Welcome to Newsletter #3. It’s been fun receiving feedback from friends and new colleagues. For the foreseeable future, I will switch to publishing the newsletter on Tuesdays and the Podcasts on Thursdays. If you have any better ideas on my cadence, please message me. Good luck to those enjoying A16Z Tech Week this week; it will be a grind.

As the main piece of tech news, It's been a terrible week in the stock market. Salesforce's share price plummeted over 20% following its Q2 2024 earnings release, which slightly missed Wall Street expectations by 0.3%. Two key factors seem to be driving this steep decline. Firstly, an economic slowdown makes customers more cautious about their investments in Salesforce's products, as they scrutinize the potential returns more thoroughly before committing. Secondly, there's growing concern among analysts that generative AI technologies could enable competitors to offer comparable services at lower costs, potentially undercutting Salesforce’s profit margins in the long run.

Salesforce is a leading indicator for the overall SaaS market and could be a canary in the coal mine for the future of SaaS generally.

Frankly, after looking at earnings reports this week, I see that the overall economy is odd. Companies are rapidly expanding their expenses for AI and new projects but seem to be shrinking their software spending elsewhere. Honestly, this might be a sign of a slowdown, where the Fed may feel compelled to lower rates.

I will be going from event to event this week, so I hope to see you around the circuit.

As always, I am starting my VC syndicate if you are interested in angel investing. We have a current deal that keeps with our legal tech emphasis, so if you are an accredited investor, you can look at the Angellist listing here. You can also contact me if you want to join my exclusive Angel Investment opportunity list.

Finally, you can share updates with the channel you want to highlight to the community using this form.

News I Have Been Reading

Tech News

• Check out my interview with Mycompanion.ai CEO Maggie Sin and see how Generative AI is helping content creators establish digital twins.

• I came across this great article about the digitization of VC, which, ironically, is a pretty archaic industry by practice.

• I saw this thoughtful piece written by my friend John Kennedy and think it provokes interesting thoughts about the future of software companies’ development. Read the Asset Light Software Business and the New Paradigm for Startups.

• Even when Salesforce falters, the SPV market for AI startups is red-hot. Read this tech crunch piece.

Tweets and Posts

Jonathan Lehr shares an important lesson on raising a round from a multi-stage firm.

Venture funds are consolidating at the earliest stages.

Aaron Levie, the CEO of Box, gives his bullish take on the future of AI.

Raises and Exits

Congrats to StructureFlow, which raised $6M led by Fintop CapitalData / AI / Machine Learning • Series A • London, UK

Big news for my friend Ihar with Zendata raising $2M led by PayPal Ventures, Geek Ventures, and Others Data / AI / Machine Learning • Seed • San Francisco, CA

Firefly, which is solving the painful cloud infrastructure management problem, raised $23M even after its co-founder is murdered by Hamas. Data / AI / Cloud • Series A • Tel Aviv, Israel

Henchman is set to be acquired by LexisNexis. It couldn’t have happened to a better team. Data / AI / Legal Tech • Exit • Amsterdam, Netherlands

Events

Tech week is this week, so you should have already determined your schedule. But if you have nothing to do tomorrow, you can hang out with me during NYC tech week at Le Pain Quotidien, 1309 Lexington Ave, from 8:30 to 9:30 on June 5th.

Please fill out the form if you have a shout-out or announcement you’d like to make.

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