How I Invest with David Weisburd
00:42:05 · David Weisburd, Jerry Ye
[00:42:05] S0: You're in the midst of seeing hundreds of these rounds come together today. What would you say founders are prioritizing from their venture capital equity partners? [00:42:15] S1: I think it depends on the stage. Right? So for... And there's also signaling risk and all these kind of things with larger platforms as well. But there is... I believe someone did a study a while ago where there is actually like an impact on your ability to hire if you, you know, get funding from a top tier firm. Right? So that... That's definitely top of mind. [00:42:40] S0: But as... That's really brand. [00:42:43] S1: Yeah. [00:42:43] S0: It's brand affiliation. [00:42:44] S1: Right. As you, you know, grow as a company, then it probably becomes less important. Right? Then it's just... [00:42:51] S0: The company starts to build its own brand. [00:42:53] S1: It's just the terms in that case. Right? Then capital from one company or, like, a large bank probably doesn't differ that much from a a venture fund. [00:43:02] S0: And recent Horowitz just reportedly fired a lot of their recruiting team. What do you make of that given how important talent is?
00:43:02 · David Weisburd, Jerry Ye
[00:43:02] S0: And recent Horowitz just reportedly fired a lot of their recruiting team. What do you make of that given how important talent is? [00:43:12] S1: I think that goes back to the example I had a little bit, right, where sometimes it's, you know, just hard to even attribute where that came from. So I'm not sure if they saw that from their end in terms of, you know, like NPS or surveys that they sent out to their portfolio. But at a certain stage as well, it's just it's just hard to beat a company or a firm that's actually just purely focused on talent. And for for large companies, right, they have their own in house teams. I think we touched a bit on terms of AI making teams much smaller as well. So maybe hiring itself is also just, like, not as needed.
00:43:12 · Jerry Ye, David Weisburd
[00:43:12] S1: I think that goes back to the example I had a little bit, right, where sometimes it's, you know, just hard to even attribute where that came from. So I'm not sure if they saw that from their end in terms of, you know, like NPS or surveys that they sent out to their portfolio. But at a certain stage as well, it's just it's just hard to beat a company or a firm that's actually just purely focused on talent. And for for large companies, right, they have their own in house teams. I think we touched a bit on terms of AI making teams much smaller as well. So maybe hiring itself is also just, like, not as needed. [00:43:52] S0: The distinction between value add and attribution is a fascinating one. It tracks to some of the other conversations going on that I've had with others. Sam Altman's coach, Joe Hudson, talks about this, which the top founders that he's ever coached, and he's coached not just Sam Altman, but some of the top founders in the world, they all have pretty much goldfish memories. They have to make thousands of decisions a day so they don't second guess themselves. They make a decision. They move on. They just compartmentalize on an SDR level so they don't remember. If somebody made an introduction three months ago, they don't remember. And that's not a bug, that's actually a feature. That's what allows them to scale and manage these teams of of tens of thousands of people. That tracks to why these firms might not be getting the the credit for for some of the value add that they're providing. [00:44:39] S1: Yeah. Definitely.
00:44:39 · Jerry Ye, David Weisburd
[00:44:39] S1: Yeah. Definitely. [00:44:39] S0: One of the interesting factors that we see in the startup ecosystem today is these tranche rounds. Sequoia will come in at a billion dollar valuation, and then startups will raise another round at $2,000,000,000 almost, you know, a couple weeks later. What do you think about these tranche rounds? [00:45:00] S1: It's pretty interesting to see those, especially on the AI side. A lot of these are a reflection of revenue growth. It's... They're just scaling so quickly that a round that was priced a couple months ago might be completely mispriced already just five, six months down the road. So I think that makes sense from that perspective. And Venture itself is still sitting on the most dry powder it's had ever. Right? So there's a lot of money as well slashing around. It's just about getting into the right positions. [00:45:31] S0: You've been quantifying venture capital, this art of venture capital, arguably longer than almost anybody going back to 2013 and really built your career on this. If you go back and give yourself one timeless piece of advice when you first started doing this, what would that be?
00:45:31 · David Weisburd, Jerry Ye
[00:45:31] S0: You've been quantifying venture capital, this art of venture capital, arguably longer than almost anybody going back to 2013 and really built your career on this. If you go back and give yourself one timeless piece of advice when you first started doing this, what would that be? [00:45:47] S1: A lot of firms take the if it ain't broke, don't fix it mentality, and it is hard to impact using data from a structural standpoint. Right? You really need top down support from the the GP, unless there's actual KPIs around targets and whether there's outreach, etcetera, it's it's hard to to actually motivate the team to actually go and do the outreach or to to follow-up on flags from the data side. It's actually much easier to target more of the operational side in terms of making the firm more efficient. There's a lot of uncomfortable conversations that come with, you know, just quantifying access or understanding the efficiency of a venture firm. And especially as like an outsider, like, most data people in venture are, coming from like a outsider perspective is hard to... Especially when you deal with attribution as well. And it's a uncomfortable conversation, and it kinda makes it harder than what I initially thought it would be in terms of of of getting adoption through a firm.
00:45:47 · Jerry Ye, David Weisburd
[00:45:47] S1: A lot of firms take the if it ain't broke, don't fix it mentality, and it is hard to impact using data from a structural standpoint. Right? You really need top down support from the the GP, unless there's actual KPIs around targets and whether there's outreach, etcetera, it's it's hard to to actually motivate the team to actually go and do the outreach or to to follow-up on flags from the data side. It's actually much easier to target more of the operational side in terms of making the firm more efficient. There's a lot of uncomfortable conversations that come with, you know, just quantifying access or understanding the efficiency of a venture firm. And especially as like an outsider, like, most data people in venture are, coming from like a outsider perspective is hard to... Especially when you deal with attribution as well. And it's a uncomfortable conversation, and it kinda makes it harder than what I initially thought it would be in terms of of of getting adoption through a firm. [00:46:58] S0: Let's say that you're advising a CEO, one of the top multistage venture capital firms, one of these top 15 firms. And the CEO was bought in of the firm, and they wanted to institute data in the deepest level within their firm on every part of the stack. How would you advise them to execute on that strategy? [00:47:20] S1: I think you need KPIs, like what a true north star is. [00:47:24] S0: You need to make it objective.