🤖 Living Tissue Organism Fights For AI Regulation: You Probably Heard About #02 [I'm No Economist]
Take no advice from me. I'm No Economist.
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It will be sent out every Friday by the end of the day and will consist of a summary of big numbers, what happened during the week in finance and tech, and what's important to keep on the radar.
⚠️ Important: These sections can change. And they will depend on the audience's preference. I'm open-sourcing it to the audience with polls by the end of each section so I can iterate for the next edition - if I want to, after all, it's my newsletter.
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🏦 It's divestment season
With the recent liquidity crunch, Tiger Global is looking to sell $40B in assets in the near future. It's no surprise that firms may be looking for liquidity. Especially when a lack of liquidity can be the catalyst for solvency issues for financial institutions - as we've seen from First Republic and SVB recently.
But for Tiger Global, it's been hard finding the right price for private assets. The Wall Street Journal reported that they already saw $23B being wiped out in its VC portfolio value in 2022 (around 33% markdown).
I say that the secondary market doesn't look too good for this other $40B, son.
🌱 Seed saves the day
While later-stage ventures were marked down, according to Pitchbook's VC valuation report, Seed is the least affected investment stage by the current climate (as of March 23).
Late-stage valuations fell to the lowest levels since 2017. Angel suffered from the lowest median valuation levels in the last decade.
But the good news is that markdowns are happening less often in Q1'23 than in the previous period, meaning that value wipe-outs from later-stage ventures will decrease.
I wonder if check sizes are being adjusted as well. Macroeconomics impacts higher-risk assets - VC especially. So if we're having liquidity issues, does this mean that lower valuations will knock on earlier-stage companies in no time?
🤖 Living Tissue Organism Fights For AI Regulation
Sam Altman went before the U.S. Congress in favor of AI regulation. He has 99 fair concerns about the impact of AI, but making zero dollars ain't one. He answered questions on privacy, the impact on jobs, and other risks imposed by AI. He encourages authorities and puts himself at their disposal to help with developing regulations.
🤷♀️ Here's the profit you ordered, sir
Nubank (NYSE: NU) never ceases to amaze investors. This time they surprised everyone with the biggest profits in the company's history during Q1'23. The expectation from BTG Pactual was $74M in profits, but they came in at $141M in net profits during the period. Did that make you think when was the last time you exceeded someone's expectations? Maybe it's just me.
🥖 Bringing in that bread
NeoFeed: Bossanova wants to divest from 45 positions by the end of 2023. So far it has already exited from 7 companies in the past ~60 days and is looking to accelerate the pace. “If startups reach a R$70M (~$15M) valuation, we're looking to sell it." says the CEO João Kepler. You get an exit, you get an exit, everyone gets an exit!
🇧🇷 Brazil
Monthly IGP-M on Wednesday, May 24th
Foreign Direct Investment on Friday, May 26th
🇺🇸 U.S.
Powell's FOMC speech on Saturday, May 19th
News Conference on Debt Ceiling on Sunday, May 20th
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I'm No Economist is a newsletter about global investment trends.
Here you'll read research digests and updates on what's going on in Venture Capital, Private Equity, and Global Macroeconomy - all subjects I'm fascinated with and have strong opinions about.
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Talk soon,
L.
Would be great to have all Bossanova data, probably some incredible insights over BR early stage venture capital market.