# AI Agents Reshape SaaS Valuations and PE Exits

**Podcast:** The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
**Published:** 2026-04-30

## Transcript

It's entirely plausible in a world of super big exits that 10 super big exits cover the entire nut from the LP perspective, such that it's still a good business.
It's a whole new world where I think OpenAI is even more competitive again.
The dirty little secret of venture again is how much of your money you make in that one year in 10 when everybody buys the dream.
More and more, the agent is going to choose what models and just what vendors we use.
It's possible you look back and see that as the first disconnect from compute equals revenue.
They didn't way over-level it, they just way overpaid for it.
You can service 2 billion plus of debt on a 1 billion low-growth company with a pre-AI story that has to transform to AI.
This is 20VC with me, Harry Stebbings.
It's my favorite show of the week.
Rory O'Driscoll, Jason Lemkin, the biggest news in tech.
In other words, this shit's going to make you much smarter at a dinner party.
So what's on the agenda this week?
Number one, $45 billion.
poured into Anthropic from the hyperscalers.
Next, China blocks Meta's $2 billion acquisition of Manus.
And then finally, Toma Bravo hands over the keys to Medallia, to creditors.
$5.1 billion of equity wiped out.
What is the future of this stage of private equity?
But before we dive into the show today, are you a founder working nonstop to raise your next round?
Are you an investor doing all you can for your portfolio companies to help them stand out?
Funding and scaling a vision is challenging.
Banking should not be.
HSBC Innovation Banking caters to tech and healthcare founders all over the world who need a really great banking partner that matches their pace, offering fast onboarding, product packages designed for your business, and capital solutions built for high-growth startups.
and the VCs investing in them.
With HSBC Innovation Banking's rapid onboarding, you can get access to your new accounts and facilities quickly, so your team can stay focused on building and scaling what's next.
You'll be paired with your own dedicated team of venture ecosystem veterans who have the network and experience to guide companies in your specific sector, at your specific stage.
And behind that support is this real strength, HSBC's $3 trillion balance sheet and global network that provides this stability and international reach needed to grow your operation with confidence to see how hsbc innovation banking can support you whether you're on day one or day a thousand visit innovationbanking.hsbc to learn more and connect with an innovation banking specialist that's innovationbanking.hsbc while hsbc manages your corporate banking needs deal helps you build the global team behind it Founders scale startups faster on Deal.
Grow without borders.
Deal handles the hard parts of global hiring, so you can stay focused on growth.
Set up payroll for any country in minutes.
Hire anyone, anywhere, and get visas handled fast.
Deal takes care of onboarding, HR, IT, EOR, benefits, and compliance.
Everything your startup needs to scale quickly.
All done fast in one place.
It's why more than 40,000 fast-growing companies, like Airwallex, Eleven Labs, and...
Intercom, trust Deal to move fast and get back to building.
Visit deal.com slash 20VC.
That's deal.com slash 20VC.
Deal handles the global team and Framer handles the front door.
A website should help your business grow, not slow it down.
If updates to your .com feel harder than they should, Framer is the shortcut you've been looking for.
Framer is an enterprise-grade, no-code website builder that works like your team's favorite design tool, and it's used by companies like Perplexity, Miro, Mixpanel to move faster.
Designers and marketers can fully own the site with real-time collaboration, a robust CMS built for SEO, and advanced analytics that include integrated A-B testing, so you're not just shipping pages, but you're maximizing what works.
And when you're ready to ship, changes go live in seconds with one click.
publish without relying on engineering.
Plus, Framer is built for scale, with premium hosting, enterprise-grade security, and 99.99% uptime SLAs.
Whether you want to launch a new site, test a few landing pages, or migrateyourfull.com, Framer has programs for startups, scale-ups, and large enterprises to make going from idea to live site fast learn how you can get more out of your dot com from a framer specialist or get started building for free today at framer.com slash 20vc for 30 off 30 off a framer pro annual plan that's framer.com slash 20vc for 30 off framer.com slash 20vc rules and restrictions may apply you have now arrived at your destination Boys, we are back.
It is another week of Harry asks questions.
Rory continuously puts them down as being terribly phrased and useless.
And then Jason provides the actual wisdom and value.
But I love you.
Sorry.
Feeling spicy.
I just came from an LP meeting.
I wanted to start with OpenAI missing numbers, specifically across user growth and revenues with the two obviously matches missed numbers on.
It's led to call.
dropping and Oracle dropping, I think 5% and 7% respectively.
Is this being made too big a deal of?
Is this justified in terms of the response that we're seeing?
How did we analyze this?
It feels a little overdone and a little over late.
Overdone in the sense of it accurately flexed what happened last year, which is, if you think of the two big picture jobs here, you know, you've got two jobs when you're running one.
You've got to build great models and you've got to buy enough compute to be able to run them.
And there's no doubt in the back half of last year, OpenAI failed at the first part of that job.
They didn't build great models.
And as a result, their traction relative to...
Antropics declined markedly.
Their market share declined markedly, right?
That's probably the shoe that's dropping now.
If you look at the model they shipped recently, I think it's 5.5, reviews of the coding say it's pretty damn good and arguably better than the current Antropic model.
So I think to some extent, this is a late dropping shoe on facts that were probably knowable.
three, four months ago, if you were paying attention to the traction.
And the funny thing is, in the super connected Twitter AI universe, in fact, Antropic is the guy that's getting the slamming right now.
There's a whole bunch of, oh, Claude can't keep up, can't support the users, and the current codex model is better.
So this feels a little like old news that maybe is news to the Wall Street Journal, but probably isn't news to anyone paying more attention.
It's funny.
This is looking backwards, right?
This is looking backwards, a lens into last year.
It confirms what we knew, right?
Anthropic, obviously, the rate of growth was incredible.
And some of that was market share, right?
It wasn't all AI.
Some of it was market share and it stole market share.
Elon was clear about this, that Anthropic had, quote, something special in coding, which underestimates how much of the overall growth in the market coding was, right?
And I think OpenAI acknowledged it by...
double coding red and getting codecs better.
Just two thoughts.
One, as crazy as it sounds, I think this is also yesterday's war.
But I think going forward, more and more, the agent is going to choose what models and just what vendors we use.
Do we use Canva or do we use native AI-based generation tools like Fall?
The agents are going to choose which LLM we use.
Just like everyone from Dario down has said there's going to be more and more agents doing coding, the agents are going to make the decision on everything.
And I would say as a consumer of LLM, forget about coding, which is the number one by dollars, right?
As workflows expand to do everything, as agents do more, they will pick the LLM.
And I see no competitive advantage to Claude for most workflows.
It is so good.
OpenAI, whether it's Codex 55, just state-of-the-art of the models, it's so good for my workflows that I think the advantage that humans get out of Claude and Claude code, which is huge, right?
This was a story last year.
Humans shipping code, shipping products.
We got an advantage.
We got more superpowers from Claude and Claude code.
I'm not sure agents are going to get the same advantages.
They may get just as many advantages from OpenAI.
And I already see that with our agents, our AI VP of marketing, AI VP customers, our applications.
They love OpenAI.
They love it.
So I think this is another benefit that is ephemeral as agents take over more and more of the workflows of our lives.
And we're going to look back at last year's transition era where most workflows were managed by humans.
And late 2026 into 2027 is most workflows.
are going to be managed by AI agents.
Not AI, agents working autonomously.
Not crazy open claws blowing up our Mac minis, but running everything.
And I think this is where OpenAI is very well positioned.
Very well positioned.
The agents will pick what they want.
And it's not about what makes humans better.
And our agents like OpenAI.
One of the many reasons I've come back to Team Sam and Team OpenAI is not because I care, because my agents like OpenAI.
They love it.
So I got to follow my agents.
Just like you got to back your team of humans in the old days, like 2024.
Today, I have to back my team of agents.
If they pick open AI, I got to be on the team.
I'm not exaggerating.
It's a radical change that most folks are just still in the human-led AI world.
They're not seen yet.
We're off piste already, but I'm going with it.
I'm going to paraphrase and then I'll have two questions.
What you're basically saying is in a world where agents pick the models, you don't have this human anchoring bias for my favorite agent.
And thus it becomes more of a every day is a new day kind of market.
Yeah, they have very different perspectives on what vendors to pick.
Agreed.
And presumably has better perspective.
So the interesting thing about that.
So the obvious question, what does that mean for the large AI companies?
And so I have a couple of questions.
One is, if the choice is between OpenAI, Claude, and Gemini, then it's still a nice, cozy little oligopoly.
To get in the game where you can be chosen by an agent between it, do you still think it's just the state-of-the-art foundation models who are going to be relevant here?
Over the weekend, my 996 project was I built an agentic API grader where I just had Claude, OpenAI, and Gemini together.
take the top 120 APIs and grade which ones they thought were the best, which tools I thought, 11 labs, everything on down.
Interestingly, Stripe got the highest grade, got the only A+, which is a reason to go along in Stripe.
I did not think Stripe would come out on the top.
My Captain Alvi is learning, and you'll see the same thing if you just ask Claude what to use.
Very biased toward the leaders.
Now, very biased toward momentum.
They're not going to recommend Marketo for your agent to do marketing automation.
Okay.
In fact, it mocked Marketo outreach and sales loft as tools useless to agents.
Okay.
This API grid.
They said there is no place in the, an agent will never send an email through outreach sales after Marketo because it will just craft and send a better email itself and said, these are worthless products in the age of agents.
But they are very, if you had to do a two by two, they want market leaders that are innovative.
That's who the agents pick.
So I think for now, that three by three is Gemini, OpenAI, and Anthropic, right?
In fact, the order is Anthropic.
And so the greater, it graded Anthropic just above OpenAI.
And then Gemini was just down here.
So it was interesting.
That's what all of them wanted to pick.
And I think that's the world we're going into.
And the old guard are going to be bypassed or useless.
So to your point, I think this is an interesting story, but it's a whole new story.
the agent's pick.
It's a whole new world where I think OpenAI is even more competitive again.
So let's go with that.
So my mental model remains it's a three-way oligopoly, just like cloud is a three-way oligopoly with Google Cloud, Amazon, and Azure, right?
What you're saying here is, which is fine, got it.
And then the other question that I'd be curious to get your thoughts on is, when OpenAI just announced that agent product, it seems to me if you're running one of the foundation...
model companies and Jason's world is the world you agree is going to happen, then you just make damn sure that you build the agent harness such that the device picking the agents is your device.
Are the agents picking models?
Under discussed.
The public markets have the right idea, but the wrong direction.
The public markets think vibe coding and Claude are their threat.
No, the threat is what the agents pick.
And actually, if you look at overall, the markets, they almost get it right.
They're worried about Atlassian.
and Monday because agents don't need project management tools.
They have no use for them.
And the ones that are actually have outperformed, right?
The Twilio's, the cloud flares and others, the agents still have use for it.
So our whole narrative, the public market somehow saw the future that most podcasts couldn't see, which is what matters is what the agents will pick.
And to your point, this is why the agent wars, I mean, Mark Benioff gets it even more.
This is why Sam Altman, they're all like, you got to win the agent wars because if OpenAI wins the agent wars, then you have lock-in.
The OpenAI will probably pick OpenAI as the API.
Now, maybe they will evolve where they're actually agnostic at some level, right?
Where these agents are so successful, they have to pick the best of breed.
One could imagine it.
But you've got to own the agentic layer, not just the fabric, but you've got to own the agents too, because they're going to make these decisions.
Do we place no value then on large multi-year enterprise deals?
a la ServiceNow, we had Mike from Atlassian on who talked about the increased rate of multi-enterprise deals that are very large.
Do they just not have value because we're going to see the eradication?
They just mass decay.
Churn that is deferred still exists.
It is where the rent to CEO and the mediocre hide.
Okay, Workday does three-year contracts up front and five-year renewals.
So the average Workday customer effectively signs up for an eight-year contract.
Three and five is their standard term.
Does that mean they're going to stay on Workday forever?
No, that means they have eight years to find better agentic solutions.
Now, maybe the executives are all gone by the time that that comes up.
If you believe that public values, Rory's better at this than me, if you believe that public stock prices are the sum of terminal values of cash flows and profits, then deferring churn, masking churn doesn't matter.
It doesn't help if you defer it four years because if it dies, if the customer dies anyway, at the end, you never have it because it falls off your ARR rules.
I think that's definitionally true.
I'm not sure it's extreme in the sense I can envisage a world where even eight years from now, you don't turn off your SaaS system of record, but you're not growing.
So interestingly, and again, I didn't expect to be here so quickly, but hang on, Jason, I'm going to greet you on something.
It was interesting because we're going to discuss service now at some point in time, right?
Which grew 20% plus or minus, very negative market reaction.
And if you listen to the analyst call, this will make you very happy, Jason.
A lot of the really...
really kind of grindy questions were, is your AI agent revenue really real?
Are you just bundling it?
Is it growing fast enough?
In other words, I buy into, let's call it Jason, the narrative you articulated, which is, if all you are is a system of record for humans, you are a bounded cash, even if you're not a negative.
NPV.
And I think some companies will be.
We'll talk about that later.
But even if you're not a negative NPV, you're a slow growth at best NPV, terminal value.
And the only way to get the high price that you need to make the stocks compelling is to have agent-based activity on your platform.
And it was just super interesting.
We had that talk a few weeks ago where you kind of gave me clarity on that, that you need to see agent acceleration.
And then it was funny to look at the...
the call.
And this is a company, I should know the numbers, doing $16, $20 billion.
And they're grinding the CEO about a half a billion to a billion dollars worth of agent revenue because what they've recognized is that's the tell for the future.
And I'm willing to bet in a quarter or two, someone's going to be asking Benioff for how many calls to your agent, your headless API did you get?
How do you measure that?
How do you measure value?
And that kind of stuff.
This is the way it's going.
So you are right.
I think Canva is going to have a wildly successful IPO.
And they just launched their They're agentic suite.
Okay.
And it's got a lot of great agentic products and you can, you can vibe images.
You can vibe, you can vibe everything.
Like it's actually very, very good.
This Canva two, I think it's called Canva 2.0.
It's great.
And if it had come out last year, it might even be the default that we use instead of startups.
Okay.
And it's so, so no question it's Canva 2.0 is great.
Is it the best?
It's definitely better than make.
No, I mean, it's great.
It's great.
Okay.
But ask yourself a question.
Would an AI agent use it?
No.
An AI agent is not going to go in and move assets around.
It's just going to create the assets.
So an agent doesn't need Canva.
This is the meta threat.
The stock prices reflect, but the narrative misses, right?
Canva, maybe in 2026, built the right 2025 product.
But will agents buy?
I don't think any chance an agent is going to use.
Canva, I don't think there's any chance an agent is going to use Jira or Confluence unless it's forced to.
It has no need for these products.
Can you help me understand?
I love Cliff.
He's been a guest.
He's a really good friend of mine.
If he's going out in 28, which I think is a realistic timeline for when he would want to go out, and you just said he will have a successful IPO, but agents would never use it.
Yeah.
Can you...
I don't know when it crosses over at the low end at consumer versus enterprise.
Actually, this is one area where the enterprise crosses overhead of consumer because we want to automate these workflows as soon as we can.
Right.
I don't know if the average low end B2C user who gets so much value from Canva is going to make themselves obsolete with it.
I agree.
They're going to still be designed.
They're going to pay 18 bucks a month, getting incredible value out of Canva.
So they may be, it may take time because we, none of us really want to replace ourselves with agents, right?
It's our team.
So the more people you have on your team, the more you're going to deploy more agents to replace them.
The more you're just yourself, a solopreneur, the more you're going to use AI tools.
but not agents to replace you, agents to enhance you.
So this is going to harm enterprise workflows before it hits the sort of prosumer market.
I think there's a lot in that.
And I want to just put a bookmark on it because I think it was actually very helpful.
What it means, Howard, if you think of three categories for software companies, eroding terminal value, melting iceberg, you're in trouble.
You have a low stock price.
We'll talk about it later.
And if you've leveraged, you're dead.
Then the middle category is system of record.
They're going to keep you forever, but no activity.
but not a ton of agentic activity on top.
You're going to be worth something.
There is a positive terminal value, it's calculatable, and there's a price at which you should buy the stock.
And then the happy outcome is the agents are using you when you're getting increasing returns from AI leveraging your technology.
If you put those three buckets, I think what Jason, you're right in saying, Jason, in those three buckets, successful enterprise software companies can easily get to that top bucket.
Because you're right, companies want to automate because it's called taking costs out and it's called making yourself more efficient.
So successful SaaS companies in the enterprise that adapt to this reality can probably reignite growth.
Obviously, unsuccessful ones will fail.
With what you're saying about Canva, I'm not a design person.
I don't have a feel for it.
I like the team, but I'm not a designer.
I have zero creativity.
But I think you could be right, which is that individual user, small user, they want to have AI tools, but they don't need to create a whole AI automated workflow because they're just not doing enough to matter.
So intuitively, what that says is they end up in that middle bucket.
where I think now bringing it back to the IPO, the point is they have the scale and the profitability to be an IPO.
This company is going to do great.
The problem is, as we've discussed before, so much of venture is about the pixie dust upside and any IPO without pixie dust upside just gets priced like a real company.
And it's always a bummer for venture people when their company gets priced like a real company, because it's just so much easier to make money when you get pixie dust credit.
And the truth is SaaS pixie dust credit expired in 2025.
You know, we talked about Rippling growing 70 some odd percent at a billion, right?
This should be, if this were an AI play, it would be a jaw dropper, right?
AI.
Will it trade at a SaaS discount?
I sure hope not.
No, it'll trade.
See, I don't like the second half because I actually think it's, I think Rippling is a great story instead.
And I know you do too, but it's like, it's going to trade on a sensible.
adjusted PE multiple based on growth, based on cash flows, entirely rationally in a way that any value investor could buy it, which by definition means it won't trade like SpaceX, which is going to trade hopes, dreams, and prayers.
And the dirty little secret adventure again is how much of your money you make in that one year in 10 when everybody buys the dream.
It's a great outcome.
And so it's not going to trade.
I don't think it's a SaaS discount as much as I think it's going to trade at fair value.
I mean, maybe that's the way to say it even starker.
A lot of venture capital makes money when their assets don't trade at fair value.
They trade at a narrative premium to fair value.
And in those one year in 10, when you make 30 to 40% of your total cash back, you get an unexpected gift.
Good SaaS companies that aren't AI first are going to trade at...
fair value, which means if you've created value, you'll get value.
And I think Canva and Rippling have both created enormous value.
So they'll get value.
But what they won't get is that stupid 30 times revenue premium that looking back, you might've gotten 2021.
We started this conversation on OpenAI missing numbers, switching to Anthropic.
You had Google committing up to 40 billion, 10 billion in cash now at 350 billion, and then 30 based on performance milestones.
And then Amazon adding up.
adding another $5 billion to the round.
This was kind of latest fundraising news from Anthropic.
How did we analyze this?
And as the ultimate loser here, when I read this, not NVIDIA.
You're training on Tranium and TPUs and getting closer there with no NVIDIA.
I mean, there's just such a lot to disentangle.
Let's put a pin in NVIDIA for a second and go back to the big...
picture on what the deals mean.
I've been thinking a lot about this.
Remember I said earlier, you have two jobs when you're running an enterprise foundation model, leaving aside the consumer business.
You have to build amazing models, and you have to buy enough compute to make sure they can run them at the demand you see.
Both jobs are incredibly hard.
The funny thing is right now, OpenAI got one job right, they have enough compute, and they got the model wrong.
So that's why they're in trouble.
And Entropic did it the exact opposite way.
They got the model perfect.
In fact, they may have over-succeeded.
And as a result of that, they'll light on compute.
So that's what's big picture going on.
Entropic are massively constrained on compute, which is why they're doing these big deals.
And Dario has articulated in the past, I'm a little careful about this.
And let's get real.
No one had a business plan last year when they went from one to nine that said they're going to go to 30.
by the end of Q1.
So they were hit by their own success.
So that's kind of what happened.
And the bigger picture, going back to the two big jobs is, and I just internalize this, how incredibly hard and risky the second job, the buying compute job is, and how capital intensive this is.
I don't think we internalize it, right?
I was thinking about it.
If you're at a $10 billion run rate right now, which is roughly on Tropic end of last year, right?
And you're looking forward two years and you think you're going to go 5x this year.
And maybe 4x next year, not crazy, which means you're going to be, which is 20 times.
So that's 200 billion two years from now.
So let's run 100 billion two years from now.
So whatever you have today capacity to serve 10 billion, you run that model and you say, now I need capacity to serve two years from now, 10 times that amount, which is 100 billion.
I need 90 billion of new capacity.
And the capital intensity for every dollar of run rate revenue, it probably takes four or five dollars.
of CapEx to support that.
So if you're going to add $90 billion in revenue capacity, someone between you and your partners has to find plus or minus $300 billion to buy chips, dig holes in the ground, build data centers, and make it all happen.
Think about how capital intensive that is.
You're doing $10 billion in run rate, and you're effectively saying between you and your partners to be able to meet demand two years from now, you've got to invest $300 billion.
Not all yourself, some of which are your partners, but think how, and by the way, If you get it wrong and you end up doing 200 billion in run rate revenue, you're going to only have half the compute you need.
You're going to look like an idiot.
And if you get it wrong and you only get to 50 billion in revenue two years from now, you're going to be left with 150 billion of stranded capacity.
In software land, it was so easy.
If you sold more, you made more money.
You didn't have to spend a lot to make that happen.
At worst, you had to hire some reps.
Microsoft had to hire no one when they exploded in revenue.
They just shipped more PCs.
More PCs ship, and they got there like 20 bucks per PC.
In this case, two years before you get the revenue, you have to bet four times that amount on CapEx.
So my big aha from this is, it's obvious when you say it, but how incredibly risky this bet is.
And it's no accident that if you look at the two CEOs, who is going to take the risk to the upside and just spend the money and just double take the consequences?
It's going to be Sam.
So he has lots of compute.
And who's the more careful guy and might underspend?
It's Dario.
And I don't blame either of them in the sense of the sums involved.
It's not just that the business is capital intensive, that there's $4 of CapEx for every 1x of revenue, but it's also 10x-ing in growth.
Yeah, the combination means you have to bet four or five, eight times your current run rate revenue in CapEx just to meet demand.
And you've got to do that every year.
I'm sitting here going, all these stories, I want Topic screwed up because they don't have enough compute.
Dude.
If you can predict two years out what the demand is, let me tell you, you can join Leopold in a special situation, in the situational awareness trading game.
It's really hard.
So that's my big aha, which is the compute intensity means the capital intensity and the growth means the spread and the risk of that capital intensive bet is just huge.
Yeah, I don't think it's a huge deal, but if OpenAI really missed last year, and I think some of it's definitional what the miss is, right?
We're reading an information report.
And again, I don't think this is a huge deal.
It's possible you look back and see that as the first disconnect from compute equals revenue.
Because the risk mitigation, to Rory's point, is as stressful as this is, all the spend.
If Sam's right, that really compute equals revenue one to one.
If there's a perfect correlation, then it all kind of works out in the end, assuming that capital is available.
If that breaks for any reason, right, then it just adds a level of risk to the model that's even higher.
And I'm not saying that happened for sure, but superficially it seemed to have happened, right?
Superficially.
Jason, you're exactly right.
I mean, I think it's a fucking stupid statement by Sam, right?
It's correlated.
It implies causation.
It's just correlation.
Let's rephrase that statement because the Altman statement is compute equals revenue.
Not true.
I mean, I can tell you what is true.
No compute equals no revenue.
But compute and a shitty model also equals no revenue.
See Grok for details.
The truth is, to succeed, you need to have enough compute to meet demand and a good enough model to generate demand.
And you've got to do both of them in sync.
It's hard.
So I agree.
The correlation argument, everyone was making that causation argument that compute equals revenue only because while they were making that argument, the demand seemed almost infinite.
But the minute your model underperforms a little bit, it's not quite infinite anymore.
The good news is if aggregate demand is going up 5, 10x per year, these air pockets are just going to be air pockets for both sides, right?
I mean, I think because zooming out, Jason, the big picture comment is Agents, I mean, what do you think?
How many more tokens does your agent use per day than you did, Jason?
Our Salesforce bill went up from $12,000 to $22,000 a year, and our seats went down from 10 to 2 plus 1.
So there's your map.
What about your token?
I don't know the noun.
It's derivative of it.
It's like your data center number, like dramatically up.
They're using dramatically more tokens.
That's my point.
I think they're using literally, I saw a number like it's 50 to 100 times more expensive in terms of tokens to serve an agent.
than a Jason.
Actually, probably 10 times than a Jason, 100 times than a Rory, because you're pounding that.
Well, it's because it runs constantly, if you let it.
So the good news, and that's why you don't want to get caught, lost in the who's winning, who's losing on a kind of weekly, monthly basis.
The good news, and the reason these guys can all take these risks is, in the short term, the compute equals revenue is not always true if your model's not there.
But the big picture trend is, over the next, as agents kick off, the demand for compute over the medium term will be there.
So it makes sense to lean in, but you should also accept you're leaning into a thing where there's going to be wide short term swings.
There's probably going to be six months period where you're like, I'm an idiot.
I don't have enough demand.
And then six months later, I'm an idiot.
I don't have enough compute.
And it's just going to be the journey.
What's easier to rectify?
Is it easier to resell excess compute that you have?
Or is it easier to emergency buy compute that you don't?
It sounds like it, again, hadn't thought of it.
But the problem is, if you're one of the two big guys, you are so much, what are you going to do?
I can imagine it.
You open AI, you have half a gig of excess compute.
Antropic is desperate for compute.
The hell you sell it to them.
Hi, Daria.
Oh, you want to buy it?
Oh, sure.
I mean, it sounds crazy, but like Samsung would build phones and then sell its components to all its direct competitors, right?
Totally.
That's fair.
I mean, you get Zen about it at some point.
We're going to have two divisions.
We're going to have our compute division and our applications divisions, and they've got their own P&Ls.
What's more like, remember, you don't have that.
The truth is you actually have the compute on a long-term contract, but Amazon, Google, Microsoft, CoreWeaver, Oracle will actually, quote, have the compute.
Maybe the way to phrase it is, if foundation model company A can't take their take or pay, the hyperscalers will probably take that compute to foundation model company two and say, hey, guys, I got some cheap short-term compute.
It's like a sublet.
Yeah, just a $10 billion sublet.
So yeah, there will be some kind of market.
De facto is that's happening right now at a kind of macro.
Remember that whole core wave, the reallocating a data center from company A to company B?
That's this going on in real time.
Remember, that forecasting problem I articulated, on top of that, there's a two-year lead time.
So it's not like you're forecasting next month's demand.
You have to forecast two years out, bet 10 times your revenue on CapEx, and hope you're right.
It makes running an airline look easy.
It benefits Google, too.
Google's the big winner here.
Well, first of all, now Anthropic's deeply tied to them, right?
So Google wins, whether you use Gemini or whether you use Anthropic now, right?
Google has infinite capacity because they're the largest provider of traditional web software.
So they have all this capacity for themselves that they can allocate even better than Microsoft.
Do I want to give it to my own compute?
Do I want to give it to Anthropic?
Do I want to give it to them?
They have the surplus, to Rory's point, to your point, Harry, that they can route between their customers and themselves and others.
They win-win here.
They have Gemini, they have Amazon, and they have the capacity, and they have the ability to rotate it when they want, and they have the cash flow.
They have the cash flow to manage it all.
So Google, win, win, win.
And to stick with the more ways to win, we forgot Harry's original question on NVIDIA.
Yeah, the last shoe to drop here is both Amazon and Google have chip products they can bundle into the equation.
And for context, GPU spend is roughly 50%, 55% of total capex on any build-out.
So if you're building out a one gig data center and your estimates range $30, $40 billion, $20 billion, that is...
compute.
And NVIDIA's gross margins are 70%, which means 14 billion of that per gig is raw profit to NVIDIA.
That's what Google and Amazon are trying to do, which is substitute that for their chips.
Now, Jensen will make the argument, as he did on the podcast, dude, it's a mistake.
Our chips are better.
They have more support.
And you got to be in the weeds on that to know the exact answer, especially for specialized use like...
Google and Amazon would say that the NVIDIA advantages aren't as good on specialist use, but I wonder myself.
But nonetheless, that is what's happening, which is some attempt to bundle.
Neither of those two chips, the Google chip or the Amazon chip, are widely available on a standalone basis.
So what both of the hyperscalers are doing is effectively bundling their chip with their capital and their equity investment.
to convince Entropic to continue to run on their products and just take more of the gross margin, arguably with, as NVIDIA would say, a substandard product.
But, you know, tech is, there's many examples in tech of substandard bundling products succeeding.
See Microsoft for details.
Mini quickfire round, Google hit 4 trillion, NVIDIA is a $5 trillion company for maximum value gain on a per dollar basis.
Which one would you invest in today?
Okay, not the question I was expecting.
Maximum dollar gain?
It's a bad question.
I'm not doing my thing again.
I think risk adjusted, I would do Google reluctantly because I think if you just wanted the upside.
You can paint an NVIDIA as a more single-threaded story around raw CapEx demand.
But I think risk-adjusted, you probably would do Google.
Because to Jason's point, the biggest advantage NVIDIA has is if this thing happens, if this one thing happens, which is CapEx explosion, they get it all.
The biggest advantage Google, but if it slows down even a little, they're really in a different place.
The biggest advantage Google has, it has multiple ways to win.
It can win if AI adopts fast.
It can win if AI adopts slow.
It's kicking off cash.
So it's got a bunch of steady businesses.
Provided only one thing can go wrong.
Provided ChatGPT does not erode Google search, which is the mother load of cash, they're golden.
So risk adjusted, I'd probably reluctantly buy Google.
No, you got to do NVIDIA.
Okay.
Despite the fact that...
It potentially has reached its market share ceiling with Anthropic and deals and others.
It's the best pure play into the AI vector.
Yeah, we are.
So you don't want to minimize your risk.
Just put it into VTI or bonds.
If you want to bet on AI today, because we can't buy Anthropic or OpenAI, just buy NVIDIA.
That's how you buy AI today.
Just buy NVIDIA.
Don't even...
think or spell it just buy it for what it's worth that's totally fair and i think if you're just going for max upside if yes if you wanted to create your ai upside exposure it's nvidia and then a bunch of other weird things we can talk about another time yeah don't even buy core weaver these crazy things just go just go back the truck up to nvidia and if nvidia loses ai ai stumbles it's okay i want to be a long only manager fuck it buy nvidia buy google done go home for three years Seriously, this game is great.
I wish a long only seems like the place to be.
Rory, come on.
Just charge your fees and commissions and just, well, it looks good today.
I think Nvidia looks good this week, boys.
Let's buy Nvidia.
And I've heard good things about Google.
My friends use it.
Let's go buy some Googles.
This broadcast show was shit.
Yeah, we love Janssen.
Go Janssen.
Look, the data says most managers, I mean, we all know that underperform the index.
And then especially if you adjust for beta, they underperform the index.
So no, it turns out to be remarkably hard, Harry, but keep telling yourself that.
I think that's because they don't do Google and NVIDIA.
I think it's because they try and have a diverse portfolio.
Yeah, no, agreed.
Yes.
And when you're non-diversified, you're either right or wrong.
I mean, yeah, survival bias here.
But yes, move on.
Yeah.
Is there anything else on Anthropic or OpenAI that you want us to discuss?
I mean, there's a couple of things being Mythos, the ads.
No, we're happy to move on.
Yeah, I don't want to be all Anthropic all the time.
Right.
Let's do it.
China.
Blox Meta's $2 billion acquisition of Manus.
This was a surprise.
Distributions have been made to investors.
The company is a Singaporean company.
The people aren't in China.
This feels like a regulatory overreach.
Well, Benchmark has their money, all right?
Who cares?
If I own 20% of Manus and got my $400 million out, I would love the boys.
I'd want to help get the boys out.
Don't get me wrong, but I don't care if I got my money out.
I ain't giving it back.
I'm not accepting the service of process.
I'm hiding from the service of process provider.
I'm keeping my 400 million.
I'm taking my 80 million and carry for myself, and I'm hiding.
Dude, I don't know if you can hide in Woodside from the CCP.
It is a real risk, but I ain't giving my money back.
If I'm benchmarking France, I ain't giving my money back.
I don't want to trivialize it only because there are humans at the heart of this who are at risk stuck in China.
But I do agree with your assessment.
The investors who've gotten their capital out, the chances of them having to or being willing to return that capital is zero.
So when China says they want to unwind the transaction, I actually don't think they're talking about the money as much as I think the leverage point is over meta, where they're really saying, you have this technology, we'd like it back.
And let me give you a clue.
If that had happened to Tesla, where they have a massive car plant in China, they'd be coming to the table right now with the Chinese government and saying, maybe we should unwind this transaction because you've got a lot of leverage over me.
If you do a lot of business in China, this ruling is going to start a discussion.
If you don't do a ton of business in China, no one's going to be pursuing the venture investors.
To some extent, it's going to be pushing on Meta.
And then obviously, the more human thing is some of those teams are still based in China and they're not going to be able to get exit visas.
It's less about getting this thing back than it's preventing it from ever happening again.
That's the first, last and only one of these deals that anyone will do.
Unless literally as before you wire your money as a venture investor, you know, the night before you put everyone in a 737 in Beijing and say, dude, we'll wire the money when you hit Singapore and bring your family.
It's just not going to be a thing.
So I think China is just sending a very close.
And look, like Meta loses that just because.
They've lost the money.
They've paid, and they're not getting the tax.
No, but they have the technology other than some of the funds.
They have the technology, and any of the team that's based in Singapore, they have.
There'll be some resolution.
As I said, I go back.
I don't remember how much business meta does in China.
But if they do a lot, they'll have to settle.
If they don't do a lot, I can't even remember.
I know Google didn't for the longest time.
I just don't care what Meta does in China.
Neither subject interests me and the combination interests me less.
But I think that if they do, they're going to feel some pressure.
As I say, just like if you were a big US manufacturing company or Tesla and the Chinese government took this position, you'd have to take it seriously because they'd say, otherwise, we're just going to register a 4 billion judgment against you and exercise it against your local plant.
Have a great day.
I think it's just a blip.
Human issues aside, to Rory's point, I don't mean to minimize them, right?
I would just take my carry and hide.
I don't think the service providers will come from China.
It will be a minor blip.
in some upcoming AI war between China and the US that is difficult to fully understand today, how this war goes, right?
Well, Nvidia is supporting AI to China, right?
Let's do more.
That's in their best interest.
Others are against it.
It's clearly a war at some level, but I'm not smart enough to fully predict where it will go.
But this will just be the start of, well, not the start, but one of the first expressions beyond this Nvidia chip drama of where this war will go.
It's a war.
I agree.
And I don't love the war word because I think that implies actual violence.
But I think you're right, because it's funny, you often have to step in the other person's shoes.
If you think back, if you're looking at it from China's perspective, there is someone going to go to prison somewhere, I think in Singapore or the US, for selling NVIDIA chips to China in breach of the sanctions.
And they're probably sitting there going, well, if you won't give us your chips, I'd be damned if we're going to give you our researchers.
And it feels a lot more balanced.
from their perspective.
And you evil Westerners are putting this dude in prison and all he tried to do is sell us some, you know, Blackwell chips back off, right?
The sanctions we're exerting on them probably feel problematic to them.
Now, I remain on Team USA.
I live in Team USA.
I'm with Team USA.
But just put yourself in the shoes of the other side and think, well, they're probably sitting there going, we'll show you with Manus like you showed us with NVIDIA.
All makes sense.
It's at least slightly tied to DeepSeek finally raising outside financing at $20 billion, right?
Maybe war is the wrong term.
I think there's two great battles that will come before this pot ends, right, that are subtle, that we won't hit everyone.
One is this China versus U.S.
in AI is a battle that's happening.
And the other is just the social dislocation from AI.
It's already happening.
I think there'll be more revolts and issues as layoffs happen.
I think the California will pass its billionaire tax and the exodus will continue.
I think New York has already passed.
is trying to pass its penthouse tax, which is already leading to wars with the Citadel founders and others.
So there's going to be this theme of social unrest and this war with battle with China over AI that won't bubble up each week.
But I think at a meta non-political level, these are the two big things, I think, that we can ignore in our quest to get rich fast.
And we're going to have $3 trillion IPOs.
Who cares?
Who cares about the little guys when we have $3 trillion IPO?
Who cares?
Yeah.
But I think that bit at the end sounds mean, Jason.
But I think what you're saying in the rest of it is it turns out the non-trillionaires or non-billionaires can see that the billionaires don't care.
And you're right.
I think the political climate has shifted.
And yes, this is going to be a continuing social drama.
It's not the thing that preoccupies my day because I'm just trying to do my job.
But you're right.
If you were to zoom out and write a social history.
of the 2020s, 30 years time, I think you're exactly right.
I think the two historians will talk about the revolt against inequality and AI, and they'll talk about China.
I think it's a very good framing.
I think those are the two big social slash political framing things here, provided we don't blow up the world.
I haven't seen the polling on the billionaire's tax.
My rule of thumb used to be California, the electorate is quite sensible.
They elect Dems, but they're pretty profoundly right-wing at heart, which is what no one ever talks about.
Polymarket says mid-40s now that it passes.
Interesting, because normally they vote down any tax because they're like, no, we've learned, just vote no to anything, right?
Yeah, we're Democrats in our heart, but we're Republicans in our pocketbook.
But if it's 40% already, that's interesting.
I haven't paid attention because unfortunately, it's not a billionaire that I'm.
I'm not in the price bracket, but duly noted.
In the venture game, we have a lot of zeros.
In the PE game, it's rare to have a zero.
Home at Bravo hands Medallia to creditors.
5.1 billion equity wipeout is the first total loss.
There was 3 billion in debt.
That seems to all be going.
And it's just very significant because you never or very rarely see an asset of this scale.
being handed back to creditors and it's the first of its kind.
Might be second behind Pluralsight, depending on how you define it.
It might be the second big one.
We just weren't as focused on Pluralsight, but Pluralsight died under debt too, under massive debt.
Yeah.
What was the size of that, Jason?
You're right.
I'm wrong.
Misspoken from me, but yeah.
It wasn't as big.
It was a couple of billion.
No, you're absolutely right.
I misspoken.
So I'm sorry for that.
Can we just confirm though on this?
Because when I was reading it, I didn't quite get it.
Are Toma losing money here?
Did they recoup back money?
100% they're losing money.
I mean, from memory, 2021, the deal, I think, went down in 21.
It was a $6 billion transaction or whatever, and $5 billion of it was equity.
So it was not wildly overleveraged, right?
Maybe 1.6 of debt, the rest of equity.
So not wildly overleveraged.
Fast forward today, they have more debt than that now.
So it could be there was a minor dividend recap and they took some money out.
Maybe they got 20 cents on the dollar.
But the big picture here is this, and it's terrifying, is that this is a company, I believe, with a couple hundred million dollars in EBITDA.
If you look at it from a cap structure perspective, it was 80% equity, only 20% debt.
And that should be pretty safe.
But when you way overpay, for a company that now has way underperformed, and for reasons we'll talk about vis-a-vis AI, has very significant terminal value questions, then even though you've only got a small amount of debt, the stunning thing is with less than a couple of billion, did you say it was three billion of that?
I thought it was closer to two, but that's okay, right?
They basically said the debt smothers the company.
Even though it was fairly under-levered, what that means is at $200 billion, they basically realized at eight, nine times adjusted EBITDA, it wasn't worth putting any more equity in.
They've massively overpaid and the deal's underperformed.
It's a business that looked like nothing could go wrong in, which is enterprise software.
And people would have said, if something does go wrong, it would be, oh my God, you way over-levered it.
They didn't way over-levered it, they just way overpaid for it.
That's the important insight that I think is missed, right?
Pluralsight was both, right?
Vista apparently lost $2 billion, but it was very levered.
This is not heavily levered, but they can't afford the $300 million of debt service, or it's not worth servicing the $300 million, right?
Actually, that's the thing, because I'd say relative to the, and I wasn't precise here, in terms of the transaction size, most of the consideration was equity.
So in that sense, it wasn't over levered.
But relative to the size of the company, I think the medallion was doing a billion.
You can service $2 billion plus of debt.
on a 1 billion low growth company with a pre-AI story that has to transform to AI.
You simply can't, and that's the big scary aha across all these other companies.
It used to be the only, you'd be like, you muddle along, you do 10% operating income, service the debt at low interest rates and refinance it.
You don't have a chance to do that now.
There's nothing good about this because they don't have an AI story.
They'd have to invest a lot to get one because this is a...
Medallia, stepping back, is kind of in the measuring customer engagement, customer happiness kind of survey business.
It's not a major system of record like ERP.
It's fairly easy to transition to a next generation product.
And you can totally see a whole bunch of AI first, very much better products in the space.
We have an investment in Enwrap.
It's a small company that has analysis of customer sentiment.
There's a whole bunch of much.
push our own product is, there's a whole bunch of way better AI first products in this space.
So they're looking at an asset that just doesn't have a story that's relevant.
It's a full rewrite to change it.
And it's just too hard.
And this is a full write down.
And that's not what this business is meant to be.
I mean, that sales quota attainment was 21% reportedly.
And the other problem with Medallia, and I'm not sure it's true of all the ones that are at risk.
There's some big ones at risk.
Coupa, New Relic, Anaplan, even Zendesk, Avalara, Smartsheet, they all look like they may not be able to fully repay their debt.
My limited understanding of the problem with Medallia, it's just, it's one of the ones that CIOs want to reduce.
It's just that simple.
It's not even whether it's a system of record, that's an ultimate threat.
But why it's already struggling to even retain 100% of its revenue is you sit around the room.
Under discussed is the amount of vendor consolidation that's occurring at the same time as AI growth.
Whether you look at Gartner's numbers, 30 to 50% of AI dollars are coming from consolidation.
Medallia is a top target.
Do we really need that half million dollar a year dated survey product?
Did we really learn that much from it, guys?
No.
So it gets cut before you cut your workday or Salesforce, right?
Agreed.
It's just prioritizations.
I think for venture, the question is, and Rory would be the expert here.
Sorry, Harry, you're the boss, is does it matter?
And what I mean is, OK, so Tom O'Bravo is going to take a $5 billion hit here.
I'm like, I don't know, $20 billion fund, right?
That's not expected outside of the bound, but it happened, right?
Even if all of these died.
Medallia, Proofpoint, even Qualtrics, Alterics, Cornerstone appears to be potentially going under.
Koopa, New Relic, Anapline.
Does it matter?
Because we've got to just move on into the AI age.
Does it really matter?
It matters a bunch of different dimensions.
I'll say it to save cornerstone ringing and yelling.
Don't say anyone's going under because that pulls you into saying things that may or may not be correct.
Multiple term loans underperforming, apparently.
That's exactly right.
They're already underperforming the loan.
It's not a great sign, right?
I mean, look, the horsemen of the apocalypse are, first of all, the debt starts trading well below par.
And then the second thing is the debt starts doing kind of payment in kind and kind of activating the toggles that activate when you need more time.
And then when the refinancing cliff happens, that's when you face the music.
So that's the movie.
And I'm not commenting on any of those comments.
But you're right, Jason, every one of them in the category of highly levered 2021 deals, which means high absolute price.
So again, back to my comment, even if the equity versus debt mix was fairly unaggressive.
The debt as a percentage of current revenue, which is what you got to look at now, because the evaluation you paid in 21 is irrelevant.
The debt as a percentage of current revenue is probably pretty high.
And you're right.
Does it matter if half of these go?
I think it matters in three ways, right?
A bunch of different ways, actually.
First is a lot of LPs are going to take a lot of losses if this happens.
And we share LPs.
This looked like the other part of a balanced.
private portfolio.
And PE was always, this is the safe part of the business.
And venture, we always said, was risky, which is why you had to have the better return to justify the pain.
And now if the safe part of the business takes some significant hits, it's definitely going to reduce the appetite for risk.
But just to challenge that, is that true?
And the reason I only ask the question from ignorance, for example, most of the LPs I talk to, pre-boom, AI boom, we're like, well, we're expecting the 2021 funds are going to perform terribly.
We've just got to move on.
OK, they were terrible investments.
The LPs I talked to be like, we just got to give them a mulligan on the 2021 fund.
It's done.
It's time to move on or we got to quit the asset class.
I think a lot of LPs had internalized the 21 vintage was a tough venture vintage, right?
Typically smaller dollars of at risk, right?
I think their mental model was.
But the PE guys, in return for never giving me that 4X, 5X upside, they've been consistent 2X earners all the time.
And now it's one thing when your speculative early stage seed fund blows up.
It's quite another thing when your safest houses $500 million commit to mega PE fund, A, B, or C, ends up with a subpar performance, right?
And there's a lot of co-investments in there.
So if a bunch of these names...
that you articulated, Jason, do lose money.
It'll be significant.
It won't be fatal, but it will be significant.
In general, I've observed with people, including myself, that you can be, you can seem calm and phlegmatic about the prospect of loss, but when it actually happens, it hurts.
Right.
So I do think there will be some element of loss there.
And then the other thing, just to put it out there, is there goes one of our exit routes.
Well, that's effing for sure.
That's the biggest impact, right?
There it goes, right?
Yeah.
I mean, you can wander around the Toma Bravo all you like and say, you know, and yeah, they'll say they're still doing deals and they are, but the bar is going to be much higher.
The automatic, you can't build a company big enough to go public.
Strategics don't care.
So you can sell this thing for 3x revenues to fill in the PE firm.
That's not going to be true going forward.
And that has significant consequences in particular for your older companies, your 2015 to 2022 companies, where if they don't have an AI story and they're tracking, they don't have a strategic outcome.
And if they don't have a strategic outcome or an IPO, what are you going to do with a $100 million revenue company going 10% even if it has no leverage, even if it's not blowing up from a performance perspective?
Because the buyer of last resort is no longer in the market.
If the three traditional assets were sell to a strategic technology provider, one of the large incumbents, IPO, or sell to PE, if the sell to PE goes, and we all agree that smaller IPOs, aka non-massive IPOs, and drills, or you name it, do we only have one asset route left?
What's that?
Secondaries to each other?
I missed the route.
What's the route?
I think there's no exit.
Selling to a strategic incumbent.
Sell to Google, sell to Nvidia.
But here's the thing.
They don't have the appetite.
PE is a much better buyer for most at least B2B plays.
The volume isn't there at these guys.
And more importantly, what they want is very specific.
It's very specific.
You can't count on anything.
I can tell you when I was a VP at Adobe, you would say, oh, Adobe should buy these companies.
Like it's the perfect fit.
I'd be in the meetings.
They never even heard of that company.
And it didn't matter if you had a buddy.
Unless your buddy was shot new, it didn't matter.
Like they didn't care, right?
It's more narrow than you would ever imagine.
It's narrower than you would ever imagine.
What is the exit funnel of the future?
I think it's really straight.
I think, first of all, you're exactly right, Harry.
It's like the IPO has not gone away.
They just have to be big.
The strategics haven't gone away.
They just have to be super targeted.
And the PEs have gone away, except at very low prices.
What it says to us is, in our perspective is, and this is contrary to someone that received wisdom out there, at the stage all of us are investing at, which even though it's slightly different between us, all to a rounding error is early.
And I now define early as anything before you can squint and see an IPO, which is now 400 million minimum.
I mean, your portfolio construction has to reflect the reality that we call it internally fewer.
but bigger winners.
Instead of having a bunch of companies exit early, you're going to have a bunch of companies taper out, maybe get so-so exits.
And then the one that goes the distance and gets to $400 million in revenue could have an even bigger outcome than you've seen before.
It's the corollary to the statement that we're having some of the biggest exits we've ever seen.
And that's true.
Both things are true together.
The exits that you're going to have now are going to be huge.
There's going to be a lot less of them.
And therefore, from a portfolio construction at the early stage, early broadly defined, you just have to have a higher end count because your probability of getting one right is lower.
Now, at the late stage, and by late stage, I now mean when you're investing in companies that could already be public, right, above 400 million, then you don't have that risk, that risk, and it won't make public scale.
Because you're already at public.
There's many things that can go wrong with Stripe investment, but it's not going to fail to be big enough to go public.
So therefore, at that stage, you see this massive concentration because there's only a small number of companies big enough.
Right.
So that's why you really there are two venture businesses now.
There's the, as I say, early, which I think pick your number below 100 million ARR, where it's.
have a pretty diversified spread, except it's fewer but bigger winners, and have diversification.
And then there's late, where Thrive puts $3 billion in company A, $2 billion in company B.
But as I think one of the guests on your show said from Thrive, partially it's easy because there's only 40 names you even have to think about.
It's just a different business.
The number of places where you can park a building is few and far between.
And they're both sides of the same coin.
The business has totally changed.
I remember when I started the business in the 90s, there were years where there were 300 IPOs a year.
And what were the valuations?
50, 100, 250, 300.
It used to be basically the Series C.
That's Harry's average A round right there.
The point is this.
The public markets had an appetite to be part of the IPO process by a process of regulation and a whole bunch of other reasons.
And that's no longer the case.
And the trend, which I thought would flatten out in the kind of 2015, 2020 level, has even further accentuated.
It's a different game.
I literally had this discussion at a board meeting the other week with a company that just crossed 100 million.
And I'm like, great.
And you're cash flow positive.
You're in control of your destiny.
Let's be clear, though, to achieve your outcome in today's market, you need to hit a billion in revenue, probably growing 40%.
The room went silent.
OK, because 400 million growing 30 percent is not good enough.
I think you'll still get it done.
Yeah, but they're all failed.
Navon, Figma, SailPoint, Netscope.
They're all broken, crappy IPOs.
I'm not saying they're crappy companies.
They're great companies, but the IPOs are crap.
So the bar has gone up even further since the IPO.
And there was just no answer.
One of the things I think is going to happen is unless.
Tomo Bravo decides these are all AI enhanced winners it wants to buy in Vista, which could happen.
Actually, we could talk about it.
I don't want to spend too much time.
It could happen.
They could come back into the market for a variety of reasons.
If they don't, and the BART IPO is a billion growing 40%, I think what's going to happen more is they're just going to give the company to their friends, CEOs, founders.
Okay.
And what's going to happen is let's say I'm at a hundred million in revenue and my best friend at my peer, he's my best CEO.
We're great together.
He's at 200.
Okay.
We're both growing.
40%.
Okay.
I'm done after 10 years.
It's not that I don't care, but I don't see any path to that IPO.
I have not gotten an M&A offer from Google.
Harry said it would come.
I've never gotten an offer from Google.
I used to get PE calls.
I haven't gotten a PE call in three years and I don't see it anymore.
So I'm giving the keys to Rory and I'm going to give a third of my company, right?
Because I don't see any exit and the founder gets out, right?
The emotional weight, the heaviness, the VCs.
I guess get to roll over this into a fake company where the valuations line up, but no one really gets anywhere, right?
There's no distributions to the LPs.
You haven't achieved critical mass, but this is a micro trend that I think is going to accelerate this year as founders giving the keys to their friends, not completely quitting like eight months after an accelerator that didn't work out.
But I mean, it's just, I'm at 40 million, 50 million, 20 million, a hundred million.
I'm not going to get there guys.
So, so Harry, here's let's merge our companies.
I don't know if, Grammarly is taking any more mergers.
So I'm giving my company to my buddy, Harry.
It sounds like I'm kidding, but I think we're going to see this happen all the time, is give the keys to my friend that's bigger and better than me.
Just give the keys away.
There's just a huge amount of rationalization that's got to happen.
Because look, these numbers are big enough.
I mean, if the total privately held FMV is plus or minus six trillion, and if the big three or four and the other guys who can comfortably get out is three or four trillion, then the world of everyone else is two or three trillion bucks.
Let me tell you, no one's going to just walk away from two or three trillion bucks.
But at the same time, it's not obvious what has to happen.
And capitalism works.
People are going to come up with solutions.
But Jason, you're right.
It's going to be some guy who's a mid-career operator who's willing to take the pain is going to say, I got this.
I'll take these five software companies, all broadly speaking in the systems management space.
We'll put them together.
I'll run them like a hard ass.
We'll get to 20% growth, 30% EBITDA, and just compound our way.
I'm a mid-market manager, and this is a chance for me to make 50 million bucks as the CEO.
We won't have a ton of stock-based comp because only me and five other people are getting stock.
And there'll be a whole bunch of tough, hard acts that will happen because people aren't just going to say, OK, you caught me.
It's $2 trillion.
I don't want it.
I'm not going to walk away from our older companies.
We have value there.
My LPs have value.
And frankly, I have value.
But you're right, Jason.
There's going to be a fair amount of industrial, non-glamorous work involved in converting that stuff into free cash flow or to distributed cash flow.
Before we move to venture, just final thing on this.
This is not exclusive to Toma.
You can go from Francisco to Vista to EQT.
Everyone's got theirs.
Genuine question.
What happens to this as an asset class, as a cohort of funds?
Do they just raise the same size funds and inshallah we move on?
Do they move away completely?
My rule of thumb is this.
Whenever something looks incredibly easy.
And it looks like it always works.
And everyone who does it make money.
And everyone says that everyone who does it makes money.
And it becomes the conventional wisdom that everyone's going to make money.
It's going to blow up in your fucking face.
And that's what happened in PE.
It was like, well, you're going to make two X regardless.
So whatever.
And then let's talk beyond that.
And it's going to happen in venture two.
Whenever someone says you can't lose, you're just about to lose money.
By the way, the fact that you had 20 names all doing the same thing with exactly the same strategy, that was probably a clue.
We're pointed out in venture two.
Tomo Bravo and Vista in particular, like we're all in on AI enhanced B2B.
In my own portfolio, I've only seen one soft offer this year, but it was from a P firm that was exactly that startup at scale.
that is not growing at astronomic rates, but growing at really good rates, that is clearly AI enhanced in the AI category, got what I would say a decent soft offer.
Okay, so those deals are happening, not at the rate they were in 2021 or even 2023.
That's the current, seems like the current playbook is near as I can see it.
So they're reviving that play, and they've been clear, you know, Orlando Barlow has been clear that's what he sees.
That's the playbook today.
The meta question.
is the whole B2B thesis broken because it's just not a stable category of software anymore.
My sense is everyone's talking to their game, to use Rory's language.
I think they're kicking the can on this issue because I don't think most of these P firms have a reason to exist if B2B software is stable.
Now, if it just means they need to evolve to a new category of B2B software, no problem.
Raise another 10, 20, 30 billion.
And if these AI enhanced candidates exist, right, that are affordable, you just buy them and you do the same thing.
But if it's not, Not to use the trite term of durable, but there is an argument that classic B2B market is just broken.
There is an argument that even the high flyers may not, the ones, you know, the one that Kleiner just did in a billion for voice agents, for plumbers or Lagor or Harvey, we may find they're not durable.
I'm not saying to have the answers.
If they're not durable.
then the whole classic P model is broken, right?
This massive amount of software.
And that's the crack in the debt market was it doesn't appear durable.
So I don't know, but there's a chance it's all broken because AI has rendered it all non-durable.
That would be what the Yahoo's that think Claude destroys everything would say is none of it's durable anymore.
Doesn't matter if you're great or grinding or struggling.
Doesn't matter if you're Legora or Medallia, none of it's durable.
It's a great point, Jason, because in that world, And I'm not sure I believe in that world, but you're right.
People at least posited if the AI first venture backed startups that exist adjacent to the foundation models can't make it with equity dollars only, then they sure as hell can't make it with debt on top.
So what you're saying is there would just simply be no compelling investment opportunities for PE debt type firms.
It's like the most depressing realization ever.
Basically, exit markets have gone.
B2B markets have gone.
I do think that the exit narrowing is a little depressing, okay?
And I think it will solve itself.
I beat myself up.
Rory and I first met when I sold my last startup.
And the post I wrote just a couple months later was, it had nothing to do with the timing.
It was an okay decision at the time, okay?
But I didn't know about this PE market.
I never would have sold at a million in revenue if I'd known PE would come to the rescue and buy me for two or three times more a couple of years when I had 140% NRR and was profitable.
But it started just a couple of months later and a friend of mine called me up and he said, hey, Jason, I just got an offer to buy my company for a hundred million.
I'm like, this is just no way.
I love you, your little bootstrap company.
Who the hell's going to buy you?
And it was the start of the PE wave.
And so it opened up this wonderful era to Rory's point where we had plan Bs.
Everyone had a plan B, right, for your investment.
And I do think it is depressing.
I think it'll work itself out.
The big exits will solve it, right?
The whizzes and the, I mean, we thought whizz was big.
Now we have cursor.
Now I'm going to win the bet of $100 billion exit in the next year, right?
So in the aggregate, it'll work itself out.
But I do think for the average person, it's a little depressing.
It's a little depressing that there may be no exit for so many companies that there used to be exits for.
I think it's stressful as heck.
It was stressful for me.
Just before the PE wave came in, I was like, God, I wish I hadn't sold.
Just for this reason, only for PE, I wish I hadn't sold.
It's entirely plausible in a world of super big exits that 10 super big exits cover the entire nut from the LP perspective, such that it's still a good business.
And literally nobody cares about the fact that the other 96 companies wither off on the vine, right?
And the 96 other VCs wither off on the vine.
This is why many of the big firms are trying to get bigger.
Because they see this and they go like, if there's only a small number of slots, and if you're in those slots, you make a billion dollars.
And if you're not in those slots, you make zero.
Then do what it takes to be in those slots.
I totally get the logic.
It's Darwinian.
It's firms trying to adapt to that reality.
I don't think it's quite as stark as that, but it is definitely on that trend line and you have to adapt to it.
Okay, guys, we're going to do privates.
There's a lot in privates.
You guys, you choose.
Maybe choose one with a positive slant.
Sorry, sorry.
My fault.
What are the choices?
There's Thrive.
There's Chamath's numbers.
There's Gary Tan on bullshit ARR.
There's SBF, the greatest ambassador of our generation.
I think the Gary Tan one is worth a quick discussion.
We've hit it before, but I appreciated that he called out these issues.
Can you provide some context, Jason, just for those that missed it?
I think it was started by a guy at this legal tech startup.
What are the...
Spellbook.
Spellbook, who pointed out...
kind of made too much of it, how there's a lot of bullshit ARR, okay?
And for example, I've got one investment I made that's north of nine figures in revenue.
I get three different ARR numbers each month.
Three different definitions.
I can't, at least they're trying to be honest, right?
What's like core software ARR?
What's software plus variable usage and what's like committed revenue, okay?
And there's a massive delta between these.
The point was like, it's just so, what startups are saying they're doing in classic real revenue, gap revenue certainly, versus what a non-gap number has grown so great it borders on fraud was the initial point, okay?
And rather than say no big deal, who cares?
at the seed level, like YC, who cares if the YC was so early?
Gary's like, no, man, be truthful and precise about your revenue.
And he laid out five points, which hit most of the issues.
The ironic thing to me is even I felt by the time I got through Gary's whole memo, I didn't even understand what revenue meant anymore.
It was so correct, but also so confusing the way we've rebooted revenue.
And I don't know what you guys have seen, but I got burned once on this in the old days, right?
But everyone's kind of been burned on this that's done a deal quickly.
And I personally found if it's sort of mostly disclosed, it's been OK.
If it's been hidden, I ain't going to make any money.
Yeah.
I ain't going to make any money when this is bullshit, which is to Gary's point.
And obviously, frankly, the fact that he had to say it probably suggested it is rampant at the seed stage or he wouldn't have to say it.
That's my experience is that it's rampant as well.
That people radically like how can everybody get to three million in revenue by the end of Demo Day?
Maybe everyone can't.
Maybe only a couple can.
I think it was simultaneously really good and really shrewd.
The really good comment is pretty obvious.
It's necessary.
You're right, there's this all ambiguity about revenue.
Young founders are overstating things.
At best, suckering people into doing investments they shouldn't do, and at worst, ending up in litigation and potential fraud allegations down the line if they mistake things.
So some guidance is really good and helpful.
And I predict if it sticks, the shorthand version of the seed stages will be, does this conform to the Y Combinator revenue guidelines?
So that's why it's a good thing.
It needed to be done.
Let me tell you what's a shrewd thing.
Because if you own a market, you want to make sure that that trust in the market remains.
It's a little like the way De Beers policed the diamond market for years.
You want to know that people can transact in complete confidence, right?
White Combinator has a dominant market share in the seed market, 25%.
It erodes the value of their product if a whole bunch of people start thinking the numbers are bullshit.
So not only was it a good thing, it was a shrewd thing, because it's now basically saying, If you look at these deals at the margin, you know, you want to say you've got the Y Combinator.
Here's how things are calculated correctly.
Steal of approval.
So I think, again, it was good and shrewd.
And as such, it's going to stick.
Some version of it's going to stick.
It's a good point.
They're a market maker.
So you want to have this level of transparency.
If 1 in 20 NYSE stocks lied about the revenue, at some point, the NYSE would say, we need to fix this thing here, people.
Let's get the auditors in a room.
And that's just what happened here.
On the slightly other end of the venture spectrum, Thrive Eternal, Josh just continuously bringing out new products and new packages for his investors.
Thrive Eternal, I didn't want to say this, but it looks remarkably similar to Sequoia's evergreen fund in terms of the hold periods.
I think you misread it because I understand that the verbiage looked the same, hold companies forever.
And you were saying, is this an example?
Because again, for context, folks, in 21, late 21, Sequoia, Correctly said, over the long term, our very best companies continue to compound.
And if you held all the companies, even the bad ones, the good ones would have swamped it because you'd have Apple, you'd have Cisco.
And the analysis is entirely correct.
And it's like the old analysis on any equity return business.
Over any 20-year rolling return, it's positive over 10.
Most are positive over five.
Some are positive.
And every once in a while, over one, it blows up in your face.
And unfortunately, Sequoia opted to do the eternal hold every stock forever in that one year where it blew up.
your face.
So they felt a little foolish about that, though I think over 10 and 20 years, their analysis will still be correct.
If you build enduring companies, even in the public markets, the compounding will happen.
That was the Sequoia comment that Harry was referencing.
But I think the Thrive product is actually very different.
If you read the perspectives, or at least the information on it, it's much less about holding up public stock forever.
It's interesting.
kind of very marketing and positioning around different kinds of assets that aren't impacted by AI that are going to be eternal.
It's an entirely different form of investing because I think their first investment is in one of the San Francisco teams.
I can't remember which one.
Is it the Giant?
I can't remember.
Was it the baseball team?
I think it's the Giants.
Yeah.
Again, in other words, it's actually just a totally different product line.
They're making the big picture point that there are assets beyond the digital.
that are enduring and can't be replaced in any way, shape or form by digital.
Because they're right about that.
There's no amount of automation.
It's like that stupid people who say, oh my God, the robots can run faster than people on the half marathon, therefore it's over.
Well, as someone pointed out, a Toyota Corolla can drive faster than people, but we still watch the marathon, right?
What they're saying is this group of assets is so different than AI that they're enduring long run media assets.
And at that level, they're correct.
I don't know if the average venture investor would be a really good buyer of sports assets, though history would say the Warriors has been a great deal.
It's a different bet than the Sequoia bet.
It's a different asset type.
And if their LPs want to do it and they can pull it off, the guy's showing great taste.
Good luck to him.
It's outside my pay zone.
This is totally off script, but we do business of sport, a sports show where we interview the biggest owners of sports teams in the world.
The business of sport is dictated largely in Europe, at least.
I don't want to speak for America, but by media rights.
If you see the personalization of media, whereby everyone gets very independent media that they consume, whether it's games, TV shows, they can customize, craft to their own preferences, and it impacts slash, to Jason's point, maims the consumption of sports, then you have a significant impact on the digital rights package.
that teams get, that is very, very significant.
And so if you wanted to paint a world where AI changes content consumption patterns, that has the ability to significantly maim digital rights for these sports teams, which would significantly impact their revenue generating ability.
That would be the bear case.
You're right.
In the case of sport, you're right.
You have the individual personal journey and you're right.
You're seeing a bunch of that at the margin in sport.
You know, you're seeing it even at the high school and college level where the athlete's personal journey is a large part of it and they can monetize that.
And in fact, the way Lionel Messi monetized being Lionel Messi when he came to America is an example of that.
He extracted the value, which by definition means that value that the sports team owner didn't get.
Because he was able to get it.
So I do hear your point at the margin.
I mean, I still think, you know, you're going to, if you own the entity that's playing the game, you do have the marquee asset.
And especially in the US, the NFL economics have been widely compared.
The US, in fact, has been even more.
more successful at creating sports money printing machines than even in Europe.
But so I do hear you, Harry.
Mind you, I will say something I said earlier.
You do go back to that comment I made earlier, which is when something is so obvious that everyone thinks it can't lose, that's just a time when you do.
And sports has been a home run win for 20 years, maybe 30 years, right?
It's been the one irreplaceable asset.
I'll give you one fun example.
When Ryan Smith sold Qualtrics, I think he made about a billion dollars.
after 20 years or so.
And I believe that billion, most of it went back into the Jazz and it has quadrupled.
Absolutely.
Sports teams go up.
Quadrupled.
Now he needed the billion, of course, to lead that takeover.
But, you know, he's made, he's up three billion on the Jazz or something like that versus the 20 years.
Just to be very clear, this is a very, this is a super US-centric perspective.
Sports teams do not go up.
Tottenham are on the brink of disaster.
Harry, Harry, I want to just get very, because I can comment on that.
Actually, sports teams in Europe do go up in a sense of one key difference is some of the best worldwide assets are some of the European sports teams.
One key difference though, in England in particular, you have the concept of relegation, which our American friends mightn't understand, which means in the NFL, you're always in the NFL.
And no matter what happens, you're in the NFL.
Same thing in basketball.
In English soccer, if you're the bottom three teams in the bottom of the division of Premier League, you get kicked down.
one, right?
And your economics go to shit.
And as Harry pointed out, Paul, Tottenham looked like they're going to be relegated.
Leicester's been relegated twice.
So it is worth noting that Europe, the alleged socialist capital of the world, has a far more performance-oriented sports culture than America, where it's a nasty little oligopoly.
I mean, the NFL and all the American things have been constructed, partly because they're the only three businesses that have an exemption from antitrust.
So they're all constructed as nasty little oligopolies where there's no penalty for failure, which is the definition of socialism.
And Europe...
In general, from an American perspective, which is meant to be the home of mollycoddling socialist wimps, in fact, has a brutally accountable soccer culture whereby if you're at the bottom of your league, you go down and your revenue goes down 5x.
I actually think it's one of the best things about the English Premier League and the English league system in general.
It's like there's real penalties for failure and Wrexham could go up.
100% aligned, Rory.
Of course, it's worth pointing out it's the only part of Europe that has accountability and we have it everywhere else.
But okay, it shows what you think important, Harry.
Although I have to, I don't think anywhere hates billionaires as much as the US right now.
Maybe Norway does, but I wouldn't say you're exactly pro-capitalism, are you?
Jason, you can choose one more.
Rory delegates decision-making to us on topics.
Maybe a happier one?
A happier one.
I do wonder, I think the last one that would be interesting and then the next show will be all happy.
All good times.
The one maybe that is mixed at the end, but maybe it is good times.
I just think it's worth touching on.
Is Robinhood Ventures 1 and the Angel List USVC fund, are these good, bad, ugly?
Should I put a couple hundred grand into each of them?
Can I put them on the Saster Fund website if I do, the underlying entities?
Are these good investments, crappy, or are these just play investments for a token amount of your portfolio and it just doesn't matter?
I mean, I think it's, for a step back, it's catering to a need.
which is that public investors have been denied access to these products and want to do it.
So it's a way to say, I got an investment in SpaceX, Atropic, and OpenAI.
So first of all, at the level of symbolic, I think they'll get some action.
And as proof of that, I felt this morning, I put literally the lowest amount possible in the VC product.
So I am now an individual investor in Anthropix, SpaceX, and OpenAI.
And even as we speak, I'm adding the logos to our website.
Okay, we have to add a disclosure at the start of each show.
Rory is an investor in all of the show's companies discussed on today's 20VC.
Rory, what was the minimum?
500 bucks.
You cheapskate.
You put in 500 bucks.
I just thought I actually genuinely wanted to process through the thing this morning because in anticipation of this, I try and use the products.
By the way, wonderfully easy flow took 10 seconds done and it uses plaid, which we can talk about in a second.
But the serious comment is.
are they worth doing?
I think 30%, 40% of it is in those three investments.
It boils down to if you think those investments are good at 1.8, whatever it is, 1.75 for SpaceX.
I don't know what the stated value is.
Because look, for 500 bucks, I'm not doing the analysis.
Would you put 1% of your network in there, which is kind of what the level of diversity?
Step back.
I've been looking at this.
If the big three go public around $3 or $4 billion, it's about a little under 5% of the S&P.
So if you're 60% equities, 40% bonds, and you wanted to get that action a little earlier, putting plus or minus 1% of your net worth.
in a vehicle that offered those things privately would be logically correct, which is different than saying it is correct because I haven't looked at the valuations.
Before I put 1% of my net worth in there, I'd want to do a lot more analysis.
But that's the product they're offering.
If you think those valuations are correct, it's a little like the logic for blockchain.
Do you put 1% of your assets in Bitcoin?
Do you put 1% of your assets in these high market cap companies?
I personally would be angsty about the valuations on aggregate.
but before I'd put 1% of my net worth, but I get why the product exists and it's probably going to do reasonably well.
Let me ask a question that I'm ignorant on, Harry, sorry, you're the boss, but there was some controversy on Twitter.
So AngelList charges 3.61% a year to manage this fund, right?
I'm confused.
On the one hand, for a mutual fund, that's going to destroy your returns, right?
If you charge me 3.6% a year to manage the S&P, not only is it expensive, but...
over 20 years, it just destroys your capital, right?
Their point was our cost to deliver this product, this complicated venture product and managing these funds, it is 3.61%.
In fact, we're subsidizing that because it's not even 3.6%.
So is this a high load on a mutual fund or a cheap way to get into the underlying managers and underlying funds?
Well, I think what it proves is that it's the argument for companies going public because first of all, you're right.
If these companies were public, To look at the system as a whole, the companies would have to pay 5, 10 million a year more kind of compliance costs.
But individual ventures could buy in mutual funds that are paying 50 bps or less versus 380 bps.
So it would be a lot cheaper.
Looking at, on the other hand, from the venture side as a private asset, 3.81 is high.
But let every venture, let he who is without sin cast the first stone.
The average venture investor is charging 2%.
And then 20% of the profits, which typically turns into, if you're successful, a 4% or 5% drag between gross and net.
So it would be hypocritical of me to say, oh, 3.8% is awful.
If we're successful, our fee drag should be around 4%, including carry.
I guess the counterargument, you're better than me, the counterargument might be it's a fund to fund, so it's expensive for a fund to fund, right?
Yes, but the only reason you can pay in the long term 2% to VCs and 20% of the profit is because the gross returns have to be high enough, 25% plus, that the net return is still 20%, which is so far above the Ibbotson small cop return of 11%, 12% that it's worth doing.
If your gross return is only...
10%, 15%, and you put 4% fees on top of it, then you would have been far better off in the public markets.
So the question is, do these companies still have 15% compounding returns from here?
The bigger you are and the closer you get to the public markets, the harder it gets.
Now, it has to be said, the companies that have proved every sentence that I've just uttered to be incorrect have been in Tropic and OpenAI, where you've had 10x returns at 60 billion.
in the case of Anthropic.
And that's why these products are taking off.
There are some companies that even at 60 bill have demonstrated wildly great returns over an entire business cycle across all the investments of that size.
Will it return 10x?
I doubt.
The lesson is, Rory, to your point, who made money from Medallia, Ultimate Ones?
Sequoia, baby.
Who makes money from Anthropic?
With a 17.5% carry and a 1% upfront fee, Goldman.
Be Goldman or be Sequoia is the takeaway.
You know what a related lesson from, yeah, Sequoia owned like 40% of Medallia, right?
It was basically bootstrapped, right?
I think a reminder lesson is, and you don't want this to be true, but when a top fund doesn't go all in on an investment, it's such a bad signal.
Not only is it bad if Andreessen does your seed and doesn't lead your way, that's the classic discussion we could have done on 20 VC in 2015, right?
But the subtle one is when you do the growth round, when you do the billion dollar run, when you do whatever, And you don't see the big fund lean in for the super pro rata.
I just think it's a terrible sign in today's world.
I know people are going to challenge it, but it's my experience.
Like if they've got the billions to deploy, they're going to put it into your winners.
And if they don't stick you in the side of your chest with an elbow to get super pro rata, it's a bad sign.
I'm going to be so honest.
I just couldn't take, for the last few weeks, it's been gnawing at me so much, my Figma and Duolingo positions.
I was like, you know what?
I've just had enough.
I've had enough after this conversation.
I'm selling them all.
While you guys were doing my Skydio, I just sold Figma 40% down.
Harry, no way to run your money.
It is.
The agents don't need them.
I'm up 24%, Rory.
I agree, but it just seems, yeah.
Okay.
Do you know what, Rory, the big lesson I have?
Don't wait for the shit to come up.
Just sell it and redeploy.
I agree with that.
I think that is very true.
I've spent so long waiting for Figma and Duo to come back.
Don't.
Just sell it.
It is, by the way, as a random comment, it is the big difference between public investing and private investing.
You do as a private investor, you end up, especially when you're on the board and you end up dismantled.
We're working this out together.
And the whole beauty of public companies is, no, dude, you're working this out.
I'm leaving because I don't know how you're going to work it out.
And it's just a different mentality.
And it's why I think It's one of the things why I think venture investors can be mediocre public investors.
And I talk to the best.
I remember talking to Brad from Altimeter.
You can tell there's a guy very dialed into.
Every position has an exit price.
And it's a discipline that you need as a public investor.
So maybe I cancel my comment.
My version of your thesis is if you don't have an active reason for holding the stock and a belief it can outperform the S&P 500, which you can get access to for 50 years.
20 bips, then why are you holding it?
If you don't know why you're holding it, you shouldn't be holding it.
So yeah, you're probably right.
Jason, sell me this pen on Figma make.
Honestly, I'm just, I just don't know that our agents will work with Figma because they have to, but they don't need it.
Right.
They don't need it forever.
Right.
They definitely don't need Duolingo.
So I can't.
I want to see the turnaround story for the agentic Figma.
I do want to see it.
I'm just, it's May.
I'm just going to leave on the Jeff Bezos's Project Prometheus establishes AI lab in London.
Kings cross, baby.
We're back.
Boys, thank you as always.
A wonderfully uplifting episode.
Every week you have to have the feel-good story from 20VC.
I'm voting for a new edition to the show.
We compete for the feel-good story of the week.
I like this new edition.
But before we leave you today, are you a founder working nonstop to raise your next round?
Are you an investor doing all you can for your portfolio companies to help them stand out?
Funding and scaling a vision is challenging.
Banking should not be.
HSBC Innovation Banking caters to tech and healthcare founders all over the world who need a really great banking partner that matches their pace, offering fast onboarding, product packages designed for your business, and capital solutions built for high-growth startups.
the VCs investing in them.
With HSBC Innovation Banking's rapid onboarding, you can get access to your new accounts and facilities quickly, so your team can stay focused on building and scaling what's next.
You'll be paired with your own dedicated team of venture ecosystem veterans who have the network and experience to guide companies in your specific sector, at your specific stage.
And behind that support is this real strength, HSBC's $3 trillion balance sheet and global network that provides this stability.
and international reach needed to grow your operation with confidence to see how HSBC Innovation Banking can support you.
Whether you're on day one or day a thousand, visit innovationbanking.hsbc to learn more and connect with an innovation banking specialist.
That's innovationbanking.hsbc.
While HSBC manages your corporate banking needs, Deal helps you build the global team behind it.
Founders scale startups faster on Deal.
Grow without borders.
Deal handles the hard parts of global hiring, so you can stay focused on growth.
Set up payroll for any country in minutes.
Hire anyone, anywhere, and get visas handled fast.
Deal takes care of onboarding, HR, IT, EOR, benefits, and compliance.
Everything your startup needs to scale quickly.
All done fast in one place.
It's why more than 40,000 fast-growing companies, like Airwallex, Eleven Labs, and...
Intercom, trust Deal to move fast and get back to building.
Visit deal.com slash 20VC.
That's deal.com slash 20VC.
Deal handles the global team and Framer handles the front door.
A website should help your business grow, not slow it down.
If updates to your .com feel harder than they should, Framer is the shortcut you've been looking for.
Framer is an enterprise-grade, no-code website builder that works like your team's favorite design tool, and it's used by companies like Perplexity, Miro, Mixpanel to move faster.
Designers and marketers can fully own the site with real-time collaboration, a robust CMS built for SEO, and advanced analytics that include integrated A-B testing, So you're not just shipping pages, but you're maximizing what works.
And when you're ready to ship, changes go live in seconds with one click.
publish without relying on engineering.
Plus, Framer is built for scale with premium hosting, enterprise-grade security, and 99.99% uptime SLAs.
Whether you want to launch a new site, test a few landing pages, or migrateyourfull.com, Framer has programs for startups, scale-ups, and large enterprises to make going from idea to live site Fast.
Learn how you can get more out of your .com from a Framer specialist or get started building for free today at Framer.com slash 20VC for 30% off.
30% off a Framer Pro annual plan.
That's Framer.com slash 20VC for 30% off.
Framer.com slash 20VC.
Rules and restrictions may apply.