The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:58:56 · Jason Lemkin
[00:58:56] S2: I just think it's interesting because it it... Listen. This this structure is fading away a little bit in the politics aside in the current administration. It sure seems easier to get a quick deal done, a a fin or a listens lab pretty quickly. Right? So some of these issues, some of them are fading at the margin. But man, I don't know. Some of these deals sure feel like mergers and substance to me. So I think I think if one of these lawsuits wins, which even if one fails, another may well win. Right. I think this is a mergers and substance. I think these deals will die because they already have double taxation. They're already horrific from a double taxation perspective. Then add a whole set of risk and carve back for the employees we're leaving behind with the keys at Windsurf who will end up being the big winners and cognition, right? But it looked like they got left with the keys and a year of cash to work it out. I think it'll end these deals if there's significant legal risk here. It also feels to me a little like a safe note. You know, SAFE say, I know this sounds niche, SAFE say they qualify for a qualified small business stock because they're stock, but they're not. They're clearly not stock. And all these non merger documents say they're not mergers, there's licensing deal. I'm sure they say the more deals go by, the more clauses say it's not an acquisition but just because you say it's not a duck, it don't mean it's not a duck. I think some of these are
01:00:09 · Rory O'Driscoll, Jason Lemkin
[01:00:09] S0: Exactly, and that's exactly the case to lay it out, which is it was a de facto in acquisition and there's a whole bunch of things you have to do in an acquisition. So yeah, you're right. [01:00:18] S2: It's just in hindsight that we didn't think about this because they may end up being like, how the hell did we think we could do these deals? And just completely work around the... Not just part of the cap table, but the whole cap table. [01:00:28] S0: But it's it's forgiveness permission. I don't... We talked about it at the time. We don't like it. It feels unfair. But I think the pragmatic answer that I'm willing to bet... Grock was NVIDIA, wasn't it? Right? I'm willing to bet. Let's say they have to settle and they have to chuck in an extra $200,000,000. The real answer is my lawyers, my very smart lawyers came to me and said, I found a way that we can buy this company on a Sunday night and all the employees start on Monday morning and we have the IP versus this other way where we put in an application to the US government and close in nine months. And Jensen said, is there some risk? And they said, yeah. He said, I can live with it. Done. We did the deal. And then two years later, you go, yeah. There was a little bit of risk. It turns out it's 1% extra on the price. Here's $200,000,000.
01:00:28 · Rory O'Driscoll, Harry Stebbings
[01:00:28] S0: But it's it's forgiveness permission. I don't... We talked about it at the time. We don't like it. It feels unfair. But I think the pragmatic answer that I'm willing to bet... Grock was NVIDIA, wasn't it? Right? I'm willing to bet. Let's say they have to settle and they have to chuck in an extra $200,000,000. The real answer is my lawyers, my very smart lawyers came to me and said, I found a way that we can buy this company on a Sunday night and all the employees start on Monday morning and we have the IP versus this other way where we put in an application to the US government and close in nine months. And Jensen said, is there some risk? And they said, yeah. He said, I can live with it. Done. We did the deal. And then two years later, you go, yeah. There was a little bit of risk. It turns out it's 1% extra on the price. Here's $200,000,000. [01:01:10] S3: I think an additional that just isn't discussed enough is Muse was a phenomenal launch and has been a phenomenal reception. And I respectfully think DOS has been very unimpressive. I thought that demo was incredibly poor, very tech centric. How do I do flights for enterprise usage for an OpenAI employee? I thought it was out of touch, and I thought it was very underwhelming. Thoughts?
01:01:35 · Rory O'Driscoll, Harry Stebbings
[01:01:35] S0: Obviously, you've Muse for a while, you're right. Let's do Muse, they've killed it. And, you know, I I... As as someone who taught Ian that acquisition isn't working, it seems there's a whole bunch of gear grinding, I just gotta give the executors credit. Whatever he did, whatever between Zuckerberg and Alex Wang, they put their heads down and they ship product. And as the CEO on this call... Both CEOs on this call know better than me, that cures everything. They ship the killer product. They launched it full on. They resourced it with compute. They kicked ass. You know? And it's good. I mean, I'm going to New York this week. I'm pay... It's real fun. You do instinct and you muse, and you kind of check on them and see who's winning. It's kind of a bit of a geeky joy, but there you are. They're, you know, absolute... Let's use the word frontier, state of the art. This is as compelling as any freaking start up. You guys have muse nailed it. Anyway, conversely, was trying to figure out dots today. I wasn't quite sure what it is even at the end of it. I went and looked at in anticipation of the program here, I went and looked at the whole online demo day thing, and I'm not quite sure I got it yet. I see where spaces is going, but yeah, it's not nearly as cool. [01:02:37] S3: And so you are a thirty year venture investor, Rory. How do we feel about America adopting this?
01:02:37 · Harry Stebbings, Rory O'Driscoll
[01:02:37] S3: And so you are a thirty year venture investor, Rory. How do we feel about America adopting this? [01:02:43] S0: I don't know. I'm not gonna be as opinionated as that. I wouldn't... I'm I'm not a product guru. I'd like to hear from these guys. But my point is I wanted to celebrate the good, because in the past, I'd been a little cynical of the meta thing. They nailed it. I wanna celebrate the good stuff. All I can say on the openai. Stuff is I'm still trying to figure it out. So, Jason, did you did you turn it on? Did you try
01:03:03 · Jason Lemkin
[01:03:03] S2: to help? Listen. I don't I don't disagree with Harry's point that, like the consumer PR element was definitely underwhelming considering the MuseBuzz, which I modestly contributed to. But I think it's because the initial point of Dots is that it integrates with Codex and can work as a twenty four hour coding agent. And one of the annoying things and one of the things that it's under discussed that actually a Replit or a Lovable did well in the early days is they could be on all the time, At least sort of, sort of. But it's pretty annoying to you can't really keep Claude Code or Codex going twenty four hours. That's why OpenClaw took off and others. I'm simplifying a lot of stuff. Now everyone has a twenty four hour persistent agent that can work with Codex if nothing else. So I want to give it thirty days and see what developers do for real, right, with the persistent agent optimized around codecs before giving up on the fact that maybe they weren't as excited about booking my business class tickets to Palm Beach over the holidays as other folks were. It could end up being the bigger win and in a sense, it's almost guaranteed to win in that sense, right? If it's sort of the persistent extension of Codex and building on the OpenAI stack, it almost can't lose unless they stop developing on it. But maybe it's never that consumer y. Maybe it's just a nerdy product, and like like Mongo, it's okay. Like, you can make money in these nerdy products, can't you Dev? It's... There's money to be made. Let's view it from the developer lens and give it ninety days and see what cool stuff gets built.