20VC: a16z's Martin Casado on How the Venture Model is Broken, Why VCs Should Be Running Wall St, Who Wins and Who Loses in the Next Generation of Venture & Investing Lessons from Marc Andreesen, Ben Horowitz and Chris Dixon
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 5 December 2022
⏱️ 52 minutes
🧾️ Download transcript
Summary
Martin Casado is a General Partner @ a16z where he focuses on enterprise investing. At a16z, Martin has led investments and serves on the board of dbt Labs, Fivetran, Material Security, Ambient AI and many more incredible companies. Before venture, Martin was previously the Co-Founder and CTO at Nicira, acquired by VMware for $1.26 billion in 2012. While at VMware, Martin served as Senior VP and General Manager of the Networking and Security Business Unit, which he scaled to a $600 million revenue run-rate business.
In Today's Episode with Martin Casado We Discuss:
1. From $1.26BN Founder to Leading Enterprise Investing for a16z:
- How did Martin make his way into the world of VC and come to lead enterprise investing for a16z?
- What does Martin know now that he wishes he had known when he started investing?
- What have been some of his biggest investing lessons from Marc and Ben?
2. The VC Model is Broken and Why:
- Why does Martin believe that the current model for venture is broken?
- Why does Martin believe that VCs are not oracles and they were not gifted with picking ability?
- How will asset allocation more broadly fundamentally change over the next decade? Why will Silicon Valley take over and run Wall St?
- Why does Wall St not care about innovation and true technological development?
- Who will be the winners and who will be the losers in the next 10 years of venture?
3. Surviving a Crash - What Founders Need To Know:
- Layoffs: What is Martin's advice to founders on doing layoffs today? How much is the right amount to cut? Should it be done in one go? How should this be communicated to investors and the board?
- Scenario Planning: What three scenario plans should all founders be creating right now? How should they know which one is the right one to execute against?
- Comparisons: How should founders use and look to public company performance and market cap to determine which plan they should choose?
- Hiring Freeze: Why does Martin believe the biggest companies in the world make massive mistakes by freezing hiring? What should they do instead?
4. The Changing Guard at a16z:
- What have been the single best and worst changes a16z have made over the last 24 months?
- What are the first things to break when a firm scales as fast as a16z has done?
- Does Martin agree a16z returns will reduce with the scaling of their funds larger than ever?
- How does Martin look to train and educate his junior team? How does he advise them on surviving a downturn? What should they do? What should they not do?
5.) The Makings of a Great Board:
- What are the three types of board members? What is the best? What is the worst?
- What does Martin believe makes the truly great boards?
- What is the biggest advice Martin gives to young board members today?
- How has Martin changed as a board member over time? What does he need to improve?
Items Mentioned in Today's Episode:
Martin's Fave Book: The Weirdest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous
Transcript
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| 0:00.0 | I think that we should be running Wall Street, not the finance people, that don't believe in any of these things. |
| 0:04.8 | So I think like where Venture's broken, is this time to grow up? |
| 0:07.6 | Oh my, this is such a great 20VC. |
| 0:09.9 | I cannot wait for you to hear this episode. |
| 0:11.8 | In prep for this show, we did 13 reference calls with the board that this guest sits on. |
| 0:16.1 | We have 48 pages of notes. |
| 0:18.0 | And so we were more than ready for this one. And I'm so thrilled to welcome |
| 0:20.9 | Martin Casado, general partner at Andresen Horace, where he focuses on enterprise investing. |
| 0:26.1 | And at Andresen, Martin has led investments in the likes of DBT Labs, 5Tran, Material Security, |
| 0:31.9 | and many more. Before venture, Martin was the co-founder and CTO at Nysera, acquired by |
| 0:36.8 | VMware for $1.26 billion in 2012. |
| 0:40.3 | While at VMware, Martin served as senior VP and general manager of the networking and security business unit, |
| 0:46.0 | which he scaled to a staggering $600 million revenue run rate business. |
| 0:50.2 | And I want to say huge thank you to Angela Strange, Patrick at orbit, Ida, Rapid API, Tassard Action IQ, |
| 0:56.5 | Tristan Need DBT, John at Tackle, so many amazing suggestions, and we couldn't have done this without you. |
| 1:02.1 | 20 VC is supported by First Republic Bank, when private equity and venture capital firms are funding the innovations of tomorrow, speed is of the essence. |
| 1:10.5 | That's why at First |
| 1:11.6 | Republic, you'll be paired with your own banker, who will remain dedicated to helping |
| 1:15.5 | your team through all market cycles and will be ready to respond quickly to your requests. |
| 1:20.5 | As a First Republic client myself, having a direct relationship with a personal banker, |
| 1:25.0 | who I can really depend on to help me make the right decision, |
| 1:28.3 | matters a lot. In fact, your banker will serve as your single point of contact by phone, email, |
... |
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