Misaligned Incentives Between GPs and Founders with Altimeter's Jamin Ball | E2045
This Week in Startups
Jason Calacanis
4.4 • 1.3K Ratings
🗓️ 15 November 2024
⏱️ 62 minutes
🧾️ Download transcript
Summary
This Week in Startups is brought to you by…
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Todays show:
Altimeter's Jamin Ball joins Alex Wilhelm to discuss VC-founder dynamics, fund returns, rapid fundraising, and its impact on M&A. They cover public vs. private valuations, startup liquidity, AI's influence, SaaS trends, and Jamin’s outlook on IPOs and exits.
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Timestamps:
(0:00) Jamin joins Alex to kick off the show
(6:30) Alignment of incentives between VCs and founders
(10:25) LinkedIn Jobs - Post your first job for free at https://www.linkedin.com/twist
(11:54) Venture capital allocation demand and its impact
(15:55) Comparison of returns between small and large venture funds
(21:54) Beehiiv - Get 30 days free and 20% off your first 3 months at https://www.beehiiv.com/twist
(23:23) Power laws in startups and venture capital's impact
(24:19) Effects of rapid fundraising cycles on founders
(31:33) CLA - Get started with CLA's CPAs, consultants, and wealth advisors now at https://claconnect.com/tech
(32:59) Raising large rounds and long-term commitments
(35:15) Venture capital's influence on startup M&A activity
(37:38) Public vs private market valuation disparities
(39:24) Future of startup liquidity and exit scenarios
(46:06) Proposals for realigning venture capital funds and founder incentives
(47:41) Impact of AI on startup growth and venture capital
(52:20) SaaS multiples and cloud software market analysis
(57:43) Software spending trends and startup optimism for 2024
(1:00:15) Procurement scrutiny in startup budgets and market differentiation
(1:01:17) Promising companies and Jamin Ball's investment outlook
(1:01:28) Expectations for IPOs and startup exits in the coming year
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Mentioned on the show:
Join Jamin’s substack here: https://cloudedjudgement.substack.com/
Jamin’s article: https://cloudedjudgement.substack.com/p/clouded-judgement-102524-misaligned
Check out Altimeter: https://www.altimeter.com/home
Follow Bill Gurlery on X: https://x.com/bgurley
Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com
Check out the TWIST500: https://www.twist500.com
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Follow Jamin:
LinkedIn: https://www.linkedin.com/in/jamin-ball-49366137
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Follow Alex:
LinkedIn: https://www.linkedin.com/in/alexwilhelm
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Follow Jason:
LinkedIn: https://www.linkedin.com/in/jasoncalacanis
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Thank you to our partners:
(10:25) LinkedIn Jobs - Post your first job for free at https://www.linkedin.com/twist
(21:54) Beehiiv - Get 30 days free and 20% off your first 3 months at https://www.beehiiv.com/twist
(31:33) CLA - Get started with CLA's CPAs, consultants, and wealth advisors now at https://claconnect.com/tech
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Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland
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Transcript
Click on a timestamp to play from that location
| 0:00.0 | For venture capitalists to get rich, you need big company exits. For founders to get rich, |
| 0:04.4 | you have equity in one company. There's one way for founders to get rich, which is big company exits. |
| 0:09.3 | And so those paths were aligned, right? When founders got rich, venture capitalists got rich. |
| 0:14.5 | And more importantly than that, it was kind of the only way to get rich. It's not to say that |
| 0:17.9 | investors and founders now have opposite incentives, right? It's not like |
| 0:22.7 | your failure leads to my success and their perverse incentives. It's just more to call out, |
| 0:27.2 | the outcome is irrelevant, and now it's how can I maximize my AUM, how can I maximize my deployed |
| 0:32.4 | dollars? But that part of it can lead to suboptimal outcomes and experiences for founders. |
| 0:38.8 | And we can talk about like, hey, how can these incentives of just deploy, deploy, deploy? |
| 0:43.8 | How can that lead to outcomes for founders? |
| 0:46.2 | And what are the implications for founders that they might not necessarily be thinking about |
| 0:50.3 | before going into a fundraising process? |
| 0:52.9 | This week in startups is brought to you by LinkedIn Jobs. |
| 0:57.2 | A business is only as strong as its people and every hire matters. |
| 1:01.2 | Go to LinkedIn.com slash twist to post your first job for free. |
| 1:05.1 | Terms and conditions apply. |
| 1:06.7 | Beehive. |
| 1:07.6 | Power your newsletters with AI tools, referral programs, and network features all in one |
| 1:12.8 | platform. Get 30 days free and 20% off your first three months at Beehive.com slash twist. And |
| 1:20.0 | CLA. Innovation takes balance. CLA's CPAs, consultants, and wealth advisors can help you get |
| 1:26.9 | from startup to where you want to |
| 1:28.5 | end up. Get started now at clyacconnect.com slash tech. |
... |
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