The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:49:07 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:49:07] S1: Why? My friend Leo told me that was how you did risk management. [00:49:10] S0: In all seriousness, this this may be my weakness. I... My scar tissue is I want a hundred days. Whether it's seed or growth, I want one hundred days. [00:49:17] S1: But Jason, you're just not... I agree with you, Deep, but you're just not getting that, say. [00:49:21] S0: I might not be. And I don't want to lose you from the fund, though it's Stebbings and company. So if we have to do it to not lose you, don't wanna go all while gotchall. I don't wanna go all while gotchall here. We'll do it. But I I just... I'm gonna use... If I can use one black pebble this quarter, it's gonna be on this one, and I'll and I'll take the hit when I'm wrong. [00:49:39] S1: Any other rounds that we think are worth bringing up? As we said, flapping airplanes, I thought was an interesting one. They're building models that [00:49:45] S0: learn How about super dogs at a billion and a half? That one, I need a little help with the TAM. I need more... I need more to give you my TAM analysis for for for bionic dogs at 1,500,000,000. Or is this just just another Elon bet, like, he's gonna make it work? [00:49:57] S1: For for context, Warhounds is a start up cofounded by Palmer Luckey, the founder of Anduril, that is essentially... I mean, genetically modifying dogs to be next generation conflict war machines [00:50:09] S2: Yep. [00:50:10] S1: Would be an apt description, put a valuation of 1,500,000,000 on it because it's Palmer Luckey if he deserves it, to be honest. Discuss.
00:50:10 · Harry Stebbings, Rory O'Driscoll
[00:50:10] S1: Would be an apt description, put a valuation of 1,500,000,000 on it because it's Palmer Luckey if he deserves it, to be honest. Discuss. [00:50:18] S2: I mean, I I realized that I had zero value to add on that. I genuinely saw it and said, Wow, genetically interesting. How do you price that thing? I saw some analysis of the number of dogs, military use, blah, blah, blah. But you're all just moving paper around. I think the investment memo probably wasn't one, but to the extent there was one, it's, wow, that's a cool idea. Let's put in 50. I think that was the sum of the investment memo. Let's genetically engineer these dogs to be savage so that they can be better war dogs. I mean, what can you say? That is Palmer Luckey. You're [00:50:53] S1: like, yeah. Okay. [00:50:55] S2: Yeah. Team. Not not not not... I won't be doing it, but who knows? Once you found it on... You know, I didn't nearly say that on traffic. Once you found it on, you know, once you're the sword of the West, you can do what you want.
00:51:05 · Jason Lemkin, Rory O'Driscoll
[00:51:05] S0: Well, mean, there is a connection between this and his other startup. He just started this this laptop one, blue chip. Right? Oh, yeah. He's both solving sovereignty issues where where key national security things are dependent on vendors outside The US. The dogs come from Europe, apparently. I didn't know this. Yeah. I certainly know that almost all the rugged laptops, which probably you can sell for $10, right, or much higher margin. Those components are almost all entirely from outside The US. How big these models are, I don't know. But he's such at the core of this industry that he wants to plug the white spaces he thinks are important. And maybe the TAMs are small, but the models make sense. Like he's right there and he has the channels to sell these products. Like he could get 100% of all the mil spec laptops as soon as this thing launched. It wouldn't surprise me. Right. So you get 100% of the of the of the bionic dog market. And these are real markets where he has visibility into him that other founders can't penetrate. It's just, you know, whether they're worth it, I don't know. But I guess if you're Sean Maguire, your returns are so strong and consistent, it almost you just do it. You just back up. People were mocked in that discovery when Larry Ellison and Mark Andreessen gave Elon blank checks to Twitter with nothing. They just said, Tell me the price. How much do you want me to send? And he was mocked when he wanted to get out of that deal, but in the end, they're making money. [00:52:20] S2: Absolutely. No.
00:52:20 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:52:20] S2: Absolutely. No. [00:52:21] S0: Yes. So maybe I'll have to merge the dog startup into Anduril or something, but [00:52:26] S1: But I mean, it's okay. Haven't you seen the brilliant graph where there's like... You start here, you go up here thinking that you know a lot about the market, thinking you know a lot about the market, and then you just come down to where [00:52:36] S2: you Agreed. [00:52:37] S1: And it's like founder, founder. And it's like where you are in your career. Zero years, fifteen years. In the middle period where you think you're an intelligent investor, no. No. No. That really just [00:52:46] S2: is Yeah. No. I'm very familiar with that. Yes. [00:52:49] S1: It is. It's so, so true. Any others, Jason, that you'd like to bring to IC this week? We're a very busy committee. [00:52:55] S0: Well, 20% of the fund is is... I I think is enough for one week. I think we can't do that 50... What is 20 times 52? What percent of the fund is that? Help me. [00:53:02] S1: It's so interesting. I I I speak to so many LPs. We just had our AGM. The single most common piece of feedback that I hear from all LPs is every mega platform went out to raise. They raised bigger. They spent faster. They're coming back next year.
00:53:16 · Rory O'Driscoll
[00:53:16] S2: You know, I mean, look. Yes. Because it's where... I mean, we're Pavlovian creatures. And, you know, if you put money into Anthropic three years ago, it feels amazing. And most of the platforms did at some level, so they feel amazing. So we're going to do other things over and over again until it... And it's not going to stop until something goes wrong. So yes, there's going to be these big rounds. We are risk on until we're not. The public markets, oddly enough... Let's be really telling you. Interesting. On a ten year PE, they're they're at an all time high. I mean, objectively, they're at an all time high. Interestingly, on a forward PE basis, they're actually quite cheap because the market, you know, oddly enough, earnings have been so amazing in part driven by one off gains from privately held investments in the public companies. A current PE basis, stocks like Nvidia on a forward PE basis look cheap. Now, you're going to have this long discussion on cyclical blah, blah, blah, but the aggregate market isn't hurting. Now, what is true is that four fifty out of those stocks are hurting. It's a really weird... I mean, a better statement, Harry, is it's a really weird market right now. There's 40 or 50 stocks that are working in the S and P that are primarily associated with tech and AI. Everything else is quietly subpar. And oddly... And then despite that, there haven't been a ton of IPOs because everyone's been waiting for this trillion dollar thing, and the whole world is in suspended animation. So that's where we're at, which means that... Just to draw to a conclusion, which means that it's a perfect time for these platforms to put a whole ton of money out on private companies because there's a big demand for money.
00:54:38 · Harry Stebbings, Rory O'Driscoll, Jason Lemkin
[00:54:38] S1: Any other stories, boys, that I've missed this week? [00:54:41] S2: I mean, there's a lot. I mean, the interesting thing is, did appreciate... It was odd because I thought you'd come in with Anthropic and nothing else, but there was a whole bunch of financings we talked about. You you've got the continuing SpaceX Tesla drama, which is gonna run and run and entertain everybody for hours to come. Then you're right. There was a ton of really interesting companies. [00:54:57] S0: I had one that was under discussed. I didn't fully understand. I should have done more research on it. There was much more drama with Zuck and the board about leaving California than was discussed. It was clearly a high stakes drama. Mean, Zuck hired lawyers. The lawyers negotiated with the board. The board was not his ally. He had to threaten to sell all of his homes and leave in one week if they didn't give him the equity that he wanted to stay in California. There's a lot of mechanical things happening there with the billionaire tax and others, but the fact that it had to go with lawyers for months and threats to sell, I get it, but it's certainly the opposite of giving... Of the era where founders are controlling everything. Right? It's a... There was a lot going on.