Brian Armstrong

We've released the latest edition of our EQ/IQ Crypto Newsletter, and it's packed with key industry developments. Here are my top three takeaways: 1️⃣ U.S. Senator Cynthia Lummis officially introduced the BITCOIN Act in the U.S. Senate, proposing to pay down the national debt through the creation of a strategic Bitcoin reserve. 2️⃣ Historic levels of volatility swept across broader markets as the VIX reached levels we've only seen a handful of times in the past two decades. 3️⃣ U.S. presidential candidates are increasingly signaling a pro-crypto stance in an effort to capture tens of millions of "crypto votes." We cover all of these topics and more in our weekly newsletter. Stay up-to-date on this rapidly evolving market by downloading your copy today. 🤝

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When I first read Jevgenijs Kazanins's very excellent fintech take on why Cash App Pay could be the next major driver of Block’s growth, I was floored by his initially compelling case that if Cash App can incentivize more payments payments volume to go through Cash App Pay, they can drive massive gross profit uplift, because Cash App Pay’s take rate is substantially higher than Cash Card’s take rate on purchase volume (2-3x). But if it were true, why hasn’t Cash App taken advantage? Whereas Jevgenijs is more optimistic about the ~$2.5bn in GPV that Cash App Pay has generated in its first ~2.5 years of existence, I find it downright embarrassing. That’s less than 1% of Square’s GPV after two years in the wild? And that’s despite it being essentially pre-installed on every terminal with no change in hardware required. I started to have a sinking feeling that maybe something was missing in the calculus. And as I dove deeper, it became clear that the “magic” take rate uptick we thought we’d found was more of a magic trick, relying on some deception. The seeming increase in take rate comes about like this. Normally, when a Cash App user makes a purchase, Cash App acts as the Issuer which means there are several intermediaries between what the merchant is charged and what Block earns on the transaction, meaning its ultimate take rate is relatively low. But in the case of Cash App Pay, there’s potentially a few magic tricks at work. The first is that in this case, Block is facilitating the Square merchant’s acquiring POS AND it’s issuing the Cash App user’s debit card, thereby cutting the intermediaries down in the typical payments flow and seemingly increasing Cash App take rates by 35-50% (instead of just interchange, you’re now getting interchange and markup). But then gets even better with the second trick, because if you’re both the acquirer and the issuer, *you don’t even need the payment network at all*. You can simply move money by book transfer between your merchant’s bank account and your user’s bank account in a perfectly closed loop payment network. Suddenly, Cash App Pay has a magical 2.9% take rate with no money movement costs at all. The problem with these magic tricks, like the ones in life, is that they are actually using some deception to hide what’s truly happening. Let’s play it out. In the status quo, without Cash App Pay, Square would earn ~1.85% in acquirer markup and Cash App would earn 0.90% in interchange for a total of 2.75% in take rate. In the Cash App Pay case, Square and Cash App would split the 2.90% Merchant Discount rate they artfully charged without having any money movement. So instead of the 2-3x markup, the uptick is more like +15bps (+5%). So maybe there isn’t a massive take rate arbitrage, but Block should still be focusing on its closed loop payment network because it represents huge opportunity for other reasons. Read the full post at https://lnkd.in/d93nkn29.

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🚰 VODA.ai is building software to make one of our scarcest, most important resources safer and more cost effective to manage🚰 It's W13 / Q2 / 2024 & this week in our MGMT Boston startup series we’ve got VODA.ai, an AI startup helping analyze our nation’s water infrastructure at a local level to deliver better service for utilities and local populations across the country. Co-Founder & CEO George Demosthenous was working in product management at a utility technology vendor that builds metering & network infrastructure for utilities. George consistently heard that while the technology Mueller was selling was effective, the external pipe detection equipment and sensors they were purchasing didn’t necessarily stop leaks. There are 2.2M miles of drinking water pipes across the U.S. In Jackson, MS more than 65% of their processed water does not make it to end customers. In Detroit’s Highland Park neighborhood an estimated 70% of water is lost from 120 year old pipes. Imagine if Apple shipped 100M iPhones stateside and 50M were littered across the Pacific Ocean floor on their way over from Asia. Crazy, right? VODA.ai is building a software company that uses existing data to assess the condition of pipes that cannot be seen and determine which ones will have the highest likelihood of an event, like a leak or a break. VODA.ai created an AI engine dubbed “daVinciTM” here in Boston that uses pattern recognition in the way that LLMs probabilistically identify the next word in a sentence. daVinciTM has been tested head-to-head with other alternative models and has always outperformed! No pressure.. Since COVID they have grown both revenue & customer count by 200%+ y/y, continuing to leverage AI with both their product & team. AI’s emergence has helped VODA.ai’s sales cycle fall from a full year to three months as utilities broadly want to leverage best in class AI software. This Seed-stage startup has already analyzed over 1M miles of pipe (almost 50% of America!) and over 2M miles of service lines with customers from Boston to San Jose, CA. They are planning to more than 2x revenue in 2024, becoming the go to decision support platform for water utilities across the country in the next five years. VODA.ai is backed by local Boston investors Innospark Ventures and the Massachusetts Clean Energy Center. MassCEC has named VODA.ai a top carbon reduction emission leader, the team has twice been voted (by water utilities!) the Best Smart Water Solution at the Smart Water Summit, and VODA.ai plans to continue to grow their team in Boston in the quarters ahead. Operators to Know: -Kyra Dubinsky, Chief of Staff -Cory Sides, SVP Sales -Dan Hack, EVP of Operations and International Sales -Lowell Rust, MBA PMP, VP of Customer Success If you're interested in learning more, the full post is linked in the comments! And sign up for the newsletter to see who we bring you next week, will you?? #bostontech #startups #AI

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More news from Socure!

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Ever since we launched SHAKTI, every quarter we write a letter to our LPs = Each letter includes an update on the portfolios, the GP's (our) view on the zeitgeist, an interview with a portfolio CEO and an interview with a TITAN = So far, we have 16 such letters = it's been on our "to do" list to share these publicly (i am lazy) = then Google comes along to save lazy people like me (thank you NotebookLLM) = here's a 10 min podcast summarizing our journey since Dec/2020 with the 16 LP letters as source = if you wanted to know what we are about, this is a pretty good place to start = https://lnkd.in/db7K2TrT cc SHAKTI

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🚨 Startup friends - If you bank with Evolve through one of their fintech partners (such as Mercury or Stripe Treasury), take some steps now to try to protect your identity. If you aren't sure if you bank with Evolve, you can confirm by looking at your wire details in your account. I recommend: 1. Setting up credit freezes with each of the major bureaus 2. Signing up for an identity protection and credit monitoring service, such as Lifelock (especially if you aren't able or willing to do #1) 3. Be hyper vigilant for phishing attacks 4. Change your passwords with the fintech partners (while allegedly credentials were not leaked, I say better safe than sorry) Lastly, consider diversifying your financial stack (happy to chat about this with folks, just DM me). From SVB last spring, to Synapse's collapse, to this - there's always something.

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Thrilled to personally participate in the $1mn seed raise of Electron that is building a universal zk-proof aggregation layer for Ethereum, alongside LambdaClass, @Zephyrus Capital, Blue7, Interop Ventures, Founderheads, Router Protocol and super angels including Sandeep Nailwal, Martin Köppelmann, Jaynti Kanani, Anurag Arjun and others. The high cost of proof verification on-chain in Ethereum can result in millions of dollars of infrastructure costs, even for new projects. #ProofAggregation emerges as the ultimate solution for elastically scaling on-chain proof verification. It has the potential to slash proof verification costs by over 99.9%, saving builders hundreds of millions annually. Electron aspires to become the de-facto "method" for verifying proofs on Ethereum. They're already collaborating with tier-1 partners like Polygon Labs, Gnosis , LambdaClass, Avail, Biconomy and several others. Notably, Electron's superproofs, currently live for Cosmos Network: Internet of Blockchains are already demonstrating a 98% reduction in verification costs. You can explore them here: https://lnkd.in/dZYWEEJ2

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https://lnkd.in/enNr2zfN Outgo, a Seattle, WA-based freight payments platform provider, raised $15M in funding. The round was led by Gradient Ventures, Construct Capital, with participation from Neo, PSL Ventures, Bezos Expeditions, Fintech Fund, Operator Stack and Upper90. Additionally, the company has secured a $50M credit facility raised from Upper90 for receivables purchasing. The company intends to use the funds to expand operations and its business reach. Led by CEO Marcus Womack, Outgo is a provider of a payments platform for freight carriers to increase transparency and eliminate high rates, hidden fees, and long contracts. The company is rebuilding the entire factoring process and carrier experience with automation and technology at the forefront. Outgo announced its commitment to four-hour funding speeds for carriers, but also that it over-delivers by approving 50% of invoices within 90 minutes, and 25% within 15 minutes. On top of that, funding is available to carriers 24/7, with no delays for banking holidays or transfer cutoffs. Outgo Inc is a financial technology company, and is not a bank. Banking services provided by TransPecos Banks, SSB and Blue Ridge Bank, N.A., Members FDIC. The Outgo Business Visa Debit Card is issued by TransPecos Bank, SSB and Blue Ridge Bank, N.A., pursuant to a license from VISA U.S.A. Inc. and may be used everywhere Visa is accepted.

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Insightful breakdown from my great Partner Omri Amirav-Drory on the simple factors that really separate the top 1% of investors from the rest, and how more operators should become investors! https://lnkd.in/gEiZdT2h

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Starting a company requires all your life's energy. Make it big and worthwhile. There's an opportunity to do that in the stablecoin space right now. Founders, your work is vital for maintaining US financial hegemony and stability. My NFX partner Morgan Beller's case for why stablecoin founders are essential for US national security: https://lnkd.in/gpxiEdb8.

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In our recent episode, Eddy, Daren, and Robert talk through our annual State of Crypto Report. The report is an analysis of the latest data and trends that have defined the industry in 2024. Listen to the full episode: https://lnkd.in/gZi8Ervj

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Weekly VC deals done: Sixfold / USA (NYC) / $15M / Generative AI for risk analysis / Salesforce Ventures, Scale Venture Partners, Bessemer Venture Partners, Crystal Venture Partners Hoop / USA (NYC) / $5M / AI-powered task management / Index Ventures, Origin Ventures, Divergent Capital, Chingona Ventures Liminal / USA (Denver, CO) / $5M / Generative AI for data security / Fin Capital, High Alpha, Matchstick Ventures, Craft Ventures Scout Fund Signapse / UK (Guildford) / £2M / AI Sign Language translation software / Soulmates Ventures, Deeptech Seed Fund, Royal Association for Deaf people, Empirical Ventures, CEAS Investments, The FSE Group Tobiko Data / USA (San Mateo, CA) / $21.8M / Data infrastructure / Unusual Ventures, Theory Ventures, 20Sales, Fivetran CEO, Census CEO, MotherDuck CEO Taloflow / USA (San Francisco) / $1.3M / AI technology / Wonder Ventures, First Check Ventures SiTration / USA (Boston, MA) / $11.8M / Materials recovery / 2150, BHP Ventures, Extantia, Orion Industrial Ventures, Azolla Ventures, MIT E14 Fund Kanastra / Brazil (São Paulo) / $21M / Tech-driven back office for finance / Kaszek, Atlantico, Valor Capital, Quona Capital, QED Investors, Actyus HyperSpectral / USA (Alexandria, VA) / $8.5M / AI-powered spectral intelligence / RRE Ventures, Kibo Ventures, Correlation Ventures, GC&H Investments Advanced Medicine Partners / USA (Durham, NC) / $32M / Advanced medicines / Deerfield Management, ARCH Venture Partners Understory / USA (Madison, WI) / $15M / Insurance for climate-vulnerable industries / True Ventures, Prelude Ventures M0 / Switzerland (Zug) / $35M / Decentralized financial infrastructure / Bain Capital Crypto, Galaxy Ventures, Wintermute Ventures, GSR, Caladan, SCB 10X Wevr / USA (Los Angeles, CA) / $3.5M / Creative development and production / HTC Corp., Epic Games Dive Engineering Software / Germany (Berlin) / $10M / Simulation software / D. E. Shaw group, First Momentum Ventures, Segenia Capital, Senovo Capital Envisagenics / USA (NYC) / Undisclosed / RNA splicing therapeutics / Third Kind Venture Capital, Empire State Development, Red Cell Partners, Bristol Myers Squibb Testsigma / USA (San Francisco, CA) / $8.2M / AI-powered test automation platform / MassMutual Ventures, Accel, STRIVE, BoldCap Inventive / USA (San Francisco, CA) / $6.5M / Embedded AI for SaaS / Wing VC, Tokyo Black, angel investors group XREX / Taiwan (Taipei) / $18.75M / Blockchain-enabled financial service / Tether iCOMAT / UK (Bristol) / $22.5M / Advanced composite manufacturing / 8VC, NATO Innovation Fund, Solvay Ventures, Velocity Partners VC restor3d / USA (Durham, NC) / $70M / 3D printed orthopedic implants / Summers Value Partners, Trinity Capital Eko Health / USA (San Francisco, CA) / $41M / AI for early detection of diseases / ARTIS Ventures, Highland Capital Partners, NTTVC, Questa Capital, Double Point Ventures, EDBI, LG Technology Ventures Alinia / Spain (Barcelona) / $2.4M / Corporate alignment platform / Speedinvest, Precurs

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Crypto is complex. We make it simple. Take CryptoEQ Premium for a test drive with our brand-new EQ Dashboard walkthrough video. A Texas-sized shout-out to Rebecca Correa, Michael Thoma, and team for putting this together! Learn more at CryptoEQ.io. 🚀

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Want a front-row seat to the frontier of tech? We’ve got the role (or two) for you! We’re expanding our frontier-tech team at Blackbird by hiring a Frontier Tech Investments Associate and Foundry Fellows! Got questions? We've got answers... 1️⃣ What are the roles? 🧪 Associate = a full-time VC investment gig in our Blackbird Investments team, working directly with me. We’re looking for someone with a science and/or engineering background and more curiosity than they can handle. You’ll grow your own investment brand and practice, support our portfolio founders, and will help build Foundry, our early-stage frontier-tech accelerator. ✨ Foundry Fellow = a casual/contract gig in our Blackbird Investments team, ~15h per week for 3 months. The Fellowship is ideal for PhD students and ECRs who want to learn more about startups and VC. You’ll go deep on emerging areas relevant to your expertise (or curiosity!), get a front-row seat to groundbreaking companies in those areas, build out your non-academic network, and develop a solid writing practice. 2️⃣ Why are you hiring? We love frontier tech, and we’re ready to grow our team. 3️⃣ Wow, it’s so great that you’re starting to look at deep tech! Look, we get it: we don’t make a lot of noise about our frontier tech investing. Buuuut we’ve been deep-tech investors since we backed Tim Kentley-Klay to found Zoox back in 2014—we’ve been on incredible journeys with PsiQuantum (building the world's first utility-scale quantum computer right here in Australia!), Inventia Life Science (transforming drug discovery with high-fidelity cell models), Remedy Robotics (surgical robots for remote endovascular procedures), Opto Biosystems (minimally-invasive neural implants to treat cancer), and more. We believe that frontier technologies, and great frontier-tech investing, will be part of the solutions to the greatest problems humanity faces today. 4️⃣ When do applications close? May 31st at 11:59pm AEST. 5️⃣ I have more questions! I’m sure you do! Clare Birch and I are hosting an AMA to answer any and all questions about these roles. Want to know what a week in the life of our team looks like? What’s keeping us up at night? What our ideal candidate looks like? Come along and find out - registration link in the comments 👇 Apply for these roles: Associate - https://lnkd.in/gCfj4EUJ Foundry Fellowships - https://lnkd.in/gj6ATZVZ If you know anyone that we should meet, send me their details! Cameron Elise Ben Andrew Robin Joseph Adelaide James Olivia Lucinda Raghav Jesse Christie Mohamed Tom Amee Pablo Haya Loong Hon Joshua Benjamin Megan Harry Denzil Matthew Diana Daniel Tom Deanna Justin Amar Lilly Stone Thomas

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Scaling Investor Outreach: How We're Using AI to Personalize VC Fundraising at Scale As a General Partner at Vibe Capital, I'm always looking for innovative ways to connect with potential investors and grow our fund. Recently, I developed an AI-driven system that's revolutionizing our approach to investor outreach. (Tentative name: Vibey) I'd like to share how we're using cutting-edge technology to build stronger relationships in the VC world. Our challenge was clear: how do we personalize communication with hundreds of potential Limited Partners (LPs) while maintaining efficiency? The solution came in the form of a three-part automated pipeline: 1. Smart Contact Categorization: First, I created a script that taps into the power of AI (specifically, the Claude model) to analyze our vast network of contacts. It combs through our email history, categorizing each contact as a potential LP, a referral source, or other. This crucial step allows us to focus our efforts where they matter most. 2. AI-Powered Personalized Emails: Next, I developed a system that generates highly personalized emails for each potential LP. These aren't your typical templated messages. Our AI crafts unique emails that reference recent interactions, highlight Vibe Capital's latest portfolio successes, and even extend invitations to exclusive events in San Francisco. It's personalization at a scale that would be impossible to achieve manually. 3. Streamlined Email Delivery: Finally, I automated the sending process. This script handles the technical aspects of delivering emails via Gmail's API, carefully managing rate limits and potential errors. It ensures our personalized messages reach investors' inboxes efficiently and reliably. The results are...TBD. We just sent out the emails today! That said, we're now able to reach out to a much larger pool of potential investors with messages that feel personal and relevant. It's allowing us to build and maintain investor relationships more effectively than ever before, which is crucial as we approach our next fund close in Q3 2024. But beyond the immediate benefits, this project represents something bigger. It's about embracing technology to enhance the human touch in our relationships. We're using AI to create more meaningful connections, to start real conversations. As we continue to refine this system, I'm excited about its potential to reshape how we approach investor relations in the VC world. It's a perfect example of how AI can be a powerful tool in building the relationships that drive our industry forward. I'd love to hear your thoughts on this approach. How do you see AI shaping the future of VC and investor relations? #VentureCapital #AI #InvestorRelations #Innovation #TechInnovation #Fundraising #AIinVC #InvestmentStrategy #DigitalTransformation #VCInsights #FutureOfInvesting #PersonalizedOutreach #InvestorEngagement #AIApplications # #ScalableSolutions #InvestmentTech #NextGenVC #Vibecap

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Sharing a sanitized version of the mu ventures Q2 q'ly LP update. Included musings: 👉 SEOs shrinking impact, and the rise of LLMO (large language model optimization) 👉 examples of the Commerce AI application layer coming to life 👉 a modern fund strategy that accepts companies require less capital, time, and people to trigger the power law 👉 Mu's guide to investing in AI 👉 all 30 companies in the Mu-niverse (and several others we admire) Founders, VCs, LPs - if you like how we think and suspect we can partner, hit us up! https://lnkd.in/dTJ2zjav

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Early stage VC investing is a job for the innately curious with an aptitude for risk.

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