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The prestigious venture firm Sequoia Capital likes to say all its partners invest in every sector. But more than anyone, the growth-stage partner Grady, part of Business Insider's 2024 AI Power List, has led the firm's AI strategy, making bets on companies including OpenAI, Harvey, and Hugging Face. Along with another partner, Sonya Huang, Grady also wrote a public blog post on Sequoia's website inviting AI founders to email them their ideas and pitches directly. A successful deal for Sequoia is more about investing in the best people rather than at the best price, Grady told Business Insider last year. "We don't make money by getting a good deal," he said.See Business Insider's full <a target="_blank" class="" href="https://businessinsider.com/ai-power-list-2024">AI Power List</a>

Sequoia Capital partner Pat Grady is redefining AI investments

Missing some action, adrenaline rush, and thrill in your life? Are the good old, albeit mundane money investment avenues like mutual funds and fixed deposits not making the cut for you? Want to experience a heart-pounding, financial rollercoaster that will constantly keep you and your portfolio on tenterhooks? Well then, welcome to the world of initial public offers (IPOs), especially those brought to you by SMEs, or <keyword id="6375845" type="General" weightage="20" keywordseo="Small-and-Medium-Enterprises" source="Orion">small and medium enterprises</keyword>. Truth be told, <keyword id="3704207" type="General" weightage="100" keywordseo="SME-IPOs" source="Orion">SME IPOs</keyword> have been all over the bourses this year. So far, 2024 has seen 206 SMEs debuting on both BSE and NSE, out of which 146 listed in gains and 46 listed in losses. Odds seem good, right? In contrast, the year has only seen 63 IPOs from the elder brother i.e. mainboard, only 48 of which managed to post any listing gains. And getting an allotment has also been a major uncertainty, given the unusually high demand this year. <h2>So, what's an SME <keyword id="6354763" type="General" weightage="20" keywordseo="IPO" source="Orion">IPO</keyword>, you ask?</h2>Think of a mainboard company as Shah Rukh or Salman Khan—well-established, financially stable, strong legacy of profitability, and fairly well-known. On the other hand, SMEs are your Prateek Gandhi (Harshad Mehta, Scam 1992), Siddhant Chaturvedi (MC Sher, Gully Boy) or Avinash Tiwary (Majnu, Laila Majnu). While they are doing super well, they are yet to make it big like the Khans. They’re currently underdogs, lesser known, but who knows? They can be the next big thing in the future! And SME IPOs are getting a stellar reception. In 2023, 182 such IPOs had raised a substantial Rs 4,967 crore. In 2024, more than 200 companies have already raised over Rs 7,500 crore, and we have four months to go. This, with one quarter of the year still remaining. <div type="image" title="In 2024, India leads IPO activity in the Asia-Pacific region" height="900" width="1200" msid="113875643" hostid="261" caption="&amp;lt;p&amp;gt;In 2024, India leads IPO activity in the Asia-Pacific region&amp;lt;/p&amp;gt;"></div> But what does it take for a company to be classified as a small enterprise? The company has to have an annual turnover/income of up to Rs 50 crore, and for a medium enterprise to be called so, its annual income has to be up to Rs 250 crore. When such companies go public, in a bid to raise funds from investors and expand their operations, they launch an IPO, but not on the main exchange, but separately, on NSE’s Emerge and BSE’s SME platform. As of September 2024, <keyword id="4484133" type="General" weightage="20" keywordseo="NSE-Emerge" source="Orion">NSE Emerge</keyword> has 147 listed participants, while <keyword id="1885131" type="General" weightage="20" keywordseo="BSE-SME" source="Orion">BSE SME</keyword> has 155 market makers. Mounting an SME’s IPO is comparatively less stringent than their mainboard counterparts, as far as regulations are concerned since their DRHPs (draft <keyword id="12225712" type="General" weightage="20" keywordseo="Red-herring-prospectus" source="Orion">red herring prospectus</keyword>) are not filed with SEBI. So, wouldn’t a lenient treatment make them inherently riskier? Why are they so appealing, you ask? <a href="https://www.businessinsider.in/stock-market/news/a-company-with-8-employees-looking-to-raise-12-crore-ended-up-getting-applications-worth-over-4700-crore/articleshow/112824522.cms">Delhi firm with just 8 employees seeks ₹12 crore via IPO, gets ₹4,700 crore worth of investor applications!</a> Well, for one, some of them have delivered exceptional returns—we’re talking 100%, 200%. Consider this—Owais Metal and Mineral Processing, which launched its IPO in February this year, delivered a whopping listing gain of 201%. Another SME, Maxposure, whose IPO was out in January 2024, had earned its investors listing gains worth 317.40%! Apparently, higher risks also mean higher returns, and also super high investment. Most SME IPOs need a minimum investment of Rs 1,00,000 or more, as opposed to mainboard IPOs, where you can buy one lot of shares for anywhere between Rs 14,000-15,000. Even the minimum trading lot size for SME shares is about 10,000. In short, you’d have to potentially empty your pockets to invest in an SME IPO. And still, there’s no guarantee that the listing will fill your wallets. For all you know, your pockets before and after the IPO is listed might stay the same - EMPTY! There's also the question of whether or not these SMEs are able to maintain their listing day mojo, or do they just fizzle out thereafter? Data from Prime Database highlights more instances of the latter. As of August 2024, about 166 SME IPOs had made it to the exchanges. Around 72 of them, or close to 50%, could not sustain their momentum going ahead, and were trading below their listing day prices. Consider this. The post listing gains of Medicamen Organics, whose IPO came out in June 2024, earned its investors massive listing gains of over 300%, by listing at Rs 137.85, significantly higher than its price issue price, which was set between Rs 32-34. But as of October 1, 2024, the stock was trading at Rs 64.2. Talk about falls. Additionally, risks of pump-and-dump, and illiquidity, among others makes SME IPOs dangerous See, you're largely venturing into unknown, pitch-dark territories, without much light to guide you. For starters, SME IPOs face less scrutiny from market watchdog SEBI. This also means they are able to list quickly, just 3-4 months. On the other hand, mainboard IPOs can take upto a year before they are cleared for listing. Also, there is far less information and disclosures available about their financials, fundamentals and performance to investors for making an informed decision, as compared to mainboard stocks. Then there’s the issue of illiquidity. Once purchased, you might find it hard to sell off your SME stocks, since they are not traded as frequently in the market, which means lower liquidity. Trivesh D, COO, Tradejini explains that liquidity is a major concern for such stocks. “These stocks typically have a smaller free float, and are traded in lots, which can lead to volatility and sharp price swings. This means it can be challenging for investors to buy or sell shares without significantly impacting prices. Additionally, speculative trading practices, like 'pump-and-dump' schemes, can inflate stock prices, leaving retail investors vulnerable to sudden drops”. Recently, SME IPOs have gained notoriety for price manipulation via showing fictitious sales and revenue in their books of accounts, selling of promoter holdings at inflated prices, and being the facade for many infamous <keyword id="10663340" type="General" weightage="20" keywordseo="Pump-and-Dump" source="Orion">pump and dump</keyword> schemes. This is where select people create frenzy, or mass euphoria over a particular stock or company, causing its prices to soar, and then dumping them, or selling their shares at this massive price to make a killing! Infact, it's not just the promoters, but also the investment banks floating these IPOs. At present, SEBI is investigating around 6 investment banks which have allegedly charged SMEs a staggering 15% of funds raised via IPOs as fee, as opposed to the standard 1-3%. In March 2024, SEBI chairperson Madhabi Puri Buch had also highlighted witnessing signs of manipulation in the SME space. “We do see signs of manipulation in the SME segment. We are able to see certain patterns.” Buch had observed back then. Adds Kresha Gupta, Founder &amp; Director, StepTrade Share Services, “Investing in SME IPO comes with significant risks, despite their impressive returns in recent years. Limited participation from institutional investors and public in some SME IPOs also mean that those companies may lack the support and stability that comes with larger-scale investments” “Additionally, many SMEs may not have strong fundamentals to justify their valuations. High P/E ratios can be misleading, and while some IPOs have delivered impressive returns, they often come with significant volatility, continues D of Tradejini. <h2>So, should I stay away? </h2>Yes, and No. Yes, if you don't want to do your homework of researching the company thoroughly beforehand. Anand K. Rathi, Co-Founder of MIRA Money suggests asking a couple of questions before investing your hard earned money: <ul><li>What is the company's financial performance over the past 3-4 years?</li><li>What is the company's governance structure?</li><li>Is the financial success driven by the IPO, or is it a result of consistent performance?</li><li>Does the company have what it takes to scale its operations to the next level?</li><li>Are the company’s promoters trustworthy, capable and experienced?</li><li>What is the level of participation by large, institutional investors?</li></ul> But staying away completely? Not necessary. Gupta adds that retail investors, in particular, should avoid viewing SME IPOs as quick money-makers based on their short-term performance, as this can certainly lead to poor investment decisions. “To mitigate risks, investors should always focus on long-term fundamentals rather than just short-term price movements. Key indicators include the participation of institutional investors like DIIs and FIIs. This often signals confidence in the stock”, she continues. A red flag you should look out for is if a company is only offering OFS, or Offer for Sale. This can indicate early investors looking to exit, potentially signaling weaker future growth. That's why it is better to look for companies which are raising capital for expansion purposes. This is a sign of healthy business growth prospects and improving fundamentals. In conclusion, backing the underdog, or SMEs, is not a bad proposition, but not without its risks. Investing in SME IPOs is like riding a unicorn—but you don't know whether you're riding it to rags or riches! So, take your pick.

Why investing in SME IPOs should not be on top of your adventure to-do list!

<div type="image" title="In 2024, India has seen around $12.2 billion worth of IPOs, including mainboard and SMEs" msid="113878163" hostid="261" sizebytes="45300" caption="&amp;lt;p&amp;gt;In 2024, India has seen around $12.2 billion worth of IPOs, including mainboard and SMEs&amp;lt;/p&amp;gt;"></div> Missing some action, adrenaline rush, and thrill in your life? Are the good old, albeit mundane money investment avenues like mutual funds and fixed deposits not making the cut for you? Want to experience a heart-pounding, financial rollercoaster that will constantly keep you and your portfolio on tenterhooks? Well then, welcome to the world of initial public offers (IPOs), especially those brought to you by SMEs, or <keyword id="6375845" type="General" weightage="20" keywordseo="Small-and-Medium-Enterprises" source="Orion">small and medium enterprises</keyword>. Truth be told, <keyword id="19938687" type="General" weightage="20" keywordseo="sme" source="keywords">SME</keyword> IPOs have been all over the bourses this year. So far, 2024 has seen 206 SMEs debuting on both BSE and NSE, out of which 146 listed in gains and 46 listed in losses. Odds seem good, right? In contrast, the year has only seen 63 IPOs from the elder brother i.e. mainboard, only 48 of which managed to post any listing gains. And getting an allotment has also been a major uncertainty, given the unusually high demand this year. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">So, what's an <keyword id="5559702" type="General" weightage="100" keywordseo="SME-IPO" source="Orion">SME IPO</keyword>, you ask?</h2>Think of a mainboard company as Shah Rukh or Salman Khan—well-established, financially stable, strong legacy of profitability, and fairly well-known. On the other hand, SMEs are your Prateek Gandhi (Harshad Mehta, Scam 1992), Siddhant Chaturvedi (MC Sher, Gully Boy) or Avinash Tiwary (Majnu, Laila Majnu). While they are doing super well, they are yet to make it big like the Khans. They’re currently underdogs, lesser known, but who knows? They can be the next big thing in the future! And SME IPOs are getting a stellar reception. In 2023, 182 such IPOs had raised a substantial Rs 4,967 crore. In 2024, more than 200 companies have already raised over Rs 7,500 crore, and we have four months to go. This, with one quarter of the year still remaining. <div type="image" title="In 2024, India leads IPO activity in the Asia-Pacific region" height="900" width="1200" msid="113875643" hostid="261" caption="&amp;lt;p&amp;gt;In 2024, India leads IPO activity in the Asia-Pacific region&amp;lt;/p&amp;gt;"></div> But what does it take for a company to be classified as a small enterprise? The company has to have an annual turnover/income of up to Rs 50 crore, and for a medium enterprise to be called so, its annual income has to be up to Rs 250 crore. When such companies go public, in a bid to raise funds from investors and expand their operations, they launch an <keyword id="19898327" type="General" weightage="20" keywordseo="ipo" source="keywords">IPO</keyword>, but not on the main exchange, but separately, on NSE’s Emerge and BSE’s SME platform. As of September 2024, <keyword id="4484133" type="General" weightage="20" keywordseo="NSE-Emerge" source="Orion">NSE Emerge</keyword> has 147 listed participants, while <keyword id="1885131" type="General" weightage="20" keywordseo="BSE-SME" source="Orion">BSE SME</keyword> has 155 market makers. Mounting an SME’s IPO is comparatively less stringent than their mainboard counterparts, as far as regulations are concerned since their DRHPs (draft red herring prospectus) are not filed with SEBI. So, wouldn’t a lenient treatment make them inherently riskier? Why are they so appealing, you ask? <a href="https://www.businessinsider.in/stock-market/news/a-company-with-8-employees-looking-to-raise-12-crore-ended-up-getting-applications-worth-over-4700-crore/articleshow/112824522.cms">Delhi firm with just 8 employees seeks ₹12 crore via IPO, gets ₹4,700 crore worth of investor applications!</a> Well, for one, some of them have delivered exceptional returns—we’re talking 100%, 200%. Consider this—Owais Metal and Mineral Processing, which launched its IPO in February this year, delivered a whopping listing gain of 201%. Another SME, Maxposure, whose IPO was out in January 2024, had earned its investors listing gains worth 317.40%! Apparently, higher risks also mean higher returns, and also super high investment. Most SME IPOs need a minimum investment of Rs 1,00,000 or more, as opposed to mainboard IPOs, where you can buy one lot of shares for anywhere between Rs 14,000-15,000. Even the minimum trading lot size for SME shares is about 10,000. In short, you’d have to potentially empty your pockets to invest in an SME IPO. And still, there’s no guarantee that the listing will fill your wallets. For all you know, your pockets before and after the IPO is listed might stay the same - EMPTY! There's also the question of whether or not these SMEs are able to maintain their listing day mojo, or do they just fizzle out thereafter? Data from Prime Database highlights more instances of the latter. As of August 2024, about 166 SME IPOs had made it to the exchanges. Around 72 of them, or close to 50%, could not sustain their momentum going ahead, and were trading below their listing day prices. Consider this. The post listing gains of Medicamen Organics, whose IPO came out in June 2024, earned its investors massive listing gains of over 300%, by listing at Rs 137.85, significantly higher than its price issue price, which was set between Rs 32-34. But as of October 1, 2024, the stock was trading at Rs 64.2. Talk about falls. Additionally, risks of pump-and-dump, and illiquidity, among others makes SME IPOs dangerous See, you're largely venturing into unknown, pitch-dark territories, without much light to guide you. For starters, SME IPOs face less scrutiny from market watchdog SEBI. This also means they are able to list quickly, just 3-4 months. On the other hand, mainboard IPOs can take upto a year before they are cleared for listing. Also, there is far less information and disclosures available about their financials, fundamentals and performance to investors for making an informed decision, as compared to mainboard stocks. Then there’s the issue of illiquidity. Once purchased, you might find it hard to sell off your SME stocks, since they are not traded as frequently in the market, which means lower liquidity. Trivesh D, COO, Tradejini explains that liquidity is a major concern for such stocks. “These stocks typically have a smaller free float, and are traded in lots, which can lead to volatility and sharp price swings. This means it can be challenging for investors to buy or sell shares without significantly impacting prices. Additionally, speculative trading practices, like 'pump-and-dump' schemes, can inflate stock prices, leaving retail investors vulnerable to sudden drops”. Recently, SME IPOs have gained notoriety for price manipulation via showing fictitious sales and revenue in their books of accounts, selling of promoter holdings at inflated prices, and being the facade for many infamous pump and dump schemes. This is where select people create frenzy, or mass euphoria over a particular stock or company, causing its prices to soar, and then dumping them, or selling their shares at this massive price to make a killing! Infact, it's not just the promoters, but also the investment banks floating these IPOs. At present, SEBI is investigating around 6 investment banks which have allegedly charged SMEs a staggering 15% of funds raised via IPOs as fee, as opposed to the standard 1-3%. In March 2024, SEBI chairperson Madhabi Puri Buch had also highlighted witnessing signs of manipulation in the SME space. “We do see signs of manipulation in the SME segment. We are able to see certain patterns.” Buch had observed back then. Adds Kresha Gupta, Founder &amp; Director, StepTrade Share Services, “Investing in SME IPO comes with significant risks, despite their impressive returns in recent years. Limited participation from institutional investors and public in some SME IPOs also mean that those companies may lack the support and stability that comes with larger-scale investments” “Additionally, many SMEs may not have strong fundamentals to justify their valuations. High P/E ratios can be misleading, and while some IPOs have delivered impressive returns, they often come with significant volatility, continues D of Tradejini. <h2 style="box-sizing: border-box; border: 0px; outline: 0px; padding: 0px; margin: 0px 0px 0.7em; font-family: &quot;Open Sans&quot;, sans-serif; font-weight: 700; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; list-style: none; background: 0px 0px; text-rendering: optimizelegibility; text-transform: none; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;">So, should I stay away?</h2>Yes, and No. Yes, if you don't want to do your homework of researching the company thoroughly beforehand. Anand K. Rathi, Co-Founder of MIRA Money suggests asking a couple of questions before investing your hard earned money: <ul><li>What is the company's financial performance over the past 3-4 years?</li><li>What is the company's governance structure?</li><li>Is the financial success driven by the IPO, or is it a result of consistent performance?</li><li>Does the company have what it takes to scale its operations to the next level?</li><li>Are the company’s promoters trustworthy, capable and experienced?</li><li>What is the level of participation by large, institutional investors?</li></ul> But staying away completely? Not necessary. Gupta adds that retail investors, in particular, should avoid viewing SME IPOs as quick money-makers based on their short-term performance, as this can certainly lead to poor investment decisions. “To mitigate risks, investors should always focus on long-term fundamentals rather than just short-term price movements. Key indicators include the participation of institutional investors like DIIs and FIIs. This often signals confidence in the stock”, she continues. A red flag you should look out for is if a company is only offering OFS, or Offer for Sale. This can indicate early investors looking to exit, potentially signaling weaker future growth. That's why it is better to look for companies which are raising capital for expansion purposes. This is a sign of healthy business growth prospects and improving fundamentals. In conclusion, backing the underdog, or SMEs, is not a bad proposition, but not without its risks. Investing in SME IPOs is like riding a unicorn—but you don't know whether you're riding it to rags or riches! So, take your pick.

SIMPLY PUT: Why investing in SME IPOs should not be on top of your adventure to-do list!

<ul class="summary-list"><li>Small business owners are on the brink of a prosperous era, economist Phil Powell says.</li><li>The Federal Reserve is expected to cut rates, the economy is growing, and productivity is increasing.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/entrepreneurs-small-business-owners-share-challenges-of-starting-company-2023-10">Small business owners</a> have reasons to stay optimistic.With the economy still growing and the Federal Reserve expected to <a target="_blank" class="" href="https://www.businessinsider.com/fed-rate-cuts-labor-market-federal-reserve-jerome-powell-unemployment-2024-8">cut interest rates</a> next week, economist Phil Powell told Business Insider that small businesses are on the precipice of an era of <a target="_blank" class="" href="https://www.businessinsider.com/gdp-gross-domestic-product-second-quarter-2024-us-economy-2024-7">prosperity and growth</a>."There are bright days ahead, but it's not going to be frantic," Powell said. "It's going to be a nice, steady, incremental improvement."Powell, who is the executive director of the Indiana Business Research Center and a business economics professor at Indiana University Kelley School of Business, said <a target="_blank" class="" href="https://www.businessinsider.com/boomer-entrepreneur-started-business-be-own-boss-consulting-part-time-2024-8">small business owners</a> should not expect relief overnight, but gradually, they should start to feel easing financial pressures, such as more affordable credit.Fed Chair Jerome Powell <a target="_blank" class="" href="https://markets.businessinsider.com/news/interestrates/powell-hints-at-near-term-interest-rate-cut-the-time-has-come-for-policy-to-adjust-1033718618">signaled on August 23</a> that it was time for the central bank to cut the Federal Funds rate, which has remained between 5.25% and 5.5% for over a year. This has spiked the interest rates small business owners are paying on new mortgages, credit, and loans.According to the <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch Tool</a>, there's a roughly 75% chance that the Federal Open Markets Committee will decrease interest rates by 25 basis points and a 25% chance the Fed will decrease interest rates by 50 basis points.Powell said that small business owners are poised to benefit regardless of the size of the cut and should remain hopeful about future growth."Falling interest rates are going to make credit easier to acquire," Powell said. "If you're a small business, whether you need a loan for a capital investment or a loan for working capital, it's going to be easier to acquire, steadily."<h2 id="4365bdec-7a60-4f9a-8f5f-283ee993e9e1">The brightening economic outlook goes beyond interest rates</h2>Entrepreneurs have filed a record 19 million <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://home.treasury.gov/news/featured-stories/small-business-and-entrepreneurship-in-the-post-covid-expansion#:~:text=The%20post%2Dpandemic%20economy%2C%20with,since%20the%20end%20of%202020.">applications</a> for new businesses in the past four years, and business applications remain elevated above pre-pandemic levels.Additionally, small businesses created 71% of net new jobs since 2019, according to the <a target="_blank" class="" href="https://home.treasury.gov/news/featured-stories/small-business-and-entrepreneurship-in-the-post-covid-expansion#:~:text=The%20post%2Dpandemic%20economy%2C%20with,since%20the%20end%20of%202020.">Treasury Department</a>. While the small business economy can be volatile, and applications don't always translate into successful projects, according to Powell, well-managed businesses are in for an era of stable growth.In fact, Powell is bullish that small businesses are poised for a productivity boom like in the 1990s when there was a surge in tech startups surrounding the development of the internet.Powell said that similar to the 1990s, the US economy has seen strong year-over-year growth in corporate profit, stock market growth, and increases in labor productivity.Business labor productivity in the second quarter was up <a target="_blank" href="https://www.bls.gov/opub/ted/2024/productivity-increased-2-7-percent-from-second-quarter-2023-to-second-quarter-2024.htm#:~:text=Nonfarm%20business%20sector%20labor%20productivity,hours%20worked%20rose%200.7%20percent.">2.7% year-over-year</a>, which is an overlooked yet positive sign for economic growth, Powell said. He also said <a target="_blank" class="" href="https://www.businessinsider.com/how-use-ai-save-time-work-best-ways-use-chatgpt-2024-9">AI will further contribute</a> to a productivity boom if entrepreneurs can learn to use it to <a target="_blank" class="" href="https://businessinsider.com/how-use-ai-same-time-work-chatgpt-claude-jasper-2024-9">save time</a>.Powell said solid economic growth is another positive sign for small businesses. According to the <a target="_blank" class="" href="https://www.bea.gov/data/gdp/gross-domestic-product#:~:text=Gross%20Domestic%20Product%20(Second%20Estimate,Preliminary%20Estimate)%2C%20Second%20Quarter%202024&amp;text=Real%20gross%20domestic%20product%20(GDP,the%20calculation%20of%20GDP%2C%20increased.">Bureau of Economic Analysis</a>, real GDP increased 3% year-over-year in the second quarter of this year.To be sure, many small businesses aren't feeling the relief yet. According to the National Federation of Independent Businesses, <a target="_blank" class="" href="https://www.nfib.com/surveys/small-business-economic-trends/">small business confidence</a> dipped in August. Yet, Powell said the economic data points to brighter days ahead despite the dip in optimism."The economy is much better than it feels, but our emotions lead us astray in terms of our impressions, even as business owners," he said.Economic indicators <a target="_blank" class="" href="https://www.businessinsider.com/us-economy-outlook-data-points-to-soft-landing-no-recession-2024-9">point to a soft landing</a>, and small business owners who are struggling with high rates just need to make it through these next few months, Powell said."What they should be fearful of is that they're going to get too pessimistic, and they're going to make emotional business decisions, and they're going to lose out on what could be several years of upcoming prosperity driven by right now," he said.Sean Higgins, an associate professor of finance at the Kellogg School of Management at Northwestern University, similarly told Business Insider that interest rate cuts could be particularly positive for small business growth.He said small businesses tend to be more credit-constrained, so changes in interest rates are particularly influential for business owners' management decisions."They are often the ones that can be more affected by or benefit more once rates come back down, relative to larger businesses," Higgins said.Higgins said that interest rate cuts from the Federal Reserve would create access to cheaper credit, enabling small business owners — whether tech startups or mom-and-pop shops on Main Street — to invest further in growing their businesses or funding expenses.Are you a small business owner who has experienced a recent change in sales or hiring? This reporter wants to hear from you. Please reach out at <a target="_blank" class="" href="mailto:jtowfighi@businessinsider.com">jtowfighi@businessinsider.com</a>

Small business owners could be poised for a 1990s-like boom

<ul class="summary-list"><li>Independent luxury brands face pressure to sell or seek investment amid the market downturn.</li><li>Even the biggest and most successful independent brands with cult followings are under pressure.</li></ul>Sell up or get out.It's a decision some independent luxury brands are confronting amid an <a target="_blank" class="" href="https://www.businessinsider.com/lvmh-sales-drop-bad-indicator-luxury-market-kering-hermes-china-2024-10">industry-wide downturn</a>.With smaller budgets and fewer resources than counterparts owned by conglomerates like <a target="_blank" href="https://www.businessinsider.com/lvmh-luxury-louis-vuitton-struggles-china-slowdown-2024">LVMH</a>, indie brands are feeling the heat of an increasingly challenging retail landscape.Even the biggest and most successful independent brands with cult followings are under pressure.Mere weeks after the grand opening of its first boutique in Soho, New York City, drew large crowds, the French-born indie luxury label <a target="_blank" class="" href="https://www.businessinsider.com/luxury-fashion-in-style-according-to-jacquemus-2024-1">Jacquemus</a> announced it's seeking outside investment."I value my independence," French designer Simon Porte Jacquemus told French outlet Le Figaro in October. "I want to pass down this company to my children, but I have to break through the glass ceiling by finding the right partner, who would only have a minority."<div type="image" title="Gigi Hadid walks the Jacquemus runway." height="2000" width="1333" msid="115416179" hostid="261" sizebytes="107156"></div>Founded by the French designer in 2009, his eponymous label has experienced a meteoric period of growth. The Business of Fashion reports its sales hit 270 million euros ($290 million) in 2023. Jacqumeus did not immediately respond to requests for comment.But as 2025 nears, the luxury landscape is proving to be more difficult to navigate, even for LVMH and <a target="_blank" class="" href="https://www.businessinsider.com/things-arent-looking-great-gucci-kering-apac-slump-to-blame-2024-10">Kering</a>, both of which reported weaker-than-expected third-quarter earnings in October."If all of these brands that are giant brands with gigantic budgets behind them are suffering this economic climate and this luxury downturn," Blanca Zugaza Escribano, a fashion and luxury consultant at Metyis, told Business Insider, "Imagine smaller brands that have way smaller resources."<h2 id="c138f4ef-aa24-4cfb-8439-dbf25775bf1a">Seize the moment or risk failure</h2>Escribano said there's been an uptick of independent brands seeking investors as a survival strategy.Earlier this year, a series of independent brands, including Vampire's Wife, a luxury British retailer beloved by Kate Middleton, Dion Lee, an Australian luxury brand that Taylor Swift has worn, and NYC-founded Mara Hoffman, found themselves on the chopping block.A combination of the slowing luxury market and the closure or decline of third-party retailers that these brands heavily rely on, took its toll.Others managed to survive by selling out, including Roksanda, the eponymous label of Serbian designer Roksanda Ilinčić, which was bought by The Brand Group in May.For independent brands, Escribano said, the thought process is "either we make it today or we're not here tomorrow."<div type="image" title="Kate Middleton departs a special reception hosted by the Gov. General of Belize in celebration of Her Majesty The Queen's Platinum Jubilee in March, 2022 in Cahal Pech, Belize." height="1838" width="1280" msid="115416180" hostid="261" sizebytes="272002"></div>"It's just a very, very competitive category," Milton Pedraza, CEO of the Luxury Institute, said, adding that independent brands often don't have the resources to scale their business by themselves."The margins are very low, and it takes a long time to achieve critical mass to have success," he said. "It's almost like a salmon swimming upstream in a very turbulent river."Successful marketing tactics, like Jacquemus's buzzy food-inspired beauty campaigns or its mini <a target="_blank" href="https://www.businessinsider.com/jacquemus-tiny-handbag-le-chiquiti-review-2020-1">Chiquito bags,</a> which the internet couldn't get enough of in 2019, can fuel brand momentum, but it takes more to make it last and compete against heavyweights.In his interview with Le Figaro, Jaquemus offered an example, saying its store in Paris' Avenue Montaigne saw a drop in visitors over the summer as some shoppers avoided the city during the Olympics Games, although he said they weathered it."In reality, we are doing quite well considering we're the smallest house on the avenue," he said.Nevertheless, being the smallest on the avenue means a drop in shoppers can hurt more if you don't have the resources in place."You have to feed this monster of growth to scale to achieve this critical mass," Pedraza said.It's no surprise that Jacquemus is seeking an investor as "they need fast money to capitalize on this momentum," Escribano added.But finding an investor post-COVID-19 is no walk in the park either, as many feel as though they "got burned" by brands "that were just asking for money and burning through it, not really achieving sales, not achieving results, and not having great products," Pedraza said."The consumers and the investors have so many choices out there that they can afford to be very picky," he added.<h2 id="98e6d44e-cb1f-47ae-a13c-19724d62dcc6">Safety in numbers</h2>Jaquemus may be relatively small, but its decision to seek an investor has some foreshadowing with bigger stand-alone brands.In the summer of 2023, Kering acquired a 30% stake in Valentino, a historically independent brand.Rumors have been squashed of a Moncler acquistion of <a target="_blank" class="" href="https://www.businessinsider.com/burberry-turnaround-plan-new-ceo-revenues-plummet-luxury-slowdown-2024-11">Burberry</a>, the beleaguered stand-alone British brand.Burberry, which reported a 22% sales decline in the six months ending in September, faces an uphill battle to regain a competitive position in the luxury market.Nonetheless, Pedraza believes that consolidation between brands and independent brands seeking outside investment will likely persist as they confront industry-wide issues, including the rise of artificial intelligence."It's going to be harder for new brands to penetrate into the life of the consumer, to get the attention, to get the eyeballs, to get the awareness," he said.<div type="image" title="Designer Simon Porte Jacquemus attends the opening of the Jacquemus' Boutique as part of Paris Fashion Week at 27 avenue Montaigne on September 26, 2022 in Paris, France." height="853" width="1280" msid="115416178" hostid="261" sizebytes="44988"></div>But going the safety-in-numbers route and doing so by being acquired by a conglomerate is a decision with consequences.Brands have historically feared certain acquisitions, Escribano said, as it can fundamentally impact brand identity and creativity.For Jacquemus to sell out, it could still lose what Escribano said its magic, which in her view, is its head designer's ability to do "whatever he wants without having to explain his decisions or his creative choices to a board of investors which, at the end of the day, is going to limit so much of his creativity because he's going to have to think purely about business."

Why founders of some small luxury brands are eyeing exits        

<ul class="summary-list"><li>Cathie Wood's Ark Venture Fund allows retail investors to invest in high-growth startups.</li><li>The fund's net assets have climbed to $69 million, roughly tripling year over year.</li></ul><a target="_blank" href="https://www.businessinsider.com/cathie-wood-profile-ark-invest-etf-rise-success-following-tesla-2021-2">Cathie Wood</a> attracted billions of dollars with her fresh approach to betting on tech stocks, combining bold calls on the future with the ability for investors to buy and sell in an instant.Wood's effort to do something similar for venture capital has delivered investments in many of Silicon Valley's hottest deals. Though its investors will have to wait much longer before they see any returns.Wood's firm Ark Invest debuted a new closed-end interval fund in 2022, allowing investors to throw as little as $500 into a vehicle that invests in private startups. Investors can buy and sell shares in the fund just as they do with stocks, with some restrictions."Our goal here is to provide the best venture portfolio in the world to everyone in the world, not just to the rich and the famous," said Brett Winton, who works closely with Wood as chief futurist at Ark Invest and is an architect of the firm's venture capital strategy.The fund, Ark Venture Fund, has now gathered close to $70 million in assets, some distance from venture giants like Sequoia and Andreessen Horowitz, or even Ark's other funds. ARKK, Wood's most famous fund, has $5.8 billion in assets, down from a peak of $50 billion.Despite its small size, the fund has clinched deals to invest in <a target="_blank" href="https://www.businessinsider.com/openai-bets-big-on-humanoid-robots-with-figure-ai-2024-2">Figure</a>, a Jeff Bezos-backed startup developing humanoid robots, <a target="_blank" href="https://www.businessinsider.com/elon-musk-xai-hiring-spree-ai-tutors-2024-10">xAI</a>, an artificial-intelligence firm founded by Elon Musk, and OpenAI, the maker of ChatGPT.<div type="image" title="Elon Musk SpaceX" height="2034" width="2712" msid="115254561" hostid="261" sizebytes="675642"></div>It raises the question of why aging startups SpaceX, Epic Games, and Databricks, which have raised billions in funding, bother to include Ark in new rounds. SpaceX is Ark Venture Fund's largest holding, accounting for 13% of the fund's total assets, worth around $9 million.Winton said it's a subject he's frequently addressed in early meetings with founders.First, Ark produces reams of <a target="_blank" href="https://www.ark-funds.com/articles">original research</a> on areas of investment. Winton said this research helps the firm win over teams because it demonstrates a grasp of their breakthrough technologies. "It means we can engage in really constructive conversations with them about their strategy," Winton said.Second, because Ark invests in both the private and public markets, it offers relationships with potential customers across the size spectrum of enterprises.Lastly, unlike a traditional venture fund, which has a fixed lifespan to invest the capital and return the profits to the fund's investors, Ark set up its venture fund to continue indefinitely, allowing investors to enter and exit the fund on a periodic basis.This provides flexibility to hold shares of companies after they go public, which can be particularly attractive for founders who are looking for investors with a long-term outlook and a higher tolerance for market volatility.In October, Ark invested at least $250 million into OpenAI's latest round, which pushed the AI startup's valuation to $157 billion.Most of that investment came from a related private venture fund that's only for high-net-worth investors. OpenAI makes up just 5% of the Ark Venture Fund's portfolio, which means it has less than $4 million invested."We would prefer to be able to write larger checks out of the venture fund than we currently can," Winton said.For that to happen, the fund will need to attract more investors.Though the fund is up 36% since its inception date, it's down 3% year to date, according to the website. The S&amp;P 500 in comparison is up 26% this year, with surging tech stocks and <a target="_blank" href="https://markets.businessinsider.com/news/stocks/trump-election-win-stock-market-today-record-high-sp500-dow-2024-11?_gl=1*nfthw5*_ga*MTQ0NjYxMDEzMC4xNzIyMzAwMzYy*_ga_E21CV80ZCZ*MTczMTM0MjA0MC4yNDUuMS4xNzMxMzQyMDY4LjMyLjAuMA..">Donald Trump's election win</a> driving record highs.Ark Venture Fund charges a flat fee for investing assets under its control, the same as a venture fund. The fee, 2.75%, is high relative to other interval funds, according to Morningstar, but it doesn't take carried interest or a share of profits.Winton said the fund could accrue assets into the billions of dollars; on a follow-up call, he walked back his comment, saying it's hard to know how big the fund could get."If that happens, then that'll actually become the story of Ark," he said. "Ark kind of changed venture capital."

Ark's Cathie Wood changed Wall Street. Now, she's set her sights on venture capital.

<ul class="summary-list"><li>VCs are lobbing cash at the presidential election and key congressional races, FEC data shows.</li><li>While most VCs favored Democrats, a16z's crypto giving dwarfed all other donations.</li></ul>America is bitterly divided over politics, and the tech industry — once portrayed as a liberal bastion — is <a target="_blank" href="https://www.businessinsider.com/election-a-distraction-silicon-valley-wants-to-be-over-2024-8">no different.</a> Among the sector's investor class, these disputes typically play out behind closed doors, with checkbooks rather than <a target="_blank" href="https://www.businessinsider.com/silicon-valley-political-divide-twitter-elon-musk-kamala-harris-2024-8">angry social media posts</a>.This election cycle, investors at the top venture capital firms have plowed tens of millions of dollars into the election, both backing their favored political candidates and just cannily promoting commercial interests.Business Insider trawled political donation data released by the Federal Elections Commission to see how employees at VC firms have donated by candidates and political entities as the hotly contested race enters its final phase.The data is limited, focusing only on a subjective grouping of 10 high-profile firms, and cutting off at varying points over the summer. More recent FEC donor data will be released in the days and weeks ahead of the November 5 general election, often the most turbulent time in any cycle.The sheer volume of donations captured in the FEC filings underscores the significance of the tech constituency in the political arena, how the Silicon Valley elite has embraced politics of late, and just how flooded by money modern American politics has become.<h3 id="dd94bff4-8a0b-4fe4-8f40-59db1deb3131">The big spenders</h3>For venture capitalists, talking politics can invite scrutiny — or worse, turn off founders seeking funds for what might be the next big thing. It's part of the reason why many firms won't take positions on political issues or push a candidate on their employees.While that hasn't stopped individual investors from voting with their dollars, many VC firms are quick to point out that donations do not represent the organization's political stance.Except when they do.Andreessen Horowitz, or a16z, is the sole firm in our dataset to make political contributions directly. In this election cycle, it contributed $47 million to groups working to elect blockchain-friendly candidates, including Fairshake, a titanic crypto-industry backed super PAC. The firm is all-in on crypto, investing in Solana and Yuga Labs, and launched a $4.5 billion investment fund focused on this area in 2022.While the names of the firm's founders, Marc Andreessen and Ben Horowitz, also appear on filings for donations to these groups, a16z says on its <a target="_blank" href="https://a16zcrypto.com/posts/article/contributing-to-fairshake-pac/">website</a> that these contributions come from the firm, not the founders personally. Though the distinction a16z draws between itself and its founders might be slightly artificial, given Andreessen and Horowitz created, own, and named the firm after themselves.For all the brouhaha about Andreessen and Horowitz putting <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-vcs-in-silicon-valley-2024-7">millions of dollars</a> behind Trump's latest bid for the White House and Horowitz hedging his bets with <a target="_blank" href="https://www.businessinsider.com/read-ben-horowitzs-email-a16z-saying-plans-donate-kamala-harris-2024-10">a planned donation to Harris</a>, the data shows the two are a rare breed among venture investors: relatively bipartisan donors.Horowitz sent roughly 59% of his personal political contributions to Republicans and a little under 40% to Democrats, while Andreessen more strongly favored Republicans this election cycle, with 64% of his donations.In the time period covered by the data, a16z even eclipsed Greylock, where outgoing partner and <a target="_blank" href="https://www.businessinsider.com/silicon-valley-billionaires-investors-kamala-harris-mark-cuban-reid-hoffman-2024-8">Democrat megadonor</a> Reid Hoffman has personally pumped nearly $30 million in recorded donations into the presidential election and key congressional races.Investors at Founders Fund, which has backed SpaceX and Palantir, are nearly 100% Republican in donations, though the bulk of contributions came from Keith Rabois, who left the firm in January to rejoin Khosla Ventures. Employees of venerable firm Kleiner Perkins are the opposite, giving almost entirely to Democratic causes, as is the case for Y Combinator, the colossal startup accelerator.Like Andreessen Horowitz, Sequoia Capital is largely bipartisan. Unlike a16z, its biggest donors are largely split on party lines. Michael Moritz, who left the firm midway through last year and continues to serve as an advisor to Sequoia Heritage, its wealth management group, gives to Democrats, while Sequoia partner Shaun Maguire donates to Republicans.<h3 id="3ae3c5f1-4f98-4417-8e68-d3e367656034">Number-crunching</h3>When a candidate's campaign or other political entity receives political donations, they must report it either quarterly or monthly to the FEC, along with information about the donors, including the donor's employer. The federal agency processes these filings, before releasing them in a searchable format on its website.The data analyzed for this story cuts off on August 31 for entities that report donations on a monthly basis (including presidential campaigns, national party committees, and some PACs), while the cut-off for entities that report quarterly (including Congressional committees and some PACs) is June 30. (The filing deadline for Q3 data for quarterly filing entities was October 15, but this data isn't yet readily available in full online.)Business Insider selected 10 venture capital firms to focus on, taking into account fund size and cultural and industry significance. The list encompasses employees ranging from general partners and firm founders to marketers and executive assistants.The findings should not be interpreted as an exhaustive accounting of all venture capital investors' donations to date, but as a comparative analysis of how some of the industry's most significant players have approached political giving over the summer as the election heated up.Business Insider divided the recipients into three categories: Democrat-aligned, Republican-aligned, and unaffiliated — a grouping that includes both bipartisan groups like Fairshake and independents like West Virginia senator Joe Manchin, as well as organizations like The Lincoln Project, run by self-described Republicans but in practice supporting Democratic causes.<h3 id="383b71f4-35bb-4d3d-9fd8-a1daae48b9df">Hoffman vs. Horowitz</h3>Hoffman, the top individual donor, has developed a reputation as tech's Democratic Party standard-bearer. In this election cycle, records show his efforts include $2 million to help fund an <a target="_blank" href="https://www.forbes.com/sites/saradorn/2024/01/31/billionaire-reid-hoffman-spent-2-million-on-bidens-new-hampshire-write-in-campaign-fec-records-show/">unusual write-in effort</a> for President Joe Biden in New Hampshire, and millions to joint fundraising committees for Harris after Biden dropped out. Hoffman also <a target="_blank" href="https://www.nytimes.com/2023/12/05/us/politics/nikki-haley-reid-hoffman-donation.html">gave $250,000</a> to a super PAC supporting Nikki Haley, the last major candidate to challenge Trump for the Republican nomination.Most donors more closely resemble Hoffman than Horowitz: clearly partisan, with an overwhelming majority of their donations going to support one party.Vinod Khosla of Khosla Ventures is another of the biggest donors on the Democratic side of the aisle, with more than $3 million in recorded donations during the time period to recipients including the Democratic Congressional Campaign Committee and Harris' presidential campaign. Khosla's giving puts him just above John Doerr, chairman of Kleiner Perkins and architect of cleantech investing, though he hasn't managed funds for the firm in a decade.Sequoia Capital's Doug Leone is one of VC's most prolific GOP-aligned political donors, giving his almost $3.8 million to the National Republican Committee and other causes.The vehicle of choice for many of these donations is via super PACs, a controversial political fundraising tool that can raise unlimited funds — <a target="_blank" href="https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/contribution-limits/">bypassing FEC limits on donations</a> to candidates and other committees — but cannot directly coordinate with candidates. Asides from Fairshake, some of the biggest super PACs out there favored by VC investors include Future Forward PAC, a tech billionaire-linked Democrat-supporting group, and <a target="_blank" href="https://www.businessinsider.com/elon-musk-trump-america-super-pac-2024-10">America PAC, a right-wing entity founded by Elon Musk</a>.Investors also gave to several joint fundraising committees, which take money for multiple candidates or organizations. They, too, became favored over the years because a joint fundraising committee allows candidates to rake in cash while sharing the costs of fundraising — think website hosting fees, high-end hotels, and catering for splashy Hamptons fundraisers. The most well-loved committees in our dataset were the Harris Victory Fund and Harris Action Fund, the joint fundraising efforts between the Harris campaign, the Democratic National Committee, and state Democratic committees.Reached for comment by Business Insider, none of the named investment firms agreed to make employees available for interviews about their political giving. Perhaps, from the donors' perspectives, they don't need to: They're already putting their money where their mouth is.Have a tip or a story? Connect with Melia Russell via email at <a target="_blank" href="mailto:mrussell@insider.com">mrussell@businessinsider.com</a> or by phone at (603) 913-3085. Reach Rob Price at <a target="_blank" class="" href="mailto:rprice@insider.com">rprice@businessinsider.com</a>. For sensitive matters, use the Signal app on a non-work device for encrypted messaging.

Venture capital is going to war over the election. Here's the data to prove it. 

<ul class="summary-list"><li>Investment firms want to offer private-credit ETFs to ordinary investors, the WSJ reported. </li><li>It would give retail investors access to a $1.7 trillion market. </li></ul>A booming corner of the financial markets that has only been available to institutions might soon be open to everyday investors. <a target="_blank" class="" href="https://www.wsj.com/finance/investing/wall-street-races-to-bring-private-credit-to-the-masses-8a25b624?mod=finance_lead_story">According to The Wall Street Journal,</a> some of the biggest private equity and investment management giants want to offer retail investors access to exchange-traded funds backed by private credit. The term broadly refers to loans made to companies and consumers by nonbank lenders. Historically, fund managers have sold "alternative assets" like private debt to institutional investors at a high cost, generating returns of around 10% in recent years — more than they would have seen from investing in the stock or bond markets.Now, as those institutions slow allocations to private credit, the biggest players in the space want to target a new class of investors. According to the Journal, firms like State Street, Apollo Global Management, and BlackRock are working to roll out private credit ETFs to regular investors. The challenge, though, is building a highly liquid ETF out of illiquid private loans. That hurdle is also what will likely draw the eye of regulators as they ensure the ETFs are appropriate for retail investors. But if these ETFs get approved, they will enable regular investors to tap into a booming market, one that BlackRock expects will more than double to $3.5 trillion by 2028. The race to launch private credit ETFs has heated up in recent months.In May, Capital Group and KKR teamed up to start offering funds investing in both public and private assets—including in private credit—starting next year.Last month, State Street proposed a private debt ETF to the Securities and Exchange Commission. The ETF would blend public debt with private debt on mortgage, corporate, and consumer loans purchased from Apollo Global Management. Anna Paglia, State Street's chief business officer, <a target="_blank" class="" href="https://investors.statestreet.com/investor-news-events/press-releases/news-details/2024/State-Street-Global-Advisors-and-Apollo-Global-Management-Join-Forces-to-Increase-and-Broaden-Investor-Access-to-Private-Markets/default.aspx">said in a statement</a> the ETF would "democratize access to private asset exposures," and make them "more accessible to a wider swathe of investors.""It is our goal to bring these investments to scale and help facilitate the process of making private assets more accessible and liquid over time. We see this as only the beginning of a new wave of innovation as public and private markets increasingly converge," Paglia said. Alternative assets make up a small share—less than 3%—of individual investors' global investments, KKR's head of Global Client Solutions Eric Mogelof, told the <a target="_blank" href="https://www.wsj.com/finance/investing/wall-street-races-to-bring-private-credit-to-the-masses-8a25b624">Wall Street Journal</a>.But he says there is huge potential for that share to grow by over three times. "We anticipate these allocations to rise to 10% or greater in the future," he told the Journal.

Investing giants want to offer retail traders access to a booming sector of financial markets

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Happy Friday! Wondering how AI can finally impact your life in a positive way? Here's a step-by-step guide to how you can easily (sort of) <a target="_blank" href="https://www.businessinsider.com/manage-school-calendar-pdf-with-ai-google-chatgpt-2024-8">add your kid's school calendar to your Google Calendar</a>.In today's big story, Big Tech wants in on OpenAI.What's on deck:<ul><li>Markets: A hedge fund just got one step closer to building <a target="_blank" href="https://www.businessinsider.com/hedge-fund-balyasny-analyst-research-generative-ai-2024-8">the AI equivalent of a senior analyst</a>.</li><li>Tech: Nvidia's growth trajectory is starting to mirror <a target="_blank" href="https://www.businessinsider.com/nvidia-growth-slowdown-apple-jensen-huang-ai-earnings-2024-8">another high-profile tech company</a>.</li><li>Business: MrBeast can't lawyer his way <a target="_blank" href="https://www.businessinsider.com/mrbeast-jimmy-donaldson-hiring-celebrity-lawyer-wont-help-reputation-experts-2024-8">through his current crisis</a>.</li></ul>But first, can I get in on that round too?If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="6b55417b-9b93-4690-85a5-7a36518b5444">The big story</h3><h2 id="c137e301-d5ac-43d0-b98a-8002fa4e134a">Apple and Nvidia have OpenAI fever</h2><div type="image" title="Photo illustration of Apple with bite taken on top of OpenAI logo" height="900" width="1200" msid="112926381" hostid="261" sizebytes="56492"></div>Who isn't interested in investing in OpenAI?Two of the biggest tech companies in the world are reportedly looking to join the startup's newest funding round, which values it at more than $100 billion.The Wall Street Journal first reported <a target="_blank" rel="noopener" href="https://www.businessinsider.com/apple-microsoft-rivalry-deepens-with-openai-funding-round-talks-2024-8">Apple's interest in the round</a>, which was quickly followed just over an hour later by a Bloomberg story that <a target="_blank" rel="noopener" href="https://www.businessinsider.com/nvidia-talks-invests-openai-microsoft-apple-100-billion-valuation-reports-2024-8">Nvidia, too, would like in on the action</a>.And let's not forget Microsoft. The longtime OpenAI backer, which has poured roughly $13 billion into the startup, is also reportedly involved in the latest round.The news comes a day after the initial report of the funding <a target="_blank" href="https://www.businessinsider.com/sam-altman-openai-100-billion-club-2024-8">being led by Josh Kushner's Thrive Capital</a> with a $1 billion investment. (It's been a busy month for Kushner, who also spent almost $30 million <a target="_blank" href="https://www.businessinsider.com/wave-house-harry-gesner-rod-stewart-malibu-homes-for-sale-2023-6">on a legendary Malibu beach house</a>.)It's not just money coming in. The WSJ also reported some OpenAI investors are looking to sell their shares.The reports show how tech's biggest players are picking sides and placing bets on the companies they view as the future in an AI ecosystem bound to consolidate.Apple already has ties to OpenAI with ChatGPT <a target="_blank" href="https://www.businessinsider.com/apple-wwdc-event-live-updates-keynote-announcements-2024-6">being incorporated into its products</a>. But it also seemed open to partnering with other players in the space. (In March, it was rumored to be <a target="_blank" href="https://www.businessinsider.com/google-apple-partnership-rumors-ai-industry-gemini-model-iphone-2024-3">mulling a deal with Google</a>.)Investing in OpenAI doesn't necessarily mean Apple can't work with other players. Microsoft is building its own AI model <a target="_blank" href="https://www.businessinsider.com/microsoft-training-ai-model-rivals-openais-gpt-4-2024-5">separate from OpenAI</a>. But an investment makes clear there is a financial incentive for Apple to see <a target="_blank" href="https://www.businessinsider.com/openai-competition-investor-anxiety-talent-retention-microsoft-meta-google-2024-8">OpenAI remain at the top</a>.<div type="image" title="Sam Altman photo illsutration." height="1480" width="2960" msid="112926374" hostid="261" sizebytes="133678"></div>The three biggest companies in the world want to invest in your company. What could possibly go wrong?Adding so much firepower to one's balance sheet is obviously good, but it's also bound to draw Washington's attention.Everyone is already on edge about <a target="_blank" href="https://www.businessinsider.com/california-assembly-passes-ai-safety-bill-artificial-intelligence-big-tech-2024-8">the threat of AI</a>. And OpenAI and <a target="_blank" href="https://www.businessinsider.com/openai-sam-altman-new-era-tech-villian-chatgpt-safety-2024-5">CEO Sam Altman</a> haven't done a great job of calming nerves. Add in the fact regulators have started <a target="_blank" href="https://www.businessinsider.com/google-monopoly-antitrust-ruling-should-make-apple-meta-amazon-nervous-2024-8">cracking down on Big Tech</a> for what they view as monopolistic tendencies, and you can see where this is going.A minority investment isn't the same as an outright acquisition, so there is some legal wiggle room. But investments like these will raise eyebrows as some lawmakers will likely want to avoid more consolidation of power.Meta, Amazon, Anthropic, and, most notably, Google <a target="_blank" href="https://www.businessinsider.com/ai-models-microsoft-openai-meta-google-2024-6">all remain in the AI race</a>. But Apple and Nvidia's interest in OpenAI makes clear it's time to start picking sides.<h3 id="431da80a-8d04-4aa8-b160-f32aa33f421a">News brief</h3><h2 id="e31c83d2-cf38-4460-a5b3-0440fd09e759">Top headlines</h2><ul><li>A Kroger exec reportedly testified that the supermarket giant <a target="_blank" href="https://www.businessinsider.com/kroger-milk-eggs-prices-increased-beyond-inflation-executive-testifies-report-2024-8">raised prices of milk and eggs beyond inflation costs</a>.</li><li>Nvidia is in for a fight to <a target="_blank" href="https://www.businessinsider.com/groq-cerebras-challenge-nvidia-booming-ai-inference-market-2024-8">maintain dominance in this area of AI computing</a> as the field crowds with contenders.</li><li>Tyson's finance chief is <a target="_blank" rel="noopener" href="https://www.businessinsider.com/john-tyson-heir-cfo-replaced-suspended-chief-financial-officer-2024-8">out of the job</a>. The Tyson heir got the gig at 32, making him the youngest Fortune 500 CFO.</li><li>A top CIA official said Taylor Swift's Austria concert was targeted by people who plotted to <a target="_blank" href="https://www.businessinsider.com/cia-taylor-swift-thousands-of-fans-in-danger-austria-concert-2024-8">kill 'tens of thousands'</a> in a terror attack.</li><li>Putin and Kim Jong Un's new alliance is <a target="_blank" href="https://www.businessinsider.com/russia-alliance-north-korea-proving-to-be-a-win-win-2024-8">proving to be a win-win</a>.</li><li>Signal president says she spent 2 sleepless days <a target="_blank" href="https://www.businessinsider.com/signal-security-concerns-elon-musk-meredith-whittaker-2024-8">dealing with the fallout of Elon Musk's criticism</a>.</li></ul><h2 id="738dac66-7143-40a3-a4bc-ebf4318b9fcf">3 things in markets</h2><div type="image" title="Image of trader crying" height="1374" width="2000" msid="112926384" hostid="261" sizebytes="130622"></div><ol><li>Everyone's favorite high-rate environment trade is about to end. The "T-bill and chill" trade was the go-to bet for investors looking to cash in on high interest rates. A looming rate cut will diminish those returns, but JPMorgan <a target="_blank" href="https://markets.businessinsider.com/news/bonds/fed-rate-cuts-treasury-bond-yields-money-market-outlook-jpmorgan-2024-8">has some ideas on how to reposition your portfolio</a>.</li><li>Speaking of trades that won't last… The small-cap stocks rally — fueled by future rate cuts, rotation out of Big Tech, and a potential soft landing — could be winding down. If the US economy continues to cool, <a target="_blank" href="https://www.businessinsider.com/small-cap-rally-where-to-invest-quality-stocks-cooling-economy-2024-8">the sector will likely start underperforming</a>.</li><li>Balyasny dreams of AI analysts. The hedge fund wants to build an AI equivalent of a senior analyst. Thanks to <a target="_blank" href="https://www.businessinsider.com/hedge-fund-balyasny-analyst-research-generative-ai-2024-8">a recent breakthrough</a> by its Applied AI team, it's one step closer to that goal. A new tool can scan tens of thousands of documents and provide detailed reports in a fraction of the time it would take a human researcher.</li></ol><h2 id="3d1ff5a6-4887-4e2b-a2d0-cc75d3ce82e5">3 things in tech</h2><div type="image" title="Jensen Huang" height="975" width="1300" msid="112926378" hostid="261" sizebytes="80972"></div><ol><li>Nvidia is extraordinary, but it isn't otherworldly. The chipmaker's stock dipped on Wednesday after it reported earnings, despite blowing past expectations for Q2. Although Nvidia is still growing, <a target="_blank" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-q2-earnings-results-nvda-outlook-jensen-huang-2024-8">it can't keep pace with investors' loftiest dreams</a>. Its growth is starting to look more <a target="_blank" href="https://www.businessinsider.com/nvidia-growth-slowdown-apple-jensen-huang-ai-earnings-2024-8">like another notable tech company's</a> — but Wall Street <a target="_blank" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-outlook-buy-q2-earnings-decline-wall-street-2024-8">still thinks it's a good time to buy</a>.</li><li>When will ServiceTitan go public? The startup, which makes software for service workers like plumbers and electricians, filed confidential paperwork to go public in 2022. Now, execs are waiting until after the election to make any decisions. <a target="_blank" href="https://www.businessinsider.com/servicetitan-waiting-until-after-the-election-to-go-public-2024-8">The move could push its IPO into 2025</a>.</li><li>Wait, Apple has a sports app? Launched in February, the Apple Sports app has yet to garner a meaningful following. And while it just announced some new features, the <a target="_blank" href="https://www.businessinsider.com/apple-sports-app-mystery-eddy-cue-limited-scores-2024-8">actual purpose of Apple Sports still remains murky</a>.</li></ol><h2 id="9baed1f1-1f1a-4e58-a0b8-f27f73536b54">3 things in business</h2><div type="image" title="Kamala with a hard hat on, smiling." height="898" width="1198" msid="112926376" hostid="261" sizebytes="85718"></div><ol><li>Thanks to Kamala Harris, it's YIMBYs' time to shine. Pro-housing advocates, known as the "yes-in-my-backyard" or "YIMBY" camp, are having a moment thanks to the Democratic Party's sudden shift in policy. A quickly organized group, YIMBYs for Harris, <a target="_blank" href="https://www.businessinsider.com/yimbys-harris-housing-policy-walz-lower-home-prices-affordability-2024-8">raised more than $100,000</a> at a virtual fundraiser.</li><li>Dollar General just showed how bad things are for budget-conscious shoppers. The store's stock plummeted 30% after reporting worse-than-expected Q2 results. It warned that its <a target="_blank" href="https://www.businessinsider.com/dollar-general-shows-how-bad-economy-is-for-some-shoppers-2024-8">low-income shoppers have pulled back their spending</a> — and that it could get even worse.</li><li>MrBeast's PR crisis won't be solved in court. Jimmy Donaldson, the YouTuber known as MrBeast, is in hot water over a string of controversies regarding his associates and the conditions on his gameshow. He's hired a super lawyer to muscle through it — but PR experts say that won't help him win back fans. <a target="_blank" href="https://www.businessinsider.com/mrbeast-jimmy-donaldson-hiring-celebrity-lawyer-wont-help-reputation-experts-2024-8">Here's what they think he should do instead</a>.</li></ol><h2 id="f86efd3c-9c8f-4c5d-a900-e375f9842255">In other news</h2><ul><li>Sleep in this weekend — <a target="_blank" href="https://www.businessinsider.com/sleep-in-longer-healthier-life-according-to-science-2024-8">it may help you live longer and avoid heart disease</a>.</li><li>I was scammed out of $300K in a <a target="_blank" href="https://www.businessinsider.com/scammed-out-of-family-savings-in-three-months-painful-2024-8">3-month government impersonation scam</a>.</li><li>A nutrition coach to elite athletes helps clients boost their longevity. <a target="_blank" href="https://www.businessinsider.com/how-elite-athlete-nutrition-coach-clients-boost-longevity-2024-8">He focuses on 3 key things</a>.</li><li>First, he banned WFH. Now, this billionaire wants to stop <a target="_blank" href="https://www.businessinsider.com/billionaire-banned-working-from-home-wants-to-stop-coffee-runs-2024-8">his staff from going on coffee runs</a>.</li></ul><h2 id="b44deeea-8079-4891-b6fc-d69e0ae01f5b">What's happening today</h2><ul><li>Telluride Film Festival begins in Colorado.</li></ul>The Insider Today team: <a target="_blank" href="https://www.businessinsider.com/author/dan-defrancesco">Dan DeFrancesco</a>, deputy editor and anchor, in New York. <a target="_blank" href="https://www.businessinsider.com/author/jordan-parker-erb">Jordan Parker Erb</a>, editor, in New York. <a target="_blank" href="https://www.businessinsider.com/author/hallam-bullock">Hallam Bullock</a>, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.

Apple considers investing in OpenAI, joining rival Microsoft in AI race

<ul class="summary-list"><li>Olivia Gaudree started working at Fuel Venture Capital as an intern in her early 20s.</li><li>She worked her way up the ranks and became a partner in under seven years at 28.</li></ul>This as-told-to essay is based on a transcribed conversation with Olivia Gaudree, a 28-year-old partner and VP of Operations at Fuel Venture Capital. Business Insider has verified her employment. The following has been edited for length and clarity.I grew up in an entrepreneurial family. My parents work at a family catering restaurant they've run for 30 years. They started a few businesses when I was a child and openly discussed the ups and downs of their businesses' operations.I knew I wanted to do something in business. I thought internships would help me figure out what.I got an internship at a local hedge fund in highschool. I worked there for two summers and one school year.I attended Florida State University and majored in finance. In 2017, my junior year of college, I had a summer financial internship at Thomson Reuters in New York.Those were formative summers for me. Through my exposure as an intern, I learned I liked working with a smaller team, where I had a lot of responsibilities and more creativity, versus a bigger investment house where everyone stays in their lane.I noticed there are ways to move up the corporate ladder at a bigger firm, but maybe not as quickly as at a younger, smaller firm.<h2 id="26c27631-144f-4aad-b290-8f95876eeb4d">Networking helped me land my job in venture capital</h2>At my high school hedge fund internship, I met Maggie Vo, now the managing general partner at Fuel Venture Capital, and got to know her well.I made a point of maintaining the relationship at college. I updated her on my progress and asked about hers.Maggie saw that I was willing to learn quickly and had the work ethic to contribute to the firm. She offered me an internship right after I graduated from college.Connecting with people in venture capital and maintaining those connections is imperative for young people. When you don't have quantitative metrics to prove your worth, industry connections can help. Reaching out meaningfully, even once a quarter, makes relationships warmer.<h2 id="d80906a1-7251-4830-9016-5b91f5bbfaab">Why I chose VC over investment banking and financial services</h2>At the time, I was considering opportunities in investment banking and financial service firms and was fielding full time offers.I chose Fuel because I would work with the investment side and directly with the founders. You don't often get exposure to both sides in a larger firm.When I joined Fuel in 2018, it was a small team of managers with one fund. I could work directly with senior leadership and access all the different parts of the business.It was also a rare opportunity to get into VC early.The typical path into VC starts with working a few years in investment banking, then a few years in a small private equity firm, and then you get a chance at VC. It can take 10 years. The alternative is to get an internship early, prove yourself, and work your way up.These days, there are more early opportunities. Some firms offer entry-level positions within the investment team, but they aren't common. Firms usually want to see that background before coming into VC.<h2 id="3b8bc890-7a6a-4da0-b3cb-bab35ee2a118">I worked my way up from intern to partner in under 7 years</h2>Fuel offered me a full time role three months after I started as an intern at 22. I then worked my way up through several more analyst roles.In the early days, I worked alongside Maggie on the investments team. I tried to absorb as much information as possible from meetings.I was working on decks, putting together due diligence packages on potential portfolio companies, and working on internal processes.I had to work harder since I didn't come to VC from the traditional investment banking path. For the first two years, I immersed myself in the industry, reading as much as possible and listening to industry podcasts.Now, I've done everything from refilling the printer to facilitating successful exits.You need to make yourself indispensable and understand every aspect of the business to thrive. Learning how to communicate effectively with everyone — founders, investors, and colleagues — was especially crucial.One easy, surefire way to move up the ranks is to know what your boss wants and, if possible, meet them there.When I first started as an intern, I also worked directly with Jeff Randsell, Fuel's founding partner. I noticed that he'd spent 25 years working his way up at Merrill Lynch. Because he'd been exposed to that cutthroat environment, I always made sure to be the last person to leave the office. He didn't say this was an expectation, but I hoped he'd recognize my hard work. I think it ultimately contributed to my getting a full time position at Fuel.<h2 id="6b480740-0c25-42a2-9afd-640b460a9dca">I shifted roles and got promoted to partner</h2>An opportunity to move on to operations arose in 2022. I never saw myself in operations because I thought it was a paperwork, back-office role. But it felt like a natural progression in my career, and I still got to work with founders and investors — now I'd understand even more about the business.Coming into the operations side, I had a good macro view of the firm I'd built up in my first four years.In this role, I work with third-party partners, run the audit process, and work directly with the tax and legal teams. I'm also involved in the investment side but with compliance. I even learned how to form a fund from the bottom up.I was promoted to partner,which was very important.<h2 id="d7507795-b2ba-4968-8b0f-430ba4120462">I've put in 110% effort to make it as a woman in VC</h2>With most jobs in finance including VC, there are fewer women at the table. You have to prove yourself and overcome implicit bias when you're a woman or a minority.I account for this by putting in 110% effort and a lot more planning and preparation to ensure I'm viewed as equal to everyone around me.Switching gears and interacting with a stressed founder and then a member of the tax team has been valuable to my career progress. The women I work with are very good at balancing many different things simultaneously. They are also observant and ask hard questions.These skills were especially useful in 2021 when founders went from capital exuberance to more scarcity. Everyone found this challenging.<h2 id="9be33f2f-2918-4b52-9330-3a9e63106dc0">VC means long hours, but it's fulfilling</h2>It's an 80 to 100-hour workweek industry. You have to enjoy the work. If not, it will be miserable.VC has turned out to be a great fit for me, and it's a career path I'm fully committed to.My entire journey has been so fulfilling with Fuel. I've seen founders' growth trajectories and how that's positively impacted all the people they employ and the generational wealth they're creating for their own families.While numbers heavily drive VC, it's also about gut instinct, relationships, and networking. You have to have intuition and move on it. It's not about waiting for direction. While you learn along the way, curiosity, and emotional intelligence are essential at the entry level.

I broke into venture capital at 22 and became a partner by 28. I learned one easy, surefire way to move up the ranks.

<ul class="summary-list"><li>Sri Pangulur started his own syndicate while working as a sales executive in Silicon Valley.</li><li>He parlayed that syndicate experience to transition working in to venture capital at Tribe Capital.</li></ul>Sri Pangulur embraced the after-work hustle to invest in early-stage startups. By day, he was a <a target="_blank" class="" href="https://www.businessinsider.com/billionaire-cloudflare-ceos-lawsuit-over-neighbors-dogs-getting-wild-2024-4">CloudFlare</a> sales executive. But after work, he spent up to 15 hours a week attending hackathons, meetups, and venture events to source the <a target="_blank" class="" href="https://www.businessinsider.com/most-promising-startups-2024-according-top-vcs-2024-8">next hot startup</a>.There were many times when Pangulur just jumped straight into chasing a deal after a long day of work. He recalled when his CloudFlare team closed a high-stakes deal late on a Friday at the end of a quarter. But instead of celebrating with this team, he met with a hot seed stage company."I was trying to get into a pretty high profile seed round as well that had very little allocation left in the deal," he said, adding that he had to really beg to get a spot. After chatting with the CEO until midnight, Pangulur got into the deal.He started his side hustle investing efforts by writing small checks but soon found himself flooded with deal flow. He decided to formally create a syndicate called Overtime VC, investing up to $250,000 in seed and Series A rounds. Through Overtime, Pangulur invested nearly $20 million in 65 companies, with a focus on enterprise infrastructure and apps. Among those startups in his portfolio were <a target="_blank" class="" href="https://www.businessinsider.com/abnormal-security-valued-at-5-billion-in-new-funding-round-2024-6">Abnormal Security, currently valued at $5.1 billion</a>, and <a target="_blank" class="" href="https://www.businessinsider.com/most-promising-enterprise-startups-according-to-vcs-2021#airbyte-open-source-tools-for-moving-data-2">Airbyte</a>, now valued at $1.5 billion.Pangulur met <a target="_blank" class="" href="https://www.businessinsider.com/mayfield-vc-navin-chaddha-early-stage-startup-investment-opportunity-2022-7">Mayfield Fund managing partner Navin Chaddha</a> through investing. In 2016, the pair met at a tech networking event and kept in touch, discussing industry trends and collaborating on deals."This guy will go places," Chaddha recalled of his first impressions of Pangulur. Seven years later, Pangulur joined Mayfield as a partner.The path to VCBorn in Michigan and raised in Ohio, Pangulur grew up in a family of doctors. He initially was pre-med at Case Western University, intending to follow in his family's footsteps. But as the dot-com bubble brewed in the late 1990s and early 2000s, Pangulur decided to pursue finance.After college, he worked on the M&amp;A team at KeyBanc Capital Markets and then joined Lehman Brothers, focusing on software investments. He also got a taste for venture capital at TeleSoft Partners, an early-stage firm, before jumping to the operating side.Over the next decade, Pangulur worked in a range of sales roles, ultimately landing at CloudFlare to lead one of the company's first sales teams in North America. At CloudFlare, he gained experience selling to CTOs and CISOs across various companies, from startups to the Fortune 500.He also continued investing through his syndicate, Overtime VC, and brought these firsthand experiences to the founders he advised.Pangulur helped founders with recruiting, answering questions like, "Who's that first VP of sales you should hire? What does that profile look like, and how does that evolve over time as you scale?"The Overtime business kept scaling, and then he said he pondered whether he wanted to work at one company most of the time or work with many entrepreneurs full-time rather than on the side."That's when I had the realization that maybe I should do venture, " he said.'Cooking' at the Series BPangulur began raising his own venture fund based on the success of his syndicate fund, Overtime VC. But a few months into fundraising, he received an unexpected offer from Tribe Capital, a VC firm that uses data science to invest in crypto and software startups.With Tribe's $1.6 billion assets under management, Pangulur was drawn to the idea of writing bigger checks and advising founders as a board member. "I decided to take that jump," he said.At Tribe, Pangulur built out the firm's software investing practice. With a focus on enterprise infrastructure and software-as-a-service, Pangulur led six deals, including the sales intelligence startup Apollo, which is now valued at $1.6 billion.Last September, Pangulur joined Mayfield. "I wasn't actively looking to make a move," he said, but after working with Chaddha over the years through Overtime and Tribe, Pangulur was intrigued at a new opportunity to join the firm.He and Chaddha met for an in-person catch-up in the fall of 2022. "I went into the meeting thinking it would be a normal catch-up," Pangulur said. "But that's when he told me about the opportunity he sees in the market for the Spring Fund."<a target="_blank" class="" href="https://www.businessinsider.com/why-mayfield-doing-more-startup-investments-focusing-ai-2023-7">Mayfield</a> is one of Silicon Valley's oldest venture firms, with $3 billion in assets under management. While the firm has traditionally invested at the seed and Series A stages—it announced its seventeenth fund of $580 million focused on seed and Series A in 2023 — there was still a gap in the market for investment."Our Select/Spring Fund is aimed at founders who are beyond the ideation stage, with a team, early product-market fit, and initial market adoption," said Chaddha. "Their financing stage is typically at the A prime or Series B."The firm first raised a $125 million Spring fund in 2016 to invest in its breakout portfolio companies for follow-on investments. Last year, Mayfield raised a Select III/Spring Fund of $375 million, aiming to focus the vast majority of its investments on new outside opportunities.Pangulur was brought in to co-lead the firm's Select/Spring fund with Chaddha."He came from a sales background," Chaddha said. "He's investing at a stage where there's already product and customers— his go-to-market expertise is his superpower."This is the stage "where you need to get in the weeds, work with the founders, help them do some of that cooking," Pangulur said.Earlier this month, Pangulur announced two new investments he led: a $25 million Series B for billing infrastructure startup Orb and a $28 million Series B for TeamBridge, a workforce operating software startup.Despite the overall tepid funding market, Pangulur is optimistic. "The Spring Fund is a relatively new initiative," Pangulur said. "I want us to be one of the first calls that a lot of founders call when they're hitting that inflection between being at inception early stage to finding those early elements of product market fit and go-to-market repeatability."

How Sri Pangulur went from building his own syndicate to co-leading Mayfield's Series B investing practice

<ul class="summary-list"><li>Industry leaders hope that candidates commit to having clearer crypto guidelines and AI regulations.</li><li>Harris has a chance to lean into her California roots and demonstrate knowledge of the tech world.</li></ul>When Vice President Kamala Harris uttered the word "founder" — Silicon Valley's preferred lingo for entrepreneur — during her acceptance speech at the Democratic National Convention, many venture capitalists cheered. But when she <a target="_blank" class="" href="https://www.businessinsider.com/trump-harris-presidential-debate-preview-2024-9">debates</a> former President Donald Trump on Tuesday night, the business and tech worlds will be watching closely to see how the candidates address key issues for their industries.Industry leaders told Business Insider that <a target="_blank" href="https://www.businessinsider.com/election-a-distraction-silicon-valley-wants-to-be-over-2024-8">investors, venture capitalists, and the Silicon Valley crowd</a> will be listening for clear crypto guidelines, clarity on federal appointments, and a balance of innovation and regulation. With Harris at the podium instead of President Joe Biden, the business and tech sectors see a new opportunity for progress.Chris Larsen, the billionaire co-founder of blockchain payments company Ripple, hopes that Harris strikes a similar tone to her "pitch perfect" speech at the Democratic National Convention, which distinguished her from what he called the Biden administration's "anti-business rhetoric." He recently <a target="_blank" class="" href="https://www.businessinsider.com/murdoch-cuban-corporate-executives-silicon-valley-wall-street-endorse-harris-2024-9">signed a letter endorsing Harris</a> and is confident that she, a <a target="_blank" href="https://www.businessinsider.com/harris-july-fundraising-california-tech-silicon-valley-2024-8">California native</a> with strong ties to <a target="_blank" href="https://www.businessinsider.com/silicon-valley-billionaires-investors-kamala-harris-mark-cuban-reid-hoffman-2024-8">Silicon Valley</a>, understands the tech industry far better than the president. Larsen hopes to see her display that intimate knowledge at the debate.For Bradley Tusk, a co-founder of venture capitalist firm Tusk Venture Partners and Democratic political strategist, policy proposals put forth during the campaign are mostly irrelevant, because they are merely designed to attract voters."Where the rubber meets the road is who they appoint. And that really, for tech, is going to determine what matters," he told Business Insider. For starters, he is eager to see candidates replace Gary Gensler of the Securities and Exchange Commission, whom he described as "the worst regulator ever for the [crypto] sector."Larsen agrees that <a target="_blank" class="" href="https://www.businessinsider.com/crypto-bitcoin-election-spending-kamala-harris-donald-trump-2024-8">crypto policy was chaotic under Biden</a>, and said it's crucial that Harris commits to making the rules clear. He would also want the next president to replace Gensler, and so would Jordan Nof, another co-founder of Tusk Venture Partners"It would be helpful for both candidates to articulate how they plan to manage key agencies that impact tech and VC," he said in a statement to Business Insider. "We need to appoint leaders who understand the balance between regulation and innovation. At the SEC, we need someone who provides clear guidelines for crypto, unlike Gary Gensler's approach, which has stifled the industry.""Let's just be honest here — the far left tries to argue that crypto and technology, we want no regulation. It's absolute bullshit. We want clear regulation," Larsen said.Few are better acquainted with the <a target="_blank" class="" href="https://www.businessinsider.com/silicon-valley-political-divide-twitter-elon-musk-kamala-harris-2024-8">priorities of Silicon Valley</a> executives than Kieran Snyder, a venture capitalist who organized a survey of <a target="_blank" href="https://www.businessinsider.com/silicon-valley-leaders-support-harris-musk-andreessen-support-trump-2024-7">VCsForKamala signatories</a>, a group of VCs who have pledged to support the vice president. Despite their stated support for Harris, the 225 survey respondents were bipartisan — among those who chose to share their political affiliations, 30% self-identified as Republicans.Though Snyder didn't have a question explicitly targeted toward crypto regulation in the survey, several of the respondents addressed the topic in their written answers and sought "a clearer regulatory environment."<a target="_blank" href="https://www.businessinsider.com/harris-lina-khan-balance-billionaires-silicon-valley-hoffman-progressives-ftc-2024-8">Lina Khan of the Federal Trade Commission</a>, who is known for her ambitious antitrust agenda, is another sticking point for industry leaders. Larsen wants to see her replaced, and though Tusk supports her efforts to break up big tech, he takes issue with other aspects of her leadership."Her general end-to-compete to any sort of brokers and acquisitions and activity is incredibly damaging for innovation and early-stage tech, because she's created such a chilling effect," he said, noting that venture funding and new company formation have fallen."At the FTC, leadership should support mergers and acquisitions crucial for venture capital liquidity, rather than hindering growth as Lina Khan has done," Nof said in his statement to Business Insider.On the question of AI, the venture capitalists that Business Insider spoke to stressed that the candidates need to demonstrate they can implement safety regulations without being heavy handed. Trump has promised to roll back Biden's executive order on AI, which ensures that developers test the safety of future models. Harris said she would assess the risks and benefits of AI while speaking at a panel at the DNC.But neither candidate has put forward a comprehensive plan. All the while, the U.S. lags behind Europe in terms of AI regulation."You need to be both the champions of innovation and thoughtful about AI safety. It cannot be an either-or situation," Larsen said. Overall, he wants the candidates to demonstrate that they understand the complexity of the issue.Harris recently distinguished herself from Biden on some aspects of <a target="_blank" class="" href="https://www.businessinsider.com/trump-trade-vs-kamala-harris-opportunity-economy-policies-market-impact-2024-8">economic policy</a>: She rolled back his top capital gains tax proposal, saying that there should be a rate of 28% compared to Biden's desired 39.6%. Her advisors believe a lower tax could spur entrepreneurship and help small businesses, the <a target="_blank" href="https://www.wsj.com/politics/elections/kamala-harris-to-pare-back-bidens-capital-gains-tax-proposal-14c537b1">Wall Street Journal reported</a>."That was a clear effort to court business and tech," Tusk said. And the pitch seems to have landed, at least with some — industry titans <a target="_blank" class="" href="https://x.com/mcuban/status/1831439600767955328">Mark Cuban</a> and <a target="_blank" class="" href="https://x.com/levie/status/1831442705991479485">Aaron Levie</a> celebrated the move on X.Trump has said that he wants to <a target="_blank" href="https://www.businessinsider.com/what-us-economy-would-look-like-with-trump-biden-presidency-2024-5#taxes-6">cut taxes for corporations</a> and top earners. He also wants to institute strict tariffs: 10% on all goods coming to the U.S. and 60% for those coming from China.Snyder's survey focused on issues with the biggest impact on business and tech innovation — things like taxing carried interest, government appointments, regulating mergers — but respondents showed a surprising amount of investment in what are typically seen as social issues. Immigration and reproductive rights emerged as areas of focus.A vast majority of respondents said that the US should offer startup visas to qualified entrepreneurs and issue more high-skilled visas. And like the general electorate, the tech leaders who responded were motivated by the question of abortion — a full 97% said that it was a mistake to repeal Roe."That was really eye-opening, because that is not usually thought of as a business issue, it's thought of as a social issue," Snyder told Business Insider. "But when you think about who is in the workforce and people's ability to build predictable careers that they can autonomously drive, reproductive rights are really important."Respondents also agreed that policies combating climate change are beneficial for American business, and Larsen said he hopes to hear the candidates talk about the issue at the debate.But business and tech leaders will be looking at more than just policy on Tuesday night. In industries that are already subject to the whims of the market, having a stable leader is uniquely important."If you are a venture capitalist and the only thing you care about is your pocketbook, it is not irrational to say that you prefer Trump," Tusk said. "But I don't like living in a world of total chaos. It is stressful when Donald Trump is president. It is stressful every day to have the stability of the country, the stability of the government, the stability of the economy at risk."Snyder echoed that sentiment. "In general, people are looking for calmness in the face of chaos, not chaos in the face of chaos," he said. The debate stage offers an opportunity to project that strength — or flounder amid tough questions.Tusk said that debates matter "tremendously" and that his colleagues will certainly be watching, especially after Biden's campaign-ending performance in June.Larsen believes that Harris may be able to provide the country with the reset that he and other business leaders are looking for. He hopes that she leans into her Bay Area roots on Tuesday and demonstrates that she understands the business world more intimately than Biden."Maybe go ask Joe Biden if debates still matter. They matter a ton, maybe never more than now," he said.

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