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Illustration: Rebecca Zisser/Axios

Last week's triple-digit layoffs at BuzzFeed and Vice were blamed, in many digital media quarters, on unrealistic growth expectations by those companies' venture capitalists. Kind of like what we heard after Mic shut down, except louder.

Yes, but: It's more complicated than that.

  • Let's start with the obvious conflict: I work at a VC-backed digital media startup. And we're not even 2.5 years old yet, so what follows could really come back to bite me in a few years. After all, neither BuzzFeed nor Vice were doing layoffs so early into their existences. So please delete this email immediately after reading.
  • Media, like mattresses, isn't software. It doesn't scale the same. And if either VCs or entrepreneurs don't recognize the distinction, they're both going to be in for a world of hurt. Or at least their non-core employees will be.
  • But digital media startups can generate returns that satisfy VCs, founders and early employees.
  • One recent example would be Business Insider, which raised around $55 million over 7 years, with a $7 million pre-money on its Series A in 2008 and a $166 million pre-money on its Series G in early 2015. Later in 2015 it was purchased by Axel Springer at a valuation north of $440 million (it's a bit complicated with cash on hand and Jeff Bezos rolling over his shares).
  • Yes, Business Insider got lucky that Axel Springer had just lost out on buying The Financial Times, but it was still well-positioned as a consolation prize.
  • Business Insider founder Henry Blodget tells Axios: "We assessed our 5-year plan carefully with every raise. We wanted to be confident that we could generate a compelling return. We also didn’t want to take more than we needed to. In hindsight, that approach worked well."
  • Blodget adds that he doesn't "think it’s categorical that more capital is necessarily bad," pointing out that both BuzzFeed and Vice have built large, highly-valued companies. But the reality is that they've raised around a combined $2 billion, so even achieving Business Insider-level returns for later investors is extremely daunting. Again, this isn't software.

Go deeper

In photos: Protests outside fortified capitols draw only small groups

Armed members of the far-right extremist group the Boogaloo Bois near the Michigan Capitol Building in Lansing on Jan. 17. About 20 protesters showed up, AP notes. Photo: Seth Herald/AFP via Getty Images

Small groups of protesters rallied outside fortified statehouses over the weekend ahead of President-elect Joe Biden's inauguration Wednesday.

The big picture: Some protests attracted armed members of far-right extremist groups but there were no reports of clashes, as had been feared. The National Guard and law enforcement outnumbered demonstrators, as security was heightened around the U.S. to avoid a repeat of the Jan. 6 U.S. Capitol riots, per AP.

6 hours ago - Politics & Policy

Trump to issue at least 100 pardons and commutations before leaving office

Photo: Mandel Ngan/AFP via Getty Images

President Trump plans to issue at least 100 pardons and commutations on his final full day in office Tuesday, sources familiar with the matter told Axios.

Why it matters: This is a continuation of the president's controversial December spree that saw full pardons granted to more than two dozen people — including former Trump campaign chair Paul Manafort, longtime associate Roger Stone and Charles Kushner, the father of Trump's senior adviser and son-in-law, Jared Kushner.

  • The pardons set to be issued before Trump exits the White House will be a mix of criminal justice ones and pardons for people connected to the president, the sources said.
  • CNN first reported this news.

Go deeper: Convicts turn to D.C. fixers for Trump pardons

Schumer's m(aj)ority checklist

Senate Minority Leader Chuck Schumer. Photo: Tasos Katopodis/Getty Images

Capitalizing on the Georgia runoffs, achieving a 50-50 Senate and launching an impeachment trial are weighty to-dos for getting Joe Biden's administration up and running on Day One.

What to watch: A blend of ceremonies, hearings and legal timelines will come into play on Tuesday and Wednesday so Chuck Schumer can actually claim the Senate majority and propel the new president's agenda.

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