20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

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

🗓️ 5 February 2024

⏱️ 89 minutes

🔗️ Recording | iTunes | RSS

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Summary

David Tisch is the Managing Partner of BoxGroup, one of the leading seed-stage investment firms of the last decade having invested in over 500 seed-stage startups, including Plaid, Ro, Ramp, PillPack, Amplitude, Stripe, Warby Parker, Harry’s, Flexport, Classpass, Airtable and more.

Terrence Rohan is the Managing Director @ Otherwise Fund, a fund that discretely empowers a network of today's top founders to make multi-stage venture investments. Terrence has invested in the likes of Figma, Hugging Face, Vanta, Notion and Robinhood to name a few.

In Today's Seed Investing Special We Discuss:

1. Is Seed Investing Now a Commoditised Asset Class:

Why does Dave Tisch believe seed investing will remain the most inefficient market? What does that mean for the future of returns at seed?
Why should you always pay up and be price-insensitive at seed rounds?
Why does David believe that no one is great at seed investing?
Why does David believe that you cannot index the seed market?

2. The Biggest BS Elements of Venture Capital:

Signaling: Why does David believe that the theory of signaling is total BS? Why does Terrence disagree and think it is valid and common?
Group Decision-Making: Why does Terrence believe that investing decisions should be made solo and groups merely encourage consensus decision-making?
Reserves: Why does Terrence believe reserves hurt DPI and are not good? How does David respond given his growth fund?
Venture Value Add: Why do David and Terrence think venture value add services platforms are BS and not worth it?

3. The World of LPs:

What is the single biggest misalignment between VCs and LPs?
What are David and Terrence's biggest pieces of advice for emerging managers today?
Should LPs expect depressed returns from venture as the asset class commoditises?

Transcript

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0:00.0	If you invest in the biggest, best companies, you will have great returns.
0:04.0	If the best company is going to raise a $10 million on $100 million seed round, and you say no,
0:11.0	but that turns out to be the $100 billion opportunity, that was a mistake.
0:16.0	Preserves and follow-ons, I think it actually hurts seed investing and it hurts seed investing in two ways.
0:21.3	No one expects the multi-stage fund to do all their series A's if they bought enough in the
0:26.0	seed. Signaling doesn't exist. This is 20 VC with me, Harry Stebbings, and today we have two of the
0:30.7	best seed investors joining me to discuss what is the state of seed today and what can we expect
0:36.2	for seed rounds moving forward?
0:38.0	In the blue corner, we have 20 VC veteran David Tish, managing partner at Box Group,
0:43.2	where he's invested in over 500 seed stage startups, including plaid, ram, stripe, flexport and more.
0:50.4	And in the red corner, we have Terrence Rohan, Managing Directorate Otherwise Fund.
0:54.7	Terrence has invested in the likes of Notion, Figma, Hugging Face, and many more incredible
0:59.1	companies.
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	...

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