Mar 20, 2021 · 1h 17m · allin
E26: State of Venture Capital, plus fan questions on longevity, decentralization & quantum computing
Chamath Palihapitiya · 24m spoken Jason Calacanis · 18m spoken David Friedberg · 14m spoken David Sacks · 12m spoken
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In Episode 26 of The All-In Podcast, hosts Jason Calacanis, Chamath Palihapitiya, David Sachs, and David Friedberg answer listener questions regarding longevity science, cryptocurrency, and quantum computing before delivering a comprehensive deep-dive into the shifting dynamics, valuations, and disruption across the venture capital landscape.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 100% of the talking time here. How this is scored →
The hosts as informed peer 6.9 Guest teaching 4.3 Guest disagreement 2.9 The hosts pushing back 3.0
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 30:05 Chamath rejects JCal's comparison between AI and quantum computing
Chamath forcefully shuts down JCal's attempt to compare early AI funding struggles with quantum computing, insisting AI always possessed immediate commercial revenue potential.
Hardest push from the hosts ▶ 14:36 Friedberg challenges Sacks on tax enforcement under decentralized walletsFriedberg refuses Sacks' idealized framing of Bitcoin by pressing him on how a government can enforce taxation and maintain state funding if asset wallets are anonymized.
Biggest teaching moment ▶ 23:01 Friedberg educates the hosts on qubit mechanics and quantum error ratesFriedberg delivers a comprehensive scientific explanation of qubit wave functions and error correction, demonstrating why quantum code-breaking capability is decades away.
The host holds their own ▶ 1:00:13 Sacks demonstrates domain expertise in SaaS unit economicsSacks demonstrates deep mastery of SaaS cash flow dynamics by breaking down customer acquisition costs against monthly billing cycles to explain why he issued a term sheet to Pipe in fifteen minutes.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Pre-Show Banter and Topic Preview | 2 | 1 | 2 | 2 | Casual opening banter where Sacks expresses apathy toward longevity and quantum computing while JCal teases him about sharing show time among all four hosts. | |
| Weekly Poker Game Recap and Banter | 2 | 1 | 2 | 2 | Lighthearted recap of the hosts' weekly high-stakes poker game, including Chamath running bluffs on JCal and jokes about losing home-equivalent sums. | |
| Startup Investments and Valuations Mania | 8 | 6 | 2 | 2 | Friedberg delivers an expert overview of cellular repair switches and longevity supplements from David Sinclair's book, while Chamath outlines his preventative medical screening protocol. | |
| Fan Question: Crypto, Decentralization, and DeFi | 8 | 5 | 3 | 4 | Sacks and Chamath explain Bitcoin and DeFi as the separation of state and money, while Friedberg pushes back on how governments can maintain tax enforcement under decentralized wallets. | |
| Fan Question: Quantum Computing and Deep Tech Realities | 9 | 6 | 6 | 6 | Friedberg details quantum qubit mechanics and error correction timelines, while Chamath dismisses quantum and fusion as capital sinks, forcefully rejecting JCal's attempt to compare them to early AI funding. | |
| Evaluating Deep Tech: Commercial Viability vs. Science Experiments | 8 | 5 | 5 | 5 | The hosts analyze milestone-based venture investing versus capital-swallowing failures like Magic Leap, with Chamath correcting JCal on the definition of technical incompetence. | |
| State of VC: Shifting Founder Demographics and Trends | 8 | 5 | 4 | 5 | Chamath presents data on founder demographics before challenging Sacks with statistics on the severe lack of black investors and founders in venture capital. | |
| Atomization of VC Firms & The Individual Brand Shift | 6 | 3 | 2 | 2 | The hosts discuss the atomization of VC firms as founder capital flows shift toward individual partner brands and solo capitalists over institutional firm names. | |
| Crossover Capital Expansion and Early-Stage Valuation Inflation | 8 | 6 | 2 | 2 | Friedberg explains how Andreessen Horowitz introduced aggressive check sizes and higher valuation multiples in 2009, triggering the flood of crossover growth capital into early-stage venture. | |
| SPAC Growth and Venture Capital Deal Size Inflation | 8 | 4 | 2 | 2 | Chamath, Sacks, and Friedberg review metrics showing 3x to 5x surges in average venture round sizes alongside mega exits scaling up to tens of billions. | |
| Non-Dilutive Financing Platforms Disrupting Mid-Stage Venture | 8 | 6 | 2 | 2 | Sacks and Chamath detail how non-dilutive revenue-trading platforms like Pipe and ClearBank are replacing traditional mid-stage equity rounds. | |
| Modern Venture Stack and Democratization via Equity Crowdfunding | 8 | 5 | 2 | 2 | Chamath summarizes the streamlined modern venture stack before JCal highlights updated SEC equity crowdfunding rules that allow founders and VCs to raise capital directly from retail investors. | |
| Startup Investing Equity vs Gambling and Advice for Entrepreneurs | 7 | 3 | 3 | 3 | Chamath points out the irony of state laws enabling gambling while restricting startup equity investing, and JCal urges aspiring entrepreneurs to acquire core technical or sales skills. |
Statements from this episode (31)
Calacanis: All-In Podcast will go on world tour post-pandemic
“When this thing is over, we are going on world tour. We'll see you in Vegas. We'll see you in at the Royal Albert Hall in London and Miami.”
Palihapitiya: Fintech startup Pipe reached multi-billion valuation in under two years
“That company's worth a couple billion dollars in less than two years of its existence.”
Friedberg: Someone alive today could live past 200
“So arguably someone is alive on planet earth today that could live past the age of 200.”
Palihapitiya: Full-body MRI scans will soon drop to hundreds of dollars
“Two things will happen. One is the scan time will come down, right? So it was an hour and a half. Now it's sort of right under an hour. It can probably be as low as 40 minutes, which is relatively tolerable for most people. And then the cost will come down int…”
Palihapitiya: Non-zero coronary calcium scores double annually, indicating future cardiac issues
“When you have a calcium score, you know, most of us at zero, but when it starts to be nonzero, it doubles every year. And by the time it gets into the thousands, you're basically guaranteed to get some form of cardiac Issue.”
Palihapitiya predicts DeFi will financialize every real-world asset
“All the leakage you have today goes away in a world of defy because you will financialize Every single asset possible.”
Sacks: Buffett and Munger have a massive technology blind spot regarding Bitcoin
“Whether it's like Howard Marks or Warren Buffett or Charlie Munger, whoever they're all like great investors or whatever, but they're not technologists and it's a blind spot.”
Sacks asserts Bitcoin is first digital asset impossible to infinitely copy
“Bitcoin is the first digital asset to ever be created that you can't create infinite copies of, right?”
Friedberg: Quantum computers won't crack RSA-2048 encryption before 2040
“The estimate currently by some researchers is that this there's a less than five percent chance this happens before the year 2040. So we're talking somewhere between the year 2040 and the 2060. When we get a quantum computer that has enough logical qubits to b…”
Friedberg: Quantum computing breakthroughs this decade will center on material modeling
“Over the next hundred next 10 years or so, the current super noisy, super low fidelity quantum computers can be used to simulate quantum states, which is the condition of atoms and molecules, and use that to do better modeling of physiochemical properties of m…”
Palihapitiya: Quantum computing attracts investors with more money than common sense
“Quantum computing is like fusion. It's like a technical problem that has attracted people who've had more money than common sense. And it just basically a way to burn an enormous amount of money over 20 or 30 years.”
Friedberg: Government's best role is taking on capital-intensive technology risk
“The government, the best role the government can provide is to take on that technology risk, that large capital intense Technology risk.”
Sacks: Pre-product startups boasting billion-dollar valuations are presumptively fraudulent
“Any company That's trying to raise hundreds of millions of dollars or, you know, has a billion dollar plus like evaluation before shipping a product is presumptively fraud.”
Chamath: Relativity Space is second most valuable private spaceflight firm
“A company called relativity space is now the second most valuable private spaceflight company after SpaceX.”
Palihapitiya: Magic Leap's failure stems from technical incompetence rather than fraud
“Magic leap just looks like it's technically incompetent.”
Palihapitiya: Female-founded startups represented 23% of 2019 VC deal activity
“Female founded companies were 23% of all deal activity in 2019. That's pretty good. Up from 12% in 2010.”
Palihapitiya: 61% of $1B+ VC funds have zero female decision makers
“About a quarter of them have at least two plus female decision makers, but 61% of them have zero and 80% of venture firms still have no black investors.”
Calacanis: Mid-tier venture capital firms severely lack top talent and value-add
“The loser in this, I believe, is the mid tier firm, or the lower tier firms that actually, none of the partners there are all that great. The performance is not that great. Their value add is not that great.”
Calacanis: Sequoia or a16z board seats trigger immediate lower-tier markup offers
“When they join the board, they own over 10%, you are anointed in a way that is transcendent. You will get pounded with inbound from the second tier and third tier firms who want to triple your valuation and give you twenty million bucks.”
Chamath: DAG Ventures' LP pitch was marking up every Sequoia deal
“Dagg's LP pitch is we just, we will mark up every Sequoia deal.”
Friedberg: a16z offered a $40M term sheet when I sought $30M
“I got my series B term sheet in 2000 eight, I guess it was. And or 2009 and I had three venture firms. Andreessen was one of them that gave me a term sheet. And the interesting thing about at that time with Andreessen was they gave me a term sheet. I was tryin…”
Friedberg: Early-stage startup expansion was driven by later-stage capital
“Those large chunks of capital became available and the valuation step ups were so significant for these later stage startups that the money flowed down and more money was raised in earlier stage venture that enabled this proliferation of capital and this proli…”
Friedberg: SPAC capital raises hit $100 billion in Q1 2021
“Last year, eighty billion was raised in SPACs. This quarter, a hundred billion in SPACs.”
Palihapitiya: Average growth-stage pre-money valuations spiked from $100M to $570M
“The typical pre money on a growth stage deal in 2010 was a hundred pre. This is for the top quartile. And it's now, or sorry, this is for the average. It's now. Growth stage at a hundred pre is now 570 pre.”
Palihapitiya: Tiger Global announces a new venture deal every 48 hours
“Tiger, it says here in the notes, Tiger Global has announced the deal according to PitchBook every 48 hours in 2021.”
Sacks: Annual VC exits grew from $43B in 2010 to $290B in 2020
“We had forty three billion in exits in 2010. We had two hundred and ninety billion in exits in 2020.”
Sacks: Annual venture capital exit volume could reach $1 trillion by 2030
“Wouldn't be surprised if VC hits one trillion by 2030.”
Palihapitiya: The middle section of growth-stage venture capital will disappear completely
“I mean, I am such a believer in this middle section of venture disappearing. Like when you have these growth rounds, they're undifferentiated, and they shouldn't be dilutive in any way, shape, or form.”
Calacanis: The Syndicate on track to deploy $50M across 60 deals in 2021
“We're on track this year to do five deals a month, 60 deals, and we'll put fifty million to work this year at the syndicate.com.”