The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:31:28 · Harry Stebbings, Rory O'Driscoll
[00:31:28] S2: Okay. You said 2021 there, Jason. 2021, there were 34 Decacorns. We now have a record 42 startups that have become Decacorns in 2026. [00:31:41] S1: As they say in the Simpsons cartoon, that's 2026 so far. Right? What a quarter to go. Yeah. There was 34 decacorns in 2021. Right? So in other words, more decacorns than the last time things went horribly wrong. That's the first obvious description. In other words, because if you look back at those decacorns, Mirror was a decacorn in 2021. Know, Airtable was a decacorn. I don't think they'll be the same, but just worth pointing out. I think the more funny statistic is this. There are in the public markets a grand total of 98 decacorns ever. And if you look at them by decade, there's a scary word. It's like... And you take the private and the public decacorns as of the start of this year, we roughly generated 20 plus or minus deck of corns per decade for the last five decades. And we generated, what did you say, 42 deck of corns in less than a full year of this decade. Now, is some obviously market caps continually go up. All those things point in your favor. But it is stunning to think of 20 to 30 decacorns per decade and then 42 decacorns in less than a year. And, you know, that does only 98 public companies. I just had to 98 above 10,000,000,000, another 30 above 100,000,000,000. So 130 companies in total worth 10,000,000,000 or more since the dawn of in tech, since the dawn of American capitalism, and a further 42 this year.
00:31:41 · Rory O'Driscoll, Harry Stebbings
[00:31:41] S1: As they say in the Simpsons cartoon, that's 2026 so far. Right? What a quarter to go. Yeah. There was 34 decacorns in 2021. Right? So in other words, more decacorns than the last time things went horribly wrong. That's the first obvious description. In other words, because if you look back at those decacorns, Mirror was a decacorn in 2021. Know, Airtable was a decacorn. I don't think they'll be the same, but just worth pointing out. I think the more funny statistic is this. There are in the public markets a grand total of 98 decacorns ever. And if you look at them by decade, there's a scary word. It's like... And you take the private and the public decacorns as of the start of this year, we roughly generated 20 plus or minus deck of corns per decade for the last five decades. And we generated, what did you say, 42 deck of corns in less than a full year of this decade. Now, is some obviously market caps continually go up. All those things point in your favor. But it is stunning to think of 20 to 30 decacorns per decade and then 42 decacorns in less than a year. And, you know, that does only 98 public companies. I just had to 98 above 10,000,000,000, another 30 above 100,000,000,000. So 130 companies in total worth 10,000,000,000 or more since the dawn of in tech, since the dawn of American capitalism, and a further 42 this year. [00:33:08] S2: Scratching the obvious itch there, you're basically saying that we're in a bubble.
00:33:08 · Harry Stebbings, Rory O'Driscoll
[00:33:08] S2: Scratching the obvious itch there, you're basically saying that we're in a bubble. [00:33:13] S1: I don't know if I'm saying... You're trying to make me say I'm in a bubble. I just think that, well, we got the pref, as Jason points out, so we're all fine. But what you can say for certain is the production rate of decacorns is higher compared to anything we've seen before, including five decades of data in the public markets. It definitely, I mean, this is the most economically transformative event since the industrial revolution, or we're getting a wee bit ahead of ourselves. You pick. [00:33:41] S2: Which would you pick, Rory? [00:33:42] S1: Maybe the better answer is this. I'm actually going to go back to the pref answer, right? It's kind of funny, because you have to remember all these private company valuations, that valuation is set by someone who does have a LIC pref. And once you have a LIC pref and you believe it exists, you can say to yourself, unlike a common stock where it trades every day, you can say it's a 1x plus option value. And the thing right now is option values have high value because there's a lot of vol. Some apparently three companies in this decade will become worth a trillion dollars, many will become 100,000,000,000, even if it's 10. It's rational to say there's some non zero probability this company becomes fricking amazing. And my downside is a one x. To make it concrete, I don't think all these stocks would trade at 10,000,000,000 or more if they were all traded on the public markets?
00:33:42 · Rory O'Driscoll, Harry Stebbings
[00:33:42] S1: Maybe the better answer is this. I'm actually going to go back to the pref answer, right? It's kind of funny, because you have to remember all these private company valuations, that valuation is set by someone who does have a LIC pref. And once you have a LIC pref and you believe it exists, you can say to yourself, unlike a common stock where it trades every day, you can say it's a 1x plus option value. And the thing right now is option values have high value because there's a lot of vol. Some apparently three companies in this decade will become worth a trillion dollars, many will become 100,000,000,000, even if it's 10. It's rational to say there's some non zero probability this company becomes fricking amazing. And my downside is a one x. To make it concrete, I don't think all these stocks would trade at 10,000,000,000 or more if they were all traded on the public markets? [00:34:31] S2: That's not giving me an answer. [00:34:33] S1: I think it is.
00:34:33 · Rory O'Driscoll, Jason Lemkin
[00:34:33] S1: I think it is. [00:34:34] S0: Well, we're all... We're betting this is true. Right? I mean, Menlo had some math when they raised their last fund. It was... I think it was a $3,000,000,000 fund to deploy the next twelve months that they're betting they'll have at least $425,000,000,000 plus exits to make the fund, right? That's just the math. It's not complicated, right? That they can do that like clockwork. That's the bet. The AI spend and the recent exits of the last X months justify it. Historical evidence makes it suspect. So are you living the moment or are you living as a student of history? I just don't think in venture there's a lot of upside in being a student of history, even though we have one starring on the show, which I'm grateful for. I don't know if it gets you the huge carry checks. [00:35:13] S1: And in fact, as I looked at this data, which one of my colleagues was doing for something else, I think what I actually realized you need to do is then you say, if you extrapolate, what level of growth are you assuming to make this math work? Because yes, Jason, are. Because every year, I mean, every decade, it looks bigger than the last decade with the exception of 1970s because stocks go up. But the question is, I mean, made a comment for 25,000,000,000 plus outcomes and in a world per fund, yeah, and there are only 130 above 10,000,000,000 ever. So there's probably only 70 above 25. And so you got to get four new ones. It's doable, but you can't miss a lot here, dude.
00:35:13 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:35:13] S1: And in fact, as I looked at this data, which one of my colleagues was doing for something else, I think what I actually realized you need to do is then you say, if you extrapolate, what level of growth are you assuming to make this math work? Because yes, Jason, are. Because every year, I mean, every decade, it looks bigger than the last decade with the exception of 1970s because stocks go up. But the question is, I mean, made a comment for 25,000,000,000 plus outcomes and in a world per fund, yeah, and there are only 130 above 10,000,000,000 ever. So there's probably only 70 above 25. And so you got to get four new ones. It's doable, but you can't miss a lot here, dude. [00:35:52] S0: But that's what Andreessen got so right. People, when we started our investment, maybe pre my investing career, but people mocked Andreessen in the early days for overpaying and doing this wrong and saying, we have to be in all the winners. And they just did the math. Yes, you have to be in all the winners. And even a lot of the winners, won't make money in because you'll overpay, but the super winners will make up for all of it. It's it's just basic. And everyone... All the Yahoos mocked them, they are completely right. The price of overpaying for a winner is get... Being in the super winner. [00:36:19] S2: Well, of super winners, Jason, do [00:36:21] S1: you wanna come back to