Early Investing News Roundup, May 2016

What an interesting week for startup investing news. Here are some of my favorite recent reads.

The price of Ether, a bitcoin rival, is soaring because of a radical, $150 million experiment

Ethereum is a digital, or “crypto,” currency. In essence, it’s electronic money that cannot be counterfeited. It can be transmitted quickly and cheaply and has limited supply. So, it’s similar to Bitcoin.

What makes this crazy is that a group of Ethereum enthusiasts created an investment fund, and somehow they’ve collected $150 million already – from more than 11,000 (anonymous) investors!

It’s called the Decentralized Autonomous Organization (DAO). Owners will vote on which projects to fund. I suspect it will be shut down by the feds before too long. But damn if it isn’t going to be fun to watch.

It’s ironic that this fund launched around the same time as equity crowdfunding. Because getting equity crowdfunding through Congress and the SEC took years.

And here comes this completely unregulated “share offering,” and it takes off faster than ECF. Despite the fact that it’s likely to get shut down. (Previous models have been tried with Bitcoin before and have been shuttered.) And the voting process will likely be a disaster.

It’s a fascinating idea, and I’ll cheer if they pull it off. But I suspect the DAO experiment will hit turbulence soon. Ethereum, however, does look interesting. And it should be pulling back in price soon, due to how the DAO is structured.

Uber testing driverless cars in Pittsburgh

This is a space I’m watching closely. Self-driving cars and trucks could be the most disruptive event since the personal computer. It’s hard to overstate the implications.

Consider that we might only need one car per five people in the near future. Self-driving cars can go 24/7. The car insurance industry would shrivel if this technology works as well as I think it will.

Self-driving trucks may happen first and be even more impactful. Trucking is massive. It’s a $650 billion market in the U.S. alone.

Otto, founded by ex-Googlers, is bringing self-driving technology to trucks

Otto is building an aftermarket kit to convert 18-wheeler trucks to “autopilot” mode.

There’s an interesting double-edged sword here. Some will see this as a “well, there goes 4 million trucking jobs” story.

I prefer to look at it from the perspective of “this is 400% more efficient than the current system!”

Still, we can’t ignore the fact that disruption this large will have unintended consequences… and wide-reaching social implications. Regardless, the increased productivity will far outweigh the negatives. Markets have a way of figuring these things out.

Have a great Memorial Day weekend, everyone.

Adam Sharp
Founder, Early Investing