Michael Gao

Exciting news for startups! California accounts for about 50% of all venture investments. The not-so-secret reason is that non-competes are illegal in California, so engineers at FAANGs can build competitors without fear. Today, the US Federal Trade Commission declared non-compete agreements illegal nationwide. This means that engineers at big tech companies can now leave and build their own companies without fear of violating a non-competes (legacy agreements for executives are still enforceable - talk to your lawyer), this is a step in the right direction for fostering innovation and competition across the country. A variety of big-business groups have vowed to sue to bring non-competes back, but at least for now, they're gone! #startups #innovation #competition #noncompete Official Announcement: https://lnkd.in/gRXUpgDy Impending lawsuit: https://lnkd.in/gqSiVuTd

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During yesterday's LibreQoS APNIC webinar, I posed the question: won't more bandwidth solve these problems? As Herbert Wolverson said, yes, more bandwidth is good, but, still these problems remain if queueing is done incorrectly. Here's my take on why bandwidth alone is not as good as bandwidth + good queueing policies: Generally it was believed that 'data is important, so don't throw it away; hang on to it and send it later'. In practice, this has proven to be suboptimal as two issues may emerge: 1) latency increases for some flows due to heavy demand from other flows using the same bottleneck link, 2) even a single flow can have excessive latency due to aspects of typical TCP behavior (referred to bufferbloat) when the buffers grew large enough that the data being buffered was retransmitted anyway. It turns out that not all data is equally important. Active Queue Management is the art of deciding priorities, both in deciding what data to throw away, but also in allowing some later arriving data to be transmitted ahead of data in another connection that arrived before it. These problems have been studied, and good solutions have been found by using certain queueing policies in routers and switches, referred to as “fq_codel’ and “cake”. These track the different flows not by classifying the data, but by watching the behavior. Flows that send relatively little data (DNS lookups), or at a measured pace (video chat) have priority over flows that send a lot of data as quickly as possible (App and System updates, Video and ISO downloads).

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Some unicorns and late-stage VC-backed companies restrict their employees from selling their stock, often at the request of their boards of directors. Not this one. Andrew Feldman and his executive team at Cerebras Systems (a high-flying AI chip startup mounting a challenge to the likes of NVIDIA and Groq) have been willing to recognize the blood, sweat and tears that employees with vested options have put into building this impressive business, by allowing them to sell their shares in the private market. This is not just great news for current and former Cerebras employees but also for the company and its investors! Why? Liquidity typically leads to higher stock pricing, making it more attractive to investors. How so? The short answer is that when a stock is more liquid, its riskiness declines. When risk goes down, so does the discount rate (the cost of capital) that investors use to price the asset. When the discount rate goes down, all else equal, the price should go up! This enhanced liquidity and pricing can help a company with fundraising valuations, consolidating the cap table before an IPO, and bridging the valuation gap between an illiquid private market and a very liquid public market. Congratulations to Andrew and the Cerebras team for delivering on your promise to your employees and investors by allowing a liquid market for your stock. And bravo to your board members (which, according to PitchBook include Eric Vishria of Benchmark , Brad Gerstner of Altimeter, Steve Vassallo of Foundation Capital, Lior Susan of Eclipse, Thomas Laffont of Coatue, and Pierre Lamond) for supporting your vision! #secondarymarket #privatemarket #marketplace #unicorns #stockoptions

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I find it hard to believe that with millions of EVs entering the market and the proliferation of AI compute that PGE is actually going to have excess capacity in 2040 without any additional generation from 3rd parties. I am also curious if there are enough transmission lines and if PGE views that as someone else’s problem. Maybe they are planning on AI and ACTUAL figuring it all out! https://lnkd.in/gybsMmaw

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Allocate just released an analysis on a dataset of 253 venture funds, with only pre-2019 vintage years being included. The analysis shows a clear negative correlation between high risk / high reward investment profiles and size of venture fund, i.e. the smaller the funds, the higher the performance, but also the higher the risk. Two ways that LPs can mitigate the higher risk of smaller funds: 1. Diversify across more emerging managers, and 2. Invest across vintages with said managers. Here are the details: Small Funds (0-100MM): Mean TVPI: 4.3 Standard Deviation: 2.4 Median Portfolio Companies: 26 Mid-Sized Funds (100-250MM): Mean TVPI: 3.6 Standard Deviation: 2.0 Median Portfolio Companies: 24 Mid-Large (250-500MM): MeanTVPI: 3.0 Standard Deviation: 1.2 Median Portfolio Companies: 35 Large (500MM+): Mean TVPI: 2.7 Standard Deviation: 0.9 Median Portfolio Companies: 43

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In this week's episode of the Mobile Dev Memo podcast, I speak with notable X personality Trung Phan about the evolving social media landscape, and how to tame the mayhem and pandemonium of X. https://lnkd.in/dVHMzbui

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To build a multi-agent system, start simple, validate your design, then gradually scale. When I spoke to Chi Wang, the creator of AutoGen, he explained why. Deploying one or two agents at first allows builders to evaluate and refine the core design and interaction patterns before introducing additional complexity. This method also streamlines debugging and optimization because it makes it easier to trace issues back to specific agents. Our full conversation here: https://lnkd.in/gEKmExu4

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🌟Innovative VC Firm Overcomes Exits Drought with Secondary Sales🌟 ⛵Navigating a challenging landscape where exits are scarce, Santa Barbara Venture Partners (SBVP) has pioneered a novel approach to sustain its growth and attract investors for its second fund: secondary sales. Instead of waiting for traditional exits like IPOs or acquisitions, SBVP opted to sell shares of its portfolio companies, demonstrating its ability to generate returns for investors and stand out in a competitive market. 🎤According to Dan Engel, founder and managing partner of SBVP, these secondary transactions have been a game-changer, sparking investor interest and bolstering the firm's credibility. By leveraging its recent successes, including a lucrative stake in sports-betting company DraftKings Inc.' acquisition of digital lottery app Jackpocket, SBVP seized the opportunity to return profits to its limited partners (LPs) and pave the way for its second fund. 💡Engel highlighted the challenges faced by young VC firms in raising subsequent funds, particularly amid a downturn in exit activity and heightened investor scrutiny. With traditional exit routes becoming increasingly elusive, the pressure is on for firms to demonstrate tangible returns and establish a track record of success. ✨"For us, secondary sales have been a game-changer. They've helped us return profits to our LPs and attract investors for our second fund," said Dan Engel. 💰For SBVP, the decision to pursue secondary sales was driven by the need to provide liquidity to LPs and validate its investment thesis in the eyes of prospective investors. By strategically offloading portions of its holdings in high-performing portfolio companies like Bark Technologies and Rad AI, SBVP not only generated substantial returns but also bolstered investor confidence in its ability to deliver results. ⚠Despite the complexities and potential stigma associated with early share sales, Engel emphasized the importance of prioritizing investor returns and seizing opportunities to unlock value for stakeholders. With a focus on profitability and transparency, SBVP remains committed to its mission of delivering sustainable growth and maximizing returns for its LPs. 🔍 "Returning profits to our investors is our top priority. By strategically selling shares, we're proving our commitment to delivering results and driving value for our stakeholders," added Engel. As SBVP continues to explore secondary transactions and expand its investor base, the firm stands as a testament to innovation and resilience in the face of market challenges. 🚀 ✅ Looking to raise capital for your #fund and increase the international pool of your LP #investors?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments?   ▶ G+QUANT's link for inquiries and fund decks: https://lnkd.in/gjC_EuTE #VCInnovation #SecondarySalesSuccess #InvestorReturns #ValueCreation 

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Summary: Lacey Hunter, founder of TechAid, went through the Newchip accelerator in 2022 and was blindsided when the organization filed for bankruptcy in May 2023. The bankruptcy court is auctioning off the warrants held by Newchip in over 1,000 startups, causing outrage and forcing some companies to shut down. Newchip had a tumultuous history, facing criticism for its CEO's leadership style and ultimately filing for Chapter 11 and 7. Key takeaways: Many startups paid thousands of dollars to go through the Newchip accelerator, giving the organization the right to buy shares in their company at a future date. Now, the bankruptcy court is auctioning off these warrants, causing distress and in some cases, leading to the closure of startups. Newchip's founder and CEO, Andrew Ryan, faced criticism for his leadership style and reportedly fired a manager in front of the entire company as a "test" of loyalty. The bankruptcy revealed that Newchip had missed keeping track of some companies that had exited or raised money, potentially causing the organization to miss out on millions of dollars in potential upside. Counter arguments: Newchip may argue that their bankruptcy was due to unforeseen circumstances and was not a #vc #startups #accelerators

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Vishal Sachdev highlights the strategic integration of open source and proprietary tech in architecting tech stacks, developer ecosystems and resulting business models. The world class companies effectively balance value commoditization in open source and value capture in proprietary tech. This is the strategic challenge for companies operating in #blockchain and #AI. I believe those who operate at the intersection of blockchain *and* AI stand to win this strategic battle...

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Ross Haleliuk posted the fantastic article below. This is the world where I live day-to-day. At TechOperators, we invest mostly in early-stage cyber, but we do things a little differently, and we believe there are ways to invest successfully outside of pure Power Law math. The article argues that many security problems are too small for VC. I agree. I often try to convince bootstrapped founders not to raise venture because doing so can turn a successful, slow-growing bootstrapped company into a failed venture-backed company because, despite a large infusion of capital, it couldn't double every year. VC is not monolithic--not by stage, strategy, or style. Venture is often equated with "Tier 1 Venture". Ross argues that VC is not always great for early-stage cyber--and he is right. Bootstrapping AND VC work when incentives are aligned. Does it work for an early-stage VC with a <$200M fund to invest in several early companies at reasonable valuations, setting up the conditions for reasonable exits that pay off for both investors and founders? Yes. Does it work for $800M funds investing in seed stage at $100M+ valuations? Well, that depends! Power law says it does (for VC), but the unfortunate externality is that these rounds destroy companies and founder equity more often than not. There is a role for patient capital in this ecosystem to fuel successful companies that retain exit optionality as they scale--driving exit value for both founders and investors.

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iPad sales will get a nice boost in June and September. That tailwind will likely fade in 2025. Separately, Apple is moving faster to get new silicon in the market, a competitive advantage in AI. https://lnkd.in/g3mfdzMt

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On AI landscape, my current working hypothesis is: Model layer: commoditized other than specialized verticals like bio. Infra layer including compute capacity: hyperscalers like nvidia, Amazon will win. Groq likely gets acquired by Google, Amazon or Microsoft. Dev tools: Most startups will not monetize but some will emerge as large winners. App layer: This is where there could be 1K+ winners. Would love to hear where I’m wrong or missing the mark completely.

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The state of venture capital is wild right now. We are witnessing a surge of innovation across the spectrum: - Funds merging - VC doing PE - PE doing VC - Secondary funds - Buyout funds - Spin-out funds - Debt funds - Continuation funds - Infrastructure funds - GP turnover - Hard Tech surging - Family Office uptick

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⚡ Kicking off 🌎 Earth Day with exciting news as we unveil 8090 Industries' latest investment in Exowatt led by Hannan P. along with Sam Altman Andreessen Horowitz, Atomic, Overmatch Ventures, Protagonist, and many more. As the boom in AI heightens the energy demand for data centers, Exowatt is pioneering a fundamental breakthrough in baseload renewable energy that helps makes $0.01 per kilowatt-hour, 24 hours a day a reality for commercial and industrial use cases. 🏗 How does it work? The Exowatt P3, represents a breakthrough 3-in-1 modular system, a heat collector, a heat battery, and a heat engine capable of providing dispatchable power and heat 24 hours a day. Unlike traditional solar panels that convert sunlight into electricity directly, Exowatt uses a unique approach by storing solar energy in a thermal battery, which can retain this energy for up to 24 hours per day. The Exowatt P3 modules are designed to fit the space of a standard 40-foot shipping container. They can be deployed on small and large commercial and industrial projects, linearly scaling with workload size and infrastructure requirements. Best captured by Founder and CEO Hannan P. himself, an industrialist you're going to want to pay close attention to: “You don’t have to go back to fossil fuels to solve the data-center energy problem…That’s counterproductive and unlike traditional renewable solutions that require significant upfront costs and extended setup times, Exowatt's modular system can be deployed rapidly and cost-effectively – and it's available THIS YEAR. Exowatt is built to respond quickly to the escalating energy demands of the modern world, especially those spurred by the rapid growth of AI." 👀 Who Cares? Exowatt has a backlog of demand for OVER 500 megawatts for data centers across the U.S. and plans to begin deployments later this year. With this $20 million seed funding, Exowatt intends to expand its team and deploy the Exowatt P3 with its first set of data center customers. Stay tuned! Lots to come! cc Kerem Ozmen Wes Mendenhall Filip Vurdelja Haluk Sabanci Dincer Grant Brown Ishan Meswani Garuth A. Andrew Irwin Charles Oppenheimer Fatimah Bello #energyabundance #decarbonization #climatetech

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118 VCs (one hundred eighteen!) are gathering in San Diego next week - to meet with 30 SD startups. But it's so MUCH bigger than just those 30 co's. It brings VCs back - when they see quality companies. It helps those who are next-in-line and adjacent. It enables us to send deal flow all year 'round. It attracts talent and other companies. It inspires entrepreneurship. Connect is working for SD. Together, we're building the best damn innovation ecosystem on the planet. Year over year. Five.Ten.Thirty.

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ISP Strategic Leadership, Engineering, and Operations As an organization scales, there is often a need to separate strategic technology leadership under the CTO from internal execution under engineering and operations management. This allows the CTO to focus on outward-facing duties while enabling streamlined operational efficiency. However, it's crucial to recognize the differing motivations and needs of these distinct technical roles. On one hand, engineers thrive on tackling interesting, challenging projects that push their abilities and knowledge. They value working alongside capable peers, genuine recognition of technical accomplishments, and contributing to products/services that reach the market. In contrast, operations teams should strive for repeatable processes, continual improvement, and driving efficiency at scale. Their priorities revolve around standardizing workflows, minimizing disruptions, and incrementally optimizing existing systems and procedures to maintain consistent service delivery as the company grows. An effective organizational structure acknowledges this dichotomy, fostering an environment that fuels engineering innovation while providing operations with the stability and process-orientation they require. Striking this balance enables the company to stay agile and innovative through its engineering efforts, while simultaneously scaling operational execution in a reliable and repeatable manner. Competitive compensation remains an important motivator across both domains. By properly aligning structural elements, motivational factors, and leadership priorities, a rapidly growing ISP can position itself to attract and retain top talent across engineering and operations, driving sustainable growth and success in the dynamic technology landscape.

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** This is not Financial Advice, so do your own due diligence ** I have been a long time Cisco bull --like forever -- but I was disappointed by CSCO's latest earnings call. I fear, Street is over-modeling FY26 rev growth of >5% Y/Y.. if the past is any indicator, CSCO just cannot sustain over 1% CAGR growth, let alone the 5+% CAGR over a 3 year period. Opinions aside, facts are CSCO 3 yr CAGR is ~1% (70bps to be exact) vs the 5 - 7% CAGR it guided, which btw the company lowered after first offering 7 - 9% CAGR they guided to--even with the backdrop of COVID-led enterprise refresh. Hard to see CSCO's campus opportunity growing here, I'd rather argue we just went through a peak cycle as is evident from the Peak Gross Margins for both CSCO and SPLK. Plus Jayshree Ullal and team at Arista Networks are eating away share in the Fortune-100. $PANW's pjatformization play will likely take a bite out of CSCO's security story, which frankly took too long for CSCO to right! integrating point solutions and stitching them together just doesnt work in security-- CSCO should borrow a page from $FTNT on how to organically grow in security. CSCO has a lot of work ahead of them, SPLK had been on the block for so long, its previous mgmt. significantly under-invested in SPLK and so now CSCO has to step up and drive incremental Opex. Beyond incremental opex, the higher interest rate expense is gonna eat away the EPS.. Streets ~$3.70 FY26 EPS is too high.. would be lucky if they get to $3.50. You know CSCO is in trouble when they got out of their comfort zone of tuck-in acquisitions (typically less than $3B) and bought SPLK for $28B! Remember, Harvard Business School wrote a case study on CSCO's "innovation through acquisition" untill John Chambers disastrous acquisition of Linksys (to expand into consumer market). History is clear the Linksys acquisition was a disaster. Look M&A is hard, Tech M&A is even harder and large tech M&A is next to impossible to be successful. To be fair, CSCO has out executed in the past, its track record in M&A is simply outstanding, one of the reasons why CSCO is still as relevant today as it was during the hight of the "dot com" bubble. CSCO rightfully belonged in the tech leader with the likes of $MSFT, $ORCL. But with the SPLK deal odds are against them -- i suspect this deal was dont by "financial heads" vs the "product leaders". Sure SPLK was big enough to drive a step function improvement in CSCO's software revenue story.. but it also comes with a set of challenges that CSCO is not accustomed to. Odds are against CSCO this time.

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