Gustav von Sydow

@vkhosla Or they just end up creating more work for one another 😬

The right place for AI in law is the enterprise, not law firms which are conflicted if the cost of legal services goes down rapidly. AI makes it possible to dramatically reduce this business overhead.

@credistick 🤣🙌🏻

@coolastekatten Looks amazing 😻

@PeterJ_Walker @tmamut Interesting 🤔 Is that the average val in each quartile, or thresholds? Different these days I’m assuming?

@tmamut The difference in seed round size between the bottom quartile in 2017 and the top quartile in 2017 was about $1 million. Not a big gap.

Lots of conversation lately about how consensus in VC is bad. (and FWIW I mostly agree with that) But the data does say that seed rounds with high valuations will turn into unicorns more often than those with low valuations. A competitive, hot seed round != bad investment

Desalination is a good example of the “consequences of AI” thesis. Water is obviously critical, but current generation desalination uses a prohibitive amount of energy. As AI-led infrastructure spend brings down the cost of electricity, and technology makes desalination more efficient, the opportunity gets larger.

@ankurnagpal Qsbs

QSBS is the most generous tax break in America today: - Start a C-Corp - Hold shares 5 years - No taxes on $15M on sale Advanced features can multiply the impact: - Gifting shares - Setting up trusts - Rolling over QSBS - Converting a LLC at $50M Comment QSBS for my guide

@credistick @FracSlap To be fair, there is a ”If it does work” caveat to the ”any premium you paid on valuation is likely worth it.” 😛

“I'd be willing to bet that the majority of the best-performing deals are the ones that seemed 'expensive' This is actually just a basic function of supply and demand. The best deals are going to have the highest demand and hence the highest price.” This is not true in early stage venture capital, for reasons described here:

Most VCs are thinly-veiled private equity firms larping as venture capital. Who cares about valuations at pre-seed? Startups are a binary game, it either works or it doesn't. If it does work, any premium you paid on valuation is likely worth it. I'd be willing to bet that the majority of the best-performing deals are the ones that seemed 'expensive' This is actually just a basic function of supply and demand. The best deals are going to have the highest demand and hence the highest price. And this actually extrapolates across different asset classes—you see it in oil and gas. I asked @nimblephatty about his best-performing oil and gas deal and if they paid a premium on that rock at the time of purchase and he said 'absolutely' It's really no surprise that you pay a premium for the best rock and get the best return on that asset. In VC land, 60% of funds fail to return capital to LPs and I think it's because they fundamentally do not understand the game they're playing. They're focused on hedging and minimizing downside instead of being focused on power laws and outsized returns. If you're looking for cheap companies to invest in, there's probably a reason they're cheap. A world class founder with an interesting idea is rare—if you are passing on that because of price, you are probably just not good at what you do.

@AntWilson Now that’s an airport slogan

just touched down in the AI capital of europe 🛬

@chrismaconi @johnrushx Not sure there’s really such a thing as a (much) better product that no one wants 😛

@johnrushx Have to disagree. I've seen terrible products thrive with great distribution, and great products die because no one knows that they exist (or even wanted them in the first place).

Product > Distribution Every successful founder I know agrees with it, but every failed founder still blames the distribution, while it’s the product to blame. I think this is the greatest misunderstanding among junior entrepreneurs

@johnrushx 1000% right if you’re in a market with friction free adoption, and it’s possible to build something undeniable better, cheaper and/or easier.

@theo Works flawlessly in @strawberry

@lmushin Just ask ChatGPT to make it longer

feeling sad because I’m 127 slides into the Bond AI report and there are only 213 more to go :(

agents are going to run our lives

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another cracked swedish founder

Damn, Stockholm keeps dropping crazy AI apps Finally a browser where I don't need to have 100s of open tabs Congrats my friend @charles_maddock & team

@credistick @DavisSwenden ”Shaping exits” is probably the most useful value add, for the most companies.

@DavisSwenden Their brand strength means they wont be squeezed out in later rounds, and they can raise enough capital to participate — maintaining ownership/influence. Plus, unlike the majority of seed investors today, they have experience with helping shape exits.

"Venture capital spent the last decade pulling itself in two. The vast amount of capital resulted in the expansion of early investing while also keeping companies private for much longer. It’s easy to find people talking at cross purposes because they exist at opposite ends of the market. The differences are so fundamental that they are practically separate asset classes. It is in these differences that the future of venture capital lies: the value unlocked by embracing the divergent strengths of early and late stage managers — with the former selling significant stakes from their portfolio to the latter." (source: "Why venture capital should embrace divergence") It became clear in the aftermath of 2022, when the venture market took a tumble, that many early stage VCs were frustrated with the state of venture. They had watched portfolio companies get "foie grased", becoming sluggish and overvalued — no exit in sight. Indeed, it highlighted a serious problem that is unique to early-stage VC: managers are exposed to the late-stage market as their portfolio companies mature. For no other category of investor is this the case. Asset managers would never find themselves with a book that no longer fit their own strategy. And yet, for early VCs, this was the norm. (Originally, VCs would partner with a startup from inception to exit, when exits took ~4 years. The greats like @Benchmark and @USV have adapted to today's ~12 year horizons, but many seed investors lose board seats / get crammed-down — losing relevance.) Unfortunately, there was no other option. Liquidity was unlocked at exit, and the limited volume of secondaries had a negative signal attached. Fortunately, this is now beginning to change. The obvious desperation for liquidity has — for now — removed the stigma associated with secondaries. This is an opportunity for venture capital to embrace the divergence, building a new structure around shorter feedback loops, faster liquidity, stronger pricing tension, more responsive investing, and focused investor attention. There's a great read on this topic by @hunterwalk, running through the 'traditional' role of secondaries versus the opportunity today — looking at everything from pricing to signalling and the impact on startups: "Balancing and consolidating the cap table on behalf of the founder to make sure the later investors have enough skin in the game. Sometimes we’ve seen founders proactively asking if we want to sell because they have more investor demand than they want to service." (source: "Praise Our Lord For Secondary Markets, Because Selling Shares Is Now an Essential Part of (Seed) Venture Capital") Unsurprisingly, @chudson is already skating to where the puck will be, talking about the importance of secondaries to investors at the earliest stages like @PrecursorVC: "For funds like his, selling stock of private startups to other investors will be “75% to 80% of the dollars that [limited partners] get back in the next five years,” Hudson told me from his office in San Francisco’s brick-lined Jackson Square." (source: "How Charles Hudson’s Precursor Is Navigating the IPO Drought") Indeed, some investors (like @m2jr) have seen this for a while — recognising the shifting priorities as private companies mature over much longer periods of time, and how that is reflected in the cap table: "Let's be realistic here; you're better off in the fullness of time if certain players are in your cap table, and not a seed fund." (source: "Mike Maples: Three Frameworks to Evaluate Startups and Founders") In summary: There are now three distinct strategies in venture (more on that "trifurcation" in the quoted post), and secondaries play an important role for each in terms of exit, entry, or both. The main question seems to be how many years of 'private market growth' a company might have in its strategy. Meaning, high-speed / low-margin growth for capturing market share (ugly financials). Beyond a certain point, when the growth of a company begins to decelerate, it makes sense to help them mature towards a traditional IPO or M&A exit (more attractive financials). For most companies, the traditional path is likely to remain the most appropriate. Indeed, if the goal of venture banks is to build the 'MAG-7 of private markets', it's not clear how many players that strategy can really support — for all that it is the 'loudest model' today (h/t @kwharrison13 for the lingo). The resistance to this idea is in the 'power law' wisdom that value comes from the compounding value of the biggest winners. It's difficult to see how much of this is just status-quo bias. There are a number of factors which must be accounted for: The status-quo may no longer be appealing as: - Companies are taking much longer to exit - Dilution is much greater - Preference stacks are larger - Early investors lose relevance OTOH, earlier liquidity via secondaries means: - Faster returns / better IRR - Better survival rates - Less dilution at exit - Better understanding of risk/environment It doesn't mean VCs are exiting the position entirely, just that they are properly executing their fiduciary responsibility: taking enough money off the table for LPs before the portfolio company grows beyond their influence — at which point risk is much greater. For seed investors that continue to hold until the ultimate exit, it's difficult to see that strategy as anything but letting Jesus take the wheel.

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@credistick Magnum Opus!

OK hang on, on the Worldpay acquisition: GTCR bought 55% at $18.5B valuation so c.$9B cash at work. Company sold in <2 years at $24B. They returned c.$13B. A lot of that $9B would have been leverage...this is an incredible return. Am I missing something? Beautiful deal.