Marvin’s Best Weekly Reads July 17th, 2022
“You never change your life until you step out of your comfort zone; change begins at the end of your comfort zone.” ― Roy T. Bennett
This is useful for fundraising founders.
https://twitter.com/jamoses92/status/1542635532877832193
2. "I think we’re seeing the limitations of Russian power already. Clearly, Ukraine is a priority for him. Now, there will probably be a period of consolidation if he is successful in Ukraine. I was in Ukraine last week, and one thing that people were discussing is that, perhaps in the future, Putin will use Ukraine as a tool for further adventures. If he conscripts Ukrainians forcefully to the Russian army, if he uses Ukrainian industrial and military bases. It seems to be the strategy to use forces from other minorities in Russia (Chechens, South Ossetians, etc).
This has happened in the past in Russian and Soviet military history. We in Europe have lost contact with such practices that seem barbaric to us, but they are as old as Mankind; the Romans did the same. If he follows that path, it will take a while, it won’t be immediate. After a period of consolidation of two or three years, Russia could then become stronger, because it would certainly be a much larger country, including large parts of Ukraine."
https://georgiatoday.ge/bruno-macaes-on-putins-empire-ambitions-and-georgia-losing-its-way
3. This is the playbook that China & cursed CCP used to crush democracy in HK. Being used all over the world now too. Be aware.
https://mobile.twitter.com/suelinwong/status/1542634038619521026
4. "On one hand, industry giant and once prolific investor Coinbase has been tapping the brakes. Its venture arm, Coinbase Ventures, invested in just eight companies in June—including decentralized crypto custodian Entropy and crypto-focused asset manager Valkyrie —compared to 28 in March and 11 in the same period last June, dragging its second-quarter deal count lower, according to data from PitchBook. Non-fungible token marketplace OpenSea, which launched OpenSea Ventures in February, has yet to announce an investment, a spokesperson told The Information.
Others are going full steam ahead, looking to capitalize on potential winners when other competitors slow down investments. Binance Labs, for example, announced its first fund worth $500 million in late May. Since launching the fund, Binance Labs has announced one investment, an undisclosed seed round for decentralized exchange ApolloX."
5. Four decades later, the firm he and his friends founded, Susquehanna International Group, is a sprawling global company that makes billions of dollars. Yass and his team used their numerical expertise to make rapid-fire computer-driven trades in options and other securities, eventually becoming a giant middleman in the markets for stocks and other securities.
Today, Yass, 63, is one of the richest and most powerful financiers in the country.
But one crucial aspect of his ascent to stratospheric wealth has transpired out of public view. Using the same prowess that he’s applied to race tracks and options markets, Yass has taken aim at another target: his tax bill.
There, too, the winnings have been immense: at least $1 billion in tax savings over six recent years, according to ProPublica’s analysis of a trove of IRS data. During that time, Yass paid an average federal income tax rate of just 19%, far below that of comparable Wall Street traders.
Yass has devised trading strategies that reduce his tax burden but push legal boundaries. He has repeatedly drawn IRS audits, yet has continued to test the limits. Susquehanna has often gone to court to fight the government, with one multiyear audit battle ending in a costly defeat.
Yass’ low rate is particularly notable because Susquehanna, by its own description, specializes in short-term trading. Money made from such rapid trades is typically taxed at rates around 40%.
In recent years, however, Yass’ annual income has, with uncanny consistency, been made up almost entirely of income taxed at the roughly 20% rate reserved for longer-term investments.
The tax savings have contributed to an explosion in wealth for Yass, who has increasingly poured that fortune into candidates and causes on the political right. He has spent more than $100 million on election campaigns in recent years. The money has gone to everything from anti-tax advocacy and charter schools to campaigns against so-called critical race theory and for candidates who falsely say the 2020 election was stolen and seek to ban abortion."
https://www.propublica.org/article/jeff-yass-susquehanna-tiktok-tax-avoidance
6. "The collapse of 3AC in and of itself is unremarkable. A hedge fund that was previously successful executing boring but stable yielding arbitrage strategies decided to strap on leverage to accelerate returns, and paid the price. The use of borrowed funds to play the TerraUSD carry trade sealed their death sentence.
But what made the 3AC default so impactful is that it blew a whale shark-sized hole in many of the largest centralised crypto lending businesses. Due to losses on 3AC loans, many of these lending businesses have gated customer funds and become functionally insolvent. The withdrawal of credit from the crypto ecosystem has caused a generalised market crash of Bitcoin, Ether, and the whole pantheon of shitcoins. No coin has been spared.
But what’s conveniently going unmentioned by much of the media is that both centralised and decentralised lending companies / platforms had exposure to 3AC — and only the players in one of these two markets went belly up. The centralised lenders failed en masse, while their decentralised counterparts liquidated collateral and operated with no hiccups. Using the story of 3AC as the canvas, let me paint you a picture that illustrates why Lord Satoshi and Archangel Vitalik’s creations stood the test of time, and what this means for the future of crypto."
https://entrepreneurshandbook.co/number-three-511f334d8fae
7. I find these videos very educational and inspirational. Building & Maintaining multiple income streams while doing it location independent.
https://www.youtube.com/watch?v=ZAIpGwaU9CU
8. "I also don’t get people who go to Phish concerts or collect Pokémon cards, both of which have thriving communities around them. The culture surrounding many higher-profile NFT projects, whether it be Bored Apes or Doodles or whatever else, is hyper-monetized fandom. Web3 in many circumstances may be a cynical cash grab from those at the top, but at the bottom of a pyramid are a lot of people who are at least, in part, true believers.
It makes it hard not to root for the underdog, even if the underdog is banking on a future that very well may not pan out."
https://www.vox.com/the-goods/23186695/nft-nyc-bored-apes-doodles-web3-crypto-crash
9. "It’s encouraging to see how the universe of savvy, experienced people investing in startups is increasing — and that includes creators. But as I sift through the 100th press release talking about a footballer becoming an angel investor in a startup, it’s easy to wonder how those creators and celebrities actually analyse the risks involved in the startups they back.
In that sense, a fund like Creator Ventures — with a track record and dedicated team — can be an important conduit. And it’s also just generally fun to see people with different backgrounds getting into investing — it should translate to more companies that might not have caught the eye of traditional investors getting a chance at backing."
https://sifted.eu/articles/creator-ventures-raise
10. "Reads the presentation, “We expect the market downturn to impact consumer behavior, labor markets, supply chains and more. It will be a longer recovery and while we can’t predict how long, we can advise you on ways to prepare and get through to the other side.”
In one key slide, the firm notes what startups have already been told by a wide variety of other VCs and the broader market itself, which is that investors’ focus is shifting to companies with profitability.
Writes the firm: “With the cost of capital (both debt and equity) rising, the market is signaling a strong preference for companies who can generate cash today.”
https://techcrunch.com/2022/05/24/sequoia-capital-plays-nostradamus-again
11. "Public market multiples directly impact private company valuations. Other than a brief period of time recently, it’s been this way forever. As entrepreneurs, we should understand this relationship and take it into consideration as part of our fundraising plans."
12. Great discussions here on generalist versus specialist for those in the business of creativity. Another good episode.
https://www.youtube.com/watch?v=9TZ50I--0NQ&t=970s
13. "When you lend your coins you have to trust that the service evaluated counterparty risk properly, which includes: financials of borrower, collateral requirements, custody, etc.
Your keys, your coins.
Is the return that lending services provide worth it? This is subjective and up to each person to decide."
https://www.theheldreport.com/p/the-rise-and-fall-of-blockfi
14. These small profiles of up and coming VCs are always fun. Li Jin of Variant Fund.
15. "Chen cited a particular Kimmel-hosted dinner where her co-founder found herself sitting with one of The Chainsmokers. “I don’t know how she does it,” said Chen, “but she’s able to have a conversation with anyone.”
And these conversations have been happening fast. In the three years since founding her early-stage fund, Kimmel has become a particularly glamorous symbol of venture’s movement toward solo general partners. Worklife Ventures, backed by limited partners including Marc Andreessen, Alexis Ohanian and Garry Tan, has claimed a seven times return over the last three years, with investments in seven unicorns, including Webflow, Tonal and Hopin.
In a few weeks, Kimmel will put her “magical” mingling power to an even higher test. She is set to open Worklife Studios, a speaking salon and creative clubhouse in Los Angeles’ Silver Lake neighborhood, on July 11. Taking over Depop’s old building, Worklife Studios will become a bricks-and-mortar manifestation of Kimmel’s own connector persona, a place where Los Angeles creatives can gather for workshops on non-fungible tokens, poetry readings or dinner parties."
https://www.theinformation.com/articles/once-upon-a-time-in-brianne-kimmels-hollywood
16. A very good interview with the sober David Sacks. One of the best operators and angel investors in Silicon Valley. PayPal mafia.
https://www.youtube.com/watch?v=l7zxA5oUZDw
17. This man is a true hero. Such a fan of him and World Central Kitchen.
"He’s a force of nature, with a slew of successful restaurants. There’s Minibar, a 10-seat fine-dining counter with two Michelin stars in Washington, D.C., but also Beefsteak, his vegetable-forward fast-casual chain. At various hotels, you can find his freewheeling Bazaars, with their potato espuma and “Say When” caviar service. In New York, there’s the sprawling Mercado Little Spain, a love letter to his home country. And in the next year alone, ThinkFoodGroup, Andrés’s company, is opening a New York outpost of his D.C. hot spot Zaytinya, as well as three restaurants—San Laurel, Agua Viva, and a branch of his (very good) steakhouse, Bazaar Meat— in Los Angeles.
Even so, I’ve never seen Andrés as he’s depicted in the new documentary We Feed People, directed by Ron Howard and available now on Disney+. For the last 12 years, since he founded World Central Kitchen, he has traveled the world, hopscotching from hurricane to tornado to flood to war zone, helping to make and deliver more than 70 million meals. And for the last two years, Howard’s crew has followed him.
The film shows the organization being at once extemporaneous and carefully thought out. By mobilizing existing kitchens, avoiding bureaucratic red tape, and recruiting local volunteers, WCK has been able to deliver lifesaving aid where larger institutions cannot. It takes chutzpah and an outlaw’s gumption, and the man at the center of it all—advocating, yelling, hugging, crying, and, of course, cooking and feeding—is Andrés."
https://www.hemispheresmag.com/people/hemi-q-and-a/jose-andres-central-kitchen-ukraine
18. Halfway through this documentary. Highly recommend it.
It’s about the amazing Chef Jose Andres, his story and also the story of one of my favorite charities: World Central Kitchen.
Incredibly inspiring.
https://www.youtube.com/watch?v=-eYaSwwmGl4
19. "What this investor could not have imagined is that the geeky tech analyst would one day run one of the world’s largest private-investment firms and that he would also become both a central player in a frenzied years-long global tech bubble — one driven by “unicorn” companies trading at absurd valuations — and its bursting over the past six months. The guy who started as a shy analyst would put up impressive gains for years, then suffer mind-boggling losses: $25 billion (and counting) as of June, a record figure even in the lofty world of hedge funds.
The meltdown at Coleman’s firm, named Tiger Global in a nod to his mentor, is one for the ages. “Their losses look to be the biggest in the history of hedge funds,” says one hedge-fund manager, ticking off other notable contenders for that unfortunate title. Tiger Global’s drubbing far surpasses that of Bridgewater Associates, the world’s largest hedge fund, which lost $12 billion in 2020, or Melvin Capital Management, the now-infamous target of the Redditor-led short squeeze of GameStop shares in 2021, which cost it $6.8 billion. Long Term Capital Management, the most notorious hedge-fund blowup of all time, shed a mere $4.6 billion when it almost collapsed in 1998.
Looking back, Rasmussen, the former Bain Capital analyst and current hedge-fund manager, believes that it’s easy to see how Tiger Global got into its current predicament. “They’ve just been winning, and winning, and winning,” he says. “I think one thing that happens to people who win, win, win, win, is they get overconfident, and they can’t imagine a scenario where they’re not winning.”
https://nymag.com/intelligencer/2022/06/tiger-global-poster-child-of-the-tech-meltdown.html
20. "Both sides therefore must adapt, but, admittedly oversimplifying, the Russians are adapting into becoming more of a 20th Century army while the Ukrainians are becoming more of a 21st Century army. The Ukrainian adaption process will therefore taking longer but the prospect at the end is of a much more capable force.
Over the next few weeks we should start to get some sense of whether Ukraine can start to take the initiative and impose its own priorities on Russia rather than the other way round, and how well the Russians are able to respond to the steady improvement of Ukrainian capabilities. Should Ukrainian forces be able to create any momentum, however, then the situation could move in their favour very quickly. Can the Ukrainians win? Yes. Will the Ukrainians win? Not yet clear, but the possibility should not be dismissed."
https://samf.substack.com/p/can-ukraine-win
21. Magical Tenerife. Cannot wait to visit in the future.
https://www.hemispheresmag.com/europe/spain/tenerife/three-perfect-days-tenerife
22. This was a very interesting profile on Mark Manson, self help guru and writer and how to recover from burnout.
https://nymag.com/intelligencer/article/mark-manson-subtle-art-of-not-giving-a-fuck.html
23. "As an acutely disillusioned conservative who lives in a Trumpy county in a blue state (Maryland), I’m used to treading water in crosscurrents. And you know what? It’s fine. It’s doable. In fact, we’ve been doing it for 246 years, we just didn’t have as many professional windbags convincing us that we’re doomed. And by the way, we are doomed if we think we are. Which is why we have to stop thinking we are.
America is not perfect, and never was during whatever imaginary period you’re romanticizing from a past that never existed. What we’ve always had going for us is that unlike plenty of other countries, we can work through that, and have. Which is not to say it’s easy work. But too many now seem to think we’re entitled to a work stoppage, which, sorry, is deeply un-American."
https://mattlabash.substack.com/p/happy-fourth-of-july
24. "This brings us to the most fundamental level of what this is about: sheer power. If the United States allowed China to seize control of Taiwan, America’s position in Asia, and hence as a global power, would tumble overnight. Its alliance structure in the East would collapse, and China would become the regional hegemon, despite its many protestations to the contrary.
If, by the same token, China were to prevail in a conflict over Taiwan, it would not just be able to cow neighbors such as Japan and South Korea (among others)—with the world’s largest navy already, it would soon control the entire western Pacific. The Chinese government, of course, doesn’t talk openly about the stakes in these terms for fear of frightening others.
But for a democracy like the United States, and indeed for its most deeply implicated allies, this is unacceptable. Smart people may differ about the wisdom of eroding strategic ambiguity around Taiwan, but with stakes this high, the public deserves a clear and open discussion of the high risks and cost and benefits of defending the island."
https://foreignpolicy.com/2022/06/24/taiwan-china-us-war-democracy-great-powers-biden
25. I dream of Italy, especially Southern Italy in this case.
https://www.hemispheresmag.com/europe/italy/amalfi-coast/three-perfect-days-amalfi-coast
26. "The role of a venture capitalist is a lot like that of a founder. You spend your days pitching, meeting with potential investors in the fund, and going over financials & term sheets. But the best part of being a career venture capitalist is meeting with founders and backing the next generation of entrepreneurs.
Some assume that VCs sit around tweeting all day and refreshing TechCrunch. However, being an investor is a full-time job. In fact, being a first-time fund manager is MORE than a full-time job.
Yeah, you read that right. Emerging fund managers have to be scrappy too. Our team is all distributed, we use no-code tools like Airtable & Notion, and automate where necessary. To get Overlooked Ventures off the ground, I had to put in my own money to get started. And so far, we haven’t paid ourselves all that much in the last year. Why? We’ve prioritized deploying capital to founders."
27. Stoicism is a powerful tool in ancient and modern times.
"To me, the proof of the philosophy and its universality is that back to back, its two most influential thinkers are someone of extreme privilege and someone of extreme powerlessness. I think it works for both in that the central tenet of the philosophy is: Focus on what you control, focus on the response to the things that are outside of your control. Do the best you can in the world within which you exist."
"How do you just wake up and deal with a world filled with difficult people? And how do you stay true to what you believe, to what you think, to your duties and obligations, when people can feel like obstructions or disincentives to what you should be doing?
And I just love that the Stoics were not just practical in terms of how do we get stuff done, but they’re like, how do you go through the world and not be bitter and angry?"
28. "The U.S. retains a remarkable array of fundamental strengths — a large and well-educated populace, a huge amount of land and natural resources, favorable geographic location, a civic culture that is far more robust than people give it credit for, a multiracial and multicultural population that is very cohesive at the local level, a welfare state that’s far more robust than people realize, top scientific and technical institutions, world-class industries, and so on.
But despite these strengths, the U.S. is in trouble, because of politics. It would be foolish not to acknowledge this. The recent string of Supreme Court decisions that is upending the political-economic status quo is not (yet) a major cause of the dysfunction, but it is a bellwether of instability, and it has served as a wake-up call for many of those who thought the political conflicts of the last 8 years were just social media hype."
https://noahpinion.substack.com/p/a-time-of-troubles
29. "Oil and commodity prices will not stay high forever. The West will find alternatives to Russian supply, and Russia will likely struggle to quickly divert supply elsewhere - lots of talk of energy sales to Asia, but Russia lacks the pipelines to divert gas from Europe to Asia. And it will take years for these pipelines to be built.
Sure, sanctions have not stoppped the Russian economy in its tracks. But it was never meant to - or the West always had to weigh cost to Russia against the costs to Western economies. But the sheer scale of sanctions and self sanctioning will inevitably weigh on Russia growth over the longer term, its ability to finance investment, and likely the economy will stagnate. This means higher unemployment, lower living standards, capital flight and a brain drain.
Meanwhile, the experience over the past decade or more, is of more, not less malign actions by Russia, and now with the setting of a Russia - NATO arms race, there will be more pressure in the West to crimp Russian economic capability to restrain its military rebuild. And sanctions are still one of the limited options it has at its disposal. The reality is therefore more, not less, sanctions causing ever greater harm to the Russian economy."
https://timothyash.substack.com/p/sanctions-on-russia
30. "New details have emerged about Belarusians fighting for Ukraine against Russia's invasion as part of a broader struggle to free their own country from Russian domination and the rule of Moscow-backed autocrat Alexander Lukashenko.
Speaking exclusively to VOA in a Tuesday phone interview, the deputy commander of the largest pro-Ukraine Belarusian fighting force said its numbers have almost reached the size of an average Ukrainian battalion, which he said has about 450-500 troops."
31. I'm neutral on this view as many in the media are left-wing tech biz hating individuals.
But I also see alot of arrogance in tech biz leadership where founders who are great builders usually are not great people managers.
"This management style is confrontational and public-facing, and it relies on “thought leadership” expressed through tweets. The Musk School is as much about cultivating the individual executive’s brand as it is about running an actual company. Its practitioners see themselves as visionaries, and they can often point to the early success of their companies as evidence. But they also believe that the skills they perceive as having in one area are applicable elsewhere—in particular, the messy art of managing people.
This is a poor and ineffective management style that is usually only thinly disguised by the executive’s cult of personality. Still, it’s now a quite popular tactic among celebrated tech leaders of a certain type."
32. "Conclusion: If a firm like Voyager, BlockFi, Celsius etc is offering a high return of say 10%, there is no way they can sustainably meet that return *if* deposits go up. Talk about a terrible business. The more customers they attract, the harder it is to make money if the yields remain high.
Now if you’re looking at the yields today, many have fallen to 3% or so. There is just no point. You’re better off buying iBonds at 9.6% with $10,000 worth of value and if you have a decent amount of crypto, say 10BTC+, it isn’t worth risking 100% loss for a 3% return."
https://bowtiedbull.substack.com/p/blockfi-rescue-what-is-a-bailout
33. "Romans believed the “soul” was their will. They called it the ANIMUS. It was an animal-like spirit that drove them forward. Many words we have today descend from Latin counterparts. Virtue comes from the Roman Virtus, which was how the Romans described manliness. You can see that modernity has degraded the meaning of the word, but Virtus isn’t the only word effected by modernity. Inertia is another word that’s changed meaning since the time of the old Republic.
Inertia to us means to not be moving. To not change. For the Romans, to be inert is to be a coward. They believed you had to undergo labor, to do great things you had to move. You had to impose your will on the world. The coward sat on his couch all day. You — as a disciple of the warrior religion — must avoid inertia at all costs.
Being surrounded on all sides by enemies, the Romans had to become warlike people. They had to outwork and outfight their opponents. They had to be on a different level."
https://resavager.substack.com/p/the-metaphysical-understanding-of
34. "Empires have varying origin stories and while the Barbarian Principle may not fit all empires, it’s happened often enough to be mentioned in the historical record. The Ancient Greeks were savages compared to the more civilized Persians.
The Romans were founded by a gang who raided the nearby villages of their women in order to continue their civilization. Rome itself was later overran by barbarians after years of decadence and decay. The Barbarian Principle is almost a law of nature and something every people should think about, but don’t.
The barbarian is closer to nature than the civilized man. He understands what the civilized man never did: nature is brutal. There’s no fairness in nature. Nature only cares about who wins. And it is wolves who win wars.
The most important thing you should take away from the Barbarian Principle is this. Don’t let your fate rest in the hands of the elite. Anyway you can find a way to break the chain. Create your own small tribe and train with your friends. Live on your own terms so when and if the fall happens, you’ll be amongst the barbarian caste."