Assertion Supported
Active venture capital fund entities have quadrupled from 1,000 to 4,000
“Samir over, he's running his own shop now, but when he was at First Republic, he used to track the number of funds that were out in the market. And it used to be A thousand. Like, that was always the number. Like, NVCA, National Venture Capital Association, al…”
Insight
Multi-stage venture firms investing at seed are essentially buying option portfolios
“In venture, what we're doing is we're already buying long dated way out of the money options. And by investing in the seed stage, a lot of these guys, whether they admit it or not, are basically buying option portfolios”
Disclosure
Subscale solo GPs face severe cram-down risks in a market downturn
“I've always worried that the solo GPs with subscale funds would run up against this constraint if the market ever turned and the later stage guys started getting more aggressive. They'd get crammed down and kicked to common and all that stuff. And so I've stay…”
Assertion Contradicted
Mid-level engineers at Microsoft are making $1 million in total compensation
“I was just on a call where somebody was talking about mid-level, not even senior engineers at Microsoft are making a million dollars.”
Disclosure
Frontier tech startups attract passionate talent more effectively than enterprise SaaS
“So in my own personal investing, It's caused me to double down on people who are working on really interesting and challenging projects, because I think it's better to find great talent for people who are working on something on the frontier, where you've got …”
Opinion
Larger exit outcomes and markets justify higher startup valuations despite inflation
“The exits are so much bigger today, the markets are so much bigger, and there's a lot of opportunity, I think, that justifies these bigger valuations, even in the context of this inflation.”
Insight
The best late-stage venture investors are stock pickers, not operational helpers
“Where historically a lot of people, because I think somebody told them at some point LPs love it when you say, you know, your value add, but the reality of it is the best late stage investors have always been good stock pickers.”
Prediction Not checkable as stated
The transition to Web3 will play out over decades
“And that transition to Web three is probably going to play out over the course of the rest of my career, if not my lifetime. Crypto will be an important part of that, and you just can't ignore it.”
Insight
Venture capital returns inherently carry massive public market beta through exits
“Everything eventually has to exit, and either you're going public or you're selling to somebody who's got an inflated or deflated public currency, the amount of beta as a result is huge.”
Insight
Taking a startup from zero to one represents pure alpha
“The thing that has always attracted me to the seed stage has been that there's no beta in going from zero to one. That's all alpha.”
Prediction Not checkable as stated
Venture dry powder will support top startups even in a 40% downturn
“In the venture world, we've got an incredible overhang of capital. And a lot of new entrants who are here for good, and even if tomorrow the market went down 40%, you still have an incredible amount of dry powder ready to support the best companies.”
Opinion
LPs cannot build real conviction picking emerging managers at showcase conferences
“I don't understand, by the way, how people who are building new programs today, and they fly out from Ottumwa, Iowa, and go to the Raise Conference, which is one of the big showcases of emerging managers, and make bets. I don't understand how you can do that w…”
Insight
Formal venture training carries far more weight than an AngelList track record
“Everybody's got an angel-less track record today, but I'm talking like formal investor training. So I love introducing people like, I mentioned, you know, Ross Fabini, who spent, you know, years with Canaan Ventures, or Sunil Nagaraj, who launched Ubiquity aft…”
Opinion
Touting $25K angel checks in consensus hot companies shows zero value proposition
“The thing that kills me dead, and this is a work one, is when I meet with folks, and they tell me about what a good investor they're in, because they're in companies A, B, and C, and the number of times that I hear, literally in the course of a week, the same …”
Opinion
Hedge Funds Divide the Pie While Venture Capital Expands It
“In hedge funds, with all due respect, it feels like we're just fighting over how big our slice of a pie is gonna be, whereas in private equity and venture especially, it feels like we're growing the pie.”
Assertion Not checkable as stated
Top University Mega-Endowments Continue Outperforming Despite Multi-Billion Dollar Size
“But you look at, kind of, what Princeton and Yale and, you know, Northwestern's ten billion dollars, Stanford's twenty billion dollars, you know, these guys continue to put up great numbers At very large sizes, we always thought size was the enemy of performan…”
Insight
Asking Sand Hill Road for VC Recommendations Yields Warmed-Over Conventional Wisdom
“The way most people do diligence is they run up and down Sand Hill Road, and they say, hey, Mike Moritz, who's good? Hey, John Doerr, who's good today? And you're just getting this warmed over conventional wisdom with sometimes a healthy, you know, dose of pol…”
Insight
Volatility Is a Misspecified Measure of Venture Capital Risk
“There's a whole riff I can go on about how that completely is a misspecified measure of risk, even in public stuff, but especially in private stuff, not only with stale prices, but like, when I think about the startups that I invest in, not only do we have, li…”
Insight
Venture Bubbles Occur When Time Is Scarce and Capital Is Cheap
“When venture's working really well, time is really cheap and capital is really expensive. He says what happens in bubbles is that time becomes really scarce and expensive. People don't have any time. And as a result, their capital becomes cheap.”
Insight
Venture Capital Returns Cannot Be Meaningfully Risk-Adjusted
“The risks are so high as to be almost infinite, so you can't risk-adjust it. You can maybe time-adjust it, slash duration-adjust it, but that's nothing.”
Insight
Returning a $500M VC Fund Requires Generating $15B in Enterprise Value
“So, if you look at the ownership for a firm that owns on average 10% at exit, they've got to return 15, one five billion dollars. They've got to create fifteen billion dollars in enterprise value to get a billion and a half in returns, right?”
Insight
Fund III Is the Optimal Venture Fund Because Hunger Meets Experience
“I've always had this hypothesis that fund three is like the optimal fund. It's where, you know, hunger and experience intersect.”
Insight
Making Small Exploratory LP Commitments Is De-Worsification, Not True Diversification
“We shouldn't pick and choose among our managers. Once we decide to hire them, the bar is so high that we should hit them hard. We shouldn't take these, like, little, you know, hesitation marks, right? Like, I know a lot of people are like, oh, I'll throw a mil…”
Insight
Most Venture Capitalists Today Are Price Takers, Not Price Makers
“I think in the main, most venture capitalists today are price takers, not price makers.”
