How much is ChatGPT worth?

This is The Startup Breakdown, the newsletter where we learn, laugh, and love startups. By joining this growing community of hundreds of future startup aficionados (think i spelled that right?), you're getting a beachside view of the ocean that is the startup and VC scene. This ain’t your grandpa’s newsletter, so prepare yourself for an inbox full of 4/20 jokes and Succession references.

Happy Thursday, folks.

A few weeks ago, I had a complete 180 and came around to the appeal of kombucha. Used to consider it more obnoxious than socks and sandals or company-issued Patagonia vests, but idk. Stuff is good, guys.

Had a similar awakening on oat milk, and now I never drink a warm glass of cow utter juice.

Now, I type this from a Sweetgreen, where I just consumed a buffalo chicken salad and thought… wait this is actually really good.

What I’m trying to say is try something new today. Broaden your horizons. Expand your mind and palette. Break your financial advisor’s heart.

Treat yo’ self.

How low can you IPO?

Possibly the only thing that is cheaper than it was last year (inflation and all) are shares in newly public companies.

This has had massive downstream effects on the startup ecosystem by making exit potentials murkier than Galveston Bay, something that is central in the decision-making process for investors. The exit potential part, not how clear the water is off the coast of Texas.

It’s also tough for early round VCs to guesstimate valuations of certain verticals and industries as there really are no real public comps to be drawn.

Finally, to invest in startups, you kinda need to have cash, and when investors have their money tied up in big private companies with few options for liquidity, it can be tough to scrounge between couch cushions for dollar bills to send with a 🚀 emoji to startups on Venmo.

Recently, a few brave souls have jumped into the IPO waters (probably the same folks who go swimming right after watching "Jaws"), but spoiler: it was still a bloodbath. Most tanked faster than you can say "disappointing debut."

The big banks advising these companies on how to price their shares are marching the walk of shame, and rather than taking responsibility for the fact that putting 10 for every instance of discount rates in their DCFs DOESN’T always work, they’re advising companies seeking their advisory services to lower their expectations. Kinda like my mom when I told her I think I’m ready to date again.

This advice not exactly be encouraging for the market, but at least it’s not discouraging bell-ringing enthusiasts from trying. Plaid, the fintech giant that connects your seldom-checked PFM apps to your bank, announced that they’ve hired their first CFO.

This typically precedes a public move, and though the company stated there are no plans at this time, most view the hire to be as obvious a sign of what’s to come as when the Eagles load up their players behind Jalen Hurts on 4th and inches #BrotherlyShove #TushPush

OpenAI opens valuation ceiling

I, too, would like to purchase stock in OpenAI.

Unfortunately, though, I am not Thrive Capital, the firm leading a purchase of employee stock, providing those individuals within the company looking to buy a Mercedes or a Sweetgreen salad with a 175% return on their equity from when the company announced a $300 million raise just this spring.

The new valuation? $80 billion, 60x its annualized revenue, which is… a lot.

But it also is telling of the central role that ChatGPT’s creator is expected to play in the AIconomy moving forward.

Is this the top, or is there still room to cash in on the AI trend? You tell me 📧 

Who sat on the remote?

Zoom went the way of Google and Kleenex, surpassing its status as a mere company name and becoming a full-blown Merriam-Webster Dictionary verb.

Unfortunately, though, the pandemic-era darling could also go the way of the Dodo if recent work trends continue.

According to a recent survey, the number of American households with a member working at least one day per week remotely has hit a multi-year low, now sitting at just 26%.

The culprit? Bosses who think productivity and pajamas don’t mix, which speaking from personal experience, fair.

Yet, many still defend their couch-typing efficacy. A couple of years ago, employee power was at its peak, and companies were starving for talent.

Now, every knowledge worker goes to work fearing the cardboard box on their desk and the outsourcing of their job to a recently minted $80 billion company; the bargaining power has certainly swung to the other end of the spectrum.

Never one to follow trends (unless it was the internet, crypto, AI…), startups aren’t exactly complying.

Most realize that paying exorbitant rent prices for office space is less burn-conscious than claiming WFH expenses on their tax docs in April. So, if you’re a founder looking for ways to attract talent without having the resources to pay them FAAN(OpenAI)G salaries, maybe make your subject line "something along the lines of “So you want to work from bed, huh?”

What should I write about next week?

Next week, I am sending another edition of my premium newsletter. Big shoutout to the readers who upgraded last week, and I appreciate you supporting my addiction to caffeine-powered writing sessions.

Because this event is for the people (#community #family #peacelovejoy), I want to get your input on what the topic should be. It has been a busy last couple of weeks, so want to make sure you know exactly what’s the most important:

No verified 40 times or Bench Press reps, but this scouting team will tell you all about the future Hall of Famers in SaaS. Check them out now!

Cheers to another day,

Trey