May 16, 2022 · 49m · 20vc
20VC: The Founding of General Catalyst, What it Takes to Build a Firm That Stands the Test of Time, Why VCs Need to Give Founders Greater Permission to Go For It & Why Venture Capital is Like Tennis with David Fialkow, Co-Founder @ General Catalyst
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 20VC, General Catalyst co-founder David Fialkow reflects on the founding and evolution of his firm, sharing insights on leadership succession, authentic relationship building, and the power of storytelling in venture capital.
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 24% of the talking time here. How this is scored →
Harry as informed peer 2.0 Guest teaching 3.0 Guest disagreement 1.2 Harry pushing back 1.5
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 35:15 David rejects Harry's premise on performance vs personal life
David directly pushes back on Harry's premise that personal life trades off against professional performance, asserting Harry is using the wrong definitions for work capacity.
Hardest push from Harry ▶ 21:45 Harry challenges backing young founders over experienced onesHarry resists David's flexible stance on young founders, citing his own frustration with first-time founders making basic errors and questioning why investors shouldn't prefer experienced 35-40 year olds.
Biggest teaching moment ▶ 35:15 David re-educates Harry on holistic performance and machine mindsetsDavid reframes Harry's transactional view of productivity, explaining that being a well-rounded human with deep personal relationships enhances creativity and founder empathy rather than diminishing performance.
Harry holds his own ▶ 26:16 Harry presents critique of lost startup storytellingHarry demonstrates strong market expertise by identifying how abundant venture capital diluted startup narrative discipline, backing it up with his Times Square billboard diagnostic.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Founding Story of General Catalyst | 1 | 3 | 1 | 1 | Harry prompts David for the origin story of General Catalyst. David explains his travel background with Joel Cutler, self-funding without VCs, and the impromptu decision on a Hawaiian beach to start the firm despite having no tech or investing experience. | |
| The Unique Partnership of David Fialkow and Joel Cutler | 1 | 2 | 1 | 1 | David shares the core rule of his partnership with Joel Cutler: placing business integrity above pretense. He also touches on their consumer-focused origin and why they avoided calling their early structure an incubator. | |
| Raising Institutional Capital and Early LP Relationships | 1 | 3 | 1 | 1 | David shares anecdotes from early institutional fundraising, including mistaking LP commitments for philanthropic donations before understanding expected returns. He credits early backers like David Swenson and Andy Golden for believing in their empathy-driven approach. | |
| Authentic Relationship Building in Venture Capital | 2 | 2 | 1 | 1 | Harry asks about David's reputation for deep relationship building. David explains that he prioritizes understanding personal circumstances over pure financial metrics, leveraging his network to support founders. | |
| Cultivating Depth and Vulnerability in Relationships at Scale | 2 | 4 | 2 | 2 | Harry asks how to maintain authentic relationships at scale, noting his own struggles as he ages. David lightly banters about Harry's age and explains how hosting intimate, vulnerability-driven dinners builds non-transactional depth. | |
| Giving Founders Permission to Go For It | 3 | 4 | 2 | 3 | Harry pushes back on backing young, first-time founders due to avoidable mistakes, favoring experienced founders in their late 30s. David reframes the topic around empowering founders and creating supportive environments where failure is treated as a pivot. | |
| Essential Founder Traits and the Importance of Salesmanship | 2 | 3 | 1 | 1 | David outlines the core traits he evaluates in early-stage founders: emotional stamina, leadership draw, and intrinsic salesmanship. Harry listens while David details how compelling founders sell through objections. | |
| The Art of Storytelling in Startup Creation | 4 | 3 | 1 | 2 | Harry asserts that capital proliferation has degraded the art of startup storytelling and introduces his Times Square billboard diagnostic. David agrees and explains how he guides founders away from buzzwords toward narrative vision. | |
| Evaluating Trust, Core Principles, and Paying It Forward | 2 | 3 | 1 | 2 | Harry admits his own difficulty in trusting people after being burned. David outlines his core operational principles for evaluating character and trust, emphasizing paying forward goodwill and standing by partners in adversity. | |
| Marriage, Personal Fulfillment, and Life Balance | 2 | 4 | 2 | 2 | Harry asks how to maintain personal relationships without losing professional performance. David explicitly rejects the dichotomy, correcting Harry that personal fulfillment makes one a better investor and mentor rather than less efficient. | |
| Leadership Ascension and Succession at General Catalyst | 2 | 3 | 1 | 1 | David discusses succession and ascension at General Catalyst, crediting Jim Schwartz for advising them to establish a West Coast presence and describing handing over firm leadership to Hemant Taneja and Adam Valkin. | |
| Quick Fire Questions with David Fialkow | 2 | 2 | 1 | 1 | In the quick fire section, David shares recommendations on favorite books, hard fundraising cycles, and core lessons learned, emphasizing the total importance of compounding winning founders. | |
| Intersections Between Filmmaking and Venture Capital | 2 | 3 | 1 | 1 | Harry asks about the parallels between documentary filmmaking and venture capital. David highlights their Oscar-winning films and shares the political resistance they faced self-distributing 'The Dissident'. |
Statements from this episode (19)
Fialkow built and sold four companies before founding General Catalyst
“Prior to founding General Catalyst with Joel Cutler, David was a serial entrepreneur. Building and selling no less than four successful companies.”
Fialkow built a multi-hundred million dollar travel company without VC funding
“We built a business with several hundred million dollar business without ever having to raise venture capital.”
Fialkow: Co-founders must prioritize business needs over protecting their friendship
“Most people who start business with their friends, I think, can make a mistake. They say, let the business never get in the way of the friendship. We said the exact opposite. Let the friendship never get in the way of business.”
General Catalyst launched without a master plan to hatch Boston startups
“We had no plan. We had no strategy. We had no business model. All we knew is that we were going to take some of the money we just made selling our travel business, and we were going to hatch companies in Boston.”
General Catalyst's first $70M fund was structured as an LLC
“Well, the first fund was probably seventy million dollars, and it wasn't even in GPLP, it was an LLC, because of course we were building a company, which is the only thing we thought we knew how to do. It was seventy million, most of it was from us, and then a…”
Fialkow: Investor value lies in network mobilization over individual expertise
“There's a limited amount that I can bring anybody, but I can bring an enormous amount of people to you as a founder who have skill sets or relationships or desires to help you.”
Fialkow: Inviting acquaintances to curated dinners ruins group openness and dynamic
“If I bring two people that know each other, they're immediately going to change the dynamic of the group.”
Fialkow was a struggling documentary filmmaker at age 24
“Can I tell you what life was like for me when I was 24? You know, I was a filmmaker trying to make documentary films, and it was like I couldn't make a living. I wasn't sure what I wanted to do, and I had a couple of ideas.”
Fialkow: Great founders do not need to be well-rounded
“Building a business is not like playing tennis. To be a tennis player, you have to learn how to head back in. You can't get away with it. Business is not like that. You don't have to be well-rounded. I mean, obviously, I'm a good example of that, right? What y…”
Fialkow: Founders unable to endure extreme stress will fail regardless of idea
“The first thing you've got to evaluate is, is this person that's sitting in front of me Capable of the emotional, physical, and mental stress that it's going to take to build a business. Binary. If they're not that person, regardless of how good their idea is,…”
Fialkow: Great early-stage startup teams operate like cults
“Great early stage companies are like cults. They all believe, they believe with a capital B.”
Stebbings: Only 5% of founders can articulate an inspirational message
“And I would say five percent can even give an answer, let alone a good answer.”
Fialkow: Founders should ignore TAM and CAC/LTV in early pitches
“So the first thing I would say is forget about markets. Forget about TAM. Forget about CAC LTV. Forget about all the things you think traditional people are going to ask you. Paint a picture for me. What do you want to build?”
Fialkow: Poor family relationships signal poor leadership potential
“Somebody who's a loner and somebody that doesn't like to get along with people who has shitty relationships with their family, not as a rule, but it's pretty hard to imagine that they're going to be a great leader.”
General Catalyst LPs stayed supportive despite the firm's market underperformance
“We had a tough fundraise. The market was off. We didn't have a lot of liquidity. And we went to our LPs and said, hey, things aren't great right now. We're really, like, feel like we underperformed the market over the last couple of years. But, and they all sa…”
Accel's Jim Swartz warned General Catalyst to expand beyond Boston
“Jim Schwartz told us in the summer of 2011 that if we didn't open a presence in California because we were only in Boston, we would never survive as a firm.”
Fialkow: New leadership outperforms General Catalyst's original founders
“And in the years since They've all really taken on the day-to-day management of the firm. It's a much better place. I don't hate to admit. They have done a much better job than Joel and I ever did.”
Fialkow: Venture capital success is 100% about founders, not TAM
“It's a hundred percent about the founders. Not 99, it's a hundred percent. Forget about markets, forget about TAM, forget about even other co-investors. Myopically focus on your relationship with founders in choosing people who are going to build the next gene…”
Fialkow: Distributors refused to buy 'The Dissident' over Saudi fears
“Couldn't get the film sold. It was one of the best films that we ever made, and no film company would buy it. No film company would distribute it, because they honestly were all scared of the Saudis. And it taught me a lesson. Right after winning an Academy Aw…”