The Ledger, every show

“First I think an issue with a lot of the kind of FinTech one point O companies was there actually isn't any technology behind them. They're marketing companies. And so like how, without talking about any one company and specifically like how many of them would…”

“VCs in general, as a macro point tend to make money by convincing entrepreneurs to give up everything.”

“Over time, we do think that the concept of private investing, based solely on human heuristics, that will die off over time.”

“And the reason they move up market is that the fees for larger funds always outweigh the performance of smaller funds. The people running these funds have incentives to raise larger funds.”

“From tech VC firms, and we're seeing, you know, the mayonnaise company with a nine hundred million dollar valuation and fifteen million dollars revenue. That math doesn't make any sense. It's offensive. They're not going to have a successful exit. They will ha…”

“Most tech VC firms look at D to C, direct-to-consumer, as a way to scale a business efficiently. That is completely wrong. It is not a channel to scale a business. It isn't certainly not a channel to scale a business efficiently. DTC is a great channel to test…”

“At the end of the day, consumer companies have higher net margins and are more profitable than tech companies.”

“I think what's more likely, to be frank with you, is that companies will fail in trying to raise from accredited investors and then turn to unaccredited investors. That's adverse selection, and that concerns me.”

“Consumer investors would always like extrapolate their preferences on on, on the company or sorry, on the investment decision. And I don't like the taste of us. No one will like the taste regardless of the data. And what they miss is that the data was identify…”

“But you're kind of pricing it to perfection at that point where, you know, if the core product is zero margin and I, by the way, you're right, technically negative margin. It is negative margin. Then like, you really got to believe a lot from those ancillary p…”

“And there were three VCs who I did not mention. I love these people, but I did not mention them. And the three VCs said Hey, look, love it. It's very emotional. You should know you will be dead to Sequoia. When you write this, you'll be dead to a VC”

“There will be more of them, but they will get to a smaller level. So what I mean is it lasts 10 or 15 years, the brands that won, Chobani, et cetera, you can build multi-billion dollar businesses. I'm skeptical if that's true in CPG going forward.”

“In CPG specifically, there will be quantitative VC firms... We think that that is possible in some industries in the private markets. We don't think it's possible in tech.”

“Think of these firms, these VC firms as little companies that effectively have EBITDA margins of 30 to 50%.”

“I think that that trend will start outside of early stage tech and outside of Silicon Valley. So it'll start first in an industry where there's a ton of data and where business models are largely the same.”

“There weren't a thousand other examples where there's enough training data to train models to understand what success looks like. There might be two or four. That's a reason why I really struggle to understand how this could be successful in tech, but in other…”

“There's a lot of studies that suggest that returns go down as funds get larger in AUM. There's a ton of studies that show that.”

“These companies in the consumer space, they tend to get to profitability by raising four to eight million dollars. Not 50 to eighty million dollars, as they do in the tech space.”

“Where Honest Company is a good company, it just got stuck in a post-money trap. It got passed over for acquisition, and now it was in a little bit of recapitalization mode with Catterton because it raised too much at far too high of a valuation.”

“In consumer, you need to find a way to deploy one to five million dollars into each of a lot of companies. That's the answer. You can't be looking to invest in 50, seventy-five million dollars into an early stage consumer product company, you're going to get j…”

“We think it's a different model, candidly. We think it's a model of developing systematic approach to private investing. So if you're familiar at all in the public markets with AQR, Two Sigma, Renaissance Technologies, any of the public quant funds, We think t…”

“It turns out that almost every DTC company eventually realizes when they get to a We got to start building our own stores or, you know, selling these products offline because the online channels are just too expensive”

“Consumer companies typically it'll be a graveyard. There'll be some exceptions. Unilever bots, Dollar Shave Club, because they needed the capabilities of DTC. That'll happen a few more times, but many times they will be sold for half of the last round valuatio…”

“Our view is that it won't be it won't have a major impact, and we believe it will not have a major impact in part because of the costs to the companies.”

“Well, first and foremost, I think tech companies, to be candid with you, shouldn't use any online platform.”

“But I think the downside is whatever your recommendation is, you don't have to live with the results. You know, the famous McKinsey study from the eighties that gave, I think it was AT&T, the advice that the entire cell phone market would never be more than a …”

“I think the most exciting thing about that technology or sorry, the fund is that no one on that team ever led a deal before joining circle up.”

“I didn't feel like I could do that with the team. I felt like that team didn't know that I had cancer. They found out earlier this year when I told them before the blog post. But they, the board knew that I had cancer and they let me just be myself.”

“I'm very skeptical that anyone over time is going to build that marketplace in a way that it looks like a true marketplace in a way that marketplaces typically get high valuations by having, by consolidating fragmented supply and demand.”

“I think the reason you wouldn't want to do that is because credit is such a bigger Opportunity than equity. There's just more companies that should take credit than should take equity.”

“We see a lot of DTC companies raise money, you know, with a CAC, let's call it 10 dollars, 30 dollars, and then over the course of the subsequent two years, it raises literally sometimes by an order of magnitude, and that is just killing their profitability.”

“So when we say it doesn't work, I think it is an incredible channel for iterating on a product. I think it drives innovation. I can find my consumer base and I can test a new product. Next month I can test a different product. That's very different than the of…”

“I think grocery stores are here for the very, very long term. Very long term meaning next 20 years at least.”

“You've got a couple retail level sales providers that on average track 20, 30,000 Products or companies rather each. There's about a million and a half out there. A million and a half, and they cover less than five percent of them.”

“Covers 30 to 50 times as many companies as your existing data source does.”

“The way a hundred million dollar fund operates today looks basically identical to the way it operated 20, 25 years ago.”

“What I think will happen is that innovators are going to attack those profit pools and the lack of innovation.”

“Innovation isn't coming from the large CPG companies because they don't spend anything on R&D. It's coming from the small ones, so they're all looking for that innovation.”

“I tend to find the concept of, oh, that person's just not a cultural fit to be a really bad estimate of whether or not that'll be successful.”

“When you're thinking about whether or not to let someone go, to fire someone, the decision's already made, and that point is absolutely true. When you're having that consideration in your head, it has gone far enough, and you need to just make the decision.”

“Offline retailers need Instacart to work. Amazon is too much of a threat. Instacart is closer to a partner.”

“The returns at the earlier stage Are extraordinary. On average, about three and a half times your money in four and a half years.”

“Returns in tech Investing over the past 15 years have been very poor.”

“The average company is growing at more than a hundred percent per year since raising on CircleUp, or the unrealized average IRR on CircleUp is over 50%, five zero.”

“In addition to that, this is an asset class that's not correlated with the overall economy and has half the volatility of the tech market.”

“Union Square had said very energetically that they would never invest into an online equity investing platform. And they met us, and they changed the Their view because they realized that we were filling a need”

“Targeting investors, and this is, it sounds so obvious, but targeting investors that have an understanding of the underlying pain that you're trying to solve is critical, and when you go to an investment firm that has, that needs to be educated for 45 minutes …”

“Consumer was and is not, consumer products was and is not a passion for me, frankly.”