The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:45:24 · Harry Stebbings, Venky Ganesan
[00:45:24] S1: What if it's not material? I'm I'm... Fuck this. I'm using this as a consulting lesson. You can invoice me later. I have a company where we are like 40 x up. Yeah. And you're like, wow, wow, fantastic. Should... You got a 100 k in there. Return 4,000,000 back to a $100,000,000 fund that it's in. I don't think it's a [00:45:40] S0: it's a size issue. It's just to me, like, look, lock in the gains. If you go back to the SaaS portfolio in 2021, there were valuations done at, let's say, pretty high prices. If people had taken 10%, 15% off the table, even if it's small, it locks in, allows you to go long. The other thing I tell entrepreneurs is that just like when you take some trips to the table, you're more likely to go long, so are we, right? Because we can now afford to go along with you. And so it aligns. And so to me Will you ever settle with your position? Generally, no. Not unless the company is being sold. Not interested. I think that's a different situation. I mean, the only time I think is like if you do not have a relationship with the founder and you've... Like, that's that's different. But if you... As long as you are and you're in, you're gonna ride... We'd ride [00:46:25] S1: and die with our founders. Jason Lemkin says on the show, you know, whenever a founder leaves, like, I ride it to zero. When a founder founder's is gone, gone, it's zero, zero, zero. Do you find it to be the same when the founder leaves? You're like, we're supportive, of course, and we're still here, but, like, mentally, you're like, that's a zero?
00:46:25 · Harry Stebbings, Venky Ganesan
[00:46:25] S1: and die with our founders. Jason Lemkin says on the show, you know, whenever a founder leaves, like, I ride it to zero. When a founder founder's is gone, gone, it's zero, zero, zero. Do you find it to be the same when the founder leaves? You're like, we're supportive, of course, and we're still here, but, like, mentally, you're like, that's a zero? [00:46:42] S0: I mean, my friend and your friend, Nikesh Arora, would disagree with you and say he goes on founder mode. I mean, look. There are people like Nikesh, G2 Patel at Cisco. They go on founder mode as an exec. It's sort of an insult to people like that when you say, oh, the founder leaves. Look at the situation. Who replaced them? Founder mode is a mode of working. It's not it's not tied to anyone personally. I think anyone can be a founder in terms of the founder... Working in the founder mode. And I think some people do. And I mean, Frank Slootman. Frank joined Data Domain, Snowflake, ServiceNow. In each of those places, he acted like a founder. He didn't act like an exec.
00:46:42 · Venky Ganesan, Harry Stebbings
[00:46:42] S0: I mean, my friend and your friend, Nikesh Arora, would disagree with you and say he goes on founder mode. I mean, look. There are people like Nikesh, G2 Patel at Cisco. They go on founder mode as an exec. It's sort of an insult to people like that when you say, oh, the founder leaves. Look at the situation. Who replaced them? Founder mode is a mode of working. It's not it's not tied to anyone personally. I think anyone can be a founder in terms of the founder... Working in the founder mode. And I think some people do. And I mean, Frank Slootman. Frank joined Data Domain, Snowflake, ServiceNow. In each of those places, he acted like a founder. He didn't act like an exec. [00:47:19] S1: By the way, Nikesh, please don't kill me. I love you more than ever, and I've always loved you, and it was Venky that said it. It wasn't me that said it. I'll give you Venky's address later. I'm gonna get brutally You're definitely here. I'm terrified of Nick Ash. Are you kidding me? So, yes. That's very funny. Can I ask you then? We see so many sales now. It's like, you know, Fei Fei Li sells for 8,200,000,000. It's like, it's amazing. A phenomenal exit. Well done to everyone involved. Yesterday's news. I mean, OpenRooter's so yesterday's news. We've all forgotten about it. And I don't mean this glibly or any... I know that sounds so child of this ecosystem, which I'm not, sadly. Are we just gonna see a load more exits now?
00:48:03 · Venky Ganesan, Harry Stebbings
[00:48:03] S0: Yeah. I think you're going to see because I think there's competitive pressure. There is also this notion that we have a regulatory regime that will let you do M and As, right? There's been a backlog of M and As that was supposed to happen. Didn't happen because we had a different regulatory regime. There's this notion that this may not continue forever. So one, you have a window of time. Also have competitive pressure. When AMD buys a real world model, does NVIDIA need to do something? Do other people need to react? And so I think every acquisition forces a bunch of competitive dynamics we have to consider. And then people have equity prices, right? AMD is now a trillion dollar company. Dollars 8,500,000,000 is still, I think, less than 0.1% of the company. So you can do stuff because of this combination of things. And then the notion that, you know, anything that lets you catch up in the AI view is very high. Like, did Meta do a good job paying up for scale? I think they would say, yeah. If you look at the market cap ad of Muse to Meta, maybe that 15,000,000,000 seems cheap now. I'm also, like, so happy for Zuck. It feels like he's kind of almost got like [00:49:08] S1: a cofounder in Alex Wang who he can delegate some of the shit to. Do you know what [00:49:12] S0: I mean? I mean, Zuck is a great capital allocator. Go back and look at the history of his capital allocation has been phenomenal. Best best of CEOs. He bought Instagram for a billion dollars.
00:49:12 · Venky Ganesan, Harry Stebbings
[00:49:12] S0: I mean? I mean, Zuck is a great capital allocator. Go back and look at the history of his capital allocation has been phenomenal. Best best of CEOs. He bought Instagram for a billion dollars. [00:49:22] S1: He has executed. He bought a Novo for 400,000,000, which allowed him to see everything that went so smart. [00:49:29] S0: Like, I think they're incredible technologists, but I think there are very few people I think who are incredible technologists and good capital allocators. Suckers right up there. [00:49:37] S1: If you could choose one skill for a founder at scale between capital allocation or product visionary, what would you choose? [00:49:44] S0: I'd choose capital allocation. Because by the way, allocation by itself also captures product visionary because you're allocating the capital to the things that matter. So in some ways, part of the dynamics of deciding on capital allocation is which product direction you need to go. But the other way is not true. There are some people who can be great product visionaries but who might not think about what is going to be the return on that. [00:50:04] S1: Abbott's Snap. Love the dude. I mean, like, candy every year. SPC through the roof. You a shareholder of Snap? [00:50:10] S0: We are not a shareholder of Snap, but look, look, Ev is a product genius. There's no question about that. Genius. Right? His vision for Snapchat and what is executed. I think it would be fair to say you have not been rewarded being a shareholder of Snap, at least for the last seven, eight years.
00:50:10 · Venky Ganesan, Harry Stebbings
[00:50:10] S0: We are not a shareholder of Snap, but look, look, Ev is a product genius. There's no question about that. Genius. Right? His vision for Snapchat and what is executed. I think it would be fair to say you have not been rewarded being a shareholder of Snap, at least for the last seven, eight years. [00:50:24] S1: Not been rewarded. I was trying to be polite here. That's like giving Titanic an eight out of 10 in the holiday review book. Like, [00:50:33] S0: not being rewarded. [00:50:34] S1: I've not been rewarded. Duh, blow hard. Yeah. No. That... That's a good way to put it. Okay. That's really interesting. Are you worried by how much money is being made by people? Like, which... I'm seeing sales reps at OpenAI walk out with $3,040,000,000 bucks. [00:50:50] S0: You know, here's the thing. I always believe this. Money doesn't change people. It reveals them. So so what I mean by that is money and power, people think, changes people. No. It only reveals them. What it means is like if you're an asshole before, when you have money and power, you reveal that. What I have found is that the people who are really motivated, they're gonna be motivated even if they have lots of money. And the people who are not motivated who are acting it, when the money shows up, they will opt out. And so to me, it won't change for the A players because for the A players, money is just a way of keeping score, but what they love is the game.