20VC Newsletter - Apr 7th 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week!
Wednesday’s episode with Trae Stephens, Partner at Founders Fund & Co-Founder at Anduril:
Download the full transcript here:
My 10 key takeaways:
Biggest Advice to new VCs
Meet with every single company in the first year. Have no standards.
Build a benchmark for what great founders look like.
It takes 500 pitch meetings before you know what you're doing.
Why the most competitive deals are the worst
Prices get out of control and don’t reflect value.
There’s no edge on the investment. Value will decrease.
When a founder lets it become an auction, they’re saying they don’t care if it impacts the responsible growth of the business.
The Best Venture Firm Has No Process:
We all run our own strategy. We do not have partner meetings.
The more process you have, the easier it is to game.
At FF, you have to be pounding the table, dragging people out of meetings, to get deals done. It is that level of conviction.
Why Anduril is a $100BN company
Lockheed Martin does over $65BN a year in revenue and is worth $130BN on the public market.
Anduril operates at higher margins and much faster growth rates.
Incredibly bullish on the path that it’s heading down and the speed it’s growing.
Biggest lesson from Peter Thiel
Hype is not aligned with outcomes.
It’s often negatively correlated.
When something feels super consensus, you should be running away, not running toward.
No company is successful because of their VC
The VC is not going to do the hard work to build a company.
Great companies are built by the founder and the team around them.
The role of a VC is to provide good advice, introductions and not create drag.
Momentum is the most important thing for startups
Look at the best companies in any portfolio.
They were the best companies at every stage.
Companies rarely struggle for a long time and then suddenly hit an unlock.
Loss Ratio is Total BS
It is all upside maximisation.
Great funds are determined by how big their winners are.
Whether or not we got our money back on sub-performers has never impacted fund performance.
Only needle mover is a $10BN+ outcome.
What George Clooney and Repeat Entrepreneurs in Enterprise SaaS Have in Common:
They have the potential to do something world changing and instead do something easy that makes money.
If you are a serial entrepreneur starting a trivial, simple enterprise SaaS company, shame on you.
You need to go big.
The Biggest Risk of Multi-Stage Money at Seed:
Doing just your pro-rata is lazy.
Doing more or less is a signal to market.
Like it or not, signalling is real.
Friday’s episode with Mario Schlosser, Co-Founder & President of Technology at Oscar Health:
Download the full transcript here:
My 6 key takeaways:
Going Public Saved Oscar
We raised half a billion dollars in the IPO.
We needed the money, otherwise we would have raised at bad points in time.
It was necessary & we were lucky we did what we did.
How to deal with stock going down 94%
Going public was supposed to be the pinnacle of my entrepreneurial career.
Our stock dropped immediately on day 1.
It was the most embarrassing day of my life & I still haven’t gone back to this day.
I had to get prescribed antidepressants to deal with my depression.
Biggest Bottleneck is the Professionalisation of Management
If you professionalize management at the top level, everyone else below will follow.
That’s how you end up with 20 levels of management.
You will end up with more meetings & fewer people doing the work.
How Billionaires Think About Wealth and Money
They have an incredibly strong sense of what they’re owed by society.
Their minds keep reminding them & they demand it.
It’s almost like a brain defect you need to succeed.
What Mario Wished He’d Known in the Beginning
Jensen Huang’s advice that “Without pain, there is no resilience, and without resilience, there is no greatness.”
10 years is not a lot of time so what you do matters a lot.
It is your job to bring intensity back into your work.
Advice from Josh Kushner @ Thrive Capital
The world doesn’t end that often.
It’s something you don’t get from books & experience.
The more you go through this stuff, the easier it gets.
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 we have next week:
Founder and CEO of Postmates Bastian Lehmann
Founder of MongoDB, AlleyCorp and Business Insider Kevin Ryan
Founders Fund Partner Sam Blond.
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