The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:58:36 · Harry Stebbings, Sameer Dholakia
[00:58:36] S1: Why? What makes him so good? [00:58:38] S0: First off, George, he's an exceptional thinker. He's super strategic. He's very analytical. He has been doing this for decades, and he knows how to run. He knows how to build a go to market engine. Harry, like, very few people in technology in the market today know how to build. And so when he... His joining Lynn and Fireworks, I'll just say, preceded our investment by about a month or two because George joined, and I'm like, dude, these guys are gonna crush because you have the brilliance of Lin, strategic thinker, deep technologist, unbelievable techno... Technical team for Meta, and now George building the go to market engine. That that is the pitch right there. You asked me for the bull case. Those two together at the top of that company leading, they're gonna build an enormous business. So I'll leave it there. I will say, though, in terms of the TAM and the market and what they're doing, think I their general pitch of enterprises are not gonna wanna rent intelligence from somebody else. They're gonna wanna own their own. I just think it's, the simplest and really compelling tagline for any enterprise CIO buyer. And and, personally, I think there'll be a healthy healthy amount of both. But, man, they're gonna... I I I can't... It's it's hard to imagine a business saying, yeah. No. I I I don't wanna own any of my intelligence. Every business is gonna wanna own some of their intelligence for sure. [00:59:52] S1: Do you buy the sovereign model argument?
00:59:52 · Harry Stebbings, Sameer Dholakia
[00:59:52] S1: Do you buy the sovereign model argument? [00:59:54] S0: I do. We... We're invested in two. We're invested in Sarvam in India, and we are invested in... Or investing in Mistral right now. [01:00:04] S1: And so you think that, hey. Countries in geopolitical regions will, for obvious geopolitical concerns, need to have access to their own. Is that it? And to what extent then do we just go down the stack of we we need our own energy providing? We need our own
01:00:04 · Harry Stebbings, Sameer Dholakia
[01:00:04] S1: And so you think that, hey. Countries in geopolitical regions will, for obvious geopolitical concerns, need to have access to their own. Is that it? And to what extent then do we just go down the stack of we we need our own energy providing? We need our own [01:00:17] S0: Yeah. Yeah. Yeah. I'll say in in certain markets and for certain use cases. Right? So, like... And they're different. Like, in India, I think, you know, one of the things that makes India such a ripe opportunity for intelligence local to their market is the Indic languages. There are so many different languages and training the models on their own content, and so... And that's multimodal. It's it's voice. It's text. It's all the things. There's a very particular argument there, and not to mention, of course, they have some of the best technologists at scale in India who can work on the problem. In in the case of of a Mastral, look, at the end of the day, like, if you're trying to determine whatever my military strategy for fill in the blank, there are certain use cases where if it's a government use case or a regulated industry or whatever, that having it be a sovereign model is probably gonna feel more comfortable to that buyer. And, when you got a market as big as intelligence, it doesn't have to be all the buyers. Some of the buyers decide that they wanna use that sovereign model for some of the use cases in some of the industries, and you're gonna build a very large business.
01:01:20 · Harry Stebbings, Sameer Dholakia
[01:01:20] S1: When you're writing a check, how does the upside requirement change depending on the vehicle that it's in? And so for us, it's... I'll put it very simply. From the early fund, we need to see a fund returner, which means a 50 x. And from the, you know, growth fund for us, we need to see a 10 x. Doesn't need to be a fund, but a 10. How does that upside requirement change for you and look? [01:01:44] S0: What you said actually is is very consistent with how we think about it. You know, we want we want the five x plus funds. Right? Like, that's that's just really hard to do at any stage. You can only get to that if at the later stage, you're putting big dollars behind businesses, some of which may be lower than that, but some of which are gonna be way higher than that. And in the early stage, man, you know, you know by definition, your hit rate is gonna be so much lower because they are earlier stage. There's just less developed businesses. You're gonna need some 50 x's to account for and pull up all the all the ones that don't work out. Obviously, it's it's derisked when you get to the growth stage a lot more, and so so the the upper bound doesn't need to be quite that high. You don't need 50 x's in growth, although some of ours, I think, may may approach that. But that's not that's not the same bar. I think the blended gets to the same place. [01:02:34] S1: Do you think you can still do a five x given the fund sizes being as large as they are?
01:02:34 · Harry Stebbings, Sameer Dholakia
[01:02:34] S1: Do you think you can still do a five x given the fund sizes being as large as they are? [01:02:38] S0: A 100%. No hesitation. Especially in this era because of what is happening in the world right now. When you see businesses scaling at the rates we are scaling them, Harry, the the value creation... And so it's not a hypothetical anymore. I sounded like a crazy person three years ago when I would say this stuff, but now everybody just looks at me like, oh, yeah. That's true. I can I I can think of 10 examples? And so, like, there's no debating that we're seeing value creation in this era unlike anything we have ever seen. And so, absolutely, I believe we can generate those kinds of returns. [01:03:08] S1: You can only invest in one of those funds early early growth or late growth. Which one do you invest in? [01:03:14] S0: If I can only pick one p... Yeah. I mean, per... Me, personally, obviously, I'm focused on the growth stage, and and I really do like the the opportunities that make [01:03:22] S1: the growth. Better there. I think outcome scenarios are bigger than they've been in a long time, which means the upside and the multiple invested cash is much bigger. But I think we both did fireworks at, a 15 price. I think there's a 20 x in that for us.
01:03:22 · Harry Stebbings, Sameer Dholakia
[01:03:22] S1: the growth. Better there. I think outcome scenarios are bigger than they've been in a long time, which means the upside and the multiple invested cash is much bigger. But I think we both did fireworks at, a 15 price. I think there's a 20 x in that for us. [01:03:35] S0: I agree. A 100%. And and so when you can get early venture return MOICs on late stage derisk companies, man, I'm with you. That is that is a great spot. I will say that, you know, we have a world class early stage franchise that's been doing pre seed, seed, early, you know, series a's for a very, very long time. If you can buy 1020% ownership early for small checks, man, that's fantastic too. I would love... I would... You know, we're gonna continue to keep doing that all day long, but, yeah, it's definitely an... And that's why I love our model as a giant platform. We're we're... Synergy of that practice with our early growth practice, with our late practice, like, is really, really something. [01:04:16] S1: I wanna do a quick fire where I pepper you with questions, and you give me your [01:04:20] S0: immediate Okay. [01:04:21] S1: Who's the best picker in all of Basima? The picker.