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Jan 18, 2017 · 31m · 20vc

20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund

Rishi Garg · 22m spoken Harry Stebbings · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Rishi Garg, General Partner at Mayfield Fund, shares strategic insights on evaluating co-founder dynamics, navigating the risks of oversized Series A rounds, and scaling early-stage startups based on his extensive corporate development experience at Square and Twitter.

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 25.3% of the talking time here. How this is scored →

Harry as informed peer 2.0 Guest teaching 4.4 Guest disagreement 0.6 Harry pushing back 1.0
05100:0010:0020:0030:002:27–10:01 · Harry as informed peer 1/10 Rishi Garg's Journey from Drama Major to Tech Corporate Development and VC Rishi recounts his career path from Stanford drama major to corporate development at Square and Twitter. Harry mostly listens and lets Rishi provide a detailed narrative overview of his background.10:01–12:09 · Harry as informed peer 1/10 Strategic Learnings from Corporate Development at Square and Twitter Rishi outlines key operational takeaways from corp dev and mentions setting up founder alignment workshops at Harvard Business School. Harry asks open-ended prompts without challenging the responses.12:09–18:26 · Harry as informed peer 3/10 Assessing Co-Founder Dynamics and Relationship Transparency Rishi educates Harry on evaluating co-founder relationships, citing Noam Wasserman research on equity split conversations. Harry probes with follow-up questions on how to dig deeper without being overly intrusive.18:26–23:21 · Harry as informed peer 3/10 Navigating the Dangers and Dynamics of Large Series A Rounds Rishi critiques large Series A rounds for causing complacency, while Harry asks for concrete runway figures and shares his own dilemma regarding 18 versus 24 months of runway.23:21–29:11 · Harry as informed peer 2/10 Quick Fire Round: Lessons from Square, Books, and Media Platforms In the quick fire round, Rishi details Square's struggle to find a second big hit with Square Wallet and explains his involvement with Rent-A-Center. Harry maintains an upbeat tone and keeps time tightly.2:27–10:01 · Guest teaching 3/10 Rishi Garg's Journey from Drama Major to Tech Corporate Development and VC Rishi recounts his career path from Stanford drama major to corporate development at Square and Twitter. Harry mostly listens and lets Rishi provide a detailed narrative overview of his background.10:01–12:09 · Guest teaching 4/10 Strategic Learnings from Corporate Development at Square and Twitter Rishi outlines key operational takeaways from corp dev and mentions setting up founder alignment workshops at Harvard Business School. Harry asks open-ended prompts without challenging the responses.12:09–18:26 · Guest teaching 6/10 Assessing Co-Founder Dynamics and Relationship Transparency Rishi educates Harry on evaluating co-founder relationships, citing Noam Wasserman research on equity split conversations. Harry probes with follow-up questions on how to dig deeper without being overly intrusive.18:26–23:21 · Guest teaching 5/10 Navigating the Dangers and Dynamics of Large Series A Rounds Rishi critiques large Series A rounds for causing complacency, while Harry asks for concrete runway figures and shares his own dilemma regarding 18 versus 24 months of runway.23:21–29:11 · Guest teaching 4/10 Quick Fire Round: Lessons from Square, Books, and Media Platforms In the quick fire round, Rishi details Square's struggle to find a second big hit with Square Wallet and explains his involvement with Rent-A-Center. Harry maintains an upbeat tone and keeps time tightly.2:27–10:01 · Guest disagreement 0/10 Rishi Garg's Journey from Drama Major to Tech Corporate Development and VC Rishi recounts his career path from Stanford drama major to corporate development at Square and Twitter. Harry mostly listens and lets Rishi provide a detailed narrative overview of his background.10:01–12:09 · Guest disagreement 0/10 Strategic Learnings from Corporate Development at Square and Twitter Rishi outlines key operational takeaways from corp dev and mentions setting up founder alignment workshops at Harvard Business School. Harry asks open-ended prompts without challenging the responses.12:09–18:26 · Guest disagreement 1/10 Assessing Co-Founder Dynamics and Relationship Transparency Rishi educates Harry on evaluating co-founder relationships, citing Noam Wasserman research on equity split conversations. Harry probes with follow-up questions on how to dig deeper without being overly intrusive.18:26–23:21 · Guest disagreement 1/10 Navigating the Dangers and Dynamics of Large Series A Rounds Rishi critiques large Series A rounds for causing complacency, while Harry asks for concrete runway figures and shares his own dilemma regarding 18 versus 24 months of runway.23:21–29:11 · Guest disagreement 1/10 Quick Fire Round: Lessons from Square, Books, and Media Platforms In the quick fire round, Rishi details Square's struggle to find a second big hit with Square Wallet and explains his involvement with Rent-A-Center. Harry maintains an upbeat tone and keeps time tightly.2:27–10:01 · Harry pushing back 0/10 Rishi Garg's Journey from Drama Major to Tech Corporate Development and VC Rishi recounts his career path from Stanford drama major to corporate development at Square and Twitter. Harry mostly listens and lets Rishi provide a detailed narrative overview of his background.10:01–12:09 · Harry pushing back 0/10 Strategic Learnings from Corporate Development at Square and Twitter Rishi outlines key operational takeaways from corp dev and mentions setting up founder alignment workshops at Harvard Business School. Harry asks open-ended prompts without challenging the responses.12:09–18:26 · Harry pushing back 2/10 Assessing Co-Founder Dynamics and Relationship Transparency Rishi educates Harry on evaluating co-founder relationships, citing Noam Wasserman research on equity split conversations. Harry probes with follow-up questions on how to dig deeper without being overly intrusive.18:26–23:21 · Harry pushing back 2/10 Navigating the Dangers and Dynamics of Large Series A Rounds Rishi critiques large Series A rounds for causing complacency, while Harry asks for concrete runway figures and shares his own dilemma regarding 18 versus 24 months of runway.23:21–29:11 · Harry pushing back 1/10 Quick Fire Round: Lessons from Square, Books, and Media Platforms In the quick fire round, Rishi details Square's struggle to find a second big hit with Square Wallet and explains his involvement with Rent-A-Center. Harry maintains an upbeat tone and keeps time tightly.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 89.7% · guest 10.3%0:00 · Harry 89.7% · guest 10.3%3:00 · Harry 0% · guest 100%3:00 · Harry 0% · guest 100%6:00 · Harry 0.6% · guest 99.4%6:00 · Harry 0.6% · guest 99.4%9:00 · Harry 8.8% · guest 91.2%9:00 · Harry 8.8% · guest 91.2%12:00 · Harry 19.5% · guest 80.5%12:00 · Harry 19.5% · guest 80.5%15:00 · Harry 20.7% · guest 79.3%15:00 · Harry 20.7% · guest 79.3%18:00 · Harry 11.3% · guest 88.7%18:00 · Harry 11.3% · guest 88.7%21:00 · Harry 19.7% · guest 80.3%21:00 · Harry 19.7% · guest 80.3%24:00 · Harry 14.3% · guest 85.7%24:00 · Harry 14.3% · guest 85.7%27:00 · Harry 42.5% · guest 57.5%27:00 · Harry 42.5% · guest 57.5%30:00 · Harry 100% · guest 0%30:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 19:30 Critique of oversized Series A rounds

Rishi pushes back against the market trend of raising massive Series A rounds, arguing it breeds complacency and destroys operational discipline.

 Hardest push from Harry ▶ 22:15 Pressing on exact runway months

Harry refuses to accept vague advice about an adequate cushion and directly challenges Rishi to define whether 18 or 24 months is ideal.

 Biggest teaching moment ▶ 14:12 Academic research on co-founder equity splits

Rishi educates Harry by citing Noam Wasserman's research showing that the depth of founder equity conversations correlates strongly with company success.

 Harry holds his own ▶ 22:15 Framing runway options from angel experience

Harry demonstrates his own market expertise by offering a concrete perspective on startup cash runway dynamics and comparing 18 versus 24 month horizons.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Rishi Garg's Journey from Drama Major to Tech Corporate Development and VC 1300 Rishi recounts his career path from Stanford drama major to corporate development at Square and Twitter. Harry mostly listens and lets Rishi provide a detailed narrative overview of his background.
Strategic Learnings from Corporate Development at Square and Twitter 1400 Rishi outlines key operational takeaways from corp dev and mentions setting up founder alignment workshops at Harvard Business School. Harry asks open-ended prompts without challenging the responses.
Assessing Co-Founder Dynamics and Relationship Transparency 3612 Rishi educates Harry on evaluating co-founder relationships, citing Noam Wasserman research on equity split conversations. Harry probes with follow-up questions on how to dig deeper without being overly intrusive.
Navigating the Dangers and Dynamics of Large Series A Rounds 3512 Rishi critiques large Series A rounds for causing complacency, while Harry asks for concrete runway figures and shares his own dilemma regarding 18 versus 24 months of runway.
Quick Fire Round: Lessons from Square, Books, and Media Platforms 2411 In the quick fire round, Rishi details Square's struggle to find a second big hit with Square Wallet and explains his involvement with Rent-A-Center. Harry maintains an upbeat tone and keeps time tightly.

Statements from this episode (8)

Assertion Not publicly verifiable
MTV Networks offered Facebook a Series A term sheet at $45M valuation
“We put a term sheet on Facebook series eight, a forty five million dollar post.”
Rishi Garg Jan 18, 2017 ▶ 5:10
Assertion Supported
Twitter completed about 14 acquisitions in 14 months under Rishi Garg
“After that, we did a bunch of different projects, about 14 or so acquisitions in about 14 months.”
Rishi Garg Jan 18, 2017 ▶ 8:37
Opinion
Garg: VCs fail to systematically evaluate co-founder dynamics during diligence
“What VCs generally do is they rely on their systemic ability to sort of perceive these things in meetings or reference checks. One of the things they don't do is systematically evaluate and try to dig into what are the relationships between co-founders look an…”
Rishi Garg Jan 18, 2017 ▶ 12:54
Assertion Partly supported
Discussing equity splits at length correlates with higher long-term enterprise value
“There's a guy named Noam Wasserman who has found that whenever founders discuss equity splits at length, even if they end up just dividing it 50 50, okay, the fact that they've had the conversation is a higher indicator of long-term company success based on en…”
Rishi Garg Jan 18, 2017 ▶ 14:22
Assertion Not checkable as stated
Very few of the most successful tech startups raised huge Series A rounds
“If you look at the data, look back at all the companies that have been founded, and ask yourself, how many of the best companies that we're most proud of started out with a really huge Series A's? Very few of them have that dynamic. That doesn't mean it's not …”
Rishi Garg Jan 18, 2017 ▶ 20:35
Insight
Garg: Seed startups should raise twice their estimated testing cost
“At the series seed, I always say, like, you want to basically double your money, so it's going to take you 600 grand to answer three or four top hypotheses, try to raise a million to.”
Rishi Garg Jan 18, 2017 ▶ 22:36
Opinion
Garg: Series A startups should target 20 to 24 months runway
“It's going to take me nine months to figure out or 12 months to figure out the key hypotheses I need right now. So let me add another, you know, nine to 12 months of runway onto that. So that puts you kind of into the range you mentioned, that kind of 20 to 24…”
Rishi Garg Jan 18, 2017 ▶ 22:52
Disclosure
Square Wallet failed because Square backed it too long without 10x value
“We tried Square Wallet. It was unsuccessful. We backed it for too long. We kept it going for too long. I think there wasn't enough focus on creating the same kind of 10 X value proposition in that product that Square's core product originally had.”
Rishi Garg Jan 18, 2017 ▶ 25:24
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