Alternative Investing Report - August 19, 2024

_{*as of market close August 16, Bitcoin as of August 18}

Only 9% of U.S. venture funds raised in 2021 have returned any capital to investors after three years, which is well behind the pace of earlier vintages. Additionally, 2021 funds have a median net rate of return of -0.9%, while 2022 funds sit at -6.9%. Looking at venture-backed startups, only 15.4% of seed-stage startups from Q1 of 2022 have made it to Series A within two years, which is half the rate of startups from Q1 2018. This data comes from a report published by Carta, which looked at 1,803 U.S. venture funds, with vintage years between 2017 and 2022.

➨ TAKEAWAY: Recent vintages of venture funds are struggling to return capital to investors and show positive returns. The ramifications from the pandemic-era VC bubble are starting to be felt by investors, and with more than half of startups founded between 2017 and 2023 that raised over $1 million already out of business, it might get worse before it gets better.

Sales last week at Monterey Car Week totaled $371 million, which is an 8% decline compared to 2023, with high-end vintage cars in particular posting a rough week. The sell-through rate for cars priced at $1 million or above fell to 52% from 63% last year, while less-priced cars saw no such decline. Three cars did sell for over $10 million, with a 1960 Ferrari GT SWB California Spider leading the way with a $17 million price tag.

➨ TAKEAWAY: The projections for total sales were between $430 million and $488 million, so any way you slice it, the overall results were a disappointment. In most categories of collectibles, what has maintained value the best over the past few years have been high-end, rare, vintage items, but that was not the case here. Could the lackluster sell-through rates be because of falling customer demand, or sellers simply asking too much? Only time will tell.

Last Thursday, Vincent's Slava Rubin was joined by Republic President Andrew Durgee and SKI Partners' founder Stuart Goldfarb to talk about sports teams as an asset class and opportunities for everyday investors to get involved.

🏡 New rules for realtors: On Saturday, changes went into effect as a result of the settlement the National Association of Realtors agreed to in several antitrust lawsuits. The major changes affect buyers and how their agents get paid, and could have a major effect on the housing market as everyone adjusts to the new landscape.

🏈 The NFL and private equity: The biggest sports league in the U.S. is meeting next week to vote on whether to allow institutional investors to buy minority stakes of teams, something every other major North American sports league allows. The ramifications were talked about in our event last week.

🎬 Indy’s hat: The iconic fedora worn by Harrison Ford in “Indiana Jones and the Temple of Doom” sold for $630,000, well above the pre-sale estimate of $250,000-$500,000.

🚀 WeRide IPO: After a delay, the Chinese self-driving company is on track to launch its IPO this week, and is looking to raise $119 million on a $5 billion valuation.

🪙 “Pig-butchering” fraud: As crypto-based fraud reached nearly $4 billion in 2023, “pig-butchering” scams, named for the scammers “fattening” up the victims with flattery, are on the rise and crypto users need to stay vigilant.

🚀 Radical Ventures raise: The AI-focused venture firm has secured $800 million for its next fund, which will focus on late-stage companies, and shows that

🏀 Kobe Logoman: The centerpiece item of the Goldin 100 auction, a 2003-04 Kobe Bryant signed “Logoman” card, featuring a game-worn patch of the NBA logo, sold for $1.584 million, continuing a run of high-value Kobe memorabilia.

Monday: The Democratic National Convention starts in Chicago and will run through Thursday.

Wednesday: Our deep-dive on direct indexing, a must-read for any investor.

Thursday: Fanatics Collect’s Premier Auction, featuring a game-used Tom Brady Bucs jersey, Existing-home sales report.

Friday: New home sales report.

Saturday: The most expensive piece of sports memorabilia ever, the 1932 Babe Ruth “Called Shot” jersey, goes under the hammer at Heritage Auctions.