Guest
Ali Hamed
#265: Ali Hamed on Seeking Value in Today’s Private Credit Market
- Private credit markets are reacting more slowly to COVID-19 than public markets because covenant breaches require actual non-payment rather than price speculation; public bond markets respond immediately to perceived risk changes. - Borrowers should proactively communicate downside scenarios to lenders rather than hide information or feign optimism; transparency builds trust and opens dialogue around workable solutions. - Venture-backed companies are cutting costs aggressively—reducing AWS, Salesforce, and rent; right-sizing headcount; and extending runway—while some are positioned to gain market share in sectors like streaming and e-commerce. - E-commerce and lower-CPM ad platforms (YouTube, Snap) are likely to outperform traditional media and premium-CPM channels; views are up but CPMs and ad spend are down. - Subscription businesses may prove more resilient than enterprise software because consumers prioritize services like Spotify and Netflix over discretionary enterprise purchases. - COVID-related covenant language will likely enter loan documents permanently; future pandemic insurance and government trust funds may emerge for high-risk sectors like airlines and hospitality.
Ali Hamed, founder of CoVenture: A VC's Take on Crypto
- CoVenture's multi-disciplinary model across venture capital, credit, and crypto investing allows them to identify opportunities at the intersection of technology and finance where competitors lack cross-asset expertise. - Alternative lending and direct lending strategies, particularly asset-backed lending (especially against Bitcoin), offer superior risk-adjusted returns because traditional firms cannot pitch such strategies to their investment committees. - Most cryptocurrency and blockchain projects fail because founders prioritize technology over the actual network dynamics, market adoption, and user acquisition required to create liquidity and value. - Security tokens will likely emerge as a secondary liquidity mechanism for private company equity holders seeking exits, rather than as a primary fundraising tool for startups. - The venture capital and crypto investment communities overestimate their contrarianism; most early-stage investors operate on consensus-driven strategies and face pressure to demonstrate traction within 12–24 months rather than pursue truly differentiated theses. - Bitcoin functions as a store of value and inflation hedge within a diversified portfolio, offering portability and currency optionality for individuals in uncertain geopolitical environments.