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Startup Digest Reading List: Semiconductor Demand and a Deep Dive into Coinbase’ S-1 Filing

Issue #144 — View online — Suggest a link
Startup Digest Reading List

A curated list of the top stories in technology, startups, and venture capital.

Welcome back to this week’s edition of Startup Digest’s Reading List.
We invested in a stealth seed stage startup founded by prominent individuals in the data infrastructure space. They are looking to hire their first core product hire to help lead product strategy.
If you’re interested in this opportunity to join a fantastic team, send me a reply back (chris@race.capital) with your Linkedin profile, I’d be happy to connect you to the team.
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Written by Chris McCann, General Partner @ Race Capital, former Greylock Partners. More about me.

Big Tech News Last Week
Deep Dive into Coinbase’s S-1 Filing
Instead of my usual recap of deep dive posts, this week for fun I read through the whole Coinbase S-1 Filing and wanted to share some interesting tidbits I found along the way.
Summary: 
  • Coinbase is the top US based digital asset exchange.
  • They are doing a direct listing and expected to price at a market cap of $100B.
Company Details
  • Coinbase did $1.3B in revenue for 2020, and $530M in 2019.
  • Transaction revenue (from retail consumers) constitutes 96% of their revenue.
  • Coinbase has 43M “verified users” of which 2.8M are active (monthly transacting users).
  • Trading volume is variable based on the volatility of the crypto market. Institutional investors have become a bigger share of Coinbase’s trading volume. However, this is a double edged sword because the majority of Coinbase’s revenue is generated via retail traders.
  • The “assets on platform” is $90B, which is a huge number. However digging into the filing, more “custodial funds do to customers” is only $2.8B. My guess is the Coinbase custody product has low penetration, and the majority of assets are via consumer wallets.
Cap Table
  • The largest holders and biggest winners for this IPO will be Andreesseen Horowitz (A16Z - $11B), Union Square Ventures (USV - $5.1B), and Ribbit Capital ($4.4B) - assuming the price of the last secondary market sale.
  • USV conducted 4 secondary transactions selling a portion of their shares to A16Z and Paradigm.
  • Ribbit conducted 2 secondary transactions selling a portion of their shares to A16Z and Paradigm.
Interesting Tidbits 
  • Coinbase is the only company I know of that lists its corporate headquarters as “Address Not Applicable” and instead refers to itself as a remote first company.
  • The filing sends a copy to “1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa” which is the bitcoin genesis address owned by Satoshi Nakamoto. 
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Techstars Startup Digest Startup Digest Reading List is curated by:
Chris McCann Chris McCann - General Partner @ Race Capital, former Greylock Partners
chris@startupdigest.com
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