Sep 1, 2023 · 51m · more-or-less
#12: Inside the VC brain · More or Less Podcast
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of More or Less, co-hosts Jessica Lessin, Sam Lessin, Dave Morin, and Brit Morin analyze Jessica's diplomatic reporting trip to China regarding semiconductor export controls, while delivering an unvarnished audit of venture capital economics, fund downsizing, and startup liquidity.
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 99.2% of the talking time here. How this is scored →
The hosts as informed peer 5.7 Guest teaching 2.1 Guest disagreement 1.8 The hosts pushing back 2.4
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 35:29 Sam rejects Dave's assertion on mid-fund strategy pivots
Sam forcefully rejects Dave's premise that VCs merely lack the bravery to change strategies mid-flight, pointing out that LPs harshly penalize emerging managers for strategy deviation even when bets succeed.
Hardest push from the hosts ▶ 23:25 Sam counters the ski parka money characterizationSam refuses to accept Dave's framing that huge returns are mostly accidental ski parka discoveries, arguing that truly massive venture outcomes come from high-conviction bets that survive near-death experiences.
Biggest teaching moment ▶ 13:36 Sam explains how VC management fees mirror tenureSam provides a clear, unvarnished breakdown of fund economics, demonstrating how managers draw steady management fees regardless of performance while delaying accountability for a decade.
The host holds their own ▶ 43:58 Jessica clarifies the gap between chip manufacturing and designJessica leverages deep reporting and industry analysis to explain that while China excels at manufacturing volume, the core bottleneck remains advanced semiconductor design and specialized lithography.
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 |
|---|---|---|---|---|---|---|
| More or Less Animated Title Sequence | 2 | 1 | 1 | 1 | The hosts engage in light banter regarding Jessica's return from Asia, air quality differences, and Sam's TV recommendation of What We Do in the Shadows. The dynamic is conversational and humorous with no genuine disagreement or substantive debate. | |
| Jessica's Reporting Breakthrough with Otter.ai | 6 | 2 | 1 | 2 | Jessica shares her reporting workflow using Otter.ai while traveling on Chinese bullet trains with Secretary Raimondo. Sam and Dave detail their investment history and early thesis around ubiquitous recording, while Brit mentions the obsolescence of court reporting. | |
| Pool Reporting Obsoletion and Editorial Objectivity | 5 | 1 | 1 | 1 | Jessica explains the institutional role of pool reporters in government coverage and how modern transcription tools expose its inefficiencies. The co-hosts joke about their shameless plugs for portfolio products. | |
| The Economics of VC: Management Fees as Tenure | 7 | 3 | 2 | 3 | Sam articulates his thesis that venture capital operates like academic tenure, where 2 to 2.5 percent management fees guarantee compensation over a ten-year horizon without near-term accountability. Brit adds nuance regarding the psychological toll of long feedback loops. | |
| The Age Debate: Experience vs. Energy in Venture Capital | 7 | 3 | 3 | 4 | The panel debates optimal investor age and experience, with Dave proposing his Jedi versus General framework. Dave describes massive venture wins feeling like finding forgotten money in a ski parka, which Sam qualifies by arguing real returns require sustained non-consensus conviction. | |
| The Zero Fund: Backing Distressed Founders | 8 | 3 | 2 | 3 | Brit laments VC funds abandoning struggling portfolio companies, prompting Sam to propose a Zero Fund to buy distressed positions at ten cents on the dollar. Jessica connects this to The Information's reporting on Social Capital selling off fund assets to deliver DPI to LPs. | |
| The Downsizing Dilemma: Fund Cuts and Strategy Drift | 7 | 4 | 4 | 5 | The discussion covers fund downsizing and strategy drift. When Dave suggests managers fail to adjust their strategies mid-flight, Sam pushes back firmly, explaining that early-fund managers face severe LP backlash if they deviate from their stated mandates. | |
| Behind the Curtain of Raimondo’s China Mission | 6 | 2 | 1 | 1 | Jessica describes the diplomatic stagecraft of Commerce Secretary Raimondo's trip to Beijing and Shanghai, including scripted translation sessions and working groups designed to lower geopolitical friction. | |
| Sanctions, Slower Chips, and China's AI Future | 8 | 3 | 3 | 3 | Jessica reports on private discussions with Chinese tech leaders facing US chip export controls, explaining the difference between Nvidia H100s and degraded H800s. Sam and Dave examine state-run AI versus commercial models and whether China needs cutting-edge chips or merely scale. | |
| Analyzing Raimondo's China Visit and Reporting on Atoms | 5 | 1 | 1 | 2 | Jessica recaps Raimondo's practical approach to non-sensitive trade such as cosmetics, and displays her handwritten reporting notes as she races to meet an upcoming deadline. | |
| Labor Day Holiday Plans and Slow Ventures Founder Perks | 2 | 0 | 1 | 1 | The episode concludes with lighthearted discussions of Labor Day plans, Sam joking about Slow Ventures providing founders with pool house saunas and rides to the airport, and calls for podcast reviews. |
Statements from this episode (20)
Morin: Path almost merged with Sam Liang's startup
“In a little known story, we actually almost acquired Sam and I almost merged companies during Path.”
Brit Morin: AI transcription has wiped out court reporting jobs
“Court reporting is a job that is just gone. Like, the whole, like, her whole life, she spent typing what everyone's saying at a speed so fast that she could follow along, and now it's just wiped out.”
Lessin: Venture capital functions like academic tenure via 10-year guaranteed fees
“Being an investor in Silicon Valley is kind of being like having tenure in the startup community, right? Because, you know, you kind of, it's the weirdest job, right? Like you get paid no matter what, right? You have fees coming in, like sure, after a few fund…”
Lessin: Lack of short-term KPIs leads VCs to waste years of time
“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…”
Lessin: Young VCs will struggle to ever return to operating roles
“Total time flexibility and control of your schedule and tenure, super fucking hard to go back to working a million hours a week in an operating company, right? It's like very dissonant, right? Because the lifestyle is, and the control is like so good, like ten…”
Brit Morin: It takes up to 10 years to know if you are good at VC
“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.”
Sam Lessin: Big VC firms believe 30 is the ideal partner hiring age
“The big firms have a problem, really want to hire people in their early thirties, right? Like, their view is that if you've had a successful career in your twenties, you're super networked then, you have all the energy, You're not a fucking burned out, ten-yea…”
Morin: VCs gravitate to Twitter, crypto, and podcasts for quick feedback loops
“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?”
Lessin: The most successful early-stage investments appear dead for years
“Most of the things I out of the gate thought were working ultimately didn't. They're the things that I had fundamental beliefs on and every single thing that I feel really proud of investing went through a several year period because we go so early of like, oh…”
Brit Morin: Some VCs rank companies binary zero-or-one and abandon struggling founders
“This is why I hate, by the way, when VC funds do this ranking, I don't know if a lot of people know this, of like zero or one, like, is it winning, is it dead or alive? And some funds, like if they claim it's dead, they just stop supporting it.”
Sam Lessin: Buying VCs' written-off startup stakes at 10 cents could succeed
“Someone could do really well picking those up, right, before they're dead.”
Dave Morin: The VC ecosystem is locked up from lack of LP liquidity
“I think that's the driving force right now is that the ecosystem's kind of locked up. Because there's not enough liquidity moving around from the GPs to the LPs.”
Sam Lessin: Venture capital performance must be measured on DPI, not markups
“Distribution of paid-in capital, that's what VC is actually supposed to be measured on. How much fucking money did you give back?”
Brit Morin: Secondary buyers are aggressively pursuing Offline Ventures portfolio stakes
“We've had a noticeable amount of secondary firms reach out, you know, even just to Offline, who's a young firm, to try to buy positions”
Sam Lessin: Non-transparent secondary brokers damage the startup ecosystem
“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 …”
Sam Lessin: Venture funds haven't cut costs yet, but will
“You know, I don't think funds have really cut costs yet, really, but I bet they will.”
Jessica Lessin: Sequoia recently had a 'mini bloodletting'
“I mean, Sequoia just had a mini bloodletting.”
Dave Morin: A research list showed the world's top three largest LLMs are Chinese
“Like I saw a list, somebody I won't say who, but showed me a research list That had every single large language model in the world on it, and the number of parameters, and like the top three are all Chinese.”
Jessica Lessin: Leading AI models will only be months ahead of rivals
“I tend to agree with you, Sam. Like, I think if, or, you know, the best models are going to be months ahead of the next best models. I mean, they may, that gap may already be almost that slow now.”
Sam Lessin: AI is fundamentally a communist technology and crypto is free-market
“I mean, at the highest level, like, I have to give credit, even though I wish I didn't have to Peter Thiel on this, because he's right about it, right? Where he's like, look, fundamentally, AI is communist. Right. And crypto is like free market as a technology…”