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NEWS: Breaking down SBF's trial and the downfall of FTX | E1824

This Week in Startups

Fri Oct 06 2023



SBF Trial and Downfall of FTX:

  • Sam Bankman-Fried (SBF) is currently on trial for alleged fraud related to his involvement with FTX.
  • The prosecution argues that SBF stole customer deposits through a secret backdoor to Alameda Research and used the funds for personal gain.
  • The defense concedes many facts but claims that SBF operated in good faith. They place blame on Caroline Ellison for failing to hedge exposure.
  • Witnesses have testified against SBF, including a Paradigm investor who stated they wouldn't have invested if they were aware of red flags.
  • Gary Wang has pleaded guilty to fraud and revealed that SBF named Alameda Research to make it easier to do business.

Future of Software Unicorns and Late-stage Funding Rounds:

  • It is predicted that there will be more unicorns in the future as efficiency and profitability increase within startups.
  • Late-stage funding rounds may become less necessary as startups require less funding and become profitable at earlier stages.
  • Investors may shift their focus towards earlier stages or taking companies public rather than participating in late-stage funding rounds.