👋🏾 Hi friends!

It’s been a sunny week in London, though sadly, having been in meetings all weekend I didn’t really get much of a chance to enjoy it 😢 , even more frustratingly, I also managed to miss out on the spectacular light show that the country got to experience on Friday and Saturday evening as the Northern Lights came to the UK. Fortunately some of my neighbours got snap happy, so check out this incredible shot from the weekend 🤯 

I’m well underway writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

Now let’s get down to business…

In this weeks Off Balance, I’ll be chatting about:

🎙️ Ash Arora, Partner at LocalGlobe on the Nothing Ventured Podcast
🇪🇺 eu/acc – what’s the movement all about?

Why Ethereum is the Hugging Face of Blockchain…

In the latest episode of Nothing Ventured, I had a wide ranging and fascinating conversation with Ash Arora, the youngest Partner at LocalGlobe, a UK-based venture capital firm that focuses on seed and impact investments leading their web3 and blockchain practice.

Before joining LocalGlobe, she was Investments Lead at Polygon Labs leading the $100Mn Polygon Ventures’ Fund where she focussed on early-stage web3 startups with global LPs across the US, and Europe.

Three takeaways from this episode that are worth thinking about:

1️⃣ We are Soooo Early in Blockchain and AI

Ash noted that we are still in the early stages of both blockchain and AI technologies and adoption. Despite the hype and excitement around these fields, there is still a lot of infrastructure work yet to be done. The challenges of security, scalability, and cost have not yet been fully addressed, leading to immense potential for growth.

2️⃣ The Heisenberg Uncertainty Principle in Blockchain

Ash introduced the concept of the Heisenberg uncertainty principle in blockchain, drawing parallels to the famous physics principle. She discussed that in blockchain, it’s challenging to achieve security, scalability, and cost efficiency simultaneously. This fundamental problem underscores the need for innovative solutions and infrastructure development to overcome this trilemma.

3️⃣ Blockchain Use Cases and Real-World Adoption

We discussed the importance of real-world adoption of blockchain technology, focusing on practical use cases like land registry on-chain. While the technical aspects of implementing blockchain solutions may be feasible, the legal and regulatory frameworks need to evolve. The intersection of code as law and traditional legal structures presents a complex but promising landscape for adoption.

Beyond this we talked about:

🐇 How Ash went from knowing nothing about VC to going down a 3 month rabbit hole writing a paper on Bitcoin for Citi
🪙 Getting into crypto because she was restricted from investing anything else whilst at Citi.
🤷🏾 How 99% of the crypto community back in the day didn’t know what they were doing.
🎡 Feeling at home in London after landing for the first time for 20 rounds of face to face interviews with LocalGlobe.
🤝 Choosing LocalGlobe having 7 job offers in her pocket and using her 50+ question framework!

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Now let’s get into it.

Off Balance

There is a bit of a movement going on at the moment – you may have come across it on Twitter / X – lots of folks with a variation of e/acc or 🇬🇧/acc or some variation on that theme in their bios.

And while the movement is already a couple of years old, I thought it would be valuable to unpack what’s going on from the lens of eu/acc which has struck a chord with people throughout the European ecosystem.

eu/acc

To understand eu/acc (or any other ?/acc) you first need to understand the overarching movement that surfaced in 2022 and gained momentum in 2023 amongst prominent people throughout the tech ecosystem.

That movement is e/acc or Effective Accelerationism.

The concept of effective accelerationism (e/acc), posits that civilization should align with the universe’s inherent tendency towards increased energy utilisation and entropy.

e/acc draws on principles from physics, suggesting that life and societal structures like capitalism are manifestations of these thermodynamic processes, optimising energy extraction for growth and replication.

e/acc advocates for a laissez-faire approach, arguing that open, competitive systems are better at evolving and adapting than those tightly controlled by top-down regulations.

This perspective envisions a future where human limitations are transcended, advocating for a dynamic and flexible framework that encourages innovation and evolution towards greater complexity.

It’s proponents summarise it themselves as follows:

At a broader level, e/acc is a progression of accelerationism (developed by British philosopher Nick Land and since fallen out of favour due to perceived or actual racist views including nods to eugenics and far right undertones). It is also a push back against the effective altruism movement which proposes a much more cautious approach towards AGI (artificial general intelligence) which it frames under ‘longtermism’ and again, e/acc is also a response to the degrowth movement which expounds a philosophy of reduced economic activity and consumption.

Now, while you only have to head over to Reddit to get a feel for the pop-pyschology vibes of the movement with plenty of physicists and PhDs showing their disdain for the movement as slightly nonsensical, probably the best quote I have seen about it is from this article in the New York Times:

Because what e/acc really is, is the seed of an idea that people can take and interpret how they want to. It has allowed for a plethora of sub /acc movements to take off, and this is where my interest really lies.

European Accelerationism

Let me preface this by saying the following:

I think it sucks that the UK exited the European Union.

I think that the European Union has some significant challenges and issues.

The ecosystem in Europe is not homogenous (which is kind of the point).

On 30th April 2024, Andreas Klinger (formerly CTO of Product Hunt, Head of Remote at AngelList and currently investor at Remote First Capital) posted a blog entitled: Dear Europe, please wake up – eu/acc.

In it he uses the the general objective of the e/acc movement but in a European context arguing for certain changes that could take Europe out of its (perceived and actual) malaise on the pathway to startup and technological growth.

The first part of his essay deals with probably the most prevelant problem in the European startup ecosystem, one that comes through in the podcasts I’ve recorded with VCs across Europe – though never as explicitly, nor providing the ultimate rationale, as Andreas does, as being the self doubt that Europe has driven by tropes and memes driven predominantly by our US counterparts.

If you live in Europe (the continent not the political organisation the EU) and have spent any time in the tech and venture ecosystem, I’d warrant that you have come across at least one of these statements either overtly or in meme form at some point online.

Andreas makes the case against each one whilst accepting that to some extent there is no smoke without fire and that, the continuing ‘belief’ in these tropes has the potential to become a self fulfilling prophecy.

He suggests that all the big themes – tech, AI, space-tech, climate etc. are all already being tackled in Europe. We don’t lack the ambition. Instead, according to Andreas, what causes us the most problem is friction.

And because of that friction, he proposes two issues that need to be tackled to help ‘unleash’ European accelerationism.

Creating an EU Inc.

Teach English as early as possible.

Europe has 750m people, the EU 450m all spread across over 40 countries. That means 40+ different legal systems, regulations, corporate law, employment law, tax regimes, customs, cultures and, of course, languages.

And as many investors I have attested to, one of the reasons that it is so hard to invest in certain jurisdictions is the bureaucracy that goes with that. Andreas talks about investing in a German GmbH as an example, requiring notaries, physical presence and all sorts of other friction that makes sure investors think twice before parting with their cash.

Norway has recently shocked the startup ecosystem with tightening of rules around their exit tax which would levy 37.8% on unrealised assets over Euro 43k that had been built up in the country. This has very specific and costly implications for founders looking to scale up and out of the country whose population currently stands at just under 5.5 million people.

So the case for an EU Inc is a strong one, if founders (and importantly investors) had a standard vehicle they could set up wherever they were based in Europe, this would lead to a far smoother process to launch and raise capital.

It is no surprise that in the US, the Delaware Inc has become the vehicle of choice for investors, and, as Daniel Glazer stated in my interview with him, it is with good reason that if you are a European based startup looking for US investment pre Series B, you are likely going to have to flip to a Delaware topco. Investors simply don’t want to have to figure out the regulations that will bind them in some other jurisdiction.

A Europe wide structure would definitely remove some of those challenges (though this would need to be tested over time as case law is explored and precedent is formed).

The case for teaching English from an early age is also not that controversial (at least in principle if not in practice). It is understandable that individual nations do not want to lose their cultural and linguistic heritage but the reality is that English is the lingua franca of tech, business and – especially in the venture ecosystem – the US is the most likely destination for growth.

As a linguist myself, you will never hear me arguing against the value of learning second and third languages, it expands horizons and allows for better understanding of those from other cultures and backgrounds.

But English, especially in Europe, comes with connotations. The backlash against linguistic imperialism is real. We have all heard the stories of the French wanting to ban ‘le weekend’ from the vocabulary in the early 2000s, and it still surprises me when I travel to Italy how few people have a functional understanding of English outside of the cities.

This has real implications if you are building in the venture space, you will rub fewer shoulders, glad fewer hands and generally struggle to expand outside your home nation.

Obviously this is not always the case and you can be successful without learning or being fluent in English, but when all is said and done, as Andreas states, doing so provides optionality for future generations whilst standardising media and networks as opposed to maintaining disperate and patchy nodes across the ecosystem.

Just a few days ago Andreas launched https://eu-acc.com/ alongside a Discord which quickly garnered several hundred members with the starting ambition to tackle the issue of the EU Inc.

I have interviewed many VCs across the UK / European ecosystem and beyond and there is something quite enticing about what Andreas is proposing. Not just because there should be so much more optimism around tech in Europe, not just because we want to ensure we don’t fall behind the USA, China and other emerging ecosystems like India, Israel and elsewhere but also because his approach is to work with regulators and standardise rather than attempt to overturn or antagonise. Collaboration is always a better way to effect change if you can.

But also, I am attracted to it because (unsurprisingly) Andreas doesn’t approach this with the techno-libertarian overtones that the US advocates of e/acc seem to promote.

And as he says, if the EU could adopt the Euro across the bloc then anything is possible.

What do you think, does he make the case for European accelerationism and do you subscribe to the thesis?

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As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #35 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

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That’s it from me so until next time…

Stay liquid 🙂

Aarish