Steve Bennet

Excited to announce our investment in Alta Resource Technologies alongside Leonardo Banchik (Voyager Ventures) with participation from Orion Resource Partners, Overture Ventures, and WovenEarth Ventures. Rare earths are critical in products from magnets to ceramics and it's important for the US to develop its own supply chain. While the US has some of the best rare earth resources, separating them has historically proven expensive and environmentally unfriendly. Alta through it's computationally designed and optimized proteins allows the US to bring back rare earth production with a cleaner, lower capex, and lower opex solution - and that's just the beginning. Congrats to Nathan Ratledge and the entire Alta team. Read more here: https://lnkd.in/gbGnAJn3

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Friends, Q2 was a quarter of progress and learning for us at HawkTower, where we invest in early-stage startups applying breakthrough computing technologies to maximize California's natural resource markets. Our focus is on technology-enabled interventions (e.g., AI-enabled geospatial radars for lithium-ion batteries in the waste stream) for critical, market-level imperatives (e.g., disaster prevention) that can drive rapid commercial adoption (e.g., placed on every recycling truck in the world). Our current investment priorities are: - Agricultural productivity and efficiency - Biomanufacturing - Labor and mobility automation - Waste stream optimization and decarbonization - Disaster prevention and management Here’s a snapshot of what we’ve been up to: Milestones and Investments: - In late April, we officially launched our fund, filing with the SEC. Yay. - By June, we completed our first fund close ahead of schedule, with backing from family offices, foundations, high-net-worth individuals, and organizations aligned with California's future. - Our portfolio now includes three early-stage investments (Farm-ng, Agriful Software, and Nexstera Tech). Strategic Partnerships: - We believe that startups operating closer to their customers and resources, especially in agriculture and biomanufacturing, have a strategic advantage. For instance, the Salinas Valley, a major agricultural hub, is less than an hour from Silicon Valley and serves as a center of thought leadership in the convergence of agriculture and AI (from Western Growers, Taylor Farms, and others). - Similarly, the North San Joaquin Valley is emerging as a biotech and agtech innovation hub, and we are proud to support BEAM Circular, a startup hub for the circular bioeconomy. Key Relationships: - Karen Warner, CEO of BEAM Circular, joined HawkTower as a strategic advisor. - Jackie Cruz, Ed. D. Cruz, Hartnell College’s VP of Advancement, advises on Salinas Valley and workforce development. - Ben Palone from Western Growers, with his technical background in agriculture, became a trusted advisor. - Matthew Hoffman from Driscoll's Global R&D team provides insights on global agriculture, product positioning, and investment strategy. - We collaborated with Monterey Bay DART for workforce development and automation in agtech. - Dominic Milano and the Milano Technical Group from Merced collaborated on key initiatives and advised us on investments. - HawkTower is participating in Santa Cruz Works's accelerator cohort as a mentor and advisor. Thank you Doug Erickson. - We published an overview of entrepreneurship across the UC system with input from across the University of California system. Moving into the fall, we remain deeply committed to supporting founders shaping California's future natural resource markets. Stay tuned and be in touch! : ) Db

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Having a Cars and Capital event tomorrow in Southern California with Oren Klaff. If you want to join message me. https://lnkd.in/gDQ4D39u Oren Klaff Bridger Pennington #InvestorEvent #FamilyOffice #InvestmentOpportunity #CarlsbadEvent #PrivateEquity #WealthManagement #InvestmentConference #CapitalRaising #NetworkingEvent #IndustryLeaders #FinancialGrowth #InvestorsMeetup #WealthBuilding #BusinessGrowth #InvestmentForum

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The Cynicism of It All: The Domino Effect of Impunity If such behavior is allowed to persist unchecked, what message does it send to other aspiring corporate puppeteers? Will Singapore become a haven for those seeking to exploit loopholes and manipulate the system for their own gain? Will the pursuit of justice become a Sisyphean task, reserved only for those with the deepest pockets and the strongest resolve? Let's not forget the grand HC spectacle, a legal drama worthy of Shakespeare himself. It's a tale of convoluted claims and counterclaims, a labyrinth of procedural maneuvers designed to confuse and confound.  The irony is palpable. The very individuals who claim to be champions of corporate governance and minority shareholder rights are the ones actively undermining those principles. They're playing a game of legal chess, where the pieces are not pawns and knights, but the livelihoods and reputations of those who dare to question their authority. https://lnkd.in/eJ9hGQmw

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I find it hard to believe that with millions of EVs entering the market and the proliferation of AI compute that PGE is actually going to have excess capacity in 2040 without any additional generation from 3rd parties. I am also curious if there are enough transmission lines and if PGE views that as someone else’s problem. Maybe they are planning on AI and ACTUAL figuring it all out! https://lnkd.in/gybsMmaw

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B-School Blather Can’t Beat Real-World CEO Know-How "What’s needed is a new management theory that avoids both the deceptive certainties of neoliberalism and the equally deceptive vagaries of stakeholder capitalism. But where can we find the material for such a rethinking? Not in the great US business schools, which are either stuck on hold in stakeholder land or determined to replace the vague rhetoric of stakeholder capitalism with the even vaguer rhetoric of “corporate purpose.” Not in management consultancies such as McKinsey, which is engaged in a vast exercise in woke-washing over its role in corporate scandals. And not in the great US IT companies, which operate according to the idiosyncratic rules of the information economy (give away services to your users while selling user information to advertisers). Instead, I am increasingly persuaded that the answer lies in talking to hard-headed CEOs who run first-class companies in unglamorous bits of the real economy." #corporategovernance #governance #boardsofdirectors #shareholdervalue #management #institutionalinvestors

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LP Tip #20 out of #50: To re-up or not to re-up A re-up refers to an LP making an additional investment in a fund where they previously invested. Before we dive in I want to share that there are reasons an LP may not to re-up which are not in your control. Here is a short list: ➡️ The LP may have evolved their strategy and needs to scale back the #️⃣ of funds they invested in.   ➡️ The LP was never set up to re-up in the first place. ➡️ The LP could be an individual that found themselves in a cash crunch and overly exposed to venture.  I'm assuming that when you got your investment that the LP explicitly told you they do re-ups. Please do not assume they do. My expectation is also that the LP dug in to properly underwrite the fund. 🏴 Re-ups are not automatic. An LP will have to re-underwrite each fund. The speed of the re-up also depends on how much work was done in the initial investment, who led the investment, level of confidence there existed when that investment was done, and current pipeline of funds. There are 4 flags that may cause an LP to walk away. 1️⃣ Partner Breakups/Changes and Team Turnover:  The biggest risk in Partnerships are whether the Partners will stay together. One LP gave me a framework on how to think through this issue that has stuck with me. Partnership is like a marriage. If one feels there is potential for a breakup, does one believe it will be an amicable breakup? Or, does one believe the spouses will never talk again? If it is an amicable split that is manageable. The Partners can find a way to support the fund. Then the question becomes whether the LP wants to back the Partner/s that remain.  If there is high team turnover. The LP will want to investigate because team stability is used as a proxy for firm sustainability and ability to scale. 2️⃣ Fund Does not Execute on what they Sold the LP:  The LP “bought” something specific and typically it is because they were missing this strategy or wanted exposure to a strategy for the portfolio they were constructing. An institutional LP will invest and write a detailed investment memo flagging all the things you said you were going to do and then go back and compare when you come back to ask for money. If for example you pitched a generalist seed stage fund and you show up asking for money sharing that you invested in deeptech at A that will cause alarm. The same can be said for the number of companies you promised to invest in or check sizes you wrote. If there are big differences LPs will want to know why. 3️⃣ Bad Actions  The fund manager/s does something that is unethical. This is a no go for an LP.  What if the situation is not clearcut? This is different for everyone and requires discussions b/w GP and LP, but most LPs don't want headline risk. 4️⃣ Continuous Underperformance  If it's early days an LP will look at some key indicators to see how you are progressing over time.

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If you work in tech transfer this is a good read-in on how our diligence tech can assess and evaluate assets with minimal inputs. The best way to learn more is to see it live! Reach out to me directly to learn more!

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Here’s a question investors are often asked: When evaluating early stage companies, how much time do you spend on due diligence around future exits? It’s not surprising we hear this question a lot. Also not surprising: it’s got a wide range of answers depending on the firm. Some don’t spend much time here at all. Others make it a point to put meaningful time in as part of their process. Our current thinking: take the time to do the work on public market comps. At Alpaca VC, we spend significant time understanding how public market investors will  realistically value a business based on margin profile, product, business model & TAM. In short, we want to know: how will this company be valued at scale when we get taken out? Yes, we can acknowledge that the journey toward exit is a windy road and that there may be pivots along the way, but there are still public market companies that have a business model similar to the early stage company you're evaluating. And you can always look at gross profit multiples if you think the margin profile will change over time. So we still do the work on the comps. Quantitative metrics we look at when making the comparison to public market comps include EBITDA multiple, revenue multiple, Gross Profit multiple or all of the above. As part of this process, it’s also important to factor in the public market company’s year-over-year revenue growth as this will also significantly impact the multiple it trades at. Simple example: if you have two public market companies with similar business models and similar margin profiles, but one's growing 100% year over year, and one's growing 50% year over year, then obviously the DCF (discounted cash flow) analysis is going to spit out a very different valuation for the one that's growing faster. Why this matters: When you take all of that information into account as you evaluate an early stage business, you can begin to create a realistic picture of how this company will be valued in the public markets at exit - or how an acquirer will value the company for an acquisition. Strategic acquirers may, of course, pay a premium, but we won’t underwrite for that. This allows us, for example, to form conviction around valuation based on revenue and gross profit predictions. If we think they can do $100M of revenue five years from now, we use this diligence process to form a thesis about whether the characteristics above (product, margin, business model, etc.) will cause the company to be valued at $200M vs. $500M vs. $1B at exit. Curious how other early stage investors think about underwriting an exit and how much time they’re spending on public market comps even though these companies are in their infancy.

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We (Climate VC) need to stop making excuses for the growth trajectories of our companies There’s a reason why Matthew Stotts and I chose the venture capital asset class to focus on - it has to GROW fast. And there are a lot of fast-growing, money-making opportunity areas with huge problems that could benefit from highly motivated well-funded and skilled teams looking to build a large company. If you need to make an excuse or caveat for any of the statements in the previous paragraph, you’re in the wrong asset class The good thing about VC is it grows fast and BIG. The clock is ticking on our biggest problem areas - let’s get to work!

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During yesterday's LibreQoS APNIC webinar, I posed the question: won't more bandwidth solve these problems? As Herbert Wolverson said, yes, more bandwidth is good, but, still these problems remain if queueing is done incorrectly. Here's my take on why bandwidth alone is not as good as bandwidth + good queueing policies: Generally it was believed that 'data is important, so don't throw it away; hang on to it and send it later'. In practice, this has proven to be suboptimal as two issues may emerge: 1) latency increases for some flows due to heavy demand from other flows using the same bottleneck link, 2) even a single flow can have excessive latency due to aspects of typical TCP behavior (referred to bufferbloat) when the buffers grew large enough that the data being buffered was retransmitted anyway. It turns out that not all data is equally important. Active Queue Management is the art of deciding priorities, both in deciding what data to throw away, but also in allowing some later arriving data to be transmitted ahead of data in another connection that arrived before it. These problems have been studied, and good solutions have been found by using certain queueing policies in routers and switches, referred to as “fq_codel’ and “cake”. These track the different flows not by classifying the data, but by watching the behavior. Flows that send relatively little data (DNS lookups), or at a measured pace (video chat) have priority over flows that send a lot of data as quickly as possible (App and System updates, Video and ISO downloads).

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I recently saw this metric from Carta’s 1Q24 VC Fund Report, which is very concerning. DPI... is nowhere to be found in earlier vintages that probably should start showing DPI. Funding early-stage projects is great, but ultimately, these venture dollars need to exit their investments and pay back their limited partners. That’s where the metric Distributed to Paid-In Capital (DPI) comes in. While managing a fund, we get interim measures during the life of the fund (e.g. IRR, MOIC), but ultimately, “you can’t eat IRR.” If you want to build a lasting venture capital organization, you need to start showing DPI for your fund. Keep in mind that this is traditional VC data from Carta, and is not strictly crypto venture. Crypto venture tends to get liquidity earlier (tokens) and things tend to go parabolic sooner (faster, more unicorns) - but I’d wager that the data here is somewhat similar for Crypto VCs… Not as much DPI as there should be from these earlier vintages. Read the full article, as well as a recap of all the crypto fundraising rounds for August, here: https://lnkd.in/g3eVJ-iF

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Introducing the 2024 LA Hard Tech 50! 🚀 The momentum has become unstoppable for the ecosystem of entrepreneurs and engineers building in the hardware industrial ecosystem in Southern California. The story goes back over 100 years to the days of early aviation pioneers Glenn Martin, Allan Lockheed, Jack Northrop, and Howard Hughes, and to the founding of the Jet Propulsion Laboratory just before World War II. The macroeconomic, geopolitical, and technological tailwinds have been brewing for years, and the talent pool that accumulated in the legacy primes and subs became a tinderbox, where SpaceX served as a match and lit the industry on fire. The Algorithm, hardcore work ethic, and sense of responsibility and ownership instilled in SpaceX engineers built a uniquely entrepreneurial culture that is churning out new startup founders, and we’re now seeing second-order centers of excellence like Anduril and Hadrian. New startups are being founded almost every week in LA across space, defense, manufacturing & industrial automation, and energy & critical resources. The list was harder to write this year as the ecosystem has grown. The 2024 LA Hard Tech 50 includes 30 companies that were on last year’s list, and 20 new entrants who made a big impact this year. Nick Kim and I also give shout-outs to 5 key ecosystem builders and 10 exceptional operators in the community. There’s also a link to a more comprehensive Airtable list and a map of the companies. Let us know who we missed!

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Key takeaways from VC Goat - Vinod Khosla podcast. - The firm cares more about working on interesting problems with large technical solutions rather than just maximizing IRR. The team is there because they believe in the mission. - Khosla assumes they've lost the money the day they invest, and then maximizes for the upside opportunity. He calls it "option value investing" rather than IRR investing. - Khosla has contrarian bets in AI (neuro-symbolic computing, probabilistic approaches), biotech, robotics, crypto, and more. - He believes aviation fuels, fusion energy, new transit systems, and other contrarian areas ignored by most investors will be huge opportunities. - Most large innovations come from outsiders, not industry insiders. Khosla looks for founders who can learn a business rapidly rather than have deep domain expertise. The Future Impact of AI - AI will be deflationary and increase productivity growth to 4% annually vs the typical 2% forecast. This will cause great abundance but also increasing income inequality. - Bipedal robots will take over most manufacturing and manual labor jobs within 20-25 years. This will free humans to be more creative and pursue their passions. - Education will shift from job training to creativity. Uniquely human elements like taste and curation will be most valued in an AI-enabled world. https://lnkd.in/gqBsmbks

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WAYMO -- WAYCOOL or GHOST RIDER? If you preside in San Francisco, Santa Monica or Phoenix you are now seeing driverless Waymo taxies making their way through town on an ever-increasing basis. The network is expanding, and I can honestly say that in the Santa Monica / West Los Angeles area I have not driven anywhere in the last two months without seeing one of them on the road every time. In fact, sometimes they are so prevalent that there might be three in a row waiting at a stop light. It still is kind of spooky seeing cars moving around with no driver, or anyone for that matter, in the front seat. It's not exactly the same as the Headless Horseman but it does conjure up that image in my imagination. I have not taken a ride in one, but several family members have and report their satisfaction. Waymo is a division of Alphabet (GOOGL). I have not seen any visible evidence of General Motors (GM) Cruise vehicles which I understand are still being road tested, while Tesla (TSLA) has been projecting their autonomous vehicle vision for some time. For now, Tesla seems to be behind but that could change quickly. GM is likely to use their own branded vehicles, and it would seem that Tesla will likely do the same. However, Waymo technology could be outfitted on any cars. That seems like a big advantage, staying out of the car business and just being like the "Intel/Microsoft" inside personal computers which is a much higher margin business. There has been a lot of noise in the business journals and chat rooms about a Waymo initial public offering but nothing from Alphabet itself. They recently concluded a $5.6 billion investment round; see TechCrunch post below. The autonomous race is on, and it will be expanding rapidly from here on out. I just wonder if we will ever see an autonomous police vehicle stop a wayward autonomous taxi and write it up for some violation as yet unknown. Will traffic school be an option? #waymo, #autonomousvehicles, #selfdrivingcars, #GM, #Generalmotors, #tesla, #Investing, #business,

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🚨 California Bill AB-3129: A New Era for Health Care Transactions? 🚨 Thanks for the detailed note: Kathryn Edgerton, Deborah Daccord, Karen S. Lovitch The recently introduced California Bill (AB-3129) aims to curb the price increases and lower service quality often linked to such acquisitions. Key Highlights: 🔸 Mandatory Reviews: Private equity groups and hedge funds must notify the AG 90 days before any transaction involving a health care facility or provider group. The AG can extend this period by 45 days, potentially delaying transactions. 🔸 Conditional Approvals: The AG can grant, deny, or impose conditions on transactions if they are likely to have anticompetitive effects or significantly impact access to health care services. 🔸 Prohibitions on Management: The bill restricts physician and psychiatric practices from entering management agreements with private equity or hedge fund-controlled entities. Impact on Digital Health Adoption: The increased scrutiny could slow down the adoption of digital health solutions, as transactions involving tech investments may face delays and additional costs. However, it could also ensure that such innovations prioritize patient care over profit. Cost of Healthcare Provision: While the bill aims to control costs, the additional administrative burden and potential delays might increase operational costs for health care providers, which could be passed on to patients. Consolidation by PE Firms: The bill could deter private equity investments, slowing down the trend of consolidation in the health care sector. This might benefit smaller, independent practices but could also limit access to capital for necessary upgrades and innovations. 🤔 Should Other States Follow? While California's approach aims to protect patients from the negative impacts of unchecked acquisitions, it also introduces significant regulatory overhead. Other states should consider the balance between oversight and operational efficiency, learning from California's experience. This bill is a double-edged sword: aiming to protect patients but risking increased costs and delayed innovation. Other states should watch closely to determine the best path forward. #HealthcareReform #DigitalHealth #PrivateEquity #HealthCareInnovation #CaliforniaLegislation

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Once upon a time, in the hazy, radiation-tinged dawn of the nuclear era, scientists and politicians alike were positively giddy with atomic enthusiasm. They threw parties with radioactive cocktails (probably), designed cars that looked like they belonged in a Jetsons episode (the Ford Nucleon, bless its impractical heart), and dreamt of a world where electricity would be "too cheap to meter." Move over, Big Oil, there was a new, infinitely more explosive sheriff in town. Then, like a party crasher nobody invited, came the buzzkills: those pesky "costs" and "safety concerns." Turns out, building giant, complex machines that harness the power of the atom is a tad more expensive than, say, setting up a lemonade stand. And who knew that splitting atoms could be, dare we say, a smidge dangerous? The dream started to unravel faster than a cheap sweater in a centrifuge. Costs ballooned to astronomical heights, construction times stretched longer than a politician's promise, and the public started to get a little nervous about having a potential Chernobyl next door. Suddenly, those "irrational fears" of meltdowns didn't seem so irrational after all. Our intrepid nuclear knights, the Atomic Energy Commission (AEC), bless their optimistic souls, tried their best to keep the dream alive. They churned out reports predicting a nuclear-powered future, even as their regulatory ratcheting and bureaucratic snafus were choking the industry they were meant to nurture. It was like watching a doctor frantically pumping adrenaline into a patient while simultaneously tightening a tourniquet around their neck. Then came the cinematic omen: "The China Syndrome," a film that, coincidentally, mirrored the growing public unease. And, as if on cue, Three Mile Island decided to have a little "whoopsie" just days after the movie's premiere. The public's reaction? Let's just say it wasn't a standing ovation. Chernobyl, years later, was the final, devastating nail in the coffin. Fast forward to today, and the once-mighty atom is looking a bit like a has-been, a faded rockstar playing to half-empty stadiums. New nuclear projects are about as common as unicorns, and those that do get off the ground are often plagued by the same old demons: delays, cost overruns, and the lingering fear of turning the local landscape into a glowing green wasteland. Meanwhile, those upstart renewables, once dismissed as hippie pipe dreams, are having the last laugh. Solar panels are popping up like daisies, wind turbines are gracefully pirouetting across the countryside, and the price of clean energy is plummeting faster than a lead balloon in a vacuum. They even have advantages that make nuclear look positively archaic: no radioactive waste, no potential for meltdowns, and, best of all, they don't require an army of bureaucrats to approve every nut and bolt. https://lnkd.in/eYbqbsPj

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118 VCs (one hundred eighteen!) are gathering in San Diego next week - to meet with 30 SD startups. But it's so MUCH bigger than just those 30 co's. It brings VCs back - when they see quality companies. It helps those who are next-in-line and adjacent. It enables us to send deal flow all year 'round. It attracts talent and other companies. It inspires entrepreneurship. Connect is working for SD. Together, we're building the best damn innovation ecosystem on the planet. Year over year. Five.Ten.Thirty.

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