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Q You mentioned the raising of future funds there. The other kind of dominant trend is the rise of mega funds from SoftBank to Sequoia to Lightspeed to General Catalyst, all billion dollar, or in SoftBank's case, multi-multi-billion dollar. Everyone is raising record amounts. What do you make of this, and is this a sign of a bubble?
A I think that the sort of mega fund that's mattered the most in terms of impact is probably SoftBank, Simply because at a hundred billion dollars, SoftBank is the equivalent of a hundred general catalysts or 12 Sequoia funds. So just the sheer scale of capital that they have is pretty immense. So I think that's been the thing that's impacted the ecosystem the most. I do think these billion dollar funds will effectively lead to an ongoing trend of preemption. And it also means that certain VCs will double down much more aggressively on companies that are working and potentially shut out others from participating in their companies. And so I think we may see a trend towards VCs being more defensive of their companies versus more collaborative. And I think in general, venture capital has gone through waves where VCs wanted to own as much as possible of a single company and push everybody else out. And then there have been waves where VCs have wanted to spread risk and collaborate as much as possible. And I think we're about to enter a wave where people are going to have sharper elbows and try and sort of defend their turf in terms of owning as much as possible of the companies they're involved with.
AI assessment note: “I do think these billion dollar funds will effectively lead to an ongoing trend of preemption.”
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Q within organizations, and Transparency would also be kind of being open about runway and being open about cash balances, which a lot of founders say they are on the show. But then you get challenges like that, which to leaving people who've been laid off is in many ways fair. How do you think about the limits to transparency, especially in cases like this, where it could potentially really backfire?
A I would just be open and honest with people and explain it. I think people largely will understand this. When all is said and done, you need to focus on the survivability of the business because If you set things up where you go from a hundred million to twenty million to zero, you've destroyed the business, right? And so this is about ensuring that everybody who spent four years, six years, 10 years, however long it's been building the company sees that company survives, sees that their stock is worth something, but also that a lot of people are left with jobs versus nobody having a job. So I would just come back to that because that's really the reason you're doing it. You're trying to create a sustainable business. And at the same time, if you make sure to treat people well on the way out, that helps a lot too, because, you know, they're friends of yours, the people running the company, right? Like you've, unfortunately, some of the people who are going to be laid off are people that you knew well, and that you worked with side by side with for years. And they're friends with the people who are also left at the company. And so you want to make sure to treat those people very well for multiple reasons, including that.
AI assessment note: “I would just be open and honest with people and explain it.”
