The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 70 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Gil: Half of Unicorns Are Dramatically Overvalued
“Half of the unicorns are probably dramatically overvalued, and if they were public companies, their valuations would get chopped down pretty dramatically relative to where they are today.”
Elad Gil: Stock market must drop to reconcile with economic damage
“Travel is decimated. Restaurants are decimated. And yet the stock markets are slightly down. And so I think all that's going to be reconciled.”
Elad Gil: Fall 2020 COVID-19 wave will trigger new lockdowns
“My belief is that we're going to see a second wave of COVID in the fall, and there will be a subset of states that will lock down and a subset of countries that will again.”
Elad Gil: Summer 2020 will be an economic 'valley of false hope'
“I think May to July or May to August or May to September, something like that is going to be the valley of false hope in some sense, and I hope I'm wrong.”
Elad Gil: Spotify invented direct listings to bypass private equity terms
“I think even Spotify, I think, invested the direct listing to get around some structure that a PE firm went in around an IPO, and that's why they didn't do an IPO. They invented direct listings to get around a structure, as far as I know.”
Elad Gil: SoftBank's impaired portfolio is delaying Vision Fund 2
“SoftBank would be an example of that, where they invested a very large amount of money In a number of companies, a number of those companies are now below where SoftBank has invested. A number are well above, like Gardent. And it looks like the Second Vision F…”
Elad Gil: Startups conducting layoffs should cut deeply in a single round
“And in general, when you do a layoff, you want to be able to do something significant all at once and So when cutting, you should cut more deeply than you think you should. And anyone who's marginal or you need to figure out, unfortunately, you should default …”
Elad Gil: The San Francisco Bay Area will remain a tech epicenter
“And I think most people are going to stick around. And I think no matter what, the Bay Area will continue to be a tech epicenter.”
Elad Gil: Hire Hungry Senior Directors Instead of Established Enterprise SVPs
“Instead of hiring the SVP of engineering from an organization, you hire their Key senior director or their key VP who is really excited to take on an entire functional org.”
Elad Gil: Most Investors Making Preemptive VC Bets Will Make Costly Mistakes
“I do think a lot of people will be making mistakes on the preemptive side, though, because they're basically investing ahead of time with little data evaluations that aren't merited by the data, and so you either have to be extremely good or extremely lucky, a…”
Elad Gil: SoftBank Has Had the Greatest Impact of All VC Mega Funds
“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 …”
Elad Gil: Mega funds will drive preemptive rounds and VC defensiveness
“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 …”
Elad Gil: Avoid Taking Seed Checks From Growth Funds to Preserve Capacity
“The other thing I would keep in mind is that people who tend to invest late may be good sources of capital later. And if they own a lot of the company early, they're just not going to participate later. So there may be some funds that you want to sort of keep …”
Elad Gil: Tech Companies Close More Candidates at Lower Compensation Post-IPO
“So a friend of mine runs a technology recruiting firm, and he has data that shows that when a company goes public, they actually close more candidates at lower price than right before they went public.”
Gil: In a bad market, market dynamics beat a great team
“Many angels I know are very team driven, and I think the team is important, but I think a great team in a terrible market, the market tends to win.”
Gil: Expecting a 5-10x return on a $1B valuation is highly improbable
“And so if you're investing at a billion and you're hoping for a five or 10 X, that's actually an extremely improbable event on average.”
Gil: VCs applying software metrics to food tech and biotech will burn
“I think the place where it ends poorly is where somebody applies and assumes software-related models to non-software areas, and they don't think about the margin structure, and they don't think about dealing with physical goods, and that's where I think a lot …”
Gil: Winning Startups Recast Existing Behaviors Rather Than Creating New Ones
“So I just think, like often the most compelling things are capturing behavior that already exists, and then revamping it in a new way, or capturing it in a new medium, versus creating entirely new behaviors. I actually think there's very few things that exist …”
Gil: Traditional venture capital unnaturally bundles capital, governance, and advice
“The traditional BC model bundles capital, governance, and advice, and the people who are great investors aren't necessarily good at governance or advice, or vice versa. People who are great advisors may not be great investors. They may not be able to identify …”
Elad Gil: Profitable late-stage startups were forced into emergency COVID fundraises
“And I've seen a number of late stage companies now have to go into an emergency fundraise, not because they weren't great companies who weren't, they were profitable three months ago. It's just COVID hit them so hard. Suddenly they needed to raise money in a v…”
Elad Gil: COVID-accelerated startup categories like consumer edtech will vaporize
“And so I think there's going to be certain areas that are really accelerating right now that are going to vaporize.”
Elad Gil: Hedge funds and family offices are exiting late-stage VC
“And so where I've seen real capital shifts is hedge funds and family offices temporarily exiting late stage private investing so that they can focus on these public market opportunities.”
Elad Gil: Selling to a 10x breakout acquirer yields optimal exit outcomes
“If you do sell, if you can sell to a company that's breaking out itself and has a clear 10 X on it, that may actually be the smartest way to exit all else being equal. A, because you're going to end up with a much bigger financial outcome because, you know, th…”
Elad Gil: Fast-Scaling Startups Must Sometimes Slow Growth to Protect Culture
“And so you sometimes actually have to slow down growth rather than accelerate it, not because of capital constraints. Usually you have the money to do it if things are really working well. But more because you're just going to kind of blow up the way that the …”
Elad Gil: Recent tech startups fail to leverage distribution moats
“And so I think the most recent wave of companies tend to be much less aggressive about reimagining themselves as a distribution centric company and not just a product centric company.”
Elad Gil: Average Startup Quality Has Fallen as Seed Volume Quadrupled
“The average company has gotten worse rather than better, and the number of companies has gone up dramatically. I think there's now a few thousand venture-backed companies a year, or seed companies, I should say, a year, when a few years ago was maybe a quarter…”
Gil: Preemptive VC Capital Locks Founders In and Destroys Early Exit Options
“And so I think the downside of preemptive rounds and extra capital is it also locks in the entrepreneur to a longer story, and it removes the option value of actually exiting at a valuation where lots of people would have bought them.”
Gil: Extended Privatization Traps Capital and Talent in Undeserving Startups
“It's actually been positive for them to be private for longer, but it may be bad for the ecosystem overall because it's tying up a lot of capital and talent into pockets that may not deserve that capital and talent as much.”
Elad Gil: I Took Lower Valuations at Both Startups for Better Investors
“Or anything else, you know, for my own companies, as I've run them, I've started two companies. And in both cases, there have been rounds where I've taken lower valuations to get a better investor on board or somebody that I thought would be more helpful. So I…”
Elad Gil: Amazon's Low-Margin Playbook Fails for Most Tech Companies
“I think that in Silicon Valley, too many people are stuck on Amazon as the primary model for what will succeed as a company, and Amazon is actually the exception versus the rule. In other words, Amazon is a company that went for very high market share with ver…”
Elad Gil: Capital acts as a moat when paired with high customer LTV
“Despite large amounts of capital in the system, there does become a point where It becomes reasonably uneconomical for other people to compete from a capital perspective. I don't think that there's ever been a business where the sole defensible point is capita…”
Elad Gil: Google Spent Hundreds of Millions Buying Firefox Homepage and Toolbars
“Google was spending hundreds of millions of dollars on To acquire customers via things like toolbar distribution. They bought the homepage of Firefox for many years. They basically did whatever they could to push distribution as hard as possible.”
Elad Gil: Facebook Bought Ads Targeted at Specific Individuals' Names in Europe
“Facebook ultimately ended up doing the same thing where they were literally buying ads in Europe against individuals' names so that they could convert those people onto Facebook as a platform.”
Gil: Multi-billion-dollar startups should aggressively pursue M&A for talent and product
“Any company that has a market cap of a few billion or more, in my opinion, if they're new, should actually be buying up other companies pretty rapidly, and I think in some cases, those teams just haven't hired a corp dev person, or they haven't professionalize…”
Gil: Google, Apple, and Amazon prove public companies stay innovative
“The most innovative companies in technology are actually the big public ones, right? I would argue that Google and Apple and, you know, Amazon are the most innovative companies in the world, and they do that as public companies.”
Gil: Best Companies Always Look Expensive Initially and Cheap in Hindsight
“I think the best companies always look expensive at the time and cheap in hindsight.”
Elad Gil has backed over 20 unicorn startups
“I've now backed 23 or 24 companies worth a billion dollars or more, 16 of them at the seed or series A.”
Elad Gil: US unemployment could reach 30% due to COVID-19
“So unemployment right now is at 20%, or, you know, some people think it'll land at 20 to 30%.”
Elad Gil: Startups need 2.5 to 3 years of cash runway
“In general, as a company, you want to have two and a half to three years of cash on hand, or the ability to get to that point, or to be profitable.”
Elad Gil: Instacart will retain massive growth post-pandemic
“Instacart, I think even if it snaps back to half of Where it is today, it's still going to be massive acceleration of the business.”
Elad Gil: Corporate travel demand will recover within 1-2 years
“Some corporate travel company like TripActions, I don't know anything in detail about them, but I'm assuming there are businesses way down, but in a year or two, a lot of it will come back. Enterprises will start to travel again.”
Elad Gil: Marginal enterprise software products get decimated in recessions
“So anything that's marginal versus core, I think is really going to get hurt.”
Elad Gil: San Francisco construction subcontractors are bidding up to 50% lower
“I was talking to a friend of mine who's a real estate developer in San Francisco, and he said a lot of the general contractors he worked with have told him that their subs, their contractors, are coming in with 30, 40, 50% lower bids than they used to because …”
Elad Gil: Preemptive inside VC rounds will end within two months
“And I think that trend has another month or two on it. And then I think late stage VCs will start shifting their perspective for early stage investments.”
Elad Gil: Several venture funds will struggle to raise capital in 2021
“I do think that there are going to be a handful of venture funds that are going to find it increasingly hard to raise their next venture fund sometime next year.”
Elad Gil: M&A buyer activity will surge within 6 to 18 months
“I think there will definitely be a number of buyers coming into the market and that's actually one of the offensive things that you can do as a company if you're late stage is you can start planning ahead in terms of what are the companies you want to buy and …”
Elad Gil: Half of early-stage funding rounds involve multi-stage VCs
“I think about half the rounds at the early stages are multi-stage capital and half are not.”
Elad Gil: Early-Stage Startups Only Need to Solve Three Core Priorities
“There's only three things you need to do at an early company. Number one is find product market fit. Number two is don't run out of money, which is another way of saying find product market fit. And number three is don't fight and implode as a founding team.”