WEBVTT - The SEC Sues Gemini and Genesis 0:00:13.720 --> 0:00:16.040 I'm Caroline Hyder Bloomberg's World sead quarters in New York, 0:00:16.079 --> 0:00:18.279 and I made Ludlow also in New York this week. 0:00:18.320 --> 0:00:22.120 This is Bloomberg Technology coming up samm Gunfried. He responds 0:00:22.120 --> 0:00:26.000 to charges in a detailed posts saying in still funds 0:00:26.120 --> 0:00:30.000 or stashed billions away. And scrutiny of Disney leadership continues, 0:00:30.040 --> 0:00:34.440 with activist investor Nelson Pelts nominating himself to the company board. 0:00:34.479 --> 0:00:38.040 What could this mean for Bob Biga? And we talk 0:00:38.120 --> 0:00:40.880 with a venture capital founder backed by Melinda French Gates 0:00:41.080 --> 0:00:44.440 about her new fund dedicated to investments in longevity, the 0:00:44.479 --> 0:00:49.120 spending power and influence of women and diverse communities. But 0:00:49.320 --> 0:00:53.640 first let us check in on these markets, because once again, friends, 0:00:53.680 --> 0:00:56.800 it was a day of macro affecting your benchmarks and 0:00:56.880 --> 0:00:59.920 looking at the CPI print, the inflation data actually show 0:01:00.120 --> 0:01:03.400 aid drop in overall prices in the month of December 0:01:03.480 --> 0:01:06.080 versus the month of November, down north point one percent. 0:01:06.080 --> 0:01:08.280 If you look at month or month overall, we're still 0:01:08.319 --> 0:01:11.840 seeing that CPI showing that inflation is cooling, maybe even 0:01:11.880 --> 0:01:14.440 peaked that as the market liked nascack up six cents 0:01:14.440 --> 0:01:16.840 of percent all country World Index now up for five 0:01:16.880 --> 0:01:19.760 straight days, similar moves to the NAZTAC five stup days. 0:01:19.800 --> 0:01:22.560 It's the longest winning street we've seen since July twenty two. 0:01:22.720 --> 0:01:26.160 And really the key move was in borrowing costs yields bonds. 0:01:26.240 --> 0:01:28.840 We see yields come down by twelve basis points on 0:01:28.880 --> 0:01:31.039 a five year, but across the curve we see borrowing 0:01:31.080 --> 0:01:33.319 costs fall. As we think the Federal Reserve it's going 0:01:33.360 --> 0:01:36.000 to start slowing that pace of hiking. Certainly we're hearing 0:01:36.280 --> 0:01:38.160 from a libany of the members of the f O 0:01:38.319 --> 0:01:40.399 m C talking about now just a quarter of a 0:01:40.400 --> 0:01:43.080 percentage point is a new norm. Let's flipping it on 0:01:43.160 --> 0:01:44.920 because I wanted to look at there for what happens 0:01:45.000 --> 0:01:47.160 to the US dollar. The US dollar has been on 0:01:47.160 --> 0:01:50.320 a weakening trajectory. In fact, it was down versus basically 0:01:50.520 --> 0:01:53.040 every single G ten currency. Look at the Japanese N. 0:01:53.080 --> 0:01:56.400 The w c RS function World Currency Rankings on the 0:01:56.400 --> 0:01:58.480 Bloomberg shows that the Japanese N on the day was 0:01:58.520 --> 0:02:00.440 up more than two point four percent than nor we Chrone, 0:02:00.480 --> 0:02:03.520 Ozzie dollar, Europe all doing well. This, of course is 0:02:03.560 --> 0:02:06.720 a story of strength versus the US dollard. Yeah, we've 0:02:06.720 --> 0:02:09.600 got some breaking news also happening after market. Carrow Apple 0:02:09.960 --> 0:02:12.959 saying in a regulatory filing that Tim Cook's salary for 0:02:13.760 --> 0:02:19.840 three his compensation will be reduced to a more modest 0:02:20.320 --> 0:02:23.520 million dollars. They're saying the regulatory filing that Tim Cook 0:02:23.600 --> 0:02:26.000 had some influence on this, and going forward they'll re 0:02:26.160 --> 0:02:29.080 evaluate his pay relative to peers, bringing it more in 0:02:29.120 --> 0:02:33.080 line to the eighty to ninety percentile, which you know, 0:02:33.280 --> 0:02:35.920 still a lot of money, but interesting development, happy areas. 0:02:35.919 --> 0:02:38.160 There's a sort of modest reaction down a tenth to 0:02:38.240 --> 0:02:40.400 a cent on Apples dog in that after ours move, 0:02:40.919 --> 0:02:43.679 we got the reaction we expected when inflation came in 0:02:43.680 --> 0:02:45.919 in line with expectation. When it came to tech dogs, 0:02:45.919 --> 0:02:48.360 that was kind of one of the primary movers. Interesting 0:02:48.639 --> 0:02:52.320 forward ten straight days of gains, its longest streak on record. 0:02:52.440 --> 0:02:55.240 No real catalysts or news in the news cycle, but 0:02:55.360 --> 0:02:58.080 interesting to see that performance to start the year from 0:02:58.120 --> 0:03:01.080 Ford as it shifts towards E V East. Tesla up 0:03:01.080 --> 0:03:02.680 three tens and one percent. It had been lower for 0:03:02.760 --> 0:03:05.519 much of the session. Disney, We're gonna get into investors. 0:03:05.560 --> 0:03:07.000 It's not clear whether this was kind of part of 0:03:07.040 --> 0:03:10.760 the broader market move or investors cheering the activism that 0:03:10.760 --> 0:03:12.959 we're seeing from Tryann and Nelson Pelts. We're going to 0:03:13.000 --> 0:03:14.720 talk about that in just a moment. In t SMC 0:03:14.919 --> 0:03:17.640 really interesting, it's US listed shares. It's a d r 0:03:17.680 --> 0:03:21.160 S up six point four percent this Thursday. The company 0:03:21.200 --> 0:03:25.239 cutting its capex in response to slowing demand, particularly consumer electronics. 0:03:25.440 --> 0:03:28.320 Revenue forecast for the FISC WAL first quarter slightly below 0:03:28.600 --> 0:03:32.080 street expectations, but they're saying they're seeing improvement of supply, 0:03:32.400 --> 0:03:34.920 particularly for automotive and how there's been a shortage of 0:03:35.000 --> 0:03:39.280 chips there. Bitcoin interesting, We continue to see strength and bitcoin. 0:03:39.280 --> 0:03:41.040 I want to get straight to a Bloomberg tuminal chart 0:03:41.080 --> 0:03:44.400 behind me. There's still this really high correlation right between 0:03:44.400 --> 0:03:47.200 bitcoin and technology stocks, and that this hasn't add to 0:03:47.240 --> 0:03:49.160 that futures in this charts case. I think it will 0:03:49.200 --> 0:03:51.680 be really interesting carry to look at this correlation as 0:03:51.720 --> 0:03:54.520 we go forward. Right the narratives move now to twenty 0:03:54.600 --> 0:03:57.000 five basis point hikes in the short term from the 0:03:57.000 --> 0:03:59.600 Federal Reserve that's got the tech balls coming out. Well, 0:03:59.640 --> 0:04:01.960 if the balls are out for stocks might not seek 0:04:02.040 --> 0:04:04.920 some continued momentum for bitcoin as well. Well, let's look 0:04:04.960 --> 0:04:07.640 at what might be a more bearish and narrative. Currently 0:04:07.720 --> 0:04:10.800 in crypto, we have breaking news that the SEC is 0:04:10.800 --> 0:04:14.680 suing the crypto brokerages Genesis and Gemini. This is for 0:04:14.720 --> 0:04:18.920 offering unregistered securities through their joint Earned product as it 0:04:19.000 --> 0:04:21.800 was called. Now, this is all, of course, the product 0:04:21.839 --> 0:04:24.159 to do with Cameron Winkle us and currently the attack 0:04:24.200 --> 0:04:27.680 he's making on DCG S Barry Silvert. They've been fighting 0:04:27.720 --> 0:04:29.960 back and forth about really who's to blame for what 0:04:30.040 --> 0:04:33.600 has been well, the fallout ever since the Earned program 0:04:33.600 --> 0:04:35.919 has of course been a problem following the claps of 0:04:35.920 --> 0:04:38.960 crypto more broadly. But the SEC really deeming that basically 0:04:39.200 --> 0:04:41.240 you cannot be using these sorts of products that let 0:04:41.240 --> 0:04:44.440 customers loan out their assets in exchange for interest payments, 0:04:44.720 --> 0:04:48.640 and they're saying, of course this is unregistered securities. Shinnalie 0:04:48.640 --> 0:04:51.799 Bassett joins us for more so, the SEC once again 0:04:51.960 --> 0:04:55.040 weighing in on crypto, certainly in a big way. Caroline, 0:04:55.040 --> 0:04:58.560 here you have the SEC has complained here calling into 0:04:58.680 --> 0:05:02.960 question Genesis and Gemini in the same complaint. Now, why 0:05:03.040 --> 0:05:05.440 is that interesting? We have again to your point that 0:05:05.480 --> 0:05:09.960 you're making here these two counterparties that had previously been 0:05:10.440 --> 0:05:15.240 suiting over how the situation has been handled since holding withdrawals. 0:05:15.360 --> 0:05:18.520 Now what does the complaints say? As you said, they're 0:05:18.560 --> 0:05:21.640 looking at the unregistered offer and sale of securities to 0:05:21.760 --> 0:05:25.480 US retail investors. You also have the SEC talking about 0:05:25.560 --> 0:05:29.080 the marketing from both parties here, both parties, and I 0:05:29.120 --> 0:05:31.599 want to be very specific, it is Genesis Global Capital, 0:05:31.680 --> 0:05:35.320 the subsidiary of that large Genesis trading desk here that 0:05:35.480 --> 0:05:38.320 is part of the defendants being named in this complaint, 0:05:38.480 --> 0:05:41.920 but both of them marketing these assets to investors and 0:05:42.000 --> 0:05:45.240 being called into question by the SEC. Now, remember this 0:05:45.320 --> 0:05:48.159 comes just days after that big open letter you saw 0:05:48.200 --> 0:05:53.320 from Cameron winkle Boss, after a number of correspondences between DCG, 0:05:53.600 --> 0:05:56.520 that Digital Currency Group, that big entity run by Barry Sobert, 0:05:56.760 --> 0:05:59.680 as well as the Winkel Bosses twins Gemini for this 0:05:59.760 --> 0:06:03.120 gem the earned product. And it's days after you have 0:06:03.200 --> 0:06:07.560 Cameron Winklevoss alleging here private lies and accounting fraud. And 0:06:07.600 --> 0:06:10.080 also in the same week that you have Barry Silber, 0:06:10.200 --> 0:06:12.479 the head of Digital Currency Group, also reaching out to 0:06:12.520 --> 0:06:17.080 investors with a very large multi page question and answer 0:06:17.120 --> 0:06:23.360 here that addresses how Digital Currency Group uses the proceeds 0:06:23.400 --> 0:06:27.400 of loans borrowed from Genesis Capital, the same asset here 0:06:27.400 --> 0:06:30.800 in question that is under the sec review. Now there 0:06:30.800 --> 0:06:33.440 will be a lot of questions both from investors as 0:06:33.480 --> 0:06:37.560 well as regulators on where the money went, what, what 0:06:37.640 --> 0:06:39.559 kind of money was lost, how you get it back. 0:06:39.920 --> 0:06:42.520 But at the end of the day, as I said before, 0:06:43.040 --> 0:06:46.760 these two are being named the complaint together after days 0:06:46.800 --> 0:06:50.600 and days and days months really sparring. And so how 0:06:50.760 --> 0:06:54.720 they handle this when they're both listed together as under 0:06:54.760 --> 0:06:57.960 the complaint of the Securities and Exchange Commission. Yeah, this 0:06:58.000 --> 0:07:00.920 is an interesting development in POD because Bloom reported last 0:07:00.920 --> 0:07:04.239 week according to sources, that federal prosecutors were looking into 0:07:04.560 --> 0:07:07.720 Barrios Barry Silber in the Digital Currency Group. So now 0:07:07.720 --> 0:07:11.760 we have this triangle, right, Vinkl Voss Silber regulators. As 0:07:11.760 --> 0:07:15.160 you said, the complaint is joint between them. Bring tie 0:07:15.200 --> 0:07:17.960 that all together. What is the relationship as it stands 0:07:18.000 --> 0:07:21.760 now between Barry silver and the Winkl Voss brothers twins 0:07:22.040 --> 0:07:24.520 as it stands Remember they have been both kind of 0:07:24.520 --> 0:07:26.960 at war here, uh, And I think what's worth kind 0:07:26.960 --> 0:07:30.520 of pointing out here is the difference between how Genesis 0:07:30.560 --> 0:07:33.520 frames this issue versus the wink of Voss twins. We 0:07:33.600 --> 0:07:37.920 reported in late November actually that when Genesis was out 0:07:38.040 --> 0:07:39.920 kind of looking for money, we had reported they had 0:07:39.920 --> 0:07:42.360 reached out to a number of big investors to try 0:07:42.400 --> 0:07:45.360 to really stave off some of these issues. As they 0:07:45.400 --> 0:07:48.160 did that, they revealed all of these loans that existed 0:07:48.160 --> 0:07:52.360 between Genesis as well as other Digital Currency Group experts 0:07:52.360 --> 0:07:57.880 here or entities here. Now remember those entities um investors 0:07:57.920 --> 0:08:01.560 of Digital Currency Group did have clarity into how the 0:08:01.760 --> 0:08:05.240 entity worked. So the big reveal here then becomes now 0:08:05.520 --> 0:08:08.000 you know, regulators asking questions about where the money went 0:08:08.000 --> 0:08:10.200 at the end of the day, but also the allegations 0:08:10.240 --> 0:08:13.920 being made by Gemini and Gemini earns products on behalf 0:08:13.960 --> 0:08:17.840 of those more than three hundred thousand customers. Remember when 0:08:17.840 --> 0:08:20.320 you look at Digital Currency Groups response to this publicly, 0:08:20.680 --> 0:08:22.960 they said this is a way for Gemini to be 0:08:23.000 --> 0:08:25.800 deflecting blame. But again the way that this is culminating 0:08:25.800 --> 0:08:29.200 now they both are under this complaint for the sec 0:08:30.240 --> 0:08:34.400 Let's weave all of this narrative together, Shinali, because a 0:08:34.440 --> 0:08:37.400 lot of the reasons that the funds have been trapped 0:08:37.640 --> 0:08:41.720 in Genesis is because of the ongoing fallout across crypto. 0:08:41.880 --> 0:08:44.520 Then in many parts wasn't just started by the collapse 0:08:44.520 --> 0:08:46.800 of fd X. It came much prior to that. Actually 0:08:46.840 --> 0:08:49.880 some of them related to lending products themselves. But just 0:08:49.920 --> 0:08:52.240 talk to us about what we've heard from sat Magman 0:08:52.280 --> 0:08:54.200 Free today about the st X full out and really 0:08:54.360 --> 0:08:57.959 how all of this is one big similar collapse that 0:08:58.120 --> 0:09:00.199 is just having so much of a contagion effect. Yeah, 0:09:00.200 --> 0:09:02.559 it's really interesting because we've heard of course Sam Bigen 0:09:02.600 --> 0:09:06.320 freed before the indictment came out, him have his media tour, 0:09:06.720 --> 0:09:09.280 but then since he's been on house arrest, we've seen 0:09:09.360 --> 0:09:11.520 him tweet here and there, and now we have a 0:09:11.559 --> 0:09:15.080 sub stack coming out as well in which he's detailing 0:09:15.320 --> 0:09:18.199 kind of his defense here on this idea that he 0:09:18.240 --> 0:09:21.520 didn't steal funds, he didn't stash them anywhere. That the 0:09:22.000 --> 0:09:26.120 name of this sub stack was ft X pre Mortem Overview. 0:09:26.640 --> 0:09:29.800 He also links the issue to how he was treated 0:09:29.800 --> 0:09:32.520 by rivals. He's been complaining about finance and the handling 0:09:32.920 --> 0:09:35.360 of assets for a while here. Now, at the end 0:09:35.400 --> 0:09:37.640 of the day, what happened in the middle of last year, 0:09:38.559 --> 0:09:40.760 Luna three Arrows, people lost a lot of money, and 0:09:40.760 --> 0:09:42.679 it's spirals from there, and it's kind of as simple 0:09:42.720 --> 0:09:45.760 as that, alright, bloom bog Stionnali Bassett keeping us posted 0:09:45.800 --> 0:09:48.680 on every twist and turn in an industry under duress, 0:09:48.760 --> 0:09:52.640 executives under the spotlight, And speaking of executives under the 0:09:52.640 --> 0:09:56.080 spot let's talk about Disney, where activists invested. Nelson Pelts 0:09:56.120 --> 0:09:59.199 has nominated himself to the board. This could become a 0:09:59.280 --> 0:10:03.880 highly public abait over Disney's returning CEO, Bob Iger and 0:10:03.960 --> 0:10:07.680 his leadership. Bloomberg's managing editor for Global Business, Creating Harrison 0:10:07.880 --> 0:10:10.200 with us in New York. I guess the question you 0:10:10.240 --> 0:10:13.080 go straight to is what is Nelson Peltz trying to 0:10:13.080 --> 0:10:15.520 get out of this Well, he's trying to get the 0:10:15.559 --> 0:10:17.560 things out of it. Then Nelson Peltz is always trying 0:10:17.559 --> 0:10:19.360 to get out of these things, right, which is we 0:10:19.400 --> 0:10:22.600 can squeeze cost savings, we can run this business more efficiently. 0:10:22.679 --> 0:10:25.200 You know. He argues that Disney has been overpaying for 0:10:25.240 --> 0:10:28.080 assets for a while, especially the Fox steal from a 0:10:28.120 --> 0:10:31.040 few years back. Um. You know, he criticizes them for 0:10:31.120 --> 0:10:33.480 having gone after Sky which they did not win. But 0:10:33.559 --> 0:10:35.199 we're willing to bid up the price quite a bit 0:10:35.200 --> 0:10:37.520 on he has it's time to shake things out and 0:10:37.640 --> 0:10:40.000 uh and and and have a little more focused on 0:10:40.080 --> 0:10:42.880 operating margins and restored the dividend. He's calling for the 0:10:42.920 --> 0:10:45.880 dividend to be restored by five Remember that went away 0:10:46.200 --> 0:10:48.880 early in the pandemic, as it did for many companies. Now, 0:10:49.240 --> 0:10:52.920 none of these perhaps challenges and concerns must be that 0:10:53.000 --> 0:10:54.840 much of a shock to Disney. They know that they've 0:10:54.840 --> 0:10:57.480 had some issues. They've just announced changes at the board level, 0:10:57.559 --> 0:11:01.240 perhaps in a focus at least on success should but 0:11:01.320 --> 0:11:03.280 ultimately they're not gonna want Pelts on the board. No, 0:11:03.760 --> 0:11:05.760 they very much do not want Pelts on the board. 0:11:06.000 --> 0:11:07.920 I think Bob Iger would like to, you know, have 0:11:07.960 --> 0:11:10.520 a chance to run this show himself without without input 0:11:10.559 --> 0:11:13.480 from Nelson Um. But they are, you know, sort of 0:11:13.480 --> 0:11:16.240 acknowledging that there's at least some public facing changes that 0:11:16.280 --> 0:11:18.960 they need to make. One interesting little piece of brinkmanship 0:11:19.000 --> 0:11:21.480 is that Pelts was supposed to unveil his big campaign 0:11:21.520 --> 0:11:23.800 this week, and it's Disney actually got out ahead of 0:11:23.840 --> 0:11:26.520 it with the announcement of the change in this board. Now, 0:11:26.520 --> 0:11:28.560 it says Susan Arnold had already hit the age limit 0:11:28.640 --> 0:11:30.800 or I'm starry, not the age limit, but the tenure 0:11:30.800 --> 0:11:33.480 limit to be on the board. Um. But the coincidence 0:11:33.559 --> 0:11:35.520 is there if you want to read into it. Um. 0:11:35.600 --> 0:11:38.839 They also did announce that they're establishing a succession committee 0:11:39.400 --> 0:11:41.839 at the board level. So that's a signal to investors, Hey, 0:11:41.880 --> 0:11:43.920 we know we need to you know, set our course 0:11:44.000 --> 0:11:47.040 on the future and decide who will eventually replace Bob 0:11:47.040 --> 0:11:50.000 Iger in a couple of years. UM. That is very much, 0:11:50.160 --> 0:11:52.120 you know, sort of a first volley in what is 0:11:52.120 --> 0:11:53.800 likely to be a months long five This is like 0:11:53.800 --> 0:11:56.079 one of those stories where you actually do some contexts 0:11:56.080 --> 0:11:59.120 of recent history where you know Iger has returned to 0:11:59.200 --> 0:12:03.280 see having retired quote unquote, they don'tly just renewed JPEX 0:12:03.559 --> 0:12:06.320 contract before he was dismissed. Essentially, we actually asked our 0:12:06.559 --> 0:12:08.840 audience if Pelts has a point? Here? Does Pelts have 0:12:08.840 --> 0:12:11.360 a point? Um? These are the results from the Twitter 0:12:11.400 --> 0:12:14.600 poll that we did. I'm not entirely surprised by this. 0:12:15.920 --> 0:12:20.000 Respondents asking who who is Pelts? The answer really is 0:12:20.040 --> 0:12:22.280 he's a classic activist, isn't he? And he built up 0:12:22.360 --> 0:12:26.040 that stake in November. Um, I guess does he have 0:12:26.160 --> 0:12:30.000 any track record? Of achieving these things. Absolutely. He changed 0:12:30.080 --> 0:12:33.320 Disney absolutely, and you can argue that he already has 0:12:33.400 --> 0:12:35.960 with these moves, right. Um, but you know, you look 0:12:35.960 --> 0:12:39.480 at examples like Procter and Gamble General Electric, the executives 0:12:39.520 --> 0:12:41.679 of those companies would say he very much changed it. 0:12:41.800 --> 0:12:44.080 There's a great example of DuPont, which is a company 0:12:44.120 --> 0:12:46.880 that he didn't actually win his activist fight, but the 0:12:46.920 --> 0:12:49.280 CEO was out months later. They had a bunch of 0:12:49.320 --> 0:12:51.640 cast cuts there now. So he is a big deal 0:12:51.720 --> 0:12:54.960 and he will make his presence felt, and some analysts 0:12:54.960 --> 0:12:58.079 say maybe they need to listen to the point thing. 0:12:58.800 --> 0:13:00.760 Great to have you here, Thank you so much, cause 0:13:00.800 --> 0:13:05.360 Bloomberg's managing editor of Global Business, Claydon Harrison. Meanwhile, coming up, 0:13:05.440 --> 0:13:07.360 we've got a little bit of sprinkling of VC action, 0:13:07.440 --> 0:13:09.240 right Eddie. We're talking about pitch Book. It's out with 0:13:09.280 --> 0:13:12.520 its new report on the state adventure capital in two. 0:13:12.640 --> 0:13:15.960 Spoiler alert, it's not too pretty. More on that. Next, 0:13:16.200 --> 0:13:28.240 this is Bloomberg. We raised this round in a context 0:13:28.240 --> 0:13:33.280 where the business was growing incredibly well. We grew AX one, 0:13:33.280 --> 0:13:37.000 we grew almost forex in twenty two. Yes, the market 0:13:37.120 --> 0:13:39.559 is more difficult. Um, I think there is much greater 0:13:39.600 --> 0:13:44.679 scrutiny of our financial financial performance. You're and so on, 0:13:45.440 --> 0:13:48.400 but underlying, you know, the numbers really did speak for themselves. 0:13:49.920 --> 0:13:52.640 That was Peppy co founder and co CEO Rejewla poor 0:13:52.679 --> 0:13:55.120 A talking with Carrol twenty four hours ago about the 0:13:55.160 --> 0:13:58.120 current environment for raising money, and I think we've got 0:13:58.120 --> 0:13:59.960 to get some context on this. This is the talking 0:14:00.080 --> 0:14:04.040 point beyond Silicon Valley where founders and those who have 0:14:04.080 --> 0:14:06.800 backed them historically are thinking about what on earth is 0:14:06.840 --> 0:14:10.000 going on in all sorts of economies. Carl Stanford, lead 0:14:10.080 --> 0:14:13.160 vcn lists at pitch Book, joins us from San Francisco. 0:14:13.240 --> 0:14:16.160 Pitchbook out with its report for two and the State 0:14:16.679 --> 0:14:24.080 of Venture Capital two in summary, was a transition year, right, Kyle. 0:14:24.160 --> 0:14:26.560 It was difficult, It was hard, There was a pullback 0:14:26.560 --> 0:14:29.920 in funding overall. What is the conclusion that you guys 0:14:29.920 --> 0:14:31.600 reached when you took to a look back at the year. 0:14:33.240 --> 0:14:35.000 I think a transition year is a really were a 0:14:35.080 --> 0:14:37.320 really good way to describe what we saw in two. 0:14:37.760 --> 0:14:40.280 Throughout the year, the momentum of the venture market that 0:14:40.320 --> 0:14:44.200 had really grown in faded pretty quickly from Q one, 0:14:44.240 --> 0:14:46.320 which we saw as in the most active quarter in 0:14:46.360 --> 0:14:48.680 our dataset to Q four, we saw deal count drop, 0:14:49.960 --> 0:14:53.280 we saw deal value drop sixty which is an incredible 0:14:53.320 --> 0:14:55.960 number when you look at where that is coming from, 0:14:55.960 --> 0:14:58.880 though a lot of that is coming from the unicorns, 0:14:58.920 --> 0:15:01.240 the late stage, the gross age of venture which really 0:15:01.280 --> 0:15:04.560 saw a huge amount of capital pushed into the market 0:15:04.600 --> 0:15:06.960 of the past few years, which when when you see 0:15:06.960 --> 0:15:11.440 the crossover investors pull out and readjust their investment strategy, 0:15:11.680 --> 0:15:14.400 that capital, that is those late stages every led on 0:15:14.600 --> 0:15:18.680 came out pretty quickwo. I think what's really interesting in Caroline, 0:15:18.720 --> 0:15:22.280 and I've have been discussing this every single day, is 0:15:22.320 --> 0:15:25.320 how actually it wasn't completely doom and gloom, and it 0:15:25.400 --> 0:15:29.000 may not be complete dooming Glean three because at the 0:15:29.040 --> 0:15:33.400 early stage, you know seed precede um, that there seems 0:15:33.400 --> 0:15:37.440 to be more appetite to deploy capital because right if 0:15:37.440 --> 0:15:40.280 you're a venture capitalist, you take a long term view. 0:15:40.640 --> 0:15:41.840 You know, you know you're not going to have an 0:15:41.840 --> 0:15:44.400 exit for for a while. Is that a fair assessment 0:15:44.440 --> 0:15:48.560 of the psychology I suppose of this industry right now? Yeah, 0:15:48.560 --> 0:15:51.160 that's exactly right. When you think about seed stage companies 0:15:51.280 --> 0:15:53.920 or even Series A, Series B, those companies, even the 0:15:53.920 --> 0:15:56.080 most successful ones are years and years away from the 0:15:56.080 --> 0:15:58.080 public markets, so they do have a little bit of 0:15:58.120 --> 0:16:03.000 an immediate installation from the broader Macwick economy. But we 0:16:03.080 --> 0:16:05.920 do believe that there is still some deflation to come 0:16:05.960 --> 0:16:09.960 out of this market after the exuberance, and the longer 0:16:10.040 --> 0:16:13.560 the macro volatility persists, we do expect early stage and 0:16:13.640 --> 0:16:16.000 seed to start to see that crunch that the late 0:16:16.000 --> 0:16:19.760 stages is seen. Right now, go global for US if 0:16:19.800 --> 0:16:23.080 you can, because well, it's interesting. Is the outperformance of 0:16:23.160 --> 0:16:25.480 late last couple of months of the public markets in 0:16:25.520 --> 0:16:28.600 Europe visit v the US. I'm interested. Of course, that 0:16:28.760 --> 0:16:32.600 comes from a lower base, whether Europe and other areas 0:16:32.640 --> 0:16:35.720 we've heard from Textiles for example, talking about exuberance and 0:16:35.760 --> 0:16:37.920 excitement going on in Africa, and at least from a 0:16:37.960 --> 0:16:41.920 seed stage around and indeed from the actual startup culture 0:16:41.920 --> 0:16:44.280 there at the moment. Are we likely to still see 0:16:44.320 --> 0:16:47.840 the money in Silicon Valley, New York or is it 0:16:47.840 --> 0:16:51.160 going to spread out a little bit more? I think 0:16:51.160 --> 0:16:53.040 we've seen the spread out really happened over the past 0:16:53.040 --> 0:16:54.840 few years. But when you look at the data, the 0:16:54.840 --> 0:16:58.800 way we tracked data, and all the capital being located 0:16:58.840 --> 0:17:00.800 in the headquarters of the fund. We at seventy seven 0:17:00.840 --> 0:17:04.280 billion dollars raised in Silicon Valley this year. UM. A 0:17:04.280 --> 0:17:07.320 lot of those huge mega funds that we see being 0:17:07.440 --> 0:17:10.560 raised our headquarters are by firm's headquartered in Silicon Valley. 0:17:10.600 --> 0:17:12.120 So when you look at the data, it does look 0:17:12.240 --> 0:17:15.520 very concentrated. But we do believe, especially from kind of 0:17:15.520 --> 0:17:19.680 the the change towards zoom and towards a more global 0:17:20.000 --> 0:17:23.000 venture market, we will see that capital spread out UM. 0:17:23.160 --> 0:17:25.760 One interesting notable report is that the Silicon value of 0:17:25.800 --> 0:17:29.160 the Bay Area actually saw less than of deal count 0:17:29.160 --> 0:17:30.760 in the US for the second quarter in a row, 0:17:30.800 --> 0:17:33.600 which is the first time that's happened in our data set. UM. 0:17:33.640 --> 0:17:35.960 And so even though the capital is staying here, there 0:17:36.080 --> 0:17:38.920 is a much more global venture economy. Would that be 0:17:39.160 --> 0:17:41.399 you know, moving the capital to the Midwest or to 0:17:41.520 --> 0:17:44.240 some of the second tier cities in the US, or 0:17:44.320 --> 0:17:46.960 to seeing capital go to Latin America or Europe. We've 0:17:47.000 --> 0:17:49.679 seen a lot of growth everywhere and talk to us. 0:17:49.720 --> 0:17:54.240 Can you break it down by industry Where remained relatively healthy, 0:17:54.240 --> 0:17:57.640 Where was able to weather some of the concerns, All 0:17:57.640 --> 0:17:59.760 were able to break it out as much as well. 0:17:59.760 --> 0:18:03.639 Hell Care fintech cybersecurity store remains pretty resilient in the 0:18:03.640 --> 0:18:08.280 face of a recessionary environment. I'm not sure any sector 0:18:08.359 --> 0:18:11.119 really weather the storm in two. I think everyone was. 0:18:11.640 --> 0:18:14.680 Every sector was there right for some kind of pull 0:18:14.760 --> 0:18:17.439 back from VC because of the exuberance, and then the 0:18:17.480 --> 0:18:20.080 media we saw one. But when we look from a 0:18:20.119 --> 0:18:21.960 sector of perspective, the first place we look is the 0:18:21.960 --> 0:18:25.240 public markets. Fintech had a really difficult year. Cloud has 0:18:25.280 --> 0:18:27.040 stayed a little bit better, and you can see that 0:18:27.080 --> 0:18:29.119 reflected in the valuations that are coming across in the 0:18:29.160 --> 0:18:32.359 private market. I think that there's two data points I 0:18:32.400 --> 0:18:34.600 want to hit with you really quickly. Kyled it they 0:18:34.640 --> 0:18:37.320 even though they weren't necessarily the deals in two. I 0:18:37.320 --> 0:18:40.080 think I'm right in saying that actually venture capitalists all 0:18:40.119 --> 0:18:42.359 around the world launched quite a few new funds, right. 0:18:42.400 --> 0:18:45.720 They at least got their war chests set up. If 0:18:45.760 --> 0:18:47.919 they didn't then deploy them right, and we may not 0:18:47.960 --> 0:18:50.280 see them deployed this year. The other data set that 0:18:50.320 --> 0:18:54.000 really catches my eyes that about capital invested in female 0:18:54.040 --> 0:18:56.959 founded companies. Could you just speak to us about that 0:18:57.040 --> 0:19:02.120 that trend that you saw in four female companies. Yeah, 0:19:02.119 --> 0:19:05.479 I think female founder companies have been um, you know, uh, 0:19:06.080 --> 0:19:08.639 a point of interest for for much of the industry. 0:19:08.680 --> 0:19:10.320 In the past few years. UM, there's been a lot 0:19:10.320 --> 0:19:13.720 of new funds that have been raised by female gps. 0:19:13.760 --> 0:19:17.520 There's been a lot of uh, you know, you know, 0:19:17.720 --> 0:19:19.840 help from the industry to make sure that there's more 0:19:19.920 --> 0:19:23.160 capital going to female founding companies. I think one data 0:19:23.160 --> 0:19:25.560 point that gets tossed around there is the percentage that 0:19:25.640 --> 0:19:28.240 is raised by female founding companies of the total deal value. 0:19:28.520 --> 0:19:29.960 And the unfortunate part of that is that it is 0:19:30.080 --> 0:19:32.040 very low, and no matter whey you cncisate, it's not 0:19:32.080 --> 0:19:33.840 going to look great. But a lot of that is 0:19:34.000 --> 0:19:36.359 is influenced by the huge deals that we've been seeing 0:19:36.359 --> 0:19:38.560 over the past few years. We had eight hundred fifty 0:19:38.640 --> 0:19:41.679 seven hundred million dollar deals closed in one we had 0:19:41.720 --> 0:19:43.720 a you know, a four hundred fifty of those closes 0:19:43.760 --> 0:19:46.800 in and many of those are artists, older companies, and 0:19:46.840 --> 0:19:49.560 they have been started by by by men, and so 0:19:50.119 --> 0:19:52.560 there has been a push towards more investment in female 0:19:52.560 --> 0:19:55.040 founding companies and hope, we're hoping that because of the 0:19:55.080 --> 0:19:58.800 fundraising that has been done by by female led gps 0:19:58.920 --> 0:20:01.680 as well as the initiative of you know, the broader industry, 0:20:01.680 --> 0:20:04.240 that we will see a sustained growth in investment into 0:20:04.240 --> 0:20:07.640 female founding companies, and we've got a female lad fund 0:20:07.680 --> 0:20:09.440 coming on a little bit later in the show, Carl, 0:20:09.600 --> 0:20:14.040 just briefly from the diversity's perspective, many have been worrying that, 0:20:14.359 --> 0:20:16.280 you know, it's a recent trend that money had been 0:20:16.320 --> 0:20:18.479 put to work in this and therefore when we go 0:20:18.560 --> 0:20:22.280 back retrench worry people go back to their previous old norms. 0:20:22.800 --> 0:20:25.680 Are you hearing that three people are still gonna be 0:20:25.720 --> 0:20:30.000 stood by ensuring their backing diverse founders, diversity of thought 0:20:32.640 --> 0:20:35.000 In a similar way from investment, we we thought the 0:20:35.040 --> 0:20:36.879 exact same thing was going to happen to the small, 0:20:37.680 --> 0:20:40.640 small ecosystems that had really popped up in the Midwest 0:20:40.920 --> 0:20:43.439 and then hadn't had the local fundraising and had received 0:20:43.440 --> 0:20:46.199 a lot of capital from the East Coast or a 0:20:46.200 --> 0:20:48.320 Bay area. What we did see, though, there was a 0:20:48.359 --> 0:20:50.879