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Welcome back Chronicler!
This week Washington reached into the talent market and pulled one of Big Tech's favorite levers out of its hands. Meanwhile the money kept flowing to the physical stack under AI, with quantum, owned-cloud hardware and chip simulation all landing big rounds.
Plus: the participating preferred trap hiding in your term sheet, and a $475M quantum Series B.
As always, thank you for subscribing and engaging week-in week out.
With Love,
Kev
THIS WEEK IN VC & TECH
What matters this week
LEAD STORY
The administration is suspending Microsoft, Adobe, Capgemini, Cognizant, HCL, Infosys, Tata and Wipro from the permanent labor certification pipeline on fraud allegations, and the Labor Department will not accept new or pending applications from them. The non-obvious effect is that the incumbents who normally hoard scarce senior engineers just lost their best retention tool, which turns their foreign-born staff into the most poachable talent pool of the year.
VCs should tell portfolio founders to run targeted outreach to visa-dependent engineers at these firms now, while pairing offers with immigration counsel and a clean, audited sponsorship process, because founders with compliant filings will beat the giants on certainty. Funds should also stop assuming offshore IT-services capacity is a cheap fallback for early engineering and budget for more US-based and nearshore hiring.
When the biggest employers lose the green card lever, the startup with a clean immigration process wins the talent.
QUICK HITS
SAP / TechWolf SAP is acquiring Ghent-based TechWolf, an AI workforce-skills startup with 120+ staff, in what the company calls the largest sale of a venture-backed software company in Belgian history. Enterprise incumbents buying European AI application startups at modest scale makes sub-$100M exits a real base case for seed and Series A investors in the region.
Data Center Power Wood Mackenzie found four-hour batteries cost less than open-cycle gas turbines in all 43 markets it surveyed, while turbines take two to four years to procure. Power is the binding constraint on AI buildout, so the opportunity shifts toward storage, grid software and power-aware compute startups.
Flock Flock is cutting about 270 employees, roughly 18% of staff, through voluntary buyouts amid pushback on its license plate readers and people-tracking tech. Public backlash is now a headcount and growth risk for surveillance-tech startups, so diligence should price in regulatory and reputational exposure.
Starlink India India's Communications Ministry rejected Musk's claim that Reliance chairman Mukesh Ambani is obstructing Starlink, saying Starlink and two other licensed satellite operators are at the same stage of security assessments. Founders building on satcom in India should plan for regulator-paced timelines, not partner-paced ones.
PRESENTED BY Kalshi
The ice cream shop that makes money when it's cold
28 Wishes sells ice cream in Los Angeles. Below 70°F, sales fall about 20%. The weather is out of their hands. Rent isn't.
So the owners started putting about $20 a day into Kalshi weather markets, taking the cold side. The days that keep customers away now pay something back.
This is hedging. Big companies have done it for decades, buying protection against bad weather, fuel spikes and rising rates. It used to take a broker, a trading desk, and an order size no corner shop could meet.
Kalshi opens it up. Contracts on weather, fuel prices, inflation, tariffs and regulation, starting at a few dollars. Take a position on the outcome that would hurt you. If it hits, the payout softens it. If it doesn't, the contract expires and the good month was the point.
MONEY IN MOTION
The deals that shaped the week
Quantum computing startup Oratomic pulled in $475M at roughly a $5.4B valuation, co-led by ARCH Venture Partners, Spark Capital and Khosla Ventures. When a deep-tech company can raise back to back rounds in a quarter, investors are telling you the scarce asset is credible hardware roadmaps, not another software wrapper.
Oratomic | Quantum computing | Series B, $475M | ARCH Venture Partners, Spark Capital, Khosla Ventures | Oct 9, 2026 Link
TypeSafe AI (Jev) | AI developer platform | Reported $870M, Series A | Andreessen Horowitz | Oct 9, 2026, reported and not company-confirmed Link
Butterfly Effect (Manus) | AI agents | $500M+, stage undisclosed | Boyu Capital, IDG Capital | Oct 8, 2026 Link
Oxide Computer | Cloud infrastructure hardware | Series D, $445M | Eclipse Ventures | Oct 9, 2026 Link
Vinci | AI chip and hardware engineering simulation | Series B, $250M | Advent International, Temasek, Xora | Oct 6, 2026 Link
Capital concentrated in AI software platforms and the physical stack beneath AI: quantum, owned-cloud hardware and chip simulation. Compute and infrastructure plays took as much money as pure AI apps.
VENTURE BITE
Participating Preferred
"Participation isn't a double dip forever, the cap decides when it stops paying and when you should walk away from it."
Participating preferred lets an investor take their preference back and then also share in what is left as if they had converted. Take $5M invested for 20% with a 1x participating preference: in a $25M sale the investor collects $5M first, then 20% of the remaining $20M ($4M), for $9M total, or 36% of proceeds on a 20% stake. Most negotiated versions add a cap, say 3x ($15M total), and the cap creates a trap that new investors miss: the investor hits the $15M ceiling at a $55M sale (5 + 0.2 x 50 = 15), stays flat at $15M until 20% of the price exceeds $15M at a $75M sale, and only above that is conversion to common better. So at a $60M exit the investor is stuck at $15M, and the founders actually keep more of each marginal dollar than the headline ownership split suggests.
True or False?
For an investor with $5M in for 20%, a 1x participating preference and a 3x total cap, converting to common pays more than staying preferred at a $60M sale.
AI TOOLKIT FOR VCs
Our curated stack for the modern investor
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THIS WEEK'S STANDOUT
A beta add-in that puts Claude inside Google Docs, Sheets and Slides to draft and edit documents, analyze spreadsheets, write formulas, build charts and create slides. Many VC teams keep cap tables, portfolio KPI trackers, IC memos and LP updates in Sheets and Docs, so this brings AI analysis into those files without copy-pasting. It is available in beta on all paid Claude plans.
Manifold MCP - Feeds SEO, AI-answer, social, ads and lead data to an AI agent, which could support market mapping and sourcing signals.
Scrape Anything by Context.dev - Turns any website into clean structured data with one API call, useful for building market maps and scraping portfolio or competitor sites.
Hexis Cloud - A shared company brain for all your AI agents, which could hold fund-wide deal and portfolio context.
Bearconnect 2.0 - AI-powered LinkedIn platform for content and outreach, usable for founder outreach in deal sourcing and for firm brand-building.
FROM X
This week's best take
Paul Graham, co-founder of Y Combinator, argues that Amazon banning shopping agents is the first real opening for an Amazon competitor, because people will not want an Amazon-supplied agent buying on their behalf.
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THE BOARD
VC jobs, curated for you
Here's what you've been waiting for: exciting job opportunities! To maximize your chances, remember these key tips:
Apply early and tailor your application to each specific job posting.
Research the Venture Capital firm thoroughly, including their portfolio companies and investment thesis.
Customize your CV to highlight the strengths most relevant to the role.
Go the extra mile: Identify a startup that aligns with the VC's portfolio and investment strategy. Then, craft a two-page memo explaining why you believe it would be an excellent fit for their investment
🔥Must Apply | 🌱Impact Investing | 🧑💻Remote Role | 🥳Easy Apply
🇺🇸 Microventures - Analyst
🇺🇸 Entegris - Senior Principal
🇺🇸 Ontario Teacher’s Pension Plan - Analyst 🔥🔥🔥🔥
🇺🇸 L’Oreal Corporate VC - Analyst 🔥🔥
🇺🇸 Microsoft M12 - Associate 🔥🔥🔥
🇺🇸 Aramco - Investment Principal 🔥🔥🔥🔥
🇺🇸 Wells Fargo CVC - Vice President 🔥
🇺🇸 Plug & Play - Ventures Associate 🔥🔥
🇬🇧 British Business Bank - Associate
🇬🇧 General Atlantic - Associate 🔥🔥🔥🔥
🇪🇸 ACL Partners - Associate
🇩🇪 Bosch - Venture Investment Manager 🔥
🇩🇪 Revent - Investment Associate
🇩🇪 YZR Capital - Principal
🇩🇪 Antler - Investment Team
🇸🇬 SG Growth Capital - Investment Manager
How was the newsletter today?
That’s it for today, hope you enjoyed this as much as I did curating it, see you next week!
-Kev