The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
01:00:49 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[01:00:49] S2: It does soften it slightly. The employees had 534,000,000 in tender offer just a couple months ago. It does soften the blow, but it's definitely a bummer. Like the whole, if you've been on the other side of it, going public, there's just so much emotion, right? It's a bummer if the stock price is lower than you thought. It's a bummer if the pop is less than you thought. What I thought when I read it, I was like, man, there's just, there seems to be so much liquidity. We talk about all the M and A deals when we started it, but man, you can't get a damn IPO done. [01:01:17] S0: And that's what, I mean, Dan Primmick made that point. He said, don't like it because of market conditions. We are 1.4% of the S and P all time high. The Schiller PE is at an all time high. I mean, how much better does it have to be big guy? Because I agree, it was like, And it would be interesting to see any of these other non anthropic IPOs. I'm not sure what's up next. I know what it is. Is it new, not new scale? [01:01:40] S3: It's Enscale. [01:01:41] S0: Enscale. Yeah. Yeah. That's another highly aggressive compute dependent one to Jack's point. The interesting thing when that one goes.
01:01:41 · Rory O'Driscoll, Jack Altman, Harry Stebbings, Jason Lemkin
[01:01:41] S0: Enscale. Yeah. Yeah. That's another highly aggressive compute dependent one to Jack's point. The interesting thing when that one goes. [01:01:48] S1: What'll be interesting too is we haven't really seen any of the like AI native companies go out yet. My guess is a lot of them would trade very well because public markets don't have enough exposure to them. But I think it's scary to be the first one. It's scary to do it before the labs have gone out and everybody can see how the markets react to all of those things. So I think there's a lot of companies waiting in the wings. And I think if the market holds on, I would I would expect that in 2027, there will be quite a few of these. We just... It's interesting that we haven't seen one yet. [01:02:17] S3: Which will be the first, Jack? [01:02:19] S1: If I knew that, I'd be really good at my job. I'd be able to pick them all. I don't know. There are many that can choose to go out tomorrow if they wanted to, but it'll just be a decision with the management teams and the boards to the point of this, you know, the... Or a conversation. It's... It it is not a question of can they be public. It's just what price do they get, are they happy with it. So it's... There's a lot of companies who just... Know, it's at their option right now. [01:02:40] S3: On the other end, you've also got Monzo, the British bank getting inquired for [01:02:44] S1: Oh, Roy, why do you not like [01:02:45] S0: that one? Come on. I love [01:02:46] S3: that one. [01:02:47] S0: No. I I think it [01:02:48] S2: gives me a chance
01:02:48 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[01:02:48] S2: gives me a chance [01:02:48] S0: to bitch. No. I know. No. I'm sorry about my face, Howard. You... I'm really excited to do Monzo. I have stunningly opinions on this. [01:02:54] S3: For everyone, Rory has an astonishing RBF, which is a resting bitch face. But whatever you say is continuously just miserable. But Monzo, 8 to kind of 12,000,000,000. There's quite a range now on the suspected acquisition price by Newbank. Honestly, I was really surprised by this. David is very focused on winning The US. Buying Monzo, which is bluntly a phenomenal asset in The UK, a really strong, strong British bank, but it... It's in The UK. To bite off The UK and The US at the same time, I thought was respectfully very strange. David's brilliant, so much better than me, so he knows what he's doing. But I was shocked to see this news. [01:03:32] S0: Put it another way, it is more surprising to see that NewBank wants to buy than it is to see that Monzo wants to sell. That's effectively what you're saying, Howard. [01:03:41] S3: And I agree with Monzo wanna sell for sure. They're too... They're way too small to be significant in a US public market, and that the European public market's a shit ass. And so you've got... You... You're praying for someone to come and save you. [01:03:53] S0: Agreed. That that is funny because that's all you're gonna take. Yeah. That's exactly right. Yeah. So the question is why new bank? Because in fact... And the interesting thing is the stock market agreed. I think the new bank stocks went down on this. Right? [01:04:03] S3: $6,000,000,000. Yeah.
01:04:03 · Harry Stebbings, Rory O'Driscoll, Jack Altman
[01:04:03] S3: $6,000,000,000. Yeah. [01:04:05] S0: The part... I'm not... I'm gonna make the argument, and then you can tell me why it's dumb because I think it is. It's that, you know, you can make the argument that, look, the problem with The US as a neobank market is we're just so damn efficient in terms of our banks that there's not a lot of fat profit to be taken, which is why Chime, which I admire as a company, trades well, but not amazingly. I I... $56,000,000,000. Whereas Revolut, which is sticking it to all the crappy old school banks in Europe, is making out like a bandit. So maybe the argument is, if I'm Manzo, the reason they did so well in Brazil, it's another market full of crappy old school banks that overcharge. Maybe they're just focusing on the less efficient markets than The US. And that's possibly the argument. But you're right, even then, a, you're entering The UK, not Europe, because you guys left Europe, you silly people. And then b, you compete with Revolut, who, as you point out every week, Harry, is not exactly a shrinking violet when it comes to competition. [01:04:56] S3: Oh my god. Terrifying. [01:04:58] S0: Jamie Dimon, but as a Russian, you know what could go wrong? [01:05:02] S3: NewBank are down 23% over the year. Oh. Market cap is 47,000,000,000. Over the week, they're down 12.6%. I'm gonna buy this. [01:05:12] S0: Cool. [01:05:12] S3: Real time, Jack. This is how we do business. [01:05:15] S1: I love this.
01:05:15 · Jack Altman, Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[01:05:15] S1: I love this. [01:05:15] S0: Yeah. You'll you'll... Jack, you'll note the complex analysis he did here. He looked at the stock chart. So it was when he filed in. Exactly. [01:05:22] S2: 30% of your public cash you're putting in? [01:05:24] S1: 30. I I would I would do a full 30. [01:05:26] S2: 30% of your liquid assets. 30% of your liquid assets. [01:05:29] S3: Yeah. You've got your [01:05:30] S0: old fund now. Third in instinct, a third in Jave, and a third in new bank, man. You you you you... You're in. You're one third liquid. You're golden. [01:05:37] S3: Traded. Done. Thank you very much. I'm out now. Thank you so much for coming, Jack. [01:05:42] S1: Yeah. Exactly, man. Thank you. [01:05:43] S2: I don't know too much. Honestly, I don't know too much about this deal. I can't add too much value. But the one thing I will say in general is it seems to me they're buying time, right? They're buying time to instantly have the British market. They're not buying just the revenue, right, of the customers. They're saving themselves time. And I think as venture investors, those are great for our portfolio companies because sometimes a company you have, it's not even growing that crazily, but it has a position and someone will pay up to save time. We need that for venture to work too, It's the only way people are going buy the A minus, B plus assets is to save time. So thank you. And I have a few others that can save you time, that can save you years of time. I got them. And here's a deck.
01:06:24 · Rory O'Driscoll, Harry Stebbings
[01:06:24] S0: I also think one other comment on the Monza side is that the whole you know, boardroom drama, you know, originally founder Tom had retired, they put in the CEO, then the chairman swapped out the CEO, and then the investors were pissed, and then they reversed that, and then the chairman's retired. It's gonna sound really, it's that UK chairman plus CEO role I've seen, which makes intuitive sense for well governed public boring companies, but in my view makes absolutely no sense for venture backed deals. And you can tell what happened here under the surface, which is all the VCs were like, you did what? You know, we weren't backing the chairman, we were backing the CEO and you changed him. So I think there's a lot of board instability. And when you have that, especially when you've taken out the founder and you have a ton of board instability, and then suddenly someone says, I'll buy you out, you're like, hit the bid and the pain. [01:07:11] S3: Well, I think everyone was thrilled bluntly when TS came in, just to be super clear. With the greatest of respects, the company turned around when TS came in. And then when TS got taken out [01:07:20] S0: That's my point. [01:07:21] S3: Oh, yeah. Mother of god. Why the fuck did you take the guy who was competent out of this business?