📶 the FBI goes to Silicon Valley

Today’s sponsor

Good morning 👋

Yesterday we asked readers to rate how happy they are in their current roles on a scale of 1-10.

The overwhelming favorite?

6.

I feel like that’s a non-answer.

Switching gears.

Let’s get into why the FBI is investing a venture firm.

P.S. 🚨 Are you a full-time investor?

Help answer our VC comp survey so we can help you get paid a better market rate.

TL;DR:

• 👀 Top

• 🔗 Links

• 🐥 Tweet

• 📰 Headlines

• 🗳 Poll

• ☑️ Results

TOP STORY
The FBI comes to Silicon Valley 👀

The FBI is investigating Hone Capital over potential involvement with the Chinese government and whether it shared sensitive startup data with Beijing.

The Palo Alto-based firm was founded with $115 million from Chinese PE group, CSC. Since its inception, the firm has invested in 360+ U.S. startups, including Stripe and AngelList.

The probe comes as U.S.-China tensions mount, prompting a decline in Chinese startup activity and venture funding. Hone has also been embroiled in a legal battle with former executives over fraud allegations, further complicating the firm’s current standing.

Why it matters: We can’t predict the future, but it doesn’t seem like trade relations between the US and China will be great any time soon.

With its deep ties to U.S.-based startups, Hone’s investigation will likely raise alarms over national security and data privacy. As U.S. regulators clamp down on foreign capital, firms with Chinese links could face increasing scrutiny, limiting their ability to access top-tier deals or fundraise.

What happens next: We expect U.S. regulators to intensify their focus on any foreign capital linked to China, especially in sectors deemed critical to national interests. That has historically overlooked venture, but that may be changing.

If the probe uncovers any misconduct, Hone could face severe penalties or restrictions, which could cascade into wider industry implications for other firms backed by Chinese capital. Additionally, we’ll likely see a larger withdrawal of U.S. investors from China as regulatory and political risks heighten, pushing both countries' venture ecosystems further apart.

Together with Intercom
Did somebody say “free customer service for your portfolio companies”? 👀 

Join Intercom’s Startup Partner Program to give your portfolio 12 months free on Intercom’s complete AI-first customer service platform.

Join 600+ other VC's, accelerators and startup communities such as Y Combinator, a16z and Index Ventures and start referring your founders by applying below.

LINKS

🫵 Do It Your Way: Morgan Housel thinks it’s possible to be humble and learn from other people while also recognizing the best strategy for you is the one closest aligned with your unique personality and skills

🙌 Tech Success for Men in their 20s—Adapt or Die: Tech advice you won’t hear from most of the other blogs you read

🤖 AI’s Privilege Expansion: Digital Native explains how AI expands access to expensive, hard-to-get services

🙄 The Cost of Apathy: Jack Raines makes the case for being intentional with your life and having ambition about something

💬 Thoughts on Work-Life Balance: Elena Verna hates that term and prefers “work-life prioritization”

TWEET

HEADLINES
What else we’re reading

• Startups Look To Streamline Tasks Around Death And End-of-Life Planning (Crunchbase)

• OpenAI finally brings humanlike ChatGPT Advanced Voice Mode to U.S. Plus, Team users (VentureBeat)

• Call center startup Ujet lands $76M as investors pin hopes on AI agents (Pitchbook)

• Torq Raises $70 Million to Expand AI-First Cybersecurity Hyperautomation Solutions (PYMNTS)

• Tech Investors Head to Mideast for Deals (The Information)

• Scale AI’s Sales Nearly Quadrupled in First Half (The Information)

Sponsor Confluence.VC Weekly
Got a B2B biz? 📥

Join dozens of high-growth companies partnering with us to reach some of the most sought-after people in tech and finance.

• 73% of audience makes over $100k / year

• 65% of audience between 25-44

• 90% of audience based in US

Talk to our team to learn more.

(Media kit available upon request)

POLL

Thanks for reading this far and giving us a little bit of your attention this week.

Feel free to unsubscribe whenever this stops becoming valuable to you.

- Clay

RESULTS

Here are the results from our poll question in yesterday’s piece:

On a scale of 1-10, how satisfied are you in your current role?

🟨🟨🟨⬜️⬜️⬜️ 1 (4)

🟨🟨🟨🟨🟨⬜️ 2 (6)

🟨🟨🟨⬜️⬜️⬜️ 3 (4)

🟨🟨⬜️⬜️⬜️⬜️ 4 (3)

🟨🟨⬜️⬜️⬜️⬜️ 5 (3)

🟩🟩🟩🟩🟩🟩 6 (7)

🟨⬜️⬜️⬜️⬜️⬜️ 7 (2)

🟨⬜️⬜️⬜️⬜️⬜️ 8 (2)

🟨🟨🟨⬜️⬜️⬜️ 9 (4)

🟨⬜️⬜️⬜️⬜️⬜️ 10 (2)

37 Votes