Aug 30, 2022 · 59m · news
Logan Bartlett: WTF is Happening at Growth Stage Investing? | 20VC #920 · 20VC with Harry Stebbings
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Redpoint Managing Director Logan Bartlett joins host Harry Stebbings to analyze the current state of venture capital, exploring macroeconomic corrections, shifting power dynamics between founders and VCs, and the strategic operational realities of growth-stage investing.
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 15.4% of the talking time here. How this is scored →
Harry as informed peer 5.0 Guest teaching 4.5 Guest disagreement 2.4 Harry pushing back 3.9
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 40:17 Rejecting Brad Feld's CEO Firing Definition
Logan directly rejects the conventional VC rule articulated by Brad Feld, arguing that relying on board power to fire a CEO signals a broken relationship rather than proper governance.
Hardest push from Harry ▶ 21:14 Calling Dual-Branding Strategy IdealisticHarry forcefully pushes back against Logan's dual-brand philosophy, arguing that trying to elevate individual partners and firm brand simultaneously is idealistic and historically ineffective.
Biggest teaching moment ▶ 47:27 Explaining the B2B Marketing Talent DeficitLogan provides a structured breakdown reframing why B2B marketing suffers, demonstrating how top creative talent flows into consumer budgets or sales organizations.
Harry holds his own ▶ 29:45 Challenging Outcome Modeling with Power Law WinnersHarry draws on empirical findings from studying hyper-growth companies to demonstrate how traditional VC outcome modeling systematically underprices breakout power-law winners.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Logan's Journey: From Investment Banking to Redpoint | 2 | 1 | 1 | 1 | Harry opens with warm nostalgia about meeting Logan years ago before asking how he landed at Redpoint via Battery. Logan outlines his transition from investment banking to Battery and eventually Redpoint. | |
| The State of the Venture Landscape Today | 5 | 5 | 3 | 6 | Harry challenges Logan's claim that prices have recalibrated by pointing out inflation at pre-seed and seed due to growth funds moving early. Logan explains how late-stage capital dry-ups cascade down the funnel to push money into early stages. | |
| Advice to Founders on Raising Capital in a Downturn | 5 | 4 | 3 | 6 | Harry pushes back on advising founders to delay fundraising, arguing macro markets cannot be timed and founders should raise immediately if needed. Logan offers nuance, distinguishing urgent cash needs from Series B companies waiting for price discovery to resume. | |
| Capital Concentration and "Catching a Falling Knife" | 6 | 4 | 2 | 5 | Harry questions whether concentrating capital into winners is achievable without falling into falling-knife traps or being boxed out by top funds. Logan acknowledges that optionality investing rarely works unless firms build real board-level alignment like Sequoia or Founders Fund. | |
| Have VCs Gotten Lazy? The Shift in Power Dynamics | 4 | 5 | 2 | 2 | Harry prompts Logan on his off-air comment that VCs have grown lazy over the past two years. Logan details how easy returns created generational laziness among VCs who mistook market luck for investing skill. | |
| Personal Branding vs. Firm Brand in Modern Venture | 7 | 5 | 4 | 7 | Harry directly challenges Logan's dual-brand approach, calling it idealistic and citing distinct counterexamples like Sequoia and Benchmark. Logan defends his stance using an email address analogy to explain mutual firm-partner brand accumulation. | |
| Portfolio Markdowns and LP Transparency | 6 | 5 | 3 | 4 | Harry argues VCs are damaging LP trust by holding artificial portfolio markdowns. Logan agrees that keeping peak valuations is delusional, but reveals LP counter-incentives where fund-of-funds prefer stable marks to aid their own fundraising. | |
| Price Sensitivity and Underwriting Frameworks | 4 | 4 | 1 | 2 | Harry candidly admits losing price sensitivity during the 2021 bull market and asks if Logan did too. Logan agrees everyone lost discipline and shares Redpoint's 3-5x with 10x upside underwriting model. | |
| Outcome Scenario Planning & Randomness | 6 | 6 | 3 | 6 | Harry challenges outcome scenario modeling, arguing it systematically underestimates massive power-law winners like Twilio. Logan accepts the critique with his own Braze valuation mistake story while defending decision-theory principles. | |
| Ownership Requirements vs. Multiple on Dollars | 5 | 5 | 2 | 2 | Harry asks whether Redpoint enforces strict ownership percentages versus MOIC targets. Logan explains growth investing prioritizes dollar multiples over ownership, then shares how missing Snowflake taught him to look past early customer feedback when long-term shifts are inevitable. | |
| Losing Faith in a Founder and the Role of the Board | 6 | 5 | 4 | 7 | Harry confronts Logan with Brad Feld's premise that a board's primary fiduciary job is hiring and firing the CEO. Logan rejects this framing, contending that relying on formal board votes represents a breakdown in trust and advocating for soft diplomacy instead. | |
| Board Dynamics: Capacity and the Best Board Members | 4 | 4 | 1 | 2 | Harry asks Logan to evaluate board seats, capacity limits, and top peer board members. Logan highlights Eric Vishria of Benchmark, praising his empathy, operational depth, and constructive pushback. | |
| Quick-Fire Round: B2B Marketing, PR Firms, and Crossover Funds | 5 | 6 | 2 | 1 | Harry runs a quick-fire round covering books, crypto, marketing talent, and agency mistakes. Logan delivers a sharp breakdown explaining why top marketing talent flows to consumer or sales, leaving B2B marketing structurally under-resourced. |
Statements from this episode (31)
Redpoint rejected Logan Bartlett as an associate before hiring him as partner
“Battery gave me an offer. Redpoint did not. I went over to Battery. I was there for six years and the Redpoint folks kind of stay on, stayed on top of me and they wanted to correct the error of their ways and not making me an offer when I was associate. And so…”
Growth funds moving to earlier stages drives seed price inflation
“In seed and A, nothing's changed, because all of you guys, have cut and girls, have come down earlier, and so actually, you're almost seeing price inflation at the pre-seed and the seed with the migration of growth funds earlier.”
High past valuations stall Series B through Series D deal flow
“There aren't a ton of deals getting done right now. That's the Series C, Series D, maybe a little Series B stage. And so what you are seeing is there's a dearth of opportunities that even exist right now because those companies have raised so much capital and …”
Founders should raise capital immediately rather than timing macro markets
“You cannot align your fundraise To macro markets, because six months time, it could be worse than it is now. 12 months could be even worse. If you need to raise, just fucking raise.”
Private growth deals hit 300x ARR while public markets peaked at 20x
“We were this summer seeing businesses get done at 200 times, 300 times ARR. When the public markets were saying like at best you could trade at, I don't know, 20 times forward revenue or something.”
Sequoia and Founders Fund excel at building deep ownership in winners
“I think Sequoia has always done a good job of this. I think Founders Fund has done a good job of this.”
Using sharp elbows to box out co-investors alienates founders long-term
“And the ones that don't do it well are the ones that really view this as out of the money call options. And if the opportunity presents itself, we're going to try to get sharp elbowed and box out other groups. And I've yet to see that really work. It might wor…”
Venture capital institutionalized more in the past five years than previous 25
“Venture has been a pretty cottage asset class, right, for the last, whatever, 30 years, and it's been institutionalized more in the last, you know, five than it had in the previous 25, in my opinion”
Legacy VCs retired rather than adjust to higher market competition
“A lot of very famous investors retire, and I don't blame them at all because the game on the field has definitely changed and it's far more competitive than it was in their day. And you're chasing around people trying to earn the opportunity to invest. And whe…”
Venture capital has evolved into hyper-personalized offerings for founders
“It's, I think the venture capital world that we live in today is is more akin, we went from a generation, and I, I've made this analogy, that we were in the generation of Broadcast television, right? Where there were only a handful of channels and what you wer…”
Redpoint partners must build distinct individual brands to stand out
“I think it means that each individual at red point has to stand for something and be known in some way, shape, or form for what it is that they do to help rise above the noise.”
VCs maintaining unadjusted peak valuations are delusional and lose LP trust
“It is some level of delusion. If you actually believe That all of these companies are worth what they were worth six months ago, then and you're saying that with a straight face to your limited partners, and I think you're losing trust, right? A hundred percen…”
A disciplined valuation process matters more than the markdowns themselves
“Just having a disciplined structure of how you're doing it, I think is more important than actually taking down the marks themselves.”
Every venture capitalist lost price sensitivity during the 2021 market peak
“Anyone that invested last year lost some level of price sensitivity.”
Redpoint's growth framework targets 3x-5x returns with 10x upside
“Our simple underwriting framework for growth at Redpoint is three to five X with 10 X plus upside, right?”
Logan Bartlett has no regrets on investments made during 2021 market peak
“While I wish that I invested at today's prices last year, there isn't a single investment that I wish I had back, right?”
Logan Bartlett initially expected Braze to be acquired for $300M-$400M
“At the time I was convinced that the most likely outcome was that it was going to be a 300 or four hundred million dollar acquisition by sales or Adobe or someone like that. And so I felt like I had to be really disciplined on the entry price because it just s…”
VCs should not haggle over $10 million valuation differences to win deals
“Well, it's definitely informed my, if you wanna be in the company within the margin, just find a way to get into it and don't get too hung up on the ten million here, ten million there.”
Redpoint's growth team prioritizes return multiples over ownership targets
“So we really focus on the outcomes more than the percentages at our stage.”
Market conditions matter more than founder quality in startup success
“Mine was most importantly that actually the market is more important than the founder. And what I mean by that is if you are in an untenable market, Even the best founder will not be able to get out. Like, truly untenable. Social, political unrest. Currency de…”
Battery missed Snowflake by over-indexing on early customer complaints
“If we had looked at the founding team and the infrastructure they built, I think we would have looked past the individual customer feedback, a data point here, a data point there, that said, hey, this is still not quite ready for prime time, and instead focuse…”
VCs should invest in market inevitabilities even if slightly early
“If something just feels like an inevitability and you might be a little early on the tacker on the market, we're talking months or maybe years, not decades, then it's worth just getting on board. If you think the company is going to be the one to execute on it…”
Ousting a CEO via board vote signals failed venture capital governance
“If ever you're going to the votes and using your role as a board member to oust the CEO, something else is broken down along the way in the journey and the relationship you built with the founder and the rest of the board.”
VCs can effectively handle at most eight to ten board seats
“I think that the way that I want to be able to do it, I think it's probably eight to 10 is what the people I've admired have been able to scale up to something like that and still be active and pragmatic about their relationships with the people they work with…”
Logan Bartlett names Benchmark's Eric Vishria as an A++ board member
“The one that I've internalized the most from and that I just have infinite amounts of respect for is Eric Vishria from Benchmark. Eric and I worked together on the Amplitude board, and now we have a new company Acuity MD together. And Eric is just, A++ as a bo…”
Recent crypto fund vintages will produce a high number of zeros
“I think we're going to see a lot of zeros pop out of the vintages of these crypto funds that we've seen recently.”
Top marketing talent chooses consumer over B2B due to larger budgets
“Because if you were good if you cared about marketing and you were really good, you would go into consumer because the budgets are much bigger and you get an opportunity to be much more Creative and come up with things like Superbowl advertising and all that.”
Early-stage startups should keep PR in-house rather than hiring external agencies
“Even if it doesn't work, you're much better in-housing it than throwing it over to someone else and having them give a, you know, probably not their best performance and trying to get you placement.”
Newer crossover funds that scaled rapidly face an imminent market reckoning
“Anyone that either doesn't have their existing track record of the last, whatever, 10 years attached to the name of their existing firm, or anyone that scaled well beyond what they had, you know, in the prior five years, in the last two years, I think anyone t…”
Logan Bartlett has had zero portfolio bankruptcies in eight years of investing
“I haven't yet. Now we've been in a eight year bull run since I've been investing.”
Investment memos must explicitly detail every potential failure risk beforehand
“What I'll always tell our team internally is, I really don't care if something goes wrong, ah, in an individual investment, that's gonna happen, but it can't be something that we didn't have written out in the investment memo before.”
Shorts cut from this episode
▶ Price Sensitivity lost in 2021 - Part 2/2 #shorts · 20VC wit (@28:36)
▶ Price sensitivity lost in 2021 - Part 1/2 #shorts · 20VC wit (@27:30)
▶ When NOT to haggle over $10 million - Part 1/2 #shorts · 20V (@32:06)
▶ When NOT to haggle over $10 million - Part 2/2 #shorts · 20V (@32:42)
▶ Branding: Individual vs Company #shorts · 20VC with Harry St (@22:33)
▶ VCs have become lazy #shorts · 20VC with Harry Stebbings (@16:01)