The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:00:00 · Jason Lemkin, Rory O'Driscoll
[00:00:00] S0: Agents are an existential risk to DoorDash because their number three competitor is nobody. All these app platforms have a risk of slight disruption from agents. [00:00:08] S1: Kalshi is a money deal. If you want revenue velocity right now, nothing gives you revenue velocity like inference. Physical intelligence, company with relatively little revenue is worth 20,000,000,000. Dropbox, company with billions of revenue ain't worth a lot there. It just shows revenue multiples don't get you anywhere.
00:00:23 · Harry Stebbings
[00:00:23] S2: This is 20 VC with me, Harry Stebbings. It's the best show of the week. It's Rory O'Driscoll. It's Jason Lemkin coming together to discuss the biggest news in tech. Today, we have OpenAI's big fundraise, $1,250,000,000,000 price down from 1.4, apparently only $11,000,000,000 committed. Sad face. Then we have the AI trade hitting a wall. Alphabet, $500,000,000,000 off the market cap overnight. Intel falling 29%. Then we have DoorDash buying Instacart for 17,000,000,000. Baseten's new round. We have Physical Intelligence's new round. We have Serval's new round. God, the show just keeps on coming in terms of these venture financings. This and so much more in the show today. But before we dive into the show today, Base44 is one of those products I used and I just thought straight away, man, I wish I'd had this when I started Twenty VC with $50 and no contacts in Venture. I wanted to see what it could do, so I built a guest research hub for the show. Upcoming guests, company notes, previous interviews, sponsor contacts, follow ups, all in one amazing location. I described it in plain English. A few minutes later, I had the product open in front of me. Database, login, back end, and hosting already handled and just all in one. It made it so easy. And that's what I loved. I didn't write a long spec. I didn't stitch five different tools together. I built the thing, and I started using it. For any founder listening, that's the point. The faster you turn an idea into something real, the faster you launch. Apps, dashboards, internal systems, AI agents, whatever you need to build, Base44 gets you there. Go to base44.com/20vc. That's base44.com/20vc. While base 44 helps you build, AlphaSense helps you find answers really, really fast. Quick one for anyone doing diligence in venture right now. AlphaSense just launched SuperAnalyst, and it's one of the more genuinely useful AI products that I've seen come out of this space. It's an always on agent that works like a power user inside AlphaSense, but on your behalf. So check this out. It pulls from over 500,000,000 premium sources covering both public and private companies. That's filings, earning calls, broker research, expert transcripts. And it doesn't stop when you close your laptop, point it at a sector, a company, a thesis you're tracking, and it keeps working in the background.
00:02:44 · Harry Stebbings
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00:04:25 · Rory O'Driscoll, Harry Stebbings
[00:04:25] S1: You have now arrived at your destination. [00:04:28] S2: Boys, we are back. Luckily, there has been a huge amount happening in the last seven days. So let's start with OpenAI. Its valuation got cut from 1,400,000,000,000 to 1,250,000,000,000, and the round reduced from 30,000,000,000 to 20,000,000,000 with only about 11,000,000,000 committed. As a result, everyone is going, oh, no. This is further examples of the AI wave cracking. How do we think about that? [00:04:55] S1: I would dispense with the whole AI wave cracking narrative. I think people are trying to extrapolate their desires, wishes, whatever, prejudice and biases on the story. It's as simple as the other company is bigger, growing faster, profitable, and about to go public, so you can buy it liquid at 1.5 to 2,000,000,000,000. What would you pay for the smaller company growing less quickly, still losing money that's illiquid? Answer less than 1,500,000,000,000. How much less? Well, that's what they're figuring out. So it's utterly not surprising. It is as simple as that. No projection about AI, positively or negatively, just as two securities are gonna be sold in the next two months. And which one do you wanna buy? [00:05:32] S2: But Jason told me last week that it was the most underappreciated.
00:05:35 · Jason Lemkin
[00:05:35] S0: I think it is. It just may... Maybe it needs to drop a little more. Well, don't forget. Listen. There's gonna be bumps. Right? And broadly what we call AI stocks fell 5,000,000,000,000 last week, right? Now maybe this AI round was the week or two before that. There's obviously a temporal gap, but when we're seeing this level of volatility and listen, I'm surprised that folks didn't talk more about it. I mean, Anthropic had a down quarter from net new revenue. It was down in this last quarter in terms of net new bookings over Q2. There should be some nervousness. Maybe it would fill up at a trillion. Maybe I'm glad we didn't put in our bid until the end, Harry. That second tranche will be lower than the first. It makes sense there should be a little bit of wobbling at the moment. The stock market's down. We could argue, maybe Rory will challenge me. We can argue that Anthropic's last quarter wasn't quite as crazy as some folks might thought. There should be wobbliness and maybe it doesn't matter. It matters where it'll be in twelve to eighteen months. But it makes sense there's wobbliness. There's wobbliness in the debt markets. CoreWeave debt is paying 15%. That's wobbliness. There's Broadcom having, I know Rory didn't kind of took me to task on this last week, but Broadcom having to guarantee Anthropic's debt is a little wobbly. It's just wobbly And IPOs are always thin and wobbly. No matter how many times we say they get oversubscribed 20x, so many of them are just a little wobbly going into it.
00:06:50 · Rory O'Driscoll
[00:06:50] S1: Again, I didn't take that off. I think all those things are true. Think it is. The way I think of it, there's a lot of pushing, shoving. There's a lot of price discovery, risk discovery going on on the supply side of the AI trade. You know, what price do you need to be paid to lend money to CoreWeave? What price do you need to pay to buy OpenAI in the private markets when you get in the public markets? Agree to all that stuff is going on. And I think when you go from assumed euphoria regardless to tempered euphoria, there's this kind of price discovery process on the way. I think it's fair, Jason. Those things are all true. As I say, my point is merely if the other side of the equation, the demand side holds up, all these things will be forgotten in six months. And if there's a problem on the demand side, on the growth side, then all these things will be straws in the wind of a very significant change. That's my point. When you zoom out to what matters, if the demand for AI is anything like some of the bulls would say, then let's talk about the core weave bonds, because everyone's like, Oh my God, the bonds are going to go. If the demand for AI is as strong as people think, then everyone's gonna need every damn computer, GPU, and data center they want, and those bonds will be money good because someone will buy the damn company. There's just no risk of that. If the demand is not there, then the first person is gonna suffer when the demand is not there. It's not gonna be Google or Amazon, whoever, big ass balance sheet. It's gonna be the guys like CoreWeave, and that's where the problem will come, and that's why there's some risk in it. So that's all that's going on.