VC Daily Digest - 08/09/2023

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Your Monday to Saturday Daily Dose of Venture Insights, Funding Updates and Startup Stories Delivered Straight to Your Inbox. Stay Informed, Stay Inspired and Stay Ahead In the World of Venture Capital !

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📢 Top Venture Capital News

Exposed: A closer look at seed investors’ biases and incentives: As Y Combinator's Demo Day approaches, it's crucial for founders to understand the implications of their fundraising decisions. While securing a spot in a YC batch comes with a high-quality network and a stamp of approval, it also means aligning with a model that seeks extreme outliers and offers little support for companies that aren't immediate success stories. Raising a $2 million SAFE at a $20 million cap can limit potential investors and set high bars for future milestones. It's essential for founders to consider the long-term impacts and hidden costs of such decisions. More Here

VCs don't care as much about Y Combinator's Demo Day anymore: The allure of Y Combinator's Demo Day, once a pivotal event for early-stage startups in Silicon Valley, seems to be fading. With the event now virtual, many top startups are securing funding before the event, making investors more selective about which YC startups they back. High valuations and early fundraising by larger multistage funds are contributing to this shift. Despite these changes, Y Combinator maintains that many successful companies still raise funds at Demo Day and beyond, and the virtual format allows startups access to a wider pool of investors. More Here

How The Venture Capital Model Could Boost America’s Small Businesses: The recent economic downturn has highlighted the need for a diverse capital ecosystem to support small businesses, particularly those led by women and people of color. By adopting the best of the venture capital model, including debt-free funding and access to mentorship and networks, we can empower these entrepreneurs. However, we must also challenge the profit-at-all-costs mentality and strive for economic equity and environmental responsibility. It's time to rethink how we invest, who we fund, and how we measure success, to ensure a more inclusive and sustainable economy. More Here

Toyota Extends Into Venture Capital And Software As Prevention Against 'Big Company Disease': Toyota, a global automotive leader, has surpassed giants like General Motors and Ford in vehicle sales, becoming the top seller worldwide for the third consecutive year in 2022. With a keen eye on the future, Toyota is actively investing in startups and early-stage companies through Toyota Ventures, and in mobility and autonomous driving technologies through Woven Capital. More Here

📢 Top Startups News

Show me the revenue growth: In the Summer 2023 Y Combinator cohort, a surge of companies are leveraging AI in the medical field. This trend aligns with the broader tech industry's focus on using AI tools like LLMs and generative AI to streamline operations and potentially replace labor inputs. Public tech companies are also exploring this space, with UiPath and C3.AI's recent earnings calls revealing strong customer enthusiasm for AI solutions. However, growth projections from AI-centric tech companies seem modest, suggesting a complex demand-supply-revenue landscape. As we head into Q3 2023, it's crucial to examine how AI-related revenues could impact net-retention rates and the challenges startups may face due to data deficits. More Here

Startups race to strike hydrogen gold: The pursuit of natural hydrogen, or "white hydrogen," is on the rise, with reservoirs discovered in numerous countries and startups leading the exploration. This renewable, clean energy source is continuously generated in the Earth and could potentially yield an estimated 23 million tons per year, according to Viacheslav Zgonnik, CEO of Natural Hydrogen Energy. Scientists have identified serpentinization and radiolysis as key processes for hydrogen creation in the Earth's crust. As understanding of these processes grows, we move closer to a systematic exploration strategy, with companies like Koloma and NH2E at the forefront of this exciting new frontier in clean energy. More Here

📢 Featured: Today’s Featured Article

How Will a Venture Capital Recovery Feel? Observations from 2008

What will a venture capital turnaround feel like? Will it be gradual or sudden? What will change the sentiment in the market? One of the interesting article to read written by Tomasz.

Check this out this. 👇

📢 Top AI News

IBM rolls out new generative AI features and models: IBM is stepping up its game in the competitive AI space with the introduction of new generative AI models and capabilities on its Watsonx data science platform. The new models, known as the Granite series, are designed to summarize, analyze, and generate text, with IBM promising to reveal the data and processes used in their development. Additionally, IBM is launching Tuning Studio, a tool that allows users to tailor AI models to their data, and a synthetic data generator for tabular data. These advancements are part of IBM's ongoing efforts to provide clients with secure, trustworthy AI solutions that can be scaled to meet their specific business needs. More Here

AI Startup Imbue Tops $1 Billion Valuation After Funding from Nvidia: Imbue, a startup building large language models to power artificial intelligence tools, has raised $200 million from investors including Nvidia Corp. at a valuation of more than $1 billion. Astera Institute, a nonprofit founded by cryptocurrency billionaire Jed McCaleb, led the funding round, with participation from others including Kyle Vogt, the chief executive officer of General Motors Co.’s self-driving unit Cruise, the company said Thursday. The amount is 10 times what the startup has already raised, it said. More Here

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📢 Top Startup’s Fundraising News

Syscap closes on $2.3M to create private credit infrastructure in Mexico: Syscap closed on $2.3 million in seed funding to continue building an infrastructure that helps Mexico’s non-banking lenders to manage and access private credit. David Noel Ramírez and Alejandro O’Farrill met while working at the multinational beverage and retail company Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA). Both went on to do other things — Ramírez co-founded Concéntrico, while O’Farrill worked at Amazon and Nubank — prior to founding Syscap. More Here

AI reading coach startup Ello raises $15M to bolster child literacy: Ello aims to eradicate childhood illiteracy by leveraging artificial intelligence and child speech recognition technology. The startup announced today that it secured $15 million in Series A financing to help it do so, and the funding will go toward product development and expanding access to consumers. More Here

Imbue raises $200M to build AI models that can ‘robustly reason’: Imbue, the AI research lab, has secured $200 million in Series B funding, raising its total to $220 million and valuing the company at over $1 billion. The funding will accelerate the development of AI systems that can reason and code, with the ultimate goal of building practical AI agents that can accomplish larger goals and work safely in the real world. Imbue's AI models are designed to robustly reason and are trained on data to reinforce good reasoning patterns. The company is also investing in its own AI and machine learning tooling, and conducting research into understanding the learning process in large language models. More Here

SoftBank Group backs former Argo AI founders on new self-driving trucks startup Stack AV raised $1Billion: The founders of the now-defunct autonomous vehicle startup Argo AI have launched a new company, Stack AV, focusing on commercializing self-driving trucks. Backed by SoftBank Group, the startup aims to leverage AI to revolutionize the transportation of goods and supply chains globally. Despite challenges faced by others in the sector, CEO Bryan Salesky is confident in their experienced team and the support of SoftBank, who are committed to AI as a game-changer across industries. Stack AV is currently focused on hiring and testing its technology on the road. More Here

SimpleClosure raises $1.5M in less than 24 hours to help companies shut down faster and cheaper: It’s easy to start a startup. But it’s far more difficult to shut one down. An estimated 90% of all startups fail, so there is no question that the problem is a widespread one. Yet the process to wind down a company is largely manual and bureaucratic. That’s something three-time founder Dori Yona realized when building his last company and was tasked by a board member to create a “shutdown analysis.” But to even get to that realization took a while. More Here

Compliance and risk management startup Certa raises $35M: Certa, a platform specializing in compliance, governance, and risk management, has successfully raised $35 million in a Series B funding round. This brings their total capital to over $50 million. The platform aims to simplify the process of working with third parties globally, addressing the risks that come with such relationships. With a vision to centralize and standardize data from multiple sources, Certa offers risk scoring reports, templates, modules, and third-party validations to analyze risk and maintain compliance. More Here

Low-code platform Retool makes it easier to bring AI smarts to business apps raised $45M: Retool, the platform known for building business apps, is now launching tools to aid in the creation of AI-based applications. Their latest offering, Retool Vectors, is a hosted vector storage service designed to simplify the integration of custom data into large language models (LLMs). This move addresses a significant challenge businesses face when building custom AI applications - keeping data up-to-date and easily accessible. By partnering with OpenAI, Retool also introduces AI-based actions for common use cases, further empowering businesses to leverage AI technology. More Here

Base Ecosystem Fund, Hashed Emergent invest $1.9M in Nestcoin to scale its Onboard product: Nestcoin, the development company behind the modern finance project Onboard, has secured $1.9 million in strategic funding led by Hashed Emergent. The company, which faced significant losses after the cryptocurrency exchange FTX's implosion, is now focusing on developing Onboard, a noncustodial wallet aiming to provide equitable economic access to individuals in frontier markets. More Here

🗞️ Interesting Weekday Reading On: Startups, Technology & VC

• 📪Hidden Trap Of Convertible Note and Liquidation Preference Multiples Read More

• 📰 Why it's Better To Raise Less Capital In The First Round? Read More

• 📮 Which Is The Better Option For Growth Funding: Venture Debt or Venture Capital? Read More

• 📑 Decoding Sequoia Capital: How Do They Dominate the VC Landscape? Read Here

• 🗃️ How Do Investors Protect Themselves from Down rounds ? Read Here

• 📮How Much Should You Raise For Your Startup? Read More

• 📑 How Do LPs Evaluate VC Fund Performance? Read Here

• 📜 Decoding Startup Valuations with the Venture Capital (VC) Valuation Method Read More

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