20VC: GV's Tom Hulme on Why Investing in Foundation Models is like Investing in "Power Stations", The Conventional Wisdom in VC that is BS & Lessons from a 24x Angel Track Record, 255x on Robinhood and Making Billions on Uber

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 8 May 2024

⏱️ 77 minutes

🔗️ Recording | iTunes | RSS

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Summary

Tom Hulme is a Managing Partner of GV (Google Ventures), and leads the European team. Today, GV has over $10BN in AUM and Tom has led investments in Lemonade.com (IPO), Snyk, Secret Escapes, Blockchain.com, GoCardless, Blue Vision Labs (exited to Lyft), and Currency Cloud (exited to Visa). Prior to joining venture full-time, Tom was one of Europe's most successful angel investors with a 5x DPI track record and 20x+ TVPI.

In Today's Episode with Tom Hulme We Discuss:

1. Lessons from a 24x TVPI Angel Track Record:

What are Tom's biggest lessons from his biggest winners angel investing?
What are Tom's biggest takeaways from the 0's in his angel track record?
What is the biggest advice Tom would give to angel investors starting out today?
What are the single biggest mistakes Tom sees angel investors make today?

2. The Four Pillars of Venture Capital:

What does Tom believe are the four key components of being successful as a VC?
Why does Tom describe VC as "being a founder on anti-depressants"?
How does Tom categorise the three different types of investors that exist?
Sourcing, selecting, servicing: What is Tom best at and what is he worst at?

3. The Conventional Wisdom in Venture That is Not True:

Why does Tom believe it is BS that you should never sell your winners?
Why does Tom believe he has never had complete conviction in any of the companies he invests in?
Why does Tom believe the "everything has to be a fund returner mindset" is BS?
Why naivety doesn't lead to great founders? Why employees at rocketships are the best founders?

4. AI: Foundation Models, Generative AI, The Incumbents: Where Does the Value Go:

Does Tom believe there is money to be made investing in foundation models?
Why does Tom liken investing in foundation models to investing in power stations?
Where does Tom believe there is value in the application layer?
Why does Tom think that generative AI is largely a sustaining innovation?
Why does Tom think Microsoft will win the next wave of AI? Who else is well-positioned?
Why does Tom believe there is a correlation between those that fear monger around AGI and those that need funding for their businesses?

Transcript

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0:00.0	Venture Capital is it's like being a founder on antidepressants. You basically have all of the highs,
0:05.7	just not as high, all of the lows just not as low. There are basically three types of investors.
0:10.4	You've got smart investors that know they're smart and they're going to add value. Then you've
0:14.3	got passive investors that are going to stay passive and they're not going to get in the way. Both
0:18.6	of those are absolutely fine. You need to avoid investors that are passive or sometimes even dumb, but think they smart and actually
0:26.4	get to interfere. This is 20VC with me, Harry Stebbings, and today is a really special one for me
0:31.4	as I welcome one of my closest friends to the hot seat, Tom Hume. Now Tom and I have done more walks
0:36.4	around High Park than I care to remember, and he's one of the most special people in thisume. Now, Tom and I have done more walks around High Park than I care to
0:37.9	remember, and he's one of the most special people in this business. Tom is a managing partner of
0:42.2	GV, Google Ventures, and leads the European team. Today, GV has over 10 billion in AUM, and
0:48.4	Tom has led investments in the lights of lemonade, sneak, go cardless and currency cloud, and before
0:53.7	becoming a full-time venture investor,
0:55.6	Tom was one of Europe's most successful angel investors with a 20x TVPI track record. This show was
1:01.9	such a joy to do, and you can check out the full episode on YouTube by searching for 20VC.
1:06.6	But before we dive in, I want to talk about Cooley, the global law firm built around
1:11.2	startups and venture capital. Since forming the first venture fund in Silicon Valley,
1:15.7	Cooley has formed more venture capital funds than any other law firm in the world,
1:20.1	with 60 plus years working with VCs. They help VCs form and manage funds, make investments,
1:26.2	and handle the myriad issues that arise
1:28.4	through a fund's lifetime. We use them at 20 VC and have loved working with their teams
1:33.3	in the US, London and Asia over the last few years. So to learn more about the number one
1:37.9	most active law firm representing VC-backed companies going public, head over to coolly.com
	...

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