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Apr 23, 2018 · 28m · 20vc

20VC: The Biggest Trend Of Our Lifetime Is The Decentralisation of Entrepreneurship Away From The Valley, The Biggest Lessons From Learnings The Craft of VC at Sequoia & The Benchmarks Required to Attract Growth Investors with Chris Olsen, Founding Partne

Chris Olsen · 19m 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

In this episode of The 20 Minute VC, host Harry Stebbings interviews Chris Olsen, founding partner of Drive Capital, about his transition from Sequoia Capital to launching a Midwest-focused venture firm. Olsen discusses the decentralization of tech entrepreneurship away from Silicon Valley, strategies for managing non-coastal funds, and the massive market opportunities in heartland technology hubs.

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 28.7% of the talking time here. How this is scored →

Harry as informed peer 3.0 Guest teaching 4.8 Guest disagreement 1.7 Harry pushing back 1.3
05100:0010:0020:003:01–6:18 · Harry as informed peer 2/10 Chris Olsen’s Early Career and Entry into Venture Capital Harry asks standard background questions about Chris's entry into VC. Chris shares his backstory and educates the host on VC history, including Sequoia returning $100M due to FOIA requests.6:19–13:05 · Harry as informed peer 3/10 Key Lessons and Experiential Learning at Sequoia Capital Harry structures the discussion framework into geography, psychology, and verticals, but largely yields the floor. Chris provides an extensive breakdown of Sequoia's historic bicycle-ride rule, the shift to customer proximity, and Midwest talent statistics.13:05–16:35 · Harry as informed peer 3/10 Overcoming LP Skepticism and Pitching Fund One Harry prompts Chris on LP resistance to raising a non-traditional regional fund. Chris recounts LP skepticism and illustrates the conversion process by noting local tech density, such as Nationwide having more engineers than Facebook.16:35–20:35 · Harry as informed peer 6/10 Midwest Valuations, Reserve Allocations, and Growth Capital Handoffs Harry displays solid technical VC knowledge by asking about reserve allocations and capital handoff thresholds. Chris reframes the valuation mindset, rejecting the strategy of buying discounted second-tier companies in favor of market prices for top-tier startups.20:35–22:53 · Harry as informed peer 2/10 The Global Trend of VC Decentralization and Sector Opportunities Harry invites a general forecast on VC decentralization. Chris delivers a informative monologue detailing robotics, hardware commoditization, and domain-specific opportunities.22:54–26:16 · Harry as informed peer 2/10 Quickfire Round: Books, High-Stakes Fundraising, and Duolingo In the quickfire section, Harry facilitates while Chris offers sharp contrarian opinions on Silicon Valley, citing a colleague's view that San Francisco is built primarily for the top one percent.3:01–6:18 · Guest teaching 4/10 Chris Olsen’s Early Career and Entry into Venture Capital Harry asks standard background questions about Chris's entry into VC. Chris shares his backstory and educates the host on VC history, including Sequoia returning $100M due to FOIA requests.6:19–13:05 · Guest teaching 6/10 Key Lessons and Experiential Learning at Sequoia Capital Harry structures the discussion framework into geography, psychology, and verticals, but largely yields the floor. Chris provides an extensive breakdown of Sequoia's historic bicycle-ride rule, the shift to customer proximity, and Midwest talent statistics.13:05–16:35 · Guest teaching 5/10 Overcoming LP Skepticism and Pitching Fund One Harry prompts Chris on LP resistance to raising a non-traditional regional fund. Chris recounts LP skepticism and illustrates the conversion process by noting local tech density, such as Nationwide having more engineers than Facebook.16:35–20:35 · Guest teaching 5/10 Midwest Valuations, Reserve Allocations, and Growth Capital Handoffs Harry displays solid technical VC knowledge by asking about reserve allocations and capital handoff thresholds. Chris reframes the valuation mindset, rejecting the strategy of buying discounted second-tier companies in favor of market prices for top-tier startups.20:35–22:53 · Guest teaching 5/10 The Global Trend of VC Decentralization and Sector Opportunities Harry invites a general forecast on VC decentralization. Chris delivers a informative monologue detailing robotics, hardware commoditization, and domain-specific opportunities.22:54–26:16 · Guest teaching 4/10 Quickfire Round: Books, High-Stakes Fundraising, and Duolingo In the quickfire section, Harry facilitates while Chris offers sharp contrarian opinions on Silicon Valley, citing a colleague's view that San Francisco is built primarily for the top one percent.3:01–6:18 · Guest disagreement 1/10 Chris Olsen’s Early Career and Entry into Venture Capital Harry asks standard background questions about Chris's entry into VC. Chris shares his backstory and educates the host on VC history, including Sequoia returning $100M due to FOIA requests.6:19–13:05 · Guest disagreement 1/10 Key Lessons and Experiential Learning at Sequoia Capital Harry structures the discussion framework into geography, psychology, and verticals, but largely yields the floor. Chris provides an extensive breakdown of Sequoia's historic bicycle-ride rule, the shift to customer proximity, and Midwest talent statistics.13:05–16:35 · Guest disagreement 2/10 Overcoming LP Skepticism and Pitching Fund One Harry prompts Chris on LP resistance to raising a non-traditional regional fund. Chris recounts LP skepticism and illustrates the conversion process by noting local tech density, such as Nationwide having more engineers than Facebook.16:35–20:35 · Guest disagreement 2/10 Midwest Valuations, Reserve Allocations, and Growth Capital Handoffs Harry displays solid technical VC knowledge by asking about reserve allocations and capital handoff thresholds. Chris reframes the valuation mindset, rejecting the strategy of buying discounted second-tier companies in favor of market prices for top-tier startups.20:35–22:53 · Guest disagreement 1/10 The Global Trend of VC Decentralization and Sector Opportunities Harry invites a general forecast on VC decentralization. Chris delivers a informative monologue detailing robotics, hardware commoditization, and domain-specific opportunities.22:54–26:16 · Guest disagreement 3/10 Quickfire Round: Books, High-Stakes Fundraising, and Duolingo In the quickfire section, Harry facilitates while Chris offers sharp contrarian opinions on Silicon Valley, citing a colleague's view that San Francisco is built primarily for the top one percent.3:01–6:18 · Harry pushing back 1/10 Chris Olsen’s Early Career and Entry into Venture Capital Harry asks standard background questions about Chris's entry into VC. Chris shares his backstory and educates the host on VC history, including Sequoia returning $100M due to FOIA requests.6:19–13:05 · Harry pushing back 1/10 Key Lessons and Experiential Learning at Sequoia Capital Harry structures the discussion framework into geography, psychology, and verticals, but largely yields the floor. Chris provides an extensive breakdown of Sequoia's historic bicycle-ride rule, the shift to customer proximity, and Midwest talent statistics.13:05–16:35 · Harry pushing back 2/10 Overcoming LP Skepticism and Pitching Fund One Harry prompts Chris on LP resistance to raising a non-traditional regional fund. Chris recounts LP skepticism and illustrates the conversion process by noting local tech density, such as Nationwide having more engineers than Facebook.16:35–20:35 · Harry pushing back 3/10 Midwest Valuations, Reserve Allocations, and Growth Capital Handoffs Harry displays solid technical VC knowledge by asking about reserve allocations and capital handoff thresholds. Chris reframes the valuation mindset, rejecting the strategy of buying discounted second-tier companies in favor of market prices for top-tier startups.20:35–22:53 · Harry pushing back 0/10 The Global Trend of VC Decentralization and Sector Opportunities Harry invites a general forecast on VC decentralization. Chris delivers a informative monologue detailing robotics, hardware commoditization, and domain-specific opportunities.22:54–26:16 · Harry pushing back 1/10 Quickfire Round: Books, High-Stakes Fundraising, and Duolingo In the quickfire section, Harry facilitates while Chris offers sharp contrarian opinions on Silicon Valley, citing a colleague's view that San Francisco is built primarily for the top one percent.

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

0:00 · Harry 97.9% · guest 2.1%0:00 · Harry 97.9% · guest 2.1%3:00 · Harry 16.7% · guest 83.3%3:00 · Harry 16.7% · guest 83.3%6:00 · Harry 20.1% · guest 79.9%6:00 · Harry 20.1% · guest 79.9%9:00 · Harry 0% · guest 100%9:00 · Harry 0% · guest 100%12:00 · Harry 10.2% · guest 89.8%12:00 · Harry 10.2% · guest 89.8%15:00 · Harry 20.3% · guest 79.7%15:00 · Harry 20.3% · guest 79.7%18:00 · Harry 15% · guest 85%18:00 · Harry 15% · guest 85%21:00 · Harry 9.8% · guest 90.2%21:00 · Harry 9.8% · guest 90.2%24:00 · Harry 29.8% · guest 70.2%24:00 · Harry 29.8% · guest 70.2%27:00 · Harry 100% · guest 0%27:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 13:21 Dismissing Silicon Valley LP orthodoxy

Chris aggressively challenges the conventional LP sentiment that required funds to sit in Silicon Valley, calling out the fallacy of doing the exact same thing as everyone else.

 Hardest push from Harry ▶ 16:35 Pressing on Midwest valuation supply and demand dynamics

Harry pushes Chris on the reality of supply/demand dynamics in a non-competitive market versus Silicon Valley's multi-term-sheet frenzies.

 Biggest teaching moment ▶ 8:27 Explaining the shift from engineering proximity to customer proximity

Chris educates the host on how cloud computing commoditized infrastructure, shifting venture value creation from living near engineers to living near customers.

 Harry holds his own ▶ 17:42 Drilling into reserve allocation mechanics

Harry demonstrates technical insider expertise by asking whether Drive uses 1:1 reserves or stack-ranked quarterly allocations.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Chris Olsen’s Early Career and Entry into Venture Capital 2411 Harry asks standard background questions about Chris's entry into VC. Chris shares his backstory and educates the host on VC history, including Sequoia returning $100M due to FOIA requests.
Key Lessons and Experiential Learning at Sequoia Capital 3611 Harry structures the discussion framework into geography, psychology, and verticals, but largely yields the floor. Chris provides an extensive breakdown of Sequoia's historic bicycle-ride rule, the shift to customer proximity, and Midwest talent statistics.
Overcoming LP Skepticism and Pitching Fund One 3522 Harry prompts Chris on LP resistance to raising a non-traditional regional fund. Chris recounts LP skepticism and illustrates the conversion process by noting local tech density, such as Nationwide having more engineers than Facebook.
Midwest Valuations, Reserve Allocations, and Growth Capital Handoffs 6523 Harry displays solid technical VC knowledge by asking about reserve allocations and capital handoff thresholds. Chris reframes the valuation mindset, rejecting the strategy of buying discounted second-tier companies in favor of market prices for top-tier startups.
The Global Trend of VC Decentralization and Sector Opportunities 2510 Harry invites a general forecast on VC decentralization. Chris delivers a informative monologue detailing robotics, hardware commoditization, and domain-specific opportunities.
Quickfire Round: Books, High-Stakes Fundraising, and Duolingo 2431 In the quickfire section, Harry facilitates while Chris offers sharp contrarian opinions on Silicon Valley, citing a colleague's view that San Francisco is built primarily for the top one percent.

Statements from this episode (10)

Assertion Supported
Sequoia Capital Stopped Accepting Public Funds To Avoid FOIA Disclosures
“Sequoia at the time made the decision to no longer accept public funds. And because of this disclosure, they wanted to protect the stealthiness of their businesses.”
Chris Olsen Apr 23, 2018 ▶ 5:33
Assertion Contradicted
Sequoia Capital Invests More Money Outside California Than Inside
“Today, Sequoia, and many of the other venture firms, they invest more money outside of California than inside of it”
Chris Olsen Apr 23, 2018 ▶ 10:13
Assertion Contradicted
US Midwest Universities Graduate More Engineers Than Any Global Region
“There are more engineers graduating from Midwest universities than any other corner of planet earth.”
Chris Olsen Apr 23, 2018 ▶ 12:18
Assertion Partly supported
The US Midwest Economy Ranks Fifth Globally, Ahead Of India
“It has the economy that would be the fifth largest economy in the world, bigger than Brazil, bigger than Russia, bigger than India. And it's on top of that has a 150 of the fortune, 500 companies here.”
Chris Olsen Apr 23, 2018 ▶ 12:24
Assertion Contradicted
Nationwide Insurance Employs More Software Engineers Than Facebook
“Companies like nationwide insurance, They have more engineers than Facebook has”
Chris Olsen Apr 23, 2018 ▶ 16:23
Assertion Not checkable as stated
Top Midwest Startups Command Silicon Valley-Level Valuations Despite Fewer VCs
“Even though there are fewer VCs here, the very best companies are getting priced at a very similar level to those in Silicon Valley.”
Chris Olsen Apr 23, 2018 ▶ 17:27
Insight
Midwest Startups Face Severe Funding Trough Between $3M And $40M
“If you want to raise less than three million dollars, there is a very robust pool here of angels and incubators that are willing to invest in those companies. I think that where there's this trough is from, If you're raising between three million dollars and f…”
Chris Olsen Apr 23, 2018 ▶ 19:27
Insight
$1M Monthly Revenue Unlocks Coastal VC Growth Rounds For Midwest Startups
“As a rule of thumb, a million dollars a month, Then you've got a business that will be able to raise forty million dollars from the venture community, and if you can do that, then now you're tapping into these growth funds that are on the coast”
Chris Olsen Apr 23, 2018 ▶ 20:01
Prediction Not checkable as stated
Universal Multi-Purpose Manufacturing Robotics Remain Far In The Future
“Where you can get to a world where a robot can simultaneously spit out a smartphone and then spit out a piece of gym equipment is a long, long way off.”
Chris Olsen Apr 23, 2018 ▶ 22:06
Prediction Not checkable as stated
Silicon Valley Decentralization Is Tech's Biggest Trend Over The Next 20 Years
“I believe that the decentralization of Silicon Valley is the biggest trend that we're going to live through in the next 20 years.”
Chris Olsen Apr 23, 2018 ▶ 24:48
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