venture capital

“I mean, I actually think what's going to happen is like, we're going to have so many zombie companies for the next decade, right? Of people who are like, they've done fine. They make enough money to keep going. Their VCs want them to keep going, but they're no…”

“And you know, the industry is, I think going to get eviscerated with very few survivors in the next, you know, five to 10 years, just as people run out of capital, et cetera.”

“Which is like, you know, at least I'll say that I think media and VC has always been a ridiculous combination. Like media, VC should not invest in media companies. Ever.”

“All this stuff on the margin is just getting cut. Right. And so it's like, it either has to be really working or is dead. There's no more like, eh, it's sort of working. It's a reasonable thesis. They're good people. Let's push it along. Right. No one has tole…”

“The downside to it is that because there's no KPIs in venture capital, really, that are short term, and you're wandering around and you have tenure and you can't be fired, there are two big problems. One is, it's really easy to waste a shitload of your own tim…”

“The thing in VC is it does take many years, maybe even 10 years to know if you're good at it. And so to Sam's point, it's less about like wasting your, maybe it's wasting your time if you're not good at it, but it's like waiting for the results.”

“Distribution of paid-in capital, that's what VC is actually supposed to be measured on. How much fucking money did you give back?”

“There should be markets for this shit, but there isn't, and like, so you have these terrible brokers that sit between VCs and everyone else that are super non-transparent, and no one knows who, and it's incredibly hard to transact, right, and I actually think …”

“I think this is why VCs like Twitter. And why VCs like crypto, and why VCs like podcasting. You know, it's like you see numbers go up every day, and you can get a feedback loop, right?”

“Can we just advise the companies to stop building for, to be a product for the next venture capital round instead of just Build good businesses and treat capital as an option on the future. It's not just about surviving. You want to thrive with or without.”

“I know of some instances where some well-known VCs have stopped some well-known schools from investing because they said, we don't want to work for you anymore based on your politics.”

“VCs do this, and I just think it's in every founder's right to do the same thing and say, look, you know, when competing offers come in, Who do I want to work for? And am I okay with if I make this person a billion dollars or a lot of money, what I think they'…”

“I do think that the Silicon Valley factory, you know, of, you know, where a bunch of, especially in the last few years, a bunch of people who are effectively asset managers convinced everyone they were venture capitalists to get higher fees and kind of structu…”

“And for the most part, the ecosystem uses one contract and there are all of these different forms of risk, right? And everyone goes around pitching all these you know, limited partners, the same contract and the each limited partner wants different types of ri…”

“There's all of these new tools that the AI revolution is putting out into the ether. That's that, Sam, I think you're very right. Are going to empower the small business. They're going to empower the small team of people to make a lot of cashflow to make reall…”

“Small businesses you know, things that aren't, can't be public company, twenty billion dollar public companies ever are very poorly served by everyone right now because banks won't lend to them. And you know, there's no capital for them and venture capitalists…”

“People are just saying, like, you should not invest in companies that are remote, because, like, they're all gonna underperform.”

“One thing I would mention is that if you think about how venture capital compensation works, now's a good time for folks to move around because their carry in the last few funds ain't worth very much. And so if you think about it this way, it's like, there's l…”

“And there's going to be new capital approaches and new approaches kind of hybridizing tech and VCE and PE. That kind of say, yes, there is leverage in software, but we're not going to unlock it the way we've unlocked it over the last two years.”

“What we see though is no matter what the era, there's just very few companies that matter. And this is what all venture capitalists kind of have to try and figure out and make sure they see, pick and get into the very few companies that matter.”

“So with a venture capital hat on, it's like, do you invest now to be ready for three years from now? Probably not.”

“That's just marketing fluff so VCs can dump billions of dollars into things and take fees.”

“Like, I think that, you know, for the most part, big institutional investors of all scales, you know, they're allocating five percent, you know, 10%, maybe maximum of their portfolio into the venture asset class.”

“Here we are, we're sitting here looking at an IPO that went well fed that's talking about lowering rates again. And so, you know, of course risk is going to move back on and people are going to actually start to think about allocating into the venture asset cl…”

“I think, I don't think founders totally understand that cycle, but I do think that downstream effects of that, even though they'll take probably a year or two for that whole cycle to sort of play out, assuming more IPOs go well this year, it could mean that, y…”

“It will not get red or opened.”

“The thing that I find offensive as a professional venture capitalist is like the startup of zero to one companies and the idea of using startup capital for these types of exercises, which are almost certainly like infinitesimally unlikely to work and are extre…”

“No, this is just clearing the decks before the three-month summer hiatus.”

“No, news is not a venture-backed business.”

“An asset manager is someone who generates returns in order to justify their fees. Jessica Lessin: It's a fee game. Sam Lessin: An investor is someone who takes fees because they have to support their team in order to generate returns. They're getting paid on t…”

“This, all of a sudden, I think does become a subprime crisis. Right? Like this is all gonna blow up in everyone's faces, like at some point”

“It's more complicated than this, but I actually think the way it breaks is when people realize that most of the private marks on most of this stuff is all bullshit. That may take a long time for anyone. It may be a game that everyone just plays, just agrees to…”

“Taking venture capital inherently makes you think that you need to expand faster. And I think is the downfall for a lot of companies”

“I think if things aren't working, I think because money has been so available, people have kept their companies going longer than they should. And in a lot of circumstances more recently, where sometimes the best thing you can do is just kind of quit and resta…”

“I believe you should recycle. I think that's how you actually preserve a lot of follow on capital so that you can write more sort of initial checks.”

“AUM is a game of politics for losers. DPI is the game of winners. That's how it works. So you can coast by being a political AUM person for a while, but you have nothing to be proud of because all you are is a salesman of stories versus someone who delivers re…”

“I think that the IRL experience realm is more interesting than a lot of VCs give it credit for, and we're still waiting. I don't think there's like a waiting thing there. The problem is it's so high friction and so non-scalable, and such a shitty business mode…”

“And so I think the nature of the venture capital deal is, is slowly changing. I think it's still definitely like the margin, like the edge case, but I could see that becoming a new norm, you know, 10 years from now.”

“This might be an interesting, different thing we haven't said, which is, I actually do believe that the power goes back to VCs who build and tinker, and away from finance people. Because I think VC, I think what's happened, you know, VC basically became mini i…”

“Now, interestingly, shitty VCs aren't actually managing for the killer wins. They're managing to make their companies not go bankrupt so they can raise more funds, right? And so what I'd say is a shitty VC would say, oh, we're gonna, like, manage for lower var…”

“Paul Graham does talk about the idea that a lot of founders are gaslit by their own VCs, right? And the problem with that is most VCs haven't been founders themselves.”

“There's a massive incentive to try to be the next Google in terms of how capital stacks up. And I think it's a real disservice to the company. I think it destroys a lot of companies that would be perfectly good if they were just operated sanely.”

“And like the hot take is this is the most difficult time of all time to be this category as an LP GP or founder.”

“And the outliers can be in really poor ponds. And if you're just fishing in that one pond that you think it's the most robust, it's really, you can actually have zero outliers.”

“Not anytime soon, and not for a very long time, because I think it's one of those classic things where, like, the cost of entry to play in these games is too expensive for any startup to go after.”

“I think there's maybe an over Emphasis on DPI, and that is probably, you know, if this ever makes it on the air, it's, I'm probably gonna get all sorts of angry phone calls and emails and letters, but I just think that that's not the whole story, but it seems …”

“And I was like, of course, because as venture capital just becomes traditional asset management investment banking, the last step to total conversion is to play golf.”

“The VCs invested in inflection. The VCs invested in character. The teams were acquihired and they got like a licensing fee to compensate, you know, for their money.”

“Yeah, I mean, we also had a report this last week that venture capital deals are down pretty dramatically quarter over quarter, so it's not exactly true.”

“This isn't like a shocking thing to say, but like, you know, what is it even as of like a few years ago, less than five percent of the people working in the industry were women.”

“The fact that we're even referring to this as a round. This is not venture capital.”

“I think from a cultural narrative perspective at the heart of Silicon Valley, not necessarily global, not necessarily the world, not necessarily like tastemaking and everything, but for like the beating heart of like tech and venture capital, it's unbelievably…”

“Sam's just right. It's like people investing at under twenty million is venture capital.”

“By the way, it sounds like venture capital investments. You invest in things of fictitious value on a story of questionable dubious, a dubious story. It's probably worth zero.”

“Venture capital is one of these things where like, The relationship between the work you do and the outcomes is like- The smack talk never ends. Is like almost non-existent. Like it is not an input to output business, right? Like it is, and so I think it's lik…”

“Then you have a bunch of strategics and family offices because no smart people would invest in this, right? Like that's like how you end up with strategics and like hedge funds is when like the serious venture people are like, absolutely not.”

“VCs share pitch decks with each other all the time. Like, why do they need a spy?”

“If you have a bunch of entities that don't pay taxes, they compound faster than everyone else. If they compound faster than everyone else, over time, they eat the asset base, then they become like the rule setters in some degree.”

“Actually, I just think everyone's too depressed and not having enough fun. And the question is like, I like even AI, it's funny because like there are parts of it that are quite fun, right? Like programming is quite fun on some of these things that are fun, bu…”

“But statistically, the returns of founders that are like, 45 and up, they're so much higher than those like 20 to 35.”

“Parents of small children that is generally a bad idea. Not always, but generally a bad idea to back parents of small children.”

“Yes, your hustle does source deals, and you do have to make the call, but ultimately you win these deals often because of the body at work and the reputation of the most important brand, which is not The me brand, but the us brand.”

“I tell our younger team, if you're not out at least three nights a week, then you're probably shouldn't be doing this at the end of the day.”

“I'm seeing all these tweets on the Twitter of, like, venture capitalists complaining about ridiculous valuations, and we've lost our minds, and all this type of stuff. Honestly, I'm, like, really not seeing that. I guess I just hunt in different waters on this…”

“At the end of the day, like what I've come to is like, it just has to be what percentage of the fund is going in rather than what percentage of equity you're getting out of these companies, right?”

“The reason this never happens is because big fancy investors, not us lowly seed investors, but big fancy ones, have no interest in the write down, right? It's a massive write down, right, for them. And they'd rather just stick it on their books and pretend lik…”