20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 20 September 2023
⏱️ 78 minutes
🧾️ Download transcript
Summary
Eric Paley is the Managing Partner at Founder Collective, one of the world’s most successful seed funds with investments in the likes of Uber, The Trade Desk, Coupang and Airtable.
Mike Maples is one of the OGs of seed investing. As the Co-Founder of Floodgate, he has backed the likes of Twitch, Okta, Lyft, Twitter and more.
Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds with a portfolio including Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few.
In Today's Episode on Is the Venture Model Broken? :
- Is the classic seed model dead? Can seed funds play in a world of $25M valuations?
- Why is having a firm grasp of the present the best thing an early-stage investor can have?
- Why does Mike Maples believe no company with true product-market-fit has ever failed?
- Why does Eric Paley believe "go faster" is the worst startup advice?
- Why does Mike Maples believe there is a direct relationship between price and risk?
- Why does Mike Maples believe that outliers by their very nature are lower priced?
- Why does Eric Paley not focus on ownership? Why can it be dangerous?
- What are the biggest risks for founders raising at valuations that are too high?
- Why does Eric Paley believe we will have the biggest chasm between TVPI and DPI in the prior vintage of venture capital returns?
- Why does Eric believe the majority of SPACs were BS and great companies can always go public?
- Why does Jason believe that if multiples do not reflate, the venture model is broken?
- Why does Jason believe we will see the biggest hiring spree in tech next year?
- How has illiquidity allowed Eric Paley to make some of the best investment decisions?
- What is Mike Maples biggest lesson from selling Twitter stock early at $1BN?
Transcript
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| 0:00.0 | The outliers usually start out at a low price because they're outliers, because they're non-consensus and right. |
| 0:06.2 | We do not focus on ownership. I think we've had a period of quite apathetic capital. |
| 0:11.7 | I would bet the last few years will be one of the biggest disconnects between TVPI and DPI for venture funds in venture history. |
| 0:19.4 | I actually don't think venture fully makes sense |
| 0:21.3 | in B2B at Co-I generally don't think it works. There are good times to be buyers in our industry |
| 0:25.8 | and there are good times to be sellers. Rarely is it both. This is 20 VC with me, Harry Stebbings, |
| 0:30.7 | and today we have a roundtable with the best seed investors of a generation. Eric Paley at Founder Collective, who's back the lights of Uber and |
| 0:38.0 | the Trade Desk. Then we have Mike Maples at Floodgate, who's invested in Twitter, Twitch and Lyft, |
| 0:43.4 | and then Jason Lemkin, with Algolia, Talk Desk and Salesloft, to name a few. This is such an |
| 0:48.5 | incredible discussion. I absolutely love doing these shows. I think you can hear my terrible |
| 0:52.9 | moderation, but also my passion when we do these roundtables. |
| 0:56.0 | Let me know what you think of this new format of the show on Twitter at Harry Stubbings. I love to hear your thoughts. |
| 1:01.0 | But before we dive into the show today, listen to this. |
| 1:05.0 | Mercury has been a breath of fresh air. |
| 1:08.0 | Getting started was maybe one of the most delightful onboarding experiences I've had. |
| 1:11.7 | Mercury is just so easy to use. The aesthetic of it is actually quite relaxing. For me, it was less |
| 1:18.3 | a choice and more finding a kindred spirit. Imagine feeling this way about business banking. |
| 1:25.1 | You could if you join more than 100,000 startups on Mercury, the powerful and |
| 1:29.8 | intuitive way for ambitious companies to bank. Start building momentum and leave the friction behind. |
| 1:35.6 | By visiting mercury.com forward slash 20VC. Mercury is a financial technology company, not a bank, |
| 1:43.0 | banking services provided by Choice Financial |
| 1:45.5 | Group and Evolve Bank and Trust, members of FDIC. |
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