May 15, 2025 · 1h 20m · 20vc
OpenAI, SBF & Perplexity: What VCs Know That You Don’t · 20VC with Harry Stebbings
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In this episode of the 20VC podcast, host Harry Stebbings sits down with veteran venture capitalists Jason Lemkin and Rory O'Driscoll to dissect high-level VC trends, the generative AI landscape, startup valuations, corporate ethics, and operational strategies for modern tech companies.
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 14.6% of the talking time here. How this is scored →
Harry as informed peer 5.1 Guest teaching 3.8 Guest disagreement 3.5 Harry pushing back 3.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 9:02 Jason's 'Cry Me a River' on Series A Drop
Jason forcefully rejects the narrative around the 81% Series A drop, calling complaints a B-tier founder mindset and telling people to cry a river.
Hardest push from Harry ▶ 45:51 Harry Defending Non-Technical CEOsHarry directly rejects Jason's assertion that non-technical CEOs fail at tech companies, citing Fiji Simo's execution at Facebook.
Biggest teaching moment ▶ 1:10:58 Rory Correcting Harry's Clay vs Salesforce PremiseRory breaks down Clay's actual data enrichment and RevOps functionality, dismantling Harry's premise that Clay is a direct CRM threat to Salesforce.
Harry holds his own ▶ 1:03:40 Harry Explaining Perplexity's European DistributionHarry demonstrates high domain expertise by revealing Perplexity's smart default placement strategy through European telecom partnerships.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Owner's $120M Funding Round & S-Tier Metrics | 3 | 4 | 2 | 2 | Harry introduces Owner's $120M round led by Jason. Jason humorously admits he didn't read the full docs and focuses on metrics, explaining how top-tier metrics create unlimited capital access. | |
| The Dilemma of Ultra-Fast Venture Decisions | 4 | 6 | 3 | 3 | Harry asks how to handle compressed 2-day term sheet deadlines. Rory gently reframes the question, explaining that if you hear about a deal on Monday and need to decide by Wednesday, you are already too late in tracking founders. | |
| Preempting Rounds and the Strategy of Second Chances | 4 | 3 | 2 | 4 | Harry presses on Series A preemptive bids happening weeks after seed rounds. Harry notes that preempting solves the investor's deployment problem rather than the founder's need. | |
| The Collapse of the Series A Market & S-Tier vs. B-Tier Startups | 4 | 4 | 5 | 2 | Harry brings up Carta data showing an 81% drop in Series A rounds. Jason forcefully dismisses complaining about market drops as a B-tier founder mindset, while Rory shares a personal health analogy on individual survival versus macro stats. | |
| Rory's Fight with Stage 4 Cancer & Returning to Venture | 3 | 2 | 2 | 2 | Jason asks Rory why he returned to venture after battling stage 4 colon cancer. Rory reflects on loving the work, prompting lighthearted teasing from Harry. | |
| The Redemption of Tiger Global: Bet Sizing and the Power Law | 6 | 4 | 3 | 5 | Harry pushes back against consensus criticism of Tiger Global, arguing that holding OpenAI and Scale positions with liquidation preferences will protect their downside and rescue performance. | |
| The SBF / FTX Paradox: Brilliant Venture Bets Amidst Massive Fraud | 4 | 3 | 4 | 3 | Harry points out that FTX's early venture bets in Anthropic and Cursor would have saved the fund had fraud not intervened. Jason jokes about 'a little fraud' while Rory cautions against using that quote for podcast promo. | |
| Ethics in Venture: Will the Industry Fund Convicted Criminals? | 4 | 3 | 4 | 3 | Jason predicts a top VC fund will back SBF again if pardoned, while Rory strongly disagrees, arguing that a criminal conviction creates a permanent barrier to raising institutional capital. | |
| The Democratization of Venture: Coatue's $50k Retail Fund | 5 | 3 | 5 | 3 | Harry introduces Coatue's new $50k retail fund. Jason aggressively calls it a cynical move that risks ripping off retail investors who do not understand venture illiquidity. | |
| Venture Greed and the Illusion of Retail Liquidity | 6 | 4 | 4 | 6 | Harry challenges Rory directly on whether Coatue should be considered a top-tier private manager. The group debates fee blending, gates, and the risks of retail capital in illiquid assets. | |
| The Klarna AI Controversy & Public Market AI Narratives | 7 | 4 | 4 | 5 | Harry calls out Jason's prediction error regarding Klarna walking back AI support. Jason defends his thesis using customer slider data, while Harry provides an insightful public-market analysis of AI narrative positioning ahead of an IPO. | |
| Shock Therapy: Layoffs, Return-to-Office, and Creating Urgency | 5 | 3 | 3 | 3 | Jason discusses executive shock therapy and RTO mandates to create urgency, citing Harry's late-night team tweets as an example of startup drive. | |
| OpenAI's Double Non-Technical CEO Leadership: Fiji Simo & Sam Altman | 5 | 4 | 5 | 6 | Jason argues that having two non-technical CEOs at OpenAI is bizarre and bound to fail. Harry pushes back, pointing to Fiji Simo's track record building Facebook's app ecosystem as proof that technical backgrounds are not required. | |
| Investing in OpenAI and Portfolio Concentration Strategy | 6 | 5 | 4 | 6 | Harry questions whether traditional VC portfolio diversification is suboptimal compared to concentrating funds in mega-winners like OpenAI. Rory pushes back on LP mandates and notes OpenAI's $250M minimum check size, playfully calling Harry a dick. | |
| OpenAI's Non-Profit vs. For-Profit Corporate Structure | 5 | 5 | 2 | 3 | The panel discusses OpenAI's transition toward a Public Benefit Corporation. Rory educates on PBC legal mechanics, referencing Patagonia and Anthropic as precedence. | |
| Perplexity's Trillion-Dollar Market Opportunity | 8 | 3 | 3 | 4 | Discussing Perplexity's $14B valuation rumors, Harry discloses his investment and offers detailed commentary on Perplexity's European telecom distribution partnerships. | |
| Clay's $1.5B Valuation and AI Fear-Based Buying | 6 | 6 | 4 | 4 | Harry suggests Clay is the next major threat to Salesforce. Rory and Jason correct him, clarifying that Clay is a pre-AI RevOps and data enrichment tool rather than a core CRM replacement. | |
| The Future of AI Video and Content Discoverability | 7 | 3 | 4 | 5 | Harry asserts that AI video tools remain inadequate for high-end productions like 20VC and notes that infinite AI content generation creates a severe discoverability bottleneck. |
Statements from this episode (44)
Lemkin: OpenAI Has Had Two Non-Technical CEOs
“I think the weirdest thing in this is that for OpenAI you have a CEO and now another CEO that are both not technical.”
Lemkin: Microsoft Laid Off 3% of Its Workforce
“Microsoft laid off three percent of their company today.”
Lemkin: Clay Should Raise $100M and Go Scorched Earth
“So I would armor up if I were Clay. I would hire everybody. I would raise another hundred million and I would just scorch earth everyone in the space.”
O'Driscoll: OpenAI Will Win, But Perplexity Can Be Third
“OpenAI is clearly going to win, but maybe you can be third, and that's worth a damn sight if the prize is a trillion bucks.”
Lemkin: Restaurant Startup Owner Reaches $40M ARR Growing 10% Monthly
“Yeah, they're at forty million growing 10% a month sometimes faster, sometimes slower, but the trailing is there, right?”
Lemkin: Top-Tier SaaS Startups Face Unlimited Venture Capital Supply
“If you're in the zone and I think it's harder than ever, I think, but if you're in it, there is just unlimited F and capital, right? But you got to be in that box.”
O'Driscoll: Fast Two-Day Deal Timelines Disadvantage Unprepared VCs
“If it's Monday and you're hearing it for the first time and you got to write Wednesday, you're just way behind. Because even if you crank and write the term sheet, You're also going to be up against someone who's met them before in the last round and is ready …”
O'Driscoll: VCs Must Maintain Target Lists of 10 to 20 Companies
“My rule of thumb is if I don't have a list in our salesforce of 10 to 20 names That I know I want to see, that I could imagine investing in, in the next 12 months, I'm probably not doing my job.”
O'Driscoll: Scale Has Never Paid Double a Valuation Three Months Later
“Can you stomach paying, you know, twice as much as someone three months ago? We've never done that.”
Stebbings: Carta Data Shows Series A Funding Rounds Down 81%
“Carter just announced that Series A's are down 81%.”
Lemkin: Best-in-Class Startups Will Still Secure Five Term Sheets
“Be the best of breed, you'll get five term sheets. You really will.”
O'Driscoll: Tiger Global Doing 300 Deals in 2021 Was a Total Mistake
“They did 300 odd deals in 2021. Obviously, in retrospect, total mistake.”
O'Driscoll: 2018 Late-Stage VC Funds Will Outperform Early-Stage Funds
“A lot of the late stage funds are going to have a very excellent 2018 vintage where interestingly, the earlier guys won't because they won't have had it all the way through the system by the time the window shut.”
O'Driscoll: A $12B VC Fund Cannot Be Saved by $100M Outcomes
“It's just hard to dig out of a twelve billion dollar hole in one hundred million dollar increments.”
Stebbings: Anthropic and Cursor Venture Investments Would Have Saved FTX
“When you look at FTX, their positions in Anthropic and Cursor actually would have saved them if they had the time to prove that out and they hadn't done the commingling. That would have saved their financial performance with those two investments alone.”
O'Driscoll: Sam Bankman-Fried Showed Remarkable Venture Investment Talent
“The fact that Sam invested early in Entropic and Curse is astonishing. Right. What a talent, you know, what a willingness to look at new stuff in 21 before the chat GPT moment, you know, when it was just, you know, crazy stuff that, you know, people were sayin…”
O'Driscoll: FTX's Core Exchange Was a Good Business Destroyed by Fraud
“The core business he also had was a pretty impressive and good business. I mean, the core exchange worked fine too. It was all the weird shit on top. It was all the commingling.”
Lemkin: A Top VC Firm Will Give Sam Bankman-Fried $100M
“I don't think Rory or I would, I'll defer to Rory, but I think someone will fund him. He's smart as Rory, Rory said, like he showed the upside as well as the downside. I don't know if there's a lot of morality in the business. I think someone will give them ju…”
O'Driscoll: Convicted Founders Face a Huge Barrier to Raising Venture Capital
“Once you pass the convicted criminal stage, the bar goes way up and fairly or unfairly, you can argue your toss. You can argue it's brilliant or not, but I think once you've been sentenced to 25 years by a jury of your, you know, a judge and a judge guilty by …”
Lemkin: Coatue's $50K Retail Fund Cynically Rips Off Unsophisticated Investors
“I think this is cynical, ripping people off for 50 grand that don't know what they're getting themselves into.”
O'Driscoll: Late-Stage Companies Should Go Public Rather Than Use Retail Funds
“These companies should be public, and then Fidelity Growth Fund could do them at 70, 50 bips, instead of, you know, KOTU doing them.”
O'Driscoll: Coatue's Retail VC Fund Will Sell by Offering AI Access
“Do I think it'll work and raise capital? Probably it will because the facts are there. The other The other PE vehicles have worked. And then let's get real. You know, at the end, it'll be packaged with some version of this is the only way you can get access to…”
Lemkin: 99% of People Should Stay Liquid in VTI Rather Than VC
“I think 99% of folks should only be in liquid investments, including people in tech. You should be as liquid as possible. It's just too stressful for the, like VTI is the perfect product for 99% of people. It's the perfect product. You cannot beat it.”
Lemkin: Gorgias AI Customer Support Automation Averages 20% Across 20,000 SMBs
“If you go into an app like gorgeous, where I'm on the board, where there's 20,000 customers using AI for SMB support, there's literally a slider and you can dial how much support AI you want from zero to a hundred. Okay. No matter what anybody says on X, And L…”
Lemkin: Only Two of 20,000 Gorgias Customers Automate 100% of Support
“And out of 20,000, they have a handful of folks that are at a hundred, like Klarna... Two. Two, one, 200.”
Lemkin: Startups Will Automate 100% of Customer Support by Next Year
“What will happen as we go into next year is folks will be like, I'm, I'll deal with the downside of a hundred. It's only two today, but more and more folks will say, listen, like some orders are going to be wrong. Some answers are going to be wrong, but I'd ra…”
Lemkin: Almost Every Tech Job Will Change by Mid-2026
“I don't think it's five years to Rory said, I think it's, I think by the middle of next year in tech, almost every single person's job will have changed by the middle of next year.”
Lemkin Advises CEOs to Mandate RTO and Fire Non-S-Tier Engineers
“The only advice I gave to this particular CEO is immediate, like he was hybrid. So I said to force a hundred percent of people returned to office in 30 days and let everyone go, except your S tier engineers, letting them all go. Because you don't need them.”
Lemkin Admits He Only Works in the Office Two Days a Week
“To be honest, we have a beautiful office in Palo Alto. I only go two days a week, so I represent, acknowledge it's hypocritical.”
Lemkin: ChatGPT Holds 85% Market Share and Continues Growing
“And listen, I mean, open, I mean, chat GBT has like 85% market share, right? And growing, right?”
Lemkin: Non-Technical CEOs Taking Over Tech Companies Never Understand the Product
“All the non-technical CEOs that I've seen, especially take over my investments as outside CEOs, they never understand the product.”
O'Driscoll: ChatGPT Will Absorb All Personal User Data and Phone Calls
“Jack GP is going to suck in all your brain. It's going to suck in all your phone calls. It's going to know everything about you. And you know, it's going to be like, you know, remember what once way back when you thought Evernote would know everything about yo…”
Stebbings: OpenAI Will Reach a $1.5T to $2T Valuation
“I am so sure that open AI is going to be a one and a half to two trillion dollar company right now.”
O'Driscoll: OpenAI Set a $250M Minimum Investment Threshold in Recent Round
“OpenAI said in the last round, you either show up with two hundred and fifty million or don't show up at all.”
Lemkin: Microsoft's OpenAI Deal Includes 10% Revenue Share Until AGI
“Getting everything they get plus 10% of all revenue until there's AGI plus the returns.”
O'Driscoll: OpenAI Is Converting to a Public Benefit Corporation
“What's happening is they're not going to just convert the underlying company to a for, to a classic for profit. They're going to convert it. Oh, it's a public benefit corporation.”
O'Driscoll: Anthropic Was a Public Benefit Corporation From Day One
“The public BBC structure is actually what Anthropic did from day one. They got it right.”
Stebbings: Perplexity Secured European Telecom Deals for Default Phone Access
“They've done quite a few in Europe with big telecoms providers, which enables them kind of default access to consumers phones.”
Stebbings: Clay Completed $1.5B Employee Secondary Transaction Led by Sequoia
“Clay obviously did this kind of billion and a half dollar priced transaction. I think it was employees secondaries with Sequoia.”
Lemkin: Capitalizing on Executive AI Fear Is a Winning GTM Strategy
“I do think being the vendor to take advantage of AI fear is a great strategy the next 18 months.”
Stebbings: AI Video Editing for Complex Production Remains Far Off
“Video and AI capabilities around video editing in particular for complex video is, is so far off.”