20VC: NEW FORMAT: Mega Funds Will Come Back, Why Markups Have Corrupted VC, Why RIFs Should Always Be An Embarrassment To SaaS Founders and Why Pitching is BS and Fake with Jason Lemkin and Rick Zullo
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 23 August 2023
⏱️ 54 minutes
🧾️ Download transcript
Summary
Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds focused on SaaS. In the past, Jason has led investments in Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few. Prior to SaaStr, Jason was an entrepreneur, selling EchoSign to Adobe for $100M where it is now a $250M ARR product.
Rick Zullo is the Co-Founder and General Partner at Equal Ventures. Prior to co-founding Equal Ventures, Rick was an investor at Lightbank, Prior to Lightbank, Rick worked with investment firms Foundation Capital, Bowery Capital, and Lightview Capital.
In Today's Episode We Discuss:
1. Why Venture Capital Needs It's Jerry Maguire Moment:
- Why does Rick believe that VC needs it's "Jerry Maguire" moment?
- What needs to change? What needs to stay the same?
- Why does Jason believe we will see even more mega funds in 2024 and 2025?
2. Unicorns are So 2019:
- Why does Jason believe that "unicorn investing is mostly dead for bigger funds and none of them are looking for a $1BN outcome anymore?"
- Why does Rick believe that multi-stage fund investing at seed simply does not make sense?
- What does Rick believe many founders need to know when they take multi-stage money at seed?
- Of the over 1,000 unicorns created over the last few years, how many of them do Rick and Jason feel are actually unicorns today?
3. Efficiency and Growth: We Need it All:
- Why does Jason believe, as a founder you should be embarrassed if you ever had a RIF (reduction in force)?
- Last year many founders got a pass on growth as they were more efficient. Is that pass over? Do they need to get back to growth?
- What is the single biggest reason that companies do not scale from seed to Series A?
- What happens to the many companies with years of runway but no product-market-fit?
- Are we entering a new age of efficient company building or will we go back to high burn environments and excessive spending?
4. Entering the World of LPs:
- If Jason and Rick were to advise LPs today on how much to discount the value of their venture books, what advice would they give?
- How have markups completely corrupted the venture ecosystem?
- How does LPs being incentivized by paper-marks make the industry even more screwed?
- What are the single biggest misalignments between GP and LP?
Transcript
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| 0:00.0 | I think there will be a resurgence of mega funds in late 2024 and 2025. |
| 0:04.5 | There's so many stories of how hard it is to raise a fund and how LPs are cutting back. |
| 0:08.4 | It doesn't last. |
| 0:09.4 | It can't last, right? |
| 0:10.3 | When times are good, money will re-flood into this. |
| 0:14.0 | I think there's two ways to build a unicorn plus. |
| 0:16.6 | You can stair step it or you can swing for the fences from the start. |
| 0:20.2 | I was taught this simple |
| 0:21.0 | thing are you confident the next round will be three x this valuation i mean as you can hear from |
| 0:25.6 | that this show has so many bangers in it this was so much fun to do it's a new format jason |
| 0:30.7 | lemkin returns he is always such a great guest on the show and i have to say i just love the |
| 0:34.9 | discussions with him joining me and jason's day I said, in this new format where we have three people on the show is Rick Zulo at Equal Ventures. |
| 0:42.3 | And I really want to hear your thoughts and feedback on this new format. |
| 0:45.3 | You can let me know on Twitter at Harry Stebbings. |
| 0:47.3 | I always loved to hear your thoughts there. |
| 0:49.3 | But before we dive into the show today, you know all those mind-numbing tedious tasks that seemingly take up half your day. |
| 0:55.1 | Well, Coda is here with their new AI-powered work assistant that helps you and your team, |
| 0:59.7 | not just finish tasks, but make progress, so your product team can bring a feature to market faster |
| 1:04.7 | by using Coda AI to tag customer feedback, draft PRDs, suggest target audiences, summarizing product discussions and more. |
| 1:12.6 | Your sales team can engage more customers by bringing in data from sources like Salesforce and |
| 1:17.3 | then use Coda AI to suggest action items, meeting agendas or lead scores. And your marketing team |
| 1:23.1 | can drive an impactful launch with Coda AI summarizing user insights, creating briefs generated |
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