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Sturdy: Non-founder CEOs are often best suited to scale growth companies
“So I would like to invest in a non-founder led company. You point out Satya, I know dozens of incredible CEOs that were not founders and have same, but different mix of special sauce that makes them The right person to lead that company, and often to lead the …”
Sturdy: Growth startups fail by under-resourcing their second-act product bets
“The mistake I typically see companies doing at that stage, the growth stage is too much, not making concentrated enough bets in the second, third act. And they're not significant enough. They're not focused enough. They're not large enough to really, to make a…”
Sturdy: $100M revenue companies with execution discipline are viable IPO candidates
“But I don't actually think it's necessarily a scale thing. I've seen a hundred million dollar revenue companies that are operating with that level of precision have their story tight, have their execution plan really tight, and would be a good candidate to go …”
Sturdy: VCs passed on Stripe citing high valuation and commodity market
“When I did that deal, I remember talking to lots of other investors and the pushback would be it's in a commodity market. It's valued too high. There's not real differentiation.”
Sturdy: Hiring a diverse and exceptional tech workforce is not that hard
“One contrarian thought is that I don't think it's as hard as People think to hire a diverse and exceptional workforce. So I think some of the challenges around achieving that are overstated in my view.”
Sturdy: CapitalG only underwrites existing products in base-case scenarios
“Now when I look at an investment, almost always my base case is I'm only going to underwrite what exists today. I can get excited about the possibility of the future, and that's built into the upside case, but if there's not evidence of the launch of that prod…”
Sturdy: Public companies can still make major investments if accountable for results
“I think there's a bit of a myth that once you go public, you can't make the investments that you want. I don't believe that's true. I think you can make the investments you want, but you are accountable to delivering those results.”
Sturdy: CapitalG never underwrites deals dependent on M&A exits
“We would never underwrite something dependent on M&A.”
Sturdy: Outlier founder skills alone cannot sustain a company at scale
“It absolutely is a team sport. You can no longer just rely on one, that, that one outlier or that extreme outlier advantages or skills or gifts that, that founder has. Sure. Those continue to contribute in an outsized way to the company's success. But it will …”
Sturdy: Growth investment volume remains high when factoring in AI
“If you add in AI deals, the number, the volume and dollar amount actually looks quite high.”
Sturdy: UiPath faced investor skepticism over its 10-year history in Romania
“UiPath when, you know, made that investment in the series B, the numbers were extraordinary, but the pushback was this company's been around for 10 years based in Romania. Like, why is it all of a sudden exploding now?”
Sturdy: Early-stage VCs often lack understanding of public market dynamics
“There's a lot of private state private early stage investors that don't understand a lot of the dynamics of public markets and valuations and pricing and how and portfolio management at that scale.”
Sturdy: CapitalG shifted to earlier-stage AI investments over past 18 months
“So we believe that over the last 18 months, the best opportunities have been going earlier in these AI companies, and that is what we've done.”
Laela Sturdy Makes Six to Eight Major Decisions per Year at CapitalG
“Six to eight. And then a lot of small ones along the way, but probably six to eight.”
CapitalG's average investment entry multiples more than doubled from 2015 to 2021
“We look at the entry multiples we're paying on average, and they're, you know, more than double what we did five, six years ago.”
Growth-stage investors generally expect to avoid losing capital entirely
“Typically in growth stage, you don't expect to lose money. So sort of the downside, because you're typically investing post-product market fit, and there's usually a path even on the downside for other things really don't work out for some sort of exit that wo…”
Sturdy: Most tech companies fail to execute second and third product acts
“One of the early lessons I got in pattern recognition in investing was believing more in the second and third act than I think really would transpire for most companies.”
Sturdy: Cross-industry insights outweigh pattern recognition in venture capital
“So I don't know if that's pattern recognition or an insight but I think some of the best investors, that's what they have. They have insights across industries that they bring together to make the right type of bets and lean into the right type of risk. So I t…”
Sturdy: Fantastic markets always turn out larger than expected
“The first lesson is the fantastic markets are always way bigger than you expect.”
Sturdy: Growth Companies Wait Too Long to Diversify Before IPO
“I would say in the growth stage, more often they wait too long, particularly as they're ramping up in, in the couple of years prior to IPO, because it's almost always Needed for a strong public company to have some sort of diversification.”
Sturdy: Outlier founder traits and data drive outsized venture returns
“That's one of my core investment theses is always look for outlier metrics and look for outlier personality traits in a founder. I believe that outlier data is really important to pay attention to, and that will end up having outsized impact and returns.”
Sturdy: $30M-$100M tech companies growing 15%-20% face decay to single digits
“So most of the time, if you're growing 15, 20%, you'll, you'll see that decay to single digits. And I do think that those companies, it's going to be hard to remain independent.”
Sturdy: CapitalG writes $100M-$150M checks for private equity buyout partnerships
“So in the context of working with a private equity partner, if they were to do a roll up or invest in more traditional profitable assets that either trade from the public markets to the private or have been private the entire time, then we're very open to part…”
Laela Sturdy: Stripe's 2017 Valuation Proved Fair Through Continuous Compounding
“2017 when we invested in them, nobody, or I would say lots of people didn't believe that they could compound and continue to grow at such a strong rate that actually the valuation multiple that we were paying into was more than fair because they would compound…”
Sturdy: Facing heavy pushback and self-doubt means you are in the right deal
“If you feel nervous and, like, you're advocating for something so hard and others are telling you no and, you know, to the point that it almost makes you doubt it yourself, you're exactly where you should be.”
Sturdy: Single-LP Model Frees CapitalG From Artificial Sales Pressures
“And that's a huge advantage for us because it means that we can invest and hold over the long term and why we're so obsessed with finding generational companies that will compound over the long term because that creates incredible Money on money and incredible…”
Sturdy: CapitalG invests $50M to $200M per growth-stage company
“So again, we're growth stage investors. We're investing 50 to two hundred million dollars in these companies.”
Laela Sturdy: Indian tech startups operate with higher headcount than US firms
“So I'll use India as an example. I mean, you know, you looked at the typical size and number of employees of an Indian tech company, and it was significantly higher than a lot of the U S counterparts, just.”
Sturdy: Peak bubble valuations failed to price in emerging market risks
“And I would argue in some of those markets during the peaky bubble points in the global tech markets that that risk wasn't necessarily priced in on the valuations.”
CapitalG co-led Stripe's 2016 Series D at a $9B valuation
“So I, you know, co-led Stripe Series D investment in 2016. And at the time that, you know, that was a nine billion dollar valuation back in 2016.”
CapitalG operates independently despite Alphabet being its sole limited partner
“We're an independent growth fund backed by Google and Alphabet. So the GPs, we have investment decisions. We operate entirely separate from Google and Alphabet, but Alphabet is our single LP.”
CapitalG invested $160M total in UiPath across multiple funding rounds
“I first invested in UiPath in the Series B. We co-led the Series C and invested in several other rounds. So in total, we invested a hundred and sixty million in UiPath over the course of several rounds”
CapitalG targets a minimum 3x to 5x return on growth investments
“In general, we look For growth stage investing to have a sort of three to five X return as a minimum threshold for, you know, money on money return on investments with an eye toward investments that have a 10 X opportunity.”
Generational companies recruit world-class leaders years earlier than typical startups
“One of the things that I've seen in terms of commonalities of the truly generational transformative companies is that they are able to get world-class leaders to join their companies way earlier than they should.”
Laela Sturdy says top founders spend at least 30% of time hiring
“The very best founders hiring is probably 30% of their time. If not more, they're relentless about it.”
Laela Sturdy argues pure quantitative math can paralyze growth investors
“It can't be answered by math, and you have to, you know, math can help you a little, but math can sometimes paralyze people, so you have to bring this sort of intuition and analytics together, which I love about growth”
CapitalG passed on investing early in Nubank due to market unfamiliarity
“I would say one of the big, cause I looked at new bank early. That's a good example. And I think I was, while I was loved the founder and so impressed with the business traction, the risk around a new market and a model I didn't totally understand just made me…”
Laela Sturdy claims most Y Combinator startups build websites on Webflow
“Like you look at most of the companies coming out of YC, lots of different places are built on top of Webflow because you can build amazing websites with great functionality, much quicker and much easier than you could in the past.”
CapitalG operates strictly for financial return, not strategic value for Google
“So our only metric for Google capital is financial return. So we're by no means a strategic investor for Google.”
Scaling customer acquisition channels often substantially inflates CAC
“One of the big challenges a lot of companies face is they'll get Some sort of product market fit. They'll get one or two customer acquisition channels going, but when you really dive into the details, it's quite hard to scale those customer acquisition channel…”
CapitalG does not set minimum market size thresholds for growth investments
“We've never defined, it has to be, you know, XYZ billion or trillion in market size. What we typically look at when we make a decision is we want to understand what our multiple of money will be in our IRR from an investment perspective.”
CapitalG prioritizes projected total return over equity ownership percentage targets
“In either case, we don't focus as much on what our ownership percentage will be. We focus on what do we think the investment or multiple of money will be worth five years from the time we put the money in.”
Brand equity is difficult to underwrite in growth-stage startup investments
“We find at times in our stage of investing, it can be harder to underwrite, but it's something that we think about the company sort of continuing to build on over time. And the reason I say it's harder to underwrite at our stage is often still the channels tha…”
CapitalG defines growth investing by proof of customer love and unit economics
“The way that we choose to define growth investing is to define it as the point where the, we have some data that gives us strong conviction. It doesn't have to be a lot of data, but some data that gives us strong conviction that there is both a product that cu…”
CapitalG's single-LP structure with Alphabet allows longer investment hold periods
“Because we have a single LP, who is a very patient LP, that we can have a longer than average hold period compared to maybe some other funds in the market that might be more constrained on this point.”
Whatnot expanded to five product categories within five months of Series A
“Met with a whatnot team, and I met with them within four or five months of their series A, they were already live in five categories.”