The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
01:03:29 · Harry Stebbings, David Tisch
[01:03:29] S1: Totally get that and understand that. I always love that Google will just build it or the OpenAI or Apple. [01:03:36] S0: Whatever it is. But but, like, you can't hire. You don't know how to hire. You're not gonna get... Like, it's not big enough. All these things, they're just not factors for the win. Why is it gonna work? [01:03:46] S1: You said that 17 to 90% don't work. Keith Rabois said before that's dramatically overestimated. And in fact, if you're investing in great people, your loss rate, in other words, it actually really not working, being a zero or close to a zero, is much lower than people think. [01:04:02] S0: I think at Series A, that's true. I think at Seed, it's some real scale of numbers. [01:04:08] S1: You do. [01:04:09] S0: But I think you go one stage ahead and that number is dramatically lower. I also think Keith is a generationally talented investor, and if his loss rate is, I don't know, a tenth of everybody else's, that wouldn't surprise me. [01:04:22] S1: Yeah. Listen, David, I wanna do a quick fire. So I say a short statement. You give me your immediate thoughts. How sure. Sixty seconds per one. [01:04:29] S0: Let's go. [01:04:30] S1: I'm gonna set a timer. You can choose one seed fund, one series A, and one growth fund to be an LP in. Which one?
01:04:30 · Harry Stebbings, David Tisch
[01:04:30] S1: I'm gonna set a timer. You can choose one seed fund, one series A, and one growth fund to be an LP in. Which one? [01:04:40] S0: I think Y Combinator has invented the only product in our industry. And I think for all the people that say anything critical about them, it's probably just rooted in some version of jealousy. I think what they've built is a world class brand, a world class attractor of great talent, and I think run the best business model in our whole industry. So seed fund, like YC. [01:05:05] S1: Fantastic. Completely agree with you. Series A.
01:05:05 · Harry Stebbings, David Tisch
[01:05:05] S1: Fantastic. Completely agree with you. Series A. [01:05:08] S0: I think there are five to seven equally impressive multi stage firms that just continued to find themselves in the best companies. You can choose Benchmark. You can choose Sequoia. I think the machine Andreessen's built. I think what Thrive has done. You know what Lee Fixel does in addition is fascinating and off the radar in an interesting way and sometimes is a great series a investor. So I think, you know, I think what Ribbit has built over the years, if you look at what they've done is incredible. And so I don't think... And then you have Founders Fund, which operates in their own world and is incredible. And I think, know, we we said Keith Keith at Cursor has done generational level investing. So I I actually don't think it's series a. It's easy to isolate because you're looking at this combination. If you put your LP hat on of, like, fund size accessing early stage versus growth, these blended products. And I don't think it's a black and white answer. Like, I think the two funds that were just very narrow focused for Series A over a historical period were USV and Benchmark, and I think they've changed their fund size today, but not really the partnership dynamic. [01:06:20] S1: Okay, fine. Yeah, absurd punting there. [01:06:23] S0: Yeah. Growth? I weaved in and out of your forced question. [01:06:27] S1: Growth fund? You got one growth fund.
01:06:27 · Harry Stebbings, David Tisch
[01:06:27] S1: Growth fund? You got one growth fund. [01:06:29] S0: Again, like, I think there... Like, I think Spark Growth comes to mind as an amazing, slightly off the radar, unique outlier decision making. I think what Meritech did for a while, I think what Menlo's done, these are new names in my weaving of your answer that I wanted to get in. I think what Coatue's doing or Dragoneer's doing right now, I think are interesting. [01:06:51] S1: You're in Switzerland. [01:06:54] S0: I am Switzerland. [01:06:56] S1: Why are you... Show us your Toblerone, David, come on. [01:07:00] S0: But I mean it. I think there's a tier... Green Oaks, right? I could easily just say Green Oaks is the answer to your question. [01:07:06] S1: No, because I'm asking you, I want money, dollar for dollar. Where am I gonna make the most money? [01:07:12] S0: I think it changes in every market. [01:07:13] S1: But I can give you mine. YC, I agree with you for ownership. No one gets the ownership they get. [01:07:17] S0: But I think YC is the only differentiated product in venture. [01:07:20] S1: And then I think Benchmark for Series A, and then I think Sequoia for Series B and beyond. [01:07:26] S0: So you're discounting Sequoia's early stage investing? [01:07:29] S1: I'm suggesting I would rather be in YCs than Sequoia seeds, yes.
01:07:29 · Harry Stebbings, David Tisch
[01:07:29] S1: I'm suggesting I would rather be in YCs than Sequoia seeds, yes. [01:07:32] S0: I think the real answer to your question is you're in a period of consolidation in venture, and the best firms are going to continue to compound in every which way because they're going to access the best founders, they're going to access the best scaled LP capital, and it's going to turn into the best set of returns. And there's going be a haves and have nots in venture. And I think there's probably, you know, 20 to 30 names that are competitive, and probably 10 that are outliers amongst that 20 to 30. [01:08:01] S1: What was the single most memorable founder meeting in the last twelve months? First founder meeting? [01:08:07] S0: Like in our firm, my partner Greg, you know, got to spend time with Noah from Instinct early. And I think for him, that was the mind blowing initial meeting and conversation. And we were lucky enough to be part of that early round. Oh, baby. Well done. I think for me, the things we've done in the past twelve months are not mature enough yet to talk about because they're coming. [01:08:35] S1: But just like, which founder did you find most mind blowing? When you were like, I left, like, wow.
01:08:40 · David Tisch
[01:08:40] S0: I have to be as excited every time I say yes. So I actually I don't operate like that. I operate like this. And if something rises above this, you lean in, and if something doesn't, you lean out. And so I view my job as a continuum of, like, steadiness in order to make the right decisions. And so I think what, to this point, satisfies me the most, to answer your question, is like the relationship that comes out of it. We funded this 22 year old who's building a game that's gonna release in like two months. Like a single game. Level difficulty, 1,000,000,000,000, right, to win a game business. But, like, he has been thinking about this game for a long, long time. And we're gonna see if it, like, hits. And if it hits, it's gonna be awesome. But, like, low probability of market, all these factors are negative. But he's awesome. And then met I this woman who's building this really cool piece of hardware that goes in, like, your home. It's a point solution that's, like, huge market. Everybody has a need for this. But, like, again, level of difficulty impossible. And then you meet veteran founders who are building a foundational model for a physical world application. And you're like, well, that's crazy. And you guys seem like totally the right people to do this. And then you have someone in science who's doing something. So I really do believe you have to be excited about everybody in some form equally. Who do I like hanging out with? I like, I'm a consumer mindset. I find the consumer founders the most interesting because they're nuts. Because they're going after the biggest, most confusing end user. And I think, you know, that's like, I learned from them. We're an early investor in a company called Triumph. I think spending time with Jake is like an amazing... I love talking to him. I love hearing about what they're doing. I think they'll start making a lot of noise in the coming year and sort of be one of those halves.