The Winklevoss twins rock on

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A week ago, we talked about an arrest that had investors worried. We are talking about rocking through the winter.

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blockstars

The show goes on for the Winklevoss twins who, despite announcing significant layoffs and suffering a federal lawsuit this week, have started the multi-city tour for their cover band.

The band's billionaire frontmen changed their image with a substantial bet on the digital currency years ago and the exchange hit a $7.1 billion valuation last year despite lawsuits from investors.

While consumer interest in web3 services seemed to grow more modestly during the bull run, high-flying valuations were a hallmark of it. There will be more hostile terms coming for startup that didn't raise enough.

In this week's edition of The Block, it was reported that BlockFi was taking a massive valuation haircut and was trying to raise a round at a $1 billion valuation just over a year after raising $3 billion.

While investors are getting more conservative with their capital, they are also becoming more cautious with their exit options.

The hit to their stock price has left them scrambling, reversing a hiring spree and withdrawing offers to potential employees. The misfortunes of Coinbase are likely a sign of tough times to come for private crypts who may not have been able to raise as much runway as needed. A16z will try to keep the party going for seed stage startups with new funds devoted mostly to new bets, even though companies in dire need of growth capital won't be in a great spot.

The broader tech industry has not seen a lengthy recession in a long time. It would have been expected that they would be a bit better prepared for the good times to end, but they were surprised by the crash.

the latest pod

On this week's episode, Lucas and I sadly had to be the bearer of some bad news as the altcoin market downturn began to impact employees. The recent wave of tech startup firings are not the only ones. We talked about how ugly things have gotten in the last few days, including the recent move by Coinbase to withdraw job offers it had already extended to candidates who had committed to work there.

We talked about why we think this is a long-term win for companies building in the space and investors holding digital assets, as well as the new bill that Senators Cynthia Lummis and Kirsten Gillbrand introduced this week.

Sriram Krishnan is a general partner on a16z and co-host of The Good Time Show.

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follow the money

The place where startup money is moving.

1. Mobile investment platform Delphia raised a $60 million Series A led by Multicoin Capital.
2. Calaxy, a web3 social marketplace, nabbed $26 million in strategic funding co-led by Animoca Brands and HBAR Foundation.
3. Entropy, a decentralized crypto custodian, raised $25 million for its seed round led by a16z.
4. “It’s Always Sunny in Philadelphia” actor Rob McElhenney’s web3 entertainment startup, Adim, raised $5 million in seed funding in an a16z-led round.
5. Decentralized exchange ApolloX secured an undisclosed amount in seed funding from investors including Binance Labs and Kronos Research.
6. Euler Finance, a non-custodial crypto lending protocol, brought in $32 million with Haun Ventures as lead investor in its Series A. 
7. Data infrastructure provider Vybe Network announced the close of a $10.5 million Series A investment led by FTX.
8. Mash, a Lightning Network-enabled payments platform, secured $6 million in seed funding co-led by Castle Island Ventures and Whitecap Venture Partners.
9. Cryptio, an institutional crypto accounting platform, snagged $10 million in a Series A led by Point Nine.
10. NFT portfolio management startup Floor raised an $8 million seed round led by 6thMan Ventures.

Web3 startup Calaxy raises $26M to give content creators their own social tokens

the week in web3

During a tough period in the markets, we have been thinking about the aspects of web3 that still seem to get people to come to the event.

• Web3 entrepreneur Tux Pacific summed it up well: “In fact, I’ve never felt I’ve been in a space where it’s been more acceptable for people to be so different. If you go to a [crypto] conference, it’s just filled with weird, weird people,” Pacific told Anita in an interview. Pacific, one of the rare trans, queer founders in crypto with big-name venture backing, also talked about how their unique background informs their fresh approach to building a crypto custody company.
• Maybe it’s a bold time to raise capital to invest in web3, but Ledger, a hardware-focused crypto security startup, has teamed up with French venture firm Cathay Innovation to do exactly that. The pair raised $110 million to invest in early-stage crypto startups. Ledger’s founder and CEO, Pascal Gauthier, told Anita why he’s so confident that now is a good time to be deploying capital in crypto.
• Solana Labs is doubling down in South Korea, where it’s seeing growing demand for gaming and NFTs. Solana Ventures and Solana Foundation have set up a $100 million fund to support startups in the country – Jacquie has the details.

TC+ analysis

Some of this week's analysis can be found on our subscription service.

It could be a relief for the industry.

A bill that could provide guide rails around the digital asset space was proposed by two U.S. senators. Market players say the bill is a step in the right direction and not an escape from strong regulation, but a shift with clearer rules.