The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:54:52 · Rory O'Driscoll, Jason Lemkin
[00:54:52] S1: But I think, I'm sorry, I'm just going to push again because I'm grumpy. That's exactly the Crosby argument, which is it's less likely to have that kind of mistake if you've got AI, like for the standard stuff. [00:55:03] S0: Okay, well, me flip it around. Let's imagine I go to Crosby and I make $170,000 a year and I get 0.01% of the company for the IPO that I'm not even sure is going to happen. And then I can go to Weil Prime and make two fifty. And if I'm actually good, make every great partner now makes $10,000,000 and every good... The entry level ticket at Weil was over 200,000 for an associate for a soul crushing horrific job bind you. Like I get the Crosby. My only point is, and I'm not being critical, I haven't talked to them, I'm not convinced this is as stable as a lot of VCs might hope it would be. It's too I human
00:55:03 · Jason Lemkin, Rory O'Driscoll
[00:55:03] S0: Okay, well, me flip it around. Let's imagine I go to Crosby and I make $170,000 a year and I get 0.01% of the company for the IPO that I'm not even sure is going to happen. And then I can go to Weil Prime and make two fifty. And if I'm actually good, make every great partner now makes $10,000,000 and every good... The entry level ticket at Weil was over 200,000 for an associate for a soul crushing horrific job bind you. Like I get the Crosby. My only point is, and I'm not being critical, I haven't talked to them, I'm not convinced this is as stable as a lot of VCs might hope it would be. It's too I human [00:55:38] S1: agree. There are issues with the human plus AI delivery model, I have questions on that. But I'm just going to push back on your comment on why would I go to... That's easy, because for every lawyer who wants to be a rainmaker and work 20 fourseven and make $10,000,000 there's also lots of lawyers who are like, I want to do forty hours of good law. I don't want to be a rainmaker. I don't like that. I'm just a good lawyer. And I want to then go home. Maybe I'm dealing with kids. Maybe I'm dealing with a parent. Maybe I just want to take it easy. There are lots of people for whom being a lawyer, a well compensated, nice upper middle class salary, working for someone like Crosby, doing forty hours a week with control of your own time is a perfectly good product. So I don't have a... They'll be able to get lawyers, right? [00:56:16] S0: I just don't know if I can see a $10,000,000,000 outcome here. [00:56:19] S1: Different question. Sorry,
00:56:19 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:56:19] S1: Different question. Sorry, [00:56:21] S0: don't think I can take this to ICE. It's a lot that has to happen for the corporate company, its corporate affiliate to be worth $10,000,000,000 because it has to suck so many billions of years of profits that the lawyers could otherwise take home as partners. [00:56:33] S1: That I agree with. I think that there will be a coterie of law firms five years from now that are focused on the Crosby kind of work. Crosby will obviously be one of them. They'll do really well. We like the space. But I agree. The question is, if you look at the billings of Weil, Gotshal, as an example of American law, if 70% of the dollars come from the high rainmaker, irreplaceable by AI stuff, and all you've got left is a 30%, and then you have to have the value of that to get the business, then you're right. Then you're left with the low margin parts of the business. So I do agree. That's the question is how big can it be? But whether you can build a business there, absolutely, I think you can. [00:57:08] S0: Yeah, you can build a small business for sure. It's just for our IC 10,000,000,000 is the lowest possible exit where we're allowed to bring [00:57:14] S1: it to IC. Agreed, as far as I can see, [00:57:16] S0: 2026, boys. Yeah. [00:57:18] S2: 10,000,000,000? I thought... Is 10,000,000,000 the round size?
00:57:18 · Harry Stebbings, Jason Lemkin
[00:57:18] S2: 10,000,000,000? I thought... Is 10,000,000,000 the round size? [00:57:21] S0: Look. Rory and I are a little more conservative. We're okay with a $10,000,000,000 exit as long as the entry is appropriate. We can't make the numbers for the whole fund work, but we can make our own little slice of the fund. We can we can hit our individual six x goals with those exits. [00:57:34] S2: Guys, what what have I missed? Creandum, I think probably the most exciting fund that Europe's produced in the last three years, raises seven fifty. Physical Intelligence in talks to raise at a $20,000,000,000 valuation. They've had room and acquisition talks in the last six months as well. That's with Avenir and Lux. Dropbox cuts 9% of staff and CTO leaves.
00:57:55 · Rory O'Driscoll
[00:57:55] S1: I wanna think, first of all, I... Unlike the last group of three, these things are like literally a grab bag of shit. 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. Right? It's all about the future. These are just non comparable things. I mean, look, on the physical intelligence thing, yeah, I think robotics is going through an amazing explosion. We have a small investment in... I think these next generation models are amazing. When you see the demos, I've done a lot in robotics over ten plus years. When you see what the new models can do, it is truly amazing. You go, Wow, the level of dexterity, the old models just don't have that. And I think it's just a real breakthrough moment. So two other comments though, I think deployment of robotics is just way longer than deployment of classic LLMs, and people forget that. I saw someone, somebody's coming to starting to price now on an hourly API basis, which makes sense. So you pay, if you're replacing, maybe pay $3 an hour for access to the model. And then there's only 300,000 robots in The US. So to make the math work at kind of 20,000,000,000, which is where PI is, you got to have a shit ton more robots. So the technology is amazing, the business model's got a lot of developing to do, but I think the last sentence you said is the real one. I think all the big foundation models company buy one of these things. And I think the reason is, either they build one or buy one, I think I've said this before, the really simplistic reason they do it is this: I'm writing my prospectus. There are 81,000,000 knowledge workers in The US, we have an LLM, and we sell to them. It's a great business. There are 87 physical workers in America, not knowledge workers, working in blue collar or physical world jobs. Now we have a robotic foundation model, we can address them. I've doubled my TAM. I mean, it's a bit simplistic, but I think the lure of robotics for the foundation model companies and the desire to say, Oh, we do robotics too, I think means that there could well be some acquisitions in the space. It's one of those markets... It goes back to something Jason said.
00:59:46 · Rory O'Driscoll, Harry Stebbings
It's one of those markets where you can kind of say to yourself, If you just try and be logical about the steps between here and deployment, you probably get caught up in the minutiae, and I'm often guilty of that, where it's going to take a long time, customers are going to be slow, BMW is not going to roll out 100 humanoids in a week. But if you say to yourself, the technology capability is amazing, the teams are amazing, we love our position in generalist, you kind of go, this is going to change the world. Somehow you'll make money out of it. And that's probably the investment thesis. [01:00:15] S2: Jason, any final thoughts to you on those?