Immoderata Tech #6
Welcome to the latest edition of Immoderata Tech, a newsletter about key developments impacting the broader technology ecosystem. Our goal is to inform and educate our readers - ultimately to make you (and us) better technology investors, operators, and advisors.
Immoderata is an investment group that backs ambitious technology companies. If you are an angel investor (or want to be), feel free to join us and gain access to great deal flow.
Crypto
Coinbase is looking to become more of a developer platform… More here.
The original king of crypto… More here.
More crypto contagion, Silvergate Capital files for bankruptcy after a bank run... More here.
Given the hype around AI, Web3 companies may have a more difficult time raising capital… More here.
AI & Computing
Generative AI (GAI) is officially on the hype train tracks. Salesforce Ventures is launching a GAI-only fund. Sound familiar?.. More here.
Expect to see many sophisticated chatbots in the near-future as ChatGPT recently opened its API to developers… More here.
Silicon Valley Bank
Earlier coverage of the SVB’s asset profile. A good primer for folks that want to understand the collapse a little better… More here.
Why SVB collapsed… More here.
Thoughtful commentary on the costs of SVB’s collapse outside of Silicon Valley… More here.
A contrarian, but informative, view on the SVB hysteria that has gripped tech over the few days…More here.
Editor's Note
The last 10 days have been some for the books. Three bank failures, an entire industry on its backfoot, and still plenty of uncertainty to make the next several weeks interesting. Typically, when these types of systemic failures happen, there are two interacting forces at play - poor risk management and hysteria. One typically causes the other, but the other (hysteria) is often overblown and irrational. The problem is that, in old Wall Street parlance, the market can remain irrational longer than you can remain solvent. This was the case with SVB - whose poor risk management practices are likely well understood by our readers at this point.
However, there was another overlooked risk at play. Many individuals and companies had not diversified their cash holdings and, had it not been for the government creating artificial rationality (in the form of deposit guarantees), many companies would be reeling on the brink of collapse and legal trouble.
While we are certainly glad that the government provided a backstop, the events of the last few days serve as an important reminder to evaluate the risks in your business and life thoroughly and take action to hedge. Create redundancy, buy insurance, and diversify. Improbable is not impossible.
Until next time,
Eric
P.S. - Feel free to email us or text with questions, comments, or feedback. We love hearing from you!
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