AI wrote none of Bending Spoons' code two years ago. At Luca Ferrari's last count it wrote 94%, and the co-founder and CEO of the software acquirer told The a16z Show that no well-run company should be below 70% today.
Ferrari was one of 11 people quoted in this issue. The others ranged from Jesse Pollak, who said tokenized stocks on Coinbase's Base network traded about $100M in one day, eight weeks after launch, to Michael Batko, who said a $100M seed valuation leaves only a 10x return even if the company reaches $1B, to Noland Langford, who said Honeywell broke his case for owning it when it cut its aerospace growth outlook from 8%-10% to 4%-5%.
"Coding, of course, we were at 0% written by AI two years ago. We're now... at 94%... no good company should be... below 70% right now, in my view." — Luca Ferrari, Co-Founder and CEO at Bending Spoons, on The a16z Show (Read summary)
We scanned 820 shows and 3 hours of audio, wrote 4 summaries, and pulled 30 quotes into this 13-minute read.
Here is what mattered.
Macro
Senda's CIO names three causes of the recent rise in rates
Tania Reif, founder and CIO of Senda Digital Assets, said the third cause, a higher risk premium for fiscal worries, has stayed small.
"We have seen rates rise for... three reasons: oil prices... the AI trade, the capex spend... and... concerns about fiscal sustainability and risk premium." — Tania Reif, Founder and CIO at Senda Digital Assets, on Real Vision
Spreads are widening on French bonds and on cloud giants' credit at the same time
André Dragosch, head of European research at Bitwise, said France carries debt above 100% of GDP against about 60% for Germany, but the larger story is global. The spread on US triple-C bonds is widening too, as is the cost of insuring the largest cloud companies' debt against default. He said the European Central Bank, the Federal Reserve and the Bank of Japan have all raised rates on balance over the past six months.
"French bond spreads are rising... hyperscaler CDS spreads are rising — all of these phenomena have one thing in common: tightening financial conditions." — André Dragosch, Head of European Research at Bitwise, on Bitcoin Magazine Podcast
Crypto and Digital Assets
Pollak says less than 1% of the world's dollars and stocks move on blockchains today
Jesse Pollak created Base, the blockchain network Coinbase runs. He said Base serves neobanks, online brokers and traditional banks rather than competing with them for retail customers.
"We have less than 1% of the world's dollars, less than 1% of the world's equities moving on these new rails... over the next 5 years, 10 years, it's going to be about going from less than 1% to 10% to 50% to 90%." — Jesse Pollak, Creator of Base at Coinbase, on The Wolf Of All Streets (Read summary)
Tokenized stocks on Base traded about $100M in one day, 8 weeks after launch
Pollak said trading is concentrated outside the US, where neobanks and brokers in markets such as Indonesia, Nigeria, Korea and Japan are adding round-the-clock access to US stocks.
"We just launched tokenized equities on Base with Coinbase about 8 weeks ago... yesterday was about 100 million dollars of trading volume of these equities." — Jesse Pollak, Creator of Base at Coinbase, on The Wolf Of All Streets (Read summary)
The tokens on Base carry voting rights and dividends
Each token is a fully backed share, not a derivative that only tracks the price, Pollak said. A lending market for the tokens opened about two and a half weeks before the interview and holds about $20M, letting holders borrow USDC, a dollar-backed stablecoin, at 3% to 4% against their shares.
"We really wanted to make sure that we did it right... it is a fully backed security that gives the holders voting rights, that gives them dividends." — Jesse Pollak, Creator of Base at Coinbase, on The Wolf Of All Streets (Read summary)
Most tokenized assets still settle the old way, Ethereum Institutional's US head says
David Duong left Coinbase Institutional to head US business at Ethereum Institutional, a nonprofit spun out of the Ethereum Foundation to help banks and funds use the network. He said years of pilots have raised the value of assets recorded on blockchains without changing how most institutions settle trades.
"Assets get represented on chain and that's great... but then the fund or the bank doesn't necessarily do much with it. So settlement still kind of happens the old way." — David Duong, Head of US at Ethereum Institutional, on Real Vision
Crypto held up because rates fell when the AI trade wobbled, Reif says
Reif said yields dropped as credit tied to AI companies came under pressure, which weakened the dollar. She said crypto as a whole has rallied about 40% since August.
"Since the AI trade began to wobble... we have actually seen the rates come lower as opposed to higher... and that has been supportive for the crypto space." — Tania Reif, Founder and CIO at Senda Digital Assets, on Real Vision
The dollar has driven Bitcoin while growth expectations drove the S&P 500, Bitwise's research head says
Dragosch said that split explains why Bitcoin has held up better than stocks as investors lower their growth forecasts. A stronger dollar hurts Bitcoin in the near term, he said, while a weaker one over many years would help it.
"The US dollar has actually been the most dominant macro factor for Bitcoin, while global growth expectations have been the most dominant macro factor for the S&P 500." — André Dragosch, Head of European Research at Bitwise, on Bitcoin Magazine Podcast
Dragosch's money-supply model puts Bitcoin's fair value at $197K
He said the gap between Bitcoin's price and the model is the widest on record, and he expects it to close as money moves out of gold and semiconductor stocks. Bitcoin has drawn more money than gold into exchange-traded products worldwide, he said.
"This kind of model based on global money supply implies an equilibrium price, fair value, of $197,000 right now for Bitcoin." — André Dragosch, Head of European Research at Bitwise, on Bitcoin Magazine Podcast
Alternatives and PE
A family office's back office is part of its return, Alexandra Cook says
Alexandra Cook, a CPA, runs her family's 50-year-old single family office, now called Dynastillion. She said one common mistake is housing the office inside an operating company, where family reporting comes second to the company's needs.
"I am a big proponent of viewing the back office as... part of the investment structure and therefore part of the investment return generation mechanism... not a cost center." — Alexandra Cook, Principal and Managing Director at Dynastillion, on Centimillionaire Strategies
Families worth $200M to $300M often try to run their office on $250K to $500K
Richard C. Wilson, who founded the Family Office Club and hosts the show, said the bad deals and poor structuring that follow can cost a family 5% to 10% of its net worth.
"So many times I see a family with two to 300 million dollars in wealth, and then they're trying to spend quarter million and a half a million on their family office team... it would have saved them 5 or 10% of their net worth being lost." — Richard C. Wilson, Founder at Family Office Club, on Centimillionaire Strategies
Cook screens out companies that rename themselves as AI to raise money
Cook's family invests mostly in early-stage AI and robotics companies, and she looks for founders who know the industry they are selling into.
"If I were selling bananas and then I named my company banana AI, I could go to these conferences and try to raise capital... you have to be careful weeding through those things." — Alexandra Cook, Principal and Managing Director at Dynastillion, on Centimillionaire Strategies
Technology & AI
Bending Spoons' CEO says software valuations assumed 12% growth for 15 years
Ferrari said the sell-off in software-as-a-service stocks was a reasonable correction of prices that were already too high, not a verdict that AI will replace the software.
"I think the valuations for SaaS historically were for the most part absurdly high... often based on assuming that the current 12% organic growth would last for 15 years." — Luca Ferrari, Co-Founder and CEO at Bending Spoons, on The a16z Show (Read summary)
Most Airtable customers pay under $20K a year, too little to justify rebuilding it with AI
Bending Spoons owns Airtable, Eventbrite, Vimeo and WeTransfer among 50 to 60 acquisitions. Ferrari said software rarely wins because it is expensive to copy. It wins on being first, on habit, on network size and on data no one else has.
"Most customers pay Airtable less than $20,000 a year... even if you get to a point where you can ask your AI agent... to replicate the code for Airtable pretty much perfectly... you'll still want someone... responsible for making sure that code seems legit." — Luca Ferrari, Co-Founder and CEO at Bending Spoons, on The a16z Show (Read summary)
Bending Spoons hedges all of its debt against interest-rate moves
The company borrows to fund each larger acquisition. Ferrari said it keeps its leverage ratio well below 3x, about 2.4x to 2.5x today, and refinances most of its debt each year so that maturities stay at least five years away. He put its risk of default close to zero.
"We hedge 100% of our debt against interest rate fluctuations, so we know exactly how much interest we will pay in the future." — Luca Ferrari, Co-Founder and CEO at Bending Spoons, on The a16z Show (Read summary)
Cal.com stopped publishing its full source code because of the risk of AI-driven hacking
Cal.com makes scheduling software that competes with Calendly. Peer Richelsen, its co-founder, said the company now publishes only a do-it-yourself version of its code, because it handles financial, healthcare and meeting data. He still favors open source for frameworks and libraries.
"As a tech community, we haven't really grasped the impact of AI on security... if large labs accidentally hack software, just imagine what happens on the lower tiers of hacking." — Peer Richelsen, Co-Founder at Cal.com, on opencompany (Read summary)
Engineers who only follow instructions are being overtaken by AI, Richelsen says
Richelsen said hiring has become harder. The engineers worth hiring now decide what to build and how to structure it, and let AI do more of the implementation.
"If you quote unquote are a trained full stack engineer, but you just do what somebody else tells you to do, you're basically just being leapfrogged by AI." — Peer Richelsen, Co-Founder at Cal.com, on opencompany (Read summary)
Left Brain's CIO says many AI spenders already earn profits and free cash flow
Noland Langford, founder and CIO of Left Brain Wealth Management, rejected the comparison with the telecom overbuild of the dot-com era. He said some companies have order books funded and sold out through 2028 to 2031, so today's building is meeting demand that already exists.
"I can show you many businesses that currently not only have revenue, they have profits and they have free cash flow." — Noland Langford, Founder and CIO at Left Brain Wealth Management, on The Disciplined Investor
Dragosch says many of the cloud giants now spend more cash than they bring in
That leaves the largest cloud companies, which Dragosch calls hyperscalers, borrowing to pay for data centers. He expects their capital spending to slow as credit gets harder to raise, just as the cost of chips that become obsolete in about two years starts to weigh on profits.
"Many of these... major hyperscalers are now free cash flow negative... so they depend on external financing... that's why tightening financial conditions are so toxic." — André Dragosch, Head of European Research at Bitwise, on Bitcoin Magazine Podcast
VC & Startups
Cal.com grows 2.5x to 3x a year, mostly from customers who sign up on their own
Richelsen said Cal.com has 1.3M to 1.4M total signups. Most growth comes from the product itself and from search, not from a sales team. He publishes the numbers partly because more than 100 community members became shareholders in the seed and Series A rounds.
"We grow between 2.5 and 3x a year... primarily PLG self-serve." — Peer Richelsen, Co-Founder at Cal.com, on opencompany (Read summary)
AI startups may never need venture money, Startmate's former CEO says
Michael Batko ran Startmate, an Australian accelerator that backed more than 220 companies, before founding Hourglass AI, which builds AI systems for businesses. He said AI-native startups reach revenue with far fewer staff and far lower costs.
"Because your expenses are so low and you can actually make way more revenue way faster... those AI companies in particular, they actually might not need funding, which is a bit weird." — Michael Batko, Founder at Hourglass AI, on Fintech Chatter (Read summary)
A $100M seed valuation limits a $1B outcome to 10x, Batko says
Because such a company may never raise again, investors fear missing its one round, which pushes seed valuations for companies with no revenue to $50M to $100M. A 10x on one company returns only 30% to 40% of a fund built to return 3x, Batko said, so the fund needs a much rarer 20x to 40x outcome.
"You do get high valuations of a company which has no revenue at 50 or 100 mil seed rounds or higher... if you invest in a company at 100 mil, even if they become a billion-dollar company, that's only a 10x return on that one company." — Michael Batko, Founder at Hourglass AI, on Fintech Chatter (Read summary)
Australian funds spread first investments of $1M to $3M across 20 to 30 companies
Batko said a $1B Australian fund sets aside about 20%, or $200M, for first-round investments and keeps the rest for later rounds. Australian companies still go to US investors for Series B rounds and beyond.
"So what you usually do is deploy like one to $3 million into 20 to 30 companies and then hold back like 30 or 40% of the fund to then double down." — Michael Batko, Founder at Hourglass AI, on Fintech Chatter (Read summary)
Industrials and Transport
Honeywell's aerospace growth outlook fell from 8%-10% to 4%-5% after its split, breaking Langford's case for it
Langford said he sells when the reason for owning a stock changes, not after one weak quarter. Honeywell separated its building-controls business from aerospace this year, following General Electric's three-way breakup.
"Earlier this year we really liked Honeywell... the first earnings report comes out and... they say, 'Hey, instead of an eight to 10% grower, we think we're going to be four to 5% on the growth.'" — Noland Langford, Founder and CIO at Left Brain Wealth Management, on The Disciplined Investor
Materials & Energy
The energy fund XLE is up 48% this year, and Left Brain was underweight
Langford said the firm is taking a fresh look at energy, a sector it usually avoids because profits rise and fall with commodity prices.
"The... XLE is up 48% this year... We were underweight. I bet you probably most people were because it came out of left field." — Noland Langford, Founder and CIO at Left Brain Wealth Management, on The Disciplined Investor
Policy
Crypto is getting its rules from regulators using existing law, Franklin Templeton's crypto head says
Christopher Perkins, head of Franklin Crypto at Franklin Templeton, said market-structure legislation stalled in Congress, but regulators moved ahead with formal rulemaking. Institutions will take market risk, he said, but not regulatory risk.
"We never asked years ago for legislative clarity. We asked for regulatory clarity. And we're getting that based on existing laws." — Christopher Perkins, Head of Franklin Crypto at Franklin Templeton, on Real Vision
Two and a half years of precedent would be hard for a new administration to undo, Perkins says
Regulators must follow the Administrative Procedure Act's notice-and-comment process whoever is in power, Perkins said. Without the legislation, he said, there is no federal preemption, so commodities stay regulated by the states.
"It's very hard to put the toothpaste back in the tube once you have two and a half years of precedent... that institutions are building around." — Christopher Perkins, Head of Franklin Crypto at Franklin Templeton, on Real Vision
Nuggets of Wisdom
A stock that does not rise on a beat-and-raise quarter is a warning, Langford says
The reverse holds too, Langford said: a stock that does not fall when the company cuts its guidance can be a signal to buy.
"Some stock... says, 'We've told you we're going to grow at 15. Now we're growing at 18,' but the stock doesn't move up. That's a tell." — Noland Langford, Founder and CIO at Left Brain Wealth Management, on The Disciplined Investor
A venture fund is one more money manager answering to its investors, Batko says
Batko said the picture of venture capital as mission-driven money is mostly a sales story. A fund's duty is to its limited partners, the investors who put up the money.
"It is just another investor, just another manager at the end of the day. What matters to VC is to make the LPs happy, who gave you money to essentially turn $1 into $3, $10 10 years down the line." — Michael Batko, Founder at Hourglass AI, on Fintech Chatter (Read summary)
If this was worth your time, send it to someone who has to follow all of this too.
What did you think of today’s edition? Hit ‘reply’ to this email, send us a message, leave a comment, or join the chat!
Get the latest market chatter as it happens: