Happy Friday Jr. Welcome to The Chaos Coordinator! We are Brain Candy's snarky little sister, delivering carefully curated news happening across the industry (that you should probably care about) right to your inbox, with a hefty dose of irreverence.
In this issue, we dive into:
Private Equity Races the Compliance Clock
No Card, No Problem: The Future of Digital Payments
To A.I., Or Not To A.I.
Mastercard Crashes the Crypto Party
Meet Us at Midnight
What's happening in.....
PE/VC
EVERYBODY STAY CALM
PE firms are racing to comply with new SEC induced marketing rules as the deadline approaches....next week.
Private-equity firms are hustling to implement new SEC rules about marketing funds to prospective investors, with an anticipated compliance check on the horizon when the ~430 pages of instructions~ take effect on November 4. Although investment firms have had almost two years to implement these new rules - intended to prevent investment advisers from misleading clients - many firms decided on the "due in two years, do in two years" approach and are only just starting to take steps in adapting to the new guidelines, putting them at risk of not being in compliance come next week. The biggest issue for private-equity firms raised by the new marketing rule is changing how they describe the performance of past investments in pitching new funds, reports the WSJ. While firms usually present fund returns without deducting fees and expenses, the SEC will now require that firms show returns net of expenses, including the money paid to private-equity managers.
Read more on the last minute changes taking place across PE firms here.
ENTERPRISE SaaS/FINTECH
Leaving My House With Only Apple Pay & Audacity
It looks like it'll get even easier to convince yourself you are not spending real money via digital payments.
While the continued mainstreaming of digital payments hardly comes as a surprise, the digital revolution once accelerated by the pandemic is now fueled by a widespread need for convenience. Fintech Magazine reports that in the coming years, we’ll see more alternative payment methods grow in popularity and existing digital payment technology continue to evolve through the rise of cryptocurrency, digital wallets, BNPL, one click payments and more. Just this week, Amazon rolled out a Venmo payment option for U.S. customers.
Kamran Hedjri, CEO of PXP Financials, outlines some of the ways digital payments have changed and looks to the future of a constantly changing industry here.
A new type of Artificial Intelligence is revolutionizing the way humans make art, come up with new ideas, and express their creativity. Generative A.I. is drawing in investors at a pace comparable to a newly opened Sweetgreen on the same block as any corporate office. Unsurprisingly, our friends in Silicon Valley have made it clear they won't be left behind. Stability AI, the start-up behind the Stable Diffusion algorithm has found itself as one of the most popular, yet controversial projects currently going on in the space, announcing a $101 million seed round earlier this week. The open-source Stable Diffusion image generator is "the key to unlocking creativity", says founder Emad Mostaque, and “one of the ultimate tools for freedom of expression” — as long as it stays out of the hands of a few censorious tech giants. Regulators aren't the biggest fans of open-source A.I. models or the offensive images users can churn out, because as we know, artificial intelligence is no match for natural stupidity. Nonetheless, the founder of Stability AI believes it's safer to let the public, rather than big tech, decide how the tech should be governed.
Get caught up on how Generative A.I. is attracting investor funding here.
CRYPTO/BLOCKCHAIN
Bad Vibes: What Big Banks Bring to the Crypto Party and More
The latest push to bring traditional, “centralized” finance giants into the crypto space isn't landing well with crypto enthusiasts.
Following Visa's collab with crypto exchange, FTX, to roll out crypto debit cards in 40 countries last week, Mastercard announced Crypto SourceTM, a new program to enable financial institutions to bring secure crypto trading capabilities and services to their customers. For blockchain bandwagoners who want to keep the space as “decentralized” as possible, this news could not be more anti-slay, considering that operating independently of centralized institutions is quite literally the whole purpose of cryptocurrency and blockchain. Whether you blacked out the Great Financial Crisis in '07-'08 from your memory completely, or you were 8 years old and didn't know what an economy was (guilty), the financial world’s reliance on banks as intermediaries of all financial transactions and the epic failure that ensued as a result, gave way to the creation of Bitcoin and the vision of DeFi.
Check out what's to come if banks do decide to take advantage of Mastercard’s crypto integrations here.
MARKETING TRENDS
The Marketing ~Mastermind~ Does It Again
CMOs could stand to take a page out of Taylor Swift's book of tricks.
To those of you who are unfamiliar [or live under a rock], a low-key, underground artist who goes by the name of Taylor Swift released her 10th original studio album last week at midnight, appropriately titled Midnights. Midnights earned around 185 million streams on global Spotify in its first day, making it the #1 biggest album debut of all-time. This record breaking launch is partially thanks to T-Swizzle's ornate, puzzle-oriented marketing strategy - selectively revealing details while maintaining an aura of mystery and excitement - building up to the launch of the album. Taylor's use of “easter eggs” left fans combing through her past work to find answers, increasing streams and sales for older releases. A video series titled "Midnights Mayhem with Me' featuring Taylor announcing the track names one-by-one after pulling a ball out of a bingo machine have amassed more than 83 million views on TikTok. Blondie also released a teaser trailer for music videos during Thursday night’s NFL football game. Early merch launches and cryptic messages on social media left thousands of fans posting their theories for the hidden meaning behind her outfits, accessories, and word choices. Four different versions of the vinyl album that, when the backs of the album covers are placed together, create the face of a clock, were released incentivizing Swifties to to spend $120 for four copies of the same record. We can keep going.
Read more on how Midnights became a financial success before it was even released here.
Other Things You Should Care About
The Texas attorney general sued Google last week, alleging the search giant violated state laws by collecting biometric data on face and voice features without seeking the full consent of users. A similar suit brought against Facebook parent Meta Platforms Inc. in February. Read more here.
Microsoft and Meta have teamed up for the first time in over a decade to drive corporate adoption of VR. The updated version of Oculus will be called Quest Pro, and will integrate Microsoft tools including Teams, Windows, and Office. Read more here.
WORD OF THE WEEK
SITUATIONSHIP
noun
A situationship is a casual, undefined, commitment-free relationship. Think of it as modern day relationship purgatory. For example, that weird in-between phase when you are all close and buddy-buddy with a potential client and all the paperwork to seal the deal has been sent, but the pen has yet to hit the paper and make it official.
