Kevin Xu

Once overlooked but now rapidly gaining traction, GovTech is set for disruption! 🤓💡 I've just published an in-depth overview of the GovTech market. It explores key players, innovative solutions, and market segments that are shaping the future of government operations and public services. 🏛️🚌 From public safety management to civic engagement, procurement, and analytics, the GovTech landscape is brimming with opportunities for both startups and established companies to make a significant impact. 📈💼 https://lnkd.in/gWnn_WMn #GovTech #Innovation #PublicServices #GovernmentOperations #venturecapital #startups

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In this week's column: The math at the heart of venture capital is out of whack. Successful exits have become vanishingly few and far between. That’s because it’s been next to impossible for startups to go public, and the regulatory climate for extremely large mergers and acquisitions is generally unfavorable, too. Many venture funds so far have been betting on lower interest rates and better IPO conditions in 2025. But the outlook for lower rates is receding, especially given today's strong jobs report. For many funds, particularly those in the middle quartiles when it comes to assets under management or performance, it’s time to move on with life. To survive, let alone prosper, they need an alternative to the traditional venture capital math based on big-number investments, $1 billion-plus valuations and gargantuan exits. The good news is that current conditions have prevailed since the Fed began raising interest rates in 2022—long enough that a few funds have brought forth alternatives to holding their breath or trying to manifest something better. Touring Capital arrived in 2023 with just such a thought in mind: It has positioned itself as an early growth stage fund with a focus on unconventionally modest Series B rounds. Co-founder and General Partner Nagraj Kashyap knew that startups were staying private for longer, but even he was surprised when research showed IPOs could take 15 years, far too long for venture investors to tie up their capital. And he knew firsthand that billion dollar-plus exits via mergers and acquisitions are exceptionally difficult to achieve. Touring builds relationships with startup founders at an early stage and advises them to take a smaller round of capital than they would traditionally raise, especially at the Series B stage. They get less rocket fuel to underwrite rapid growth, but founders and initial investors’ stakes are also less diluted. That should allow them to ultimately sell their companies for more modest valuations and still make substantial returns on their investment of time and capital. “A larger fund will have to invest in a quantum that is very significant because they can’t do $5 million or $10 million at a time,” Kashyap said. “So they’ll invest between $75 [million] and $100 million. Then you see that that means for the full B round, it becomes $150 million and the dilution for the founder becomes significant. That’s basically the math that goes on, which sometimes artificially takes the pricing higher.” The total size of each B round involving Touring is $30 million to $40 million. But it’s important to see that venture capital, designed to capitalize on “broken” models and experiences in a wide range of markets, is beginning to train its sights on itself, where there’s a pressing need for greater liquidity. 

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Summary: The article discusses Palantir's role in the growing defense tech startup sector and its efforts to become a driving force in the industry. The company's CTO, Shyam Sankar, is determined to help Palantir create a defense tech ecosystem and maximize its impact beyond its government contracts. Key takeaways: Sankar has initiated the First Breakfast program to provide guidance and tools to defense tech startups, aiming to secure a head start in the industry and identify potential "next Palantirs." Palantir has spawned a whole ecosystem in its wake, as evidenced by the success of former employees who have gone on to start their own successful defense tech companies. Sankar is driven by an existential fear of America's war-readiness and believes that more innovative and adaptable solutions are needed to ensure national security in the future. Counter arguments: Some may argue that Palantir's efforts to support and influence the defense tech industry could raise concerns about its potential for monopolizing the market. Critics may point out that Palantir's controversial partnerships with government agencies, especially ICE, raise ethical concerns and contradict its stated mission to protect Western values.

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WSJ piece by Dalvin Brown is my highlight for this week's "Read the News" which looks at the cross section of tech, economics, politics, and PR/media relations. All four are in this piece with highlights of the tech companies making it easier to lend funds to friends and family along with the question of how regulation and taxes come into play. Way to go Dalvin Brown! #readthenews

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SCOOP: Jay-Z’s venture capital firm, Marcy Venture Partners, has merged with another Black-owned investment firm, Pendulum Holdings’ investment arm Pendulum Opportunities, to form MarcyPen Capital Partners, a MarcyPen spokesperson confirmed to TechCrunch. The newly formed MarcyPen Capital Partners has $900 million in assets under management, according to PitchBook. Read the rest of the scoop below 👇🏿 https://lnkd.in/eUHE73GP

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The NTIA/Verisign Cooperative Agreement for .Com impacts the fundamental workings of the Internet infrastructure and US digital sovereignty. This article in Circle ID from last week sums up the problems of the Internet Plumbing Monopolies. Is Verisign a Monopoly? Does It Matter? https://lnkd.in/eQ2UrGu4 Here is my response to the article: Your arguments regarding the price of .com are logical; however, the issue of Verisign’s monopoly extends beyond just .com pricing. It also concerns the monopoly power that Verisign holds within the DNS ecosystem, a power given it through the NTIA Cooperative Agreement and Amendment 35 without any US public or Congressional input or oversight. This monopoly power has significant implications for undermining ICANN’s “multi-stakeholder” process. We have seen this in several instances, such as Verisign’s failure to implement a “Thick WHOIS,” despite being an agreed-upon consensus “multi-stakeholder” policy of ICANN back in 2016 (and now required as part of NIS2). Furthermore, Verisign has collaborated with other “contracted parties” to narrow the definition of DNS Abuse by excluding CSAM and IP violations even though the US and EU DNS Abuse definitions include both. Even more troubling is that Verisign has been colluding with ICANN to secure its policy objectives that are counter to the protection of US cybersecurity and consumer/child protection. This has occurred through bilateral contract negotiations - such as those involving .com price increases, DNS Abuse definition, and blocking efforts to ensure an open, accurate, and accessible WHOIS - and ICANN policies involving NIS2 and the US cybersecurity reporting law (CISA). #versign #icann #whois #darkwhois #internetplumbingmonopolies #nationalsecurity #cybersecurity  

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DoD is pushing startups to take on venture capital pretty hard these days. VC funding can be a great option but it's not an out-of-the-box great fit for Defense Tech. Relying on private debt to effectively dictate what new tech into Defense agencies will have consequences and I don't want to experience that particular learning curve. #defensetech #emergingtechnology #venturecapital

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Summary: Defense tech startups have raised almost $3 billion in funding so far in 2024, surpassing the previous record of $2.6 billion in 2022. The increase in funding is driven by a few large rounds and the growth of the European defense tech scene. Key takeaways: Defense tech funding has reached a new high in 2024, surpassing the previous record from 2022. The increase in funding is driven by a few large rounds, including a $1.5 billion Series F raised by weapons manufacturer Anduril. The European defense tech scene has also seen significant growth, with large rounds raised by companies like Helsing and an increase in new venture firms. Counter arguments: Some may argue that the increase in funding for defense tech startups is concerning, as it suggests a growing need for new technologies in the face of an increasingly dangerous world. Others may argue that this trend could lead to a proliferation of companies focused on developing weapons and surveillance tech, rather than addressing underlying issues that contribute to global conflicts. #defensetech #startups #venturecapital #fundraising

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Our traffic is exploding 🤯 It has nearly 3x'd in the last 30 days. But it's still so early. We're likely to see a short term decrease while google adjusts to our recently rebuilt platform. Then we think this thing could go vertical. Either way, we are ranking for high intent searches related to site selection and business location decisions. If you're in economic development, we've probably reached out to you saying "claim your free Scout profile." The chart below is why. Here are some of our top pages. Folks go from these pages to city/state profiles to discover the top cities for biz. - Data Center Migration Project Plan XLS - Explore Cities (our marketplace main page) - ScoutCities.com - Warehouse Relocation Checklist - Top Site Selection Consultants and Companies - Top Industries in Alabama - Factory and Industrial Relocation Checklist - Profiles for McKinney TX, Plano TX, Greenville NC, Frisco TX - Building a Cold Storage Facility - Complete Guide to Site Selection I'm going to keep sharing the secret sauce on LinkedIn. I'm sure we'll have more competitors as a result. But our speed and quality will be unmatched. Let's go.

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ISP Strategic Leadership, Engineering, and Operations As an organization scales, there is often a need to separate strategic technology leadership under the CTO from internal execution under engineering and operations management. This allows the CTO to focus on outward-facing duties while enabling streamlined operational efficiency. However, it's crucial to recognize the differing motivations and needs of these distinct technical roles. On one hand, engineers thrive on tackling interesting, challenging projects that push their abilities and knowledge. They value working alongside capable peers, genuine recognition of technical accomplishments, and contributing to products/services that reach the market. In contrast, operations teams should strive for repeatable processes, continual improvement, and driving efficiency at scale. Their priorities revolve around standardizing workflows, minimizing disruptions, and incrementally optimizing existing systems and procedures to maintain consistent service delivery as the company grows. An effective organizational structure acknowledges this dichotomy, fostering an environment that fuels engineering innovation while providing operations with the stability and process-orientation they require. Striking this balance enables the company to stay agile and innovative through its engineering efforts, while simultaneously scaling operational execution in a reliable and repeatable manner. Competitive compensation remains an important motivator across both domains. By properly aligning structural elements, motivational factors, and leadership priorities, a rapidly growing ISP can position itself to attract and retain top talent across engineering and operations, driving sustainable growth and success in the dynamic technology landscape.

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Led by Anduril, defense tech funding sets a new record this year | TechCrunch https://buff.ly/4129kts Anduril, a leader in defense technology, has driven defense tech funding to an unprecedented high this year. Investments in this sector have surged, reflecting a growing interest in advanced military solutions and cutting-edge innovations. This milestone underscores the increasing importance of tech-driven defense initiatives in modern security strategies. As global tensions rise, there's a notable shift towards integrating AI, robotics, and autonomous systems into defense operations. The record-breaking funding highlights the critical role technology plays in national and international security landscapes. #DefenseTech #InnovationInSecurity

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Batteries, software to make music, genetically engineered seeds: These were the innovations made in Massachusetts that in 2024 scored the biggest bucks from venture capitalists. #Boston #tech #news #massachusetts #vc #deals #venturecapital #funding #fundingalert #fundingnews

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This week, I explore the idea that startups = chaos. While good luck always seems to be present on the deck of the Good Ship Success when startups strike it big, that’s never the whole story. There are many patterns that can be discerned from the experience of top venture-backed companies, according to Index Ventures partner Martin Mignot, who led a research project on 200 standout examples. “We kept on getting asked the same questions and the main topic was the team. ‘Who do I hire next and at what level and in what role and how do I organize them?,’ ” said Mignot. Index addressed those questions in “Scaling Through Chaos: The Founder’s Guide to Building and Leading Teams From 0 to 1,000." “Regardless of the size of the team—it can be 10 employees or 1,000—founders will spend the same amount of time, just about 50%, on people,” Mignot said. “In the early days it is all about hiring and onboarding. Later on it’s all about organizing the team, and all of the process around that. What stays constant is the amount of time you spend on people matters.” Some highlights: --Regardless of the size of a startup, founders should expect to spend about 50% of their time on people-related matters. --Learn to value performance over loyalty. As the company grows, it’s natural to bring in new people with different skills and most of the original early team members will leave. --At the start, it’s best not to hire too many executives, who can be expensive and difficult to recruit. --In the early days, avoid the temptation to lavish inexperienced team members with inflated titles. Down the road, they may end up working for more senior leaders who will need those titles. Cloud security upstart Wiz credits much of its record growth to knowing how to complement the skills of the founders. Technology and sales came naturally, but it quickly became clear that it struggled with marketing. Part of the problem, CEO Assaf Rappaport said, was his own lack of expertise in the discipline. His solution was to tap Raaz Herzberg, the company’s VP of product, as the next leader of marketing, he told Index partner and Wiz board member Shardul Shah at the Scaling Through Chaos launch. While cybersecurity marketing often focuses on themes such as threats and vulnerabilities, Herzberg favored a lighter and more creative approach While many startups continually push themselves to grow faster, Rappaport said he faced the opposite challenge. Wiz was growing so fast, it was difficult to understand that it actually wasn’t at the upper bound of what it could achieve. So Wiz named Dali Rajic of ZScaler, to be its first COO and president. “He’s exactly the sort of person who would know, ‘Hey Assaf, you’re not at your limit,’ ” Rappaport said. “ You’re so far from that. We can continue building, trust me.’ ”

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Interesting piece from Marc Andreessen on how startups are not getting the regulatory support they need to sustain America's technological leadership. "Regulatory agencies have been green lit to use brute force investigations, prosecutions, intimidation, and threats to hobble new industries, such as Blockchain. Regulatory agencies are being green lit in real time to do the same to Artificial Intelligence." While many investors themselves (both in the US and Europe) are worried how AI will change our lives, our jobs and social interactions, the top VC opinion leader thinks regulation is already too restrictive. #techstartups #techleadership #strategicgrowth

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🗞️ Breaking News: Red Ventures Selling CNET at a huge Loss❗️ Context: Red Ventures, the privately held digital media and marketing juggernaut based in Fort Mill, South Carolina, is selling CNET, one of the largest tech publishers on the web, to Ziff Davis for just $100 million. For context: Red Ventures bought CNET for approximately $500 million. Reason for the Sale: Total traffic to CNET has dropped by a staggering 50% over the last three years. The main driver behind this decline is a 68% drop in organic traffic (loss off Google rankings and traffic). Tables turned: This sale is a stunning turn of events for CNET, which once bought Ziff Davis (then a tech magazine firm) in a deal worth roughly $1.6 billion - more than two decades ago. Catch Up: - Ziff Davis trades publicly with a market value of $1.94 billion. The company lost about half of its marketcap over the course of the last 48 months. Strategic rationale: If Ziff Davis is able to ink a content licencing deal with Google, Bing/Microsoft or ChatGPT (or else e.g. X.AI) - like Reddit did - it might turn out to be a very smart deal …

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U.S. Election Security & Integrity Hans von Spakovsky from The Heritage Foundation joined This Week in Startups to discuss election security, integrity, and current challenges. Key Points: - The Heritage Foundation has a curated collection of almost 1,600 verified cases of election fraud over 40 years, focusing on proven incidents where individuals were convicted or elections were overturned. - Hans discusses how many potential cases of fraud go unprosecuted, either due to lack of referral by election officials or local DAs not pursuing charges. - Hans highlights European practices like voter ID requirements and stricter absentee ballot policies as models for improving U.S. election integrity. - The conversation then dives into how tech could streamline voter roll updates and enhance election security, but notes challenges with state-level tech adoption.

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Are we building too much supply side infrastructure for AI? Will revenue ever catch up? I discussed these questions and more with Laura Chau, partner at Canaan, in episode 452 of The Full Ratchet. Tune in today to catch our full discussion. Link to the full episode is in the comment section below.

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