The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:24:17 · Harry Stebbings, Rory O'Driscoll
[00:24:17] S3: I I also think, like, this is not the round that worries me. If you would look at the instinct cohorts, which I haven't seen, but I imagine incredible. I imagine the depth of usage is like we've never seen before. What worries me is when you have three rounds in three weeks with no material movement in between and no data suggests there's been anything different. That's what worries me. Like, the the people who say, oh, 10,000,000,000, 14 people, it's just like people who said, you know, a billion for what... For Instagram was stupid. It's like, yep. You don't know if that's smart today. [00:24:43] S0: 16,000,000,000 for WhatsApp. [00:24:45] S3: Exact... Exactly. But you know what [00:24:46] S0: I love? I love the [00:24:47] S3: fact that I actually had your partner, Ev Randall, on the show, and he said, oh, we're gonna look back at Andreessen and General Catalyst and Lightspeed. And he retweeted it, which is so humble and, like, non VC like. Well, he was like, maybe I was wrong to say that Andreessen won't do a five x in this vintage because mister Martin Casado is making us look bad because the man has had Openruder. Obviously, last night had Fei Fei with World Labs, and then he had Cursor. So for the new story of the day, AMD buys Fei Fei Li's World Labs for 8,200,000,000 in stock at first big neo lab exit two and a half years into the company's journey.
00:25:28 · Rory O'Driscoll, Jason Lemkin
[00:25:28] S0: Let's focus on the entrepreneur first. I think it's great for Fei Fei and the team. I I mean, I've only met her once. I thought she was awesome, very humble. I love her book, if you read it. A very moving book about being an immigrant to The US. I was myself, so I know it, and kind of came up from nothing. As someone pointed out, it's not an overnight success. Cranked through ImageNet, kicked off the whole damn thing, cause the entire AI resurgence was really kicked off when that ImageNet project that she built, when the winner of that was Ilya and two or three other people, I think in 2012, where their model using neural net just kicked ass and blew past everyone else. And it was the first hint that this technology, this deep learning technology was going to blow everyone away. And she kind of set that up, didn't monetize that has, you know, worked at Stanford, worked at Google. And then you know, midlife quit, did this two and a half years ago and nailed it. So I think it's just an awesome story. Just a reminder yet another wildly successful immigrant story coming to The US making a ton of money. So I'm stoked for her, We can come to the venture money later, but it's just a great story. And it would be pretty criminal if we had the biggest boom in AI history and Fei Fei Li didn't get a big ass check. So I think common justice has been restored and it's good. Right? Cash the check. [00:26:44] S2: Well, just one thing, you know, AMD was like one of your grandpa's investments. Right? You know, he and his buddies from Fairchild or I don't know
00:26:44 · Jason Lemkin, Rory O'Driscoll
[00:26:44] S2: Well, just one thing, you know, AMD was like one of your grandpa's investments. Right? You know, he and his buddies from Fairchild or I don't know [00:26:49] S0: what the exact... But this [00:26:50] S2: is an oldie moldie. It's up 279% this year to 1,000,000,000,000. So I don't even know whether they're gonna continue the three d world models or they're they're they're just gonna be their counterpart to NVIDIA's model team. But whatever it is for 8% of that market, 8%. Yeah. Getting a world class team to make sure that 279% run continues like it's cheap if it's the right team, right? It's a moment in time to Jack's point. Right? If AMD was up 3% this year, they they ain't gonna be spending $88.08 8,000,000,000, but this is a run that you've... You know, it's epic, but you gotta maintain it. Right? They've gotta be number two to Nvidia or whatever the goal is, and it's a habit trail that keeps going faster. So I'd certainly invest 8% of my market cap to keep the good times going.
00:27:31 · Rory O'Driscoll, Harry Stebbings
[00:27:31] S0: And I think it's the first of a few. We've talked about this a couple of times. You look at these investments. And candidly, I don't think the World Lab companies, not the World Lab in particular, but the kind of those World Lab type companies would on a standalone basis have anything like the trajectory of Entropic and OpenAI, where there was a very quick path from here's an amazing AI technology to here's chat and that can monetize, and then, my God, here's coding and that can monetize like a mother, right? I don't think the path would have been as clear, which is why I've been a bit nervous about those deals over the last couple of years. But in retrospect, the thing I think that's now become obvious is, I think all the big foundation model companies are probably in the market to acquire some kind of robotic foundation model story. I think that, as you say, AMD just wants to be relevant to NVIDIA. So I think that wouldn't surprise me if there was a ton of acquisition interest. I mean, there's still a 100 NeoLabs, so you gotta be in the 10 that win, but I think there will be a bunch of these big ass acquisitions over the next six, twelve months if the market continues to hold. [00:28:32] S3: Do you? Because I invest with a brilliant French partner, Paul, who is, you know, incredibly cynical just by nature of being French, And he wrote this report on a 102 Neolabs, $70,000,000,000 plus raised. And my question is just, like, just how many of them can get acquired? When there were 10 to 12, like, yeah, it'll be okay. 102? We all gonna have downside protection?
00:28:32 · Harry Stebbings, Jack Altman
[00:28:32] S3: Do you? Because I invest with a brilliant French partner, Paul, who is, you know, incredibly cynical just by nature of being French, And he wrote this report on a 102 Neolabs, $70,000,000,000 plus raised. And my question is just, like, just how many of them can get acquired? When there were 10 to 12, like, yeah, it'll be okay. 102? We all gonna have downside protection? [00:28:52] S1: It was very easy when all the sort of Neolabs got started and the trend took off to just say, this is total insanity. And to your point, Harry, we don't yet know what the, like, net balance sheet of the whole thing will be. But we are definitely starting to see data points like World Labs and many others where there is real interest. And I think part of what's so different now than certainly any time I've ever seen, there have been other points in history like this, but there are just a lot of acquirers. There are 10 companies that can do $10,000,000,000 acquisitions and want to. And that's just so different. And it's much easier than going public, and it's quicker, and you don't have all of these long cycles and the hand wringing. And that has really changed things. Obviously, extremely impressive run by Martina. It's just shown that in these infrastructure lab type companies, there's a lot of room to run. So I don't know how it will go obviously any better than anybody else, but I'm definitely... I'm hesitant to be too skeptical at this point given what's happening.
00:29:51 · Rory O'Driscoll, Harry Stebbings
[00:29:51] S0: I agree with that. And I think when you deal with the 100, and yes, there might not be 10 or 20 acquisitions, but it's the... This is where people sniff, they use the word consensus in a negative sense. But there is no doubt that credentialism matters, like you got Fei Fei Li, you know, I could write that press release, originator of the whole AI thing, it's a little like, you know, the quality folks at OpenAI Nootropic. So I think the other part of this is, and then LiaLabs, making sure you have the pristine tech asset versus the gritty team. A lot of the stuff I do in the apps level, I love my gritty teams. I think for something like, you know, building a world model, you need to have proven technical success, because that's both what it needs to deliver, and frankly, it needs to navigate and be the desired acquisition candidate. And then I'm not sure that's not true overall, but it's just something I've observed. [00:30:40] S3: I was talking to one of the best CIOs in the world last night, he just said to me, the honest takeaway, dude, you really think you can play in venture with less than a billion dollar fund now? And I... Candidly, when I look at many of these companies here, the first round for this and Fei Fei was, like, 65. I had my team say to [00:30:55] S0: me the other day, we [00:30:55] S3: can't find anything under a 100,000,000. I said, wow. Seed prices are expensive. They said, no. No. 100,000,000 round size.