The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:00:40 · Harry Stebbings
[00:00:40] S2: the week. Rory O'Driscoll, Jason Lemkin, the biggest news in tech. So what are we talking about today? Well, are the AI cracks starting to show? Coolweave is hit pretty hard. Next up, we have Anthropic. The talk of IPO town is it could be priced at 1,500,000,000,000, not the 2,000,000,000,000 originally suggested. Then we move down to the world of private markets where we have Modal, which closes a $15,750,000,000 valuation fundraise. Anjuril tenders at 90,000,000,000, and then welcome to the agent land. We have Town that raised a $108,000,000 at a $1,000,000,000 valuation. This and so much more in the episode today. But before we dive into the show today, Base 44 is one of those products used, and I just thought straight away, man, I wish I'd had this when I started 20 VC with $50 and no contacts in Venture. I wanted to see what it could do, so I built a guest research hub for the show. Upcoming guests, company notes, previous interviews, sponsored contacts, follow ups, all in one amazing location. I described it in plain English. A few minutes later, I had the product open in front of me. Database, login, back end, and hosting already handled and just all in one. It made it so easy. And that's what I loved. I didn't write a long spec. I didn't stitch five different tools together. I built the thing, and I started using it. For any founder listening, that's the point. The faster you turn an idea into something real, the faster you launch. Apps, dashboards, internal systems, AI agents, whatever you need to build, Base forty four gets you there. Go to base44.com/20vc. That's base44.com/20vc. While Base 44 helps you build, AlphaSense helps you find answers really, really fast. We used AlphaSense on an investment that helped us close an $8,000,000 deal. $8,000,000, baby. That's a lot of money. That's why I'm genuinely excited to have them as a partner on 20 VC. C. AlphaSense combines AI with one of the world's deepest libraries of market intelligence, including expert interviews, broker research, earnings calls, company filings, and real time news. Every answer is grounded in this incredibly trusted evidence and fully traceable to the original source, which is so important. So you can make really high conviction decisions with confidence. But the best part, they're building super analyst and always on AI analyst.
00:03:00 · Harry Stebbings, Rory O'Driscoll
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00:04:22 · Rory O'Driscoll, Harry Stebbings, Jason Lemkin
[00:04:22] S1: You have now arrived at your destination. [00:04:25] S2: Boys, I just tweeted something that has got a rather large response from a founder community. I think Venture is broken today in the way that I'm meeting more and more companies that fit this profile. I just met a company today, and I have a company that's 20,000,000 in ARR, growing incredibly fast, six, 700% profitable, brilliant business with a great team, crickets. VCs do not want it. Is venture broken today? [00:04:53] S0: Look, I'm sure Rory has a of thoughts. I'll just add one one ahead of it, is we were talking about this company, which will be nameless. Right? I invested in a in a vaguely similar company, like, doing similar things for similar sized companies. They raised about a $3,000,000 seed round, and they're planning that's it, even with this type of growth, even with it all being agentic, even with it all being all the things we're supposed to be excited about, right? AI and voice and resolution agents, it does actually something that's pretty somewhat unique, but they're literally planning to never raise again because you get the fifteen percent eighteen a month venture update, but no one wants to meet. It's like, well, I'll put in a little more money, but it may have mean some ways in the old days where early investors may need to carry you if you're anything that's not hyper growth and the right boxes to check. Right? The three bike check. Your investors may have to carry you. It's like the old days.
00:04:53 · Jason Lemkin, Harry Stebbings
[00:04:53] S0: Look, I'm sure Rory has a of thoughts. I'll just add one one ahead of it, is we were talking about this company, which will be nameless. Right? I invested in a in a vaguely similar company, like, doing similar things for similar sized companies. They raised about a $3,000,000 seed round, and they're planning that's it, even with this type of growth, even with it all being agentic, even with it all being all the things we're supposed to be excited about, right? AI and voice and resolution agents, it does actually something that's pretty somewhat unique, but they're literally planning to never raise again because you get the fifteen percent eighteen a month venture update, but no one wants to meet. It's like, well, I'll put in a little more money, but it may have mean some ways in the old days where early investors may need to carry you if you're anything that's not hyper growth and the right boxes to check. Right? The three bike check. Your investors may have to carry you. It's like the old days. [00:05:41] S2: Jason, you're right. You said earlier that kind of specificity box has really narrowed in terms of what is interesting to investors. Yeah. And I'm seeing that more and more with this concentration of capital going to fewer and fewer names and everything else being wholly unfundable, which more so than I've seen ever in venture before, which is surprising for a sheep like market like Venture.
00:05:41 · Harry Stebbings, Rory O'Driscoll
[00:05:41] S2: Jason, you're right. You said earlier that kind of specificity box has really narrowed in terms of what is interesting to investors. Yeah. And I'm seeing that more and more with this concentration of capital going to fewer and fewer names and everything else being wholly unfundable, which more so than I've seen ever in venture before, which is surprising for a sheep like market like Venture. [00:06:02] S1: But what you're saying is if you think about... If you think of the role of venture financing innovation, what you're saying, there are lots of companies that look on the surface to have very good numbers that can't raise money. That's what you mean. Correct? [00:06:14] S2: Correct. [00:06:15] S1: And I think that's probably true. I mean, let give you the contrast, At the same time, I don't think it's just going to 10 or 20 companies in total. Because at the same time, are a whole bunch of projects that probably in another era would not get funded at all, that are getting venture money, data centers in space, quantum computing, you know, so we're very risk on for stuff that has ultra high upside. And I think the stuff that's struggling to get funded is, as you say, it's software for specific markets where there's some inarticulate fear that AI will make it all go away. Is that kind of a fair next level summary? [00:06:48] S2: Yeah, think so. I think you're absolutely right. I think it's this like power law on steroids requirement where it's like, unless you can paint me the trillion dollar market cap, I'm not interested.
00:06:57 · Jason Lemkin
[00:06:57] S0: To answer your question a little more, to be more tactical, Harry, I think you're right that you roll with a high powered crowd. I think if you want Sequoia and Benchmark and one of the better partners at Andreessen to fund you, the box is very specific, right? It's cursor better, right? Open routers, okay, but let's see what we can do better next time. I will say for companies like you described, growing at numbers that approach the iconic outlier metrics, right? Here's where I think actually the world is today. You gotta meet a 100, you gotta meet every VC, you gotta meet a 100. It is like the old days. And you will find someone that takes that bet. It will not be the seven benchmark partners and all the rest, but someone will take that bet at a reasonable, but still elevated valuation because it's the best deal they've seen this quarter. Someone will take it. You just got, it's the old days where you got to beat a 100 and there are growth investors whose names are not index and Dreeson and Bessemer. And they will take that bet because it's a good bet to grow his point. Will lead to a listen labs or better. In some cases, it's just you better meet everyone on planet earth. Now, if you just have top decile numbers, but top decile for a while was like an automatic of term sheet, right? For years, it was an automatic term sheet, right? You'd walk into Rory's office. Rory knew every deal since the dawn of time. He would know exactly if you're the top decile. If he believed in you and trusted you, you'd walk out with a term sheet from scale, right? The world just doesn't work that way today.