20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 11 August 2023
⏱️ 54 minutes
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Summary
Sam Lessin is a Co-Founder and Partner @ Slow Ventures with a portfolio including the likes of Airtable, Robinhood, Slack, Solana, PillPack and many more unicorn companies. Prior to Slow, Sam was a VP Product at Facebook having sold his company to Meta.
Frank Rotman is a founding partner of QED Investors, one of the leading fintech-focused venture firms investing today with a portfolio including the likes of Klarna, Kavak, Quinto Andar, Credit Karma and more. As for Frank, prior to QED, Frank was one of the earliest analysts hired into Capital One and spent almost 13 years there helping build many of the company’s business units and operational areas.
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.
In Today's Discussion on Why Seed is Broken We Discuss:
1. The Seed Model Was Broken and What Comes Now:
- Why does Sam Lessin believe the model for seed of a "factory line" was broken?
- What does he believe will replace it?
- Why does Jason Lemkin argue that this might not be the case for SaaS and enterprise?
2. Round Construction: YC, Multi-Stage Funds and Party Rounds:
- Why does Sam Lessin believe we have seen the end of party rounds? Why does Jason Lemkin disagree and we will see more than ever?
- Why does Sam Lessin believe the factory model of YC churning out companies is over? Where does Jason Lemkin believe the value lies in the YC model?
- Will the multi-stage funds remain in seed? How has their entrance and deployment changed the seed market?
3. VC Value Add at Seed: Is it BS?
- Why does Jason believe all talent arms in venture firms have failed?
- Why does Sam believe that no VCs provide value?
- Do the best founders really need help? Why do Jason and Sam disagree?
4. What Happens Now:
- Why does Jason believe that every manager can write off their fund from 2021?
- Who will be the winners in seed in the next 10 years?
- Why does Sam believe if you want to bet on AI, just bet on Meta or Microsoft?
- What will happen to the many companies with no PMF but 10 years of runway?
Transcript
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| 0:00.0 | The seed deals that have mattered have always been the ones that were hardest to package. |
| 0:06.1 | They were not on the factory line. |
| 0:07.6 | I think the most depressing thing in the world is not being wrong. |
| 0:10.1 | It's being right and not making money. |
| 0:11.7 | The great thing is everyone gets to write off their 2021 fund, right? |
| 0:14.8 | The LPs aren't even holding it against VCs anymore. |
| 0:17.4 | Welcome back. |
| 0:17.9 | This is 20 VC with me, Harry Stebbing. So following the massive success of our show with Jason Lemkin on Wednesday, if you haven't listened to that, it's |
| 0:24.5 | incredible, the best explainer on the state of the market stay. But I thought we'd mix it up. I |
| 0:28.7 | thought we'd do a roundtable. I thought we'd bring three incredible minds conversationalists together |
| 0:33.7 | for what is a great, great discussion. So today we have Sam Lesson at Slow Ventures, |
| 0:39.1 | Jason Lemkin at Saster, and Frank Rotman at QED, discussing the state of seed today and where it |
| 0:44.8 | goes from here. This is an incredible discussion. It's a new format. I want to hear your thoughts on |
| 0:49.4 | the format. Let me know on Twitter at Harry Stebbings. For a little contest on the guest today, |
| 0:53.9 | Sam Lesson is the co-founder and partner at Slow Ventures. He's back in the lights of Airtable, Robin Hood, Slack, Salana and Pilpac. Frank Rotman is a founding partner of QED, where he's invested in the lights of Clana, Cavac, Credit Karma and more. And Jason Lemkin is the founder of Saster, where he's backed the likes of Algolia, |
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... |
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