The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:15:12 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:15:12] S2: incredibly nuanced commentary, by the way, from you [00:15:14] S0: on that. I was very impressed. The interesting thing for this, everyone's so biased on this issue. I've never seen more crap, more selfish takes on Twitter that are seen as generous. Like, I'm only a pure seed investor. I don't need pro rata. And then you see other folks who are like, this is the most important rights under the constitution of venture capital investing. You peel the layer back, everyone's biased in the answer they give. It's just, you can't get a straight answer on this. The only thoughtful answer I ever heard, the last time this issue came up a couple of years ago, I remember what Keith Rabois wrote, which was, I thought a simple answer. He's like, you could get rid of pro rata, but it's core to our business model as larger funds. Maybe it at Founders Fund at the time. Right. And he's like, I just have to pay a much lower price than worst case. Right. If I'm investing early with an expectation I can deploy a lot later, I'm comfortable overpaying in the early round for my pro rata. I'd have to pay like a half the price I'm paying otherwise. Are you comfortable with that founders and the crickets? No one set up, I'm willing to raise at half the price for no pro rata. [00:16:12] S1: Can value an... You're exactly right. Keith's right. You can value an option and deduct it from the price. You're exactly right. [00:16:17] S0: It has a value, right?
00:16:17 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[00:16:17] S0: It has a value, right? [00:16:18] S1: You know, and it is one point, as I said, and you said it, Jason, all the people, even the megaphones who are coming in saying, you guys should waive your rights, ain't fixing to waive theirs, which shouldn't be a clue about the real value thereof. Right? [00:16:31] S0: You wave, but I ain't waving mine. [00:16:33] S2: Moving swiftly on, we... I'm... I love the bromance and partnership that is Zuck and Alex Wang. I I just... It's like uplifting in ways that are cool to see together. [00:16:45] S0: I like how they match. That's my favorite part. The outfits match. [00:16:48] S2: Did you see Zuck drinking the Guinness in the cheeky pint? And then he pulls away, and it's, like, clear that he's never tried Guinness before, and he hates it. But Meta is back at the frontier with a new model, Muse Wonder, just shy of Opus 5.5 on Independent Index. Let's start there. I don't wanna add too much. How do we think about this, guys? Another meaningful movement from Meta into the model layer, even more pros for Zuck? It's a zero. [00:17:16] S1: It's a zero.
00:17:16 · Rory O'Driscoll, Jason Lemkin
[00:17:16] S1: It's a zero. [00:17:17] S0: Yeah. Because there's no API. We can't even use it. It's only for internal use by Meta. So who? This is the most performative eval I've seen to date of a, of a never ending spiral of performative evals. I'm not saying they're not nominally true. I'm not saying that you don't want to celebrate the team, congratulate the team. You do want to do it. Clearly the team has done good work at some level, right? For the show, I'm like, okay, look, I'll hook it up. You know? Oh, you can't use it. You can use it in Muse. So what's the point of a model that allegedly has parity for the same price? It's not even cheaper and you can't use. This is the height of performative evals. [00:17:55] S1: It's available in use code. It's set on an API as well. I didn't check the API. Are you saying it's not up yet? [00:18:00] S0: You can't put it into your own app.
00:18:00 · Jason Lemkin, Rory O'Driscoll
[00:18:00] S0: You can't put it into your own app. [00:18:01] S1: No. Okay, got it. That's a fair comment from a business impact, but nonetheless, you have to give them credit for getting, know, at the risk of sounding like someone we all know back in the arena, they were competitive early on with open weight, then they kind of faded back way to the back of the pack. And now they're upfront again, notably with closed source models. So we've decided that if we're going to spend $100,000,000,000 we at least be able to charge for the damn thing as the takeaway. And, you know, it'd be interesting to see if anything comes in the enterprise business, but at the very least, the Muse instinct war will now be powered by a super modern model. But, yeah, that's the takeaway. And, dollars 12,000,000,000 got you more than you thought a year ago. [00:18:39] S0: Yeah. And to the body language thing, got him a right hand man. [00:18:42] S1: Yeah. And great tweets.
00:18:43 · Jason Lemkin
[00:18:43] S0: That's what I saw on the cheeky pike thing. I think Zuck's had a lonely stretch. Think it's been a tough job. No. It's hard being a bound CEO. It's been lonely. And I think it's been lonely since the beginning. It's been lonely before the IPO. I think he had Sheryl Sandberg back in the day. He's had others, but clearly he, you know, having it's not easy to pay someone $10,000,000,000 and have them stick around and work that hard. Like, it's easier said than done. And it's even harder to find someone you can truly trust in that body language. It's key to making this work. Right? I know he's got all the other folks, the Nat Freemans and the the Daniel Grosses and all these guys, but hard to get a right hand person. It's it's hard. So I think that's that's the untold story to Roy's point. This may be a been a great deal for scale. It may turn out. We kind of almost laughed at it when it happened. Not literally. They turn out to be the next WhatsApp or Instagram. But I, you know, the more interesting thing, I wasn't that impressed with the model. I can't use hard, hard for me to get too excited. Right. The fact that, you know, it just going to make the Muse app better though, is super interesting. The world changes so fast, but I think there's a material chance Meta has a, just a monster AI product on its hands. The amount of investment into it is so high. The capabilities are so high. The autonomy is so high. I mean, now you're going to make it 10 or 50 times more powerful. I mean, this could do better than the ARVR goggle stuff.
00:20:01 · Harry Stebbings
[00:20:01] S2: The amount of muse and instant competitors right now is pretty astonishing. Okay. Big tech go shopping, baby. We have two rumors that are circulating. Obviously, we don't deal in rumors, so I'd love to start with the first one. Reflection, which for those that don't know, is a fantastic team building open source models in The US backed by Sequoia. I think the last round was at $25,000,000,000 or so, and the rumor is that NVIDIA is buying them at a $30,000,000,000 price. This is on the back of them buying Poolside for $12,000,000,000, which is in the open model game as well. Guys, how do we analyze Janssen further going into the open model space?