Alternative Investing Report - August 22, 2024

_{*as of market close August 21}

Crypto companies have entered politics in an unprecedented way, making at least $119 million worth of political donations in the first half of 2024, which represents 48% of all corporate donations in that period. Most of the money has come from the Fairshake super PAC, which often spends on messaging unrelated to crypto when attacking anti-crypto candidates. One of Fairshake’s donors, the tech billionaire Ron Conway, recently pulled his support and criticized the group for alienating Democratic lawmakers.

➨ TAKEAWAY: As the crypto industry tries throw its weight around, both parties are paying attention, with former President Trump openly courting its support, and Vice President Harris signaling her inclination toward pro-crypto policies. It shows how influential crypto companies have become, and playing both sides makes it likely that the industry will benefit no matter who wins the presidency.

When the news broke that controversial one-click checkout startup Bolt was raising $450 million at a $14 billion valuation, it set off alarm bells for many in the VC world. For one thing, earlier this year, Bolt offered investors a share buyback at a valuation of just $300 million, a 97% decline from its previous valuation of $11 billion. To now say the company - with reported annual revenue below $30 million - is worth $14 billion was surprising, to say the least. Secondly, the company would bring back former CEO Ryan Breslow, who would be compensated handsomely. Finally, it turns out that $200 million is coming from an unnamed investor and the other $250 million is in the form of “marketing credits” from a company that Bolt would then invest $10 million into.

➨ TAKEAWAY: It’s just another chapter in Bolt’s wild history. The ploy might be a convoluted way to try and buy back shares from earlier investors, who will have to buy in at the $14 billion valuation or allow Bolt to buy their shares for one cent apiece. The strategy seems unlikely to work as those same investors would have to approve the deal.

🏡 Best real estate markets: Led by McKinney, four Texas cities cracked the top 10 of WalletHub’s rankings of the best real estate markets, based on 17 different factors measuring the housing market and local economy. Affordability reigned supreme, as the top six in that measure all placed in the overall top ten.

🚀 Preventing AI copyright theft: Story, a startup that uses blockchain technology to prevent copyright infringement by AI, raised $80 million at a $2.25 billion valuation, led by Andreessen Horowitz. That a company founded in 2022 can achieve unicorn status to solve a problem that was not on anyone’s radars until recently shows how fast the space can move.

🚜 Investors crowding out farmers: The rising cost of farmland, due largely to rising investor interest, is making it more difficult for farmers themselves to acquire land and causing them to have to rent from investors. The areas of the country that have seen the highest price appreciation for farmland, have also seen the largest decline in the number of different agricultural producers.

🎨 Important AI Artwork: In some ways, the rise of generative AI has caused an existential crisis in the art world, but artists can both use AI as a tool and comment on it, as this list of 25 “essential” AI artworks shows.

🏈 Holy Grails: Sotheby’s partnership with Fanatics Collect kicks off in NYC on September 24 with an auction of forty rare sports trading cards including Tom Brady, LeBron James and Roberto Clemente rookie cards.

🚀 Medtech holding steady: In Q2, VC investment into medtech startups was $3.3 billion, a slight decline from the $3.5 billion raised in Q1, but up 3.2% compared to 2023. Overall, investment is on track to grow by 20% this year, though the number of deals is down, as the size of transactions has grown.

The post-money valuations of GenAI companies have been seeing a 1.5-2x premium when raising VC money as compared to all other software companies. Publicly traded companies with a connection to AI are trading at around twice the forward multiple of their non-AI peers. Both the public and private market are pricing in the growth potential of the industry, so expect more companies to adopt AI strategies or play up their AI capabilities to boost their valuations.