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 66 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 3 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
Tunguz: Nvidia revenue concentration is 10x worse than Lucent during dot-com bubble
“So Nvidia, two customers for Nvidia represent more than 40% of revenues. Four percent represent more than 50% of revenues. I went back and looked at the dot-com era, the networking companies. NVIDIA is 10 times more concentrated in terms of revenue than Lucent…”
Tunguz: DeSantis will win the Republican primary over Trump
“I don't think so. I think, I bet DeSantis wins. I think it will be tough for him to circumnavigate all the legal troubles, and I wonder if the RNC doesn't get involved.”
Tunguz: AI coding progress is no longer on a steep improvement path
“Coding is no longer on this extremely steep improvement path.”
Tomasz Tunguz: Next market correction will be fast and brutal
“I think we're at a point where if there's some wobble, the magnitude of the correction will be fast and brutal.”
Tunguz: Agentic coding product-market fit ranks second only to search
“Look, I think product market fit for agent decoding is probably the best of any use case aside from search.”
Tunguz: Execution, not data moats, determines startup success in AI
“I think the answer is the one that it's always been, which is better execution is the moat.”
Tunguz: Only one or two startups can compete in foundation models
“I think at the foundational model layer, that's a big boys game or a big girls game just because of the capital intensity required, both for training and the GPU access and all those kinds of things. So maybe there's a startup or two. That's able to raise a co…”
Tunguz: Single fund closes are vanity metrics for VCs
“The purpose of a close date is just to drive people in unison to a cadence that you're trying to set. There's nothing magical about it. There's nothing terrible about having multiple closes. It's just a way of organizing a particular process. And that close da…”
Tunguz: Theory Ventures will back 12-15 companies, concentrating 40-50% in top 3
“It's about 12 to 15 portfolio companies. You have significant concentrations, so you probably have like 40 to 50% of the fund in the top three holdings, maybe more.”
Tunguz: Investors must be explicit buyers or sellers; middle positions reflect ignorance
“With every stock position that you have, if you're any kind of investor, you either, you should either be a buyer or a seller of that position. Right. And if you're in the middle, you probably don't know enough about a business”
Tunguz: VC success odds are higher at AI application layer than infrastructure
“And so if the analogy holds, then you really, you know, as an investor, it's the odds of success are going to be significantly higher at the application layer because the diversity of needs there is greater.”
Tunguz: AI Will Generate 70% to 80% of Code Within 10 Years
“I think it'll probably be 70 to 80%, and the reason I say that, I bet that 40%, a lot of it is what's called boilerplate code.”
Tunguz: Chat interfaces will replace traditional web search for many use cases
“I didn't believe that chat would replace search, but I think for many use cases, it will.”
Tunguz: AI model sophistication is far from reaching an S-curve plateau
“We're on the steep part of this geometric curve for the sophistication of these models, and at some point, it will make the shelf of an S, but we're not, it doesn't feel like we're anywhere close.”
Tunguz: Unstructured job interviews predict employee success only 8% of the time
“Unstructured interviews, which is when we interview people by asking just kind of the typical questions, can only predict success in about eight percent of the cases, which is far worse than a coin flip. And so what Adam Grant, who's a professor in this field,…”
Tunguz: Paying 15x forward revenue for private SaaS is unsustainable
“So it used to be, like, premium companies in the SaaS market would command the 15 times forward multiple. That was in the privates, and then the publics were at 7.7, and now the publics are at 3.3, so if you're still paying 15 times forward, that means you're …”
Tunguz blames Zenefits' troubles on media magnification and regulatory missteps
“No, no company's execution is perfect, but if you have the media's microscope on you, your imperfections or your errors in judgment, or they get magnified. And so I think that's what happened in this case. Compounding factor is that Zenefits operates in a regu…”
Tunguz: Cursor will retain 75% of its users in five years
“And so as long as they're able to continue to grow, I bet they hold on, I don't know, five years from now, 75% of their audience.”
Tunguz: Theory Ventures distilled a 20B model to 1/50th size with 97% accuracy
“And then we've taken a twenty billion parameter model and said Claude Code teach this little model how to call tools. And we can get to 97, I mean, this is a venture capital firm. Yes, we have a great head of AI, but we're not a research lab, and we can get to…”
Tunguz: Most hyperscaler GPU capacity is sold out for the next two years
“I mean, most of the hyperscalers GPU capacity is sold out for the next two years.”
Tunguz: Secondary transactions now account for 10% to 12% of VC liquidity
“So private equity, you look at private equity, total fraction of dollars in secondaries is a fraction of the asset class is about 25%. Historically venture has been about two to three. Now we're kind of like 10 to 12.”
Tunguz: Goldman Paid Record Asset Manager Multiple for Industry Ventures
“Goldman bought Industry Ventures, right? Leading secondary fund. Paid, paid the highest multiple, I think, ever for an asset manager.”
Tunguz: PE Took 12% of Public Software Companies Private in 2022
“I think in 22, I calculated PE had taken private 12% of all publicly traded software companies in a year.”
Tomasz Tunguz: Investor success odds are significantly higher at AI application layer
“If the analogy holds, as an investor, the odds of success are going to be significantly higher at the application layer because the diversity of needs there is greater.”
Tunguz: Top 3 cloud providers equal top 100 apps in market cap
“In web two, if you take the top three clouds and you look at their market cap, so AWS, GCP, and Azure, it's about a 2.1 trillion dollar market Just for the cloud businesses. And then if you take the top 100 publicly traded cloud companies, both on B to C and B…”
Tunguz: Successful fundraising requires convincing investors of round's inevitability
“When you're fundraising, what you want to convince people of is inevitability. That the company or the fundraising round, its conclusion, its positive conclusion is inevitable.”
Tunguz: Software forward revenue multiples dropped from 40x during QE to ~6x
“Historical forward multiple is about five X, let's just say, right? It's a little higher than that's about 5.5. And in the heyday of quantitative easing, the top quartile companies are trading at 40 times. And so you can't go, and today it's about maybe six.”
Tunguz: Snowflake struggled to raise external capital at Series C
“The company was burning a ton of capital and couldn't raise money from the outside. And it was the insiders that stepped up and led that round because they believed in the business.”
Tunguz: Enterprise buyers in early markets prefer bundled software over best-of-breed
“So my learning has been that in early markets, people want bundling. They want bundling because they don't yet understand the tech, the technology moving so fast that most people don't really understand it end to end. But they want the technology to solve a pr…”
Tunguz: Government Regulation Systematically Benefits Market Incumbents
“I think regulation on the whole, as a, one, it benefits incumbents because the cost of adhering to regulations are significant.”
Tunguz: Going Public with $100M Revenue Costs $15M in Year One
“Today, if you have a hundred million in revenue, it costs, then it costs you fifteen million dollars in your first year to go public.”
Tunguz: Superior execution remains the primary competitive moat for software startups
“And I think the answer is the one that it's always been, which is better execution is the moat. If you can build a better CRM and get it into market, you can win, right?”
Tunguz: Macroeconomic conditions will deteriorate by end of 2023
“I think we will probably be in a worse place by the end of 23.”
Tunguz: Startups with fanatical users in early markets surprise on upside
“The thing that I've learned is that the startups are the ones who create the markets. And so if you have a rabid user base in a really early market, it will most of the time surprise you on the upside.”
Tunguz: US entitlement spending projected to hit 95% of tax receipts
“Entitlement spending in the U.S. Over the next 10 years is projected to consume something like 95% of tax receipts, and so that can't be.”
Tunguz: AI coding assistant Cursor operates with just 30 total employees
“You don't have a lot of ESOP dilution because total employee count is 30.”
Tunguz: Subprime auto loan delinquencies have hit the highest rate in recorded history
“Subprime borrowers in the past 60 days hit the highest delinquency rate on auto loans in recorded history.”
Tunguz: Concentration near power law apex yields higher VC returns
“A venture capital, the industry is governed by a power law. And the more dollars you can have closer to the y-axis, so to speak, on the power law, the better your returns will be.”
Tunguz ran 150 LP meetings to raise $230M Theory Ventures fund
“It took about a 150 LP meetings. So the fundraising market was a very challenging one over the last couple of months, I'd say, but it took about a 150 meeting about a 150 LPs. And the way I thought about it was, I mean, you know me, I thought about it just lik…”
Tunguz: Startup funding conversion is 60% Seed-to-Series A and 50% Series A-to-B
“The base rate for hiring, for raising a series A from seed is about 60%. Then they need to raise a series B. Base rate is 50%.”
Tunguz: Web2 cloud infrastructure and application layers both have $2.1T market cap
“So in web two, if you take the top three clouds and you look at their market cap, so AWS, GCP, and Azure, it's about a 2.1 trillion dollar market cap just for the cloud businesses. And then if you take the top 100 publicly traded cloud companies, both on B to …”
Tunguz: Healthcare and finance enterprise AI will stay on-premises
“I think if you're in. Like finance or healthcare, you'd probably be completely on-prem for the foreseeable future.”
Tunguz: Adobe's generative AI capabilities are underrated relative to competitors
“Adobe I think is doesn't have doesn't have the recognition recognition it deserves. When it comes to using generative, I think about like the applications in Photoshop, they launched a product called Firefly. I think they're right there.”
Tunguz: Looker was his top cash-generative DPI investment
“It was Looker. And you know, the story there was in 2012, Redshift was the fastest growing product inside of AWS, and Tableau was the dominant BI product. And there was a thesis that there would be a new BI product that would be architecture for the cloud.”
Tunguz: Top data teams at Facebook and Zendesk focus on internal education
“The first is they have a data team, and there's this data, and that, this exists at Facebook, it exists at Zendesk, and these data teams, they, they're structured a little bit differently, but they all basically do the same thing. They're the experts. They kno…”
Tunguz: Human emotion is essential to decision-making under imperfect information
“We never have perfect information. And the way that we get from not making a decision to making a decision is we use our emotions. So emotions are a really important part of the decision-making process.”
Tunguz: Hiring committees must allow debate rather than relying strictly on metrics
“You're not hiring exclusively based upon the metrics that are coming out of the interviews. There needs to be an advocate inside of the hiring committee, and people need to argue back and forth, and I think that's where the emotional component definitely comes…”
Tunguz: HR data analytics is the next massive opportunity in enterprise software
“It used to be that the two people inside of a board meeting that, that didn't have data at the board meetings were the head of marketing and the head of people. And now the head of marketing and the marketing team has been fully instrumented. And so the last, …”