The Flowlie Times #18
Generative tech (lots of it), hype cycles in VC, and market wisdom from a 23-year-old founder
Hi Friends,
This is Mike from Flowlie. This bi-weekly newsletter includes the top articles about VC & PE, ranging from operations, tech, and tax advice to trends, notable guides, and news on recent capital raises. We hope you enjoy it and find some value!
3 reads for today
As we experience a market downturn, this article comes to mind “23-Year-Old Evan Spiegel's Leaked Email” (co-founder and CEO of Snapchat). Quote:
“Fed has created abnormal market conditions by printing money and keeping interest rates low. Investors are looking for growth anywhere they can find it and tech companies are good targets - at these values, however, all tech stocks are expensive - even looking at 5+ years of revenue growth down the road. This means that most value-driven investors have left the market and the remaining 5-10%+ increase in market value will be driven by momentum investors. At some point, there won't be any momentum investors left buying at higher prices, and the market begins to tumble.“
Here is a big article by NFX about generative tech - everything from definition to potential applications and important questions to answer. Quote: “It’s Oct 2022. This window will close in months. Find your area, find your seam – either technical, distribution, customer focus, geography focus, etc and hit it hard.”
Some meta-thoughts related to NFX’s article - "The Hype Cycles of Venture Capital". This piece dives into past cycles of hype and how to avoid them. Are we in one now?
3 venture announcements
Continuing the topic of generative AI, “Shutterstock will start selling AI-generated stock imagery with help from OpenAI”. A lot of questions to answer - from copyright to the value of human vs AI-generated art, etc.
Fundraising update - “Reclaim.ai Closes $9.5M in Total Funding, Launches Scheduling Links Feature & Reveals 60.2% Burnout Rate Among Knowledge Workers”. The idea is to use AI to manage calendars to prevent worker burnout.
Finally, “Merge raises $55M Series B for its unified API” moving us towards a more connected world. To quote: “a startup that offers an API integration service with a focus on HR, payroll, and accounting systems (among others)”.
The bet is clear, AI is here to stay and move us forward by co-working with us. The question that remains is whether VC willfully or accidentally will create a funding bubble that may endanger technological development.
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Thank you,
Mike from Flowlie