20VC: Greylock's Jerry Chen on The 2 Fundamentals To Assessing Startup Risk, Why Good Investors Have To Be Optimistic & Why VCs Get In Trouble When They Move Outside Their "Strike Zone"
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 2 April 2018
⏱️ 31 minutes
🧾️ Download transcript
Summary
Jerry Chen is a Partner @ Greylock Partners, one of the world's most successful VC funds with prior investments in the likes of Facebook, Instagram, LinkedIn, AirBnB, Dropbox, AppDynamics, Coinbase and many more incredible companies. As for Jerry, Jerry invests in entrepreneurs building new enterprise SaaS applications and in all aspects of AI and cloud infrastructure. Jerry currently sits on the Board of Docker, Cato Networks, Gladly, Rhumbix, Spoke, and Blend. Prior to joining Greylock, Jerry was Vice President of Cloud and Application Services at VMware where he was part of the executive team that scaled the company from 250 to over 15,000 employees and $5B in revenue. Check out Jerry's recent writing on Risk: The Game of Strategic Investment here.
In Today’s Episode You Will Learn:
1.) How Jerry made his way into the world of VC with Greylock from being on the exec team at VMWare, responsible for their scaling from 250 to over 15,000 people?
2.) What does Jerry believe are the different frameworks for how investors should measure risk? Why does Jerry believe to be a good investor, one has to be an optimist? What does Jerry find the most challenging element of risk assessment? What types of risk can Jerry tolerate and which can he not in a potential investment?
3.) How does Jerry break the theme of risk down into 2 very different categories? How does one define "uncertainty" in an investment? How does this compare to "probability"? How does both "uncertainty and probability" alter when comparing differing sectors? Does Jerry think that current pricing takes fair account of both "uncertainty and probability"?
4.) What does Jerry mean when he says, "you have to have product go-to-market fit"? Why does Jerry believe that platforms shifts are fundamentally distribution model shifts? Where does Jerry see an inherent opportunity within these net new nodes of distribution shift?
5.) How does Jerry evaluate the SaaS world today of bottoms up or top down? Why does Jerry believe that if you are budget additive, bottoms up with small ACVs is the current strategy? What does this mean for those that are budget replacements, both in sales model and ACV?
Items Mentioned In Today’s Show:
Jerry’s Fave Book: Skin In The Game
Jerry's Most Recent Investment: Blend
As always you can follow Harry, The Twenty Minute VC and Jerry on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Cooley is a global law firm built around supporting start-ups and the venture capital firms that fund them. Now we have spoken before about their forming the first venture fund in Silicon Valley, and forming more VC funds than any other law firm in the world but Cooley also represents more than 6,000 high-growth startups across the globe – through the full company life cycle. They are the #1 law firm for VC-backed exits (M&A and IPO) ranked by PitchBook, and since 2014 has represented more companies in their IPOs than any other law firm. Simply head over to Cooley.com or you can check them out at Cooleygo.com.
Transcript
Click on a timestamp to play from that location
| 0:24.3 | We are back on the 20 minute VC with me, Harry Stebbings. You can see more from us behind the scenes on Instagram at H. Stebbings, 1996, Stebbings with 2Bs, where we will also be posting the upcoming guests for the show, and you can submit your questions ahead of time and be named on the show, and we really would love to see you there. But to the show today, and an episode which really reminds me just what an honor and a privilege it is to do the show. So I'm very thrilled to welcome Jerry Chen, partner at Greylock, one of the world's most successful VC funds with prior investments in, I mean, check this out. |
| 0:27.9 | Facebook, Instagram, LinkedIn, Airbnb, Dropbox, app dynamics. |
| 0:32.4 | The list really does go on of incredible companies. |
| 0:34.8 | As for Jerry, Jerry invests in entrepreneurs building new enterprise |
| 0:38.1 | SaaS applications and in all aspects of AI and cloud infrastructure. Jerry currently sits on the board |
| 0:43.0 | of Docker, Cato Networks, Gladly, Rumbick, spoke and blend. And prior to joining Greylock, Jerry |
| 0:48.9 | was vice president of cloud and application services at VMware, where he was part of the executive |
| 0:53.2 | team that scaled the |
| 0:54.3 | company from 250 to over 15,000 employees and $5 billion in revenue. And if you haven't already, |
| 1:00.7 | you must check out Jerry's recent writing on Risk, the game of strategic investment. It really |
| 1:05.2 | is a fantastic piece, and you can find the links on the 20 minute VC.com. But before we dive into |
| 1:10.2 | the show today, our new sponsor, |
| 1:12.0 | Ring, first made a splash when they were on Shark Tank a few years ago. The concept, genius. |
| 1:16.7 | If someone rings your doorbell and you aren't home or don't want to come to the door, |
| 1:20.1 | you can respond to the person using just your smartphone, adding a level of both security |
| 1:24.2 | and convenience. Today, over a million people are using the Ring video doorbell |
| 1:28.2 | to help protect their homes. And now Ring has a great new product called Ring Floodlight Cam. |
| 1:33.0 | Just like Ring's amazing doorbell, floodlight cam is a motion-activated camera and floodlight with |
| 1:37.7 | HD video and two-way audio that lets you know the moment anyone steps onto your property. And you can |
| 1:42.8 | see and speak to visitors even |
| 1:44.6 | set off a built-in alarm right from your phone. So for me spending my life in the studio, I have my |
| 1:49.4 | ring at home and you can instruct deliveries, check security, and just feel much more comfortable, |
... |
Please login to see the full transcript.
Disclaimer: The podcast and artwork embedded on this page are from The Twenty Minute VC, and are the property of its owner and not affiliated with or endorsed by Tapesearch.
Generated transcripts are the property of The Twenty Minute VC and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.
Copyright © Tapesearch 2025.