The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:52:19 · Harry Stebbings, Venky Ganesan
[00:52:19] S1: Yeah. It is dangerous, but I'm I'm joining you on this side if this is where you're going. And you said, like, I I appreciate your leadership through the woke times. [00:52:28] S0: I mean, I think I think what I particularly appreciated about Brian is that he laid out his principles of what he believed, and he told people, hey, if you really want to engage in political activism, then Coinbase is not the place for you because we do not want to have political dialogue here. And if you... If that's important for you, you should go and find a place in which you can do it. I think that takes courage to say, and I think... But it's being true to what he wanted to do. And to me, I think that's most... That's most important is try to be authentic to who you are, and I think I appreciated him being authentic when... I think it came at a cost. Right? Definitely, he was castigated in the press and maybe on Twitter, and he had people leave. But I think he ultimately said, we want people who are authentic to point based values articulated by me, the founder. [00:53:12] S1: Have you ever been inauthentic to who you are?
00:53:12 · Harry Stebbings, Venky Ganesan
[00:53:12] S1: Have you ever been inauthentic to who you are? [00:53:14] S0: I think there are times when you say certain things to founders because you want them to like you or you want to win a deal that may not be truly authentic. What I'll tell you is that I have dealt with my own insecurities and feeling like an impostor. And I've gotten more comfortable in my skin now where I just feel like I just don't do it. And if it means I have to say something inauthentic to me to win the deal, I'd rather not win it. But that's easy to say because I'm sort of at the point in my life I like, you know, that win doesn't matter. Of course, I like to win, but it's not going to change my life. So I always say it's very different when you're a 25 year old and you're trying to build a career. You do whatever it takes to win. And so in some way, morality is sort of a privilege to the people who already succeeded. It's easy to be moral now when you already have the things you have. The question is, will I be a moral person if I were to go back twenty years ago and start that? That's the real test. And I don't think I've lived to that test as much as I would like. [00:54:16] S1: Are you a better investor now you're richer?
00:54:16 · Harry Stebbings, Venky Ganesan
[00:54:16] S1: Are you a better investor now you're richer? [00:54:19] S0: Yes. You're not afraid as much. You're not afraid of failure. You're willing to go all in and go to the hilt. And so I I just think you can go for broke more easily. It's not like... Think about it on a poker table. The guy with the big amount of chips has so much leverage to win. Right? They they can see more cards than theirs. And so ironically, and this is why I think, you know, like the way our capitalism system is set up, the rich are gonna get richer because they just have more opportunities to be the bully in the poker table. [00:54:48] S1: Does that mean emerging managers are just in the old stacked against some game? I don't see... And forgive me for this, Ben. I don't like binaries, but fuck your own media, so you kinda have to do binaries. It depends. Doesn't sell. 30 to $100,000,000 funds are just the worst place [00:55:03] S0: to be. Yes. They are today. That's a tough place to be because you're playing in a poker table where people have such high chip stacks. [00:55:09] S1: I think they were five years ago, dude. [00:55:11] S0: I think what happens is if you are lucky enough, right, and I don't know if this true, but I'm sure if you were to go and look at the cap table, there was some small investor who wrote a check. Oh, Arginine wrote a check into Anthropic. Now, maybe he didn't have a fund then, but like you wrote a check, you were a 30,000,000 to $50,000,000 check, you wrote a check into the Anthropic round, not the $4,000,000,000 round we did, but much earlier. You're doing fine.
00:55:11 · Venky Ganesan, Harry Stebbings
[00:55:11] S0: I think what happens is if you are lucky enough, right, and I don't know if this true, but I'm sure if you were to go and look at the cap table, there was some small investor who wrote a check. Oh, Arginine wrote a check into Anthropic. Now, maybe he didn't have a fund then, but like you wrote a check, you were a 30,000,000 to $50,000,000 check, you wrote a check into the Anthropic round, not the $4,000,000,000 round we did, but much earlier. You're doing fine. [00:55:32] S1: Yeah, but he was an angel not competing for rounds. And so what I'm saying is the 30 to $100,000,000 funds where they need to move like a million, 2,000,000, 3,000,000, it's kind of a pain to fit them into rounds. No. I'm actually putting in 100 ks or 200 ks shows. [00:55:45] S0: I mean, I would... Yes. I'm I'm just... Your principle is right, but I'm just trying to think about counting. I try to be intellectually honest. Right? Think about conviction. How how did Sarah and... Well, how big was Sarah's fund? I wanna say 200 [00:55:56] S1: fund was [00:55:57] S0: $200,000,000 fund, and she found a way to be in some of the most interesting companies early. Can be done. [00:56:02] S1: And then you've got Dave Tisch, I think, would be a really good example actually as well with BoxGroup. Yeah. Like, it goes against the portfolio construction that all LPs love, which is high ownership, concentrated portfolio.
00:56:02 · Harry Stebbings, Venky Ganesan
[00:56:02] S1: And then you've got Dave Tisch, I think, would be a really good example actually as well with BoxGroup. Yeah. Like, it goes against the portfolio construction that all LPs love, which is high ownership, concentrated portfolio. [00:56:13] S0: I think there's always people who figure out how to play agency art. Right? And so... But they are the best of the best, and and so you don't wanna extrapolate. But in general, those are tough places to be unless you're exceptional. And and I think I think like I was reading a tweet between Sarah and Patrick Grady, and Patrick Grady, like she was like... Sarah was telling LP, like, my strategies are just gonna work harder. That's probably the truth. Right? The truth is everybody wants to have some magic strategy that you're gonna do that nobody else is gonna do. There's no magic strategy. Everybody in the venture industry is smart. You have to out hustle and have grit to make through, and Sarah definitely has to. [00:56:47] S1: Final one before we do a quick fire. We mentioned PE being challenged in a lot of ways by a lot of AI companies. We're seeing the keys being handed back at companies like Medallia. You're seeing, apparently, a lot of struggling companies in a lot of these PE providers' books. Is PE pretty structurally fucked?
00:56:47 · Harry Stebbings, Venky Ganesan
[00:56:47] S1: Final one before we do a quick fire. We mentioned PE being challenged in a lot of ways by a lot of AI companies. We're seeing the keys being handed back at companies like Medallia. You're seeing, apparently, a lot of struggling companies in a lot of these PE providers' books. Is PE pretty structurally fucked? [00:57:05] S0: Look. They're smart guys, and they know how to figure out and operate these companies. Right? They also have majority control. In some ways, the venture backed companies, SaaS companies where people pay at high multiples, they add tables and mirrors, and they got spooned, as I say. And I think those are in a tougher situation. Don't be right. Think PE is a challenge too. But the reason why I say the venture backed companies are even tougher situation. At least PE, you have a majority owner who controls the company, can do things. You have a lot of zombie SaaS companies where nobody owns enough to be able to do anything, nobody cares. And so how would you actually land that ship? At least it's PE, they can do some stuff to it. Now landing that ship is gonna be hard for everybody. But I think in that class of twenty twenty one SaaS companies, the best outcome is getting spooned, which really means getting your capital back. And the worst outcome is gonna [00:57:59] S1: be zero. Good old bending spoons. European. Just just gonna put it out there. So the Quakefire is a combination of mine and Joff [00:58:07] S0: Okay. [00:58:08] S1: On your team. Joff. Yeah. Yeah. He came back with some bangers. My partner, Why do you love pocket squares?