The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:50:10 · Harry Stebbings, Rory O'Driscoll
[00:50:10] S1: Would be an apt description, put a valuation of 1,500,000,000 on it because it's Palmer Luckey if he deserves it, to be honest. Discuss. [00:50:18] S2: I mean, I I realized that I had zero value to add on that. I genuinely saw it and said, Wow, genetically interesting. How do you price that thing? I saw some analysis of the number of dogs, military use, blah, blah, blah. But you're all just moving paper around. I think the investment memo probably wasn't one, but to the extent there was one, it's, wow, that's a cool idea. Let's put in 50. I think that was the sum of the investment memo. Let's genetically engineer these dogs to be savage so that they can be better war dogs. I mean, what can you say? That is Palmer Luckey. You're [00:50:53] S1: like, yeah. Okay. [00:50:55] S2: Yeah. Team. Not not not not... I won't be doing it, but who knows? Once you found it on... You know, I didn't nearly say that on traffic. Once you found it on, you know, once you're the sword of the West, you can do what you want.
00:51:05 · Jason Lemkin, Rory O'Driscoll
[00:51:05] S0: Well, mean, there is a connection between this and his other startup. He just started this this laptop one, blue chip. Right? Oh, yeah. He's both solving sovereignty issues where where key national security things are dependent on vendors outside The US. The dogs come from Europe, apparently. I didn't know this. Yeah. I certainly know that almost all the rugged laptops, which probably you can sell for $10, right, or much higher margin. Those components are almost all entirely from outside The US. How big these models are, I don't know. But he's such at the core of this industry that he wants to plug the white spaces he thinks are important. And maybe the TAMs are small, but the models make sense. Like he's right there and he has the channels to sell these products. Like he could get 100% of all the mil spec laptops as soon as this thing launched. It wouldn't surprise me. Right. So you get 100% of the of the of the bionic dog market. And these are real markets where he has visibility into him that other founders can't penetrate. It's just, you know, whether they're worth it, I don't know. But I guess if you're Sean Maguire, your returns are so strong and consistent, it almost you just do it. You just back up. People were mocked in that discovery when Larry Ellison and Mark Andreessen gave Elon blank checks to Twitter with nothing. They just said, Tell me the price. How much do you want me to send? And he was mocked when he wanted to get out of that deal, but in the end, they're making money. [00:52:20] S2: Absolutely. No.
00:52:20 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:52:20] S2: Absolutely. No. [00:52:21] S0: Yes. So maybe I'll have to merge the dog startup into Anduril or something, but [00:52:26] S1: But I mean, it's okay. Haven't you seen the brilliant graph where there's like... You start here, you go up here thinking that you know a lot about the market, thinking you know a lot about the market, and then you just come down to where [00:52:36] S2: you Agreed. [00:52:37] S1: And it's like founder, founder. And it's like where you are in your career. Zero years, fifteen years. In the middle period where you think you're an intelligent investor, no. No. No. That really just [00:52:46] S2: is Yeah. No. I'm very familiar with that. Yes. [00:52:49] S1: It is. It's so, so true. Any others, Jason, that you'd like to bring to IC this week? We're a very busy committee. [00:52:55] S0: Well, 20% of the fund is is... I I think is enough for one week. I think we can't do that 50... What is 20 times 52? What percent of the fund is that? Help me. [00:53:02] S1: It's so interesting. I I I speak to so many LPs. We just had our AGM. The single most common piece of feedback that I hear from all LPs is every mega platform went out to raise. They raised bigger. They spent faster. They're coming back next year.
00:53:16 · Rory O'Driscoll
[00:53:16] S2: You know, I mean, look. Yes. Because it's where... I mean, we're Pavlovian creatures. And, you know, if you put money into Anthropic three years ago, it feels amazing. And most of the platforms did at some level, so they feel amazing. So we're going to do other things over and over again until it... And it's not going to stop until something goes wrong. So yes, there's going to be these big rounds. We are risk on until we're not. The public markets, oddly enough... Let's be really telling you. Interesting. On a ten year PE, they're they're at an all time high. I mean, objectively, they're at an all time high. Interestingly, on a forward PE basis, they're actually quite cheap because the market, you know, oddly enough, earnings have been so amazing in part driven by one off gains from privately held investments in the public companies. A current PE basis, stocks like Nvidia on a forward PE basis look cheap. Now, you're going to have this long discussion on cyclical blah, blah, blah, but the aggregate market isn't hurting. Now, what is true is that four fifty out of those stocks are hurting. It's a really weird... I mean, a better statement, Harry, is it's a really weird market right now. There's 40 or 50 stocks that are working in the S and P that are primarily associated with tech and AI. Everything else is quietly subpar. And oddly... And then despite that, there haven't been a ton of IPOs because everyone's been waiting for this trillion dollar thing, and the whole world is in suspended animation. So that's where we're at, which means that... Just to draw to a conclusion, which means that it's a perfect time for these platforms to put a whole ton of money out on private companies because there's a big demand for money.
00:54:38 · Harry Stebbings, Rory O'Driscoll, Jason Lemkin
[00:54:38] S1: Any other stories, boys, that I've missed this week? [00:54:41] S2: I mean, there's a lot. I mean, the interesting thing is, did appreciate... It was odd because I thought you'd come in with Anthropic and nothing else, but there was a whole bunch of financings we talked about. You you've got the continuing SpaceX Tesla drama, which is gonna run and run and entertain everybody for hours to come. Then you're right. There was a ton of really interesting companies. [00:54:57] S0: I had one that was under discussed. I didn't fully understand. I should have done more research on it. There was much more drama with Zuck and the board about leaving California than was discussed. It was clearly a high stakes drama. Mean, Zuck hired lawyers. The lawyers negotiated with the board. The board was not his ally. He had to threaten to sell all of his homes and leave in one week if they didn't give him the equity that he wanted to stay in California. There's a lot of mechanical things happening there with the billionaire tax and others, but the fact that it had to go with lawyers for months and threats to sell, I get it, but it's certainly the opposite of giving... Of the era where founders are controlling everything. Right? It's a... There was a lot going on.
00:55:40 · Rory O'Driscoll, Harry Stebbings
[00:55:40] S2: Yeah. The one thing you can't control is your own comp, and I get it because even Elon has to do that. Because if you're the board members and you do this without CYA a 100 different ways, you're vulnerable to being very second guess. My guess is even if they're perfectly reasonably amicable, everybody should lawyer up so they have protection and they have a process, because process is your friend in these things. But then on top of that, it was super interesting. I don't know the detailed dynamics on whether the voting, but yes, the billionaire tax is up and we'll know in a week or two. But people who think there's no impact from that have never met a billionaire when you've tried to take 5% of their money away. It turns out they take it really badly, especially when you want to take 5% of their money away. And, you know, there's some voting criteria on it when you have more voting control than anything else. So it's more than 5%. And especially when the legislation says, yeah, we can do it again soon. [00:56:30] S1: I thought they'd already given it always, and this is the point of the Priscilla and Mark Foundation that we have a tax [00:56:35] S2: efficient people tax like to give it away, but they don't like it to be taken away. It's all about agency and control. But, yeah, know that... You're Jason. That was that was probably much noise under the circumstances. And, you know, it looks like whatever happens on this billionaire tax, it's been remarkably successful in driving out enough billionaires that you will have an ordinary income tax hit. So go team.