US Digital Currency – Sam Altman

I have always held the view that a powerful digital currency is a threat to the central banking system of all governments. Which in theory means the governments could embrace it as a way of having more control over it. I think this is what Sam is suggesting since at the moment the governments are trying to squeeze it which to me is forcing crypto to figure out how to survive away from central banking control. If this happens than central banks will have a big issue on their hands and probably the only way to prevent this would be to embrace it.

Not sure it will be the USA that will pull this off but if they did would be pretty amazing. Given the Trump administration being more focused on crap like building a wall – my guess is that somewhere in Asia would be a more obvious choice.

US Digital Currency – Sam Altman:

Although I don’t think the US government can stop cryptocurrency, I do think it could create the winner–let’s call it “USDC” for US Digital Currency–and fix some challenges that governments currently face with cryptocurrency.

I think the first superpower government to do something like this will have an enviable position in the future of the world, and some power over a worldwide currency.

The US government could decide to treat USDC as a second legal currency, which would be hugely powerful.  (I think the US doing this would be significantly more impactful than the smaller governments thinking about it now.)

Ideally the initial coins would be evenly distributed to US citizens and taxpayers—something like everyone with a social security number gets two coins, one that is immediately sellable and one that you have to keep for 10 years.

Conflicted about angel rounds

Lately been noticing some strange cap tables in the early stage startup community – where angels own a fair amount of the company. There are so many ways to finance a company – most folks prefer equity or priced rounds. I tend to agree providing that all parties involved know what they are doing.

In some cases the startups are young and not very experienced. At the same time the angels are the same or potentially expecting to own too much of the company. Both of these combos can cause trouble.

First thing I tell all parties is get educated – start with Venture Deals for example.

Or read up from lots of different angles ::

But when it comes to notes you will see some pretty harsh and normally valid opinions ::

More from Fred ::

Even our local VC weighs in :

I am all for doing equity rounds if everyone knows what they are doing but I think a note might work in an early angel round when folks don’t know how to pull all the pieces together in a reasonable way. I would much rather see a note with a cap and decent terms that to see an angel owning 40% of the company for an early round.

I was looking around for someone who might explain this better and came across this from Index Ventures ::

It is not uncommon for us to come across a one-year old startup that has yet to release its product, in which the angel investors already own 60% of the company, three founders (together) own 40% and there is no option pool. While the company may be interesting to us from a product, market and team perspective, we know that we will face massive challenges in structuring an investment that will result in a company with a healthy cap table that will allow the company to grow, attract and retain talent as well as raise future rounds of funding – without having to waste energy on dealing with misaligned stakeholders.

Spot on.


Angel investors, friends and family, who contributed cash to get the business started, deserve some level of ownership; but clearly 60% (or even 40%) are out of the question, if we want the math to work. For any founder, this type of structure should ring all kinds of alarm bells.

If we assume that the Series A investor will own 20% after the round closes, there is a 20% unallocated option pool and the founders and team own 40%, this leaves 20% for the earlier investors after the round. We should also note that when a startup raises a large Series A round that may involve two or three venture funds, the amount of equity allocated to the round might be as high as 40%.

Founders also don’t think about future rounds and the problems that can steamroll:

This problem is all the more thorny, when the angel investors have the right to participate in future rounds and intend to do so in order to protect against dilution. In these cases, the equation is basically unsolvable and doing a round with a venture investor risks entangling the founders in endless meetings and conference calls with their angel backers to find a compromise that will allow them essentially to rewrite their cap table.

I keep hearing folks suggest this solution but this is not a good answer:

And while having the angel investors sell all or some of their shares to the new investor might help redress the cap table, it is never desirable to have most of the money invested in an early round going to selling shareholders rather than into building the company.

This is great baseline advice:

Our advice to future entrepreneurs in Germany, and elsewhere, is to be thoughtful about the first money you raise; think hard how much you require, who you raise it from and what your investors are getting in return. While the people giving you your first €10,000 should be rewarded, they should not be given the means to hinder your future fundraising. While this advice may be perceived as self-serving coming from a venture capitalist keen to make Series A investments in Germany, we genuinely believe it is not and that you would hear the same thing from experienced entrepreneurs in the Bay Area or elsewhere.

This also makes a ton of sense:

We also think that in your seed round, you should raise as little money as possible – just enough to allow you to get to the validation point you will need to raise your next round. Choose your angels wisely and ask yourself how helpful and cooperative they will be when you come to raise your next round. We also don’t think that it’s a great idea to raise money from dozens of angels, if you can raise it from just a handful. Keeping them informed and getting them to agree to the terms of the next round should be as simple as possible and ideally not require lots of your (and your lawyer’s) time.

And this on corporate VC’s has some truth in it as well although your mileage may vary:

Finally, we generally don’t think it makes sense to include corporate investors or their venture arms in seed rounds. Having them be part of your cap table, with an investment that is probably trivial to them, will likely entail more negatives than positives. The real value that these partners can bring is through being great customers, great suppliers or a distribution partner. Further down the road it may make sense to bring one or more corporate investors into your ownership structure, or even sell the entire business to them, but until you reach that point, we think you are much better served by trying to do business with them all.

We, the people in the SEA ecosystem, need to help everyone improve.

I have a Discord group for VC and Tech going here ::

Please join in and let’s chat about it – another experiment I want to have is random audio meet ups to chat versus type.


I like donuts. In Asia I never really find any I like apart from the basic glazed, old fashioned and Boston creme ones at Krispy Kreme. I grew up on normal American donuts and every time I go home I have more than a few. I plan on having a few this trip.

Which is why I loved this article –

I remember eating Winchell’s donuts but I mostly remember the normal mom and pop donuts – made fresh throughout the day. I would always eat then with a cold milk.

I lived in the some of the areas mentioned in the article and now I remember them being run by Asians but didn’t realize they were Cambodians. I think near one of my brother’s house is a donut shop run by Cambodians – going to check when I am in town.

The rest of the story is odd as well with the tinges of other Asian issues like the gambling, the young mistresses and all of Cambodia’s political issues intertwined around donuts.

Great read.

One last donut tidbit. When I was young my dad used to trade his mechanical services for whatever his customers could offer on barter – he happened to do a major engine overhaul for a German living in a small town near us with a bakery. A bakery with seriously awesome donuts. I probably had 2 per day for many months. I remember my mother sending us over for bread and we had to explain the credit had run out but she could never figure out we practically went and ate a box of donuts per day.

Donuts rule.

Koprol – The Inside Story. Part 2

Part 1 ::

The path a company takes with the products and services they offer to customers is highly dependent on who is running the organization coupled with how the organization is constructed. At Yahoo this is no different but in my experience it might actually suffer a bit by how the company is organized at its core. This is an important topic to cover since this ultimately influenced how Koprol was managed – it also points to some of the core issues with Yahoo in general.

I must confess that I am 2 years plus out of Yahoo now with many of my good Yahoo friends already working at other companies. So my inside knowledge is obviously much reduced. This means I am going on what I personally experienced but from all outside appearances the overall structure of Yahoo has not changed much in the last few years apart from better food and phones.

Yahoo primarily is broken down into 3 distinct regions – America, Europe and Asia but there used to be an Emerging Markets group that covered Southeast Asia, Middle East and India separately. The HQ for that group was in Singapore which at the time made Yahoo one of the biggest players in the region and with a big head count in Singapore. What this meant was their was bizdev, legal, sales and even some product folks were aligned especially with the needs of that region. This can be seen as both a good thing and as a bad thing depending on the angle since this group would focus entirely on growth but at the same time the Sunnyvale HQ was not always supportive of the separate region. I think it was for the most part a good thing since it meant the team would move fast and try to evolve quickly enough to keep the region growing but Sunnyvale wanted to start reeling things in to make the company function better as a global unit. This was a tough time for the region cause it meant that SEA and India would now fall under APAC and the ME went to EMEA. Tumultuous times all around.

Once this decision was put in place the Singapore HQ started to let folks go and move people around to fit the new world order. This actually was a good start to get the region receiving more attention from HQ but it also meant a lot of changes. Looking back I don’t think this transition went all that well and might even be a good marker for the overall downward trend for Yahoo in some of these markets. However in a lot of places the downward trend was already happening anyway but I think what made the old organization unique was the ability to act quickly and make a lot of independent decisions. That autonomy was now gone.

For Yahoo Southeast Asia it makes sense to give you some overview of this org and the countries it operated in since this lead a lot to my decisions for where to focus my efforts on looking for small acquisitions.

Yahoo HQ for SEA was Singapore but also home to Yahoo Singapore. This group was a pretty good size since the revenue from Singapore was the largest when I was there even though the audience size was the smallest. This is important to note since it always made for an awkward situation of having to decide where to focus resources – on an area where the users are but not the dollars or where the money is.

Yahoo Malaysia was another proper office that had a small editorial team and sales. Yahoo Malaysia had lots of room for growth but there was always the issue of how much to localize and how to find the right mix to attract the local users. I didn’t spend much time there at all so I can’t really speculate as to how well it was or is doing but it was never really booming for Yahoo.

Yahoo Thailand was never really an office. Used to be some Thai folks would help to manage it from Singapore with some Thai content but it never really grew. When I was there I helped a few times, I didn’t lead the effort but was supportive of it, to try and push harder in Thailand. Anyone could look at the stats for growth of the internet and mobile internet and make a case for trying to take some market share. Problem was MSFT practically owned some of the market and Google was quickly taking over the rest of it. At some point in time Thailand was very Yahoo friendly with people advertising with their Yahoo email addresses or their Yahoo messenger ID’s but those days were long gone. Yahoo couldn’t make a valid case for trying to go back in and win. Yahoo Thailand looks like now it just points to – so essentially they have given up on the place.

Yahoo Vietnam was one of the early success stories of going in with a local office and hitting it hard. The numbers looked good and the growth was good for a while but this came with it’s own complexities due to the rules in Vietnam. I won’t get into it much cause I am not a legal person but essentially once you setup shop in Vietnam with feet on the ground you are subjected to some level of government scrutiny and intervention. This makes is hard to really try and go big in the region. Yahoo’s work in news/entertainment is labor intensive and requires localization so it means that to build a great business around that you have to be as local as possible but that also means you are competing with truly local companies who might be willing to do what a multinational cannot. I will leave it at that. So Yahoo did quite well there but suffered some black eyes with the closing of some very local products and just dealing with trying to be a big local presence. At some point one could argue Yahoo owned Vietnam with products like Yahoo 360, messenger and email but I am sure those days are gone.

Yahoo Indonesia was another place the local org chose to focus on due to the size of the market, the relative openness around news and the fact that Yahoo seemed to get a warm reception from the population around Yahoo products. So Yahoo Indonesia became another decent size local office and there was even a lot of attention from Sunnyvale. Revenue wise though Indonesia was a tough nut to crack at the time. High user growth but low revenue makes for interesting times. At the present time I think Yahoo is fairing well in Indonesia but has lost a lot of employees and I think the competitors are beginning to cement a solid lead over Yahoo in many areas.

Yahoo Philippines also was a large local market with a decent size local office. This country was largely getting the same treatment as Indonesia since the brand was doing well there and the country was big. It had some of the same issues of needing to grow revenue but also to try and just grow the user base. The news/entertainment market was vibrant and fit well with the Yahoo suite of products. From what I remember, like Indonesia, the growth was good but Yahoo was beginning to lose share in some core products cause there was now competition in the marketplace where there was not before.

So with that background in mind I figured I would focus my efforts for scouring the region in Indonesia and the Philippines. Vietnam was out because it was too sketchy to put an engineering org there due to lots of legal issues. Personally I had a hard time connecting with Malaysia and just didn’t feel equipped to make a difference there. Singapore felt like it was going to be an expensive place to acquire and didn’t check the boxes for a place to expand engineering long term. Thailand was out cause we just didn’t have a big enough presence and with all my personal experience there – I just don’t trust Bangkok as a place to invest in. Look at current events to get a sense of that. I love the country but would I convince a large multinational to go all in – not with a straight face.

I even considered ways to look into Cambodia and Laos but the general consensus was Yahoo wasn’t going to try and expand the region. Keep in mind Yahoo was known for doing joint ventures to expand in some regions – this is how Yahoo Australia and Yahoo Japan were created. There was some people at the time who felt Yahoo should have done more of this. I tend to agree even though it is hard to create the joint ventures. Yahoo can offer brand, technology, and consulting – the other side of the venture brings local expertise, money and government connections. Many of us felt Yahoo could have pushed into a lot more countries with this model but it is probably too late now.

Small side journey – Yahoo was very early in all these regions and probably could have been a lot bigger if it tried to buy or build more things locally. I think this is the crux of the issue with the emergent markets versus the stable or developed markets. Yahoo’s core product suite wasn’t really appealing to the emerging markets young generation and if the region was left alone quite possibly the strategy would have been to build products, acquire, partner or white label whatever was needed to try and win the region over for the long haul. Instead what become the strategy was to take whatever Sunnyvale made and try to shoehorn it into the region. Not sure anyone can answer what would have been the best thing to do but if it were up to me – I would have probably tried to tweak for the local market as much as possible. This is what Yahoo did in Taiwan and for the most part it worked however the strategy stopped at some point and it looks like the market share in Taiwan is falling. I don’t think it will be like Korea where Yahoo made a full retreat but I doubt it will return to its former dominant position.

Deciding whether the global command and control technique of building products for the globe is better than localizing for the region is an age old question. If one looks at facebook or google you see very little localization apart from language and for those companies it has worked. Yahoo for a long time was straddling both fences of localization and global products but not doing either well. It seems under the new regime it is going to be back to global products with language and content localization. It remains to be seen what will turn Yahoo around at this point. My opinion is the the current management is mostly focused on the USA and to some extent Europe while waiting to capitalize on the Alibaba IPO. Apart from the core aspects of Asia it seems me Yahoo is now withering on the vine some in places like SEA and India.

Part 3 ::

The Sun :: Siem Reap, Cambodia

Been a while since I have been to Siem Reap and lots has changed – the place keeps getting busier and there are more hotels, bars and restaurants than ever. However I still enjoy the place and find it to be a good value for eating. Of course now I have the little one and I am not hunting for the night life but a solid meal, a chance to chat with my family and a place that tolerates the chaos of a baby. 😉

We cruised around pub street last night and came across The Sun – not sure of their website since every google search just points to a zillion different domains of trip advisor but this is the address:

Corner Pub Street, Siem Reap 12345, Cambodia

It is not a place for “native” food but just a nicely designed place with bistro food, good service and a fun place to chill.

I thought the prices were reasonable, portions were fine and everyone enjoyed what they ordered. The pizzas were also good and everyone loved the pork chops. The salads were solid but nothing to shout about but generally that is always the case with non native salads in SEA.

The staff was also very friendly, most Cambodians are, and even assisted with working around the baby.

We might hit this place one more time to check out the breakfast menu.

Check it out!