For a long time, we struggled to comprehend how the stock market functions. We know that a company’s enterprise value should theoretically be determined by expectations for its future free cash flows. But anyone who has spent time at an investment bank knows that it’s easy to manipulate a DCF to get the value you want.
In real life, stock prices sometimes feel like made-up numbers we’ve collectively decided to believe in. We used to ask our dad (a legit money manager) - if we all want to make money, why don’t we drive up the price of a given stock? We eventually learned it was more complicated than that, but held out hope that one day, retail investors would make it happen. This week, in true “13th month of 2020” energy, it finally did!
It’s probably going to take a long time to unpack how r/wsb was able to rally enough people to meaningfully move the price of $GME (and then $AMC, $BB, and others). We suspect that quarantine-induced boredom played a part - when you’re stuck inside all day, you may as well entertain yourself. And as Gen Zers increasingly buy into the “hustle mentality,” speculative stock trading seems like an easy way to make money.
However, it’s also a testament to the power of online platforms. “Niche” communities on Reddit, Discord, and Twitter have achieved things that once seemed impossible, from storming the U.S. Capitol to disproving the Efficient Market Hypothesis. And as we all spend more time online, it seems likely that significant events and movements that define our lifetimes will originate online. Ignore Internet culture at your own risk - for better or worse, the rules of society are being rewritten on the Internet!
💸 Robinhood has a rocky week. Robinhood faced massive backlash this week after halting trading of GameStop and AMC. The move raised concern from politicians on both sides of the aisle (AOC and Ted Cruz were in agreement!), who questioned whether the company was protecting hedge funds that had shorted the stocks. However, it later emerged that Robinhood made the call in order to meet the SEC’s regulatory requirements for net capital and clearinghouse deposits. The company raised an additional $1B in emergency funding to cover the deficit going into next week.
🎧 a16z doubles down on Clubhouse. Audio social app Clubhouse, which has been climbing the App Store rankings, announced a Series B this week. The company didn’t disclose round size or valuation, but Axios reports that it was $100M at a $1B post-money. The round was led by a16z, which also won a bidding war for the Series A (at a $100M valuation!) last May. Clubhouse’s user base has grown from 5,000 to 2M since then, despite the fact that it’s still invite-only. Co-founder Paul Davidson said the team will focus on helping creators monetize via grants and in-app subscriptions & tickets.
💻 Calendly raises at $3B. Scheduling startup Calendly announced its first major fundraise - a $350M round at a $3B+ valuation. Calendly scaled to $70M in annual revenue and 10M monthly users (up more than 1,000% in 2020) after raising only $550k in funding in 2014. The round reportedly includes some secondary to give liquidity to early employees & investors. While Calendly is already profitable, the company will use the remaining funds to double headcount and release more tools/integrations.
📈 IPO updates. It was a busy week for tech startups looking to go public!
Qualtrics IPO’ed on the Nasdaq and saw a 51% pop on the first day of trading. The company ended the week with a $22B market cap, a significant markup from the $8B that SAP paid to acquire it two years ago.
Roblox is delaying its IPO after the SEC raised questions about how the company recognizes revenue for some of its digital goods.
Coinbase has decided to pursue a direct listing instead of a traditional IPO.
Squarespace announced that it has confidentially filed to IPO.
In other bizarre news, digital currency Dogecoin hit an all-time high thanks to the coordinated efforts of Redditors, Elon Musk, and Tiger King’s Carole Baskin. We’re going to be honest - this one was not on our 2021 bingo card!
Dogecoin peaked at a market cap of ~$10B, up from $1B at the beginning of the week. It also set a record for the most tweets about a cryptocurrency in a 24-hour period (beating Bitcoin!). But the good times didn’t last - the coin plunged 70% on Saturday.
There’s really no rational explanation for this! The coin was created as a joke, and is now being described as “the crypto GME,” as the rally was driven by activity on Reddit’s “SatoshiStreetBets” (which describes itself as the crypto version of r/WSB).
what we’re following 👀
The New York Times explores the truth behind the “growth hacks” that claim to make your content go viral on Instagram.
A look at the brands using the “adorkable” aesthetic to target Gen Z consumers.
Greylock’s Corinne Riley explains how startups can leverage community-led growth.
Harry Stebbings breaks down Sequoia’s investment in DoorDash on a special episode of the Twenty Minute VC with Alfred Lin.
🚨 We need your help! We’re joining Mario Gabriele’s S-1 Club to do a deep dive on Bumble 🐝, which filed to go public two weeks ago.
We’re trying to gather some data on how millennials & Gen Zers use dating apps, as well as how Bumble fits into the (crowded!) landscape of options.
If you can spare two minutes, we’d really appreciate if you could fill out this quick survey - the results are completely anonymous and we’d love to get your thoughts!
hims & hers - Product Manager (Remote)
Nurx - Strategy Associate (SF, Remote)
Truework - Software Engineer (SF)
Forté Ventures - Associate (Bay Area)
LinkedIn - Associate Product Manager (Bay Area)
The Production Board - Chief of Staff (Bay Area)
DocuSign - Associate Product Manager (Seattle)
Whatnot - Ops/Customer Support (LA)
Albert - Finance Associate (LA)
Insight Venture Partners - Investment Analyst (NYC)
Metaprop - Principal (NYC)*
NextView Ventures - Platform & Ops Associate (NYC, Boston)
*Requires 3+ years of experience.
Utmost - Marketing Intern (SF, Remote)
Curology - Product Development Intern (SF)
Unity - Business Ops Analyst Intern (SF)
DocuSign - Product Manager Intern (SF)
Emerson Collective - Summer Interns (SF, DC)
Wealthfront - Data Science Intern (Palo Alto)
Founder Collective - MBA Associates (Boston)
The Motley Fool - Summer Venture Fund Intern (Alexandria, VA)
Divergent Capital - Fellowship (Washington DC)
Two Sigma Ventures - Summer Intern (NYC)
Samsung Catalyst Fund - MBA VC Intern (NYC)
Vice Ventures - Summer Data Analyst (NYC)
puppy of the week 🐶
Meet Roo, a five-month-old mini labradoodle that lives in New York City!
Roo enjoys exploring Central Park, chewing on anything her parents haven’t taken off the ground, and playing with every puppy she meets on the street!
Hi! 👋 We’re Justine and Olivia Moore, identical twins and venture investors at CRV. Thanks for reading Accelerated. We’d love your feedback - feel free to tweet us @venturetwins or email us at email@example.com.