Good morning 👋
I’m having a hard time ignoring all of the DeepSeek on my timeline.
I really don’t understand why anybody would voluntarily give over data to a Chinese-owned LLM.
How many times does it need to be proven that China is not an ally?
Moving on.
Trump has only been in over a little over a week, and everybody (VCs included) is trying to figure out how to profit over the next four years with the new regime back in charge.
We give our two cents on the major areas we’re monitoring in today’s piece.
ICYMI 👀 The upgrade options for this newsletter have gotten a boost.
Today’s highlights
Trumps agenda and its impacts
The new digital age of the SEC
Why VCs are looking at low-margin businesses again
What to make of the DeepSeek news
TOP
Trump’s agenda (and how it impacts VC)
We’re only a week into Trump’s second term, but the Trump team is making moves, and VCs are paying attention.
Over 200 executive actions in the first week signal a pro-business stance, but the impact will vary by sector.
Here are the major areas where we’re paying most attention.
Unleashing energy and the return of fossil fuels
Trump wasted no time dismantling Biden’s climate policies, rolling back emissions caps and green energy mandates. This opens the door for fossil fuel producers, logistics startups, and energy-intensive industries—but also introduces long-term risks.
More domestic oil & gas production: With fewer restrictions on drilling and pipeline expansion, fossil fuel investments will likely surge. Startups in carbon capture, alternative fuels, and natural gas sustainability could see new tailwinds.
Supply chain relief: Lower energy costs could ease inflation and reduce supply chain friction, benefiting manufacturing, transportation, and industrial startups.
Tougher road for electrification: Startups working on EV charging, heat pumps, and grid-scale batteries may struggle as government incentives dry up. Blue states like California will still push forward, but federal support is in question.
Less AI paperwork = more AI growth
Biden’s AI executive order required AI giants to share proprietary data and adhere to safety standards. Trump’s decision to roll it back signals a more free-market approach, which could accelerate growth—but also spark concerns.
Faster AI innovation & M&A: With fewer regulatory hurdles, big players like OpenAI, Google DeepMind, and Anthropic will have an easier time acquiring AI infrastructure startups to fuel their growth.
Increased private-sector investment: Without looming restrictions, more VCs and corporates may aggressively back AI chips, cloud computing, and model-training startups—especially as compute demand skyrockets.
Privacy & security risks: While deregulation is great for business, it creates uncertainty around data protection and ethical AI development—something that could invite stricter global regulations down the road.
SEC makeover (crypto edition)
Crypto investors are already celebrating as Trump installs crypto-friendly regulators and signals an end to the SEC’s aggressive crackdown. But energy concerns and regulatory whiplash remain.
Clearer (and friendlier) crypto regulations: New leadership at the SEC suggests a rollback of aggressive enforcement actions against exchanges, token projects, and stablecoins—paving the way for more institutional investment.
Bitcoin mining boom: With fewer restrictions and growing mainstream adoption, crypto miners are raising capital to expand operations. This will strain the U.S. electrical grid, forcing new energy solutions.
DeFi resurgence: Expect a second wave of VC-backed DeFi startups as regulatory uncertainty fades. However, global alignment is still a question mark, especially as Europe and Asia take a stricter stance.
What happens next:
You forget how much easier it is to do business with a pro-business government until you have to deal with four of the opposite.
If the first week is any indicator, you can expect the next four years to be very business friendly in the States.
Other countries have already pledged billions into US investments over the next four years, and it doesn’t look like the momentum is slowing down any time soon.
COMMUNITY
The OS for private investors 🕹
So you have a choice to make, and every choice has a lists of pros and cons.
Here’s the case for joining the #1 private investor community:
Cons: Pay the annual dues of $400 / year to join the #1 private investor
Pros: Speed up your onboarding curve, get an evergreen playbook that you can use over and over again on the job, meet other co-investors , meet new LPs through your new co-investor connections, expand your deal flow through new introductions from your new investor network
We’re biased, but we think the choice is pretty clear …
LINKS
🎊 A New Digital Age at the SEC: a16zcrypto proposes easily adopted adjustments the SEC should take to create fit-for-purpose regulations without sacrificing innovation or critical investor protections
👍 Venture Capital Indication of Interest Template: A free template, gone over line by line, that can help get prospective investors to give soft commitments you can leverage to encourage more investors to get on board
🧬 Most Human Wins: A strategy memo for humans, 2025 and beyond
⏩ 12 Takeaways from Alex Homozi’s Scaling Workshop: Dickie Bush gifts us a video (and podcast) that details the main ideas he received to double his business in 2025
🧐 When Should You Invest in Paid Marketing: Elena’s Growth Scoop offers a decision tree to help decide when is the right time to invest in specific channels and how to get started
TWEET
HEADLINES
Now Wanted in Silicon Valley: Ho-Hum Businesses With Thin Profit Margins (WSJ)
Spotify founder pulls in $260M Series B for Neko Health (Pitchbook)
DeepSeek ‘punctures’ AI leaders’ spending plans, and what analysts are saying (TechCrunch)
Seed Funding Rose In These Spaces (Crunchbase)
Raymond Tonsing’s Caffeinated Capital seeks $400M for fifth fund (TechCrunch)
MEME
RECS
beehiiv: One subscription to run an entire media business
POLL
Who are you rooting for in the Super Bowl?
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:
What's worse?
🟩🟩🟩🟩🟩🟩 Fast failure: Lose your principal in a year (4)
🟩🟩🟩🟩🟩🟩 Long small exit: ~1x your money over a decade (4)
"This has had a 100x ROI."
See why some readers are bumping up their reading experience ....
Upgrade todaySee which plan is right for you:
- Insider-only posts
- Operator-level access to give you an edge
- Boardroom-level support from our team (whenever you need it)
