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.
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Basu Trivedi: Massive AI foundation model seed rounds make no sense
“We don't think that the foundational model investments that, for example, they're raising hundreds of millions of dollars in a seed make any sense. They don't make sense for sure for our firm, but we don't think they actually make much sense for the big funds …”
Basu Trivedi: Small VC funds outperform larger funds
“And my firm belief in my bones is that small funds outperform bigger funds.”
Basu Trivedi: 5x net returns on $1B+ funds are historically rare
“It is incredibly difficult to have a five X net return on A billion dollar plus fund. I think there's incredibly few of those funds in history, in the history of venture.”
Basu Trivedi: LLMs will directly serve use cases, bypassing application layers
“In the large language model world, that the LLMs themselves will serve as a use case versus an application layer on top of those LLMs.”
Basu Trivedi: Several AI startups are seeing ARR declines due to churn
“I've heard there are several companies now that have grown rapidly in ARR and have now started declining in ARR as retention actually starts to affect these businesses because there's churn from folks who just try out products built on top of these LLMs becaus…”
Basu Trivedi: Elon Musk predicted fully self-driving Teslas by late 2017
“Elon Musk said in In December, 2015 that Tesla is two years away from a self-driving car. So, you know, now we're in 2016 and he said that the Tesla will get there in late 2017.”
Basu Trivedi: Exceptional startups deserve exceptions to standard VC portfolio rules
“Exceptional companies deserve exceptions. And it's a mantra that I've tried to always have in my venture career, which is yes, you have this model of how you want to invest this dream idea of portfolio construction and the profile of company that you're lookin…”
Basu Trivedi: Founders Should Judge VC Associates by Quality, Not Title
“I think that you're better off as a founder judging based on the actual conversation you have, which sometimes may be a lot better with the youngest person on the team versus the managing partner of the firm, and sometimes it won't be.”
Basu Trivedi: Most large VC firms generate excess management fee revenue
“Most venture firms have plenty of fees to cover the team and more, especially at that fund size scale.”
Basu Trivedi: Larger VC fund sizes cause laziness in investment decisions
“You know, in a strange way, I really like the constraint of our fund size. I actually think it forces us to make better decisions. And I think there's a laziness and a lack of great decision making that can come from having a bigger fund in the same way that i…”
Basu Trivedi: Early traction matters more than team and market size
“I've always been a sort of traction, early signs of product market fit first investor. Then people, and then market.”
Basu Trivedi: Market size is the hardest startup variable to predict
“I weight market third on the three that you asked me about because I just think it's the hardest one to assess and predict for myself, and I think when you look at the investments you just described and some of the very great ones, that was true for those inve…”
Basu Trivedi: Making VC decisions via internal politics is a terrible practice
“Look, I think there are partnerships where decisions are made based on the ability of individuals to sell internally, and so there's some folks that are just naturally more gifted to sell the deal to their partners, and there's political points back and forth …”
Basu Trivedi: Only 10 to 15 LPs globally anchor first-time venture funds
“Yeah, look, I think that there's, especially in a first fund, there's a handful of LPs around the world, at least that I know of and have met, who are truly independent thinking, who will truly raise their hand and say, we're willing to do a first time fund, a…”
Basu Trivedi: Most LPs fail to rigorously assess GP drive and commitment
“I don't think that they spend enough cycles on it. But I actually think some of the great ones do.”
Basu Trivedi: VC platform teams scale the firm, not the portfolio companies
“Most of those platform offerings are about scaling the firm themselves versus about Actually scaling companies and really helping companies get to the next level.”
Basu Trivedi: The Farmer's Dog is my biggest investment hit, not Canva
“I actually think my biggest hit right now at least as I can best predict it is not Canva. Dollar gains, Perspective, and on an IRR basis as well, it's a company called The Farmer's Dog, which is in the pet food space, and it's a subscription service for fresh …”
Basu Trivedi passed on early Figma rounds for lacking product-market fit
“This comes back to my bias around wanting to see some early signs of product market fit before investing, and Figma did not have a launched product. Before its first couple of venture rounds.”
Basu Trivedi: Venture capitalists cannot work as hard after becoming parents
“No, and I believe the answer is no. I mean, it has not been the case for me.”
Basu Trivedi: AUM is the stupidest metric for venture firms
“I think AUM is the stupidest thing to talk about as a venture firm, because back to what we were talking about earlier, small funds outperform larger funds, and so you really shouldn't be talking about how much capital you've raised. I'm okay with people talki…”
Basu Trivedi: Exercising pro-rata in rapid markup rounds was my biggest mistake
“I think it was doing our pro-rata In companies that quickly raised another round at a huge step up from where we first invested. Fundamentally, there was very little de-risked, and we saw this happen where a company had raised a series A from us, and two month…”
Basu Trivedi: USV belongs in the VC pantheon alongside Sequoia and Benchmark
“I think USV doesn't get the credit that it deserves. I think it should be in that pantheon of greatness that sort of Sequoia and Benchmark are typically put in.”
Basu Trivedi: Venture experience eventually trumps operating background for investors
“But now that I've been in venture capital for five to six years, the venture experience trumps the operating experience at some point. It absolutely does now for me. And so I think the venture experience now informs much more what I do every day with finding n…”
Basu Trivedi: Autonomous transportation will drive trillions in consumer spend shifts
“I focus more on the consumer side at Shasta, and we do a mixture of consumer enterprise and connected hardware investing, and I think across, across those areas, there's a few categories that will lead to trillions of dollars of shift in spend for consumers ov…”
Basu Trivedi: Legacy automakers lacking in-house software capabilities will die
“The ones that do adapt successfully will survive, and the ones that don't adapt will die. Going back to what you just said about software updates, very few of the legacy companies have that software capability in-house.”
Basu Trivedi: The autonomous vehicle market will not be winner-take-all
“Yeah, I don't view it as winner take all. That's my current thinking. Now, that thinking might very well evolve over the next six months, the next couple years, but it's a massive market. I think there'll be multiple successful approaches in companies, and I t…”
Basu Trivedi: Junior VC investors should ignore titles and act like partners
“Don't look at your title. Don't think about exactly what the role is. Just think about yourself as a VC. And I think you'll be better off for that.”
Basu Trivedi: Startup runway is meaningless without product-market fit or exit
“The runway doesn't matter unless it leads to a takeoff or a landing. Ideally a takeoff in startup land.”
Basu Trivedi: Fundraising ability differs sharply from business building ability
“And so I have been sucked in and seduced by founders that can tell a great story, that are great in a handful of one hour sessions and in person for the first time, who feel like they're magnets for talent, who know their business inside and out, it seems, and…”
Basu Trivedi: Many 2020-2021 funded startups lack basic financial fundamentals
“Like there were so many companies that were able to fundraise in 20, 21 that now don't have P and L's and fundamentals that to show for the vision that they told.”
Basu Trivedi: Startups requiring no immediate follow-up rarely become massive winners
“And I've gone back to try to study this, like, if I'm thinking about it that evening, if I'm reaching out to people to sort of suss it out better, and you know, I'm just researching on my own about it, you know, hours after the first meeting, there's something…”
Footwork requires one partner's top vote and no partner veto to invest
“One of us has to be a four. One of us has to be strongly supportive to make an investment. And the other cannot be a one strongly unsupportive.”
Footwork does not track deal attribution between its partners
“We actually don't even do attribution at the firm. We've never talked about which are Mike's investments versus my investments.”
Footwork co-founders attend all board meetings together during year one
“Well, look, we actually, for the first year after we invest, both go to all the board meetings together.”
Footwork received $450M in commitments for its $175M debut fund
“We had about four hundred and fifty million of commitments for a hundred and fifty million dollar fund. And we ended up raising one hundred and seventy five million”
Footwork caps single LP concentration at 20% to prevent governance risk
“We don't have a single LP who's more than 20% of our fund and I think in general we thought we don't want one, two, three LPs having the majority of our fund and having therefore outsized control in our thinking or our decision making in some way.”
Basu Trivedi: Relying solely on endowment LPs creates denominator effect risk
“There's still some level of risk of having an entire endowment based LP base, because they may all sort of have the same denominator effect issues at the same time.”
Basu Trivedi: VCs must spend over 50% of time sourcing new investments
“The single metric that we're focused on there is, are we spending more than 50% of our time on meeting new companies and sourcing new investments? I firmly believe you have to spend the majority of your time on those things. To be able to find the next great o…”
Basu Trivedi: Personalized founder support requires limiting investments to a handful yearly
“When you only make a handful of investments every year, when each one really matters to you because you're leading those rounds, you can deliver that type of really personalized support, and that's So much of why we've built this firm.”
Basu Trivedi: Accel's Vas Nadarajan is an underappreciated top board member
“In my peer group and sort of our generation, although you're younger than me and I'm younger than Vaz, I still think of us as sort of the same generation. I think he's one of the best and probably hasn't gotten the credit he deserves for that.”
Footwork plans to add only one or two equal general partners
“We perhaps add one or two equal general partners to our group. Who are re-founders and co-owners of the firm with Mike and me”
Basu Trivedi: Autonomous vehicles will reach Level 3 automation very soon
“I think that we are at level two, because that's where, you know, it's adaptive cruise control, and the ability for a car to stay in a lane, and change lanes, but we're increasingly going towards level three, and I think we'll be at level three very, very soon…”
Basu Trivedi: Tesla's 2016 Autopilot team had just 30 people
“So, so an example of this is, you know, Tesla has a 30 person team working on autopilot, which is their Autonomous sort of cruise control and lane changing and lane keeping software and application that's live today in in Model S's and Model X's. So they have,…”
Basu Trivedi: US AV adoption will be hybrid, Europe and Asia fleet-dominant
“So in Europe and Asia, where public transport is more prevalent and more used, I do think that a fleet-based approach, where you take out your phone, press a button, and an autonomous car comes and picks you up, But you don't necessarily own that car. It's sha…”
Basu Trivedi: Autonomous transportation will reverse urbanization by easing commutes
“One interesting thesis I have around this is that autonomous transportation actually makes it easier to live outside of the city because it enables you to commute and get into the city in a much more efficient and better experience manner. That could be one th…”
Basu Trivedi: Level 4 fully autonomous vehicles will take over two years
“To level four, where a driver doesn't have to be in the car, and where a vehicle can drive autonomously without anyone in the car, that's a big shift. That's something that is not going to happen in the next couple years.”
Footwork only leads Seed and Series A rounds with checks up to $9M
“At Footwork we do, we only lead rounds, we only do early stage we lead seeds and A's. So we've made 11 investments so far. We've done five series A's and six seeds. I think our average initial check is about four and a half million, and the range has been two …”
Basu Trivedi: Asking founders for a board agenda tests their self-awareness
“Oftentimes if I'm really digging in and really excited about something, I'll say something like, hey, let's just pretend that this is our first board meeting right now, that we just invested in the company. What's What's the main challenge topic or discussion …”