D.F.A., or, Please Do, #1
more bad news from the East Bay
This is D.F.A., from D.F.A. Capital, a newsletter filled with bad news, bad reads, bad deals, and bad playlists. Like you don’t have enough of that already, right?
Nobody knows exactly how many people publish newsletters on Substack, but my guess is somewhere in the 10k-30k range. I’ve read a couple dozen, and some are great. I definitely have my favorites in venture capital - Packy’s, Turner’s, Lolita’s, to name a few.
🌱 Our Founder Community, AJ Founders
There’s two reasons I’ve started a newsletter: (1) I have great encounters daily in our startup founder community, AJ Founders, and thought it would be cool to share some of those findings with the rest of the world, specifically members of the greater tech and startup community. I get asked questions about selling and fundraising every day, multiple times per day, by our emerging startup founders. The group is nearly 70 founders, and we’ll be launching the domain ajfounders.com in a few weeks.
We feel that DEI initiatives begin long before a check is written, and that in venture capital, real value must be delivered to founders long before a financial relationship is established between founder and investor. This kind of work must begin prior to a fundraise, not as an afterthought.
Most of the technical founders that ask questions on sales and fundraising are from science or engineering backgrounds and they’re trying to up-skill. They typically ask pretty tactical questions about how to talk to investors or how to sell their products, and I try to bring the conversation up a level.
(2) I’ve also been thinking of sharing some longer-form essays, and I used to do this from 2007 to 2012 on my blog, MetzMash, but these days, I’m realizing the newsletter medium is more suited for it, since my favorite feed reader, Google Reader, folded. I also come across some interesting shorter-form content now and then that I like to share, and even deals that I like to syndicate
🗞️ Bad News
The Quantum Technology Ecosystem, Explained - Uh, were you thinking of investing in quantum computing? Maybe just a smidge? Perhaps you’ve laid eyes on the much more in-depth Quantum Computing for the Very Curious (h/t to PackyM for turning me on to that one).
Trapital’s Monday Memo: Even if you don’t listen to hip-hop, not reading this memo is not an option, if you want to understand how and why Gen-Z buys things. Dan Runcie writes (and podcasts) masterfully. If you haven’t listened to hip-hop in a minute, Runcie will bring you back in like you haven’t missed a damn thing.
Panic Rooms - Maybe you saw this one in The Hustle. Unfortunately, interest rates don’t quite line up with the timing of this piece.
Why ISAs Failed - Cool and short Twitter thread from Sean Linehan, co-founder/CEO of Placement.com, on why his team stopped using income-share agreements (ISAs) and how his company retooled their business model. Makes me wonder if Lambda Academy could have taken these steps 24 months ago, and what would have happened had they did.
📚 Bad Reads (and the occasional listen/watch)
Inquiries Into The Nature of Slow Money by Woody Tasch: I got my start in agronomy and farming-related investing when I joined TerrAvion (YC) where I was the first sales hire in 2014. One thing that I’ve always noticed about farming-related technology is that it tends to be highly cyclical, and while it’s a market that I really enjoy, and is closely linked to the climate market (we all need to eat AND breathe), very few investors understand the concepts of “restorative economics”.
The Power Of Surrender by Judith Orloff: I know, everybody these days in tech is more into grabbing the bull by the horns and plowing forward, whether it’s in full productivity mode or in full conquest mode. I was turned on to this book about a year ago, and have been reading it slowly, sometimes taking it on hikes. It’s one of the most powerful books I’ve read in a long time, and it’s sort of the opposite of Greene’s 48 Laws of Power.
CAA (Podcast episode from Acquired with Michael Ovitz): Podcast episode from late last year. This is the story of the legendary talent agency founded in 1975 that changed Hollywood’s talent hierarchy, and ultimately inspired Marc Andreessen and Ben Horowitz, in the way that they structured a16z.
💼 Bad Deals
Later this summer, aside from our regular fundraise at D.F.A. Capital, D.F.A. Syndicate will be syndicating a couple of deals, including one in the insurance space and another. If you’d like to see my syndicate deal memos and other deal memos on a regular basis, you can join some great Silicon Valley investors who have already joined the syndicate and apply to join here. The syndicate even has its own playlist.
Current syndicate members include:
One of the 3 largest syndicate leads on Angel.co
2 venture partners from one of Silicon Valley's top VC firms
The CEO of one of Yahoo's largest acquisitions
A bunch of other people that probably didn’t read the email
Any deals that D.F.A. Syndicate send out typically reside in a few areas that I tend to invest in:
Sales and martech SaaS, or SaaS that relates to CRM/ERP, and proptech if it has a CRM/ERP angle
Web3/Crypto & Fintech ONLY if it overlaps with telecom
Agronomy, AgTech or Ag Telemetry software
In-Building Wireless, BYOC, or VOIP
Clothing You Can’t See (Bra/Underwear/Socks) and apparel that creates net-new market space
Sexual Wellness, Sex Tech or the work of Sex Work (worker economic empowerment)
🎸 Bad Playlists
In addition to the playlist linked above (the D.F.A. Syndicate playlist, which is pretty kick-ass), I decided to include something really rare from our vault. It’s Bad Religion’s 30 Years Live, which was recorded 12 years ago, and I scored it off the Bad Religion email list while I was running my consulting firm way back then, from my Yahoo email. About 8 years ago it was briefly released on vinyl. You won’t find this on any streaming service. It’s a bunch of House Of Blues gigs from Anaheim, San Diego and Vegas, and the line-up is pretty much the same as The Process of Belief (2002).
Over the coming months I’m going to be busting out playlists and tracks that are not on any of the streaming platforms, like wacky alternate versions of albums and tracks that you’ve never heard (i.e. “Born To Run” with female backing vocals?!)
The Future Is Unwritten
As far as what the next few months will look like, I’m going to be going back and forth a lot between SF/Oakland and NY, and probably also visiting our Cairo office as well. If you’re going to be in the neighborhood, definitely say hi. It would be fun to meet up for coffee. I miss seeing people in real life, going to punk shows, arm wrestling, that kind of stuff.
If you’d care to take a few minutes to get to know me or any of the team at D.F.A. Capital, I’m here.