YouSaid · the spoken record

Fabrice Grinda

lines on the record: 98
first: 2024-06-20
most recent: 2024-06-20
sittings or episodes: 1
sources: podcast

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“Yes. So Tether, and I will share my experience of it, of hearing some skeptical things about Tether and also saying, look, if they have all the money, $60 billion or now it's over $100 billion, why don't they just get regulated? Why don't they just get audited and show that they have it, they release these attestations? Interesting enough, funny to just reveal how it never ends up the way you think it. I remember listening to a very popular podcast where Sam Bakeman freed was being asked by very good journalists, what's up with Tether? Is Tether a fraud? Is Tether going to implode? Of course, Tether is still here and Sand Makers Free Empire has utterly collapsed and he is in jail.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Correct, for B date, depending on your risk appetite, just T-bills or a basis straight type product. Absolutely. And it makes sense, right? Right now, Tether is the single most profitable company in the world on a per employee basis. That does not make sense.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Correct. MT Bill is live. MBasis will be live within a month or so. We are currently basically negotiating which of the three asset managers we're going to be working with to do all the trades.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Exactly, and therefore, and the trade in the very bull, right now it only yields, I mean, only 15% or so. But like a few months ago, when people were really bullish, it was yielding like 50%. And the perpetual futures product is really a crypto invention where it reprices every eight hours or so, but people like leverage in this business. So in the crypto world, and there's a lot of DGN. And so it's an extraordinarily profitable trade. Now, it only works in bull markets, right? Like it would definitely not work in the bear market, but in the bear market, then you switch over to the tokenized T-bill product that is just your saving safe savings product until you are feeling more bullish. And that trade work, both of these products are fundamental tools that people that want to be in the DeFi and the crypto ecosystem should be using.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“BDC will be worth 100K to 120K million, whatever it is in the future, you can earn that spread. And that Fred in bull markets can be worth as much as 50% a year. Because if you think it's doubling, you're willing to pay 50%. Now, it obviously moves up and down based on people's future expertise of where prices are. But that's a product that we're launching in the next few weeks. So MIDAS is really an institutional grade tokenized security product that is completely regulatory compliant, bankruptcy remote with two main products, tokenized T-bills and a tokenized basis trade product, Delta Neutral Basis Trade Product.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“That Bitcoin, Ethereum, and others are going to be worth more in the future than they're worth in the present. What you do is you create a basis trade where you're long the spot, you own the spot, and you short the future rate. And because of that, and you create a professional...”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Us actually of launching using the same legal framework, a delta neutral basis trade. So in a product called NBASIS. So what's been happening, the most successful probably company of the last year in the crypto space is a company called Athena, which is a fastest one to gather $3 billion of assets. And what happens in bull markets? What I want Midas to be is a crypto company that is safe for consumers and to offer investment institutional grade investment products that work in both bear markets and bull markets. The bear market, you have a TVL product, which gives you the TVL rate. And in a bull that you can do interesting things in DeFi with. And then the bull market, you have a basis trade product. So the way it works is because people believe in bull markets.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“That's yield bearing where we KYC and AML people on issuance of redemption, but all the segregated transactions or not, KYC, the ML, which means you can integrate in DeFi and you can do Loveard Long Traits, et cetera, and made a lot of sense. And so we took a while because you have to become MIFID compliant. You need to be approved by the European regulators. We have to be mic compliant, but we ended up building a company called MIDAS where the first product that's called NTBIL, it's a fully regulatory compliance bankruptcy remote tokenized T-bill, which you can use to do many things, including we're integrated in lending vaults like Morpho, where you can borrow against it or lend against it. Because of course, if you're going to be lending, you might as well have a yield bearing collateral. And in moments where DeFi rates are lower than the T-bill rate, you can do lever long traits and you can make 15, 20% on your T-bills. And we're in the pro.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“In a bank in order to maximize bank profits. It's not the way it should be. Actually, there's no reason you shouldn't be settling in T-bills or settling in your savings account. It's just a means for the banks to maximize profit. So I'm like, okay, obviously crypto is highly regulated space. And so the question I ask my partner, and I'll tell you about him in a second, is like, is there a legal way to have a yield-bearing stablecoin where we can give most of the yield to the end user? And so he comes from Goldman Sachs. His name is Dennis. We'd work together on listing vehicle. We'd bought 200 million of treasuries. We'd gone through SEC registration. And we realized that actually in Germany, they have a bearer bond legal framework where basically they do KYC and AFL on issuance and redemption, but also transactions were not. And so to the extent we could issue a security token,”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“In Argentina, in Africa, in most countries, extraordinarily useful. And even at the bottom of the bear market, there was about $130 billion in stablecoins. And so my analysis was like, we're no longer in a zero rain environment. The long term Fed's funds rate is not going to be 0%. Maybe it's not five and a quarter. Maybe it's 300 basis, 100 basis points, but it's not zero. In which case, a non-yield bearing stable coin, which USDC and USDTR doesn't make sense. So right now you have Tether and USDC where you give them 100 USD. They go and buy T-bills. They make five and a quarter, you earn zero. And I'm like, that makes no sense. So there should be a yield bearing stablecoin. And by the way, the idea that we're paying in the traditional financial world with our checking account and that savings account checking account distinction is really a luxuriant.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Basically, as soon as rates started rising, crypto started falling and it went down massively. I mean, most things went down 90, 95%, many projects died. Of course, many projects were not meme coin-ish not really viable. It led me and my partner, and I'll tell you about that in a second, to think through, okay, what is a use case of crypto? What is the use case of crypto? Ignoring digital gold, Bitcoin, which is okay, but it's okay if you need a savings product and you're in Argentina and you're facing inflation, but in the US, you know, not super useful. And ultimately, the one use case, the one mass market use case actually is stablecoins. Stablecoins, USDC and USDT are a combination of a means of exchange and means of payment and a store of value and extraordinarily useful, again, not super useful in the US or Western Europe where you have reasonably stable currencies.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So post my macro analysis of 21, it was clear to me that as rates went up, we're going to have a bear, a crypto winter, if you want, as we've seen before. And what I was describing earlier in the venture space where we're in a complete bear market in 22, 23, and Q1, 24 that is starting to turn around was even more so in the liquid crypto space because crypto, whatever the bull thesis around it as ultimately is a risk asset and is possibly the ultimate risk asset. And so it is completely negatively correlated one for one with US interest rates. The second US, so I can tell you that the peak of crypto was the day before US the Fed funds restarted right the US interest started rising.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Or eBay or Airbnb and all of these types of businesses. And so we start investing in the private side of crypto pretty early in 2016 or 2017. We now have, I think, like 70 crypto investments, about on the private side, which is about 10% of our fund. And we were at the very beginning of figment and early investors in Animoka and like some of both the fundamental infrastructure layer companies and application companies in the space. So we were early investors with community investors in the space. Now on top of that, because many of the applications in crypto, the value accrues to the tokens and not to the equity, we decided to start investing in tokens as venture investors, meaning we evaluate the team, we value the tokenomics, we value the company, and we buy the tokens and we hold. So we're not hedge funds. We're not trading. We're not doing, but we're”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So I'm a gamer, and so I had very powerful GPUs. And so as an intellectual exercise, I was mining Bitcoin on my GPUs in, I don't know, 2010, 2011, like very, very, very early. And as a venture investor, my specialty is network effect businesses and marketplaces. And crypto has extraordinarily profound network effects. So if you think of the analogies of maybe operating systems like Microsoft, Windows, those extraordinary network effects, because once you have developers on the platform and developer tools, people build applications because they have applications. More people get it and so on and so forth. And same thing happens in layer one. So Solana or Ethereum, and then people build these applications themselves or marketplaces. So if you think of something like Uniswap, it's a marketplace where liquidity matters need to match supply and demand. It follows the exact same dynamics as Alibaba.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Depends on the sage. If you're early sage for sure, if you're late stage and you take a year where you're growing 10, 20% and you fix your unit economics, so you go from burning 100 million to being break even, that actually is probably okay. But if you're a seed stage company or a stage company, you're not growing, then yes, that's a death sentence because we're not PE investors. We need to underwrite a 10x or more. And if you're not growing, you're not going to make it. So in the early stage, for sure, it's true.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Of kings. I don't mean the open AI type investors. I mean like applications of AI and the companies that we're raising around it. And we're seeing some recovery in price discovery and valuations and ease of getting rounds done in the venture site. But we're still far, far from normality, still harder than I would have expected to be. And some categories are completely unloved. delivery for instance and food food tech in general which basically because everyone went and ordered food online in the bubble days uh the companies grew a lot more and and penetration greased more and people expect that to become normal and so when they shrank again divided by multiplied by five and then divided by two but the problem is they're divided by two is so painful that the category became very unloved so anything related food for instance food”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“I'd say late 22 to Q124 was terrible. Okay, it was terrible except a tale of two cities. If you're an AI, it was extraordinarily frothy and reminiscent of the bubble of 21. So in almost all categories, it was terrible. It was hard arrays, Dan Round. You needed more traction in order to raise anything. People wanted you to raise two or three years worth of cash, et cetera. Except AI. So if you were an AI related company, it was like you're at the top of the hype cycle. And so it's interesting while most of tech was in a deep, deep recession, AI was in a crazy bubble. And now it's moving both are correcting a little bit, meaning that I think we're post peak in the AI bubble in tech in terms of like where people are raising at for new AI companies. And I don't mean the game.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“And they would like to own more because they were competing with each other like Softbank and Tyree said of her like he should, we were in a position to sell our positions to them. I think for the most part they're out of the, they've, I don't know, they're out, but they've definitely scaled back their operations. And maybe they're dipping their toes in again. But to be honest, I haven't followed. I think Softbank is still a bit active, though maybe they had different funds for Geos that have been consolidated. But I definitely don't see them nearly as much. And right now, Avenger is still in a retrenchment period. As I said, we're still like down 70% to trough in the venture side with many LPs still feeling overallocated to venture and private. And so it's hard to raise funds. And as a result, the GPs don't have that much capital to deploy.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So, first of all, a lot of these were investors before in tech. I think they'd had a history. It's just that they ramped up a lot during the bubble days or the 21 bubble. And the guys that were the most fair weather investors were really the crossover guys, where the idea for them was we're coming in private late at a high valuation because of course the public and we're going to be investors in you when you go public and we're a public market investors. The thing is they, I don't think they understood how the private markets work and that many of these companies were not ready. And once the markets turned and the public markets also turned, most of them left. Now, I don't follow very closely because this is way leader than where I play typically, though they were buyers of my companies, right? Like, so very often when I'm like, this valuation is too high, there's a new rant happening, can we do a secondary?”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Brewing between the US and China, and actually be way more better coexistence. But she, as his worldview, which is in direct conflict of mind. And so no, I do not invest in China anymore. And Turkey, Erdogan, to me is violating the legacy of Ataturk. Ataturk is one of the great statesmen of that 20th century. And I loved what he did with Turkey and how you reformed and modernized it. And Erdogan is both in a, from a political perspective, but frankly, even a macro perspective, right? He believes that printing more money decreases inflation. We've seen where the impact on the currency has been. So we had extraordinary investments in Turkey and companies like Trendjoel, which is like the Amazon of Turkey. But the problem is when you have that much inflation, the lyric values that even if”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“For a bunch of months. And she so looking to study Mandarin at Beijing Nolar University. I love China. I love the story of taking a billion people out of poverty. Deng Xiaoping is one of my heroes in terms of what he did to modernize China. The problem with autocracies and dictatorships is you're only as good as your dictator, right? And you definitely saw him in the Roman Empire where yet Augustus or Marcus Aurelius and Trajan, but you also had Commodists and Nero and as much as I love Deng Xiaoping, I think Xi Jinping is normally incompetent but dangerous, dangerous to the world. He has the wrong view of where nations' powers come from, which I think is also true of Putin, by the way, and doesn't believe in the legacy of what Deng Xiaoping and others have done. And so I actually truly believe that someone like Deng was in power today in China, we would not have this Cold War II, this”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So, you're actually correct. It doesn't form where we invest. And the vast majority of what we invest is the US and Western Europe. But we used to invest aggressively in Turkey, Russia, and China. And for geopolitical reasons, I've moved for completely different reasons and moved away from all three. So we stopped Russia after Putin's side to invade Crimea. So I think it's like 2014. What we were investors is an extraordinary companies there. We had a B2B market like the Alibaba of China that was backed by Tiger Ambassamer. And of course, they got scared, and correctly so. And so all of a sudden, the company that was worth like whatever, a billion, there was no funder available for it anymore and like some oligarch took it over for peanuts. So we definitely do not have Asa Russia anymore. China, same thing. After Jockma disappeared.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Even though I follow the geopolitical things with things like Ergo and things like green mantle, which is the Neil Ferguson gathering or dialogue, it doesn't impact my ultimate decision making. I want to go and use technology to solve the world's problems.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Mission driven. I want to solve the world's problems. And I think technology is the way to do that because it is deflationary. And in fact, it's also the way to solve the inflationary problem we've been seeing in the US. If you look at most categories, if tech has touched it, it's been deflationary, right? Like think of the quality and the power of your computers, of your cell phones over the last 40 years, but also true of solar panels, batteries. Solar panels have been dividing by 10 in price for the last decade. For each decade of the last four decades. So that's price decreases divided by 10,000. Battery prices divided by 42 since 1991. And they actually fell 50% in a year, mostly due to overproduction in China, but still continued to decrease very rapidly, which is suggesting we are going to have green solutions, technological solutions to climate change.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“At the end of the day, I'm a believer that technology, which is inherently deflationary, is going to solve most of the world's problems, right? Like, so the reason I'm in tech, both as an investor and as a founder, is I see problems in terms of inequality of opportunity, climate change, and physical mental well-being crisis. I think that policymakers were structurally capable of addressing them, especially since many of these are global and have network effect, not network effects, have negative externalities like climate change. And therefore, instead, I fund for-profit solutions that are scalable to address each of these problems. And that's why I'm an investor in live energy companies to try to solve that. So regardless of the geopolitical environment and the political environment, I take it as an exhaustionist to my models, I'm going to continue to do what I do because I do it, A, it's extraordinarily lucrative, but B, more inversely and most importantly, I think it's the right thing to do, right? I could retire 20 years ago, but I'm”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Analysis expertise. So I joined a bunch of groups. And this weren't intellectual curiosity than anything else. But there's a group called Erigo, E-R-G-O, that is former U.S. intelligence operatives and CIA, et cetera, that have created essentially an advisory business for mostly probably hedge funds that are trading in the global macro business, but for people like me who are intellectually curious about the space. proprietary access to intelligence analysts, defense analysts, and people that are in the middle of what's going on who opine and put actually probability way outcomes on what's going to happen and everything from different elections to geopolitical events. And I find, look, I do get out of intellectual curiosity. It doesn't change my what I do in my investing side. And the investing side.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“They are basically reinventing the prime contractor for the defense contractor or the government business away from the Lockheed Martin Raytheons, et cetera, of the world, because these guys have like insane cost structures were not efficient. And they're building a modern acid-like capital efficient, fast move technology forward contractor and it's winning contracts right and left. And they're creating like extraordinary autonomous vehicles underwater in the air doing like defense, et cetera, that are amazing and they're winning contracts right and left. So there's definitely been an increase in defense tech writ large. Now my geopolitical”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So, look, I was investor balance here when it was private. And then I'd prefer access to the founders. The thing is, when companies go public, I lose my privileged access, because of course now you only get access to whatever the public market information is. My more interesting, I think, investment these days. So I sold all, I typically sell my public stocks once the lockup expires. So the companies went public, I'm locked up for six months, and then I sell. The most interesting investor in my portfolio and the defense.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“If you gave me the magic wand and I could change a few things, I changed my cola calculation for benefits. You moved all the public pensions to define contribution and you increased the retirement age to whatever, 70 or at least 768. And you indexed it with life expectancy to probably solve all of your various budget deficit problems. And frankly, across the board in the West, right? the dollar relative to other currencies, let's say the euro, looks right now way safer. If you look at the public debt situation in Italy, let alone Greece and others, it looks way worse. So the macro constraints, it's interesting of like not disappeared or are now secondary to the geopolitical concerns.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Russia, China, Iran, and North Korea. On the other hand, you had the West writ large. And hopefully we can move India in our camp. But there are confrontations already that are hog wars in Ukraine and in the Middle East. And the question is, does that escalate? So I don't think that China as the amphibious capacity to invade Taiwan, but what they recently did is basically they beta tested a blockade of Taiwan. And if they blockade Taiwan, what happens then? And how does that escalate? So my macro constraints today in the short term were more driven by geopolitics and geopolitical and the risk of accidents, which are obviously higher than they are fundamentally, even though, yes, do we have unstable deficits in the US? Yes. But actually, the reality is you can fix it reasonably easily. Now, the political will to fix it is not there.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“CPI remains higher than people would like. Maybe we don't see. And in fact, that's one place where the pundits where the consensus has been wrong, that race were to say higher or longer has been what I've been saying forever seems to be now becoming more consensus, right? People were originally underwriting four, five, six rate cuts this year, maybe now we're at two, but there's way more resilience and maybe there's no landing on the horizon. I think right now the bigger risk is actually not macroeconomic anymore. It's actually geopolitical. If I see grace ones or black swans on the horizon, it's more, or we in the first innings, I mean, we're definitely in Cold War II, right? Like on the one hand, you have”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“In every category, from commercial real estate to consumer debt, credit card, that student, that and mortgage that, plus a number of soil dams that were happening in various sectors. The expectation was a recession, but employment actually has held off way better than people expected, people's income has held off way better despite the overhang. And historically, when you had inverted yield, yield curves and the fastest rise in rates, you would have expected recession. We've only had a soft landing once in the last 70 years. And that was in 1994. And so the smart money was recessioned. And the app, not only did that narrative change from recession to maybe soft landing to maybe no landing, right? Like where now, because”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. I mean, this goes to show that Silicon Valley, even though it is an engine of economic growth and productivity growth, has actually not been an engine of employment growth. So the percentage of the U.S. population employed by the tech companies is still in the lows single digits. And so you could have a massive recession in tech, which we have had. And then again, not in all sectors of tech, obviously the AI companies are mostly hiring. And it doesn't, in fact, impact employment as a whole. And the economy as a whole has been actually way more resilient than people expected, right? If you take a step back in 2022, most people predicted the US would have a recession by now. With good reason, right? Like we've seen the fastest increase in rates since the early 1980s, nominal rates. And we were reasonably overloved at the same time.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“People have a tendency to spend it if they haven't. And honestly, that lifestyle, but more, okay, let's hire it, let's grow faster, et cetera. And then all of a sudden going from a growth mode to a less focused unit economics, I mean, the number of companies that are Series B and onward, so reasonably late stage that I have at to ref 65% or more of their staff is pretty mind-blowing. And by the way, if you have to do it, you'd either do it once, and they either do it multiple times because it destroys morale. You do a massive riff like you've just let 70% of the people go. And you're like, look, the people really left. That's where the team, and you use it as a morale boosting experience, even though it's a traumatic experience versus doing it 5% and 5% and 5%. That's actually the worst because then people are wondering where they're coming next.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Exists, and that's been happening to wipe out the investors who don't want to write checks anymore. So it's mostly happened to the crossover investors who completely left. So whatever, D1, CO2, and to some extent Softbank and Tiger. Two, what we're seeing more commonly is the company does not want to do Dan Round. So they do a round at a flat price, but they put structure. They put a liquidation preference. So they say, okay, now this new round is happening, but any new money I'm putting in, I'm getting 3X. But the downside of that is essentially you're capping your outcome, meaning now the company's going to go try to sell itself. And the last rand investors are going to make it two or three X. And people before are probably going to be wiped out. We as venture investors, that's not what I'm underwriting. I want to underwrite a 10x. And so doing these private equity-ish type deals with structure is not really my jam. And then number three, of course, people that have raised enough money that they actually made it.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“To play. I mean, it really destroys companies because the cap tables end up being messed up. There's too much liquidation preference. And so you need to do massive cleanups and you may wipe out the investors. And so which is okay, but it may wipe out the companies as well. So we're seeing a lot of like fake unicorn death that's been happening the last few years as these companies were not worth as much as they had raised or seeing massive either they go under or they're taking over pennies in the dollar or an acquis hired or completely recap. And so we're seeing, I guess, three scenarios. One scenario we're seeing is complete wipeout. We're raising the money now like five pre diluting the former, converting all the stack to common and the new investors were getting whatever, 20, 30, 40, 50 percent. We're recreating an option pool for the management team. So it's a restart of a company as though the prior rank didn't exit.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Well, most startups are not profitable and the expectation is not for them to become profitable with the man they just raised. And so they raised too much money at too high a price. And then they need to go raise the next round. If they cannot raise the next round at at least the same price, you need to do what's called a dan rant. And the DanRand, as I said, triggers these anti-dilution provisions where the prior rand, so let's say you just raise $200 million at 800 billion posts. 20% dilution for 200 million. But your company is only worth 200 million. The next round, you have to, they offer to raise 50 and 150 or whatever pre. Several things might happen. One is the guys before the 200 might reprice at 200, in which case you just saw 50% dilution in your company. And so the founders lose a lot of their common stock, or maybe there's no support from the insiders and backing the company, which means that the new investors don't want to do it. They create paid.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“I don't know. 10 at 50, they always take the 50 at 150, but 10 at 40 or the 50 pose. The issue is if you don't grow into it, you might have just killed your company. And so you increase the probability of failure dramatically. But there's also bad dynamics. If everyone else is raising, you feel compelled to be raised. You feel compelled to spend it. I think speed of execution was really the valuations at 100x forward looking was really what it was suggesting. It was extraordinarily frothy.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“That they were mostly not all going to make it because the prices were so high, if it was priced perfection. And an in venture, it's very rare that you see down rounds because often when you do an investment round, there's an anti-dilution clause, meaning that if you do a next round at a lower price, the prior round reprices and actually dilutes the founders because the founders don't want that. If you raise too much money at too high a price, it kills the company. So in the venture world, What kills companies, the three main reasons of death or number one, not finding product market fit, obvious. Number two, finding your co-founders, though having co-founders increase your probability of success, so to two-edge thorid. And number three is actually raising too much money at too high a price. The issue is no first-signed founder will say no. It's like someone's offering 50 at 150 pre, 25% delusion of 50 million or someone is offering, you know.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Two weeks two one hour calls in a week. We decide to invest or not and basically between the first second call they're like, oh, we're versed, we have a lead, we're raising whatever, 100 million at a billion from Tiger or Softbank, who are the two biggest, I guess, bull market investors who basically did zero due diligence and rode massive checks on the basis of one call. And so deals were being done, which at a speed that suggested that no work was being done. And you'd have to believe that all the stars are aligned, the prices they were paying, especially since people were so bullish that they would immediately fund or other VCs would go and fund this competitors. And so you'd end up having like 10, 15 very well funded competitors going after the same space at insane prices. And so it was pretty obvious.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, it's a combination of gross sales if you're a marketplace or your SaaS revenues precede would be, let's say, zero seed like 30K, A would be 100, 150K, and B would be 500K. Add these types of valuations. And what started happening in the bubble days is we saw companies raising at 100x forward-looking revenues. But the signs of the bubble was not that. The sign of the bubble, I mean, the valuations were insane. We went from like 10, 15, 20x forward-looking revenues to 100x in some cases. But it's more the speed at which the deals were being done, which suggested there was no due diligence, right? Like, oh, I'd like to take a call to evaluate the company and maybe we have a follow-on call, well, maybe a first and associated principal takes a first call and I want to take a call next week for the second call, and we decide. And we're extraordinarily quick decision.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So, the median valuation is basically completely exploded. So the median precede 2013-2019 was one at Five Pre. The median seed was like three at 9 pre. The median A was seven at 23 pre 30 posts. The median B was probably like 15 at 50 with commensurate traction. So no traction, 150km on the GMV, 600K in GMV, 2.5 million. I mean, in SAS revenue is maybe 20% of that.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“Come in cycles, and these cycles last multiple years. So I saw the boom and bust in the late 90s, early 2000. I saw it again like 2004 into 2007 euphoria to 2007, 2010 like bus. And again, 2021 boom and then the 223 busts in the venture world, which by the way is to a large extent continuing, right? Like people in the public markets are like, oh, everything's amazing. We have the magnificent seven or whatever that are worth blah. But if you actually look at the public market caps of tech companies with stocks below 20 billion, most of them are down 80%. They used to be down 90%. Now they're down 80%. So they've forex since then, but they're still down, their stock price is still divided by four or five from the peaks. And if you look at the venture market as a whole, the amount”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“So, even in the late 90s, so I graduated college in 96. I worked for McKinsey and Company 96-98, knowing there was a bubble going on, but I figured I needed more skills before I wanted to build my company. And I wanted to build a tech company. I knew that. And I thought I would miss the bubble, actually, going to McKinsey, but lo and behold, I didn't. So I actually did see the euphoria night when I built my first company, 98.99-2000. And I saw the reverse side of the bubble. I build my next company in 2001. And in 2001, when I was, I would call every VC telling them, hey, I have this amazing idea. It's worked extraordinarily well in Europe and in Asia. There's a valid business model. I know how to execute and I've proven entrepreneur with a proven track record. I don't think I finished the sentence that they'd hung up because everyone else was going under pets.com, eToys, web van, MCI Worldcom. And there was no way to build a company. So I know that these things.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“I follow. And so in 21, it wasn't a top down directive. Valuations are high sales. Like I believe that we will, that the way we value companies is sound and we will find most companies to be expensive and therefore we will not invest and we will choose to exit when the opportunities rise. So it's as much an intellectual exercise for me than it is anything else. So I've been I'm an economist by formation. I spent a lot of time thinking about it, writing about it, reading about it. And it just so happens that it has consequences that could be applicable in the venture space. But for most people, I guess they're probably okay ignoring it if they are really strict on their heuristics, especially valuation.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“If you look at the last decade, so venture as an asset class is very different than most. It follows something called a power law versus all other asset classes follow normal Gaussian distribution curves. And in this power law, it means that the top few companies in the category end up making all the returns. And if you look at the 2010s, the very best investments were made in 08, 09, 010, 011. Like so in the aftermath of the Great Recession or the financial crisis. And so I suspect the same thing will happen here. The worst time to have invested will probably have been 21 and maybe 2020. And the best time to be invested in the 2020s will have been late 22, 23, 24 until the turnaround. So macro matters. Now, that said, I'd be disingenuous to say that I do it because I think it helps me become a better investor. I actually have heuristics.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“And therefore, Latzell, actually. So I basically am suited policy that if it was anchored to the ground, we should be selling it in every asset class will enforce in the private world. That's not liquid. We only sold a fraction of what we would have liked to do. But while everyone else was investing, we were divesting. And the reverse is true. Last year, while everyone in the venture world was basically saying, tighten down the hashes, we're not investing in anything. It was like, no, this is the very best time to be investing because valuations are reasonable. I mean, nothing's cheap in tech, but more reasonable than they have been. There's way less competition. So while there used to be 20 companies funded to do the exact same thing, there's one or two. So you're more likely to win the category. And the founder is now focused on unit economics, burn rate, making sure they have two years of cash and run away and they're going to get to the next stage. And these things matter profoundly.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT
“The macrocycle matters because of the price points at which you enter and in which you exit. And that said, as an investor in the venture capital world, you don't control the exit. The exit happens five, six, seven, ten years in the future. So you actually don't know at what point you're going to be in the cycle. What you do know is when you are investing. And so I try to be very cognizant of, especially price levels, to make sure that I'm not overpaying. And so in 2021, where everyone else was basically going crazy, I took a step back and I'm like, okay, we are in an everything bubble because there's way overly loose fiscal monetary policy. And it's leading to asset price inflation in every asset class, correlation to one and the way up and everything from real estate to bonds, stocks, privates, publics, NFTs, crypto, spacs, you name it.”
2024-06-20 · Forward Guidance · Venture Capitalist Who Called 2021 “Everything Bubble” Thinks VC Valuations Are “Reasonable” | Fabrice Grinda, Super Angel Investor, on Geopolitical Threats, AI, and Yield-Bearing Stablecoins · IDENTIFIED FROM THE TRANSCRIPT