Ross Basri

@HeharNavi Or not shrinking

@BasriRoss Correct so long as they're growing.

Eventbrite $EB looks to me like it’s trading for net cash on balance sheet. It’s not a great company but worth 0? Anyone know what’s going on here?

@HeharNavi But they have 600mm of cash. Those short term liabilities always appear on the balance sheet from what I can tell so it’s more just a feature of their cash conversion cycle (which is good) than weakening their balance sheet.

@BasriRoss Cash is backing short-term liabilities (payable to creators). They have $330m of debt.

@dotkrueger Where does the cash to pay the coupon come from

Announcing a new instrument: "The Bitcoin backed high yield bond" - The bond has a 10 year maturity - The notional amount of the bond is 10 million dollars. - It is backed by 10 million worth of Bitcoin - The bond pays a coupon of 10%. - At maturity, the bond liquidates the bitcoin at market and returns it. - The power law suggests this principal payment should be between 3x and 20x the investment. Are you interested?

@rohindhar If you wanna see something insightful for how the insurance industry works take a look at the 5 year chart for Progressive or Travelers. Insurers are making money hand over first. It’s regulation and lack of supply driving costs up.

Spoke to an insurance agent today in rural California in the Sierras (mountain area with high wildfire risk) Every single private insurer left the area So most folks insurance went up from $1200 a year to $4500 a year on the state plan of last resort Folks on fixed incomes selling their homes and moving to mobile homes or leaving the area

@NaithanJones True - otherwise you might end up like this poor chap with a nice house and Porsche but a heavy heart.

Any good narratives for why we’re seeing many tech stocks lower following the softer inflation report? Looks to me mostly positioning driven as many sub sectors that have underperformed lately like enterprise saas are holding up well today.

@biotechpain Mid-curving this one. Robotaxis will unlock an insane amount of economic value. How that enormous value gets split between consumers and the few producers who can pull it off is more “we’ll see” but Tesla is definitely in pole position here.

Serious question to #Tesla bulls: Why should anyone buy a Tesla once the Robotaxi fleet is released, especially when the cost, according to Elon, is so cheap at less than $0.18 per mile? 🤷 $TSLA $TSLAQ

@GordonJohnson19 I became dumber reading this post. Thank you.

1/12 Why $TSLA's stock is going up, daily, a thread. So, around the time $TSLA reported deliveries, the ratio of puts vs. call options being purchased increased materially. Don't believe me? Simply go to barcharts.com, load up $TSLA's ticker, and click on put/call...

@Ross__Hendricks “Elon premium” on a company in pole position on the autonomous and robotics platform shift. Kinda simple innit.

Friendly reminder: $tsla is a post-growth auto company trading at 90x earnings

@jasonlk These days a $5mm round looks more like a series A in every sector but AI infra from what I can tell. I’m assuming a bit smaller round size.

So venture capital turns out to be a pretty tough business. Imagine a $150m seed VC fund that buys 15% stakes in each startup. They write some follow-on checks, but ultimately, typically get diluted to about 10% ownership. Then one start-up in the fund is sold for $500m! An epic amount! How much does that return for the VC fund? $50m. A lot. But ... but ... it's only 33% of the $150m fund. And the job of the fund is to do at least about 4x "gross", or to turn that $150m into $600m. So that $50m doesn't even get you 10% of the way there. And note while VCs are often well paid, they don't make profits or "carry" unless the full fund is first returned. Until that $150m is paid back. So you can see here, even a $500m "exit" isn't a fund returner for a $150m fund. It's not even close. It's not enough. You need a bunch -- in every fund. OK so you can see why VCs are obsessed with Fund Returners. Those rare investments that return enough money to the VC fund to pay off at least 1x the total fund size. And you can see VCs are often pretty careful to make sure structurally, any given investment can do it. A 1% stake? Maybe it can happen with a Stripe or Databricks or SpaceX, but otherwise, small equity stakes are tough to turn into Fund Returners. Investing in the #3 or #4 in a space? Yes, you can make money. But can it be a fund returner? It's much harder. So going into an investment, most VCs have to believe you can truly be a Fund Returner. But here's the non-obvious part ... that calculation changes over time. As the years go by, some investments don't make it. Hopefully at least 1 per fund breaks out over time and becomes a "Fund Returner". Some get acquired. And some keep going ... but likely won't ever be a fund returner. At some point, it's just clear that they are a good startup, but aren't going to have that $1B, $5B, $10B+ exit it might take to be a Fund Returner. And when that time comes, as long as you don't need much more money from that VC ... the VC tends to get a bit zen. They just want you to get the best outcome you can. And in some cases, anything where they make even a 2x return is great, when it's not clear there will be even a 1x return. It's not what anyone hoped when they invested. But VCs do get zen when they have a sense over time of the outcome -- and more capital isn't required. So I know on social media it can seem like there are many horror stories of VCs pushing founders to raise too much, or spend too much, and that does happen. But it mostly happens with the ones that are, or look like they can truly be, Fund Returners. The rest kind of, at least a few years in, sort of get left alone if they don't need more money.

@haydenzadams Lolololol

Forgot we did this 5 years ago! Never really caught on as a ux pattern but maybe solana stuff will bring it back

@aaronoleary This would do 35k in airbnb revs

@jasonlk What’s their moat mate?

So what if I told you about a SaaS company: - at $700m ARR - growing 30%+ - with 130% NRR - with 20%+ free cash margins - with no downturn and an epic brand - seeing 30%+ bookings next year, too what would that be worth? How about just $6.9 Billion. Barely 10x ARR It's a bit rough out there right now

@micahjay1 I agree. 1. Know AI better than most 2. Buy well positioned traditional businesses 3. Integrate AI better and faster than competition

Given that AI can automate laborious processes, I've been thinking that perhaps its best to invest in full-stack traditionally serviceoriented companies that leverage AI vs. being the tool seller. In the SAAS revolution, the tools created the value. But perhaps in this wave, the models will commoditize quickly and are quite horizontal. So ... maybe best to be the full-stack provider vs the picks and shovels?

@alz_zyd_ Uhhh I recall something vague about competition with the axis powers…

If competition is so good for innovation and science and technology, why did they put all the good physicists in one place and allocate tasks and make them work together when it mattered for the Manhattan project

@alz_zyd_ Alternative - some top down controlled entity burns way more resources making arbitrarily many mistakes with no motive to get anywhere fast

Appreciate the horrific degree of waste induced by capitalism: 3-4 companies are burning huge amounts of electricity to independently develop AI models, without sharing anything they learn with each other. Every possible mistake has probably been made independently by each team

@qthomp Bullish bearish bullish again… I can’t keep up with you man

The market is fading the positive impact of the upcoming ETH ETF way too hard

@JustDeauIt Defi tokens don’t have the same claims on their protocols fee revenue in the same way as these regulated stocks. Apples to oranges

Are the Ethereum DeFi OGs undervalued? - Uniswap has a Price to Fees ratio of 9.6x. It did $807m in fees in the last year and has 137 employees per LinkedIn. - MakerDAO is at 6.9x. It did $252m in fees last year and has approximately 100 employees. - Aave is at 2.8x. It did $240m in fees last year and has approximately 100 employees. - Lido is at 1.5x. It did $874m in fees over the last year and has 38 employees per LinkedIn For reference: - Nvidia has a Price-to-sales (equivalent to Price-to-fees for crypto) ratio of 40.4x. It did $79b in revenue last year with 32,000 employees. - Robinhood is 9.8x. It did $2b in revenue and has 3,308 employees. - JP Morgan is at 3.7x. It did $158b in revenue and has 77,000 employees. - BOA is at 3.2x. It did $97b in revenue and has 207,000 employees ---- Given the scalability of DeFi protocols, one has to wonder what their valuations could look like in a post-regulated world. [Uniswap is doing $5.8m in fees/employee. Robinhood does $604k/employee today. Aave does $2.4m/employee. BOA does $466k. ] Time will tell! Data: @tokenterminal, Yahoo Finance