The Briefing by Martin Peers, Jessica Lessin and the team at The Information

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The Briefing

By Martin Peers, Jessica Lessin and the team at The Information

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Recent Editions

Photo by FTX Arena.

From Voyager to Miami, FTX Implosion Leaves Crypto World in Limbo

By Maria Heeter, Aidan Ryan and Akash Pasricha · Nov 10, 2022 12:45pm PST · 1 comment

The near-collapse of Sam Bankman-Fried’s crypto empire, FTX, has sent shockwaves across the crypto industry, leaving many firms with ties to Bankman-Fried in limbo. Most notably, Bankman-Fried was poised to buy up the assets of bankrupt crypto lender Voyager, but while that agreement was announced in September, it hasn’t closed.... The near-collapse of Sam Bankman-Fried’s crypto empire, FTX, has sent shockwaves across the...

Art by Mike Sullivan

Modest Proposals

From Theranos to FTX: Silicon Valley’s ‘No Additional Work Required’ Late-Stage VC Culture and What to Do About It

By Sam Lessin · Nov 10, 2022 12:20pm PST · 18 comments

First, two caveats: I have invested in two outright frauds in my life (to my knowledge) and lost in total a few million dollars on them. At the seed investment stage, losing around 1% to things that turn out to be frauds probably says you’re being innovative. I pick on Marc Andreessen for his “no additional work required” line,... First, two caveats: I have invested in two outright frauds in my life (to my knowledge) and lost...

Photo by Bloomberg.

FTX’s Bankman-Fried Quietly Invested More than $500 Million in Sequoia and Other VCs

By Kate Clark · Nov 10, 2022 11:53am PST · 3 comments

FTX founder Sam Bankman-Fried was not only a tireless fundraiser from venture capital firms including Paradigm and Sequoia Capital, but also quietly made investments in those same funds, according to two people familiar with the matter. The unusual moves show how entangled Silicon Valley VC firms are in Bankman-Fried’s collapsing crypto... FTX founder Sam Bankman-Fried was not only a tireless fundraiser from venture capital firms...

Coinbase headquarters in San Francisco. Photo by Getty.

Coinbase Is Cutting More Jobs

By Aidan Ryan · Nov 10, 2022 10:45am PST

Coinbase headquarters in San Francisco. Photo by Getty.

Coinbase Is Cutting More Jobs

By Aidan Ryan · Nov 10, 2022 10:45am PST

Coinbase is laying off staff in a fresh round of cuts, a company spokesperson confirmed. The layoffs, announced internally on Thursday, affect the company’s recruiting and institutional onboarding teams. The cuts come as the broader crypto industry is reeling from the high-profile struggles of the FTX crypto exchange, which have... Coinbase is laying off staff in a fresh round of cuts, a company spokesperson confirmed. The...

Art by Shane Burke/Shutterstock

TikTok’s Secret Weapon Has Always Been Audio

By Ryan Broderick · Nov 10, 2022 9:00am PST · 2 comments

There have been whispers all summer that some kind of stand-alone audio app is coming from TikTok. In May of 2020, TikTok launched a social music app called Resso in Brazil, Indonesia and India. Then in late July, Insider reported that the company had filed a trademark for “TikTok Music,” which would allow users to “purchase,... There have been whispers all summer that some kind of stand-alone audio app is coming from...

ServiceTitan's co-founders Ara Mahdessian (left) and Vahe Kuzoyan. Photo by ServiceTitan.

ServiceTitan Held Talks to Raise Money at 20% Valuation Cut

By Maria Heeter · Nov 10, 2022 7:00am PST

Software startup ServiceTitan, which about two months ago was trying to raise $900 million in a form of pricey debt-like funding, is going a different route—one that involves a different kind of pain. The company has held talks within the last few weeks to raise about $600 million in traditional equity from investors including TPG, at a... Software startup ServiceTitan, which about two months ago was trying to raise $900 million in a...

CEOs Mario Schlosser of Oscar Health, David Baszucki of Roblox, Tony Xu of DoorDash and Vlad Tenev of Robinhood (left to right) received "mega grants" of stock, but are far from realizing any of the shares. Photos by Bloomberg and Getty Images. Background created with DALL-E 2.

These CEOs Wanted to Be Paid Like Musk. They Failed

By Cory Weinberg · Nov 10, 2022 6:00am PST · 4 comments

Elon Musk became the world’s richest person in part through a controversial pay plan four years ago that awarded him millions of additional Tesla shares as the company’s valuation swelled. Other tech CEOs took note. Many executives taking their companies public in the years following reached for similarly massive deals. But it... Elon Musk became the world’s richest person in part through a controversial pay plan four...

Photo by Bloomberg.

What Tech People Should Learn From This Era of Excess

By Martin Peers · Nov 9, 2022 5:00pm PST

Photo by Bloomberg.

What Tech People Should Learn From This Era of Excess

By Martin Peers · Nov 9, 2022 5:00pm PST

Tech people love to talk about their “learnings” (presumably because they think that term sounds more innovative than “lessons.”) And tech folks sure have learned a lot of learnings this past week, particularly about assessing future growth and being more careful with how they spend money. That applies both to venture investors, a few of whom... Tech people love to talk about their “learnings” (presumably because they think that term sounds...

Photo by Bloomberg

The (Swift) Rise and Fall of the FTX Empire

By Aidan Ryan · Nov 9, 2022 4:40pm PST · 1 comment

It’s often casually thrown around that crypto moves faster than other industries. That has never been more evident than it was over the past few days.In case you’ve been living under a rock, Sam Bankman-Fried’s FTX crypto empire has fallen. On Tuesday, the world’s largest crypto exchange, Binance, signed a letter of intent to acquire FTX, a... It’s often casually thrown around that crypto moves faster than other industries. That has never...

Former U.S. Secretary of the Treasury Larry Summers. Photo by Getty.

Subscriber Conversation

Larry Summers Compares the Surge of Pain in Tech to the Dot-Com Bubble

By Jessica E. Lessin · Nov 9, 2022 4:08pm PST · 9 comments

Former U.S. Secretary of the Treasury Larry Summers has a tough message to Silicon Valley and technology companies and investors ravaged by the downturn: “Part of it is not coming back.” In a private conversation Wednesday with The Information subscribers, Summers talked through the confluence of events that has brought Silicon... Former U.S. Secretary of the Treasury Larry Summers has a tough message to Silicon Valley and...

Meta’s Layoffs Hit Instagram, Facebook and Reality Labs—WhatsApp Less Affected

By Sylvia Varnham O'Regan · Nov 9, 2022 3:08pm PST

It was a chaotic day for Meta Platforms employees, who woke up to an early-morning email from CEO Mark Zuckerberg telling them that the company would be laying off 13% of its employees, or 11,000 people. What came next was an anxious wait for the next email, which came a short time later, telling them whether they were among the unlucky ones. ... It was a chaotic day for Meta Platforms employees, who woke up to an early-morning email from CEO...

David Baszucki, CEO of Roblox. Photo: Bloomberg

Roblox’s Bright Spot; Cameo and Meta Layoffs; The Creator Founder Rising at Twitter

By Mahira Dayal · Nov 9, 2022 3:06pm PST

David Baszucki, CEO of Roblox. Photo: Bloomberg

Creator Economy

Roblox’s Bright Spot; Cameo and Meta Layoffs; The Creator Founder Rising at Twitter

By Mahira Dayal · Nov 9, 2022 3:06pm PST

Roblox said Wednesday that its core businesses in the U.S. and Canada have surpassed their peak levels during the pandemic, and sales of its digital currency Robux—its main source of revenue—have rebounded 10% after two straight quarterly drops. But that wasn’t enough to soothe investors who focused on the gaming platform’s net loss of $297.8... Roblox said Wednesday that its core businesses in the U.S. and Canada have surpassed their peak...

Art and animation by Clark Miller. Photo of Twitter building by Matthew Keys/Creative Commons.

Flying the Coop

‘It’s Difficult to Resist’: Surviving Twitter Employees Weigh a Flood of Offers From Rivals

By Chris Stokel-Walker · Nov 9, 2022 1:34pm PST · 2 comments

Days after Elon Musk fired half of Twitter’s workforce last Friday, one employee who escaped the cuts started receiving LinkedIn messages. The employee, a veteran engineer, said he received 40 messages from recruiters in the last week, from a variety of companies operating in a range of fields—artificial intelligence and machine learning,... Days after Elon Musk fired half of Twitter’s workforce last Friday, one employee who escaped the...

Esther Crawford. Photo via YouTube.

To Succeed in Musk’s Twitter: Embrace the Chaos

By Becky Peterson and Kaya Yurieff · Nov 9, 2022 7:00am PST · 4 comments

One of the Twitter managers Elon Musk met with as he completed his purchase of Twitter last month was Esther Crawford, a product manager who had previously overseen projects aimed at helping creators make money on Twitter. The two had a one-on-one discussion about the company’s future—including ways of generating more revenue from... One of the Twitter managers Elon Musk met with as he completed his purchase of Twitter last month...

Tiger Global's leaders Chase Coleman, left, and Scott Shleifer. Photos by Bloomberg

Tiger Global Reduces Value of Private Tech Bets by Billions, Documents Show

By Erin Woo · Nov 9, 2022 5:00am PST · 4 comments

Hedge fund Tiger Global Management invested at least $19 billion in private tech companies in the past 19 months, an astonishing pace in a period in which startups’ valuations were at or near a peak. As tech stocks crumbled this year, cutting the value of Tiger’s public stock holdings by half, the firm also marked down the value of... Hedge fund Tiger Global Management invested at least $19 billion in private tech companies in the...

Sam Bankman-Fried. Photo by Bloomberg.

Sam Bankman-Fried’s Late-Night Move and How the FTX House Crumbled

By Jessica E. Lessin · Nov 8, 2022 5:02pm PST · 4 comments

Sam Bankman-Fried. Photo by Bloomberg.

Sam Bankman-Fried’s Late-Night Move and How the FTX House Crumbled

By Jessica E. Lessin · Nov 8, 2022 5:02pm PST · 4 comments

Late last night, Sam Bankman-Fried sent a message he never thought he would send. He reached out to rival Changpeng Zhao, known as CZ, CEO of crypto trading platform Binance and asked him if he would buy—and save—FTX, a person close to the deal told me. By early in the morning Pacific time, he had his answer. He would be selling his startup,... Late last night, Sam Bankman-Fried sent a message he never thought he would send. He reached out...

Photo by Bloomberg.

FTX Venture Investors Fear Total Wipeout in Binance Rescue Deal

By Kate Clark, Aidan Ryan and Akash Pasricha · Nov 8, 2022 2:47pm PST · 23 comments

Binance’s planned bailout of rival crypto firm FTX has blindsided the exchange’s venture investors, who are now worried about their investments getting wiped out completely in the deal. Four of FTX’s backers told The Information that the fate of their equity stakes remained unknown, and that they were still trying to figure out... Binance’s planned bailout of rival crypto firm FTX has blindsided the exchange’s...

Photo: Bloomberg

Creator Economy

The Days of NFT Royalties May Be Numbered; Bankman-Fried’s Twitter Influence; Who’s Using Mastodon?

By Mahira Dayal · Nov 8, 2022 2:10pm PST · 1 comment

Traders: 1. Creators who earned money by turning their art into non-fungible tokens: 0. Previously, those creators received a cut every time their NFT was sold—often between 5% and 10% of the sale price. But more recently some marketplaces have removed the requirement to pay royalties on NFTs. Traders love getting more for less, and no... Traders: 1. Creators who earned money by turning their art into non-fungible tokens: 0. ...

Art by Shane Burke

To Fix Social Media, Give Us a Reason to Behave

By Ali Partovi · Nov 8, 2022 9:00am PST · 17 comments

Elon Musk buying Twitter has reignited the free speech debate. Should social networks restrict what we say? Or should they allow everything and descend into anarchy? This is a false dichotomy. There’s a third option: Give us incentives to regulate ourselves. Let’s face it—we’re part of the problem. Fixing social media is... Elon Musk buying Twitter has reignited the free speech debate. Should social networks restrict...

Nine Public Tech Companies Worth Less Than What VCs Originally Invested

By Akash Pasricha · Nov 8, 2022 6:00am PST · 5 comments

Nine Public Tech Companies Worth Less Than What VCs Originally Invested

By Akash Pasricha · Nov 8, 2022 6:00am PST · 5 comments

At least nine tech companies that went public in the past three years—including Compass, Lyft, Oscar Health and The RealReal—are now worth less than the total amount of money they raised before going public. Let that sink in. The best example of that may be insurance tech firm Root. Venture capitalists including Tiger Global... At least nine tech companies that went public in the past three years—including Compass,...