Her ability to read people was crucial for YC. Founder’s dynamics matter a lot as early-stage ideas are bound to change many times, but the people will remain the same. This Reading the Mind in the Eyes Test is very enlightening and great training for reading people. I only got 27 out of 36!

✨ Are These New Innovations or Distractions for VCs?  VC has evolved over the years. Many VCs are now branching out and doing a lot more than just funding companies:

• Andreessen Horowitz plans to launch a private equity fund and has already launched a wealth management arm called Perennial

• Pershing Square is going IPO. 

• Thrive Capital is investing in film studio A24.

• General Catalyst is offering venture debt (providing companies with the cash for up to 80% of its monthly sales and marketing budget) and buying hospitals.

🗺️ The Enterprise AI Roadmap. This report by CBInsights discusses how enterprise buyers assess AI ROI, use cases, and more. A few things to note:

• Companies will come under financial pressure to consider how to leverage open-source models as they think more about the longer-term ROI of their AI investments.

• Small language models (SLMs) have fewer parameters and require less computational power than LLMs, making them faster to train and cheaper to run compared to the generic models.

• We're going to see consolidation in the GenAI space because it's not tenable to have 100 or more companies doing the same thing.

I suggest you pay close attention to AI development platform use case summaries on P.31. Other than the two deals with Google/IBM, annual spend for most of the deals are between $50K - $200K. Read more on CBInsights.

💰 Kleiner Perkins Fund 21 - Congrats to KP for launching Fund 21! Super entertaining Terminator-style fund deck. No surprise, this fund will focus on AI, but also fintech, crypto, hardware, healthcare, and consumer.

This week a total of 12 startups raised $645.5M in funding, 1 M&As:

• $134M goes to 3 Enterprise startups

• $70M goes to 1 Enterprise startups

• $57M goes to 2 Crypto/Blockchain startups

• $126.5M goes to 2 BioTech startups

• $120M goes to 1 Hardware startup

• $106M goes to 1 Manufacturing startup

• $16M goes to 1 Construction startup

• $16M goes to 1 Other startup

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Edith
X, LinkedIn

Funding (300 miles radius from Silicon Valley)

Enterprise

• Odaseva (data security platform for Salesforce) raised $54M Series C led by Silver Lake Waterman

• KarmaCheck (background check and compliance platform) raised $45M Series B led by Parameter Ventures

• Onehouse (data lakehouse) raised $35M Series B led by Craft Ventures

FinTech

• Klarity (AI accounting automation solution) raised $70M Series B led by Daniel Gross, Nat Friedman

Crypto/Blockchain

• Conduit (crypto infrastructure) raised $37M Series A led by Haun Ventures, Paradigm

• Ora (tokenizing AI models) raised $20M Series A from Polychian, HF0, and Hashkey Capital,

BioTech

• Frontier Medicines (chemoproteomics platform for drug discovery) raised $120M Series C

• TwoStep Therapeutics (targeted therapeutics for solid tumors) raised $6.5M Seed led by NFX

Hardware

• Etched (AI chip maker) raised $120M Series A led by Positive Sum, Primary Venture Partners

Manufacturing

• Bright Machines (automation software for manufacturing) raised $106M Series C led by BlackRock

Construction

• Clearstory (change order platform for construction) raised $16M Series B led by Prudence

Other

• Ario (AI life assistant for parents) raised $16M Seed from Wing Venture Capital, Floodgate, Bain Capital Ventures, Moxxie, etc

IPO & M&A (300 miles radius from Silicon Valley)  

• OpenAI acquired Multi (remote collaboration platform)