Early Investing

Naughty and Nice Lists for 2020

Naughty and Nice Lists for 2020
By Aryelle Young
Date December 23, 2020

Confession time. The #DogsofTwitter is one of my favorite Twitter communities. In this truly joyful corner of Twitter, dogs of all ages are trying extremely hard right now to be good boys and girls until Santa Paws arrives to give them treats and presents. Yes it’s totally corny. But I can’t help it. I love it. 

In honor of the dogs of Twitter, I compiled my own naughty and nice lists for 2020. Hopefully, Santa will be able to take it from here.

The Naughty List

I’m not sure what Santa uses to keep his suit clean while he’s delivering gifts. But whatever it is, Santa is going to need a large supply because he will be handing out lumps of coal to a pretty big list this year.

Startups with No 2020 Financials

This is a serious pet peeve of mine. Startups raising capital at the end of the year technically only have to release the previous two years of financials. They don’t have to release the current year. So startups raising in October, November or December are under no obligation to report how they’ve done in 2020 — which is ridiculous.

Traction is one of the most important metrics in evaluating startups. We have every right to know what their year-to-date revenue is. Are they growing? How quickly are they growing? Are they going through a down year?  These are all critical questions. Imagine trying to buy a house right now without telling the bank how much money you made in 2020. That’s not going to happen. As startup investors, we shouldn’t accept it either.

So for all the startups raising without providing 2020 data (and there are a lot of them!), here’s a lump of coal for your stockings. You deserve it.

Steve Mnuchin

Treasury Secretary Steve Mnuchin has been hinting for a while that he wanted to increase regulatory oversight over the transfer of bitcoin and other cryptocurrencies. And last week, Financial Crimes Enforcement Network (FinCen) proposed new anti-money laundering rules for crypto.

The new rules don’t really stop the bad guys from transferring money. And they could have been a lot worse. But that’s not why Mnuchin is on the naughty list.

Mnuchin is getting a lump of coal because he’s given the industry just 15 days to comment on the proposed regulation change. Normally, there’s a 60-day comment period. That gives people affected by the rule time to research, write and explain why they like or don’t like a proposed rule. And that feedback helps regulators adjust proposed rules to make them better — or gives them an idea of what to worry about in the future.

There’s really no reason for a 15-day comment period — especially one that includes holidays like Christmas and New Year’s Day. What’s the rush? It’s highly unlikely this regulation would be rejected by the new administration, so there’s even less reason for this condensed timeline. It makes zero sense. The right thing to do would be to give the industry the time it needs to respond — the time every other industry gets.

So for senselessly rushing the process, Mnuchin ends up on our naughty list.  


The Treasury Department wasn’t the only agency waiting to take a shot at crypto on its way out the door. SEC Chairman Jay Clayton is stepping down at the end of the year. And it appears his parting shot is the SEC suing Ripple.

Clayton has had four years to decide if variety tokens are “securities,” which would place them under much stricter regulations than they are today. The SEC has indicated bitcoin and ethereum are in the clear. But they haven’t said much about anything else. So instead of drawing clear guidelines for the industry to follow, Clayton is suing Ripple on his way out the door — and letting other people clean up the mess. That definitely gets you on the naughty list.

The Nice List


Yes, the SEC is on both lists. And that’s because they did something nice this year. In November, the SEC raised the limit on how much a startup could raise through equity crowdfunding. The current limit is $1.07 million. The new limit, which will go into effect next year, is $5 million.

That’s huge for startups — and startup investors. For startups, raising more money allows them to focus on execution instead of wondering about how to raise more money next year. For investors, it means we get to judge the progress of a startup’s product instead of fundraising progress.

And for that, the SEC deserves some kudos.


Ethereum is having a better year than bitcoin. If you didn’t notice, that’s OK. Bitcoin gets all the publicity and attention. And bitcoin cracking the $24,000 mark to set a new all-time was major news and a welcome relief for crypto investors. But ethereum has had a bigger year. Consider the following:

  • Bitcoin is up 224.9% on the year. 
  • Ethereum is up 379.9% on the year.
  • Ethereum launched a massive upgrade (Ethereum 2.0) to its system earlier this month.
  • More than $1 billion of ether has already been staked on Ethereum 2.0.
  • DeFi (decentralized finance) has seen major growth this year. And almost all of the DeFi ecosystem is built on Ethereum.

These are amazing accomplishments for any cryptocurrency. In fact, there’s only one group of people more deserving than Ethereum to be on Santa’s list. And that’s you.

Our Members

2020 has been a tough year for all of us. But all of you have persevered. You’ve sorted through the thousands of startups that have raised capital this year. You’ve let us help you find the best ones. You’ve invested in the future of America — and in creating a growth portfolio for yourself.

You’ve also taken advantage of the new crypto bull market. And you’ve done it all in the middle of a pandemic.

Congratulations to all of you. 2020 has been a slog. And you didn’t just make it through the year. You excelled. And for that, we say thank you. Your spot on Santa’s nice list is well deserved.

Top Posts on Early Investing