The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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.
01:04:25 · Sameer Dholakia
[01:04:25] S0: I mean, I think we got a bunch. I think Byron Jeremy, Adam Fisher in Israel, and and David Callan out here has been doing it for three decades. But if I had to pick one, I will say Byron Dieter, mostly because when we were going public, the morning of the IPO, we're in the New York Stock Exchange. We brought out every SendGrider who had been in the company for more than four or five years. So we have this room full of SendGrid employees. Then president of the New York Stock Exchange comes out to welcome and greet us before the bell ringing ceremony. And he says, you know, I just wanna welcome all you SendGrid employees that are here. You should be so proud. SendGrid management, so great to to have you all. Esteemed board members, thanks for coming and being part of the special moment. Byron, great to see you again. And he just pauses. He's like, Byron, how many times have I seen you here in the last... Mind you, this is a decade ago. And Byron sheepishly, because he's a very humble guy, says... You know, and I I can't remember the number at the time he flashed up, like, I don't know, like, six. And, you know, we just laughed, like, you know, that he had been there for, like, multiple of these IPOs in the in the recent time. And then I was sitting right in front of Byron, and I and I just started to count in my head, and I could come up with more than what... More than the six. I'm like, no. No. You've done more than six. And I turned back, and I was like, no. It's more than that. And he said, six here. NASDAQ was another another big number. He has had so many from early stage all the way through IPO. I mean, it's hard it's hard not to say Byron Dieter.