venture capital

“And if you think a decade ago, there were zero private venture-backed unicorns, these billion-dollar companies. Now, today, there are over 200.”

“If you look at what's been invested in cloud software, it has literally quadrupled in a six year time period and represents about 50% of total venture capital funding”

“All the VCs want like us to send them the list so they can email everybody and analyze it. We don't do that.”

“We've done speed dating in the distant past and unless it's structured very well, it hasn't been one of the most successful things we're doing, but doing through brain date works well.”

“When I first came out, I was like, holy shit, most of these VCs have no, you know, no idea in regards to tech”

“So for example, seed round, I didn't know what I was doing. And so I didn't want any VC. So it was more angel investors would invest because I didn't want to have any pressure from anyone.”

“They follow a power distribution where literally one or two companies drives the entirety of the returns. 20 to 30% plot along and return between one and two X, and two thirds actually lose money.”

“We think that most founders can actually use the overfocus on growth to their advantage, like a judo artist, either by more often choosing the lifestyle option, or by having a more sober approach to their relationship with their companies and with VCs, by actu…”

“We at Think Three think that there is an incentives misalignment, fundamentally, between most VCs and founders, and that that incentives misalignment is pushing companies to grow too much too fast, and it's ruining great companies like PowerDrive.”

“So, if you're a VC, you have the incentive, no matter where you think the company might initially fall on this rank, force ranking of multiples of invested capital, you have an incentive to try to force every company to be a unicorn, to try to shoot for the st…”

“Each time you raise VC funding, each time you bring more investors into your cap table, each time you have to introduce greater and greater growth projections in order to justify that valuation and get to the next step, you take more and more options off the t…”

“Because ironically, if and as things start to turn sour, VCs actually have to push harder to make up the losses.”

“If you're in some horizontal platform category, people may throw hundreds of millions, maybe even billions, of VC at the category. And you don't get to not play. So, if you find yourself in this situation, it's probably a sign that you're in a really good cate…”

“The more financial, i.e. Less operational they are, the more they care about two things, numbers and people.”

“And one of the things VCs do is pattern match, and if you don't channel their energy, you are likely to be pattern matched to death.”

“All other things being equal in a financing round, you can have somebody who's very nice and very smart from a no-name firm, or somebody who is equivalent from a big-name firm, your future fundraising will be much easier if you pick the second person.”

“I think for founders and other folks that are on this, I would model today, 50% decline in the number of companies that get funded and 50% decline in the dollars that go out there.”

“The net new conversations are hard and the bar is always high, but as the, one of the prior tweets said it's astronomically high right now. That will adjust and that will come back to a little bit of normal deal management in the next few weeks, but I suspect …”

“VCs in general kind of like all-in-one metrics because they're trying to make an investment decision. I always feel like operators don't love these metrics as much because if it's too high, I don't know which side of it is broken, right? If my CAC payback peri…”

“Investors will often try to pull you into preemptive fundraising discussions. I think that's mostly good for them, not necessarily good for the founders, and I think in almost all cases you are better off if you decide when you go out fundraising, and then you…”

“And the number one reason why a VC will pass on your business is that they don't like your team. This is especially true for seed and series A deals.”

“VCs will happily invest in businesses with small TAMs if they think the team is good enough to move to an adjacent TAM once they're no longer growing at a hundred percent year over year.”

“The reason that most VCs give you a no is lies, and especially the reason of total addressable market in your TAM.”

“I would avoid the VCs as long as possible, because they're the devil. Now, don't get me wrong, sometimes you need to do a deal with the devil, but you're probably gonna get fucked in the process.”

“To build the actual relationship, I do really like it sounds stereotypical, but like a coffee or a lunch, and just slotting that into your schedule every month. So that way you can be 12 different VCs in a year. And so that when it is time to actually run a fu…”

“Most of the companies rating it as shit tons of money, they, they're not using, like, novel customer acquisition techniques that couldn't have worked 20 years ago. They're just willing to lose more money on it. And then the VCs are willing to allow them to los…”

“It's absolutely not true that a VC that makes all their money off fees is going to continue to raise great funds.”

“Like, the vast majority of a VCs, of a typical VCs income, will not come from their carry. It'll come from their management fees or some slice of that over the course of their career. They don't give a shit about the outcome or the success of your business by …”

“Does the traditional 50, sixty million dollar seed fund work? I don't, I think it doesn't work unless you go with anything that has any proof, any social proof, anything privileged, it doesn't work, right?”

“When you meet a winner, when you meet a winner, you buy all the shares. Now, if you can buy a quarter of the company, you buy a quarter of the company. If you can buy two percent of the company, you buy two percent of the company. But you either buy all of the…”

“When you don't see that, my rule is, and I've made this mistake since, don't invest. No matter how much you love the founder, you can love them as humans. They can be doing very well. But if you don't have this crazy 20 year commitment to building something hu…”

“Without question. And without question, it's better for founders. Without question. Every element of venture that is, and I'm being binary when it's off course more subtle than this, but every much of the collaboration in venture did not benefit founders, righ…”

“The problem is the longer you go into the capital structure raising money before you make money, a weird thing happens in terms of your investors. You get to this point where your VCs are on the other side of the, ah, time horizon from you, right? So you're bu…”

“Having somebody on your board, a coach, a mentor, somebody who's helping you formally to think through those issues from a lens of, I've done this, and I know what it takes to get from 50 to a hundred, to a 152 hundred million in revenue, it's very different t…”

“Those marks are going to be tough in the next couple of quarters. So yes, I think like all of us, LPs are reassessing the environment, trying to figure out what to do, And my guess is that they'll do what many others are doing, which is retrench a bit. And my …”

“Just remember time never turns a mediocre VP into a good one. It just never does. And especially never listen to your VCs or investors that tell you this.”

“I actually believe private equity people are better than VCs at solving it, right? Because that's what they do for a living. They buy old, not those super big ones like Tomo Bravo or Vista, but the smaller PE firms who buy, kind of, 20 to fifty million dollar …”

“You don't want to raise money from a VC who wants you to be a billion dollars, and you want to sell it a hundred million. I've had friends who wanted to sell it a hundred million. VCs wouldn't let them, right? Because they'll say, no, we're blocking the sale b…”

“The playbook we did at Pigment is simple. We started to create some mini CRMs with all of our VC All of our advisor tracking all the P zero, P one, P two priorities of the companies we wanted to sign and making it a win-win, meaning that basically we would all…”

“So even before choosing the partners that you want with you around the table, my number one advice would be to think what VC, what advisor, what angel, what operator has the network that I need to actually unlock some customers.”

“What I love to do, you know, when someone is interested in pigment is to actually tell them that, you know, if They start making a couple of intros to their portfolio companies. Not only their portfolio companies will benefit a lot from probably, you know, loo…”

“An insider tip, if you are fundraising, figure out, now's a good time from new funds and newer VCs that have less Baggage.”

“There is one row on this table where that need for validation is there even from the earliest stages from the seed. Which is this idea around the narrative. And this becomes really important because of this dynamic at the early stages where a lot of these area…”

“The reality is, you go and pitch to VCs and you tell them, you know, this is a huge blue ocean. We have so much TAM. This is a ninety, hundred billion dollar problem. But the reality is, you need to really come in and say, okay, who are the customers that I ca…”

“And so, like, if you raise now, if you can avoid it, you're gonna be getting a lot of bottom fissures.”

“Investors are hoping for a hundred percent growth at a hundred million ARR. That's what you can back into. Today, and it's crazy, investors want a hundred percent growth at a hundred ARR.”

“The loser-ist thing as a founder you can say to a VC, right, they make you sound like a loser, and I literally never use the word loser, right, it's terrible, but it's true, is we didn't grow that fast last month because we were fundraising.”

“Most VCs think they can help you with recruiting and they provide zero value. I literally think of all of the companies I've invested in, I may be the only investor that ever introduced an actual VP, including you to Parker. No one does. Everyone talks big or …”

“I think generally speaking almost definitionally, the bar was lowered. There were, there was so much more capital being deployed in so many more companies last year compared to this year at every stage.”

“And I think it's going to fundamentally change how people think about entry points because no longer can you assume, you know, ten billion to generate a venture return in most cases.”

“It's not a volume game. It's not, Tiger Global made it look like it, they had a good play. But really, the great ones, they, you know in 20 minutes. In fact, you often know before you meet them.”

“None, one, none of them want another manager. They don't. Okay. It's not that they won't take another manager in like they will, right? If you or I sent one of them an email and said, this is the best new fund on planet earth, they will probably write up, writ…”

“Exits are rare. They're really, really rare, and VCs don't talk this way, and Twitter doesn't talk this way.”

“VCs unfortunately are looking for the trifecta. They're looking for top tier growth, but also some sort of top quartile capital efficiency. And even at, you know, even at a million in revenue, maybe not You know, 10 K in MRR, but even at a million in error, th…”

“There's still delusion across all of the markets, and I still anger founders when I bring it up. I still get Toxic comments, but you just have to assume absent evidence, you're unfundable. Like, go find, go get a term sheet, or just go get someone you trust to…”

“Categories have more rooms for number one than sometimes VCs realize, right? And that has certainly happened as SaaS and cloud has expanded, especially with vertical SaaS.”

“Rule of 40 kind of implies that mediocre growth is okay if you're profitable, and that's the disservice. It's, no VC is interested in mediocre growth that's profitable, like we started this earlier. No one's interested in the rule of 30. We really, VCs want ru…”

“Like many other companies, VCs also have their own CRMs. So, if you meet an analyst or another partner, and if the answer is no, and if you go to another partner and don't give that context, the other partner, the chances of that other partner knowing that you…”

“You know, sort of, hey, let's tap into our investors, VCs, and they will help, but they're not going to continuously help because at some point they'll just say like, yeah, I made some interest for you, bro. Like, you know, the reason I invested in you guys is…”

“In emerging markets, some VCs may care about you being profitable because they have way less risk adverse, and a lot of them have more a PE mindset than a VC mindset. So on a PE mindset, profitability matters a lot. On a VC, way less because you look at very d…”

“What no VC wants on planet Earth Is slower growth and profitability. No VC wants that trade-off. Because going back to the earlier point, the game is to go from one to two million to a hundred million in seven to 10 years.”

“The bottom line is you really can't make money in venture other than fees unless you have companies that in seven to 10 years get to at least a hundred million in revenue.”

“I don't think there's any downturn in venture. I think there's just a reset and folks that have not been raising capital or seen this side of things since, say, 2018 will think this is a terrible time.”

“The pace of investing was fast, so fast and furious that people intentionally did not do the diligence, ok? It was an intentional choice”

“If you're doubling, you can raise venture capital. If you're growing 65%, that's still pretty good growth. You can't raise money.”

“I like this version from Carta that showed through Q-one, you know, you can just see the peak of venture and that it's just plummeted, right? It's just plummeted. Capital fell 80%”

“You need to get to a hundred or two hundred million in ARR in seven to 10 years for venture to work, and if you're not growing at a rate that can compound To a hundred million in that journey, you simply can't make VCs enough money for them to make money.”

“These ten million dollar, twenty million dollar rounds in the Bay Area, they can't last, right? Not enough of these companies are gonna go from one to a hundred in two years”

“And they said, you know, come in, you don't have to have a deck, just come in and talk to the partners. And I was like, okay, sure. And this was a huge mistake. I went into this, what turned out to be a partner meeting, and I was completely unprepared. I had l…”

“So what VCs do is they'll have some poor associate look at your LinkedIn and look at people who have titles for companies who are going in and out.”

“When I look at the purpose of venture capital, it's not to, you know, burn a dollar five in order to grow a dollar of revenue. It's to give you that opportunity to already be building for the market while it is still developing.”

“Now's, now is your time, your window, and it won't last. We will get drunk again. Multiples will probably go up. Venture capital will come back. It always has.”

“You want to learn just enough. To know how the world works. You want to learn how fundraising really works, why companies get funded, what the bar is to raise... You want to get that smart, but any smarter is not a good use of your time until you're raising mo…”

“And the most important point here is don't get blinded by initial off. Only a term sheet counts. What do I mean with that? It's the job of a VC to shine, you know, to show you initial love.”

“And here the answer is between Series A it's roughly 20 to 30 X. So, 70% of the people fall into that range. The bucket, actually, with the largest, you know, share of answers, 40%, is 25 to 30 X.”

“Ah, this is series B, and here we assume six million ARR for a series B. And there the picture is slightly more concentrated, where most of the people think that 15 to 20 X is a healthy multiple, you know, for that stage.”

“I also always recommend to maximum have five investor calls per day and not go for like 15, because you sometimes realize that people are, you know, worn out at the end of the day. You don't have the right energy of it. So rather, you know, ah, focus your ener…”

“So they also typically don't have operational experience, or they don't have much of it, or it's been a long time. So as your board meetings happen quarter in, quarter out, you need to think about when the right time is to add an independent that's gonna start…”

“That actually makes you look very naive and somewhat unserious to a venture capital you know, venture capitalist when you ask for an NDA.”

“Ask VCs for advice when you want money. Ask for money when you want advice. This is terrible advice.”

“And one of the things VCs do is pattern match, and if you don't channel their energy, you are likely to be pattern matched to death.”

“VCs prefer bootstrapped, but they are not willing to give you credit on growth. That's how I'd summarize. They're not willing to say, oh, well, look, 50% growth is okay. It's because you didn't have money, but if I give you money, you'll accelerate to a hundre…”

“VCs love bootstrap companies. If you talk to Excel partners, one of the top VCs at all times, they'll say our favorite investments were Atlassian, right, which I think they bought 20% of, bootstrapped. Qualtrics, bootstrapped, on and on. Why do VCs like bootst…”

“You cannot make money in venture if at least per fund you don't have a couple billion dollar outcomes. There's a few exceptions, but as a rough rule, not, let's say you do 30 investments in your venture fund. Not all 30 have to IPO, but if a couple don't, or a…”

“It's going to create more appetite for VCs to do deals, but only at the margin will it increase valuations. Only at the margin. Only where there's like hysteria to invest, like certain AI deals. But other than that, unless there's massive competition, valuatio…”

“Venture capital is a niche, niche, niche asset class only designed for outliers. It is, the job is to find an outlier. It is to find a GitLab. It is to find an Okta. It is to find a Stripe. It is to find an Algolia. That is the job. The job is not to find a te…”

“Don't raise venture capital, or at least let me qualify it with an asterisk and a dagger. Don't raise more than five to ten million. Don't go to the double digits if you don't want IPO.”

“It is a brutal, terrible industry where if you actually saw the numbers, most VC firms underperformed NASDAQ.”

“I don't think venture will get fairer for pre-seed. I don't think venture will get fairer for folks that don't check any boxes.”

“You know, a VC will look across their portfolio and think of the best CAC payback period, the best LTV to CAC, the best rule of 40, and ask you to do, you know, beat them on all four, right? It's inherently unfair. It's a form of bludgeoning, right?”

“Because the VCs tend to be trusting and say, what's your CAC and tell me how you calculate it. And isn't that interesting? Whereas the PE people just said to say, give me all your data. I'll tell you what your CAC is fundamentally. Especially in the context of…”

“And there isn't any venture appetite for pretty good growth. There just isn't any, there's none, there's zero, absolutely none. There's no appetite in general.”

“What I've seen Certainly in 20, 21 and maybe 20, 22 is that the money was a net negative and what the money led go to market organizations to do was twofold. And I'll maybe take it like a marketing and a sales angle. I think on the marketing side, when there w…”

“Top 10, 10 to 15% that already have venture backed are in a position today to raise another round.”

“Everyone is full of shit in venture on Twitter. Oh, I'm all my investments are so great. I'm such a genius. I own point. Oh, one percent of this unicorn. I made so much money, but the real IRRs, when you blend it all together, they're negative.”

“Funds are structured for this funds are looking for ten billion dollar exits. It actually puts a lot of pressure on folks that are doing pretty good. They'll just, if you, if a V, the only way a VC can make money is not just if you exit for a billion, which is…”

“VCs still need triple, triple, double to make money. They need you to triple and triple after one million in revenue and double. It's okay if there's bumps, but that's what it needs to be to IPO in less than a decade.”

“Just assume you have to talk to more VCs than you used to. Don't play any games. Don't artificially constrain the process. Don't tell people they have 37 minutes. Be a little more chill and talk to twice as many people as you planned.”

“It's not a meritocracy. It's a brutal business investing. It's almost impossible to make money.”

“For VC, you either got to find the ones that other people don't find, or you got to win. You got to win. Right. You got to be in all the deals and find a way to win, to beat the other people. Right. The later stage venture is all things, the more it's about wi…”

“The best time to send a board deck is Saturday morning, the week before your board meeting”

“Don't hire the jaded. The one literally four minutes in your interview, they're telling you how the CEO or the VC screwed them over... Don't hire them. They're going to think the same thing of you about three weeks in.”

“We see fund CFOs for VC and for private equity as being incredibly underserved. They're still using Excel. They're still using single points of sale here with accountants. They use other vendors that are primarily service forward as opposed to software forward…”

“VCs are about 60% of last year. About 60%.”

“A lot of folks in venture, even though it doesn't look like it, they're, they don't have money to invest. They're struggling to raise another fund. They're sitting on the sidelines. They've slowed it down. They're worried.”

“You, to be a venture backed company, you have to go from zero to two hundred million in 10 years. Do a spreadsheet. If you don't triple, triple, double from a million, you will never get to two hundred million in a decade. It just won't happen.”

“The truth is we talk about on the internet that like it's a choice, but the truth is the venture capital is a niche product. It's a weird product. It requires T three D two growth. Most folks are not experiencing T three, two growth. Or don't appear to have th…”

“After 2022, the series B through the D market was effectively dead and it's starting to come back.”

“Right, but check sizes are up, the lead check sizes are up, 42% in 18 months.”

“The majority of investing, if 44% in 2024, already the majority in 2025 is into AI and AI native investments.”

“I firmly believe that even if you do raise VC for most folks, a one and done is the best approach. Raise a little bit of seed money and then call it a day. Don't take the stress and pressure.”

“This is the age of efficiency. It's not, we are back to growth. Look at that chart. Look at cursor. Look at whiz. This is what the, this is not only what VCs are hunting. It's tough. This is where your recruits want to work.”

“Founders will see a decline in market share before VCs can see it before anyone can see it, you'll smell it. You'll go walk into that deal and you'll start losing deals. But you're still growing at a hundred percent or 80 or 200%.”

“If you talk to VCs here that have been around for a while and you have a quiet conversation, ask them how many folks in your portfolio are north of a hundred million, and now are seeing growth in the 10 or 20% range. All of them. All of them. It didn't used to…”

“I'm sure, over time, they'll replace plenty of what we do.”

“VCs are now looking for trillion dollar outcomes. People have decided that every couple of years, there'll be another open AI. Not every week. There'll be a trillion dollar company.”

“If you're triple, triple, double, double, as hard as that is, as hard as that is, maybe only 20 to 30% of the investors that would have been interested, 18 months ago today, 20%, 20, 30%.”

“The median returns of venture are not as good as NASDAQ. The average VC doesn't even double their investors' money and it takes 15 years.”

“And it is 70, 80% of all venture capital.”

“Last year was three hundred and sixty three billion, which was a massive jump from 20, 23, as you can see, but already this year, It's exceeded all of last year, just in the first six months alone, three hundred and seventy seven billion in the first six month…”

“There is no interest in classic SAS companies from VCs growing at pretty good rates. If you're growing 80% at twenty million or 70% at fifty million, it's not cool, dude, but there, no one's going to fund you. Nobody.”

“And again, I think 26 will be even bigger. So we'll surpass the dollars of 21.”

“Half of all the venture capitalists here is going into four deals.”

“If you've been doing this for a while, your VCs are just going to check out on you. They're just, it's just not again, like putting all your money into anthropic. It's just natural. If your company is around six, seven, eight, nine, 10 years, and you're lookin…”

“We're gonna enter this weird world where the best VCs are gonna make money like we've never seen before, right, and the best engineers, and then, you know, the middle is gonna have no jobs.”

“There's no great answers to the question that some great businesses will compound to Epic rates, but they're unfundable now, and they would have been fundable two years ago.”

“No one knows the answer and most VCs are betting both ways. They're chucking a bunch of money in at a modest 300 or six hundred billion pre at Antropic. And at the same time, they're doing a whole bunch of investments that only make sense if in fact there is r…”