A Product Market Fit Show | Startup Podcast for Founders
00:35:16 · Peter Walker, Pablo Srugo
[00:35:16] S0: Expected value is much higher at Google than Google. Way higher. [00:35:19] S1: Yeah. Awesome, man. Anything else that we didn't touch on? Anything else? Any other trends you're seeing that you're that you're digging into? [00:35:24] S0: I think there's a there's a lot of conversation right now about what happens to the traditional 200 to $400,000,000 series a fund, and whether or not those fund managers need to go down earlier, whether they can compete with the rounds from the mega funds. Everyone seems to have assumed that mega funds will continue to attract the most money, and that super early funds have an advantage. And so, like, what happens in the middle is one of the bigger conversations around venture managers that I'm listening to right now. [00:35:52] S1: Well, actually, on that, was gonna ask, like, we're seeing you're seeing more companies created than you mentioned, but not necessarily more companies being backed. What are you seeing in terms of fund formation, like number of funds and total dollars raised? What does that look like? [00:36:04] S0: I mean, it's okay. It's definitely down from prior years. There's a there's a group of funds that are being started that are under 50,000,000 that are you know, probably is gonna come into about equal to last year, maybe slightly down from last year, at least in our data. But in general, you know, I think one of the stories of the last couple years has been a lot of VCs who got started in 2020 and 2021, they're on their last funds, and they're they're not gonna be able to raise again.
00:36:04 · Peter Walker, Pablo Srugo
[00:36:04] S0: I mean, it's okay. It's definitely down from prior years. There's a there's a group of funds that are being started that are under 50,000,000 that are you know, probably is gonna come into about equal to last year, maybe slightly down from last year, at least in our data. But in general, you know, I think one of the stories of the last couple years has been a lot of VCs who got started in 2020 and 2021, they're on their last funds, and they're they're not gonna be able to raise again. [00:36:29] S1: So, I mean, in a sense, you've got way more founders chasing the same or maybe smaller number of VCs. Sure. Some of those VCs have massive AUM, which maybe makes your total dollars available be high, but they're not gonna they're not gonna spread them probably. You know, if you have one mega fund, it's just not gonna be able to spread it as as far as a 100 or a thousand little funds, which each one's gonna do 30 deals. [00:36:53] S0: Yeah. Exactly right. Is that good or bad for the ecosystem? I don't know. But it's definitely on the mind of a lot of emerging managers who are finding this market pretty frigid.
00:36:53 · Peter Walker, Pablo Srugo
[00:36:53] S0: Yeah. Exactly right. Is that good or bad for the ecosystem? I don't know. But it's definitely on the mind of a lot of emerging managers who are finding this market pretty frigid. [00:37:02] S1: Well, I I think it's just for me, like, again, I go back to the founder mindset. Like, it just this is the bar. Like, you see the headlines. You see the medians. You're like, wow. Like, 15,000,000 a at 80 post money. Like, the world couldn't be any better. I just gotta get there. But getting there, like, just understand what that means because of all these dynamics. The bar is just it's just very high. ARR is one of those things. Growth is another. Competitive dynamics is another one. The size of your potential exit, like, all these things really have to align for you to be the one that gets counted in that meeting. Because by the way, everybody that didn't raise an a is not part of that dataset. So [00:37:36] S0: Bingo. It's a rough, rough world out there. [00:37:38] S1: Listen, Peter, it's been great having you on the show. I'll let you rest your voice a little bit, man, and appreciate you sharing the the insights with us today. [00:37:46] S0: Yeah, dude. Always good to see you.
00:37:46 · Peter Walker, Pablo Srugo
[00:37:46] S0: Yeah, dude. Always good to see you. [00:37:48] S1: Alright, dude. Chat soon. So picture this. It's months from now, years from now, and one of your founder friends, a really close founder friends of yours, guess what? Their startup went bankrupt. And it turns out, if you had just shared the product market fit show with them, they would have learned everything they needed to to find product market fit and to create a huge success. But instead, their startup has completely failed. You have blood on your hands. Don't let that happen. You don't wanna live like that. It is terrible. So do what you need to do. Tell them about the show. Send it to them. Put it on WhatsApp. Put it on Slack. Put it where you need to put it. Just make sure they know about it and they check it out.