Some good news, some Better.com news

This week Mary Ann and Alex were joined by our regular guest host Kirsten Korosec. Here's what the gang got into: FTX's former CEO SBF is heading to jail: We struggled to find much pity for the former celebrity executive. Better.com is going public: After much controversy Better.com's SPAC merger is a go. The deal is a fundraising mechanism by our understanding, though we had a bit of a tough time coming up with a bull case for the company in the present moment. Monday.com's growth: Alex has kept tabs on the earnings cycle as always, which led him to write rather kind things about Monday.com's most recent quarterly results. In short, the former startup is posting quick and cutting its losses and generating lots of cash. What's not to like? Vinfast went public, and investors are stoked: Another SPAC deal for the list today is the Vinfast debut. Vietnamese EV company Vinfast is now worth more than many major auto companies, despite falling revenues and massive unprofitability. So what, says the market. The IRA turns one: The Inflation Reduction Act's impact on American manufacturing is big, and growing. Europe might have been irked to start, but it appears that fans of domestic production have found their champion. The fundraising market: To close out the show we chatted about Becca's recent article on new venture funds raised by women, and a quick look at the pre-seed market for all the founders out there. That's all from us this week. We are back Monday morning, chat then! For episode transcripts and more, head to Equity’s Simplecast website. Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews foundersand more! Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:10Speaker 00

  Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and the nuance behind the headlines. My name is Alex and I am joined, as always, by Senior Tech Reporter on the FinTech Beat. It's Mary Ann Esavetto. Mary Ann, hi. How was your week?

• 0:25Speaker 01

  Alex, it's good, but I can't not talk about the weather. I'm sorry. I know it's a topic that we try to avoid, but we are going on like day 41 of over 100 degree temperatures here in Austin. It's brutal. It's humid. We're miserable. I had to vent.

• 0:43Speaker 00

  You know, we have Kirsten Korosec on the show. I'm going to bring her on in just a second. But Kirsten covers the transport beat and one thing I've learned from her coverage is that there are two wheeled vehicles, four wheeled vehicles, vehicles that fly, vehicles that even go to space. There's many ways for you to get out of Austin and yet you're still there.

• 0:59Speaker 01

  Well, I mean, I, you know, I have kids and school. I mean, you can't just leave right now.

• 1:05Speaker 00

  I'm going to blow your mind. There are schools in the Northeast where the weather is not as bad. Anyways, Kirsten Korosec with us again. Kirsten, lovely to have you back on the show. How are you?

• 1:14Kirsten Korosec?

  I am excellent. And Alex, just to point out that you also live in the Northeast and you complain about the weather all the time as well. So is there a safe place?

• 1:23Speaker 00

  Yes, it's called San Francisco where it's perfect. I live in the Northeast and it has been humid here and hot and miserable, but it has not been Texas hot nor south humid. So I feel like Mary Ann could do better than Austin. She could, for example, move to the surface of the sun. It's cooler there, better weather, but she decides not to. And we'll talk about climate and some stuff about the climate world and the IRA later on the show. But first, we have to talk about SBF's bail situation, what's going on with Better.com's SPAC, Monday.com's growth, Vinfast, which is a great story, more to come on that. And then we'll also talk about the Inflation Reduction Act, as mentioned, and then we'll close with some good news. So we have a nice, multi-part show for you this morning. But first, SBF is apparently going to jail because he couldn't keep his mouth shut in his Google Drive to himself. Mary Ann, what's going on?

• 2:08Speaker 01

  I mean, come on, like if we have any doubts about this man's character, I mean, this probably kind of was the Really the nail in the coffin, leaking the diary of Caroline Ellison, his, I guess, his former girlfriend and partner, right? The CEO of Alameda Research, FTX's investment arm, that is. I mean, how shitty is that? A diary is something kind of sacred, you know? I mean, no matter what happens between two people, you don't leak someone's diary? And what kind of asshole is that? And did he think nobody was gonna know? I mean, how, again, he just shows, displays this arrogance that is just unbelievable.

• 2:46Kirsten Korosec?

  It's not surprising. Yeah, absolutely not surprised by this, based on everything we've seen up to date. I mean, it is a specially extra shitty move, but if you look at all the behavior leading up to there, I think you had a really good word for that, which is arrogance. I'd add, you know, hubris on top of that. Not surprising, Alex.

• 3:11Speaker 00

  Yeah, not, not surprising, still somehow disappointing, though. Like, I, I mean, I like to think that if I had committed a alleged multi-kajillion-dollar fraud and I got caught and my two partners were cooperating with the feds, I wouldn't then try to leak their personal stuff. You know, I like to think that at that point, I would be like, okay, you got me. But apparently not. Apparently, there's always a next level down if you have a shovel and some time. And given that he's been on bond, it was a $250 million bond, he's had plenty of time. But now, it appears he'll be in jail. So more to come on that. I think when the trial comes, we'll have a lot more to say as well.

• 3:45Speaker 01

  One last thing I'll say on this topic. I was floored to read that even while in jail, this man may have access to his laptop for nine to 10 hours a day. I mean, what? He's in there because he accessed his Google Docs to leak his former partner's diary? And that now he's still gonna have access to a dedicated laptop at the jail for, oh, sorry, nine to 11 hours a day? Just have to vent, I just continuously get outraged by this.

• 4:10Speaker 00

  Okay, but Mary Ann, you can turn off the wifi. Does the laptop have, have access to the megatubes and his prior stuff? It might just be a laptop that he can like, use like, you know,

• 4:19Speaker 01

  So, why should he get to do that? Why? Why does he get this privilege? Anyway, we need to move on.

• 4:25Speaker 00

  I don't want to get into the debate about prisoner care in America's carceral state, but I do fully empathize with your point. Anyways, speaking of high moral fabric, Mary Ann, better.com's going public.

• 4:36Speaker 01

  Yeah. Okay, wow. This started about two years ago. Better.com in its heyday was doing really, really well, right? When interest rates were super, super low at record lows. People were refinancing left and right, left and right. The business was booming. Everything was great. Going public. Yay. And then everything fell apart. A lot of that also had to do with just poor decision making on the part of its executives, which they claim that they admit they could have done better. Miraculously, the company is still going public via SPAC with Aurora Acquisition Corp. Shareholders approved this last Friday. At least 65% voted in favor of the proposal. This means they're set to go public next week. I mean, this is a company that's been bleeding cash quarter after quarter,

• 5:19Speaker 01

  posting net loss after net loss. Clearly, it's just, it's just trying to get some cash here.

• 5:25Speaker 00

  Yeah. So Kirsten, you and I spend a lot of time looking at financials. What did you see here?

• 5:30Kirsten Korosec?

  I am forever fascinated and I will never probably receive the answer that is the right one, which is how these companies are getting money and how they are managing to go to the capital markets. I thought SPACs were kind of over. And we've had a couple of examples of announcements or actually public debuts this week that suggests that they're not. To me, what will be really interesting is what happens with the investors. Because in SPACs, as you know, unless there is a framework to force people to keep their money in, they can pull it out. So let's see what it is by the time it publicly debuts.

• 6:15Speaker 00

  Yeah, I'm very curious about that too. And Marian, before we let you tell us what you think will happen, a couple of numbers that I thought were pertinent to the conversation. I went through some of their SEC filings. This is between their SPAC, their blank check company and Better itself. But on the better side of things, in the first quarter of 2023, they had total net revenues of just about 21 million, which is, you know, $21 million. That's a lot of money. But it was 205 million in Q1 of last year. So the company has shrunk dramatically. And it did lose 87 million on an operating basis in Q1 of this year. And then finally, it had negative operating cash flow in Q1 of 162.8. So small shrinking and not doing so great. So Marian, why not just shut it down?

• 6:58Kirsten Korosec?

  Well,

• 6:59Speaker 01

  I mean, they're getting $550 million from SoftBank. Does that answer your question?

• 7:05Kirsten Korosec?

  To my point, to my point earlier.

• 7:08Speaker 00

  I guess what's the play here? That rates will come down and people will refinance more and there'll be more overall demand?

• 7:14Speaker 01

  I mean, I think that's the long-term hope or plan here. I can't really say much more because I've got more on all this coming out next week. Stay tuned, but yeah, it's basically they need the money or else they're going to fold. Honestly, there's no way they can continue. They've laid off about what 91% of the staff since December 2021. You know, running on fumes is that that's just what's happening. So $550 million is a lot of money. Now, what will happen when it actually, you know, hits the markets? Like Kirsten said, I mean, I can't imagine anyone rushing out to like, hey, I want to go buy some better dot com stock. Like, really? Who's going to do that?

• 7:52Speaker 00

  I mean,

• 7:53Kirsten Korosec?

  it could go into meme meme stock territory, I suppose. But I'll play devil's advocate for just a moment. A smaller company that is more focused, could it be well poised for growth? Based on your expertise in this company? Have they gone through all the pain that will allow them now to succeed?

• 8:11Speaker 01

  Okay. Objectively, better.com has been known to have decent technology, right? That powers its ability to help originate mortgage loans. So it does have that going for it. Its goal is to to make the whole process faster and easier, supposedly. So if it really can execute on that goal, purely objectively speaking, there is potential for it to maybe survive and do okay eventually if it can get past its leadership.

• 8:41Speaker 00

  Yeah. Normally here I would try to do what Kirsten did and kind of like come up with like, oh, maybe this. But, you know, after reading the filings, I don't actually have much of a bull case. So let's just leave it there. And then when the combination is complete and it begins to trade, we'll take a look at it and bring it back to the show. Also, when we get Q2 numbers, we'll talk about those. We are looking at March data. It is August, so perhaps things have turned around, but more on lesser.com in time. Now, my deal of the week is monday.com, which The company that I'm sure you've seen their YouTube ads at some point in time. They were kind of big for a moment back in the work from home Slack future productivity thing. And then they were in public and then people kind of forgot about them as far as I can tell.

• 9:20Speaker 00

  But they're doing very, very well. And I wanted to flag this because I think we talk a lot about slowing tech growth and startups that are struggling and what's going to happen to unicorns and all that. But this is like some kind of unalloyed good news. The revenue was up 42% in the last quarter, which is great. Their stock price went up. I think it was 15% in response to this. And you know, with revenues of 176 million roughly in Q2, they're really at scale and putting up almost like startup growth while public. So I was very impressed. What did you guys think?

• 9:48Kirsten Korosec?

  Well, what was the net loss? I mean, are they starting to close the gap? Is it narrowing? Because revenue, of course, is wonderful. We want that. But if you have insane untethered net losses, you know, you can only run on that little hamster wheel for so long.

• 10:02Speaker 00

  It's a great point. And one thing that I track a lot with software companies is actually operating losses. Just kind of look at where the engine of the business is. And their operating loss was 12.2 million in the most recent quarter, down from 46.2. And their operating activities generated 47.6 million in cash. So generating cash, cutting their gap losses, and they're, they're posting like fast growth, well getting more profitable and generating cash, which I think is like the three parts of the stool that SaaS companies have to kind of land on today to do well. And here it is, evidence, Kirsten, that it's possible. So to answer your question, yes, they are.

• 10:36Speaker 01

  You know, Alex, I mean, I was glad to see some kind of positive news out there. And surprisingly, I wrote about a company this week as well that had impressive financial results. Dlocal out of Uruguay, a payments company. Its stock shot up this week over 30%, at least just in one day alone. It had super impressive results in the second quarter. Our revenue was up 59% year over year. 161 million and gross profit was up 43% year over year to 70.8 million. So another example of not every company is doing badly right now, especially surprising, I feel like in the fintech space where there's been so many, so many companies struggling in the public markets.

• 11:19Speaker 00

  Yeah, and even more to that point, Mary Ann, their adjusted EBITDA was also up again sequentially for the quarter. And so they just seem to be kind of firing on all cylinders.

• 11:27Speaker 01

  Yeah.

• 11:27Kirsten Korosec?

  Do you see de-local as like an outlier? Because you made an interesting note, which is you were surprised it was in the fintech space. So is this, is this the exception to fintech? Or do you see some recovering happening right now in fintech? And this is just one of the early indicators?

• 11:44Speaker 01

  That's a good question, Kirsten. I'd say this kind of story is not too common these days. I mean, but there are some fintechs that are doing okay. So I don't want to make it seem all doom and gloom. There are others that had decent results. I think Dave last week had some pretty decent results, but not to this level, I'll have to say. I haven't really seen a lot of fintechs, you know, reporting gross profit, revenue jump of this magnitude, stock going up to this extent. So I don't want to say it's an outlier, but it certainly stands out.

• 12:14Speaker 00

  Yeah. And to put another kind of like data point on that, I haven't dug into this enough yet, Kirsten. So like, don't hold me to it. But Adyen, which is a European money transfer company in the fintech space that has been a consistently excellent performer since it did go public a couple of years back, did have quarterly earnings this week that disappointed. And I believe their stock dropped like 20 points or something. So we are seeing people in the money movement game broadly, post some results that I think are a little bit struggling. And I think that that issue is why Stripe is still private. So to me, the de-local stuff, Mary Ann, actually is pretty impressive. And before we move on to the most fun company of the week, there was also some executive shake up there. There's a new CEO. What's going on there?

• 12:52Speaker 01

  Yeah. So actually, there's two new executives this year. I interviewed co-founder and he is now president and chief strategy officer, Sergio Fogel, I believe is how you pronounce his name. And then on top of that, this week, they hired a new co-CEO and he is a former MercadoLibre CFO, Pedro Arnt. So we have two new executives. Now, the company did have some struggles. It was kind of a victim of a short seller attack late last year. And this was kind of a drag on its stock. So like these new executives, the really impressive financials, I mean, I'm, this is a very impressive rebound in just a matter of months.

• 13:30Speaker 00

  Yeah. Now, speaking of rebounds, big numbers and things that are catching our attention, Vinfast has gone public via a SPAC. Kirsten, talk us through this one.

• 13:39Kirsten Korosec?

  Vinfast, I've been fascinated by this company for a while. A lot of folks in the US probably have never heard of Vinfast and it's a Vietnamese EV maker. But really, the important thing to understand is that it's actually the arm of a massive conglomerate in Vietnam called Vin Group, incredibly powerful company in which, when you're in Vietnam, you will, everything you do will touch Vin Group in some way. Healthcare, education, death. And Vinfast started out as a company doing two-wheelers, scooters, and sort of made this shift and also outsized its ambitions a few years ago. So it's about six years old. It decided to be completely electric and it

• 14:21Kirsten Korosec?

  decided it wanted to carve out market share in the United States, meaning building, manufacturing, initially importing in, but manufacturing here in the US, EVs made for Americans that they want. That has not gone super smoothly. They've already had a recall. Their very first SUV hasn't had the best reviews, feels unfinished. But for whatever reason, investors were not worried about that because when they debuted, that SPAC originally was valued at 23 billion. End of trading the other day was 86 billion. Wow. Market cap. That's insane.

• 14:59Kirsten Korosec?

  Yeah. And notably, more than Ford or GM or Stellantis are valued. That has gone down a little bit, but it still has a market cap higher than legacy automakers. So I expect this correction to continue, but still absolutely amazing that it came out of the gate that well.

• 15:21Speaker 00

  I'm blown away by it because I've looked at the numbers and the company's actual results look worse than they really are because they transitioned away from internal combustion engines or do you call them ICEs or?

• 15:34Kirsten Korosec?

  I say ICEs or internal combustion engines and you're right. If you look at their revenues, it's like, you know, halved year over year, but that's because they have gone to be fully EV. They are successful in the scooter market in Vietnam. I think that in the first half of the year, they delivered something like 20,000 two-wheelers, but they've only delivered globally 11,300 EVs or vehicles.

• 15:58Speaker 01

  That's not much.

• 15:59Kirsten Korosec?

  That's not a lot. Yeah, that's not a lot. Of course, the number of deliveries matters, but also your margin on each vehicle made. So, you know, there are companies like Ferrari out there that don't make a lot of vehicles, but their profit margins are among the highest in the business. Vinfast is trying to be a volume provider. So we'll see how they scale. I mean, they are really trying hard to break into the US and it's going to be a tough road. I mean, other companies have done this. Historically, we've seen, you know, Toyota and Hyundai and Kia break into the US market. This was several, you know, four decades ago, but is there room for another?

• 16:37Speaker 00

  I don't know if there is, but I will say that one thing we've been tracking quite a lot is Tesla's automotive gross margins, which are coming down as it kind of fights in a global price war. Vinfast is starting life as a public company with negative gross margins, which is a tough place to be if you want to reach operating profitability. But we will have more on electric vehicles and where they're built and all things money involving green tech right after this very short break. Hang tight, we are right back.

• 17:04Speaker 00

  So Kirsten, one thing that we've been tracking as a publication is the one-year anniversary of the Inflation Reduction Act, or IRA, a very wide-reaching bill that touched a great part of the transport industry and also kind of green energy and I would say climate tech in general. So why do we care so much about this one-year anniversary? Has it been a big deal?

• 17:22Kirsten Korosec?

  We always like that one year anniversary. How much has happened? How much have we spent? So a team of us here put together a whole package of stories, which you can read it over at techcrunch.com, including one that looks at the effect on startups. So the IRA was signed a year ago this week, and a lot of that money is going towards the big infrastructure projects. And so the largest corporations and, for instance, automakers are really the beneficiaries of this, as well as on the consumer side incentives, you know, so if you buy an EV, you have a tax credit. But what we're seeing is, based on the folks we've talked to in venture capital,

• 18:00Kirsten Korosec?

  there has been a bit of a trickle down effect and that they expect will start benefiting startups even more in, say, 2024 and 2025.

• 18:10Speaker 01

  I mean, we've already seen a little bit of evidence of this with General Motors leading a 60 million Series B round into a startup called, is it MitraChem? They, sorry, battery materials startup. Am I pronouncing it correctly, Kirsten?

• 18:23Kirsten Korosec?

  Yeah, I think so. And yeah, yeah, you got it. I think that that's a perfect example. So General Motors is clearly one of the leaders in terms of capturing money from the US government via, you know, loans to finance these massive battery factories. They also, of course, are somewhat beneficiary through incentives of, you know, selling their EVs, which are domestically produced, and therefore consumers will buy them because they get tax credits. And as a result of all this investment to really shore up their supply chain, bring it all back into the US, they're also then, of course, using their investments into startups. And MitraChem is a perfect example of that. And you're seeing other automakers do this as well.

• 19:06Kirsten Korosec?

  More activity on the strategic investment side, maybe than on the just straight up VC side. So strategics are really important as it relates to the IRA.

• 19:16Speaker 00

  It's one thing that I'm tracking with this is not just the potential impact on startups and even kind of small businesses that might be suppliers to majors doing big projects, but it's also just seeing overall investment in the American manufacturing base. And I could not find the right chart from Fred, which is the Fed's database of economic information. But there are some trends floating around that show a pretty sharp rise in manufacturing investment here in the US. So the IRA has seemed to have had at least some impact on our ability to make stuff, which is green to a degree because we don't have to ship it in from somewhere else. So that also brings me a lot of joy, Kirsten.

• 19:48Kirsten Korosec?

  Right. Well, and actually, if you're looking for an amazing map to track all of the big battery factory projects, we created one that's interactive and it and it really shows how the quote unquote rust belt, which was sort of the mid Atlantic stage, so Michigan, all the way down into, let's say, North Carolina.

• 20:06Speaker 01

  Yes.

• 20:06Kirsten Korosec?

  Is now becoming the battery belt.

• 20:07Speaker 01

  Thank you for bringing that up. Yes, I just have to say that's my home state. And I have been watching with fascination at the number of companies, including Toyota, Vinfast, building plants in North Carolina. Like, this is really a coup for the state. So, sorry to interrupt, Kirsten, but, you know, I had to get my shot out for my home state.

• 20:25Speaker 00

  Go Tar Heels.

• 20:27Kirsten Korosec?

  Yeah, you're seeing a lot of activity in North Carolina, South Carolina, Georgia, Michigan, obviously, where a number of automakers are located, Ohio. You're seeing all these not just battery cell production factories, either under construction, in operation or planned, but then also these battery materials startups. Redwood Materials is a really good example of a company that started out as kind of a battery recycling startup, but actually now they're making the components of the battery cell, the anode and the cathode. You're seeing all of this activity that started actually before IRA, and I should say that. It started really as a result of COVID's pandemic showed us how weak and sensitive our supply chain was in the chip area.

• 21:10Kirsten Korosec?

  And as at the same time, all these automakers were making these big, bold commitments to EVs, they did not want to have a repeat. So that activity started before IRA. I would say the big takeaway after this one year is that there's an acceleration.

• 21:26Speaker 00

  Okay. That's what I was going to ask you is like, because I wasn't paying enough attention to this set of areas, you know, two, three years ago, frankly. And so to me, this kind of post IRA reality is the reality that I know. So it's hard to kind of judge how much things have changed. But the acceleration's a good point. The question is, Kirsten, are things accelerating enough to have a big impact on kind of the global ecosystem for manufacturing EVs, batteries, and kind of clean energy products?

• 21:52Kirsten Korosec?

  I think so. You're seeing activity not just in making batteries, but also based on the folks we've talked to, and you'll see this in our coverage, more investment in energy storage, so batteries that store energy, more investment in other climate tech, so like more traditional solar, things like that. You're seeing what was already happening before, like solar certainly not new, but you're starting to see more of this onshoring. So not just at the consumer side of things or the service side of things, but really the manufacturing side. And a lot of the incentives, when you buy an EV to get those tax credits are directly related to if they're made in the United States. So is the vehicle assembled in the

• 22:33Kirsten Korosec?

  United States? Are the materials sourced from North America, I should say. So all of that should, we'll see over the long term, mean that this will just continue. Maybe not at the same rate that we're seeing right now, but, but certainly you're going to see, I mean, there's 30 some battery factory projects right now, either operational or under construction in the United States. In 2019, there were two that were operational.

• 22:59Speaker 00

  Actually, that's by the data point I was looking for, but didn't even know. That's shocking. That's 15x in four years. But before we talk more about this, I want to say a big shout out to Rebecca B. from your team and Miranda H. from the TC Plus crew, who did the, the yeoman's work on getting the battery thing put together. I think Bryce also helped out with that. So definitely a group project and the map's really cool. So go play with it because we made it for you to play with and we'll drop a link to that in the show notes. Kirsten, one thing I was surprised though, when I was prepping for this show was to learn how much the EU was initially kind of peevish with the United States when it came to what we were trying to do domestically to bolster this part of our production and output. Cause to me, I think Europe, I think, you know, polite Dutch people that like to bicycle and use solar toilets. So I thought they would

• 23:42Speaker 00

  love that we were trying to build batteries and shit, but it turns out they were pissed. What's up with that?

• 23:48Kirsten Korosec?

  Yeah, Tim wrote about this and really it was an interesting look at what is the effect of these policies on a global scale and we pay a lot of attention to the effect that our relationship with China. But actually, in this case, our efforts to, you know, put more money towards fighting climate change, specifically on like the infrastructure and onshoring, sort of sparked a tech arms race with the EU. So my prediction is that it will be fairly short-lived. I mean, it's a bit speculative, but it will adjust and it will settle. I'm more interested in actually, there's a story that I'm hoping to get up on the site in the next week or so, is sort of exploring what's happened with US-China

• 24:30Kirsten Korosec?

  relations as a result of the same law that went into place a year ago.

• 24:34Speaker 00

  Yeah, I'm very curious to see what impact nearshoring has on the US-China trade balance and also on, I would just say, overall Chinese export volumes just by themselves. If you're not tracking that story, that's a couple of data points to keep an eye on because they're very interesting and they're changing. But let's scoot on to some more good news, which is that Mary Ann, we are seeing, this according to our own Rebecca Scootack, that women-led venture capital firms could form a bright spot in the relatively damp, I would say, 2023 funding environment.

• 25:04Speaker 01

  Yes, very good news indeed. I was very pleased to read that at least three funds founded by women closed pretty decent-sized raises this year. We had a 17 million debut fund for Cake Ventures, 75 million, which is very, very good size for Adverb Ventures in July, and then $40 million for Supply Change Capital. This is particularly interesting because I did not know this, but according to Rebecca's reporting and per PitchBook, the median fund size for this year is just $13 million. So these funds are actually way above that median size, at least two of them are, and one and one is slightly above. So that's great news.

• 25:43Speaker 00

  Yeah, it is. Also, can I just say how much better named these firms are than the old venture capital firms? Like, if these were founded by dudes in the 90s, it would have been like Tall Tree Ventures, Big Rock Ventures, and then to Cake, Adverb, and Supply Change? The last one's even witty. Who would have thought, Kirsten?

• 26:00Kirsten Korosec?

  Who would have thought? So I'm going to ask the same question that I asked much earlier, which was Alex and Marianne, do you think that this, these are outliers or is this the beginning of a new trend? Are we going to take stock of the end of 2023 and look back and say, wow, we're seeing the pace of women-led firms gain some ground? Or are these just anecdotal highlights that don't reflect what's really going on?

• 26:26Speaker 00

  Marianne, you want to take that one first?

• 26:28Speaker 01

  I mean, it's a tough call, right? I don't, I don't know. Like, there's the part of me that hopes that this is just, it's a trend that's going to keep on going, that these aren't outliers. But it's very hard to say. I, I think that in the current environment we're in, LPs are realizing they have to be smarter about where they put their dollars. So maybe to me, it's like the smarter ones are realizing they need to be more open-minded in who, who they're writing the checks to. And, and this is something that pains me a little bit to say, but historically, women and different, this term, underrepresented groups, in general, we feel like we have to work a lot harder, right? In a way, I think they, they feel like they have to prove themselves in a way that, you know, a white male-founded

• 27:11Speaker 01

  fund would not. So they work harder and they probably have better returns and, you know, just start kick-ass investors in a different way, right? Because they're really, they're hustling, I think, in a different way.

• 27:23Speaker 00

  Yeah, the phrase that I've heard is twice as good for half as much.

• 27:26Speaker 01

  Yeah, that's, yeah, sums it up, I guess.

• 27:29Speaker 00

  The thing that I would say, Kirsten, because I think it's actually the right question to ask, you know, when we're looking at anecd, you know, the plural of anecdotes is not data, it's anecdata, you know, something to always keep in mind. But here's the thing that, that stuck out to me with these, with these funds. We are seeing right now, the pace at which venture capitalists writ large can accrete capital dramatically come down. So to see a number of women-led firms land funds that are above the median point for this year means that some are succeeding even in a down market that we had concerns of that would limit the ability for women and other underrepresented groups, to use Marianne's favorite term, would be able to. So instead of seeing one fund and noticing that as like, oh, someone pulled it off, we have a collection all kind of coming around the same time. So

• 28:11Speaker 00

  to me, it's bullish, but I do think you're right that we have a little more data work to do. But I mean, you know, this is $130 million in capital that we're talking about right here. That's a lot of money in their hands to put to work. So even if it wasn't great year over year, I'm still encouraged by it.

• 28:27Kirsten Korosec?

  And actually, the point you made earlier was, actually, Mary Ann made this point earlier, was that these amounts are higher than the sort of average funds. So, so that's a positive as well, or positive momentum. So even if you're not seeing the same flurry of ideas, each round or each fund is larger than it has been in the past. So you could do more with that money, obviously, right? More power.

• 28:51Speaker 00

  Yeah. And also, these fund sizes make a lot of sense to me because, you know, I was taking a look at the pre-seed market in the, mostly the US context, looking at data from Karta, which mostly works with American startups. And what we've seen is that the amount of money that's invested in the pre-seed market is going up a little bit compared to Q1, but on fewer rounds, so kind of up and down, but it does seem to be stabilizing. But what matters for these investors we just talked about is that the median price for a seed, I'm sorry, pre-seed round startup has come down. So they're going to get more ownership for their investments that they're doing now than they would have a year or two ago, possibly setting them up for a better financial result for their investors, and therefore a larger fund, maybe the next time they raise. So to me, there's some dynamics that are not founder-friendly, but are investor-friendly,

• 29:34Speaker 00

  but in this investor context, I mean, maybe that's, Mary Ann, you know, to their benefit.

• 29:38Speaker 01

  Yeah, actually, I think it's not such a bad thing. I mean, maybe a more realistic investing landscape is good for, for everyone. And I'm not surprised by it either. I mean, I, like I've mentioned before on the show, we're seeing a lot of very early-stage deals in general in my inbox. So I'm not surprised to see that pre-seed funding is up. I am a little surprised that round size is larger, but maybe that's just because investors are being more selective and then they're, you know, the bets they are taking, they're kind of going, you know, more in on them. So overall, really interesting data.

• 30:11Speaker 00

  Can we hire somebody to do like a little app for Mary Ann's inbox that tracks the number of pitches by their dollar amount and then like just graphs them? Like, Mary Ann has received 73 pitches between $0 and $15 million funding rounds in the last seven days. That's down 14%.

• 30:26Speaker 01

  That would be fun. Yeah, that would be very fun. I would say right, right about now, that definitely they would fall very much so in the pre-seed and seed stage, a lot of them.

• 30:35Speaker 00

  You know, my nephew can code, I think.

• 30:37Speaker 01

  Well, my son can too. So I could ask him, you know?

• 30:40Speaker 00

  Yeah, there you go. We should get the youths on that. That would be amazing.

• 30:43Speaker 01

  Love it. Love it.

• 30:45Speaker 00

  I think we should go ahead and wrap up here, but let me tell you, if you want to hear this exact trio of voices, all chatting in perfect three-part harmony, you can do that at TechCrunch Disrupt this year, September 19th through the 21st. On Tuesday, we will be kicking off the entire show. And so you will see the three of us onstage, trying to be charismatic in public. It's always a good time. And we're so excited to have Kirsten for the first time onstage with us for the show. Guys, I think we're already planning what we want to talk about. So it's going to be a real good time. Can you give me any hints about what you might want to joke about when we do it?

• 31:14Kirsten Korosec?

  Well, first of all, I'm a little insulted that you said, we're going to try to be charismatic, because for me, it's just sort of natural. And I don't really have to try at all. So I am going to be bringing the energy that day, because I have a big interview with JB Strabel, who is the Tesla co-founder, former CTO, and now returning board member. But he's also the founder of Redwood Materials, which we were talking about earlier today. So I'm really going to be like fired up.

• 31:42Speaker 00

  Okay, Mary Ann, what surprises can you tell people you're going to bring to the quasi roundtable?

• 31:46Speaker 01

  I haven't gotten that far ahead yet, Alex, but I do plan to make sure I have my glasses, so I can read the script if needed onstage this year, unlike last year.

• 31:57Speaker 00

  Yeah, last year, Mary Ann forgot her glasses. Natasha's mic was too high because she's of a more modest stature. And I kept touching my makeup and getting it all over my hands. So we're going to do better this year. If you liked last year, it's going to be plus one across the board. But it's going to be a great time. And if you don't have a ticket yet to our big confab coming up in San Francisco this September, you can do so with the code EQUITY and save yourself some money and make us look good internally. Kirsten, though, because you have been so generous with your time on our podcast, why don't you tell people about your show that you do on the side?

• 32:26Kirsten Korosec?

  Oh, yeah, my side hustle. I have a podcast with two guys who are fun, hilarious, smart, intellectual guys. Our podcast is called The Autonicast. We call ourselves and our listeners, the Autonicats. And really, it's, yes. And really, it's a podcast about the future of transportation. So the idea is this, that a lot of news coverage is, you know, an inch deep and a mile wide, because breaking news. And we'll take one topic and go, you know, an inch wide and a mile deep. So we'll interview founders. We talk a lot about one specific issue all around the future of transportation, mostly autonomous vehicle technology, hence the name Autonicast.

• 33:07Speaker 00

  Well, I appreciate that. Everyone on the audience side of this show knows that I hate driving. And so if it's autonomous, I want it. And we're going to not let Mary Anne rebut that. We're just going to go away now. And we're back Monday morning with our usual show. So stick close to us. And of course, we are Equity Pod on Twitter threads and Equity on Blue Sky if you want to stay in touch. Goodbye.

• 33:24Kirsten Korosec?

  Bye.

• 33:24Speaker 00

  Bye. Equity is hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Anne Azevedo. We are produced by Teresa Locan Solo with editing by Kell. Bryce Durbin is our illustrator. And a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening and we'll talk to you next time.