Funding Friday: Little Book For Big Changes
I just backed this children’s book project. I love it. I hope you do too.
I just backed this children’s book project. I love it. I hope you do too.
I’ve been meditating every day for ten to fifteen minutes for the last couple weeks.
I am not using any technology, just old fashioned sitting and breathing.
My friend and former partner Jerry introduced me to a teacher who gave me the basics and I’ve been doing it every morning right after I wake up and before I write.
I like the addition to my morning routine. It’s very peaceful that time of the day and it’s a nice bridge between night and day.
I’m hoping for a bunch of benefits; lower stress, more presence in my personal interactions, lower blood pressure, and a healthier approach to life.
That’s a lot of asks from sitting and breathing for ten to fifteen minutes a day but I’m told it’s all there for me if I commit to the practice and keep it up.
I’m very much a creature of habit and so I’m pretty sure I can do that.
And it might improve my writing too. That would be a win for all of us.
As Bitcoin has reached five figure levels this week, I have received a number of questions about taxes owed on Bitcoin gains.
That is comforting to me. Bitcoin and crypto are a bit like religion. There are a lot of true believers out there, me included.
But at least some people are stepping back and taking money off the table. I would encourage everyone to think about at least taking their cost off the table and playing with the house money at these levels.
And if bitcoin/crypto has reached an unhealthy percentage of your net worth, I would also recommend stepping back and thinking about rebalancing your asset allocation.
So, if you are US taxpayer, what do you owe in taxes on these gains?
The IRS issued this guidance back in the spring of 2014:
IR-2014-36, March. 25, 2014
WASHINGTON — The Internal Revenue Service today issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.
In some environments, virtual currency operates like “real” currency — i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance — but it does not have legal tender status in any jurisdiction.
The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:
- Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
- Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
- The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
- A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
Further details, including a set of 16 questions and answers, are in Notice 2014-21, posted today on IRS.gov.
I would strongly suggest folks read that link to “Notice 2014-21” as it includes a lot more information in it.
I have always thought about Bitcoin and other crypto assets like stocks when it comes to capital gains. When you sell the coins, you owe capital gains taxes on the gains.
But how do you calculate the gains?
I assume the answer to the last question is yes and that you can use whichever of the three methods to calculate gains but you need to use them consistently and that requires you to track your buys and sells very carefully.
But I am most certainly not a tax advisor and I do not give tax advice here at AVC. We have very good tax advisors who will figure this stuff out for us.
Hopefully, there are some tax advisors in the AVC audience who will weigh in with answers (and likely more issues to be considered). So if you are an expert in this stuff, please take the time to leave all of some answers in the comments this morning. We appreciate it.
I remember at our first USV Sessions event in the summer of 2006 Scott Heiferman stated that he wanted to spend 20 years building a company that would “last.” This was in an era of quick flips where many entrepreneurs wanted to build and sell as quickly as possible. I was impressed by that long term perspective and told my partner Brad that we should see if we could invest in Scott’s company Meetup.
We did invest in Meetup shortly after that, Brad joined the board, and we have been investors in Meetup for the past ten years.
Today, Meetup announced that it is becoming a part of the WeWork network.
Meetup launched in June 2002, fifteen years ago. Over those 15 years Meetup has become synonymous with the idea of community being an in person thing.
Community on the Internet is easy but prone to a lot of bad behavior. Community in person is harder but works better. Humans tend to be more interesting and more decent in person.
And with the ever increasing encroachment of digital devices into our daily/hourly/constant existence, taking the time to sit down face to face with other people is more important than ever.
Meetup, like its NYC community peers Etsy and Kickstarter, has been profitable since its earliest days. As Scott said in the Wired piece “Our number one priority was independence and to live within our means.” That has meant always balancing growth and profitability, like most businesses do.
But on the Internet, particularly now in the age of winner take most, it is hard to balance profitability and growth and very few companies do.
So Meetup decided to do something this year that it had not done in a decade, since USV invested in 2007. Scott went out and talked to investors about investing in more growth. That led to “offers from what Heiferman calls the usual suspects.”
The most interesting of the offers came from WeWork which is building another in-person network, maybe the largest in-person network of scale on the Internet. It seems like such a perfect match. And so Meetup is joining forces with WeWork who will aggressively invest in Meetup to help it scale to reach even more people who want to engage in live in person conversations.
And Scott is going to continue to lead Meetup inside of WeWork meaning he will likely achieve his goal of working on Meetup for 20 years or more.
It is always bittersweet to see a company as important as Meetup leave the USV network. But we agree with Scott that this is the right thing for Meetup and WeWork and we are enthusiastic about the potential of this combination.
Etsy, now twelve years old, remains the best place on the Internet to find something unique and special for your holiday gift giving.
If you want to reject the sameness of Amazon and Walmart this holiday season, head on over to Etsy to do your shopping.
Here are two suggestions for holiday shopping on Etsy:
Happy Shopping!
We saw the Churchill film, Darkest Hour, yesterday. I loved it
It ends with a great quote, by Churchill of course, about success and failure:
Success is not final, failure is not fatal: it is the courage to continue that counts.
I think that sums up investing and entrepreneurship well. At least it does for me.
This is a fantastic Ted Talk given by Karoli Hindriks, founder and CEO of our portfolio company Jobbatical. It’s only ten minutes long and well worth your time this weekend.
Eyebeam is a “a nonprofit studio for collaborative experiments with technology” which is based in NYC and has been connecting artists with technology for twenty years.
Eyebeam is moving into a new studio and is doing a crowdfunding campaign on Kickstarter to raise funds for some extras. They have already reached their minimum funding target of $15k but if they can reach $20k, they will be able to “purchase live-streaming equipment to enable event programs to be accessed globally.”
I backed this project this morning and if you are a fan of Eyebeam, like me, you can back it too right here.
Thankfully the US is enjoying one of the longest economic expansions of the post-war period (101 months and counting)
Thankfully that economic expansion is starting to result in job growth for the parts of the economy that have lagged during this expansion
Thankfully the Trump Administration has, so far, failed to enact the most troublesome parts of its agenda
Thankfully the developing world continues to experience rising wealth, income, and living standards
Thankfully technology continues to produce answers to our most vexing problems
Thankfully renewable energy continues to grow and displace carbon-based energy around the world
Thankfully gender and racial equality is on the rise and white male dominance is on the decline
Thankfully literacy rates continue to rise rapidly around the world
Thankfully almost 100,000 students in the NYC public school system got a computer science class last year
Thankfully the NY Knicks are young, hungry, play hard, and are winning
Happy Thanksgiving Everyone
I have written about net neutrality frequently here at AVC. I believe that for as long as we have local monopolies and duopolies for last mile broadband internet in most parts of the US, we need our federal government to actively reign in the broadband providers from doing things that are anti-innovation, anti-consumer, and pro-big business. For much of the last decade, the internet crowd has been a force to be reckoned with on this issue and we fought for and won good net neutrality rules that were put in place and defended in court. If you are a long time reader of AVC, you heard me advocating for and celebrating these wins.
The times have changed. We have a pro-big business team in the White House and at the FCC who are hell-bent to overturn those hard fought for net neutrality rules. We should fight them in these efforts, just like we have fought for these rules at every turn. Here are some things you can do:
#NetNeutrality is NOT DEAD YET. Congress has stopped FCC votes before. Do NOT give up!
1) RETWEET this to help spread the word that we can still stop this.
2) CALL your lawmakers: https://t.co/S8d0OxZQe0
3) PROTEST at Verizon stores on Dec 7: https://t.co/OvdNJe0Idh pic.twitter.com/oPXgyGRsam
— Fight for the Future (@fightfortheftr) November 21, 2017
But even as we fight for net neutrality, we also should be investing heavily in efforts to reduce our society’s reliance on the big cable and telcos for our broadband internet. That’s the core problem here.
So, in addition to fighting for net neutrality, here is what you should be doing:
I believe that technology is ultimately a better solution than regulation to market failures like the monopoly/duopoly issue in last mile broadband and I am confident that we will get the technology to solve it soon enough (certainly in my expected lifetime). But until that happens, regulation is a good tool to keep things moving in the right direction. That’s why I have supported net neutrality and will continue to support it until the technology arrives in the mass market to address the underlying problem.