20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 6 September 2024
⏱️ 61 minutes
🧾️ Download transcript
Summary
Nick Chirls is the Founder of Asylum Ventures, a new venture firm dedicated to the creative act of building companies; treating founders like artists, not assets. Asylum raised $55 million to invest $1-2 million in early-stage founders practising the art of making startups. Prior to Asylum, Nick co-founded Notation Capital, one of NYC's most successful pre-seed firms.
In Today's Episode with Nick Chirls We Discuss:
1. Why Venture Capital is Broken Today:
- Why is VC a ponzi scheme today?
- Why are most VCs sheep and have lost all creativity?
- Why are most investors today incentivised to get dollars out of the door and not to make great investments?
- Why are services functions within VC firms total BS?
- Why do no VCs provide significant enough value to a company that it is needle-moving?
2. How to Make Money in VC in 2024:
- What are the two ways to make money at seed in 2024?
- Why do founders in unloved markets care more than those in hot markets?
- Why will large institutions lose a ton of money investing in the large firms of today?
- Why does Nick believe VCs should always sell when their founders sell shares?
3. Lessons from 3xing a Fund on One Check:
- Why does Nick think about not purchasing preferred shares and only buying common shares?
- Why does Nick believe that investing in competitive markets is stupid?
- What does Nick believe are the conditions you must accept if you are doing a $5M on $25M seed?
Transcript
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| 0:00.0 | Your junior partner of like a VP at Goldman, they are compensated and promoted based on money velocity, not money returns. |
| 0:08.5 | What's an ideal company for that model? |
| 0:11.4 | It's a company that requires insane amounts of capital. |
| 0:15.4 | Like the foundation models are like a big, big VC firms dream. |
| 0:19.6 | They literally require billions and billions of dollars to go pie effectively |
| 0:25.6 | Navidio GPUs. |
| 0:27.6 | What is the business model for large venture banks? |
| 0:30.6 | Deployment. |
| 0:31.6 | Yeah. |
| 0:32.6 | Raise as much money as possible. |
| 0:33.6 | Get that money out the door as soon as possible. |
| 0:36.6 | Raise as much money again and rinse and repeat. |
| 0:39.1 | I mean, this is one spicy show today. We last had Nick Charles on the show nine years ago when he founded Notation. |
| 0:45.5 | Today, he's back with the announcement that he's founded another venture firm, Asylum Ventures, a 55 million early stage firm in New York, |
| 0:52.9 | that's really focused on treating founders like artists, |
| 0:55.9 | not like assets, and this show is spicy, why VCs are just like bankers, |
| 1:01.7 | why venture has become a Ponzi scheme, and how the mega firms ruin startups by funding |
| 1:07.6 | inefficiency and even encouraging it. There is so much good stuff in this one, |
| 1:12.4 | and it is not to be missed. But before we dive in, when a promising startup files for an IPO |
| 1:17.4 | or a venture capital firm loses its marquee partner, being the first to know gives you |
| 1:22.1 | an advantage and time to plan your strategic response. Chances are the information reported it first. The information |
| 1:29.1 | is the trusted source for that important first look at actionable news across technology and |
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