20VC Newsletter - 21st December 2025
Here are the transcripts and top takeaways from 20VC episodes released this last week.
Monday’s episode with David George, GP & Head of Growth Fund @ a16z:
Download the full transcript:
My 6 key takeaways:
The Idea That Large Funds Cant Have Great Returns Is BS
Our best performing fund ever was a $1BN Fund.
In that fund:
Databricks returned 7x the fund.
Coinbase returned 5x the fund.
Github, Digital Ocean and Lyft are also in that fund.
So the idea that large funds can’t have great returns, it’s just not true.
So Much Value Is to Be Had at the Late Stage.
We looked at the top 50 IPOs from 2017 to 2025.
47% of dollar gains came from Seed to Series B, while 53% came from Series C & later stages.
There is a tremendous amount of value in the later stages.
What Is the Biggest Advantage of Staying Private for Longer for a Company?
The biggest benefit: You avoid stock price volatility you get from public markets.
If you can steadily grow or control your stock price in the private markets. Even if it’s a slight discount to where you would be in the public markets, it is a benefit.
Companies like SpaceX, Stripe, and Databricks have been able to do that.
Does Revenue Matter as Much as It Did Before, Given How Fast and Transient It Is?
It still matters but the bar is raised: We also look for high retention & engagement.
AI companies are growing so fast, we cannot look at years of renewal behavior.
Heavy organic customer acquisition and high retention & engagement are all extremely good signs.
Do Margins Matter Less Than Ever in This AI World?
The history of technology inputs would suggest that the margins will rationalize & will go up.
It is possible that this next generation of companies is 50% gross margins, but if they’re delivering a ton of value growing really fast, that’s totally fine.
We give more of a pass than we used to.
Why a16z Invested $300M into Adam Neumann and Flow
We invest behind strengths of strengths & Adam has some of the strongest strengths of anybody in the market.
He’s got an incredible insight…The average renter in the US spends 30% of their disposable income on rent, and yet it’s the only unbranded experience in anyone’s life.
The likelihood that Adam can build a huge company compared to the average entrepreneur is extremely high.
Thursday’s episode with Rory O’Driscoll, GP @ Scale, Jason Lemkin, Founder @ SaaStr:
Download the full transcript:
My 6 key takeaways:
Late-Stage Companies Not IPO-ing Is the Greatest Gift to Venture, and That Is the Winning Play
Late-stage giants staying private keep the biggest gains inside venture.
We can flood these top 20 companies with VC money and keep the upside.
Playing in the growth supercycle is the winning bet today.
Every Category Is Converging Now and Will Compete With Each Other
In 1-2 years, there will be a massive convergence of categories.
It’s not like the old days where it took 7 years for Datadog to compete with PagerDuty...
AI is creating convergence where the same product can do way more.
The Risk Is Not That Cursor Replaces Figma, It’s That It Maims It
Old customers don’t completely leave: They renew, but don’t buy as many seats.
Retention remains good, but NRR drifts down.
New customers aren’t purchasing because Cursor is “doing enough”, and growth decreases.
Cursor Does Not Compete With Replit and Lovable Because It Is a Higher Churn, Worse Category.
It is a distraction.
When they have insane retention and growth, there is no reason why they should invest in a smaller, high churn space.
They are in a bigger, better market.
Elon Option Value Drives the Market Cap of All Elon Companies
The “Elon Option Value” is the premium people are willing to pay for Elon’s companies.
It is basically a call option on unexpected breakthroughs and new markets.
The risk: if confidence breaks or leadership changes, that premium can unwind fast and hard.
I Do Not Understand the Tesla Market Cap, and I Would Not Envy the Bankers Trying to Get SpaceX Done at $1.5TN
Tesla’s market cap still doesn’t pencil out cleanly against financials or even TAM.
At $1.5TN, you’re underwriting belief and narrative more than measurable cashflows.
The SpaceX pricing will depend on how many Elon believers show up.
Friday’s episode with Gerald Marolf, CPO @ On:
Download the full transcript:
Let us know what your big takeaways from this week’s shows were in the comments below!
Thank you for reading, and don’t miss the great guests over the Christmas period:
Monday 22nd Dec episode: Year in Review w/ Jason Lemkin & Rory O’Driscoll
Monday 29th Dec episode: Matthew Fitzpatrick, CEO @ Invisible Technologies
Friday 2nd Jan episode: Luke Harries, Growth & Engineering @ ElevenLabs
Thank you for reading 20VC.
This post is public so feel free to share it.
Thanks for reading 20VC! Subscribe for free to receive new posts and support my work.