Opinion
Sethi: Quick commerce companies still lack unit economics and free cash flow
“So one of the reasons why you've seen me not invest in, you know, quick commerce or any of the delivery companies that were there, they, A, they didn't have unit economics. They still don't today. They're trying to do growth at all costs. I think that can make…”
Assertion Partly supported
Sethi: FTX showed $1B revenue and $600M EBIT when Tribe evaluated it
“Where at the time that we had measured and quantified it, there were about a billion in revenue, about six hundred million in EBIT.”
Opinion
Sethi: Over half of Tribe's portfolio has average teams but great PMF
“If I went through all of the companies that we have in our portfolio, I would say that 50, 60% plus are what I call average teams, but they have amazing products and product market fit.”
Assertion Not checkable as stated
Sethi: Tribe Capital holds the world's largest private company database
“And so we have the world's largest repository of private data of private companies. More than anyone else in the world because we've been doing it for 10 years.”
Assertion Not checkable as stated
Sethi: Tribe Capital is on track for net 5X returns on all funds
“We have a goal of hitting a net five X return profile for all of our funds over a 10 year period. And we've always been on track for them. That's kind of our historical record.”
Insight
Sethi: Emerging market consumer distrust forces companies to become conglomerates
“In emerging markets, consumers are not willing to trust companies, and so you have to build a brand to a certain size and scale, and then they'll start enabling trust to be able to try multiple products. It's why you see so many companies like a la Zomato, not…”
Prediction Not checkable as stated
Sethi: 80% of Recent Venture Capital Will Go to Zero or Consolidate
“And I think people are, in my opinion, and what we're geared up for is that about 80% of the, that capital is gonna get into consolidated or zero.”
Insight
Sethi: Data Is Not a Strategy, Only an Input to Interpret
“Data isn't your strategy. It's just something to interpret. And your strategy and your mission has to be, you know, like it has to be based on like what you really care about.”
Opinion
Sethi: Current Venture Capital Practices Are Archaic and Outdated
“What you see in venture today is it's pretty archaic and pretty old.”
Insight
Sethi: Deflationary tech means winning companies emerge in every sector
“And so our whole point here is that if software and technology and infrastructure is inherently deflationary, you will find companies in every sector that's good. And there's gonna be winners in every category. And as long as you can benchmark that that compan…”
Opinion
Sethi: Indian market valuations are halfway between intrinsic and options value
“You're probably right in the middle between intrinsic and options value because of the India story.”
Opinion
Sethi: US Private Market Reached Lowest Point in 25 Years
“In the U.S., we are kind of at the lowest point we've been since the last 25 years almost. That's right. And it's starting to come back slowly.”
Insight
Sethi: US IPOs Require $200M-$300M Revenue Versus $50M in India
“So if you're in India, you go public at fifty million plus in revenue which is great. In the U S you gotta be between 200 to three hundred million revenue as a starting point, but you have to be growing 50 to 60% sort of year over year and pretty efficient wit…”
Insight
Sethi: Startups fail from product, go-to-market, or management depending on stage
“At the early stage, they don't work because their product doesn't work. At the mid stage, you might have the product, but their go to market doesn't work. And at the late stage, it's because the management team decides to do something extreme, and then the com…”
Opinion
Sethi: Relying on US tech giants to acquire Indian startups is a bad strategy
“I think if you're relying on US companies buying Indian companies, that's a pretty bad strategy. To me, that's akin to just hope as a strategy, which is pretty poor.”
Insight
Sethi: Good venture allocators concentrate in winners, not bridging strugglers
“So if you're, in my opinion, a good asset allocator, you're reducing your loss ratio and you're concentrating your capital and the products that are working. So you're not bridging companies. You're not reserving companies just because they got a series B or a…”
Prediction Not checkable as stated
Sethi: AI and AGI will drive India's fourth economic arc soon
“And I think arc four will probably happen in the next, I'm gonna call it three, five years, where you start seeing these new companies that are leveraging actual software that's been around for 20 years machine learning, AI, and then AGI on top of it, which sh…”
Assertion Contradicted
Sethi: There are Between 40,000 and 50,000 Venture-Backed Startups Today
“The number of venture backed companies in the ecosystem today is between 40 and 50,000.”
Assertion Not checkable as stated
Sethi: Termina's eight-person team processes 4,500 to 5,000 companies annually
“So today I think we look at maybe across all of our organization, but I think we're on a run rate of about, you know, 4500, about 5000 companies per year. That's a lot. And the team that runs that for a company called Termina is eight people.”
Opinion
Sethi: India Is Only at the 'Product Market Fit' Stage of Market Liquidity
“So I'd say that, you know, on the. 20 year curve of what you wanna see in terms of liquidity in India, I think they're just starting. Let's call it. They're right at the product market fit stage.”
Insight
Sethi: Startup attrition is 80-90% at seed and 60-70% at Series A
“And so the way to sort of think about it is at the early stage seed, it's about 80 to 90% attrition. At the series A, it might be 60 to 70, series B sort of comes down.”
Assertion Contradicted
Sethi: Five companies drive the majority of the Indian stock market
“If you look at the Indian companies, you actually have five companies driving the majority of the public market today.”
Insight
Sethi: Buy companies on intrinsic value and sell on options value
“You want to be in the best intrinsic valued companies. So when they do get valued options value, then you sort of want to retreat and or sell your assets.”
Assertion Not checkable as stated
Sethi: Docker Grew From Under $5M to Nearly $200M in 18-24 Months
“We had a company called Docker. When we invested, they were just shy of five million. They're roughly just shy of two hundred million today. And, you know, it's basically between 18 and 24 months.”
