Jun 12, 2025 · 1h 22m · 20vc
Elon’s Empire: SpaceX, Tesla, Neuralink After the Storm & Anduril’s $2.6BN Power Move · 20VC with Harry Stebbings
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This episode of 20VC features Harry Stebbings, Rory O'Driscoll O'Driscoll, and Jason Lemkin in a deep-dive debate analyzing the mechanics of the IPO market, contrasting venture capital portfolio strategies, and assessing the structural impact of AI on legacy software budgets. The panel also offers sharp analyses of late-stage funding rounds, predicting the future of Elon Musk's corporate empire and evaluating key tech industry leadership developments through a prediction market lens.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 9.5% of the talking time here. How this is scored →
Harry as informed peer 3.1 Guest teaching 4.1 Guest disagreement 2.6 Harry pushing back 1.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 42:37 Rory scolds Harry for calling a $1M to $7M business unattractive
Rory forcefully rebukes Harry for disparaging founders who scale $1M to $7M in 3 years, rejecting Harry's framing and forcing Harry onto the defensive.
Hardest push from Harry ▶ 43:37 Harry refuses Rory framing regarding founder disrespectHarry refuses to accept Rory's accusation that he is pissing on the entrepreneur, pushing back directly to explain he is protecting founders from VC misalignment.
Biggest teaching moment ▶ 35:20 Rory breaks down portfolio return dilution math for JasonRory mathematically dismantles Jason's proposal to double down up to $1B on every winner by proving late-stage valuations compress follow-on multiples across a standard power-law distribution.
Harry holds his own ▶ 1:09:41 Harry hits back on Jason characterization of ChamathHarry uses his direct first-hand relationship knowledge to hit back against Jason's public characterization of tech billionaires as grouchy, defending Chamath's private character.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Analyzing the Circle IPO and Public Market Rebound | 2 | 4 | 1 | 1 | Harry introduces the Circle IPO topic, but Rory takes over to explain secondary share sales and how underpricing left a billion dollars on the table for sellers. | |
| Meme Stocks, IPO Pricing, and Listing Alternatives | 1 | 3 | 2 | 0 | Jason and Rory discuss meme stocks versus quality businesses, analyzing banker informational asymmetry during IPO pricing. Harry remains silent except for brief affirmations. | |
| Oversubscription Mechanics and the Flawed IPO Process | 1 | 5 | 2 | 0 | Jason asks about oversubscription multiples, prompting Rory to detail how theoretical demand and late-night equity capital markets bankers dictate allocations over relationship bankers. | |
| Juggernaut Private Companies and Figma's IPO Path | 3 | 4 | 2 | 2 | Harry frames a sharp question on whether public market momentum will draw out mega-unicorns like Databricks or Figma. Rory clarifies that the window is always open for $50B market cap companies. | |
| Market Sentiment and CoreWeave's Debt De-risking | 1 | 3 | 1 | 0 | Jason and Rory analyze how CoreWeave used its successful IPO pop to secure $2B in debt and completely de-risk its existential debt clock. | |
| London Stock Exchange's Decline vs. US Capitalist Domination | 4 | 3 | 2 | 1 | Harry tees up Rory regarding TransferWise leaving the LSE for the US as a major hit to London. Rory highlights US market capital dominance stats. | |
| To IPO or Stay Private: The Employee Liquidity Dilemma | 4 | 4 | 3 | 3 | Harry questions whether $2B-$5B companies should even be public given thin liquidity. Rory and Jason explain why employee equity liquidity imperatives eventually force IPOs. | |
| The Limits of Tender Offers and Private Secondary Liquidity | 3 | 4 | 3 | 2 | Harry highlights private company liquidity solutions, but Jason points out liquidity evaporates instantly if growth stumbles. Discussion transitions to Founders Fund putting $1B into Anduril. | |
| LP Constraints, Portfolio Strategy, and Risk Management | 5 | 3 | 2 | 3 | Harry asks Rory sharp questions regarding portfolio concentration limits and what he would do if LPs gave him total freedom. Rory explains risk management and sticking to core strategy. | |
| Jason's Winner-Take-All Investment Thesis | 2 | 5 | 4 | 2 | Jason proposes doing every follow-on check up to $1B in every winner. Rory directly dismantles this thesis with mathematical modeling of fund power laws and return dilution. | |
| Relentless TAM Honesty and the Lessons of DocuSign | 4 | 4 | 2 | 2 | Harry asks Rory if passing on late-stage DocuSign rounds yields a systematic lesson. Rory explains hindsight bias in venture sizing, while Jason stresses TAM honesty. | |
| Seed vs. Series A Performance Predictors and OpenView's Growth Report | 4 | 4 | 2 | 2 | Harry cites data from his first fund showing early predicted outperformers ended up in the middle bucket. Rory explains how post-scale Series A data reduces variance compared to seed. | |
| Respecting the Entrepreneur and the Realities of Venture Scale | 5 | 7 | 6 | 6 | Harry dismisses a vertical SaaS business growing $1M to $7M over 3 years as unattractive. Rory strongly admonishes Harry for disparaging entrepreneurs, forcing Harry to defend his framing. | |
| Growth Persistence, Capital Efficiency, and the Nuances of Venture Success | 3 | 5 | 2 | 1 | Rory shares internal firm study data showing no correlation between top-quartile initial growth rates and ultimate fund outcomes, citing HubSpot and Bill.com as second-quartile examples. | |
| The SaaS Slowdown, AI Budget Sucking, and Market Maturity | 4 | 5 | 2 | 2 | Harry brings up Jamin Ball research on SaaS spend deceleration. Rory outlines the macro math of 40 percent cloud workload maturity to show why SaaS growth deceleration was inevitable. | |
| AI TAM Expansion, Service Budgets, and the Labor Arbitrage Rule | 2 | 5 | 4 | 1 | Jason challenges the social media consensus on AI expanding software TAM, citing Gorgias portfolio data where replacing 50 percent of human staff only increased ACV by 50 percent. | |
| Enterprise vs. SMB AI Monetization and SaaS Timelines | 2 | 4 | 3 | 1 | Rory outlines the 2-for-1 labor arbitrage pricing rule in enterprise automation, while Jason argues SMB AI pricing will rapidly compress toward base subscription inclusions. | |
| Evaluating Elon's Empire: SpaceX, Tesla, and Neuralink | 4 | 5 | 2 | 2 | Harry asks how to evaluate Elon Musk's companies following political controversies. Rory contrasts Tesla's political subsidy exposure with SpaceX's essential monopoly status. | |
| Billionaire Grouchiness on X: Innovation or Inhibitor? | 4 | 3 | 4 | 5 | Jason questions whether billionaire grouchiness on social media inhibits innovation. Harry pushes back firmly to defend Chamath's private humble persona against Jason's public characterization. | |
| Kalshi Quick-Fire: Will Sundar Pichai Leave Google? | 4 | 3 | 2 | 2 | In a Kalshi quick-fire, Jason references Adobe CEO retention precedent while Harry brings up Sergey Brin's active return to Google leadership. | |
| Kalshi Quick-Fire: Will the New York Times Win the OpenAI Lawsuit? | 3 | 4 | 3 | 1 | Discussing the NYT vs OpenAI lawsuit, Rory argues NYT's lawsuit strategy will outperform early licensing deals, while Jason shares his Twitter revenue payout data. | |
| Kalshi Quick-Fire: Will Linda Yaccarino Leave X? | 3 | 3 | 3 | 1 | On whether Linda Yaccarino will leave X, Jason views her as an executive upgrade candidate, whereas Rory argues Elon won't want the operational headache of replacing her right now. |
Statements from this episode (55)
O'Driscoll: US has 4% of global population but 67% of market cap
“The United States has four percent of the world's people. We have roughly 23% of the world's GDP. We have 67% of the world's market cap.”
O'Driscoll: SpaceX customers must use it even if they hate it
“The truth is, SpaceX, it's just Such an amazing achievement that even if one of your biggest customers doesn't much like you, they still got to do business with you. That's not quite as true for Tesla.”
Stebbings: Circle was the strongest IPO since 2020
“Circles, the strongest IPO since 2020 and bluntly much needed positivity for the ecosystem in terms of public market response.”
O'Driscoll: Circle IPO secondary sellers left $1B on the table
“Like twenty million shares, I think, were secondary, And, you know, at 50, 60 bucks of extra dollars a share, that's a billion dollars that went to the buyers, not the sellers.”
Lemkin: Recent IPOs excluding SailPoint are up 76.8% on average
“All the last IPOs except for a sale point are up materially, and the last, on average, they're up 76.8%.”
Lemkin: Circle and CoreWeave sit on the edge of meme stocks
“It's just Circle and CoreWeave are the crazy ones, and they're at, I think they're at the edge of meme stocks, right?”
Rory O'Driscoll: IPO pops are necessary to compensate investors for pricing risk
“Some pop is necessary, right? Because, and you have to start with that fact, because these stocks haven't been traded, you're asking people to step up and write a check, and there's no prior pricing information, so you got to get paid something for the volatil…”
O'Driscoll: Bankers leverage information asymmetry against founders in IPOs
“A lot of the time, the biggest advantage the banker has is you do this once in your life, or maybe if you're a VC, 10 times, and a banker's doing it every week, and you have an informational asymmetry there”
Rory O'Driscoll: Direct listings only work for top companies not raising capital
“Direct listing only works when you're an amazing company and you're not raising primary capital because of the regulations”
Lemkin: 10x IPO oversubscription is not enough for a strong stock pop
“In my limited experience, like 10 X actually isn't enough because those are soft commitments and people put in over allocations to make sure they can get it, and you really want to be like, 30 X oversubscribed to pop hard, which I don't know if that's your, wh…”
O'Driscoll: Stripe will succeed in its IPO regardless of listing structure
“The very biggest, when Stripe finally goes public, they can do whatever they want. They can do a direct listing and not raise any primary capital. They could do the Google type option, and no matter what, it'll all be fine.”
O'Driscoll: The IPO window is always open for $50B companies
“Look, the window is, was, and always has been open for Databricks and Stripe. They just don't want to go through the window, right? There's no, like, The windows open and shut for the two billion dollar market cap IPO. The window is always open for the fifty b…”
O'Driscoll: Figma will IPO soon rather than stay private
“My guess is it totally makes sense for them to get a great IPO under their belt. In a way that, and not do the strike thing of stay private for another three or four years.”
O'Driscoll: Wise stock rose 8% immediately upon announcing US listing plans
“When they announced that the stock popped eight percent, that's basically like saying you can make eight percent free money just by listing in the US.”
Lemkin: Single-digit billion public tech companies lack institutional liquidity
“There's no analyst coverage. There's the institutional buyers are not there in the single digit billions, right? And it's just, you better be wherever there is any liquidity.”
O'Driscoll: Only 20% of current unicorns will reach an IPO
“My gut would be, it's roughly, 20% will be good enough to get public in the end, 20% will totally, maybe 25 on each site, just for arbitrariness sake, and then 50% in the middle are meaningful enough to be valuable, but not so meaningful that they'll get publi…”
O'Driscoll: Only top 10-20% of unicorns can execute tender offers
“It's only that last 10 or 20% who have, quote, IPO potential who could get a tender done. And what that says, therefore, is for most, I mean, so the consideration, the equity compensation for a lot of these companies is notional and not accessible, right?”
Lemkin: Private secondary liquidity instantly vanishes when company growth slows
“I think if your growth struggles, it's, it instantly evaporates.”
Lemkin: Tech talent should only join late-stage startups with tender offers
“If I was a top tier engineer or almost any, anyone that wanted to kind of have the comfort of a later stage company, I might only join someone with a perfected tender offer program. I mean, I wouldn't even bother for anything else.”
Stebbings: Founders Fund wrote record $1B check for Anduril's Series G
“Specifically with regards to Amgrills raising two and a half billion Series G, I don't know if you guys knew this, they got a billion from Founders Fund in this latest round. A billion again, making it their largest ever check, and the Founders Fund's prior la…”
Lemkin: Founders Fund's $1B Anduril check shows superior conviction over standard AI growth deals
“They're putting a billion in, right? That's much more ambitious than throwing a growth fund throwing fifty million into the last round of Anthropic, right? Or throwing twenty million into Lovable. It's a big bet, right?”
O'Driscoll: Scale Venture Partners caps fund concentration at 10%
“We have a capital concentration limit of 10%.”
O'Driscoll: Removing LP constraints would destroy value for most VC firms
“If everyone was set free to do whatever they want, I think for the median firm, it would be value destructive.”
Lemkin: VCs should fund every round up to $1B valuation in top seed winners
“What I personally would do would be to do every dollar up to a billion. That would be my version of it. In every winner. Ah, so if you do a seed investment and it turns out to be a winner, right? A top five percent deal, you do every round, A, B, C, D, E, unti…”
Lemkin: Deep-pocketed VCs are oversubscribing rounds to monopolize follow-on allocation
“Currently in like in my little portfolio, the two hottest companies, and I put hot in quotes, That's what investors on the cap table with access to unlimited capital are based, like, wildly oversubscribed because they're trying to just put every single dollar …”
O'Driscoll: Only 20% of Series A/B deals justify late-stage follow-ons
“Going back to our likely distribution, we do 20 deals, probably, right? 30% of them fail. You don't want to put a dime in those. 50% of them are one to five X on the money you put in, which means by definition, the next round, the two X that is a two and a hal…”
O'Driscoll: Scale invested in DocuSign at $1 and $2 per share
“We did the round at a buck and two bucks, right?”
Jason Lemkin: Big venture returns require TAM explosions for top players
“I think the venture lesson, be visionary, but relentlessly honest about TAM. Because it's a TAM story at the end of the day. If you have a number one or number two player in the space and you see a TAM explosion happening, that's where you get a big lift, righ…”
Rory O'Driscoll: Late-stage investing will prove harder over decade than 2021
“I also think there's probably been a little bit of a fake signal in 21 because even your okay ones got highly valued. So you probably think it's easier. Late stage looked a lot easier in 21 than it probably will look across a decade.”
Stebbings: Hopin, BeReal, and Clubhouse failed to be 20VC's top returners
“With my first fund, after 18 months, I predicted my top five fund returners, and you had your hop-ins, you had your B-reels, you had your clubhouse, and none of the five outperformers ended up being the outperformers, and the five outperformers I always had in…”
O'Driscoll: Series A/B success probability jumps to 60-70% if targets met
“At the A and B stage, what we've observed is this. The going in probability of a five X plus winner, our mental model, remember I said it's 30, yeah, 20% chance of that outcome. If after two years the company has done what we said it would do roughly in terms …”
O'Driscoll: Growing $1M to $7M in three years fails VC models
“It is attractive for them. And that's the most important thing. It's a great entrepreneurial opportunity. It's just not compelling for our business model.”
Lemkin: Invested in Pipedrive at a $16M Valuation
“When I did that bet in pipe drive, ok? And that was, and I, Did it at sixteen million, right?”
O'Driscoll: Initial startup growth quartile does not predict VC returns
“Very little correlation between great outcomes being top quartile or second quartile. In other words, they're almost as likely, they're growing quickly, but not astonishingly quickly, has just about the same probability of giving you a great outcome as the hyp…”
Rory O'Driscoll: Bill.com was second-quartile growth when ScaleVP invested
“For example, build.com It compounded to a huge network, right? And obviously, it was an amazing outcome for us, but the growth rate was always, I think, you know, second quartile, right? There were companies always growing faster.”
Lemkin: AI spending is actively cannibalizing legacy SaaS budgets
“If cursor did almost half a million, half a billion dollars in revenue in the same time, It sucked up an enormous amount of that dollar that would have gone to Okta and Salesforce, right? Five hundred million. That's a lot in that period of time, right? So AI …”
O'Driscoll: SaaS slowdown was inevitable regardless of AI's rise
“Independent of AI, the SaaS Industry was going to hit the mature stage. And you're right, Jason, it's all the things that happen at that stage. Bundling, consolidation, grinding out the weak, right?”
O'Driscoll: AI software expands market size by capturing labor dollars
“I think AI is the new, new thing, and to some extent, from a economic perspective, the cursor dollars in software development or any other of these things aren't directly taking away from the SAS dollars. I think it's time expansion”
O'Driscoll: AI labor replacement will be a steady 20-year trend, not explosive
“One of the reasons I'm pretty relaxed about any kind of, you know, all these mass unemployment stories, I think it's a long secular, 20 year trend that we can invest in. And I think you will see replacement of labor Buy AI on a pretty consistent basis, but not…”
Lemkin: Gorgias AI replaces 50% of agents, but ACV rises only 50%
“When I look at Gorgias, which is, which dominates Shopify for the contact center, right? They're, they have, their average customers replaced 40 to 50% of their humans with AI, and their ACV is only up 50%.”
O'Driscoll: Contact center labor spend ($150B+) dwarfs software spend ($15B)
“The contact center software market is 10 to fifteen billion a year of annual spend. The contract center labor market is at least one hundred and fifty billion dollars.”
O'Driscoll: AI will double or triple the contact center software TAM
“I do believe there is going to be at least a two X time expansion, three X time expansion as you take the simple Contact center queries and resolve them, you know, on a two to one basis, you know, for half the price using AI and you'll, and the AI company will…”
Lemkin: Fast-growing AI contact center startups rely on BPO revenue
“A lot of the folks that are exploding, I don't mean to, in the AI contact center with huge numbers, have either acquired or indirectly acquired BPOs. So they're attack tack attaching into that seventy five billion in a very interesting way. Not all that revenu…”
O'Driscoll: Enterprise contact centers offer far better AI pricing power than SMBs
“It's harder to command huge value on top of software on the SMB side, because typically the amount of labor you're saving is not a lot. The wonderful thing about automation for large corporate America is when you have 2000 people in a contact center and you're…”
Lemkin: B2B software vendors will bundle AI for free in SMB plans
“Next generation AI for B to B, as you approach true SMB, it's more and more going to be base and included with a limited upsell opportunity.”
O'Driscoll: Tesla is Elon Musk's most politically vulnerable business
“I think if any, it's Tesla only because the truth is electronic vehicle, electric vehicles have a whole bunch of specific subsidies, both around purchase and around, you know, the ability to resell emissions credits to people like GM, right? And all those thin…”
O'Driscoll: A great business retains customers even when they hate you
“It's the definition of a great, I mean, definition of a great business is when your customers can hate you and still do business with you.”
O'Driscoll: Starlink revenue surpassed the US government as SpaceX's top customer
“The truth is SpaceX, it's just such an amazing achievement that even if your, what was your largest customer, interestingly, is now no longer your largest customer because Starling is such a big business.”
Lemkin: Public outrage over Elon Musk's politics will fade within a year
“I think in a year we will not have forgotten about it, but maybe no one cares.”
Stebbings: Chamath Palihapitiya is humble and kind in private
“The one thing I will say on Chamath is the public persona and the private persona are drastically different. He's actually very humble and kind privately.”
O'Driscoll: Social media operates like Gresham's law, driving out moderate voices
“The equivalent of that in social media is Bad opinionated people drive out good, boring people.”
Lemkin: Google stakeholders will do almost anything to keep CEO Sundar Pichai
“So I suspect it's similar at Google, right? I suspect none of the large stakeholders want him to go no matter what, and they will do almost anything to keep him.”
O'Driscoll: Sundar Pichai won't leave Google, but won't solve AI threat
“So my guess is by far the prior, the most likely outcome is not leave, just continue to manage what you've got reasonably well without ever solving the existential problem.”
O'Driscoll: AI developers don't need to license more than two or three news outlets
“You could imagine an LLM saying, I need to get modern news from AP and one national newspaper, but I sure as hell don't need six. Because if you think back... By the time you got to the third, you're like, I know already, 90% of the content is repetitive”