The Wisdom Wall, every show

“You can have dispossessed urban poor forever, and nothing happens, but if you piss off the twenty-something-year-old middle class, the overeducated elites, they tend to cause trouble.”

“The reality is when you're getting open weights, you're not getting, it's not the same thing because all you get is the fixed weights that allow you to run the model. What you don't know is the black box inside those weights and how they work.”

“so many breakthroughs rely on a little bit of pushing the boundaries. I mean, Uber did with taxi regulation. Airbnb did with regulation. You're right. Polymarket did in terms of how they're regulated. So I'm actually going to get off my high horse and say you actually won that round. Is that, I mean, the interesting…”

“And I think that's right because realistically, in the journey of what's going on, the only significant things we've done, I've said this before in the podcast, we put in the money and we put in more money when they need it. We decide to hire or not hire and fire the CEO. We agree the broad strategic direction, and…”

“If you find your logic being reduced to, I've got to get rid of this much money this month, and this entrepreneur is amazing, so I'm not sure about the opportunity, and I don't like the price, but have a goal. If that's your logic, let me give you some advice. Have your fun size.”

“my mental model on the dinner is the bankers have just screwed you over for a buck a share, and in return, they buy you a very expensive dinner, and they liquor you up so you forget.”

“Cause I'm realistic enough to say that even if I, you know, if you have a venture board member who is an amazing board member, but can no longer speak to the money. Because there's no longer at the vent, at that venture firm, then to a rounding error, they're useless.”

“The other wonderful thing about starting a new firm right now that no one will ever say, not only do you ditch your colleagues track record, you also ditch your own, right? You literally go there and go, I was at mega firm from 2016 to 2024. I did some deals. Some are great. Some are shit. It's not obvious yet, but…”

“If you have access to capital that's large and forgiving, which is what these mega funds have, then you should play the big balls game. Cause you're exactly right. You don't do it. You have to do less work. If it works great, you make out the same as Jason who did the seed for suckers and Rory who did the A. And if it…”

“the LinkedIn scraping in the end, no business at scale ever gets built on that, and no business at scale ever gets built on breaking Google's terms of service.”

“That way, once it leaks, even if you leak it to, as the company being acquired to drum up competitive bid, the problem is you've set yourself up for this thing whereby if subsequently the deal doesn't come together, you look a bit, you know, shop spoiled, for lack of a better word.”

“from a recruiting perspective, it allows you to say to the next hundred people, come to work with us. Yes, you'll get stuck on a five month deployment on a bank in Holland or a, you know, a electrical company in Germany. It'll be boring as shit, but in return, you'll make a ton of money.”

“Open source is good for compute salespeople. If you're selling GPUs, you want everyone else's margin to be lower, so yours can be higher.”

“In venture deals, if you're in the right thing, it almost doesn't matter what you paid. You see cursor for details, see open router for details, right? This is the exact opposite. This is fine, precise financial engineering. If you're wrong by 20%, 30% on price, you know, your IRR dips from 20, which is totally…”

“now the holding period of venture is longer than the technology platform chain cycle.”

“Even if, as the VCs, we have board control, 70% ownership, and a drag along for the founders. Jason knows this. If the founders who are core to the business don't want to sell, it's not going to happen.”

“So now what you're seeing with these tranche deals is, You know, nature abhors a vacuum, and sequoia abhors leaving a dollar on the table, so what's happening is people are realizing everyone wants these growth rounds, and this is how these trends end. Everyone, they're going, oh, everyone wants these growth rounds, so…”

“In the early stage, when you're on the board, you can't invest in two competitors. In the late stage, structurally, you have to.”

“The main thing here is that LLMs are really amazing at code, and the amount of economic value that can be created from that dwells to everything else, right?”

“no one knows the answer and most VCs are betting both ways. They're chucking a bunch of money in at a modest 300 or six hundred billion pre at Antropic. And at the same time, they're doing a whole bunch of investments that only make sense if in fact there is room separate from that, right?”

“And then there's about a third way you're absolutely threatened, where you are typically what we call plain vanilla SaaS. You automate a workflow, and then you either got to move and survive, or you're going to be dead, right?”

“You either have compute that sells itself or people who sell it, but you can't do both.”

“the open router, you know, all the tokens with L, you know, with open source is a little misleading, because all the tokens can be in one place, but all the dollars can be in the other place.”

“why do venture firms hang together and Paper over the story because, you know, the asset is the firm and the name, and even if you hate each other, you want to manage the process well so you can keep the thing going because the firm has a brand and a reference, right?”

“And that's the risk is that it turns out that, you know, right now the assumption and Zuckerberg said it is, hey, we should invest because if we can't use it, we can always sell it. And that, and this is what you're seeing right now. Everything there is true up until the moment that compute demand isn't there at the…”

“because what you're saying is keep up the price of AI as an input to the rest of the economy by protecting, protecting these foundation models pricing structure so that they can get a trillion dollars in revenue. And the loser, as always is the case with trade restrictions, is the rest of the economy who won't get…”

“I don't think predicting who's the next Who's going to win the general election in the UK or who's going to be the next president in the US is a huge, enormous, ginormous business. I love it. I find it fun. It's actually the most interesting part of Polymarket and Calci, but that's not going to get you to a hundred…”

“if you buy a B to B software company today, it's pre-AI, it is highly unlikely that simply optimizing and pressing the buttons will be enough... unless you're kind of generating new revenue from AI and significantly reengineering the company... It won't be successful.”

“many US companies are starting to build their own model based on the open source alternative, so it's providing some kind of, it's providing a ceiling on profitability for some of the US closed source vendors.”

“You can have an improvement in productivity and a massive improvement in productivity in industry by virtue of the advent of an enabling technology like AI, and no improvement in profitability for that industry if everyone adopts the technology.”

“And now you're just in a shitty gross margin profile business, which will go bankrupt. Because when things slow down, no one says, hey, let's do an acquisition of an adjacent gross margin negative thing, and it's gonna be fun.”

“when you think about what work AI will replace, you know, white collar work, you can say BPO is a good proxy for that because anything a company is willing to outsource to India, they're probably willing to outsource to AI, right?”

“I think actually, you know, the consumer space is going to be a tougher space for open. The enterprise space has really been validated. Cause an enterprise is all about automation efficiency and a consumer space. It's about experiences. Apple's well-placed to do that. Open AI has got to compete with that and compete…”

“All these businesses have gone from capex-like cash flow machines to capex-heavy cash consumptive machines.”

“price per token, price for all those metrics going down amazingly every year, but token consumption going up every year, because as these models do more agentic reasoning, the, the, the total compute cost of that goes up. So, so the net cost of serving the customer goes up on aggregate, right?”

“In that case, you need to hire another human. Because if the AI is giving more good ideas than the humans can process, and this is kind of a whole nation of compliments and substitutes. If the AI is now giving more ideas than one human can process, and they're good ideas, hire a second human who will be now more…”

“my rough math says it's something roughly like five or seven percent Of every knowledge worker salary and 20% of every engineering salary.”

“Every tech cycle has a set of industries that for the, once in their life, get valued on prospects and futures. It's like being 21. It literally is like being 21, and people will believe everything about you. Five years ago, that was SaaS. Today, it's AI. Once you lose that veneer, you are going to be valued for the…”

“The only reason you buy stock back is because you think it's way cheaper than it should be, right? The whole, like, if the stock was trading at a trillion dollars, would you buy it back at a trillion dollars to quote offset slack dilution? I think it's a bogus bullshit answer for people who are just trying to manage…”

“The dirty little secret adventure I get is how much of your money you make in that one year in 10 when everybody buys the dream.”

“There is no argument for overstaying your welcome in the private markets at this point.”

“So what I've learned to do, which is really hard, is literally listen to the idealism Don't say, do I agree or not? Say to myself, will it motivate people enough to do something where there is economic advantage to be obtained?”

“unless you have a product that's good enough to charge for independently, You won't have revenue re-acceleration of any meaningful scale.”

“consumer alone ain't going to be enough to feed this beast, because your competitor, who's all in on enterprise, Is, you know, already at 30, right? And you're, so that was my, as I say, I almost feel like a jerk saying it's like, hey, congratulations on your hundred billion dollar ad business, probably one of the…”

“enterprise is two thirds of the ball game in AI and consumer is one third or less, which is the flip of the last time.”

“If you're a software product and you don't think AI is going to disrupt not just how you build, but what you build, Then you actually probably want to actively short it.”

“for that kind of Series A game, the Series A is not, for us, especially for a firm that just has, you know, checks for A's and B's and of this size, it's not an option value on putting a ton of money in later. Most of your value is made on that first check.”

“There's no investment opportunity so good that excess capital won't destroy it.”

“You should be very, very Very wary of ever swapping out a founder, right? It's like, I tell people it's like open heart surgery and 50% of people die, right?”

“By definition, if six or seven people articulate that that's the game they're playing and only six or seven people matter in this discussion, then it is almost Tautological to say we're going to over invest because that's what game theory says until such time as someone realizes, oh, I'm in the poker game, but I don't…”

“AI might be scary in the theoretical after, oh, it could be used for this, it could be used for that. The state is scary in the real sense of we have laws, we have men with guns to enforce those laws, and we can take your company if we want to.”

“if your story is not changing significantly every six to nine months, you are probably falling behind. In fact, not probably, you are falling behind.”

“Software alone will not be a competitive advantage. So there will still be extremely large demand for software, and there as a result of that will be very big software companies, but they will have to do something more than, hey, I wrote a bit of code for this particular vertical and this particular use case. That's…”

“legal was a miserable category in SAS land. It's been amazing in AI land because LLMs manipulate language and lawyers manipulate language too.”

“You now have a world where the low growth companies are at three X and the high growth companies are at a 50 X or a hundred X, right? The dispersion for growth has, and perceived future has, has accelerated, I would argue to a point that we very rarely see, right? Maybe 99, 2000, right?”

“The bad feelings last for a day, and the five billion lasts forever. Right? So you'll get over it.”

“Things prove up in the end for what they really are, not what you delusionally think they are at one point in time. In, in the end, a financial services company was always going to trade at a financial services multiple adjusted for growth, and that's what happened here.”

“If your customers are getting value from your AI agent that they can't get anywhere else, and you can make that value clear. Then you can charge enough to pay for your tokens, and yay you. If you're not getting, if you're not giving value, or if you're locked in a war with someone else who has infinite capital and is…”

“It's harder to be someone like Benchmark, small and brilliant, and manage generational transition, which is why it's awesome that they do it, because the asset is the brains of four or five individual people.”

“The objective fact is, Three billion plus or minus appears to be the point at which you're, you know, it's easy to go public and it gets a lot easier the more you go up from there, right? Maybe three is a cutoff, right? And when you do something at two and then you slip even a little bit, you're down into who cares…”

“And I think these late-stage investments, if you're not in the room, it doesn't matter because you don't, you don't have meaningful information rights. You're not getting the board deck. You're not there for the strategic stuff.”

“You can be promiscuous at the A if you have enough late stage stuff to cover it up.”

“If that revenue comes from Epic games, putting voice in all their games and they're paying Epic games, half a billion dollars, Epic games is going to design them out. Are they going to grind them on cost? Are there's going to be a competitor? They have the best product, but it's going to be a competitor. If on the…”

“There's only five or six people that can exert margin pressure at all on, um, Nvidia. This was potentially one of them, and let's get it off the table.”

“There's this, everyone, you know, six months ago, if you said, I think we should buy Cerebus or Grok for 20,000,000,020 billion, you're at one of these other companies, you know, five people would dump at you and say, idiots. Now you say it and they go, well, the smartest guy on the frickin' planet in semiconductors…”

“And what you'll discover pretty quickly is trying to persuade a founder to hold on when they don't want to is a very hard thing to do, right? And arguably you shouldn't even try. Right? In fact, not even arguably, you shouldn't even try. In the end, you know, 90% of the time, the founder controls the exit decision, and…”

“there really are two different late stage businesses now. It used to be late stage was, I remember Meritech would say, beyond 10 Million is late stage, and you'd think 10 to a hundred million was quote late stage. Now, late stage is 10 to four hundred million, because below that, you just can't realistically get…”

“The dynamics of a multistage firm mean that if they choose to, they can swamp a seed business to some extent and just ride it off as marketing.”

“It's monopsony power, right? If Netflix becomes the biggest single buyer of content, Then if you're making content, which is what Hollywood does, making, right, you have to sell to, you know, the media buyer for Netflix becomes the most important person in your life and your biggest customers, and they correctly hate…”

“One of the non-negotiable disciplines before you do it is you should go and try and use the core models to do the same thing. And you should try and build a functional version of that as simply as, as you can. And if you can get even vaguely close to it, you need to pause”

“But the interesting thing, when I lifted those three categories, the one thing they all have in common is they all don't need people. The big companies can't have people because they gotta be efficient. The model companies don't need people because they just need geniuses and GPU and the small AI app startups are going…”

“I'll say Lovable. And I'll tell you why. Um, I think Superbase is benefiting by the trend of vibe coding. Um, and Lovable is a bet fundamentally. It's, it's in the front end monetizing on vibe coding. One of two things happens. Either vibe coding is a category or it's not. If it's not a category, both of them are…”

“First of all, there's a reason why they sponsor the Core Weaves and the next generation of NeoClouds, because they're like, those guys ain't going to build their own chip.”

“after about three or four years, you grab what share you can, and then in most other markets, then there's a long ten-year, twenty-year period, where even though the market doubles, trebles, 10 X's, the rough market share at the start is the rough market share at the end.”

“step back in the wider us, I don't buy this idea that because X company got money from You know, YVC, that the average corporate buyer cares all that much. They want to solve that problem. So I'm not a, I'm not a believer in king making big dispositive when you have great execution and great customer love.”

“You now have to assume that that 400,000,500 million is the threshold for an IPO.”

“The first is they can literally decide they're not pricing this round, they're buying an option on the next round. If Harry's trying to make his money on seed, and they're simply trying to set themselves to make the money on the B, they can, by definition, pay a higher price, because any option always trades higher…”

“as you think about these late, super late growth fund things, the return they will realistically get absent the AI lift is some version of what was the small cap high growth public market return.”

“All the other music startups based in the U.S. got strangled at birth by lawyers, right, because it was all about IP property rights, and little old Spotify got going in a bunch of European countries that, let's be frank, your average Big Five record label didn't really focus on, so they got a much more attractive…”

“They've offloaded a lot of the balance sheet risk to everyone else, and all these other people seem to be happily taking it on right now”

“We didn't write the content. We're just trans, you know, we're just a connection mechanism. It's other people's content. And what's super clear on chat GPT is you are writing the content. So for things like, you know, advice that goes wrong, medical stuff, maybe even some of the political stuff over time, there are a…”

“in the face of unprecedented wealth, I'm shocked to discover that most people behave badly. The loyalty conversation erodes pretty quickly when you're, you know, when you're into the third comma.”

“The more you do this, the more you just say to yourself, you just need to do big, exciting deals in trends that are Absolutely obvious. And every time you try and make it harder than that, you just, you lose money.”

“Fast forward to today, the company that's dominating everything is OpenAI. They're the Microsoft of today. They have the consumers. They have the eyeballs, right? They're building this new monopoly, and the equivalent of Intel is now Nvidia.”

“It is the most forgiving equity business of getting the price wrong. Let me tell you what I mean by that. PE, if you get the price wrong, they're low variance assets. If you overpay by 50%, you're toast, because they're three X assets and they're not going to ever be seven X, right? You're degrees of freedom as well.…”

“whenever anyone uses Comps to discuss what we should pay for a deal. I want to bludgeon them to death because the problem with comps is they tell you what an ask, what company A is worth relative to what company B and C is worth today, right? In the public markets and the private too, you're exactly right... But turns…”

“If on the other hand, you don't have product market fit, the founder's not working out and you think you're going to hire someone to get the product market fit, you're deluding yourself. Don't spend a second because it's just too hard and too unlikely. You know, you, you are what's called wrong and you should sell for…”

“I know in some of these wars, having looked at some of these deals and kind of the ERP space and some of the other spaces where you're dealing with enterprise customers, the balance sheet becomes a criteria for qualification.”

“A fifteen million dollar revenue company that's perfectly good and has reasonable growth is actually of zero value to a VC because we're in the upside option game.”

“when they were all SaaS recurring revenue businesses, all seat based, all 90%, 80% gross margin with no CapEx, Right? All enterprise sales with low churn. It absolutely made sense. You could compare two companies, and that's why by 2019 or 20, it almost felt like, you know, fill in the form, give me the valuation. None…”

“The number one makes, in a business market, 67% of the market, the number two makes 20, 30, the number three makes 10, and anything after that doesn't even matter, right?”

“The big picture comment is if you spend two hours a day on chat GPT, that's two hours a day that you are not spending on Facebook and we live and die on our attention.”

“yeah, 20% of something that's not going public is not nearly as interesting as 20, as eight percent of something that is going public, right? And if you believe that it's not a continuum of value, you know, a sliding scale of value, but rather it's a, it's like electron states, there's just a gap, and then you got to…”

“If you have a services business and you're only selling to six customers, you can make this intellectual MBA case that, oh my God, they'll get ground down on price. That case is totally wrong because those six customers don't have time to optimize. No one, no one of those six customers is trying to optimize their cost…”

“I think the buyback the same as your diluted is as dumb as rocks, right? You should buy back when your stock is cheap and you should sit on your cash when the stock is dear, right?”

“I don't think you should stay private just to earn your way back into twenty billion dollars. I think you can go public and then I think it will boil down to, you know, you, you might go public and either the stock gets converted or as we've discussed, the preference remains outstanding until it grows into it. But…”

“from the perspective of, say, five or 10 years from now, the people selling cloud computing to the people who own the models will probably not make as much money as the people who own the models.”

“Which goes to explain the urgency around CapEx for these companies, because their belief, and so far it's been correct, is that the only way to quote, if you're competing with Cloud Code, all you know is the only way to outperform is more reinforcement learning, more pre-training, more whatever, which means more CapEx,…”

“The Europeans make a whole load of defense equipment that they have no business making from an economies of scale perspective. They simply do it because they're like, they don't want to rely on the Americans. And this is the AI version of that.”

“In fairness, the kind of, the SEO, I think you have to distinguish between people like Canva where they have a product to sell and they're totally happy to sell it via ChatGPT, and then media companies where the only product they have is their content, where if Google or ChatGPT serves up the answer and no one clicks…”

“the seed program, it's basically like cheap milk in the supermarket. It brings in the crowds. Right, you know, it's the last leader.”

“whenever a bank was explaining something complex, your rule of thumb should be whenever a bank was explaining something complex, you're losing money.”

“one of my rules is this. What people say they'll do when faced with a large amount of money is meaningless and bears no relevance either way to what they'll actually do. Predicting who wants to sell their company based on what they say in the abstract is a waste of time.”

“In LATAM, they were old, they were stodgy, they weren't serving their consumers, and they were, these guys came in over the top, and they didn't just build a deposit base like Chimebill, they've done the whole, the full monte, they do deposits, they do lending, they've basically built a next generation bank, they've…”

“Now it's at eleven billion dollars, despite the U.S. being, you know, I don't know in the day, 10 X larger GDP country, it's, Chime is only an eleven billion dollar market cap company because, and I think that speaks to They were playing in a less profit-rich environment. There just wasn't as much money. I mean, JP…”

“My big takeaway is not all the AI stuff is working for the hyperscalers. My big takeaway is all their existing businesses are working so well and kicking off so much cash that they can keep doing this for the next year, and they said they're going to keep doing this for the next year.”

“I think that the two people who have, the two categories Uh, in the stack that didn't meaningfully exist at scale in SAS and cloud land that exists now are the GPUs, which is all Jensen and the models. Neither of those kind of categories even existed. And obviously, um, not only do they exist, but they appear to be…”

“Raising money at too high a price is only, quote, suicide if you have to raise again. If you don't have to raise again, and all you do is have some investors who've overpaid, and they take four or five years to grow into that valuation, well, that's tough shit for the investors, but from the company's perspective, it's…”

“unless you end up with one of the very few companies that are not just amazing, but are super amazing, where they can be a twenty billion dollar outcome, your ability to deploy lots of capital relative to your early stage fund is actually much smaller than you think.”

“remember you're only taking one risk as a late stage investor, which is valuation risk. And when it goes wrong, it goes wrong in a hundred percent correlated fashion. Everything blows up in your face.”

“the thing about in any market, when you Microsoft, if you start with a monopoly and you fast forward three years and someone exists, by definition, you screwed up. Your job as a monopoly was don't lose the monopoly, right?”

“Our holding period is now longer than the tech cycle. That's a terrifying fact. Figma's holding period is 12 or 13 years”

“once the numbers make it obvious. That something's working. Pricing just go. Yeah. Pricing is going to go to the point where, you know, you're pricing in that two X best case.”

“If you're in the quadrant of patriotic and greedy, which let's be frank, most of that quote people are, you ain't going to be releasing any open source models right now, because it's a Value destroyer from an economics perspective. And you are, you have the whole CCP overlay on top.”

“And what the aha for me is this with, with committed clear leadership, which for all his faults, the UN provides and a couple of billion dollars worth of GPU, which see prior comment, the next level down people know how to do this too. The knowledge is disseminating and it will continue to disseminate from here.”

“if there's three people competing for the same Making the same kind of software. Then the law firm gets the value. Like we don't get paid. Excel doesn't charge 60 grand a year because it replaced an analyst. It charged 60 bucks because that's what you get for Excel, right?”

“If you walk in and fire a founder or any CEO and they're surprised, you have massively failed as a board member because you didn't have the guts to tell them in advance you're worried.”

“some pop is necessary, right? Because, and you have to start with that fact, because these stocks haven't been traded, you're asking people to step up and write a check, and there's no prior pricing information, so you got to get paid something for the volatility you're incurring, you know, the risk of a one-day loss.…”

“a lot of the time, the biggest advantage the banker has is you do this once in your life, or maybe if you're a VC, 10 times, and a banker's doing it every week, and you have an informational asymmetry there”

“Very little correlation between great outcomes being top quartile or second quartile. In other words, they're almost as likely, they're growing quickly, but not astonishingly quickly, has just about the same probability of giving you a great outcome as the hyper growth from day one”

“I think AI is the new, new thing, and to some extent, from a economic perspective, the cursor dollars in software development or any other of these things aren't directly taking away from the SAS dollars. I think it's time expansion”

“You could imagine an LLM saying, I need to get modern news from AP and one national newspaper, but I sure as hell don't need six. Because if you think back... by the time you got to the third, you're like, I know already, 90% of the content is repetitive”

“I think in front of every system of record, there's going to be some system of work that does it, and it'll sit on top of the system of record for now, and if it does a good job, it will gradually displace, make irrelevant, or replace the system of record if they allow that to happen.”

“Venture guys make really good thematic bets about the next 10 years and are pretty horrible at assessing how the market's going to react to the next quarter's data. Hedge fund guys are the exact opposite.”

“The only way the math works is if you stuff money into the very best company and you don't end up with a balanced portfolio. You end up literally with one company having 20, 30% of your fund in it, and that company turns out to be the big winner.”

“every single significant software platform company develops at some point in their life hardware paranoia. The feeling that somehow the hardware guys are going to screw them, and the only way they can stop themselves is by spending a whole ton of money attempting to build a hardware platform. They almost invariably…”

“Exceptional people rise to the top anywhere in the world, right? The strength of the United States economic system is we can take mediocre people and make them damn successful. That is the secret superpower of the US free market economy, right?”

“the only person who can sprint their way through a half a trillionaire in the next couple of years is obviously Elon, because he has private stocks and our ability as the ability of the private markup, private, sorry, the private market to markup investments is as yet untrammeled by any form of reality. So when you own…”

“One of the depressing facts about venture is we make an embarrassingly large percentage of our money once every seven years when you're in the white heat of must acquire, must own high growth venture assets.”

“You didn't, and an interesting lesson for the founder, you didn't raise money at twenty five billion. You thought you raised money at twenty five billion. But in fact, if you go public at 12, you raised money at 12 and you just didn't know it.”

“What it means is that the bigger your fund, the more imperative it is you have to be in those six deals, which explains why capital is so easy to raise for those companies. It all makes sense. It was great analysis. I'm not sure it points to everybody can do great in venture because everything's going great. I think it…”

“Private late stage companies in 2025 are just the same asset class as IPOs in 95 to 2005. The same analysis applies. Most of the companies barely beat their IPO price a year later or ever again, and a small number of companies compound and do amazing, right? So now how does that become actionable? If you're sitting…”

“You got to pick your wedge AI entry point for that two or three years where there's kind of magic AI premium, but you got to operate on the assumption that three, five years from now, the core thing you do is going to be commodified. And what you got to do is have used the magic moment to get the distribution. And then…”

“Everyone comes to these M&A discussions around the boardroom table, mentally running their eternal cap table, and saying, what does it mean for me?”

“almost everything about PE is better in terms of making money than what we do. And the only thing we have in our favor is that every once in a while, maybe once every five years, you find yourself with a 10% ownership in a thing that's already worth billions of dollars and is compounding like crazy, right? And you just…”

“And the seed and even the series A is a loss leading product. It's like milk at the grocery store. Come on in, buy your cheap milk, but we're going to upsell you all the strawberries you can buy, baby, right? You know, wait till you see the series C and D, right?”

“to the founder, they don't give a damn about your nuanced stage specific strategy. A founder wants two things from his venture investor. He wants money, money, lots of it with the minimum amount of hassle and perhaps the maximum amount of help, right?”

“The focus fund is better at hit rate, has more as a percentage, and lower as an absolute number than the guys cranking through 454 A's.”

“the marginal return on the marginal entrance to college in the last 10 years is profoundly negative, right? You've got the set of skills that don't have a market value and you owe 150 grand.”

“The problem with Series B is if you get it wrong, you end up effectively paying Series B prices for Series A risk. And it's exactly correct now at the A. You're paying Series A prices for seed risk. But the whole point of having to be good at this job is being able to figure out which is which.”

“Until while they keep putting money into the asset class, it will remain a stay private for longer asset class. And once the capital in the asset class reduces, then we'll go back to going public earlier.”

“Any company that has to go from a million in run rate revenue to three hundred million, which is what an IPO looks like. You need something more than hard work. You need some kind of mega trend behind you.”

“because there's no IPO, relatively no IPOs and M&As, there's no feedback loop. Like we're grading each other's exams and we're all saying we're getting A's, but teacher hasn't graded the test yet, right?”

“a founder CEO with some managerial limitations usually performs a lot better than an excellent, a reasonably good manager with no founding DNA.”

“The capital is definitely massively eroding the returns.”

“The SaaS trajectory is lock in, and Jason knows it so well, trouble, trouble, double, double, and that steady thing. The weird thing now is once you lock in, as you say, in 90 days, you go from maybe, to be fair, a year, six months, a year, you go from this company is not going to make it to, oh, my God, I think I'm…”

“If you're sitting there as a leader and you've got a hot, a talented younger partner and they're killing it. If you're not putting them in inside the tent as quickly as humanly possible, you're an idiot.”

“Sometimes it can be that I'm doing great and I am not getting the reward I need. Sometimes it can be I'm doing great and there is no fricking reward because everyone else has lost all the money. So no matter how hard I work, In the next five years, I'm just digging out of someone else's hole, right?”

“PE guys ironically love the things that we don't love. Let me tell you what I mean by that. They love a boring ass software company. In a teeny tiny vertical, with 40% market share, where they can screw the customers for the next five years by raising prices because there's nowhere else to go.”

“You see every deal, which means you see every bad deal, and there are 99 shit deals for every one good deal, so the more deal flow you see, the more important picking is.”

“if you compound at 30, 40% gross, not for eight years, but for 15 years, because you don't give a damn about giving the LPs money back early, you're just going to compound the thing to make money, then you end up with an eight or 10 X fund.”

“It will not be a great time to invest in venture until people spit at you when you mentioned the word.”

“The lesson there is value is important, but market size, market leadership, and company traction are far more important and far harder to assess. Therefore, you've really got to weight your ability to assess them and your certainty and your conviction around those issues at least as high as valuation.”

“There are lots of founders. They know they have to claim billion dollar markets to raise money. They claim it. And frankly, it's our job and why we get paid to figure out which of them are wrong.”

“As a board member, you have four jobs, and the definition of a job is if you don't do it, it doesn't get done. The four jobs are you hire and fire the CEO. You finance the company, because if the insiders don't finance the company, new investors won't. You agree with the CEO in the broad strategic direction, and I…”

“Coding is inherently more verifiable. Some parts of it are mathematically verifiable. Some parts you can just run on the machine and confirm.”

“It totally makes sense to be In OpenAI and Antropic at two hundred billion pre each time, you get limited information rights, retroactive information only, and you know, you're just on the cap table, and it's no different than being in two public companies.”

“The functionality accretes over time. Two companies pull ahead. I don't know why. It could be just they executed better and go to market for the first six months. They get more revenue. They get venture capital. They build more shit. The guys who start just a month later aren't quite as on top of it. They don't get the…”

“There's no, you can't take, you can't take Jason's agent out to a steak dinner to get him to buy your product. It just has to be better.”

“In a situation where a low-cost competitor With nearly equivalent functionalities attempting to enter your industry, you would far prefer to be number one than number two. Because number one can say, you got to just buy us because we're number one. But you're right, Jason. Number two has to say, please buy us as well…”

“people are going to have to control intelligence in a way that's, that's more like how you control money and less like how you think about software licensing.”

“Silicon Valley forgets every three years that the average American is not trying to be efficient, right? No one wakes up in the morning and says, I need to grind down my to-do list in Harlem. They're just living life. Yeah, they're doing their job, and then they're going home, and they're done, right? Not everyone.”

“Because if you think about Datadog, they sell observability. They sell it to infrastructure vendors. Nothing in their model has changed except there is now an infrastructure vendor who needs to buy a hundred times more Datadog than anyone else has ever bought, right? So all they had to do is show up and sell more.”

“And I will say they're silly, but they're not horrific. I mean, if you look at that versus other alternatives, like, you know, taking a high price but with a ton of structure, real structure, that's a worse mistake. If you look at it, you know, not raising money, taking out a ton of debt, that's a bigger mistake. So in…”

“But as you're pointing out here, there are real, even at the margin, even after you've fully paid for your training costs, there are real physical costs to serve these models, and you've got to cover your nut. You got to cover the marginal cost of the model of the, of the inference, which gets the entire two, three…”

“the first thing he's going to discover is there's no gratitude in litigation, right? You think you're caught helping your new employee or trying to get a job, they're going to burn you so fast your head's going to turn, right?”

“It's just the real dangers of adding a big slug of venture debt on top of a slow-growing business. You, you just end up trapped. You put your equity at risk, and you end up with a cap table which is very misaligned.”

“Every technology company either goes bust or lives long enough to become next generation's IBM.”

“Look, there's no doubt if the, if the price is a trillion dollars, which it has been in at least three cases, it looks like, it really doesn't matter what it takes to get there. You just have to get there. And if skimping on it reduces the probability of getting there, even 10%, it's a huge mistake. If, on the other…”

“I'm actually not here to give you insights. I'm simply here that if we're driving the thing off, the clarify screams stop. That's probably the only value add. Other than that, you guys are going to figure it out.”

“If you can be the largest tech company on the planet and still not make money, you might have oversized your ambitions a little and it might pay to come back a bit.”

“Software companies in the age of AI are either accelerating or irrelevant.”

“there is a correlation, but it's modest between initial growth rate and overall outcomes and companies that have grown slowly at the start have been huge at the end. Procore was a slow grower and then became a huge outcome.”

“The lag time between I've had amazing invention and revenue in the kind of LL, core LLM space is a year, or two years, or three years. The lag time if you have a medical invention, an idea, and turning that into real meaningful economic value is 10 or 15 years.”

“because his cost of capital is low. That's right. Because no one else could have built, I mean, if you got into your local bank and said, I think AI is going to take off, I have a crackerjack engineering team, I really can build Colossus I and II in less than a year, oh, I'd like, and I don't have any contracts, but I…”

“There's always money when people aren't afraid. When things get scary, it's not that money runs out, it's that money gets scared.”

“the amount of money that you need to build a foundation model is two or three orders of magnitude more than anything else.”

“All these businesses have gone from CapEx light cash flow machines to CapEx heavy cash consumptive machines, right? Generally, that's never good for stock prices over the medium term. Just, oh, across history, things that have high cash flow spinning out are really good investments, and things that eat money tend to be…”

“In companies that are growing at 20% and then suddenly slow down to eight or nine percent growth rate, if you've overpaid, it's kind of like overpaying for a real estate transaction. There's nothing you can do. There's no accelerant. There's no magic that's going to happen. You just own a mature SaaS company.”

“large amounts of money and large amounts of free time tends to be pretty destructive, especially, you know, thirties, forties, and fifties, you know, it's, it's hard to fill your day with, and there's so many things to do wrong.”

“When you're number two, what you do not do is wait till the number one prices goes public, and then you come out as a pale version of that.”

“from a portfolio construction at the early stage, early broadly defined, you just have to have a higher end count because your probability of getting one right is lower.”

“the only reason you can pay in the long term, two percent to VCs and 20% of the profit is because the gross returns have to be high enough, 25% plus, that the net return is still, you know, 20%, which is so far above the Ibbotson small cop return of 11, 12% that it's worth doing.”

“knowledge will be widely dispersed. But there was a period of two or three years where the knowledge was available tribally in hacker houses in San Francisco and wasn't available widely Across the west of the world, and that's, and that's why you had this Cambrian explosion here.”

“PE guys regularly come in to growth venture at the top of markets thinking this looks easy, and they regularly retreat from those markets when they discover it's hard, right?”

“when the liquidity window opens, take it seriously, because it might not open again for a while, right?”

“psychologically, the thing about a power law they don't tell you is you can have the third best outcome in venture history and be only one-tenth as large as The largest outcome in venture history, and if you're going to let that into your head, it's going to be, it's just going to be a very tough business…”

“one of the check questions we always ask when we're hiring someone and thinking about it, and in this case you are effectively hiring someone, is do you think the next check that they'll write will be better than a check that one of us will write?”

“And the correct play was to be the software provider, helping the normies tool up. And I think the same is true here in agentic marketing.”

“They, you know, the humanoid robotics that we all see, they have these legs, they consume a lot of battery life, they're pretty unstable, and most of the time in factory work or logistics, warehouse work, you don't want someone using, you don't need legs, you just need wheels. Right? They're a lot more efficient, and I…”

“You know, we've all been on boards where we've had to do CEO transitions, and no matter what's going on underneath the surface, right, provided you have good relations and you have a reasonable level of trust, you always go for the leave the person in place, find the successor, announce an orderly transition, look like…”

“What they've done is they've said for three years, I thought it was temporary, and now I recognize it's permanent, and now I'm going to value based on this growth rate, take a hit off you for technical obsolescence and the terminal value, take another hit off you for free cash flow, and I'm going to give you eight or…”

“At the level of the basket, if you buy 20, if you buy 20 stocks at an average of three times revenues, eight times EBITDA, I think you'll do just fine.”

“what you don't need in this kind of situation is generic business skills. What you need is massively specific knowledge and skills and courage to make the changes that you know you have to make. And that is where a founder's advantage.”

“if you've got a direct competitor growing 10 X, you are by definition losing every day.”

“every one of these markets. It's a race between the incumbents who have distribution needing to add product and the new guys who have product need to add distribution, right?”

“The less you are like that, a system of record, and the more you are some kind of system of work, the more likely you are to be disturbed, disrupted, and the less time you have to get shipped up.”

“Capital One bought Discover Card. Discover Card has a closed network where they get all the money in the interchange. Right? So that's a really powerful asset for them now with, you know, now that they have Brex, they will probably be directing as much of that money flow onto their own rails, as the bankers call it, as…”

“I think venture is actually two asset classes. Um, it's the traditional early stage venture that's existed for 2030 years, and this new late and later stage venture asset class that used to be called small cap growth, and is now, um, it is now privately held.”

“the venture cost of capital should be around 30%, and the public cost of capital should be around 11.”

“It's a long journey from the hope and the sizzle of a revenue, a forward revenue multiple at a high growth rate. To the steady anchor of, you know, 12 times free cash flow. It's a, it's a, it's a long and tedious journey. And there's a long flat period for the stock while that happens.”

“in fast land, you could compound for seven or eight years. Now there's existential risk every six months. And if you can't live with that, you probably need to find a different job.”

“You simply can't make this kind of math work without getting those top exits. And you don't have to get in at the A, but, you know, you don't have to do the A of SpaceX, but you better show up on the cap table before they hit total, because that's a trillion dollars of value that you've got to get.”

“stock picking in general, it gets hard to be smart in a room with more than five or seven people in it.”

“11 or twelve billion, you want to make it three X, so you got to be worth thirty billion. Right. Thirty billion at scale. You're going to trade at six or seven times. Cause that's the way human life is to get over. Right. So that's five billion of revenue.”

“you can't leave a founder in a deal Where he didn't want to sell, where he wanted to sell, and you stuck him in the deal, and now he's bitter. And if the thing goes wrong, you have no idea how toxic that will be.”

“Once it became a corporate imperative for Meta to be competitive with OpenAI and Anthropic in the LLM space, having a guy running that product, running that project, whose first line is, I don't think this is important. We should do something else. Just causes managerial, you know, disconnect.”

“I might argue a different, I actually, it may well be that's actually the correct configuration if you have a highly talented academic who isn't a commercial driver.”

“Failure rarely has complex idiosyncratic shit. It just failed because it was a dumb idea and it didn't work.”

“And if the answer keeps coming back, being private is the best way to achieve your dreams. The public markets have a problem and they need to figure it out.”

“The scariest judge of young talent is young talent, right? And I think one of the really interesting things is, I mean, you talk to any of your founders who are 25, they're marked to market on their team and on other people. They know because that's, you know, the generation they grew up in, they're finding these new…”

“The only fair way to measure things is, did you end up owning a lot, have a big ownership in big exits? And then you measure that for the year in which it happens. You don't try and account for other years, and then it's at least objective.”

“Because if all that happens is, you take your same revenue line, you bundle in a whole bunch of AI, you don't expand your revenue, congratulations, you've reduced your operating margins by 10%.”

“They, these companies become the high octane bet on AI. If you think it's going to go up, you buy Google, you get 20% appreciation, but if you buy CoreWeave and you're right, you could get a double. You're right. So they, they are the highly amplified bet because they are the marginal provider of the commodity and you…”

“On a lot of these processes, the reason you have these separate siloed companies is the humans were siloed. There was a sales person and a marketing person, but if the AI is doing everything, let's just take the customer journey. You can have a single AI agent within your company dealing with your customers”

“The way you see it is, you're, you see those CIO surveys where they rank their priorities. And what happens is, you know, as AI has gone up the zeitgeist, it's gone up the priority list, and just something that was number three goes to number six, and then it doesn't get funded. And I think that's part of the SaaS…”

“in SAS. You could use this following rule of thumb with a high degree of accuracy. The growth rate for any year was roughly 85% of the prior year's growth, right?”

“product market fit is a rolling feast at the moment. And it's a moving target. Which is why if you look at all your good apps companies, one of the things you see is when the new model comes out, they're on it that afternoon. You know, it's pizzas and late at night, and you got to know what's in the box pretty damn…”

“if at the, at the API level, I'm a commodity, and there's me, OpenAI, and Gemini, and the swapping between us, I have got to grab the apps. And that's what you're saying. I mean, Antropic is grabbing the, um, coding app, And obviously OpenAI is grabbing the ChatGPT consumer app, right? Because you're basically saying,…”

“the only test you need to run on this one is this. If you lost it today, would you go out and buy another one tomorrow morning?”

“Maybe one in three companies does it for a single year. Only one in 10 does it for two years. Very rarely seen re-acceleration when you're already at 50%, for God's sake.”

“There's a whole bunch of this knowable, but nonetheless complex information that has to be assembled and marshaled. And at the right time, the person who has the question should have to get the right answer. That question can be what form of cancer is this based on the CT scan or How much do I owe to the U.S.…”

“the earlier you are with The more hyper growth you have ahead of you, the easier it is to be undifferentiated. And by the time the growth slows down, you better either be differentiated or as, as, as, as Jason was, you better be exited.”

“If you cut R and D in the downturn, you're probably screwed. If you don't have that compelling second product that you built in 22, 23, 24, you know, you're just in a tough place.”

“I remember looking at churn in SaaS companies, and the number one predictor, the number one predictor of retention was the number of integrations.”

“The private capital has two and 20 fee drag, and the public has almost, you know, 60 bips fee drag. So from a societal perspective, there's no doubt in my mind that assets being managed privately have a far higher aggregate costs between cost to the issuer and cost to the investor than public assets.”

“whenever you have a CEO change having, it's cause something is wrong, right?”

“The defensibility theorem emerges at scale, right? In other words, if you, I do believe what's true in most enterprise businesses, once you become the anointed winner, once a market coalesces and there's two or three people at that point in time, you know, It's yours to lose.”

“my experience is, when you go to the first board meeting where you suddenly realize you're scared of the big company adjacent competition, it probably means you've graduated from the baby class. You're one of the two or three winners in the startup land, and now you gotta worry about the adjacent guy next door.”

“Conversely, if I was on the board of a company where the founder said, hey, I'm meeting with Joe at mega firm. They ask, can we share some data? They're not, you know, they just want to get a sense of it. I would shut that down and I would say, you share with everyone or you share with no one because giving your data…”

“Fundamentally, the way they've been able to produce eight and 10 X funds has been in part by, I mean, keeping it at 40, 60, a hundred million dollar funds. I mean, obviously, you know, if you want, it's hard to simultaneously keep your ownership and keep your multiple. You can decide which one you want to do. I mean,…”

“Now, the interesting thing is both of our different outcomes have great outcomes for the GP, and this is where if you only have one dollar to play with, and this is the most important LP fact, if you only have one dollar to play with, then obviously you want to do the one in the small fund that's going to give you the…”

“You're not going to get a late stage investment court returning the fund. It's not a thing because if you're doing 20 deals by And evenly that's, you know, what's that? Five percent each, unless you get a 20 X, which you typically don't get in the late stage deal. You're not going to return the fund.”

“you should know for each of the tools, professional does, how many of that profession exist, how many lawyers, how many doctors, how many bankers, how many, um, wealth advisors, cause that's your time, you know, and I'm tracking that. And then it, so it's really number of people times the amount of their work you can…”

“the two biggest changes of the last three to five years have been the advent of what's happening in AI and the transformation of the late stage and IPO marketplace to this ultra, ultra late stage where companies are way beyond the IPO threshold and still private.”

“if you take these growth rates and extrapolate them for the next four or five years, you could be catastrophic with your mental model of SAS. You know, slight deacceleration every year. You could be catastrophically wrong on growth.”

“If you think of this as a tools market, it's probably going to flatten out. If you think of this as replacing all the people using those tools to build crappy products, and you can just compress that labor spend, then you could get to, then the TAM clearly supports a billion dollar outcome.”

“The more your business is predicated on either a brand or some institutional thing, the more it's like a business, and the less it's like just three to five partners picking great investments, the more monetizable it is.”

“the time period from we haven't launched yet to, oh my God, it's so obvious has, as Jason said, compressed to the point where it's just, you know, That sweet spot is vanishingly small, and therefore you're left with the choice of do you invest into acute uncertainty or do you invest into two billion pre?”

“If you get the first two years that we underwrote in terms of revenue from the moment of our investment, if you get the first two years correctly, your probability of getting greater than a five X goes from 30% to mid seventies.”

“Liquidity doesn't evaporate because people run out of money. Liquidity evaporates because people get scared and want to keep their money.”

“I think it's a stupid question on its face, on, on multiple dimensions. Let me give you just two ways in which it's a stupid question. The first thing is, and I said this before, people's opinion on what they'll do if they're offered five hundred million dollars at a point in time when they haven't been offered five…”

“Yeah, it's only a suicide round if two things happen. One, you de-accelerate quickly, and two, you start losing money such that you're forced back into the market in the next period of time where you would have to take a down round.”

“Pragmatically in this market, I think you err on the side. If you have something that's working, And you, even if you don't know where you're going to put the money, if it's on attractive terms, you probably err on the side of taking it. Because if it, if you're in a reasonably big market, you're going to have to grow…”

“product market fit When you locked into it in SaaS land, you just didn't unlock for 10 years. Whereas here, you can lock in and out of product market fate as the models change, as things, approaches become, and you look back on the product a year ago and you go, oh my god, it feels totally obsolete.”

“it's far more useful to say to yourself, what does this, cause you don't have visibility on five years, except at a macro level. But what you can say is what's this company going to do in 18 to 24 months? And do I believe it can raise a follow on round at a step up to our valuation, commence it with the risk? And…”

“There's very few ways to make a good return on a large amount of money, which is why the bigger the fund size, the more you have to be in only five or seven deals.”

“Stories at the forefront can be priced on sizzle. Stories that are 10 years old are going to be priced on fundamentals.”

“The only way to a judge who really is founder friendly is how they behave in a tough deal. There's no information on how you do in a good time, right?”

“When you're at the Dropbox stage in terms of growth, it's just when you need acquisitions the most, But you find it hardest to do as a public company, because you're still in the low-growth penalty box, and that must be a frustrating place.”

“I think dishonesty ebbs and flows with greed, and I think you tend to see peak dishonesty at a time of peak greed, so you see more of it now, but I don't think human beings have changed.”

“No one wants to say it, but if you get the direct listing totally successful, the people buying don't make any money, right?”

“In the end, the thing that bails out our incompetence is your growth rate, and that's, that's the dirty little secret of the positive. If you get in these companies which can compound for five or six years, they can cover a multitude of cents.”

“I always tell the great operators who talk about coming into venture, don't be crazy. Your highest and best use is operating.”

“if you're paying 25 X runway for anything, you know, what you're really saying is, you know, the only thing, you know, for sure is that when things level out in growth rate, they get valued like normal companies. So implicit in that is some statement about how, how long this company can continue to grow at that kind of…”

“in a power law world, the longer you let things cook in the private markets, the bigger one or two of the outcomes will be, and things have been cooking in the private market for, I mean, yes, I think SpaceX is almost 20 years old, they've been cooking a long time, So it totally makes sense that there's going to be…”

“The interesting comment is in the public markets, when things start going south, because there's liquidity, everybody can have a stop loss of 10% and get out, and then someone else can come in and think it's going to turn, and you know, yeah, yeah, you can hold it all the way down, but you can also get out along the…”

“And my learnings have been, it's not enough to be ROI efficient. There's also so many, there's only so many things you can get your head around as the CFO, Or the chief of operations in a year. So you have to have a quantum. You have to be able to not just have a high ROI, but have a high ROI on a fairly large quantum…”

“anti portfolio regret is the psychological price you have to pay for being in the game because it's literally the emotional tax you pay for being in good deal flow. Because if you're not seeing 10 great deals, you're probably not going to do one great deal, which means the psychological tax for doing one great deal is…”

“The people who are quick to try you are quick to leave you, right? And the people who make a long considered purchase stay with you a long time.”

“At the macro level, what's happening here is the fewer, bigger winners, comma, and it's what I always say to people, it's fewer, comma, bigger, comma, winners, right? You're seeing less winners, there's less IPOs, but because they've grown so much longer, they're just so much bigger. So when you're in a winner like…”

“Direct listing only works when you're an amazing company and you're not raising primary capital because of the regulations”

“If everyone was set free to do whatever they want, I think for the median firm, it would be value destructive.”

“going back to our likely distribution, we do 20 deals, probably, right? 30% of them fail. You don't want to put a dime in those. 50% of them are one to five X on the money you put in, which means by definition, the next round, the two X that is a two and a half X or less, right? Not a compelling. Only 20% of a deal…”

“At the A and B stage, what we've observed is this. The going in probability of a five X plus winner, our mental model, remember I said it's 30, yeah, 20% chance of that outcome. If after two years the company has done what we said it would do roughly in terms of performance, in other words, it's ramped, the probability…”

“It is attractive for them. And that's the most important thing. It's a great entrepreneurial opportunity. It's just not compelling for our business model.”

“It's harder to command huge value on top of software on the SMB side, because typically the amount of labor you're saving is not a lot. The wonderful thing about automation for large corporate America is when you have 2000 people in a contact center and you're paying them eight, 50 grand a year, the quantum of money…”

“the overextrapolation of the only three deals make money, so therefore everything else at series A is burning money is just, I mean, it's true in that you prefer to be in Google, but it's not the only way to make money.”

“I actually think price discipline Is even more important the closer you get to an exit.”

“most companies fail, some companies compound to a billion in value, a few each year compound to five billion, one every year to 10, and one or two every decade to a hundred billion.”

“Something a friend of mine used to say years ago, and it's always struck me, it's just so true, price clears all markets. In other words, if you're, you know, you can get deal, it's, what we're seeing it now is, you can't get your deal done at 25, which is the price you built in, which is the price you paid for the…”

“Whenever I'm on a board on a comp committee and we start talking about, oh my God, the dilution is too high or too low. What I always say, I want to see two other pieces of data. I want to see attrition. Are we losing people? And I want to see close rate on offers. Are we failing to hire people?”

“It is no longer a hundred million. It's two or three hundred million. It's growth. It's profitable or near profitable, but that's what it takes to get something done.”

“I remember realizing when you watch the late stage hedge fund guys come in that they fundamentally run their entire life on IRR. They have, you know, yearly high watermarks, compensation schemes, and therefore they're competing for a deal and they're not saying to themselves, I need a two X or a three X. They literally…”

“If you're a Klarna, if you're a financial player where access to capital is really important, you know, you are fundamentally a lender. I think being public and having access to money in all its different ways makes sense. If you're a high growth AI company or something like Stripe, you have infinite private capital at…”

“they're the anchor tenants of the AI economy, just as Amazon, Azure, and whatever Google, Google Cloud were kind of the anchors of the cloud economy.”

“It's just hard to dig out of a twelve billion dollar hole in one hundred million dollar increments.”

“Eventually, when you're the number two and you get the heavy squeeze from the adjacent acquirer, it often makes sense to fold because, you know, because otherwise they might buy the number one and then you're done.”

“That double from there. So, so much, so much easier than grunting it out from a million to five million in ARR. Jason, because you did it as a CEO to ten million in ARR. Then the shitty year where you only go to 16. Then you re-accelerate a little. Oh my God. And now you've taken ten million and turned it into twenty…”

“In the sense that, you know, we talked to people who said, and I had an investment in this space pre-Gen AI, right, where the resolution rate was roughly 30, 35%. In other words, one in three calls got solved. We did a bunch of references around this space and around the kind of impact of Gen AI. And the conclusion…”

“venture guys love new shit with option value over all shit with intrinsic value. It's as simple as that. We don't do intrinsic value. You know why? There's no upside in intrinsic value. We are junkie, upside junkies, right?”

“There's, you know, picking. Picking out of, we do 20 deals, four of them have to be great deals. That's a hundred percent in your control. If you can't get that right, you should lose your job.”

“I don't think the algorithm is maximize IRR. Logically subject, and I'm such a geek, subject to some caveats, the real algorithm is maximize multiple subject to a constraint on IRR.”

“What you end up doing, it always amazes me when I end up selling the company that I know really well, where I've been on the board, I have a pretty good sense of what it's doing and I'm six years in, to reinvest at a slightly higher revenue multiple in a company I know nothing about, right? It's such a risk escalation.…”

“there's no business so good that excess capital can't ruin it.”

“The world you really suffered is if you don't perform. And if you do perform, no one gives a damn if you're small, medium, and large, you know, right.”

“I think what it shows is just because you really understand one domain, investing or technology, it doesn't automatically make you understand a totally different domain politics, and I think you're just saying, look, It turns out YQ is not transferable, and you can't walk into a different game where people have been…”

“If you cut off the R&D and the sales and marketing, your gross dollar retention will be 80%, you won't be selling any new shit, you'll be declining, and your product will become irrelevant in two years.”

“I don't think someone's going to say, you know, Tomo Bravo, one of these guys, you're an idiot forevermore. Um, because you did that dumb thing, right? They're probably not. They're going to say, Ooh, that funds up. Now you put two funds back for our conversation. You put two funds back to back full of idiot deals and…”

“And you've got to size the fund for the strategy because fund size is the strategy.”

“in general, my observation is people don't stop doing stupid shit because they intellectually figure out they stopped doing stupid shit. They generally stop doing stupid shit when there's no more money to do stupid shit.”

“Just as I don't know how to do 10 things that the VP of engineering at a company does, I've now long since recognized that most entrepreneurs calculate Can't calculate the market size, and their estimates are invariably wrong.”

“You start off with a relatively small market because you need to be able to win in a market that you can dominate. And then what you find is that market expands as you see in more and more use cases for your product. And then you have the best of both worlds is that you start with a small market so you can win it…”

“And it's not all the rubbishy little stuff that people talk about all the time, like introductions and contacts and all that rubbish. That's all, it's useful, but it's very second order.”

“The only time you take preemptive action, and this is the CEO not listening, I'll come back to the board separately, you take preemptive action when it's a fatal error. What I tell my CEOs is, are you making a mistake or a fatal error? If you're making a mistake, knock yourself out. We all make mistakes. You don't have…”

“people who disappoint you in the short term disappoint you in the long term.”

“If you're growing 10 X year on year, and you have any kind of positive and improving gross margin, it just covers all the nut.”

“I'm trying to, the big picture at the start was the basic point is, you know, you know, cost per token is really not a useful metric. It's kind of cost per completed task was the first thing. How much does it cost to get things done?”

“Things in motion stay in motion. Things growing at 10 X year on year might decline to eight X or six X or four X, but they don't come to a grinding stop.”

“if it's going to take you three hundred million to get something done, there's no point raising 20 at 20 pre. You're just not going to get there.”

“at least a good portion of this technology is now doing capital intensive deals again, and they're doing it on terms that are way more favorable to the entrepreneur than you had seen in the past, and they're doing that for one reason. They have the money, and there's a perception that the existing stuff does work well…”

“Winning AI, you're going to have this whole eat the work story. You won't just replace cloud software. You actually will replace the ultimate world work, and that's a much bigger marketplace.”

“If you're doing kind of a combination of software and sensors, you've got something that's obviously manifestly different. You know, you've got maybe visual sensors. You've got touch sensors. You got something out there that says, oh, but I ain't going to start shipping sensors, right? That's just not a thing. It's…”

“If you have some proprietary, visibly non-public LLM data that you build your business on, and many of our companies have that, you, again, imminently defendable. You don't have to talk about why, because they just, because the model simply can't do what you do.”

“there's a lot of categories where an AI, an LLM-enabled app is really good, and it's the next generation, and it's obvious what it should be, and customers are going to buy it. But it's not like going to scratch the corporate itch to use, you know, it's not going to get the board off your ass, so it's not got that…”

“one of the big picture jobs you have, and you have very few jobs, But one of them is, if the company is doing something that could have fatal error risk, that is when you at least record a no vote, and you say, I wouldn't do this, right?”

“The whole trick for employees, just like it is for VCs, is to join something that isn't doing a tender offer today, get a healthy grant, and join a company that within a year or two, when you've vested 50, 60% of your thing, starts doing tender offers.”

“capturing that context is really useful because it allows you, it allows an AI to automate that work. And the truth is a lot of that context exists in Slack. So if you're watching people interact on Slack, and if you watch it autonomously for weeks and months on end, you probably will get a pretty good handle on how…”

“They'll trade like financial companies, financial services companies, but they will be adjusted for growth.”

“What these guys realize is there's similar opportunity in the consumer side, which, you know, just as, you know, the whole idea was in these verticals, no one's going to change their car dealer accounting system because they put prices up 20%. In the same way, you know, the default consumer is going to stay.”

“Losing money is like sex. You can talk about it all you like, but until you feel it, you don't know what it's like.”

“The weakest link in the chain is what determines the speed of the convoy, the wagon trainer, in this case, the company.”

“I find when you're working really intensely and you're stressed and you're kind of caught up in something, the good news is you put in an extra 10 hours of effort. The bad news is you lost your judgment in doing it.”

“Cause remember the one thing you need to be successful in a CapEx intent of data center business is a low cost of capital.”

“there's a quantum reduction in risk when you go from no revenue to revenue, and then there's a linear reduction in risk thereafter.”

“And I think what you saw in the case of AppLoving and Cloudflare is it turns out high-priced stocks At the start of a paradigm shift, no matter how amazing the quarter is, are just vulnerable to disruption.”

“whenever you're selling application software, you want to be one of the top two initiatives for the most senior person you're selling to. That's how you make money, right?”

“if you're not using the technology yourself at least 10% of your time, then you're in the business of listening to other people tell you things that you don't know if it's true or not.”

“It's entirely plausible that 10 super big exits cover the entire nut from the LP perspective, such that it's still a good business.”

“If your stock is valued at a hundred times revenues, you can buy things that are trading at 10 or 15 times revenue all fucking day long.”

“If you're not making progress on that metric, as a software company, you are not with the program.”

“on the thing where you're unique and different, you know, where you're changing the world, do it as different as you like, but all the boring stuff, just give the market what it wants.”

“Owning a media asset invariably takes way more time than you think for way less money than you expect.”

“you're not a useful board member unless A, you understand what the company does and how it compares to the direct competitors, ideally with hands-on experience of the products. And then B, you find a way without being a jerk, To keep the company honest about where they are relative to the competition.”

“in the market we've been in for the last three years, it's hard to distinguish momentum players from very shrewd players. Both of them have worked out really well.”

“nine times out of 10, I'd be like, sell the company, get a president, get therapy, be better, all the other things.”

“If you can't cross sell the new AI product to existing customers who are trying to do the same thing just with an older technology, then the cross sell acquisition and cross sell story doesn't work. This is as good as it's going to get if you're an old school SaaS company”

“The odd thing is this is precisely when you should be hiring young people who are coming in replete with the knowledge and unencumbered by priors. So maybe all those unemployed computer science, but maybe some of them, maybe in some of these SAS comes genuine comment here. You do need some young talent to see what you…”

“The knife fight doesn't start until the TAM is like 60, 70% saturated.”

“almost every, all diffusion takes longer than you think, right? I think we massively overestimate the pace of adoption here, and you massively underestimate human adoption.”

“in the short term over, kind of, Six months to, in a public market, six months to 18 months, momentum plays work, value plays don't, and over a five year period, value plays work, and momentum plays advantage goes away.”

“I think it was a clever move by a very shrewd firm. I think it's been their MO for 1520 years, which is we have a very compelling offering to make to NEGP. We'll make you broadly, we'll make you equal in a very successful partnership with a lot of autonomy. And therefore you can have your pick of proven talent. You're…”

“If the only people who can roll out your shit are wizards, then you're going to run out of wizards, and then you're going to run out of revenue. So have mass adoption, you're going to need mass simplification.”

“If you think about it, if you're up here in the software stack, it's more important to own one level down, which is that model layer than to kind of start to optimize around chips.”

“we live in this crazy land of VC valuations where they're made once a year, when only one person buys, no one can subtly sell. They're very thin markets.”

“the truth is consumer conversion tends to run well under five, yeah, 10%, probably five percent or less. You just don't get enough conversions to serve the free tier.”

“you couldn't do the Series A of OpenAI and do the Series A of Anthropic. That would be stupid. I would assume one of the CEOs would stop you.”

“In the early stage, you're taking uncorrelated business risk, and in the late stage, you're taking a hundred percent correlated valuation risk.”

“one of the real tells on unemployment is quitting rate. People don't quit their job when they know they won't get another job. And if you look at the quit rate, That's a really good tell that, oh my God, I know where I am is good, and I ain't leaving, right?”

“There is nothing as terrifying as a high growth bet that slows down.”

“fintech multiples tend to be significantly more bounded than open-ended AI multiples.”

“Overpayment only works when the TAM is huge.”

“First of all, I think it's a great deal for Thrive because Jason's right. The whole trick in venture is we try and pretend we matter, but in our hearts, we know our best companies matter and the best marketing you can do is get as close as possible to your biggest deals and try to give them huge credit, put a bunch of…”

“When you're public and your stock is floating around nowhere at a low valuation, you're just very vulnerable to this. Someone comes into view, they are, you know, you're not growing quickly. They offer you a 50% premium and you get called in, but the board gets called in. The lawyer gives you the speech about fiduciary…”

“One of the big takeaways we've had is the need to be thinking about that second product much earlier than you would have thought. You don't want to wait till you hit.”

“whenever you see a product that only really rich people have, if you can find a way to get that in the hands of the rest of us, we all want it too.”

“In a bull market, nobody cares about everything. And then in a bear market, everybody discovers why you were meant to care. And now we're in the don't care part of the trade.”

“Entry price counts when TAM is unclear. Winning is the only thing that counts when TAM is huge.”

“The late stage business is either the best business in the world or the worst business in the world, and there's nothing you can do to determine which it is.”

“the key sense you're missing is you can't execute a trading strategy if they're private, because when things go wrong, the liquidity won't be, when things go right, you can, you can trade on your way up, but it would be, it'll be a lot harder to get out of one of these investments on the downside. Because the liquidity…”

“In the end, the only thing that matters is returns. The only question is how long does in the end take? We're in an industry which has very long reaction cycles. You know, you put in the money, you don't get single for five years, you don't figure it out for seven. So I think the runway at which things can continue is…”

“Salesforce was rebuild Siebel in the cloud, and it was fun, and we made a lot of money, but you're right, somewhat boring. What is really exciting now is you're not just talking about rebuild Salesforce exactly the same, but with a slightly modern UI. You are talking about something much more fundamental here in terms…”

“A founder's optimized fundraising is a VC's below ownership target.”

“when we used to track exits every year, which we do, we used to track as of IPO, and then we used to call it the locked in value, 18 months later. And our mental model was that when you want to figure out how much money people actually made, look at the market cap of the IPO, 18 months later, and that's probably a much…”

“These companies, they're in a much more bounded world now. They might grow 15%. They might grow five percent. They might trade at six times revenues. They might trade at four times revenues. You know, if you look at the stock chart, the area of magic is gone, and now they're just perfectly good. Twenty billion dollar…”

“90% of the time, your ownership target is a really meaningful metric, and it should run your business on it. And, you know, 10%, one percent of the time, who the hell cares? One percent of the biggest company on the planet is five billion dollars.”

“Now, again, reminder, in a bull market, the most aggressive person will look the smartest. Just before the crash Because the more risk you've taken, the more money you've made.”

“Venture, as someone said to me years ago, it's the get-rich-slow program, and there can be ten-year periods of non-payment.”

“If you're in a business with 10 or 15 year cycles, you just have to internalize that you have to have a 30 year span to talk about cycles, right?”

“there's a huge period of time wherever it says you're a little too young, and then there's this brief shining moment where you're good, and then there is the When is he going to retire moment, right? And it seems to me it's like 10 years each and three years in the middle”

“The interesting thing is the leverage that OpenAI has, even though they're losing a ton of money, precisely because they have the users.”

“the truth is the number of times that as an individual investor, you're in a company that's so fricking amazing that there's a free liquid secondary market where you're in early enough that you have a big enough hit to, to, to move the difference is low. If you have one of those per fund, you're doing great.”

“Compensation is how boards reveal their real priorities. Nothing else matters as much.”

“they have the margin profile and core dynamics of a financial services company, but they have the growth rate of a software company.”

“the most Cyclical business on the planet almost is a semiconductor capital equipment cycle because it's kind of a levered version of the semiconductor cycle.”

“if you're doing 30% plus, you can be aggressive and you should be aggressive and buy shit as a public SaaS company. What you're saying is if you're doing 10% You can't be aggressive because you've got to fix the growth story... even though you probably should be aggressive at least slightly because just fixing the…”

“being willing to massively concentrate on a small number of deals gets you the last dollar of out, gets you the last absolute dollar of outperformance.”

“when people have the sass is dead story and the markets buy into it and these things start trading at, you know, five and a half times revenue. And suddenly it's not like you, as Jason, it's not like you grow nine X, but you beat expectations by a couple of percentage points. And suddenly you can get a nice bounce in…”

“one thing you learn in any investment management business is if you pay people to do deals, deals get done regardless of the quality.”

“I think money brings out what people really are, because it stops you having to do things you don't want to do. So the people who love their work are going to work just as hard or harder, because they'll be able to throw money at all the other little problems that take up your daily time, right? And there'll be people,…”

“You know, your typical venture loss rate, you know, your 30% of your deals don't work out, and that's kind of where we play A's and B's. It's probably 50% plus in seed. So, you know, and I remember in 2001 and two, the loss rate spiked to 60.”

“My big aha is it's like dealing with a deranged madman trying to estimate what the street will do. I spend no time on it. Utterly unknowable.”

“Which one of them will get the prize? I tell you, it always comes down to the founder who gets it the most, gets it the quickest, and just puts everyone in the room and says, no one's leaving till we're shipping an LLM-enabled version of this, and we're going to get it in front of 20 customers by Friday, right?”

“You always, I mean, there's, as I say, there's one year in seven where you make most of your money, and the one thing you don't want to find is you don't, you don't want to, you don't want to not have assets to sell when that year comes around.”

“Like, if you need to raise money in the next two years, now would be a really good frickin' time.”

“The time to buy is when everyone else is not buying, especially when, let's put it out there, you're just little old scale, and you're not Sequoia who came in afterwards.”

“Anything the big companies have, the small and mid-sized companies want too. They're not different. They just need it packaged tightly and priced tightly so they consume, consume of it in bite-sized chunks.”

“Demand is high for premium assets, so it's a little like it's the private IPO. You float a price of a hundred, and you end up at one 50. You close the price of ten billion, you end up at 15. I think there's just a lot of demand for premium, perceived premium AI assets, and price is how scarce assets get allocated.”

“if you're not one of the key players, the minute you move away from the cap table to, you know, making it up as you go along, if you're not one of the key players, you're very vulnerable to, you know, you're basically, Depending on the kindness of strangers, as Blanche Dubois would say, which is always a mistake,…”

“The risk you face as a specialist is you get crowded out by the noise, and people don't know you're amazing enough, and therefore you lose some of the at-bats to the people who have more brand. The, the risk you face as a brand is in your wild urge to put all the money out. You end up overextending yourself, and you…”

“relevance is a short term thing. And in the end, as I can say about this job, the only thing that's true about this job over the medium term is you have to be right.”

“Once a company becomes ex-growth, the most important thing to assess about management is their ability to rationally allocate capital, including sending that capital back to the shareholders”

“The market for consensus is fully priced in and fully discovered.”

“one thing we know about venture is you can't target your return date, right? If you could, it would be easier. So it's a hard asset to fit into a liquid Individual portfolio, and I think they'll try. I think it'll be hard.”

“When you find yourself going to look at the legal documents in a venture deal, you're probably on your way to losing money, right? So the minute you start down this road, you've made a mistake.”

“I don't think large amounts of money necessarily demotivates People across the board. I think what large amounts of money do, it reveals what you really want to do.”

“My observation is no one's opinion on what they would do at a hypothetical, hypothetical offer is worth a damn. And what people actually do when the money comes into view tends to be very different on both sides.”

“I think when people ask, especially investors, their opinion on shit, the correct answer is, don't even answer that question. The real question is, where is your position?”

“Independent of AI, the SaaS Industry was, was going to hit the mature stage. And you're right, Jason, it's all the things that happen at that stage. Bundling, consolidation, grinding out the weak, right?”

“It's the definition of a great, I mean, definition of a great business is when your customers can hate you and still do business with you.”

“the equivalent of that in social media is Bad opinionated people drive out good, boring people.”

“Every company's market share is up for grabs when there's a platform shift.”

“You can go around the boardroom and ask people, here's what we said, here's what we're going to announce tomorrow, will the stock go up or down? At best, 50% accuracy.”

“Turns out vintage is the single most important and underrated part of venture capital, right? Just being there for the good years.”

“The lawyer that you engage will tell you, you've got a great case when you start out. As you get closer, To the courtroom door. And as you spent more and more money, they start changing the tune slightly just because suddenly, and maybe just not hearing what they're saying on day one, the day before court, they'll be…”

“step one on all these deals and every AI deal is do you, the vendor, and you, the customer, have a mutually agreed figure of merit on what success looks like that you can both track? If not, at some point, you're going to churn.”

“If it's Monday and you're hearing it for the first time and you got to write Wednesday, you're just way behind. Because even if you crank and write the term sheet, You're also going to be up against someone who's met them before in the last round and is ready to write another term sheet now”

“My rule of thumb is if I don't have a list in our salesforce of 10 to 20 names That I know I want to see, that I could imagine investing in, in the next 12 months, I'm probably not doing my job.”

“You've got to be on the side of using this shit and leaning into it. If you're resisting it, you're toast.”

“having tiers of pricing where you get lots of people using the base product and then escalating steps of value as you deliver more value probably is the simplified version of quote unquote value pricing in much the same way as open AI has 2202 thousand. Right. And you know, they're going to keep giving stuff away in…”