The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:39:18 · Harry Stebbings, Jason Lemkin
[00:39:18] S2: I saw that Michael Grinich post about this sixteen hours ago, but tell everyone what this is. [00:39:23] S0: ARDEX, we should be scared about. ARDEX is initially well regarded. It's only like a couple months old. A Chinese open source pen test solution to penetrate test applications. We all need pen testing. We always needed it before. We certainly needed an agentic area where everyone from Binance to the rest of world is being breached. We're all being breached. All the refrigerators in Europe are going down because they've been breached. Black October was much blacker than we made it look. And so some really smart developers, just a couple months ago in China built an open source thing, great, so it's free and you could hook it up to your deep seek and your other LLMs and it will just try to hack you. And this is what you're supposed to do. You're supposed to hack yourself, but it became very easy to turn it around and just attack other folks with agents. It became... It was flipped around and it's become one of the the greatest threat. And a lot of folks are saying, well, could always you could always do this, but now you can do it with LMs at scale. You can just tune it against anybody you want.
00:39:23 · Jason Lemkin, Rory O'Driscoll
[00:39:23] S0: ARDEX, we should be scared about. ARDEX is initially well regarded. It's only like a couple months old. A Chinese open source pen test solution to penetrate test applications. We all need pen testing. We always needed it before. We certainly needed an agentic area where everyone from Binance to the rest of world is being breached. We're all being breached. All the refrigerators in Europe are going down because they've been breached. Black October was much blacker than we made it look. And so some really smart developers, just a couple months ago in China built an open source thing, great, so it's free and you could hook it up to your deep seek and your other LLMs and it will just try to hack you. And this is what you're supposed to do. You're supposed to hack yourself, but it became very easy to turn it around and just attack other folks with agents. It became... It was flipped around and it's become one of the the greatest threat. And a lot of folks are saying, well, could always you could always do this, but now you can do it with LMs at scale. You can just tune it against anybody you want. [00:40:14] S1: So so they originally built us defensive and... Yes. Evan said, oh my god. This is a pen testing tool. Yeah. Makes total sense. It's that... It'd be basically... Yeah. It's like the guns don't kill people. Bad people with guns kill people. You built a gun, you hoped it was in good people's hands, and now it's in bad people's hands that are killing people. [00:40:29] S0: It worked... Seemed to work great at first, right, until you turned the gunner out.
00:40:29 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[00:40:29] S0: It worked... Seemed to work great at first, right, until you turned the gunner out. [00:40:33] S1: It's probably hard to overstate the cyber dynamics of the next twelve months. You're right. It's one of those stories. You never cover it on a daily basis, but you are. At some point, something really weird is going to happen. You're going to go, Come on, guys. We should have seen that. You know, the entire US Fed wire goes down for a day, and we're like, we can't move money. [00:40:51] S2: Yeah. And we joked about the refrigerators in Europe, which for people that don't know, there was a hack, which basically meant someone could turn up the the temperature on refrigerators, and they did to 50 degrees. Now it was luckily rectified, and the frozen peas were saved, which is of great relief to everyone in Europe. But you could see this being much more mission critical things like traffic lights or, like, heating facilities or you name it. So it is it is quite alarming. Ding ding ding. Mister Lampkin, we had quite a few rounds, and it's your turn to bring something to the IC this week. Goodness. [00:41:24] S0: Can I take a break for the rest of the year? We've been busy. We've deployed so much. We've got that for three funds this year. [00:41:29] S2: No. No. No. We're Andreessen. We just raised a big ass fund, and so we've got plenty more for you to go through. Jason, we're a deployment machine. [00:41:36] S0: Which company [00:41:37] S2: are you going to take to IC this week? Serval, Cognition, Baseten?
00:41:37 · Harry Stebbings, Jason Lemkin
[00:41:37] S2: are you going to take to IC this week? Serval, Cognition, Baseten? [00:41:41] S0: Well, listen. I mean, Harry, as you know, much much as, in many ways, Windsurf team lamented having to sell out to Google for just a few billion. The Crosby team's gonna gonna lament selling to to SpaceX for only 60,000,000,000. Right? Cognition at 80,000,000,000, it seems market correct. Now to get to a 10x with dilution, a trillion dollar valuation, I start to get nervous with the latest round from OpenAI and Anthropic. I do get worried that fundamentally it only owns so much of its own IP, but geez, I don't know if you saw the last Q3 of Anthropic. Like the one thing that is working that never stops working is coding agents. And Cognition has a bunch of the field open to it. They made a lot of their own luck. I don't know if the original version of Devin, when I brought it to committee, you know, a year and a half ago, I don't know that that product worked. They lucked out buying the windsurf team. They lucked out buying IP. They lucked out from open weights. But this is something with the kind of momentum that I think we can't sit out. And we have a little bit of money left in the fund, couple billion, and we need to deploy the next one. I say we close out the last fund with $2,000,000,000 in Cognition. We're already up 5X on paper. We can't lose. We might as well put the last $2,000,000,000 in Cognition. And I say if we get a little recycling before the round closes, we toss it in two.
00:42:54 · Rory O'Driscoll, Harry Stebbings
[00:42:54] S1: Interesting. Just for the people listening, because it wasn't obvious, that was a much better question than you normally ask, Harry. Because normally you say, here's a deal, Jason. Tell me why you should take it to committee. And honestly... And I respectfully, I said it's kind of stupid because all you're just saying is give me a sound bite. Right? The reason this was a good question, much more interesting, was because you have three deals in front of us. And it's worth pointing out to the listeners what they were. Three really amazing companies. You were basically asking Jason to pick between Baseten at 30,000,000,000, up 2x from June, an inference company, Cognition at $70 to $80,000,000,000 up from $48,000,000,000 in September and Serval at $3,000,000,000 up from $1,000,000,000 in December. Three different companies, very different businesses. One's an inference provider, one's a coding agent, and one's a very hot next generation AI app in the ITSM space. So three different businesses, all of whom have had around and are getting a second re up within this twelve month period. So as I say, because it forces Jason to choose, that's a much more interesting question, if you know what I mean, than just tell me nice things about this company. [00:44:00] S2: For the editors, can we please cut that segment? That's the first time that Rory has actually congratulated me on the [00:44:06] S1: It's okay because I think it happened by accident. [00:44:08] S2: I'm gonna play that to myself later just to give myself more confidence.
00:44:08 · Harry Stebbings, Rory O'Driscoll
[00:44:08] S2: I'm gonna play that to myself later just to give myself more confidence. [00:44:12] S1: But actually, genuinely, it really was a super interesting question. I kind of... So would you like to do an inference provider at 30,000,000,000, a coding agent at 80,000,000,000, or a IT AI app in ITSM at 3,000,000,000? I mean, could you... [00:44:27] S2: No shit. Which would you pick? Serval. Are you kidding me? [00:44:32] S1: Okay. So you do... You think your upside in Serval at 3,000,000,000 is better than your upside at Cognition at 70,000,000,000.