9 Burst results for "Sequoia Andriessen"
"sequoia andriessen" Discussed on Invest Like the Best
"Amazon is sort of in a catch twenty two but i think that they're the best setup to actually split up. Aws in retail. And just move on if you think across the entire capital market spectrum from very early stage v see all the way through public equities. What is most broken still in the capital market system. Like if you could snap your fingers and change something about how capitals flow. How the whole system works. What would you change liquidity. It's still very hard for companies to get funded. I think that there's again we talked earlier at the beginning about how society has these rules that institutionalize and make poverty systemic early stage capital markets. Act like a cartel and the way that this cartel works is that you have venture capital firms that you have to go to. You have to go and stand in line and convince them to do it and they all have these rough terms and even if there's price inflation it's always kept moderate like opec minus the meetings. What does i do if you don't pattern match to what they're used to funding. You're not going to get funded that speaks to why blacks women's and minorities are basically railroaded. They're never going to be a of the ruling class. And the amount of companies that get funded will never have a broad surface terry enough where the crazy outlier outcomes are possible. I mean if you think about how difficult it was for spacex and tesla to get funded in hindsight. It's like. Wow what a no brainer bet. But the fact that ilan had to tin cup for so long and he's spoken about this. It's kind of ludicrous. My thinking about this is that we need to figure out a way to make these capital markets hyper transparent and more accessible to anybody who thinks the company is good to any company who thinks they're building a good company and to anybody who wants to put their money to work so that it can't just be harvard and mit and stanford funding sequoia andriessen and gray lock. That's just fucking boring. Any thoughts on health care and education. I'm in a couple them together. As we close out this big theme discussion that we've been having that you think about it in a different way than is typical. I really think there needs to be a state-sponsored alternative to i think. It's ludicrous. that the richest country in the world doesn't guarantee every single citizen permanent residents of its country. Guaranteed health care. I just think that's ludicrous. And i think the the idea that there isn't enough market forces that can create a better. Roi is also ludicrous. This is like another perfect example of the level of regulatory capture. That we've had happen to us while we weren't looking and even if some of these rules had the best of intentions to be honest. This is gonna sound very harsh. They were written by people and when smart laws are written by stupid people. You get that outcomes. The most predictable thing the world has been health. Care inflation over the last twenty years and then what's been equally. Predictable is the decaying quality of life and life expectancy has gotten up the inflation part is because of regulatory capture. The life expectancy declines because of the lack of our away. that's not. I think that we need to go. And we need to have three or four of competitive solutions at market at all times including a government alternative where market forces drive performance. And i think it's the same in education. There is a cartel that creates this assumed branding. And if i were president for a day i would decouple the foundations of private universities from the universities themselves i would force every single university to create an. Is program and i would really revamp the teaching of stem and other capabilities at the high school and elementary school level. Probably with school voucher. so that you could have more choice so that you can have different forms of schooling when you're younger so that kids could learn that. Vocational trades are productive. Can still allow you to be a part of capital and will make you happy anything that you would prescribe. I guess maybe again. If you're president for a thinking all the way back to the start of our conversation. I'll remember this conversation as being about. How can we address. Not just the big problems of the earth. let's say but of inequity. Is there anything else that you would prescribe. In addition to the birth dividend which. I'm going to start talking about a lot now. Integrate idea in president for a day that you think could significantly change or address. This problem i would introduce a carbon tax high would cut personal taxes. Massively would raise the corporate tax rate. And i would create bassett incentives to basically onshore and rebuild an entire economy. That's focused on climate change technology and biotechnology and as part of that what that will require trillions of dollars of investment into factories infrastructure roads tunnels buildings. It will touch everything if we're gonna be fifty trillion dollars of debt and twenty five years. Let's do it the right way. I mean shit if we're going to get shit faced let's get shit faced. Let's drink some good wide bad. You've been among the people that i think have done the best job. Even if some people tell you it's grotesque sometimes of using public platforms to tell a story and a point of view. What have you learned good and bad about using the direct to consumer i. This is the way to think about messaging. Style rather than the traditional institutional structures are ways of messaging. It can only work if you're willing to be yourself. Being authentic is the only sustainable way to have such a platform because otherwise it will come back and bite you in. The ass have had time when you weren't authentic earlier on. Yeah and to be honest for me. Right now is not that in authentic on twitter for me. It's just that there are parts of my personality. That are deeply authentic. That i'm still afraid to share. See to be honest. Like i feel like i'm just talking to you so i can say things that are quite discomforting to me but i'm okay with it in these forums. Twitter for example is very bad for them for stuff like that. It's impossible to share that so the balance is important. I think the kids on tiktok have a term that they call main character which you know in a given part of the world or industry or trend or whatever else is the person that sort of embodies that trend do you feel like a main character in the investment world. Is that a role that you like wearing and do.
"sequoia andriessen" Discussed on The Official SaaStr Podcast
"That high quality data is a necessity to go to market. My Name's Henry Shotgun the CEO. Or? There's no platform out there dots together wrath than death and accuracy of business information, the way that we have. Business information is constantly changing. We built is this core I. AM machine learning in that takes literally millions and millions of unique sources so that we can deliver ninety five percent accuracy for. Data. Scientists who are bedded into our go to market motion. We're looking at every single metric figuring out how do we convert out a little bit better a little bit better a little bit better. I really WANNA build a business that in every single department leather it's sales and marketing like development I want every single piece of that business to be literally best in class. The culture of continuous of our company is a big part of our success. We're used to grind this thing out. We're going to work harder. We're GONNA care more. About the be paranoid when it's good because I wanNA make sure that it's repeatable I wanna make sure that if there is something that we did last week the made it the best week ever that we keep on doing it. Wasn't IPO in the middle, of, pandemic. It's not a celebration. It's really just a launching point for the next day. ooh, right. Sometimes on these digital things, the crowd can be a little quiet but let's all give it up or friend respect Zoom Info. It's great to have him here. and. Henry. Thank you so much for making the time and. You can just sit here and watch that movie on loop fifty. Life. Pretty. Good. Little Fitter now, than you were a for a brief moment in that journey, I hadn't noticed that before is that fair to say. I was more I was more. During the journey out now. Maybe might just be the camera angle might just be the cab rank. Yeah. It's funny. I've learned. Over the years, it's subtle. But if you see a CEO founder that you know and you see them get fitter, it's a good sign like vast like do whatever you can when because. Tell right will end looking good. I had somebody tell me once I. Feel. Guilty. If I take time away from work to work out and I had somebody tell me like you've. Henry told me that when you work out your more productive at work, you're a better version of yourself at work and so why are you not just thinking about that and then investment into your productivity at work? Yeah. It was like, yeah. Okay. I get behind that. Is True. So, this is a special session. First of all, we will try to do some Q. and a. a click on a at the bottom. If you're watching this on zoom rather than on social media clicking there, we'll try to get some these questions and this will be fun session. For Two reasons first, I think as as a case study. Zoom Info Super, interesting company we've obviously all used the product. I think and I think. But when when I I was shocked at the scale of the company, right I didn't know there's a lot. There's a lot of vendors I knew at broken out. So we were shocked in Henry. We'll share some stories as we went through this of how folks may be underestimated him on the journey right in what it took for him to build a deck of corn and it's so interesting to see one of these products that we know are like Whoa, my God, this scale of the product and why and. Why did Zoom Info breakout and it is a competitive space and how does this really work? So I think it's it's Super Fund in Harry pointed out the company did not raise eleven hundred million dollar rounds from Sequoia Andriessen and had its own sort of path through private equity and other things, and in some ways as a company, not a product might have flown under the radar a little bit until it kind of exploded this year. So a lot of interesting Henry asked what he could talk about it sastre and he did us a gift. which we're going to go through is he he laid out his top ten mistakes getting to the first four, hundred million or so in revenue. So I'm going to ask him about these mistakes and what's great is so many of these are themes that we've all talked about. In Our community and Sastre for years and I think it's special. Have to get his time to sit down quietly and write them, and it's so interesting when a co or does because you can hear their brain in their heart the number one mistake probably was the number one piece of scar tissue have. Just pure peer into their brain. So so with that, let me kick this off because this could mean so many things but mistake number one. Being risk averse in investment outside of sales, a lot of founders might have the opposite experience but what does this mean? Where were you? Where did you hold back too much and I think you could probably replace sales with like your area expertise if you're founder or CEO and so. I'm really tied into sale Anderson how it worked I did all of the sales for the first novel who sales on the front line doing sales for the first five years a company's existence like I was I on regular quota carrying sales rep on top of. Everything else and so I had. So every time it came to spend the next dollar I was much more likely to spend it in sales than really anywhere else in the business. Yeah. I was thinking about this this this mistake. I was thinking about why wasn't that I that I wanted to put all the dollars in sales and I was much less likely to put it in marketing HR customer, success. And really I think sales was easy because you can see a direct line. You put a dollar and sales you saw getting into mind. And everywhere else in the business that one was less clear. So you can put it in marketing and do you trust the reports during getting about attribution and where the leaves are coming in you could put it in hr but you really believe that they're going to strategically grow your talent and when you think about not making the investments and all those other areas when you really telling yourself is either you don't trust the people in the department, and so you're going like I'm not going to give money to marketing because I just don't really trust that they're going to be able to execute with those dollars. So. Go fix that don't not make the investment in marketing because you don't trust the execution of the leader. If you're, not GONNA make investment in product you have to ask yourself like why would I not be make none investment And it's probably because either you're chasing the wrong day. You don't trust the You don't think your customers are going to engage with outside of the product. And so I think on this one. We always wanted immediate payoff, and so we never looked to like for the early portion of the business. Then we look to making investments that have long term pay in a lot of that is because we didn't trust or I didn't. Trust the leader in those organizations that deliver me the results that I trust the leaders in sales to delivery, and so the learning here is if you don't trust. A team and you're not making investment in nineteen because you don't trust them, you have to fix the underlying issue there because investments go a long way. Well that's an interesting point, you took a slightly different place than I was expecting I thought you were going to say I trusted sales just put with limited capital. I put it where I knew but you're really saying I didn't know these other areas and I'm not sure about the leader's I hired you hire the wrong first generation of management team because you hadn't done those functionaries before what was. Not Able to trust them. Did you just make the classic hires? Classic. Ms Hires and then after I made the classic new tires. Like if I took marketing Berg sample. Classic. Miss Higher there what I convince myself. was what I was getting from. Them was better than what I would do myself in the limited time that I would have focused on marketing. Across, all of the other things I was focusing on instead of..
"sequoia andriessen" Discussed on Marketplace Tech with Molly Wood
"Bringing diversity into venture capital investing might mean you got to put it in the contract from American public media. This is marketplace tech I'm Ali would. This week, a group of venture capital firms announced that they're planning to make diversity a core part of their deals with startup founders. The ten firms committed to including new standard language in the contracts called term sheets that they make with startup founders. It's a diversity writer that says that the company and lead investor will make every attempt to include a member of an underrepresented group as a CO investor. It's not. Binding language but the idea is that it will create opportunity for underrepresented investors to participate in deals and also attract founders who prioritize a commitment to equity. The initiative was started by Alejandro Guerrero, a venture capitalist based in Los Angeles with the firm act one ventures I wanted funds to feel because, yes, this is important and everybody out here is talking about it and all the founders are trying to see more. That we're the ones signing up for it. We're actually going to be the ones that have the competitive advantage because founders are looking to work with individuals that are trying to do more. It doesn't have the teeth to see it is enforceable, but that wasn't the point. Right the point here is that all of us know what this is about all of us are making a commitment it's going to it's GonNa. Take some effort it's GonNa. Take a bit word particularly if you know maybe you didn't have the diverse network of potential investors to bring in but now it's reason to do that right it. It's a reason to go out and build more networks meet individuals that you know that you can invite and you'll get to know more, and then hopefully when you build that trust, you'll start seeing incredible new deal flow. I mean I guess I wonder why wouldn't affirm WANNA have diversity rider like this I can't speak to why they wouldn't want to do right. Every fund is different. The way that they're structured their make up their cash, their LP's I don't know. What will success look like I'm hopeful that yeah within. A few years year to that, we see this in the majority of venture funds, and hopefully we'll take it to further and say what you embed this in my term sheet. Yeah. Best case could you see a scenario where as this conversation becomes more prevalent? The push from founders right. The competition could incentivize firms to bring on more underrepresented partners. Yeah. Exactly. That's where I hope this is all GonNa go right like the matter what we do it's not enough right hire more people write more checks do the writer create officer programs, cohorts, all of it like not enough the gap is so wide right diversity is forever, and if we start thinking about it in that regard, then it won't become part of our. Normal behavior when we're out building networks when we're looking for companies when we're out doing deals, how we structure them, you know how advise our our founders to think about building their executive ranks their boards, all of it. Right. We'll give them off to a more equitable than just roll and that's the world that I wanna live in I'm an optimist and I'm hopeful that that's where we're going to see ourselves in and some in the coming years here. Alejandro Guerrero is the principal with the firm act. One ventures. And now for some related links as we mentioned in the interview, there are some notable absences from the diversity writer program big Silicon Valley names like sequoia Andriessen, Horowitz client of Perkins we asked all three if they had plans to join this totally non-binding voluntary inclusion of language and their term sheets with the goal of starting a conversation about diversity at all stages of the investing life cycle. Andriessen Horwitz pointed us to its cultural leadership fund and eighteen million dollars. So Fund made up of one hundred percent black limited partners whose primary investor is also black with one goal being to quote enable more. Young African. Americans to enter the technology industry. I should note that the LP's who've put money into the Cultural Leadership Fund are pretty much all celebrities, corporate executives and some athletes. So not the scrappy would be investors who guerrero says he's hoping we'll get a foot in the door with something like the diversity writer. And teepee insights piece from last month notes that the Cultural Leadership Fund has invested in sixty five companies and of those just three have at least one black founder and eleven have at least one female founder. To saying maybe more conversations wouldn't hurt. Cleaner and sequoia didn't get back to us in time for air. And here's what else we're watching in tech on Tiktok watch apparently, maybe you Walmart and Microsoft might team up to buy it and then Walmart would pivot Tiktok towards a more full on ECOMMERCE shopping experience. So creators and influencers could just. Sell you things which listen again privacy and data collecting are real concerns with Tiktok may be no more so than with facebook instagram. Google or Amazon, but considering the awesome and fun and diverse breadth of content on talk and the true love that people have for it. You ve kind of couldn't even engineer sadder fate. tiktok CEO Kevin Meyer who just took over a few months ago saw that Pale horse coming and promptly quit the announced the move Thursday Stephanie who produces marketplace? Tech. Alvarado our assistant producer Michael Lipkin our senior editor Becca Wineman, and Robin Edgar our engineers I'm Ali. Would that's marketplace tech..
"sequoia andriessen" Discussed on Messari's Unqualified Opinions
"Cash returns for your investor. And that's when you get paid and the hard part is a lot of venture. Investors have paper marks materializing paper marks into cash Account which is how you get paid is a very different thing right. So for a lot of investors you know the first five seven years with our fund or Great. 'cause they're marking round after round and UNIM- paper. They're doing really well right there. Unrealized IRR or their internal rate of return is high but they're realized IRR is low right and ultimately at the end of the life of the fund their td Pi or their total value created to paid-in capital is going to be low especially if your accounting for the market. We're living in now or the. Snp does twenty percent. You're not really clear if performances there especially given the opportunity costs in the time value of money right so then the question that I think becomes more interesting is. How do you stay a venture investing strategy into a broader sort of play where you are an operating company is a bunch of different ways of making money and so a coin shares we have capital markets team where we have historically been Meaning we don't interact with external counterparties we trade our own book but we're starting to change our capital markets offering an open it up to external partners. So we do there is we do market making cross number of different markets where we have a bunch of stuff. We've built to help our trading team. We've built a bunch of different connectivity offerings a bunch of different solutions for traders that we can now start to offer externally to the market. We have a cash lending books that were working on expanding and instead of working with just one or two counterparties wieland cash too we WANNA go directly to the people who want to borrow There's a lot of things you can do in the capital market side where we start plugging our companies into what we're doing there. We start providing them with liquidity connectivity. Let starts to get really interesting. That on the asset management side right. We're creating financial products. We have eight listener products in the European market. So what are the opportunities to create new listed products that we can bring to market for both retail and institutional investors and then on the advisory side? We've got some really cool stuff. Planned on capital raising 'em as well as project emanate that we've been working on the we think's GonNa be really interesting compelling for the market inciting a gun is you think about being an investor. They're all these different hats. You sort of wear but at the end of the day. It's not just like nobody's a one trick pony anymore right if you look at the direction. Adventurous headed there. Basically only chew ends of the spectrum where I think it makes sense. One is your mega firm. You have billions of dollars of a U. N. and you are a powerhouse investor. Because of your you got an early before the remodeled really existed and you helped create that category so effectively. You're the category King Adventure and if you look at the firm there it's like Sequoia Andriessen these firms that have been around for over a decade the opportunity to post returns and they've built their own unique special sauce. The by the way like a lot of what goes into the secret sauce at these firms is corporate development. Dave whole army of people who are going out and finding customers for their companies going out and finding potential acquirers for managing a lot of the connective tissue. That most people don't think about right. You see Marc Andreessen on the screen like delivering his talk. There's a whole organization of hundreds of people who make that possible right. They help create that magic and I think on the other and they were playing here in that regard right. I absolutely were. I'd say. Dc G was certainly one of the early movers in that regard and in building out at work and having the roll around you is as prominent as it was in winter up to threats But the model is moving to write in what we're seeing more of like to be ineffective in investor and to help companies today. There are three things you need. One is capital two is influenced at three as a network. Right and what? I think it's been really interesting here. You look at someone like myself right. I don't necessarily have a lot of capital to invest but have influenced. I have a a network. You look at someone like Tom Brady. When pomp came into the industry he didn't have capital to invest but he had influence he built influence and he started building network through his influence and he got the capital piece on the end by partnering up with someone who had capital. Didn't have influenced or network right so you find different ways to piece. That together would think so interesting. About Kirk does have a bunch of people who created wealth for themselves who have capital who now are starting to have influence in world. Starting to have a fairly sizable networks. Who can start to apply that capital different ways inciting the really big challenge here is like we just saw the first series get done. That didn't have a single institutional lead. It was all Angel Investors. Right which pretty cool fifty seven million dollar round and it was a bunch of angels over one hundred people on the CAP table. I think we're working on a deal right now where I'm trying to do something. A little bit similar. Where there isn't one massive institutional lead. We have a group of people who bring their capital influence a network to the table. He is arguably capitalist cheap. Right money costs nothing as we've learned from she eats what's happening in macro markets. Money is fucking everywhere. One point five trillion dollars of dry powder on the sidelines right now in P. E. N. B. C. There is a faulk load of money like an absolute metric. Fuck load of money out there. Huge amounts and the difference between a company that wins a category and a company. That doesn't a lot of times is not how much money you have. It's the people around the company who have influence and the people around that company who can connected to valuable network. So who's GonNa help you find? Your first customer is great if she can raise you know huge round of really favorable terms. But if none of those people on your table can help you find your first customer. Help you hire a VP marketing helped you connect with to corporate partners for going to help you distribution the amount of You have doesn't make a difference and so I think we're at the starting point of a huge change in venture works where we're seeing a lot of people look at Angel. Funds seed fund scout funds different models. For how sourcing might work but also I think a lot of it goes back to category leadership and how you create an peddle influence right is done on the Internet. And if you're not spending time on the Internet peddling influence like I don't know what you're doing investing space could not agree more. I've I've come at this from a couple of different angles. You know when when I think about Bring it back to cryptos nothing like Dallas Don't get excited about community allocation of capital I get excited about community allocation of LP commitments yet Batesville picking the stock pickers picking the people that have networks that have influence because the logos are not as important as the faces anymore And even when the logos are important they're usually only important as like resume fodder for the faces that are now the new influencers and what. I think is so interesting one thing. I've definitely started to notice is a lot of the deals. I'm doing is like the same ten people in the deal right and so we're starting to see in the crypto space is. You're starting to see like when you own is. Starting Crypto Ryan Twenty fifteen. It was one massive category. And I feel like there's been these sub communities that have formed like I might no means an expert defy. I'm not hot on the pulse there because it's not a big part of mine mustn't thesis moment professionally personally hugely interesting. But there's a lot of stuff going on. I can only focus on so many things so when I want to know something about defy their five people go to and they're the in my view. The people who are best equipped not privacy. A lot of time on it by no means expert. Either list of five or ten people who I go to both inside and outside. Cryptography right and applied. Cryptography of people will talk to. Who knows way more about that than me? Who I think are the influencers atteberry. I'll go ask them questions about it. So you think the other piece is also constantly keeping a Rolodex in your mind of who you think is the smartest on different topics that you are not smart on and going talking to them and testing the validity of your ideas because all listen to someone explain something to me are all find a company and be like this is so interesting so cool and then. I'll go to six people who know that idea better than I do by the way also connected to six people who've built businesses like that in a legacy status and they'll tell me a million reasons why Willer won't work with the issues distribution model or Motto are receive. You're constantly testing your own thinking and talking to people who are smarter than you. By the way the way I find all of these people twitter like ninety nine hundred. Ninety percent of the Missouri team has been hired from twitter me most of my professional relationships. They all start on twitter. Pd leads You know even folks that are interesting that I didn't And this is the real shame of twitter that I can't tell you how many thousands of dollars per year I would pay for some enterprise subscription that could triage the gold mine of followers that you just don't even know about in many cases because they might just have Egg and there are more passive and they're not pushing content out so much as absorbing it but still could be highly would pay a lot of money for is messaging aggregated. Because I feel like I have a telegram. What's up like all of these different channels and it's literally twelve platforms. The thing is like twelve so the hard part is like. Where do you action things right so I get all of this like fodder everywhere but none of it is actionable unless it hits my inbox because I use my inboxes a to do list which why delete of emails some like? I don't have to do anything goodbye. There's no way to effectively action. And so what ends up happening in this age of like ideas coming from everywhere is everything goes into this giant unless funnels down into one place for your actioning is really hard which I think by the way. Big Trend of the next decade is GONNA be aggregation in different forms. We already see this like in financial services and we see a messaging but it's very very low low level and it's because things aren't interoperable futures could be hugely important because if it doesn't get into your final filter and then it might as well basically not exist so I think as inkster to learn more about the Roi across these different platforms. People are going to optimize for the places where they're going to maximize our ally and so you're gonNA see networks Value because starting networks aren't good at creating value and that just goes back to the CRYPTO premise. Right which is the networks that create and sustain value. Are the networks? Where people are going to spend time. Bitcoin has created a lot of value in staying out of values. So lot of people. Spend time calling and by the way if you talk about Bitcoin you way Martin attention on social media because the bitcoin network is much larger than the network for anyone. Individual Protocol like. I don't think enough people think about how network effects compound across a lot of different Sort of categories so financial network value on social network value and then beatty in SORTA monetization should network value and starting to bring those together like Bitcoin has done not the best so far. We'll always do that. The not sure maybe not at right now. You know odds are looking good again. Just don't understand why people don't think about optimizing Roi. I see a lot of people spending time on things that are very low. Roi In every sense of the word and if it's low are Y and there's no way of scaling it it's not GonNa work. I don't mean Quin Quin. Shares in menuires wide certainly were obviously information aggregate or the Creator. Sorry bitcoin chairs as many ways and activators. Well right it's an. It's an aggregate or financial products or folks are looking for exposure this asset class between lending side market side the demise and look by the way. We didn't do a job at that internally. I think we spent a lot of the last twelve months. Searing out. How do we want to go to market? And we realize being in aggregation point is the best play. Now the next step is how do we aggregate in? How do we bundle a new ways? You know if you told me. Hey go run you know an ETF company would be like so was your closest companies gene. Probably and I think the reason why is the business model that works and I think it's without a cash cow business which is asset management trading..
"sequoia andriessen" Discussed on The Information's 411
"So corey. Softbank Lot in the news. Recently we've had a pair of stories in the last two weeks actually talking about what is going on there. Let's start off with just the last week story that you co bylined with Amir because that came a off the news that a Softbank Partner was leaving and gave you guys an opportunity to get inside the fund right now and what sounds to be fairly. Dysfunctional is the right word but tense and maybe chaotic situation. Those three words are okay to use to describe the world's largest tax fund right now just to obviously Softbank has been sort of one of the dominant stories of private tech in the last three years when the hundred billion dollar fund one hundred billion dollar fun reshaping the landscape of tech by just funneling as much money as possible to various companies that they choose and having this ripple effect across venture capital where the sequoias Andriessen of the world are also raising writer Growth Fund in order to keep up and so basically where we're at now you know is essentially Softbank burned through the First Vision Fund in less than three years. Essentially they are no longer making new investments out of that one hundred million dollar fund hundred Billion Dollars Yucky and they've set aside about fifteen billion dollars. Fifteen to twenty billion dollars for follow on investments and so companies that they already invested in from Ohio to cruise to bite. Dance can tell the biggest names in tech can take advantage of that. But we're really seeing now is sort of the after shocks of we works failure right which is the maybe not as much as Uber. I can't remember now but easily nearly yeah okay. So their headline investment. I mean the one that really Exemplified Masa Strategy and his belief in a game changing tech companies right. So what we uncovered last week was essentially the internal dynamics of vision. Find and how they've led to sort of poor outcomes for a lot of these companies and I think if you want to understand sort of why there was Bain a fair number of if not failures than at least souring that's from the Vision Fund. You have to understand how was how was created and how decisions get may get get made and what a mirror. I kind of found after some reporting was you have a fairly unique environment at the Vision Fund where you have investing partners who are incentivized to essentially just grow the number of deals that they're bringing to Masayoshi Yoshi Sutton Softbank. Ceo They're not necessarily incentivized to really think about sort of long-term long term fortunes of the fund. So you've had this environment. Where partners are suspecting each other of handing One company that they've invested in. You know another partner kind of taking that data and giving it to a competitor that the other partner also wants to invest in. Yeah so he's really been this bitter. There's there's in fighting and all of it to me comes down to the central. It's fun to think of it this way but challenge of. It's not actually that easy to spend one hundred billion dollars in a brewster's billions kind of way like you need to optimize your system in order to get that to happen. And that's just difficult and just played. I think it's not that's right and and we should be clear. I mean right now. The on paper the top bank just report their earnings and they have to disclose a lot. More than what a typical. Vc firm would. I mean we've gotten our hands on on sort of the fun track record of the injury of the world. You know I think it needs to be couched with with kind of understanding you know. These are tenure funds. And it's still early for for a lot of these bets but right now on paper you know about a third of the kind of companies in the Vision Fund that are privately held have been marked down within the last nine months. The South Bank is saying that their fair value is less than we're bank invested and that's on top of the on paper losses that we've seen from we work the thing that's really been holding the Vision Fund up and why may be a success is in some ways like late. Stage private investing can still be a very good business. And so you've seen some bats like invidia and flip cart and even uber now is in the black from where sopping invested. They're still at least Uber. Stock Prices Right now and we're slack stock prices right now. Softbank would make money if they sold the shares. So we're not trying to say the things are hopeless. But certainly I think the way that the Vision Fund was developed where you did have of these misaligned incentives. You had a team built of mostly former bankers rather than venture investors and I. We're seeing at least the challenges around that yeah and closing on this kind of broader elements of the whole story. I mean Do we have a clear sense yet? Of whether the whole thesis behind Softbank which is like money can be its own weather system and if we deploy it with enough velocity we can rearrange the climate the climatological map of of tack in order in our favor. That's yeah I think that that's proven to be just a bad assumption on soft bank's part. I think when you when I would have another reporters would have some early conversations back in two thousand eighteen when the fund was really just getting going. You know the idea is okay. Let's take it from bank. They would kind of voice this line of thinking you know if we can just take a company. And they're going. Well you know with fifty salespeople. What if they had five hundred right? Wouldn't that just supercharge the growth and and they've just been time and time again. Where that actually masks? The core business challenge or exacerbates. We're excessive and I think even Masayoshi Sun at Softbank earnings at a press conference early this week. You know he still has not sort of internalized that message or at least publicly saying it. I think he had a quote you know. Essentially saying that companies still need war chests companies for sure companies need money survived but now they've sort of shifted their focus at least sort of publicly towards show helping their company show a path towards profitability or unit economics. But it almost feels like they still have an internal is sort of the core lesson which is money doesn't solve every sort of business challenge. Yeah at some points. If you give an entrepreneur this much money then it's going to be. Yeah I mean I mean just to really just lay heavily on on the metaphors. Throwing out casualty here. It's like you attach like a rocket engine to something that's on a potentially rickety track. And if you do that I mean obviously you're increasing the speed of the vehicle but that thing could just fly the fuck off. Yeah and I think the I think the key question to be watching over the next year so I think over the past six months we've seen at maybe a half dozen very high profile at least in the valley flameouts young companies that are One recently by the way brand lists ran. This was the first company to actually close like they shut down after taking about one hundred million dollars from top bank and last year Zoe Bernardo story about kind of that exact issue. How soft coming in really to stabilize that. Exactly and you've seen significant write downs with the WAG investment with the we investment. And you've had some situations that companies called fair which the car leasing company and Zoom which was a robot pizza maker those companies essentially laying off nearly half the staff or pivoting. The business pretty strongly. Those are the really troubled cases. I think we see maybe another ten to twelve cases out of this portfolio ninety company portfolio. Where it's it's already pretty clear that things are going good. I think the question for the next year is just how many more cases are going to emerge where taking Softbank money became a real inhibitor and actually was damaging right and I don't I don't think we're it's quite clear yet. I think it's right now. Trendy in the valley to say that they just totally screwed with some of the patch of these companies. I think we're going to need to see more reporting. Yeah and you know it just I in fact I don't want to say in fairness to them but there's always a broader story for each individual case and it might be a convenient explanation for some companies to be that were already troubled saying. Oh that's Softbank. Money really threw us off our game really. So many of these companies just.
"sequoia andriessen" Discussed on WGN Radio
"Right I mention this before we got a partnership with these guys in the past I'm a big fan but I was only I think I'm going back in my memory here I think I only talked about this on the radio show and on the podcast which of you haven't listen to the podcast you should be basically this but like longer louder and more bad words in my opinion is more fun because you can talk to somebody founders like you maybe it's ten minutes and then it just turns into like an hour as they go down there they're like life channel it's like twenty three in me on why a founder where they came from and why they got to the point where they started a company that does whatever speaking of twenty three me that's why I bring this up so micro managers is a group that we work with in the past only on the retail side so like all of the times we have these pictures come in and you got a Republic dot dot seo slash register in you can invest in these companies that is for non accredited individuals to invest it's you know hundred dollars whatever minimum so recent not so recently been doing this a long time but recently I have got more involved with it on a makerbot your side they have a later stage side which I believe you have to be accredited or if not accredited you have to have a maybe a hundred thousand dollars in assets or something something like that because well you have to have it anyway because the minimums for investing as usual like ten thousand sometimes five thousand ten twenty twenty five fifty and up which sounds insane but in truth to invest in some of the companies are about to mention including twenty three me you would need to be a part of a fund it's investing several million in the units per unit would be you know at Lois probably two hundred thousand and change so it kind of eliminates the ability for you and I to invest in some of these companies at least at this stage if you found it when it was to farmers run around the you know the computer you could give them ten grand or whatever and been in but not now so the idea here is that companies that are in their later stage invest Roberts you know D. F. D. F. one go I PO pre IPO how do I get shares of that company and Michael ventures has basically build an app for this to participate I was you go to the website my prevention dot com and read more about it but the companies that are on this which is why I'm talking about this these are what are available right now okay I don't go into after will pick a couple these Airbnb is one for sure I think everyone knows about top golf if you're not familiar with top golf Robin Hood app you should be familiar with I talk about it constantly it pays another one twenty three me I just mentioned there are several more you know that lift was on here one point these are all companies that are not public that there ARE founder shares or there's a secondary going on and micromanages funds have been able to get in on those rounds and then they enable those of us who are not part of that larger syndicate are not part of that larger investment group to participate at a smaller value so if Michael ventures has to commit to putting in two hundred fifty thousand dollars to equal one unit of the round of the secondary they then open it up to us me in you if we felt the certain you know parameters to be able to invest as little as ten thousand or twenty five thousand to make up the two hundred fifty thousand or whatever the number is choosing amount that they need in order to make their investment so the terms are all presets only give an example of this is well and I'll tell you one tell you this I'll pick top golf because I like the Gulf and and it's something I think everyone can understand like if it's like an amusement park they have I don't know how many actually I I click on unless you know exactly they have something like sixty some odd venues around the country fifty seven to be exact around the U. S. and U. K. and they've got plans to expand into Mexico in Australia Canada and data into revenues around a hundred and sorry if I eat a hundred million dollars as QC twenty eighteen with private companies this numbers are not as easy to to find so that's that's why it's so late bottom line is there are reports that have come out that Morgan Stanley JP Morgan PFA have been hired to help them take the company public at a valuation that they're hoping to be around four billion okay so to give you perspective the last round that they raise that for this company for top golf it was raise an evaluation of about two point one billion that is one in twenty seventeen when they raise a bunch of money this round right now enables us to get in somewhere in the same general ballpark it's actually a thirty by thirty percent hike two point nine billion is the is the estimated valuation on this new second or around if this company goes public and there's a lot if you're still stay with me if the company goes public and they do meet the four billion dollar valuation you know they're about the day of of IPO or whatever the lock up ends and you got in at two point nine billion value that's obviously you know one axis sensually on money and if it ends up being worth more than that then it's worth more than that if you were an investor who got in when the valuation was one and a half billion we're two or two point three in the latest round obviously at a two billion dollar valuation they appealed for you doubled your money no none of us could have participated in those rounds because their reserve for the people who are at like sequoia Andriessen Horowitz and all the rest and obviously the companies that are out there are other the firms and funds like why commoner the get in really early the same can be said for Airbnb but only use this as an example and while like this here BMB excuse me battling a little bit of a cold these days as I'm sure many of your so Airbnb is a little fat Airbnb is raising money and a lot more value have a hard time pulling this up right now but your BMV is raising raising money at a lot fatter terms than they were when they were raising last until the IPO the question is will the IPO pan out or will be like lifting some of the other ones that went out this year with the I. P. O. at all first off second if it does will it panned out where would flop if it flops then your investment is of course obviously not a good investment and it's not worth doing but what I think is fascinating about all this is he gives us the opportunity to invest in pre IPO companies that are a little bit longer in the tooth and why that's interesting is I don't think that that's ever been nothing like I know that though the laws have been able to since about twenty sixteen you can do it since like twenty fourteen and thirteen and real estate but for private companies to be able to invest along with funds prior to the IPO mark being that close to the to the end hi I think it's really fascinating and I'm I'm sort of jazz about it I I kind of want to look into some of these companies because I I think what's best for you know six nine months and I'm on the show rambling on about some of the companies that I like so let's go backwards and then go forward I was talking about how I thought peloton could be an exciting company I was talking about how I love sprout social and live longer when they were private companies that I knew were working on going public I didn't know when they would but I I knew that they were can someone had let me get shares at somewhere around twenty to twenty five percent discount for what its IPO share or like within the first couple months of IPO shares are worth I would have done that in a heart beat because guess what when they when I PO I waited for to bounce off the floor and I bought a tele shares anyway but I bought the shares it like an example of a long ago love on one of the like forty dollars a day one went down about twenty three I bought a bunch of shares a twenty three because I love love ongoing think it's the future of the way people manage their health and Glenn Pullman is a genius so there's that but if I could have been in it sixteen Bucks what four weeks before the I. P. Otis part of this round to Mike about yours I mean who says that that that's a no brainer right because the the company I think it's probably valued at a forty dollar share do you in the next like year and change with the exception of you know recession or whatever this is a really unique tool and opportunities I think people should be looking more into so from that standpoint I think it's really fascinating and then there's also just a part of like by being able to invest in companies that we use everyday like Airbnb I'm not a big Airbnb guy but I think it's cool and I also just going to be a BB thing for one second because I I think it's worth noting Airbnb is one of the companies I don't I I promise this is in a random read this section is leading into the next segment he's one of the companies it's really jumped on to the crowd cheering obviously right because they they crowdsource homes about letting the people who are the Power Rangers of the homes to own a piece of the company they've been working on ways to do this for a long time which I suspect is part of why I PO is not such a simple route but I think that's the future I and we thought we'd be anyone is going to text in right now you're welcome to text or call at three one two nine eight one seventy two hundred years they will yeah dove dummy we had profit sharing you know forever it's a little different because right now I can't trade though shares I can't sell just like profit sharing but it's not far away because when we talk to the the call in pitch in the second half of the show about crypto that is why crypto is interesting because it could enable those people to have an ownership stake in the.
"sequoia andriessen" Discussed on Venture Stories
"What seemed to be inflated prices. If you look back into Saito. Why are we different that even other seat stage firms like a typical seed stage venture firm for every dollar? They put up front they'll reserve two or three dollars for follow on investments. And really really if you're doing that. We would argue only a third of your company only third of your capital is early stage and two-thirds. In other words, everything you reserved is really now late stage, which would late stage risk and return until like why is that why are you in early stage investor and most of your capital is being invested late stage. And and Ida argue is because the best practices in the industry and best practices in quote here because this is a small industry, and there's not a lot of best practices yet. But the best practices have really been established by you know, the top tier funds if you look at the secreta and benchmark gray lock and excel Andriessen, you know, all these guys that are the industry print setters if you will. And they all have the story of oh, it's really important to have reserves and support your entrepreneurs Rapallo on. Then double down on winters, and there's all this lower. If you will in the industry, and I'd argue that makes a lot of sense for them. Otherwise, you know, if I'm gray lock, and I have a billion dollar fund. There's no way I can get a billion dollars into the early stage investments, and so I have to put most of my money late stage because it doesn't fit anywhere else. And now I need a good story to my LP's on why I'm doing that. And so it's like that. Now becomes you know, that's practice around venture. And yeah, it's good to support entrepreneurs, and that sort of thing, but I had argued the data doesn't support it. So we're really driven by the date it when we look at the the data and the analysis give you sense. So forty years of venture kind of linked to the industry early stage. Twenty percent IRR over those forty years. One of the best performing asset classes in existence. If you look at late stage bay stage is being defined as series being beyond ten percent IRR. Oh, it's still a great in kind of the. Industry. But it only is only half the performance of early stage and early date. And so he's me or what's are listed here. Well, sorry, early early stages seed a and b late stages C N beyond. So that's the some of the data that I've been able to see so, and if you draw a line there, and you say, well, anything you're putting C N beyond is getting ten percent anything that's early is getting twenty percent. You know, it's like I wanna put all my money in basically whereas getting twenty percent or better if I can get it even within early stage. How would you break out, you know, seed in a because I have a lot of conversations about him a lot of people use are just talking about. Would you rather be? Why c would rather be first rounded, it'd be benchmark exhilarated at seed or a how do you break out with her? Well, you know, so I'd love to be any of those guys. Right. I mean, they're all killing it. Yeah. But if I look at like, if I look at like, white combinator, and if I look at their unicorn hit rate, and by the way, CBS insights, and pitchbook and so forth and put some of this data out there. And they have about a one percent unicorn hit rate, which is about the industry average. And oh, by the way, if you had an index fund of the venture industry of smart index fund, you do great. I mean twenty percent IRR over forty years. That's awesome. So so I I would say so why combinator is really playing call it the industry index. Now, if you go to like, a first round capital, they're being a little more choosy. I'd say and by the way, they're unicorn hit rate is almost three percent. So they've got a three x hit rate on unicorns compared to white commentator. I think they're doing an awesome job in terms of being able to manage a large folio inequality way. Oh, that's probably we're lu- ends up. So if you look at the success path for us, we probably look more like first round at the end of the day as opposed to like, a benchmark moving other. We benchmark has about a four and a half percent unicorn hit rate, and so you know, when when you get the later stage, you get and the more data you get the easier. It is to pick out the companies that are likely to be successes. However, you're also paying for it with much higher valuations and the competition is much more intense. Yeah, if you had all the relevant skills. You say you'd still rather be you'd rather be found because it's too crowded the air. How do you do you at all? So so I argue that the the opportunity for the best risk and return numbers are in the first ground category. 'cause it 'cause I actually think so a lot of the upside gets bid out, even when you get to the as like the really promising as the so FIS of the world the penalties of the world that sort of thing. I mean, you know, when you come out of the gate really fast, and we'll tell into your by the way that different story. But so fi when it came out of the gate, there were ten x increase between the seed price and the price. So if you were a series A investor getting into so fi you did you did good. But you didn't it didn't make your fun. Whereas if you were a seed investor that one investment made your fund if benchmark was on this call or someone from sequoia, what do you think they would say in terms of why aren't they saying, hey, we should talk frown or construction start doing leading seeds instead of leading ace. What do they believe that's being there? So they they would say it's like, hey, look, you know, my I can get all the capital. So I need the skit my scarcest resources might time. So if I can't write a ten million dollar check and ultimately put forty million dollars into a company. It just doesn't make any sense for me to spend time on a company so like at the seed stage, I mean, even a large seed where somebody's raising two to three million dollars. You know, it doesn't make sense for a benchmark sequoia Andriessen gray lock to spend any time at all on these things and Bowie every once in a while, there's some, you know, it's it's such a blow your hair back startup company that these companies will write a two million dollar seed step seed, Chuck like the like sequoia had and they put like a million dollars
"sequoia andriessen" Discussed on Venture Stories
"Humans, and by the way, the most potent leaderboards are ones where you have tribal familiarity with your peers in the leader board. So it's one thing to get likes from bots nothing to get likes from like people, you know. And of course, the most amazing things to get lex from people, you respect just why I think everyone immediately when they get likes tries to look at immediately or any of those accounts verified because what does that telling you that that's telling you that you got approval from people higher up the leaderboard. But, but what happens is you issue that tweet you get some positive feedback. And then I think your brain is doing the right thing which was like, well that was a pleasant experience. I think we should do that again. And then it reshapes your thinking. And and I don't know to what degree, you know, everyone kind of feels. The more frenetic these days and a little bit slightly more ADD. I believe Harvard publicist pacer paper about attention deficit syndrome. It's not a disorder. Now. It's just like a thing you have. And I wonder to what degree a lot of this is a byproduct of y-. You are literally training your brain to think in the shortest version communication as possible all the time or your training, the brain to to have the most the ideas that will create the most kind of reactionary content the one final variant on this. And I don't spend too much time on Twitter. His actually think one, you know. So one thing people will say is like look Daniel, thanks for that idea. But ultimately Twitter is just used amongst the, you know, Silicon Valley, you know, media Lee sexually not used broadly by the world, which is somewhat true. But the twist here is it's used by journalists and journalists create information that spreads throughout the world. So if you've you Trump as an you know, again as a as a kind of a property that emerges from Twitter. It's not because your average kind of NRA card-carrying American. Our reading Twitter. I don't think so the journalists are and journalists are trying to create, you know, now journalists are in this mindset, where they're trying to maximize likes and that is really changing the types of articles they read and the conversations they have at their offsites at FOX or CNN or CNBC. And so not since I think it has a second order effect where it's really changing global psychology. But it is a game alternately, and this why this why think it's so important to be careful what you reward in what you measure. We'll optimize for it. You have my friend sent me the site where you could see who and followed you. Of course, I see if you follow me utterly dead to me. Now, I'm taking care. Of course. You know, why do you care? It's a very interesting. I think you care for a very important reason. So here's a here's another slightly contrarian thing for us. We are. I think the Silicon Valley mindset is you should not care. What other people think about you? You are weak. If you care what other people think about you. And you know, Bob, Keegan has actually done a lot of work on the psychology of adults has it's interesting framework reaction views people who have. What's it called what he calls? The socialized mindset is somewhat neat Neanderthal. Eq you want to evolve you want to be beyond what people think about you. It's not clear to me that that is true. Because what other people think about you, especially the people you respect think about you is a very important signal as to whether you are doing the right thing or not. And I'd imagine it has a long standing million year tribal history of gosh. If the elder don't think this is good. It may not be good. It could very well. Be that. I dunno. Everyone's upset at you. Because you're like walking around naked. It could be that that is a bad idea. If you believe in the concept of decency and went up to go down that rabbit hole. You get my point. So you do care who on follows you. Because those people have basically decided to vote and say, your idea's are bad or uninteresting to me on you should learn from that now, maybe you should take the opinion that those people are just of a different tribe. You know, and and there's no need for your ideas to connect or maybe the wrong. But I don't know. Maybe they're right. Maybe you should learn from it. So actually think it's prob. Wrong for us to not care. What people think about us? Now, you can care too much. But actually think the right framework here is a balance as opposed to complete and utter rejection of what others think about you. Because then again, you end up like Japan, which is great, but very alien to the rest of the world in a global. It's an exercising compartmentalizing. Yeah. So thinking about games in Broadway of perhaps game design was they we're talking basketball earlier basketball some sense zero-sum game like there's winner, and there's lizards, and I have to be you pioneer feels and other games more positive. So I can win you can win. You'll sue I'm curious in life. What types of games were types of things even are positive some Rivera. So for example, you know, giving someone credit is at positives on when you give someone you respect recognition or award. Or when you have a lot of friends like what types of things, you were you having more of it takes away specialness for someone else. Maybe that's related to the book infinite games, which I know you're fan of but has it landed on you. So so one important thing to note about pioneer. There are multiple winners every month. So it is not like fortnight in the sense that there's one person left standing there multiple people that can win. And I think that's a very fundamental component. If players kind of sense a limited amount of oxygen in the room. Then it's really hard to engender cooperation amongst players and people. Tend to start playing have kind of a very short mind mindset in terms of cooperation, helping others. So you definitely do on a figure out how to craft something that is expansive enough. So that it feels like, yeah, we could work together. Here we could cooperate because we can kind of all win and you see this like a to exit the gaming world. You see this happen in markets. We have different managers. So for example, in the venture world because there's limited amount of oxygen to go around you'll often see funds compete, and it's not actually a very collaborative environment say between sequoia Andriessen, and they may respect each other at a very high level, but it's very competitive. Whereas it's quite interesting. If you look at it in the hedge fund world, especially when they're trying to figure out what calls to do because you know, we can put in a ten million dollar trade. You guys can put into ten million dollars. There's much more sharing of ideas, and it's a much more positive world. In fact, hedge funds have these like off sites where different fund managers go, and trade ideas that would never you would never see an offset in bed. Yeah. Here's the companies. We're looking at what do you think? So so the key here is you have to have the sense that we can all kind of win together another way to, cultivate, that sense. And this is where finite and infinite games as quite helpful reference is to try to make the case that this thing that we're doing let's imagine there's there is a limited amount of deal flow this investment in the company that we're doing I'm happy to split it with you. Because the game on maximizing in life is not making a return on this investment. It's having a relationship with you and having a relationship with you will mean ten thousand other investments down the road. It'll mean our kids can play together. It'll mean, we'll have a great life. We're playing an infinite game where it's not really clear what the end is. We're just rolling it over over and over and that occasionally happens in the angel investor world, right? Where you have like a small allocation in you'll split it with someone because you kind of want to build a longstanding relationships that kind of fold over and over. So so another approach is to try to engender, infinite gamesmanship amongst people. Where you're not really worried about like is this thing gonna work out. You kind of have faith that it will work out, and you want to very long term time horizon with that person to other quick thoughts here on Gleich. Zero-some versus non zero-some. The other thing that I think you have to do to engender healthy competition on the we kind of touched on earlier is and we care about this a lot with pioneer at something. We actually need to do a better job at the matchups between players need to be exciting. And interesting needs to be novelty.
"sequoia andriessen" Discussed on APM: Marketplace Tech
"Seat venture capital firms raise of fund which is a pool of money that they'll used to invest in companies over a defined period a limited partner commits money to that fund or of course more than one and hopes for a good return on the investments that the bbc's make these lps come in three general buckets private pensions public pensions and endowments and foundations here's bj chatterjee again but as an opportunity said you know i have to admit that venture is our poorest performing class within private markets the whole i pension plan has a little over a hundred and fifty million dollars invested in venture capital funds that's about twelve percent of its private market investments over all so it's a very small amount of the total pool the pension fund is investing and even that amount is on the decline part of the reason if you're not with the big guys you're not hitting the jackpot is often peter asher is director at pitch book a research and data firm that studies private markets and venture capital there's a very broad disparity between the top deaths i'll funds like sequoia andriessen of their ability to persistently return outsiders returns to their investors and then there's there's everybody else chatterjee says the hawaii pension fund doesn't have those relationships with big firms partly because it's actually quite small but jagge deep saying bacher does he's chief investment officer at the university of california for the whole system that is big we started investing in venture capital in nineteen 72 of that actually.