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 116 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
Maples: VC follow-on returns are so bad LPs would revolt
“If the LPs knew, like if they tracked, what's the return on follow-on checks versus first checks, there'd be pitchforks and like, Revolts in the street. It's so bad.”
Maples: The federal $40B broadband initiative has created zero broadband connections
“We've passed some, what was it? Forty billion dollar build broadband, better bullshit bill that nobody's built any broadband connections I'm aware of.”
Maples: Raising $4M seed rounds just to sell 20% equity is stupid
“People are raising four million bucks because that's what it takes to dilute 20%. And that's just stupid. It's not a good way to get started, and it hurts the founders even more than it hurts the VCs because the one thing you never get back as a founder is you…”
Maples: High-Priced Seed Deals Like Character.ai Won't Return 100x
“Expensive, high-priced investment, and hopefully it works, but you're not going to make a thousand times your money on that deal. You're probably not going to make a hundred times your money, even in the best of circumstances.”
Maples: Venture outliers usually start at low seed valuations
“I believe that the outliers usually start out at a low price, because they're outliers. Because they're non-consensus and right. People tend to believe that the world is divided between low price deals with low upside and high price deals with high upside. I d…”
Maples: US Dollar Will Lose Reserve Status Without Fiscal Responsibility
“It's inevitable that the dollar will not be the reserve currency that If we are not more responsible with the stewardship of our money.”
Maples: Clubhouse had 'COVID market fit', not true product-market fit
“I don't think so. I think it had COVID market fit. I think it had a bunch of people staying home, bored out of their minds, trying to figure out what to do, and it became, it was kind of this meme-worthy thing”
Maples: Most VC Funds Have at Most One Great Investor
“The problem with most firms is that they have less than or equal to one really good investor, and then they force the, what's called the limited partners or the LPs to buy the bundle of everybody else who's not a good investor.”
Maples: Fund size dictates VC strategy due to power law math
“Your fund size is your strategy, and I guess I'm kind of famous for saying that for a long time. I don't know if I've ever really expressed why that is, so here's why. The power law is real, and so people don't realize that Pareto is not just eighty-twenty, it…”
Maples: 3x and 10x VC funds have nearly identical loss ratios
“And so the loss ratio is about the same between a three X fund and a 10 X plus fund. What matters is the magnitude of your big winners”
Maples: Floodgate's best startup deals have historically been their cheapest, not most expensive
“No. Actually the reverse is true, but I don't know if that would still be the case.”
Maples: Seed funds are better positioned for secondary sales than multi-stage funds
“You can make money on the buy, and you can make money on the sell. And what most people don't understand is that the seed funds are actually better positioned to make money on the sell than anybody. Better, better positioned than the multi-stage by a wide marg…”
Maples: Most overfunded startups without PMF won't clear preference stacks
“I think most of them won't clear their preference stack.”
Maples: SpaceX could become the most valuable company in the world
“I don't have to squint too hard to see a world where they're the most valuable company in the world.”
Maples: Elon Musk won't be able to mass-fire federal workers
“Like, I don't think that Elon is going to be able to do what he did with, say, Twitter, and fire a bunch of people and, you know, change all the rules.”
Maples: $20M-$30M post-money seed rounds generate poor investor returns
“When a seed round is priced at 20 post, 30 post, it's not non-consensus. It's priced to perfection, and it's priced in a way that everybody believes it's gonna succeed, that it's a hot deal. And that's bad for two reasons. It's bad for the investor, Because ev…”
Maples: Zenefits Was YC's Only Startup With PMF That Failed
“The only one he could name was Zenefits, and they broke the law.”
Maples: Blitzscaling is an edge case for rare market conditions
“It's really not. It's an edge case for a very rare condition where it's clear that the market is pulling these features out of the market massively quickly, and somebody has to fulfill that demand the first.”
Maples: Venture capital signaling risk is overrated
“I think signaling is overrated. I think that companies that perform well always raise money. And companies that perform so-so Can sometimes benefit from a positive signal, but usually, usually not being able to raise is a function of not getting product market…”
Maples: Protecting SVB depositors does not resemble a bailout
“Yeah, it's incredible to me that you could put your money in a bank, that there's not transparent reporting that the federal government said was okay, and now it's like somehow an entrepreneur's fault because The bank's assets weren't what they said they were,…”
Maples: VCs must prioritize LP fiduciary duty over bank loyalty
“Yeah, and I mean, like that's not the decision I would have made, right? I'm not gonna judge who made what decision, but my view is that it's not my money. And you know, if I was the Stanford Endowment, if I was you know, Sloan Kettering, what would I want Flo…”
Maples: Floodgate initial check writers cannot allocate follow-on reserves
“We have a partner dedicated just to follow on investing, and so the person that writes the first check Doesn't get to decide who writes the follow on check.”
Maples: Product-market fit is the sole requirement for startup success
“If we get product market fit, we will be successful almost no matter what else happens. And if we don't get product market fit, we can do everything else right. It won't matter.”
Maples: Skipping startup steps leads to fake growth
“I believe that you can't really skip a step. You got to have an insight before you do customer development, and you got to do customer development before you do smart growth. And so to the extent that raising too much too soon Causes people to skip those steps…”
Maples: Evaluating seed startups as businesses gives the wrong answers
“When I think about what is seed investing really, it's not investing in a business because it's not a business yet. In fact, evaluating it as a business will give you precisely the wrong answer most of the time.”
Maples: Startups should target at least three years of cash runway
“I like to assert it should be a minimum three years.”
Maples: Floodgate Rejects Voting Systems, Requiring Table-Pounding Conviction
“We have a rule at floodgate where there's no voting system. And for a deal to happen, someone has to pound the table.”
Maples: Most VC Bridge Rounds Are Actually "Piers to Nowhere"
“Most bridges really aren't bridges. They're what I would call a pier. So, you know, sort of like, yeah, we need more money. I'm like, a bridge is like when somebody's come in and said, I'm going to put money in this company, but we're out of money until the de…”
Maples: Floodgate's biggest venture wins were not competitive deals when funded
“In our sector of the business, everything is so crazy, early, risky, and maybe even legally ambiguous. It's hard for me to say that, that our very best wins have been hotly contested and competed for, at least at the time we invested.”
Maples: Category Kings Capture 80% of Total Market Profits
“If you're the king of a category, you change the way a customer spends their money, which is ultimately why category king gets 80% of the profits.”
Maples: Number One Reason Floodgate Passes Is Ideas Unworthy of Founders
“The number one reason I pass on companies is I don't think the idea is worthy of the founder's talent.”
Maples: Floodgate Will Never Scale to a Multi-Hundred-Million-Dollar Fund
“No, we'd never be that big. I don't think we'll ever be as big of a fund as like the Series A guys.”
Maples: The top deal in a 25-company fund must yield 64% returns
“Let's say you have 25 investments in a fund. Your best investment is gonna have to return 64% of all returns. That one deal.”
Maples: Sitting on 22 boards distracted him from recognizing Pinterest's potential
“When you're on 22 boards, it's blowing up all the time. There's always something totally screwed up. You're not as awake to the possibility of what Pinterest could be when you get pitched by Pinterest, right?”
Maples: Seed funds should assign dedicated partners for follow-on investing
“We had a dedicated partner, Iris Choi, do follow-ons and that's all, and she's accountable for follow-on returns, which more, more seed funds should do.”
Maples: Floodgate reserves 30% of capital for follow-on checks
“We settled on 70% up front, 30% in reserves.”
Maples: 10x seed funds require 5% 100x hits and 15% 20x hits
“Five percent of our checks need to be a hundred X cash on cash on the first check, and about 10 to 15% need to be 20 X cash on cash on the first check. You achieve that, you're 10 X fund.”
Maples: He made only one investment in 2021, backing Hadrian
“Similarly, in 20, 21, I only made one investment the whole year this company Hadrian. And why is that? Well, I just didn't find any companies that met my criteria.”
Maples: Common versus preferred stock made no financial difference in successful startup investments
“I've never made money or lost money based on common or preferred ever in the ones that worked”
Maples: Floodgate returned 300x on Twitter, 205x on Lyft, 94x on Twitch
“Twitter was a little over 300 X and gets all the credit for Lyft, that was like about two, 205 X what else? Applied. Applied is probably encroaching on a hundred X in the first check. Twitch got close, but not quite there. It got to 94 X.”
Maples: Clubhouse never achieved true product-market fit
“I don't think they have product market fit.”
Maples: Raising Big Rounds Before PMF Culturally Breaks Startups
“What usually happens that's even worse, is these companies raise a lot of money before they have legitimate product market fit, and they hire ahead of achieving it, and now all of a sudden they're doing a bunch of wacky nonsense that's not contributing to prod…”
Maples: Half of VC exit profits occur in 18-month windows
“Throughout my career you have these 15 year windows where close to half of the exit profits are made like in an 18 months to two year window.”
Maples: Excess Startup Resources Allow Founders to Pursue Losing Ideas
“And to get product market fit, there's an advantage in being lean, and there's an advantage in having N minus one resources rather than N plus one, because, like, having too many resources lets you pursue losing ideas for too long.”
Maples: VCs' 2021 fund failures stemmed from fast 18-month deployment
“And so, you know, I think that part of why people want mulligans on their twenty-twenty-one funds is they were investing their funds in an eighteen-month cycle. And, you know, what they should have been doing is investing in a five-year cycle because the, ever…”
Maples: Floodgate monetized Lyft and Okta holdings prior to 2020 peak
“As much as we loved Lyft and Okta, you know, in those years leading up into twenty-twenty, we're like, okay, we need to monetize these things, right, because there's a lot of excitement about tech stocks right now, and these prices are really high, and it does…”
Maples: Don't underestimate strong product-market fit relative to other problems
“When a company has product market fit, that's a rare thing, and when they have strong product market fit, that's an extremely rare thing. It's like, don't underestimate how important that is relative to all other things.”