E344 | EUVC | AI Fears, VC Returns, and UK Immigration Policy hosted by Dan Bowyer
Aug 23, 2024
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In this engaging discussion, venture capitalists Alex McDonald and Mads Jensen, along with European VC expert Andreas, tackle pressing issues in the tech landscape. They explore the implications of the UK's rejection of a youth mobility scheme for talent and investment. The group debates rising AI fears, arguing the need for a balanced regulatory approach. They also delve into the rising number of startup shutdowns, linking it to a natural cycle, and discuss the 'silent recession' in VC, emphasizing the importance of a patient investment strategy.
The UK's rejection of the EU youth mobility scheme is seen as a missed economic opportunity that may hinder talent acquisition.
The rise in startup shutdowns is viewed as a natural cycle following increased formations, not a definitive sign of a recession.
Deep dives
Investment in Vernetia FC
Alex McDonald discusses his recent investment in Vernetia FC, facilitated by connections within the venture space, including Drake's manager. He highlights a unique opportunity that presented a solid business plan alongside reputable co-investors. This investment marks a notable shift as he has often regarded sports team ownership as risky due to typical financial losses associated with such endeavors. The club's recent promotion further adds to the excitement around his involvement in what he describes as a fashionable football club.
Freedom of Movement in the UK
The discussion on freedom of movement focuses on a proposal for a youth mobility scheme that would allow young people aged 18 to 30 the opportunity to work and study across Europe. Despite seemingly broad public support, the UK government has rejected the proposal, highlighting a stark political stance. Experts argue this rejection impedes potential economic benefits and talent acquisition for the UK. Concerns arise that this decision reflects a narrow view of immigration issues influenced by past Brexit negotiations, risking continued isolation from European partners.
Impact of AI Regulation on Innovation
The cancellation of planned government funding for AI development in the UK raises alarms about the impact of regulatory changes on startup innovation. Experts suggest that founders should not rely on government support and instead focus on self-sufficiency in navigating the tech landscape. The panel emphasizes that while regulation can stifle innovation, it is crucial to balance oversight with opportunity to promote growth in the AI sector. A call is made for the government to provide funding and resources, allowing startups to thrive amidst significant technological advancements.
The Silent VC Recession
The discussion underscores a notable rise in startup shutdowns, which some interpret as evidence of a 'silent recession' in the venture capital space. However, experts clarify that the increased closure rate is a natural outcome of a surge in new business formations post-pandemic. They suggest that the health of the startup ecosystem is not defined solely by these shutdowns but by the entrepreneurial spirit that persists. The narrative promoted by various media sources may exaggerate concerns, while the actual landscape reflects continual interest in starting new ventures.
The Seed: Weekly Tech & VC Roundup This week on The Seed:
Featuring insights from Alex McDonald (Sequel.co), Mads Jensen (SuperSeed), and Andreas (EUVC). Join us for a deep dive into the latest in tech, startups, and venture capital.
Chapters:
00:00 - Intro and welcome 01:14 - Launch of The Seed podcast collaboration 05:14 - UK rejects EU youth mobility scheme: Missed opportunity or political maneuvering? Mads and Alex discuss the implications for talent and investment. 10:02 - AI fears on the rise: 56% of US firms now see AI as a potential risk. Alex argues against heavy-handed regulation, while Mads considers the need for oversight. 18:42 - California's proposed AI regulation: Discussing potential liability for model developers. 23:15 - Startup shutdowns up 60%: Alex provides context, suggesting it's part of a natural cycle following increased startup formation in 2021-2022. 25:33 - The "silent VC recession": Examining the recent 0.4% return in Q4 2023 after a two-year drought. Mads explains the industry's need to adjust to new realities. 31:54 - The value of patience in VC: Alex shares insights on why funds optimizing for quick returns often underperform in the long run. 36:22 - UK AI funding controversy: Discussing Labour's decision to scrap a £1.3B Conservative AI initiative.
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