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PLUS: The largest SPAC ever..
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April 14, 2021
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Americans have had it with toilet paper. After scrambling to buy $11B+ worth in 2020, sales in January were
<em>
wiped
</em>
and fell 4.3% YoY.
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The big idea
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Coinbase is eyeing a $65B+ public debut
</h2>
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<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Internet browser Netscape went
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
public
</a>
on Aug. 9, 1995.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
In the decades since that date, the phrase “Netscape moment” has been used to signal the mainstreaming of a new industry.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Crypto-trading exchange Coinbase is going public today. With the NASDAQ setting a reference price of
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
$65B+
</a>
, it could be remembered as the crypto industry’s “Netscape moment.”
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
In the lead-up to this listing…
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
… Coinbase shared its Q1 2021 numbers; as detailed by VC Tanay Jaipuria, the results are
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
staggering
</a>
:
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<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Users:
</strong>
56m retail accounts and 7k institutional accounts
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Revenue:
</strong>
$1.8B in Q1 2021, which was more than all their revenue in 2019 and 2020
<em>
combined
</em>
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Market share:
</strong>
11% of the entire crypto-economy trades on Coinbase, up from <5% in 2018
</li>
</ul>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
How is Coinbase doing so well?
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Jaipuria credits the exchange’s strong results to 2 things:
</p>
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
High take rates:
</strong>
Coinbase gets 95% of its revenue from transactions, and its current take rate from retail investors is quite high (up to 1.5% vs. 0.05% for institutions).
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
A crypto bull cycle:
</strong>
The take rate is being applied to increasing trading volumes as crypto is in its 4th bull cycle
</li>
</ul>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
“As the price of Bitcoin has increased from $7K to ~$60K, trading volumes have increased fourfold (16X when annualized) from $80B (2019) to $335B (Q1 2021),” he writes.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
But such a juicy take rate brings competition
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
And Jaipuria notes that a bear case for Coinbase is that its fees will fall as more players -- from consumer fintech (Square, PayPal), brokerages (Fidelity), crypto exchange (Gemini, Binance) -- take share.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Crucially, the fintechs and brokerages can subsidize crypto trading with other business lines.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Coinbase’s potential moat is the trusted brand it’s built.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Either way, there will be countless Coinbase winners today from what could be the largest public debut since Facebook’s
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
$104B
</a>
bonanza in 2012.
</p>
</td>
</tr>
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<td>
<table cellpadding="0" style="width: 100%; padding: 10px 10px 0px;">
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</td>
</tr>
<tr>
<td style="padding-bottom: 5px;">
</td>
</tr>
<tr>
<td style="width: 100%;">
<table style="width: 100%;">
<tr>
<td style="color: #D62829; font-size: 16px; font-weight: bold; letter-spacing: 1.5px; text-transform: uppercase; padding: 10px 3px 12px;">
Snippets
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 0px 3px;">
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
J&J hit a snag
</strong>
after federal health officials recommended
<a style="color: #d62829; text-decoration: none;">
pausing
</a>
vaccinations so they can review 6 rare cases of blood clotting among the nearly 7m people who already received the shot.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Absolutely epic:
</strong>
Fortnite maker Epic Games
<a style="color: #d62829; text-decoration: none;">
raised
</a>
$1B in funding at a $28.7B valuation. The most ironic investor on the list: the Ontario Teachers’ Pension Plan Board.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Is your company worth over $100B?
</strong>
Sen. Josh Hawley unveiled the “Trust-Busting for the Twenty-First Century Act” that would
<a style="color: #d62829; text-decoration: none;">
ban
</a>
mergers and acquisitions by companies valued $100B+.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
IBM’s IT business is spinning off.
</strong>
It’s called
<a style="color: #d62829; text-decoration: none;">
Kyndryl
</a>
, and despite sounding like a variety of Benadryl for your next of kin, the new name is meant to enhance the brand’s focus on customer relationships.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Tourism and 2020 don’t go together,
</strong>
but Bandwango made it work. The Utah-based startup that connects businesses and tourism bureaus with local communities saw its customer base double in 2020 and just
<a style="color: #d62829; text-decoration: none;">
raised
</a>
$3.1m.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Need a fix
</strong>
: Katrina Lake -- the founder and CEO of
<a style="color: #d62829; text-decoration: none;">
Stitch Fix
</a>
, the personalized clothing retailer -- will step down from her role and become executive chairperson. Lake was the youngest woman to take a company public when $SFIX IPO’d in November 2017.
</li>
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<td style="padding-bottom: 5px;">
</td>
</tr>
<tr style="display: block; padding: 10px 2px 0px;">
<td style="width: 100%;">
<table style="width: 100%;">
<tr>
<td style="color: #D62829; font-size: 16px; font-weight: bold; letter-spacing: 1.5px; text-transform: uppercase; padding: 0px 0px 10px;">
On fire
</td>
</tr>
<tr>
<td style="padding: 0 0 6px;">
<a style="color: #d62829; text-decoration: none;">
<img alt="wood" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Flumber.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1lWdjK:5TVXNUHk2a8jDSpuL4oh8o1ICndtQ9Ge5LdMkvMV3u4" style="height: auto; width: 100%; max-width: 600px;" width="600"/>
</a>
</td>
</tr>
<tr>
<td>
<h2 style="font-size: 22px; line-height: 26px; font-weight: bold; margin: 10px 0px 5px;">
The skyrocketing cost of lumber, explained
</h2>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 0px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Wood is typically used for building roofs. Now it’s known for blasting through them.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Lumber
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
prices
</a>
are up nearly
<strong>
260%
</strong>
since April 2020, following a perfect storm of surging demand and diminished supply.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
And it all started with a simple backlog...
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
At the start of the pandemic, sawmills anticipated weak demand and limited
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
production
</a>
by up to
<strong>
30%
</strong>
. To their surprise, demand turned out stronger than ever:
</p>
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
DIY boom:
</strong>
While the US economy
<a style="color: #d62829; text-decoration: none;">
shrank
</a>
3.5% in 2020, spending on home improvements and repairs grew 3%+
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Low interest rates:
</strong>
In December, US new housing starts hit a 14-year
<a style="color: #d62829; text-decoration: none;">
high
</a>
</li>
</ul>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Despite wood production hitting a
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
13-year high
</a>
in February, supply hasn’t caught up with demand -- and now
<strong>
~70%
</strong>
of builders are
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
raising
</a>
home prices to slow demand down.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The result is a
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
$24k+
</a>
increase in the average price of single-family homes since April 2020.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
European beetles are now coming in clutch
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Not
<em>
those
</em>
European beetles. A literal beetle infestation across Europe is
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
boosting
</a>
logging there, and Europe’s share of US lumber imports reached a record high of
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
13%
</a>
in 2020.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Those imports are critical to the US lumber supply as British Columbia has reduced production by over a third in 5 years.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
In conclusion… (We wanted to end this piece with a joke about lumber, but we just couldn’t think of any that wood work.)
</p>
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Podcast
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<h2 style="font-size: 20px; font-weight: 800; letter-spacing: 0px; line-height: 24px; margin: 20px 0 0px;">
<strong>
Jake Paul Wants to Be the Next Jay-Z
</strong>
</h2>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
… and he just might. Sounds crazy? He’s already built a media empire he claims has generated billions for platforms. He’s gone from social media phenom to one of the biggest names in boxing. Now he’s investing in startups. He breaks down where he’s investing on today’s My First Million.
</p>
</td>
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<p style="font-size: 18px; line-height: 20px; padding-bottom: 12px; margin: 0px;">
🎧
<strong>
Listen below:
</strong>
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SPAC News
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<tr>
<td style="padding: 0 0 6px;">
<a style="color: #d62829; text-decoration: none;">
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<p style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; line-height: 20px; margin: 0px; padding: 8px 5px 10px;">
If you’re a superapp and you don’t have a presence in SEA, are you even a superapp? (Source: WorldAtlas)
</p>
</td>
</tr>
<tr>
<td>
<h2 style="font-size: 22px; line-height: 26px; font-weight: bold; margin: 10px 0px 5px;">
The largest SPAC ever
</h2>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 0px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Southeast Asian superapp Grab announced plans to go public by partnering with Altimeter Growth Corp., a special purpose acquisition company (SPAC),
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<em>
Axios
</em>
</a>
reports.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The kicker: At an equity value at $39.6B, it would be the largest SPAC ever.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
Grab was founded in 2011 as a ride-hailing startup
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Since then, the Singapore-based company has added a digital wallet, food delivery, and more to its offering.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
As we previously detailed,
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
650m+
</a>
people -- nearly twice the US population -- live in 11 countries across Southeast Asia.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Many of these locales have underdeveloped infrastructure, which creates the space for “superapps” to thrive by providing one-touch access to finance, transportation, and logistics.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Grab -- once called the Uber of Asia -- is competing with 2 other players to be the region’s superapp:
</p>
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Indonesia-based GoJek
</strong>
, valued at
<a style="color: #d62829; text-decoration: none;">
$10B+
</a>
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
Singapore-based Sea Limited
</strong>
, valued at
<a style="color: #d62829; text-decoration: none;">
$120B+
</a>
</li>
</ul>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
The largest SPAC ever hits…
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
… as US regulators are reviewing SPAC accounting practices per the
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<em>
Wall Street Journal
</em>
</a>
. This change could make a SPAC look less financially attractive than it would otherwise be.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
With SPACs raising more in the first 3 months of 2021 (
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
$88B+
</a>
) than all of 2020 ($83.4B), the extra scrutiny seems warranted.
</p>
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<td>
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<td style="color: #D62829; font-size: 16px; font-weight: bold; letter-spacing: 1.5px; text-transform: uppercase; padding: 10px 3px 0px;">
TRENDS
</td>
</tr>
<tr id="image">
<td class="h2020 ignore-defaults" style="padding: 0px 3px;">
<center>
<a style="color: #d62829; text-decoration: none;">
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</a>
</center>
</td>
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<tr id="bottom ad copy">
<td class="h2020 ignore-defaults" style="padding: 0px 3px;">
<h2 style="font-size: 20px; font-weight: 800; letter-spacing: 0px; line-height: 24px; margin: 20px 0 0px;">
<strong>
A 7-figure business with a $500 3D printer...
</strong>
</h2>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Have you read this week’s Trends report?
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
If you haven’t, you might have missed:
</p>
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
How one individual built a business selling
<a style="color: #d62829; text-decoration: none;">
<em>
dried hibiscus flowers
</em>
</a>
on Amazon that brings in
<strong>
$101k/month
</strong>
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
How a
<a style="color: #d62829; text-decoration: none;">
$500 3D printer
</a>
can be used to build a 7-figure business with
<strong>
90% profit margins
</strong>
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
Which niche industry is set to
<strong>
5X by 2023
</strong>
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
And much more.
</li>
</ul>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
To read the full reports
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<strong>
try Trends for one full week for just $1
</strong>
</a>
.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
During your one-week trial, you’ll also get access to exclusive livestreamed lectures, our growing database of upcoming market opportunities, and our private network of entrepreneurs, founders, and investors from around the world.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<strong>
All for a buck.
</strong>
</a>
</p>
</td>
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<tr>
<td align="center" style="text-align: center; padding: 10px 0px 15px;">
<a style="color: #ffffff; font-size: 16px; font-weight: bold; text-decoration: none; background-color: #D62829; border-radius: 15px; -webkit-text-fill-color: #ffffff; padding: 6px 20px;" target="_blank">
Read the Full Reports →
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</td>
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<td style="width: 100%;">
<table style="width: 100%;">
<tr>
<td style="color: #D62829; font-size: 16px; font-weight: bold; letter-spacing: 1.5px; text-transform: uppercase; padding: 0px 0px 10px;">
Stat of the day
</td>
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<tr>
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<img alt="chart" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252FChart.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1lWdjK:5TVXNUHk2a8jDSpuL4oh8o1ICndtQ9Ge5LdMkvMV3u4" style="height: auto; width: 100%; max-width: 600px;" width="600"/>
</td>
</tr>
<tr>
<td>
<p style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; line-height: 20px; margin: 0px; padding: 8px 5px 10px;">
Higher up and further to the right (Source: PNGKey)
</p>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 0px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
<strong>
CEO pay was up in 2020.
</strong>
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<em>
The Wall Street Journal
</em>
</a>
<em>
</em>
crunched the numbers for CEOs of 300+ public companies and found that the total median compensation reached $13.7m (vs. $12.8m) in the year prior.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
These numbers come even as many businesses were ravaged by the pandemic.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The
<em>
WSJ
</em>
notes shareholder backlash against lavish pay packages is on the rise: A dozen major companies -- including Starbucks and Walgreens -- recently lost bids to up CEO pay.
</p>
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<em>
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</em>
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Want to see ‘em? Just refer 3 more friends to The Hustle and we’ll send you our curated set of interviews with founders from brands like Zola, AWAY, Vungle, Bonobos, and more.
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Here’s a message you can use to share with your friends:
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.
<br/>
Editing by: Brad “Netscape moment” Wolverton, Les Tan (Sunscreen Provisioner).
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4 years, 1 month ago - news@thehustle.co
PLUS: The largest SPAC ever.. April 14, 2021 Americans have had it with toilet paper. After scram...