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 41 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
Bahat: Venture capital's greater fool dynamic will not survive a market downturn
“We do have this greater fool dynamic happening in our industry. And one of the challenges is if your strategy, nobody's explicit strategy is this, but if your actions reveal that actually your approach is making money on the greater fool, which is to say the l…”
Bahat: Many financially successful tech industry icons are awful role models
“I think many of the heroes that we have set up in the technology industry are... Awful role models in that the heroes that we have set up are often the people who have been the most financially successful.”
Bahat: Dollar-for-dollar, angel investors are more valuable to startups than VCs
“Angels dollar per dollar are the most valuable investors in the ecosystem, even more valuable than VCs, more valuable than us, especially angels who are themselves founders of venture backed companies.”
Roy Bahat argues the typical venture capitalist is disastrous for startups
“I think there are many wonderful VCs. I just think it's that the typical VC is disastrous.”
Bahat: VCs requesting early customer calls is a bad sign for founders
“VCs who ask founders to talk to their customers right off the bat, I tell the founder like, whoa, slow that down a minute. Like that's a bad sign about the VC that they want to go for the sanctum sanctum. Before they've even had a chance to build trust.”
Bahat: Very few multi-stage VCs historically produce top seed-stage winners
“We did an analysis looking at the top company performers. And what you see is that since the era that seed funds have existed and who funded them at the seed. And what you see is that some of them were funded by seed funds, first round true others funded some …”
Bahat: Startup valuation is primarily a mathematical function of VC fund size
“The way it works is your fund has a strategy and you say to yourself, do I want to invest in this company? And if I want to invest in this company, then I have a check size. And the check size is usually determined by the fund size, because again, back to our …”
Bahat: Bloomberg Beta requires one partner for initial checks, unanimity for follow-ons
“In our first check, We invest where anybody can say yes, and that's designed to produce good accountability and independent decision-making and avoid groupthink. But the issue with the follow-on checks is then you're serving that company, you become emotionall…”
Bahat: A founder's personal financial situation heavily drives startup decision-making
“The founder financial situation is one of the most personal financial situation is one of the most important and under discussed aspects of the life of a company, because it's going to drive so much decision making.”
Bahat: Revenue is a better startup co-investor than traditional venture capital funds
“My favorite co-investor is revenue. My second favorite co-investor is the founder of a venture-backed company in which we invest, and then you get to VCs.”
Bloomberg Beta invests if a single partner says yes, ignoring consensus
“Any one person says yes on our team we do a deal.”
Machine intelligence will eat software while software eats the world
“Yes, I think machine intelligence will eat software. While software is eating the world.”
Big data produced valuable technologies but very few valuable standalone businesses
“The, you know, the quote-unquote big data thing Turns out to have produced a number of very valuable technologies, not that many valuable businesses and part of it is because the data on its own, as everybody knows, is, you know, it's just information.”
Proprietary data access is the primary bottleneck in machine intelligence development
“At least today, access to the data is the limiting factor. Which means, by the way, not only do companies like Facebook and Google have an advantage, but pretty much every old industrial incumbent, if it has a way of getting at its data and making use of it, a…”
Horizontal black-box AI startups face severe go-to-market challenges without consulting
“The warning is, if you're startup is, hey, I've got a black box that does machine intelligence. Let me try to apply it to a bunch of different situations. Then I think the going is very hard. You know, you probably have to start with some consulting services. …”
Future human employment will be defined by demand for handmade goods
“What jobs will human beings do? Well, they'll do the jobs when other people want to buy something specifically because it was made by a person. And we have a word for this, which is handmade.”
Bloomberg Beta backs founders who reject advice to step down
“If we thought that there was a better alternative than the founder for the business, we'd tell the person that. And then if they said, no, no, no, thanks. That's nice. That's your opinion, but I'm going to keep going. Generally, we would back them to keep goin…”
Bloomberg Beta encourages founders to shop term sheets without exploding deadlines
“When I give people a term sheet, I say, go shop it. It's not going to explode. I only want you to work with us because we're the best choice for you, not because I've put you under some time pressure.”
Bahat: Startup valuation does not reflect how highly VCs rate companies
“A lot of founders believe mistakenly, in part because VCs lead them on, that company valuation is some kind of a marker of how highly the VC rates your company.”
Bahat: Bloomberg Beta never issues exploding offers and encourages shopping term sheets
“Our offers never explode, and we encourage founders to go shop our offers.”
Bahat: Bloomberg Beta loses seed deals to multi-stage VCs at 2-3x valuations
“And when we lose on a two or three X price difference often because again, valuation is a function of fund size.”
Bahat: Asking VCs about pro rata is useless; ask about underperformance instead
“Founders often ask their investors, will you do your pro rata at the next round? It's, I think that's a dumb question because if there's a next round that's led by an outside investor, generally people are clamoring for their pro rata. To me, the better questi…”
Bahat: Formal seed-stage board meetings are ludicrous and distract founders
“And it's turned into this advice-giving, checking-in governance body, and at the stage at which we invest, where founders are making critical decisions daily, the idea of meeting once every month, or two months, or three months, and doing a PowerPoint presenta…”
The best startup ideas are highly polarizing, not consensus-driven
“The best ideas are highly polarizing, and so we've set up a model to try to harness their polarizing effect to make the best decision, which is to say we want to say yes when there is one person on our team who is very excited about it.”
Open source is the most important work collaboration method ever invented
“Open source is probably the single most important new method that we as a working culture have invented, period.”
First-mover companies consistently lose to those who build the best product
“I mean, I think we tend to be obsessed with first in the technology industry, and first loses to best every time. You know, the first iOS app companies were not the best iOS app companies, you know, platform after platform, and I think that's exactly what we'r…”
Roy Bahat identifies eldercare as the number one untapped startup opportunity
“We don't invest in the space of things that serve people's personal lives, but if I did, I think services for the elderly are the number one untapped opportunity, and just wait till we have more sixty-five-year-old tech founders, because they'll see the opport…”
Society must reconsider work and subsistence within 10 to 20 years
“And my view is, A, that we probably will need to reconsider the relationship between work and subsistence at some point in the next 10 to 20 years.”
Bahat: Bloomberg Beta launches $75M Fund III
“We are today announcing our Third fund. And the exciting news is that it is precisely the same as the previous two ventures, a funny occupation where you get to like say, hooray every couple of years when you keep doing exactly what you've been doing. But when…”
Bahat: Bloomberg Beta Will Never Back a Portfolio Company's Competitor
“The competitive lanes issue, which is if I back you, I'm not going to back your competitors. And so that means that every time we write a check, we're giving up the opportunity cost of serving another customer and of backing other companies in that space.”
Roy Bahat: Founders should share sensitive data with VCs gradually
“You got to go gradually. I call it the egg toss. Of trust. You know, that game kids play where you stand near each other and you toss an egg and then you stand a little bit further away and you toss the egg a little bit further. That is to me, the model is I w…”
Roy Bahat: Bloomberg Beta is comfortable losing deals on valuation price
“We're very happy to lose deals on price. We need to be able to be deeply enough enmeshed financially with the winning companies to That we make enough to make up for all of the cases where we take risk and companies don't work out.”
Bloomberg Beta secures target ownership on initial check rather than over time
“So for us, it goes back again to the founder as customer. So our core model is own what we want to own the day we invest.”
Roy Bahat: Sequoia's culture defaults to expecting greatness
“I just go back to what I said about Sequoia generally, which is the habit of defaulting to expecting greatness is such a strong cultural pull.”
Bahat: All Bloomberg Beta returns go directly to Bloomberg Philanthropies
“The returns we earn go to Bloomberg philanthropies, and that means they go to an organization whose mission it is to help improve the lives of people around the world and fight guns and fight climate change and fight for education”
Bloomberg Beta avoids the term AI due to sci-fi humanoid connotations
“So we actually try to avoid talking about AI. And the reason is AI has come to mean both the cluster of all those techniques and the Like replicating human intelligence with something that feels humanoid and, you know, is out to get you like in Ex Machina or s…”
Method-only AI startups without specific applications usually end up as acqui-hires
“If what you're talking about is, I guess I'd call them method-only companies, you know, some technology that you think can be applied to a wide variety of situations, and you're not really building around any one of them, then yes, then I do think that is aqua…”
Early-stage investing requires finding one reason a startup could be an outlier
“What we look for is, there are a bunch of things that are tick boxes. You know, do we trust the founders? Are the deal terms fair? You know, is it in scope for us? But then really what you're looking for is, one reason to believe the startup could potentially …”
Bloomberg Beta only requests customer references late in diligence
“There's a reason we only ask for customer calls at the end of the process. Once we really already have strong conviction, because that's a very delicate, sensitive thing.”