「九成胜率是扯淡」：David Tisch 为低持股宽组合辩护，宣告纯领投种子基金之死

先说结论

这是 20VC 主播 Harry Stebbings 与 BoxGroup 创始人 David Tisch 的第三次对谈（2026 年 10 月 31 日发布，约 80 分钟；嘉宾身份与 Cursor/Baseten/Clay 早期投资记录经节目官方页面核实）。开场就是罕见的认错戏码：Harry 多年质疑 Tisch 的「低持股+宽组合」模式，如今承认「我错了，他绝对大获全胜」。Tisch 借势输出了一套完整的方法论辩护，核心数字很硬：集中型基金宣称「想要的单子九成拿下」，Tisch 断言真实数字约 20%——要组出 30 家各持 10% 的重仓组合，你得向 120–150 家公司报价，最好的公司并不总在你的组合里；与此同时 B/C/D 轮稀释从过去的 12–20% 降到 3–8%、百亿美元级退出从离谱变成常态，结果规模扩张+低稀释这两条让小支票的数学成立了。对行业观察者，本期最有价值的判断是结构性而非八卦性的：纯领投种子基金这个物种已经没有生意可做——不是因为你不行，而是因为最好的多阶段大平台正在用更低的价格敏感度和更大的支票本运行同样的策略。这与中国市场「平台型基金挤压独立早期基金」的叙事完全同构。

一场迟到两年的认错，和它背后的算术

Tisch 做早期投资 17 年，他坚持当下的狂热不能类比 2021：2021 是无根本性技术创新、纯 COVID 行为改变推动的泡沫（好卖不好买），而此刻是横向新技术部署的早期阶段，只是「创新-平台化-再创新」的周期被压缩到两三个月一轮（新模型发布、垂直 AI 收入暴涨、巨型并购各成一浪）。种子轮 1000–2000 万美元对明星创始人已成常态，这改变了基金经济学，但 Tisch 给出的两条对冲比抱怨有用（360–600s）：其一，结果规模扩张——十年前百亿美元公司是妄想，如今是早期投资人坐下来必须「眯眼看到」的正常路径；其二，后期轮次稀释大降——快速起飞的公司 B/C/D 轮每轮只稀释 3–8%（过去 12–20%），早期小比例被摊薄的幅度系统性下降。Harry 的认错点被 Tisch 精确化为「没看到结果规模扩张，这是我思维僵化」。反向地，Tisch 把矛头对准集中模式（840–960s）：所谓九成胜率是行业性的自我美化，真实约两成；由此产生的逆向选择意味着「你重仓的 30 家，未必是你最想投的 30 家」——BoxGroup 用宽组合换来了「投进更多真正令我们兴奋的公司」。他顺带把「精益创业」钉死：十年被教授、书、推文洗脑的假理论，「举个靠精益剧本跑成风投级公司的例子？上了风投飞轮你就注定是胖的，胖不等于没纪律」。

纯领投种子基金之死：与巨型平台正面竞争是必输游戏

本期标题里最锋利的判断在 1560–1680s 和 3480–3600s 展开。Harry 问：纯领投种子基金还有生意吗？Tisch 点名 Floodgate、Uncork（转写作 uncorks）、Susa、First Round 后者的答案：这些机构都已转向更灵活、必要时打后期，「我不想要那门生意——因为你无法正面战胜世界上最好的机构把该策略当作常规武器来运行，何况他们价格敏感度更低、支票本更大」。Harry 补刀现实：输给 General Catalyst 一个 junior，只因为对方出三倍价格、三倍支票，「我完全同意创始人该拿那笔钱」。曾经的「等等看 A 轮」策略也已死亡：市场效率化之后 Sequoia 赢下种子轮，a16z/Kleiner 就立刻抢下一轮——这可能是我唯一的机会。LP 侧同样拧巴：LP 们嘴上要「硅谷纯种子、一亿美元以下」的敞口，Harry 直言这是最烂的细分赛道，而 LP 的多数配置终究流向多阶段大平台。Tisch 的「Fund Four 理论」给了新基金一记透镜（3480–3600s）：新投资人拿 2000–8000 万起步基金的真正愿景写在第四期基金里——「见到新投资者我总问 Fund Four 长什么样，就像问创始人要大愿景」；多数新机构的真实野心是长成多阶段平台，而 BoxGroup 的答案恰是反例：17 年来「我们就是早期机构，没有任何做别的野心」，规模从两张 2.75 亿美元基金（种子主基金投约 150 家+跟投基金写 20–30 张 500 万级 lean-in 支票）涨了，风格一寸未变。他并提醒：「小心你的愿望——多阶段大平台里的很多人并不快乐」，但 Benchmark/USV/Conviction/Ribbit/Thrive 各有各的形态，不能一概而论。

「禁扔手榴弹」：一个反共识的决策文化

BoxGroup 内部规则可能是本期对从业者最实用的部分（3720–4080s）。自评「发现-挑选-获胜」三环节，Tisch 自嘲「我们永远 mid（一般般）」：能看到想看的 50–75%，输单最痛、但也最可战术改进（读懂房间、为不同创始人切换服务剧本——「这是个服务业」）；挑选则是玄学，做到职业生涯某处「你的品味就是你的品味， butterflies 来了就说 yes」。机制设计上：全公司每周见 50–100 家；周二周四开投委会；不投票——必须有人真心兴奋要投才能成案；最反共识的是内部禁止消极性：「没花时间和创始人相处的人，无权对案子泼冷水」「我们早期不允许扔手榴弹——不许往别人的案子上扔」。他的理由值得逐字引用：「随口说出任何早期公司为什么会失败，是这行最容易的事——干过一年就会列五条风险。你们的投资备忘录里『为什么不成立』的部分显而易见且毫不相关，因为七到九成本来就不成。这门生意的魔法在于眯起眼睛看见它为什么会成立，与创始人看见的东西对齐，然后说 yes。我们的工作是对正确的事说 yes，而不是恐惧对不成的事说了 yes。」例外只有创始人伦理/声誉问题。

从 Cursor 到 Rogo：错读、补偿与复利的位置学

组合案例部分信息量大（1920–2040s、2640–2760s）。Cursor：合伙人 Claire 通过 Dorm Room Fund 早年认识 Michael，BoxGroup 投进最早轮——单笔回报整个基金多次，最终成为「史上最大风投并购案」（Tisch 谦称只是幸运早到）；同一基金里还有十家「按更合理时间线复利」的公司。Clay：颠簸四年后爆发；Baseten：种子轮进入，「需要推理先成为一个赛道」——如今是全速起飞的 outlier。而 Rogo（AI for finance）是最好的错读样本：种子轮后 Tisch 亲自背书帮融 A 轮，约 40 位 A 轮领投人中 39 家拒绝——「有些拒得很快，我只能难过」——Keith Rabois 领投，随后 Sequoia、Kleiner 相继进入，如今是共识公司。「早期市场不完美、信息不完美，总有公司不在 zeitgeist 里，然后在雷达下复利成重要东西。」关于pro-rata（2880–3000s）：不是权利、是挣来的——写进文件其实对创始人更有利（给下一轮谈判增加杠杆）；至于早期 VC 宣称「我们不需要 pro-rata」，Tisch 评价：「营销垃圾，我也能写博客」。关于二级出售（3120–3360s）：「我为 LP 工作，我的客户是创始人」——两条关系解耦；他不早卖：一怕创始人的声誉反噬，二是「最好的公司在最后复利最多——20 亿到 40 亿再到 80 亿，比 0 到 10 亿容易」；创始人套现和 VC 减仓不是一回事（创始人的债务、生活压力、安全网改变的是风险偏好），而定期给员工 tender offer 是被低估的留人文化。

创始人画像与十年之问

今天的创始人「更技术化、更聪明、平庸再无机会」（2280–2520s）：Tisch 引用疯传的 Scott Wu 视频和「Cognition 不过是 Scott Wu 的套壳」段子自嘲「我怎么竞争」；销售型创始人变少，但早期投资人该反向思考——「如果两年后销售重新成为差异化，你今天就该投那批人」。「人人该创业」的时代结束了：公司（company）与生意（business）是两个词，风投产品对规模的胃口不可妥协；BoxGroup 已停止在种子轮投品牌（DTC）——种子阶段拿不到品牌是否成立所需的 LTV/CAC 数据，品牌投资更适合 A 轮专项玩家（饮料、快餐、个护里都有迷人的规模化品牌）；「Harry’s 的 Jeff 和 Andy 是放进任何公司都会做出伟业的世界级创始人，但问题出在时点」。校园见闻很有画面感：在哈佛 MIT 问本科生「谁对十年后的世界有愿景」——无人举手；五年——一只手；两年——手渐多。在「AI 要么灭世要么带来丰裕」的预测光谱下，没人真正知道世界去向；所以今天要找的创始人是「能实时导航 insanely fast、insanely complicated 环境的人」。结尾的自主驾驶吐槽见真性情：「技术 pretty solved，强制推行每年能救几十万条命，但我们抱着错误的建制不放」——以及「从零建一所 AI-first 学校，远比在陈旧架构里激励创新容易」。

机制与启发

三条可迁移链条。其一，基金结构的经济学链：结果规模扩张+后期低稀释 → 小支票宽组合的数学成立 → 集中模式的逆向选择（20% 真实胜率、120–150 家报价换 30 家）暴露 → 纯领投种子基金在多阶段平台的价格/支票碾压下失去生态位 → 行业进入整合期（20–30 个有竞争力品牌、其中约 10 个 outlier）。其二，决策文化的反直觉链：早期失败率 70–90% 是先验 → 「指出为什么不成立」无信息量 → 组织必须禁止低成本泼冷水（无投票、禁手榴弹、必须有人兴奋）→ 判断力沉淀为「眯眼看见成立路径」的品味——这套文化对任何高风险决策组织（研究立项、投资委员会、产品评审）都成立。其三，关系资产的复利链：把创始人当客户、pro-rata 靠挣、不早卖、长记性（对把自己挤进第二档 tranche 的机构「我有意见」）→ 声誉成为跨周期的定价资产 → 在赢家通吃的市场里，这是小基金唯一无法被支票本复制的要素。观察指标：Cursor 式「两年 80 亿美元」的速度会不会把基金周期本身压变形；LP 对宽组合数学的接受度；以及 Rogo 式「39 家拒绝后的共识反转」出现的频率——那是市场错读深度最诚实的体温计。

ASR 校正表

来源：20VC 播客（2026-10-31 发布，约 80 分钟）转写；嘉宾身份、基金规模（2×2.75 亿美元）、Cursor/Baseten/Clay 早期投资记录经 Apple Podcasts 节目页核实。文中胜率、稀释率、报价数等均为嘉宾口述估计，未独立核实。

转写原文（修正版）

[0s - 120s] I’ve never understood trying to compete head to head against who I would deem to be the best VCs in the world. Every concentrated manager will say that we win ninety percent of the deals we want to, and I think that’s total BS. I think it’s like twenty percent. Over the years, me and David Tisch have done many shows, and I’ve always questioned his model: low ownership, very diverse portfolios. And you know what? I was wrong. David has absolutely crushed it. He’s one of the best early stage investors of our time. This was a phenomenal discussion. I loved making this happen. I think the lean startup was a total fake. There’s people to me right now, and this happens in hot market conditions, that are playing the short game. I believe the right to invest in subsequent rounds is earned. I work for our LPs, and my customers are found. We don’t allow grenades at early stage. You’re not allowed to throw a grenade on someone else’s deal. Ready to go? David, I’m so excited for this, dude. It’s been two and a half years since you joined me. You very kindly reminded me of a debate that we had a couple of years ago, and we’re going to get into that. But thank you so much for joining me first. Thanks for having me back. Nothing’s happened in between the past two and a half years and now, so we can just sort of regurgitate all the old conversations. Has our job completely changed, David? In some ways, totally, and in other ways, not. I think you know, I’ve been doing early stage investing for 17 years now, which makes me old. And I think a lot of the times people try to relate the current moment to a historical moment. So, you know, is this like 2021? To me, no. It has nothing to do with 21. It’s a totally separate moment, and this one’s funky and interesting and.

[120s - 240s] Maybe frothy, maybe insane, whatever it is. But it’s a standalone new market condition that you have to figure out in today’s world. Because in twenty one, there were a bunch of other factors, macro, micro, that were creating that environment. And if you go back to you know eighteen and fifteen in two thousand ten, each one of these moments are just different. And so I could argue our job has totally changed, and equally explain that our job is just to do whatever the current market conditions present. And the actual job is like see, meet, get to know great founders, make a decision: should we invest or not? And beg them to take your money. And that’s the the funnel that we operate in. In twenty twenty one, I think we can acknowledge it was just incredibly bubble like. It was a good time to sell. It was a bad time to buy. There was no fundamental technology innovation. There was short term behavioral change with COVID in different respects. Communications buying. Everyone says, “Well, now starting to feel like twenty twenty one.” Are you in that camp of the craziness is real, or are you in the camp of no? We are so early, and there is so much room to run. I don’t think it’s as simple as that. I think in each one of these moments, there are good companies and bad companies. And so as a VC, generally and especially as an early stage VC, I think the macro is less impactful than the micro. Is the company that I am fortunate enough to be an investor in the good one? Is it the great one? Is it the the most important one that transcends the macro? And the macro to me is like a portfolio analysis. It’s a industry analysis, but it doesn’t come down to a specific company analysis. So do I think there are, you know, not perfect.

[240s - 360s] Companies raising a lot of money at big valuations, yeah, but I don’t know that that’s ever not the case. And I think you’ve seen it historically in our industry. There are incredibly public blowups of some of these companies that happen in catastrophically messy ways. It sometimes create TV shows or movies or documentaries. And then there’s companies that die quietly in the night. But I think underlying all of these moments of frothiness are probably a handful to a lot of great companies that are building high quality businesses, and they’re doing it in, you know, a long term oriented way. Are they raising money quicker? Are they raising money less dilutively? Are they, you know, doing it at big valuations? Absolutely. But I don’t think that that is a like industry wide harmful set of conditions. It’s just is this company a great company? Can this founder? Can these founders navigate incredibly complex changing environments almost in real time today to create an enormous amount of value? That I think you are to your point in the early innings of a deployment of a horizontal new technology that will have tremendous impacts. But like all other technologies, what you see is this initial wave of impact, initial set of reactions, some version of plateauing, more innovation, plateau, innovation, plateau. The difference this time is those like cycles are like two to three months. It’s the new model release. It’s the new revenue growth of a vertical AI business. It’s a huge M and A deal. All these moments create these mini cycles that feel like they have sort of waves across the industry. We’ve seen.

[360s - 480s] Seed rounds be ten to twenty million dollars, very consistently. Well, also fifty or a hundred or a billion, for sure. But I’m saying kind of if we don’t take the real outliers, like ten to twenty, it’s really been quite normalized as a round size for good seed companies with you know pedigreed founders. I get that our job is just to find them and and you know beg them to take our money. But does the business not really change in that respect? Suddenly, how do you think about sizing? You know, bluntly, that there’s there’s nothing there, and you’re having to write a large proportion of your fund as an entry check. How do you think about that with the massive explosion of round size? You can either come on a podcast and complain about it, or you can do the thing, make a decision, yes or no. If you’re going to play the game that that’s in the market of deals, you don’t get to change the competitive dynamics of a free market. So if great founders or potentially great founders are going to raise ten to twenty because someone else is going to do the deal at that price, you get to say yes or no. So I think if you think that is an important company and one that you want to be part of, you have to say yes. And there’s two conditions that allow for those starting points to not materially change the economics in venture. If the outcome sizes are bigger, so if you know you you think about ten years ago, the idea of building a ten billion dollar company was far fetched. Today, that is sort of like you have to sit and look at an early stage company and try to squint and get there as a sort of normal outcome versus a billion. So I think there’s a change factor there, and then you see anomalies well past that in terms of valuation or even acquisition or.

[480s - 600s] Or our future IPOs, and then the second one is the lack of dilution. So, as an early stage investor, to me, in the companies that tend to hockey stick very quickly, the Series B, C, D are dramatically less dilutive to the founders and the early cap table than in the past. They are raising these later stage rounds at three to eight percent dilution instead of twelve to twenty percent. And if you take that across multiple rounds, your early stage investment just gets diluted less, and that is an economic factor. Now, we BoxGroup we invest in a wider set of companies, which you’ve criticized before many times for not an ownership focus. If our entire portfolio is filled with twenty million dollar seeds at you know two hundred million pre, do I think that the the business is fundamentally changed? Yes, and so you have to find in this market of you know a in this market a varied entry points for early stage investing. I think you have to have a portfolio balance, but not on an individual deal basis. Totally get that in terms of portfolio balance, kind of on a blending entry price and making it a little bit more palatable. You said there about my criticizing your portfolio. I mean, speaking about it, I use word criticize on purpose. No, I do. I trust me. I I think one of the most important things to look for in in anyone, actually, personal or professional, is like someone who’s willing to like admit that they were wrong. Um, I have no problem admitting that I was wrong, and what I was wrong on very specifically, I think, is like not seeing outcome size expansion in the way that we have done, and that’s very rigid minded of me, which is my fault. But it’s enabled incredible returns from companies with smaller checks and not having ownership, so to speak.

[600s - 720s] What? How would you characterize what I got wrong? Did I do a good job of it there? You can own me for it. I I want like a soundtrack as you’re doing that, so we could add post-production music in. Oh yeah, we will. It’s like ambient. It’ll go a little, it’ll go a little wider on the on the. It’s kind of like lose, you know, lose yourself. The first kind of thirty seconds beat. Yeah, just like a little background music. Yeah. Harry getting deep. No, I I think I think that I’ve always believed the adventures is a pure power law dynamic industry. You have to be in the outliers, and the idea that me or you, to pick on both of us, are going to be able to find and buy ten to twenty percent of a true outlier in the seed round and beat the rest of the market, which I truly think, you know, a lot of not all are great at their jobs. You’re going to fight them head to head and convince the founder to pick you, and that’s the company that matters. I think it’s a lot of steps that you have to believe to get that business right, and so I’ve never understood trying to compete head to head against who I would deem to be the best VCs in the world. And I think these are brands and these are people that have spent decades building, you know, what their organization stands for and attracting the best set of founders to want them in their deal. And I think those multi-stage firms that have been around for a long time are really, really good at seed investing, and so in a way that they weren’t before, huh? Like I feel like they’re more they’re more concentrated, focused on it, and they’re more accessible, and they’re more efficient, and the market’s more efficient. I think founders know how to reach them and know how to run.

[720s - 840s] A process very differently than in the past. I think post-COVID, there’s a tremendous efficiency in the fundraising market. Competitive deals; it used to be three to five term sheets in an early stage round can these days be ten to fifteen, or it’s purposely only three to five, but those three to five are really competing against each other. And I think that is again something you can complain about or just accept the market conditions. And so for us, the belief has always been we have to be able to invest in the people that we meet that we think are the best, and we can’t let our business get in the way of it. And so to me, the thing that you got wrong is is two pieces. One is the math, our business math on our side as a venture manager that has LPs that needs to return our capital to LPs at a outlier way. I think you didn’t do the math right, and I think a lot of people don’t appreciate that our business makes sense, and that’s okay. We like what we do. We think I specifically didn’t do the math right because I didn’t see the outcome size expanding. Is that is that it? You’ve got the numbers. Well, the second part is yeah, maybe that’s it, or maybe the lack of dilution part that I made before is is what you get at the beginning actually stays pretty consistent. Whereas I think in the past you would probably put like a negative eighty percent on that number. With Jason Lemkin, who I do a lot of shows with every week, we do the weekly show, and he’s like a hundred percent, sixty percent, you’ll be diluted. Is that not true in your? I’m not thinking the best companies now. Like, not every company goes up into the right and never sort of runs into bumps. I think the macro when you get big can cause some bumps in valuation. You’re seeing it right now in some of the biggest labs going out and trying to raise rounds and sort of re reevaluating.

[840s - 960s] The the price that they’re raising at. If you go back in history, like Uber, Facebook, Airbnb, Ramp, which I think is one of the best modern companies ever, they’ve all had a bump, a down round, and so I don’t think it’s always just up and to the right. But I think in this specific sort of three year window, there is a lot of continued momentum in terms of valuations. But the second piece, which I think is related to the first piece, that I I think concentrated funds dismiss is there is an adverse selection in the concentrated model of what gets in versus what you want to get in. Meaning, every concentrated manager will say that we win ninety percent of the deals we want to win, and I think that’s total BS. I think it’s like twenty percent, and so in a given fund cycle, if you’re funding thirty companies that you have this immense conviction in, concentration of thirty names with ten percent, you need obviously you need because it’s vital need ten percent of the company in order to make the deal work. I think you actually offer that deal to upwards of a hundred and twenty, maybe a hundred fifty companies to get your thirty, and I don’t think people admit that. So I do believe that the best companies, the ones you’re most excited about, don’t always make it into the portfolio. And so just because you have thirty that you own ten percent of, it doesn’t mean those are the thirty that you would have liked to be in that portfolio. I think in our model, what we’re able to do is get into more of the companies that we’re excited about than other people. I get that. You know what worries me though so much, and I’m asking here, but it worries me is I completely agree with you in terms of that supposed win rate, and what happens now though is they just say.

[960s - 1080s] David, okay, fuck it. I lost a Sequoia and Box group. Let’s do another round. I’ll do it at eight hundred. I know David just did the first tranche at four hundred, but I’ll do it at eight hundred today. And for the founder, it’s like, well, good deal. Like nothing’s changed in the company. I get more money at double the price. I think it distorts companies and really. Who are you worried about? I’m worried about founders losing focus and becoming distracted with way too much money way too quickly. That is like a babysitting problem. Sometimes that’s going to happen for sure. But to attribute that fear to every founder, some founders are going to tremendously benefit from having more runway, higher valuation, more momentum, more buzz, in order to recruit people, in order to show that there are believers that think this can be huge, so that they can justify to customers to get early partners. If you are a great founder, and it doesn’t mean all of them are going to do it properly, you have to take all the conditions that you’ve chosen to take on. So, if you took on two tranches, if you took on high valuations, if you took on a lot of money, you’re going to have to use those variables and execute your company building in a different way than if you’re super capital constrained. I think the lean startup was a total fake. It was a like stupid, like brainwash that happened for ten years with like professors and books and tweets and blog posts that was just like totally awful. And I think it sent people like the wrong message. Why was it totally awful? Just because name a company that actually ran the lean startup playbook that worked. One every company, if you’re going to be actually successful, needs a lot of money, especially today. But like thirty-seven signals is is one that’s not. Yeah, some bootstrap companies, but if you if you want to get on the venture flywheel, lean is not the answer.

[1080s - 1200s] Like inevitably, you’re going to be fat. You’re not going to be lean. You have to be. It doesn’t mean undisciplined, right? What what the the difference between the word like lean and the word well funded is not lack of discipline. It it’s just not automatically attributable. Does that mean that every company that raises a ton of money is going to be well disciplined? No. There’s going to be again back to where we started. Bad companies. Will you do tranched rounds if a founder said so? You’ll invest. I don’t like them. It but like again, there’s the like emotional reaction and the business decision, and those are very decoupled. But but you will do the second or third. Don’t put this on air. I don’t want founders to know that we’ll just rip checks into tranched rounds. But yeah. Whenever like I I I don’t want to. I would like to invest at this at the lower price. I’m too. I’m fuck off. This is a partnership. I get it, but that’s your problem. Get a shrink. I didn’t need a fucking shrink. This is a partnership, and you’re saying you’re inherently less valuable than them. Well, fine, just don’t take me then. Okay, that’s their choice, and and guess what? They’re not going to take you, and you can go back and you can choose that company is not going to be. That’s a yes no decision. That’s it. And so as but you’re happy then to just to take. I didn’t say happy. That’s now an emotional attribute. I will take. I will I will be sad and take it. That’s it. That’s like a different thing. You will I will be sad. I will succumb. Yeah, you you will just admit that this is sad and fall in line. I think it’s our responsibility to earn the right to do what we want to do versus what a founder is offering us, and so again, beg you can beg to have a entrepreneur do what you’re asking them to do. So if if there’s two tranches, I would like to enter in.

[1200s - 1320s] Lower tranche, I need to convince the founder to allow me to do that. And if I don’t, it’s a me problem. I would like the lower tranche, please. Yeah, yeah. Cake or cake or death, cake, please. And then and then they say no, and then you’re like, pretty please, and then they say no again, and then you have to like beg differently. Come on, please. I’m just a little seed fund. Come on, you have to use all your little sale tactics, and then you get rejected. But like, is that an enjoyable market condition that’s been emerging more and more in the past couple years? No. Do I like if if I am sitting there and I view it as like not the founder that tranched us, but the other VC? It’s good to know, right? I also have a long memory. Scathing, but it is right. Like you have decided that I will pay another price, not the founder. You’ve created the structure of this deal such that I am not sitting on the cap table with you. I am pushed to a a different product than you get to invest in. That means when we have early stage investments and are going out to market to help them raise capital, if I get to be a voice in the ear of a founder, I have opinions too. Remember, I was on your side, David. It was I was always on your side. I was on your side. Come on, but but I mean it, right? Like there’s people to me right now, and this happens in in hot market conditions that are playing a short game, and there’s people that play a long game. And I think one of the they’re playing a short game because they’re cutting people out. They’re pushing them into second tranches. It’s like I just think like there there’s a set of relationships that you build in this business because we’re all dependent upon each other in very different ways that ebb and flow in different times, in different conditions, in different companies. That if you’re in the business of maintaining and building long term relationships, you’re going to choose.

[1320s - 1440s] Choose certain behaviors over others in different moments. And the thing that we’ve done at BoxGroup that I think is different than a lot of other firms is they’ve built is we’ve stayed very true to who we are. We do early stage investing. We try to be there on day one. We don’t take our problems and put them in front of founders. We try to be as helpful as we can be, and we try to be founder friendly in every step of the way. Does that work perfectly every time? No, but that’s the intention. So we write we write checks that are not needing of ownership. We don’t sit on boards. We don’t write competitive term sheets. We are happy to lead a deal. We are happy to help a founder get in business with some money. We’re happy to be totally creative in how we invest, but it’s oriented around early stage and getting in at that dream level. What is the average ownership? I don’t know. I have to. That’s a math question. But like, is it? I would like genuine. Is it like five percent, two percent? There are deals we do where we own at the initial check one percent. There’s deals we do at ten percent, and everything in between. But there’s no too low. Again, that’s an emotional thing, not a business thing. I I’m sad if we have to write a really small check, but it comes down to like yes or no. When does that happen the most frequently? When we get to a deal late. When you when you meet a founder and the deal’s in process, you’re now begging for scraps as you should, and that’s a that’s our fault for getting to something late. And that’s something we can do better as a firm is meet founders earlier in their journey. And if we didn’t do it, we need to figure out internally like what could we have done better to meet a founder before there was a company. Can I ask you, what’s your win rate? So different market conditions, it ebbs and flows. Probably between.

[1440s - 1560s] Um, seventy and ninety percent, and I think the single factor that causes us to lose the most is getting to something too late. Like speed of our decision making and accessing the opportunity are the two factors that we control that hurt us the most. There’s a subset of companies that just meet us and don’t want us, but that’s harder to to course correct because you almost don’t know why they didn’t like you. It’s like a, I don’t know, an EQ emotional outcome, or they didn’t think you were valuable enough, or maybe they referenced you and they they got something that said like not as good as you need them to be. I think we care a lot about those situations, but I think that happens sometimes. The ones that I think we organisationally can can work on is how do we get to everything before everybody else, and I think that’s the obsession. We’re a team of ten investors. There are six partners at the firm. We’ve all worked together for a long time. We all like each other, and we all do the work. Like our job every day is to wake up and meet the next founder that we’re excited to back. I think both of us having flexibility to not have to be lead, like you know, I think again I admitted my wrongdoing. Like I turned down great businesses over time because of ownership, and it was just terrible decisions. And so now we invest very differently. You know, we will absolutely do the one or two percent if we think it’s an unbelievable founder and it’s an amazing opportunity. So great. That means that I I never lose because I will just do a smaller check. Um, well, not never, but you know what I mean. Rarely lose because yeah. But if I had to only lead, that would come down dramatically. And so my question to you.

[1560s - 1680s] Does the pure play lead only seed funds still have a business in a world? What are the pure play lead only seed funds left? I mean, I think you’ve got your like Uncork Capital, your Floodgate, your I mean, Susa, no first round. I think they’ve moved into a different style of investing and more flexible, and play it a little bit later when necessary, on per on like strategic purpose. So, what you’re saying is that business doesn’t exist anymore. I don’t want to be in that business. And why? Why is that? Because I don’t think you can compete against the greatest firms in the world who are running that strategy as part of what they do, with much less price sensitivity and much bigger checkbooks. Yeah, I don’t even think that’s a factor. They’re great at what they do. I like very much pedestals. I do think it is a factor. We we have lost to like a GC of the world, and with respect, a junior there, and I don’t mean that disparagingly, but someone who is more junior because they offer treble the price and treble the check. I agree with the founder for taking it, like wholly within your right to do it. But that’s why. Yeah, but I like it’s an offer in the market, a free market, and I think they take the majority of the air out of the room if you’re trying to compete for. You know, I’m going to lead, sit on your board, or not sit on your board, but I need 10 to 15 percent of your seed company. I just think there’s a greater efficiency to access the multi-stage firms, and the multi-stage firms are happy to do those deals. I also think like what you’ve seen happen is it used to be a lot of firms would be like, “Okay, I’m not going to do this. I want to wait to see this at the A, or I’m not going to do this at the A. I want to wait to see this at the B.” And what’s happened is they don’t get to see it. Like that might have been your only shot to do the deal.

[1680s - 1800s] Because there’s an efficiency in the market, and there’s other people that also want to do it at the B, and you might lose there, and you might lose at the C, and so what you’re seeing is if Sequoia wins, it might mean that, you know, Andreessen or Kleiner or someone else needs to immediately come into the next round because they know that that’s the best probability they have of getting a real check into that company, and they do it quickly and they do it aggressively, and I think that if you lose head to head in a seed and an A in a B, you can either sort of put your tail between your legs and call it a day, or you can try to figure out a new entry point with minimal progress and minimal developments to get your check into that company if you believe that was an important one. I think it’s an amazing point that there was a willingness to wait before that’s now gone. I think that’s absolutely right and very pertinent. Can I ask you? Though I speak to so many LPs, as we said, they love to talk, and every LP wants one category of venture. We want the pure play seed investor in Silicon Valley, small fund under a hundred million, pure play seed, and I go that is the single worst fucking segment to be in. Like that’s the one segment you don’t want to be in, and they all kind of look at me rather horrified. What advice would you give an LP when they look at the segments today and go, ah, I want pure play seed in San Francisco as my bucket? I think there are three different stakeholders in our industry, and their incentives and and current conditions are very decoupled. For you know, probably the the the most frustrated each like like we’re in a founder world. I think GPs are struggling to have a.

[1800s - 1920s] Very static and focused strategy because of we’re in a founder friendly world, and I think LPs are frustrated because they want certain versions of exposure or portfolio construction that basically aren’t available. I don’t think there’s an easy solve for the LP problems, and I don’t think there’s a clean way to operate as a GP in a ever changing market that is very complicated right now. And so I think founders get the leverage; they get to raise capital from people they like at prices that they like, and you as a GP can say yes or no. And on the LP side, they’re going to look at your portfolio construction, your entry point, your ownership, and then a lot of the multi stage funds have multiple products that LPs will tell you and me that they don’t like to do, but yet it’s going to be the majority of their allocation into ventures going to go to the multi stage firms that are established that are a way to get scaled capital into the industry and, frankly, like exposure to some of the best companies in the industry through that. So your question is around like the LP conditions. I believe my relationship with our partners is one of truth. We invest out of a two hundred and seventy five million dollars seed fund right now. It will invest in around a hundred and fifty companies. So we are pure play seed with lack of a focus on ownership and concentration. There is a large cohort of LPs that are confused by our math and don’t doesn’t think it works and that don’t believe in our model. You do fifty companies a year, a little more probably. David, do you remember them all? Yeah, I don’t know what the other.

[1920s - 2040s] People who do one to two deals a year do all day. Podcast so confuses podcast. Like it sounds sounds lovely. There are LPs who don’t believe in our math. Our math works. Like I know our math works. I see our math, and I think our our partners also believe our math works, and that’s awesome. Because our our model’s terrible if the math doesn’t work from a liquid returns basis. What has been the single best investment? We were fortunate enough to have met Cursor sort of before they were working on the business that scaled, and my partner Claire got to know Michael when they were investing on Dorm Room Fund together, and we were in the earliest round of Cursor. Which did that return the fund? Yes, multiple times. Yeah, I told you this model doesn’t work, David. I know you didn’t listen. I know I gotta I gotta do better math. You were our Excel sheet broke. I tried to update it one day and. Do Do you know what’s astonishing with that? And I’m really pleased you chose that actually as an example, which is the speed to that enterprise value. What four years? I thought I thought every LP was moaning that venture is taking too long. Now we’re seeing OpenRuda was OpenRuda one of yours? It was not. Oh bugger! It wasn’t one of mine. Yeah, next time. Yeah, next time. But like you know, this was whatever two two years to eight billion dollars. I think the speed of company creation, growth, explosion is different, and I also think underlying, like blessed to have been in in early part of the Cursor story, and I think you know what they did and accomplished is truly sensational, and it’s it’s a generational outcome. It’s the biggest venture M and A deal in history. We were just lucky to have have been there early. I think.

[2040s - 2160s] Underlying, like in the fund that Cursor sits in, in the early stage fund that Cursor sits in, for me, what I love is there’s ten other companies that are fascinating, and they’re just taking a slightly more reasonable timeline to grow and compound. Do I think any of them, like, will get to the accomplishment of of how big and great Cursor was? I don’t know, and that’s not like a binary. They did they did it or didn’t. But I think what you have to appreciate in this early stage investing is it things take time. We were the earliest investor in a company called Clay. Clay is a bumpy four year road to explosive growth, and now is growing and compounding what they’re doing in an amazing way. But it’s not a clean, perfect story, and I think it takes learning and it takes iteration and developing their go to market that got them to where they are at today. Baseten, we’re we’re in the seed round of Baseten. You needed inference to sort of become a space, and Baseten today is a full outlier company, and they’re running at full speed and and sort of hitting that hockey stick fully. But it wasn’t this just start up and to the right. Do you think the best companies are generally immediately obvious, or do you think actually the value is generally actually in the messy middle in the ones you don’t expect? I think there are signs early on that a founder is running the experiment at a world class level, and that is either they are hiring total outlier people to join them quickly, they are finding customers that are inaccessible early, and you’re almost confused as to how they’re.

[2160s - 2280s] Getting so far ahead so quickly, and it’s a lot of the time some combination of the product and the go-to-market conversations that they’re having, or they pick the right idea. But I think there are always challenges and bumps, and sometimes those are prolonged, and sometimes those are immediate. And so, what you’re really identifying is can this founding team navigate? Again, like I think the market is so complicated today. I, I, we, we spend time and we ask young people. We go to college campuses a lot. We were up at at Harvard and MIT recently, and talking to undergrads. And I asked, like, raise your hand if you have a vision for what the world is in 10 years, which is our job. In which, if you go back in time, young people, old people, there was like, I can see what the world’s like in 10 years, or or some guess of it. No hands went up, and I’m like five years, one hand, two years. That’s when you started to get some hands, and I think that’s what people are feeling today: is uncertainty as to the timelines of what the future looks like. And when you’re in this moment of AI, and you have people saying we’re all about to die from AI, and you have other people saying we’re entering an age of abundance and free-flowing markets that will change the way labor forces work, like that’s a pretty wide gap between the prediction of the future, and then you have the models rolling out frequently with major innovations that, in some way, are important to a subset of companies, but in the end, not every company is going to need the cutting-edge, bleeding-edge model. And so, you’re watching this age of AI deployment, AI adoption, and it’s going to impact people differently at different speeds. So it’s complicated, and then you’re seeing AI impact the physical world.

[2280s - 2400s] Science, all these spaces that felt hard to access before, that are getting opened up because of this horizontal technology shift. So there’s just a ton of uncertainty. I think you feel it in the public markets. You see it with compute access, compute pricing, energy, data centers, the politics around all of it. This is complicated. And so when you’re asked to predict the future, I don’t know that anybody sits here today and actually has an answer. And it’s cool that people come on podcasts or tweet or do whatever they do and say like, I know where the world’s going. And you’re like, No, you don’t. So I think what you’re looking for in today’s founders are people that are capable of real-time navigating ever-changing conditions that are insanely fast and insanely complicated. And so to your question of like, do you fund somebody and know it immediately? No, because I think the world’s changing too quickly today for that to be a condition. Do you think the founders that succeed today are different to those in the past? Yeah. If I look at the founders that I meet, they’re inherently a lot more technical. There’s a lot fewer sales-led founders today than there are. You’re in a moment of that, right? And so the question to me is like, if you’re an early-stage investor, is there two years out when actually sales matter again in some way, and go to market becomes the differentiator? And if that’s the answer, you should fund those people today because their exposure to the bigger markets is not going to be as purely relevant for like one to four years when their company is a bit further along, their products ready. And so if that is your bet, it actually makes sense to start rotating a little differently today than sort of you. You can’t, as an early-stage investor, solve an immediate opportunity or need. Nothing goes fast enough. And so.

[2400s - 2520s] But I do. I think the founders today are more technical, in you know, a non-offensive way, smarter than ever before. I think there’s like less opportunity for mediocrity to succeed, and you can’t just like identify a gap in a business market and go attack it with like laissez-faire approaches. You have to be so good in order to win right now. And you know, you saw. I don’t know if you saw the Scott Wu video that went viral, where he’s doing counting. A you’re like, I can’t compete. I can’t compete with that, right? I saw a great one, which is cognition is just a wrapper around Scott Wu. But you have to, if you look at every company right now that to me is is becoming an outlier, the founder quality of each of them is really, really impressive. And I think that that like there was an era where like everybody was told you should start a company, everybody should start a company, and I don’t think we’re there anymore. I think it’s like can everybody start a business? Sure, and I think that’s okay. And I think the word company and business are in some way different. And venture capital for probably 10 years was funding a lot of categories that were not capable of becoming as big as maybe you thought at the beginning because what they were aiming for was a bit smaller. I think today the appetite for scale from the venture product is uncompromisable because you need to get huge to make the mouth work. And I think the founders’ ambitions today are like a huge and B. The opportunity set feels unlimited. I don’t want to like single out a company, but it’s a company that we both know and everyone will know, which is testament.

[2520s - 2640s] To a success, but like, would you fund like a Harry’s today? I think Jeff and Andy from Harry’s are like world class founders that if you put inside of any company, they would build something of importance and of meaning. We at BoxGroup have stopped funding brands, not because I actually think they’re small. I don’t think you can fund brands at seed because brands to me are built off of your initial dataset of like, does the brand resonate? Does the product resonate? Do people buy it? Do you have like customer LTV or CAC to LTV ratios that make sense? And you don’t get any of that data at seed. I think one of like the more interesting investor products out there is like doing brand investing at Series A. I don’t think it fits in your traditional venture firms today, but I think there’s a subset of investors that fund brands. If you look at the beverage industry, is a great example. If you look at some of the QSRs, if you look at you know personal care, there’s scaling brands that are fascinating businesses. I just don’t think where we sit today, we’re equipped to invest pre momentum. Can ask one thing that I see. You said it’s very much a founders market earlier. They can choose the price they want with the people they want. Yes. To me, it’s like a real haves and have-nots, which is like there are three categories. Where if you’re in that category, how fifty three categories of haves and have-nots. That’s you only name two. No, three categories of interesting company that investors just go nuts for, and obviously it’s more than three, but a small number. And if you’re not in that, even if you are in AI for X, investors like, nah, not interesting. Not in compute. Not in inference. Nah, not in data centers. Not in chips. Whatever. And you’re instantly dismissed. Do

[2640s - 2760s] You see that too, but I again come back to founder quality and founder ambition and execution. So we were in the earliest round of a company called Rogo. They were building AI for finance. Gabe finally told this story, but after the seed round, I helped them go out to try to raise an A. I put my name behind this company fully, and I’m like, Rogo is going after something huge, and Gabe is sensational, and I sent it out to make up a number. He said 40. We can say 40, 40 Series A lead investors. He got fully passed on by 39 of them. Did Keith do that round? Keith did that round. So 39 nos. This is now a consensus company. It has now been funded by Keith led the A Sequoia Sequoia did it Kleiner did it. Do you doubt yourself in the app? You do, or you just think, God, the mimicry of this market is ridiculous. Both. Well, I just get sad. I’m like, I’m, I’ve like done this a long time. I’m like telling you to spend time here, and some of the passes were quick. Of like, we don’t think this is interesting, or like, we don’t know that this could get big, or they don’t have enough traction, whatever they were. But I just think there are companies in this moment of your your point of like king making haves have nots that are misread at different stages and then become one of the other categories. And so that to me means as as it should be, early stage is not a perfect market, and there’s not perfect information. There are going to be companies that are not in the zeitgeist, off the radar, that compound value, compound momentum, and build something that’s very important before.

[2760s - 2880s] Or or outside of the immediacy of of those funding conditions, and I think Rogo to me was like totally misinterpreted by a series of investors at a specific point in time. Kept building, kept getting better, and then I think in the right way, rewarded for you know the the execution of what they’ve done. And you do follow-on checks into just the next round, next two rounds. So we we operate today two funds. They’re both two hundred seventy-five million dollars. So it’s a core seed fund, and then we do a follow-on fund. We write sort of twenty to thirty lean-in checks into companies, almost all from our portfolio. And the lean-in checks are five million bucks. Five to thirty, and that’s across the A and the B, the next couple of rounds. Yeah, what’s the most you’ve ever invested in a company across the two? Probably forty million dollars. Which company was that? I mean, we’ve we’ve written substantial checks into Ramp, into Clay, into Baseten, into Rogo, into Tandem, into which did you not? And on reflection, what did you not see? Oh, we don’t. Which did we not write a big check into? Yeah, like you did a first check. Well, sometimes you can’t. Sometimes you can’t get more than your pro rata in companies, and that’s a fight for allocation in future rounds. And that might be the founder choosing not to take a bigger check from you. So that’s one condition, and then the other condition is like we miss we misread the company and didn’t lean in hard enough when we could have. And I think we’re not a perfect. We don’t make perfect decisions. I wish we did. So I look back, and there are so many opportunities of great companies that we were fortunate enough to be early in that we.

[2880s - 3000s] We’re too slow to react to. And is there one that you think of first there? And what did I think of a lot? But I, I think we’re like incredibly fortunate to be in business with that founder at the earliest stage, and I think our job is to like continue to help them in the ways that they ask us to help them, and make our customers who are the founders happy. David, is pro rata a right? We saw this. No. Now, like, do I think do I think a bunch of the VCs that are the early stage VCs that are out there saying like we don’t need pro rata, we’re gonna like give it like it’s all marketing garbage. It’s just nonsense. Like I can write a blog post too. I just don’t believe that that it’s that black and white. I believe the right to invest in subsequent rounds is earned. So whether you have it in the documents or not, it’s earned. There are multiple factors that go into it. So having it in the documents to me is more helpful for the founder than for you as a firm. If you as a firm are asked by the founder to step back for whatever reason, that is up to you to say yes or no, knowing that if you say no, you are getting into a fight that you are likely going to lose in some form. You are either going to lose it financially, and that you’re not going to get your pro rata because of whatever mechanism can be used to remove your pro rata, or more importantly, you’re going to lose it because of reputation. You are going to piss off the founder, and they are not going to like you anymore. So if you say no to a founder, and you want to take reputational risk, that’s on you. So why is it important to have it in the documents? Because I think that funds that follow you into rounds in the A and the B, they are happy to squash you in any way they can, and the more that you have it in the

[3000s - 3120s] Documents, the more leverage a founder has to negotiate the terms of their next round. So, if a firm comes in and says we want twenty-two percent, and you look at your cap table and you’re like, I have six percent of my cap table that needs prorata, you’re able to actually create more leverage with your follow-on investor to say like that math doesn’t work for me. I would like to redo this, and then you can use that in in help of your negotiation. Do you see large firms be more ownership hungry, or more willing to accept less ownership? Have’s and have nots. So, I think there are firms sometimes that need twenty percent in a deal, and then you’re like, but last week you did a deal at five percent, and I see it because I’m in that deal too. And so, I always think that’s funny when the word need comes up in venture, and you’re like, I I know what need means, and it does not mean need. It means I’d like, like I hope for, but it doesn’t mean actually a binary need. I think within the big firms, there are very different style actors. I think there are people who are on the way up or competitive inside of their firm that behave one way, and there are people that are very confident in their position at a firm and their standing and their success that behave a different way. And you know, you can say junior or senior, whatever terminology you want to use for that, but I think that you know, relationships matter. There are times when we send a deal to a multi-stage firm and they write the term sheet and then try to squash us, and I’m like, that’s weird. Like those tend to be again this orientation towards short-term decision making versus long-term and not appreciating the the consistency of a relationship. And I think in again, I’ve been doing this a long time. There are people that you build great relationships.

[3120s - 3240s] With that tend not to have overly sharp elbows with you, and then sometimes you catch a elbow out of nowhere, and you’re like, “Oh, I didn’t see that one coming.” Who, when they send you a deal, do you pay most attention to? Great founders. That’s who I pay the most attention to. When founders inside of our portfolio, and I don’t think it’s the best ones only. I think it’s the founders who we believe have high quality taste bars and high quality networks. When those people send you some someone they know, someone they like, that’s when you pay the most attention. When you look at one part of our business that’s investing, another part is also not only making money for our LPs and selling, and we have very liquid secondary markets today. How do you think about that and taking cash off the table when there is so much demand for some of these names? I work for our LPs, and my customers are founders, and that I think is a totally again dislocated two sets of relationships. My job is, as you said, to give the people who believe in us and invest money in us as much money as I possibly can, and one way to do that is to try to get out of positions at different times. And there’s a risk to it, and there’s a financial risk to it, and a relationship, a sort of reputational risk to it. And I think that’s a really important thing to balance. So, on like in general, we don’t sell early. We believe we are investing at the seed stage to join the founder for their journey, and that could be 15 years, it could be 20 years, it could be four years. But selling early to me risks two things. One is like if a founder doesn’t want you to sell early, you’re risking reputational risk and relationship with that founder. In this market, a lot of founders are taking secondary, so you could argue like if you’re doing it, I can do it. I don’t think that’s necessarily.

[3240s - 3360s] The right framework, I really don’t, and I can talk about why, but I don’t use that framework to think about it. And then the second one, I think the best companies compound the most at the end, right? Going from like a two billion dollar to four billion dollar to eight billion dollar company is easier than going from zero to a billion. And if you believe that you are in a company that’s great, I don’t see why you would get out early. I think you’re leaving the most money on the table by getting out of something early, and I really don’t want to do that. I want to see it through. And if I still believe in a company, or one of my partners believes in a company, I don’t think de-risking it is the right answer. We’re in the business of risk, and we should stay investors in the companies that are going to keep compounding, because every turn you have at the end is a is a big win for your LPs and for your firm and for the founders. Why do you not think that if a founder is taking money off the table, investors should maybe do the same? Because I think founders have a different set of economic conditions that are are not related to what investors have. Let’s say a founder has debt. Let’s say a founder is living in a place that creates stress and overhead cognitively for their life, and in reality, having some money to improve some things outside of work allows them to be better at their company, or knowing that I have ten, twenty, thirty million dollars in my pocket, I am now willing to see this through. I’m willing to to have bigger risk appetite to like go for it because I feel some safety net. I don’t.

[3360s - 3480s] Think that that is the same risk analysis that a VC uses to be like, I need to take you know twenty percent of my position off here to like make my fund math look good or tell my partners I, you know, took some money out of this thing. I just think they’re totally different. Or giving early employees like a tender offer and allowing them to have some early liquidity, I think it could help with retention. Um, I think it could keep a lot of those employees happy and engaged and um, you know, excited to to work at a company knowing that they offer tenders every couple years. Um, we have a bunch of companies in our portfolio that are regularly doing tenders to the employee base, and I think that that’s an incredibly valuable culture to set and a retention tactic. And so I just don’t believe that they’re always related. What did you believe about venture that you now no longer believe, David? I just took a while to see. Right, every firm thinks they’re in the top decile. Right. I’ve never heard any firm be like, no, we’re bottom bottom quartile. Right. So I’m I’m like waiting to meet all the bottom three quartile firms in the in the venture industry. When you hear all the LPs explain that, and you look at the the data, and it says you know all the returns in venture are aggregated to the top five, ten percent of firms. I just I don’t. I haven’t met the the others yet. Do you think we’ll have more or less VCs in five years’ time? There’s less noise in the venture market than ever before, and there’s more competition. What do you mean less noise? There’s less new firms. Really? It feels like there’s more spinouts than ever before. I think there are less. Like I think on it, I think if you actually look at the data, you know, it takes a long time for firms to go away, even if they’re still alive. They become irrelevant. They’re not investing a lot. They might not have raised a new fund. Nobody’s sort of taking them off the map.

[3480s - 3600s] So the names remain, but the activity goes away. You know, you had asked before about like sub hundred million dollars in San Francisco concentrated seed funds. I think I like didn’t answer that fully. I don’t think very many people get into venture and want to stay consistent in doing what they do. Meaning, the starter VC is a seed fund, right? You get like if you’re new, if you’re sort of unproven, you’ll get a twenty, forty, eighty million dollar fund, whatever it is, to start. But your goal is to raise a way bigger fund one day. And when you raise a bigger fund, when you scale your business, when you have partners and scale AUM, your investment style, your stage, your concentration, your check size is all going to fundamentally change. So when I meet new investors, I always ask like, “What’s Fund Four look like?” Because Fund Four is actually your vision. It’s the same as when you meet a founder and you ask like, “What’s the big vision?” So I want to know not what Fund One is doing today. I want to know where you’re going with this because to me, the advice that you give that person should be in line with how do you get to your actual ambition, not how do you execute your starter fund. And I think what you see in the new firms today is a big ambition. They want to start with something small and get bigger and do something different really quickly. And I think what’s I love about what we do here is this is who we are. This is who we’ve always been. We are an early stage firm. We write checks at the very early stage, and we don’t have any ambition to do anything else. No, but the but but like to be clear, like you did just raise what five fifty across two funds. I mean, we’ve scaled. Yeah, the scale has changed. The the sure, but the same exact investment style.

[3600s - 3720s] And I think we see founders today come to us and say, “You’re doing the same. Like you’re you’re exactly where you were ten years ago when I started my last company. Maybe the check size is different, but we are not. We as a firm, our DNA, our craft, is oriented towards being there at the very beginning, at the dream stage. And that, to me, is like what I wake up and get excited about. And I think that when you look at new venture firms, their their ambition is to be a multi stage firm for the most part. And that’s a very competitive part of the market. It is. I don’t actually think they know what their dream is. And I know. And what I mean by that is, like you know, one thing I would say to young people, I sound really old, is like be careful what you wish for because you might just get it. And I think the truth is, if you know the people at the multi stage firms, a lot of them are not happy. The ones who are running it and wish they were the smaller firms. Yeah, but I think I think I think they’re different form factors of the multi stage firm. I think you see Benchmark scaled today, USV scaled today, and the DNA inside of those firms and the relationships inside of those firms are very different than some of your other scaled firms. I think what conviction has done is amazing and scaled. I think what Ribbit’s done is amazing and scaled. And then then you go to Thrive. Like Thrive has created a generational venture firm in a different flavor in a rapid amount of time and challenges at the very top of venture. And I think the way that they’ve built that firm is so different than again your traditional multi stage firms. And so I don’t think it’s as simple as categorizing every firm is the same. I think you have to look at each firm individually and the execution of how they’ve done it. I think like what Daniel and and Nat had done for the moment that that was incredible. And what Alot has done is incredible. And so I think if you all those firms I just mentioned are new, right? In in the grand scheme of things, I guess Benchmark and USV are not that, but the other ones are new.

[3720s - 3840s] And the speed at which they’ve gotten to where they’ve gotten is incredible, and the the quality of what they’ve built is incredible, and that was ambitious. And I think when you look at the new firms today, I think the the ones that are great are gonna execute great and have real ambition and make a real space for themselves in this industry, and the rest of them are gonna go away. When you think about finding, picking, and winning, if I were to ask you to review yourself one through three, one being best, two being mediocre, three being worst, how would you review yourself? I just think we’re mid constantly. That’s what the kids say. Our obsession at our firm is to to see things. We all wake up every day and try to see. I think we see somewhere between fifty and seventy five percent of what we want to see. Hard to know, but we can always be better there. There’s like always something out there that we didn’t see that we want to see, and getting in front of people, finding a way not just to get in front of them, but for them to take you seriously. That’s like what we wake up and obsess over. Winning. When you don’t win, it hurts like that. That is like a. That’s like a. What could we have done better? It is the area in venture. I think you can tactically work to improve. You can try different things. You can like figure out what you can do better, and I think we spend a lot of time on that. What has that led to? You spent a lot of time on that. What have you changed as a result? Everything. I mean, you you have to know what tactics to bring to the fight, and that’s like reading a room and guessing which playbook of really relationship.

[3840s - 3960s] Building that you want to use. What does a founder want from you? What are they looking for, and how do you convince them that you are the answer to what they’re looking for? And it really is so founder dependent. Each like there are certain founders that don’t want to talk a lot. There are certain founders that want transactional help. There are certain founders that want a friend that wanted a like set of experience that wants somebody who is around all the time to balance things. Like it’s a services industry, and so the win condition to me is selling your service to the point where a founder wants it, and that’s complicated, especially in this market. The picking is the art of this business, and it’s so hard. You can look at our firm from afar and assume we say yes more than other firms. I don’t. We don’t. We are hyper focused on saying yes when we should, but that’s a really really hard thing to do at the early stage in real time. And I I like want to tell you, I know how to get better at that, or we can get better at that, and yet like there there comes a point when you’re in your career and you’ve seen enough reps that your taste is your taste, and you’re going to say yes. You’re like butterflies show up. You’re going to say yes. They don’t. You’re going to say no. You can convince like we think about how to make the right decision a lot and don’t know the tactics to get better at it. David, how many companies do you meet a week as a firm? A lot, fifty to a hundred. So people are meeting twenty companies a week. Yeah, at least. Okay, and then every Monday you come for an IC and you talk about the five best, like Tuesdays and Thursdays. Tuesdays and Thursdays. Twice a week. Okay. We use Mondays for work. We.

[3960s - 4080s] Are agile with our decision making. I think group think is terrible. We don’t vote. Somebody here has to want to do a deal if we’re going to do it. Somebody needs to be like, “This is something that I am excited about, and I think we should do.” And so, I think decisions start with a human on our side being excited about, and whether that happens inside or outside our meeting is not important. And so, if we get to our meeting, and one of my partners is like, “I did a deal yesterday,” great. And equally so, like I’m leaning into this. I want to talk through it. Great. We internally don’t allow negativity in making early stage decisions. What do you mean by that? If you aren’t the person that has spent time with the founders, you aren’t allowed to be negative about it. Right, but what if you know something about the market that you feel the? I don’t think anybody knows anything about markets at the early stage. Markets evolve. If you know something about the founders, but we probably diligence that before we’re taking meetings and leaning into something. Like if there are like ethical issues, if there’s reputational issues with a founder, I think that is an important thing to share. We don’t allow grenades at early stage. You’re not allowed to throw a grenade on someone else’s deal. Our job is to get to yes. It’s I. If you name a company at early stage, I can tell you why it’s going to fail. Any company. Here are the five risk conditions, and here’s why it’s going to fail. It’s the easiest thing to do. If you’ve done this for like a year, you can guess why a company is going to fail. Your memos that every firm writes are very obvious why it’s not going to work. That’s not the job. And by the way, on a probability basis, it’s not going to work because 70, 90, whatever the number is percent of early stage companies don’t work. So.

[4080s - 4200s] You explaining why something isn’t going to work is incredibly obvious and incredibly irrelevant. What the magic of our business is is squinting and seeing why something is going to work by believing in the thing that you see, that the founder sees, that you are aligned with the founder, and seeing is going to work and saying yes. Our job is to say yes to the right things, not to be fearful of saying yes to the ones that don’t work. Totally get that and understand that. I always love that Google will just build it, or the you know OpenAI or whatever it is. But but like you can’t hire. You don’t know how to hire. You’re not going to get like it’s not big enough. All these things they’re just not factors for the win. Why is it going to work? You said there’s 17 to 90 percent don’t work. Keith Rabois said before that’s dramatically overestimated, and in fact, if you’re investing in great people, actually your loss rate, in other words, it actually really not working being a zero or close to a zero is much lower than people think. I think at Series A, that’s true. I think at seed, it’s it’s some real scale of of numbers. You do, but I think I think you go one stage ahead, and that number is dramatically lower. Hmm. I also think Keith is a generationally talented investor, and if his loss rate is, I don’t know, a tenth of everybody else’s, that wouldn’t surprise me. Yeah. No, I totally get you. Listen, David, I want to do a quick fire. So I say a short statement. You give me your immediate thoughts. How short? I’m long winded. Like 60 seconds per one. Let’s go. I’m going to set a timer. All right. You can choose one seed fund, one Series A, and one growth fund to be an LP in. Which one? I think Y Combinator has invented.

[4200s - 4320s] Only product in our industry, and I think for all the people that say anything, you know, critical about them, it’s probably just rooted in some version of jealousy. I think what they’ve built is a world class brand, a world class attractor of great talent, and I think run the best business model in our whole industry. So, seed fund like YC, Series A. I think there are five to seven equally impressive, like multi-stage firms that just continue to find themselves in the best companies. You can choose Benchmark, you can choose Sequoia. I think the machine Andreessens built. I think what Thrive has done. You know what what Lee Fixel does in addition is fascinating and off the radar in an interesting way, and sometimes is a great Series A investor. So I think, you know, I think what Ribbit has built over the years, if you look at what they’ve done, is incredible. And so I don’t think, I like, and then you have Founders Fund, which operates in their own world and is incredible. And I think, you know, we we said Keith Keith at Khosla has done generational level investing. So I actually don’t think it’s Series A. It’s easy to isolate because you’re looking at this combination. If you put your LP hat on of like fund size, accessing early stage versus growth, these blended products, and I don’t think it’s a black and white answer. Like I think the two funds that were just very narrow focused for Series A over a historical period were USV and Benchmark, and I think they’ve changed their fund size today, but not really the partnership dynamic. Absurd punting there. Yeah, growth. I weaved in and out of your forced question. Growth fund, you got one growth fund again. Like I think there, like I think Spark Growth comes to mind as.

[4320s - 4440s] Amazing, slightly off the radar, just just unique outlier decision making. I think what Meritech did for a while. I think what Menlo’s done. These are new, like names in my weaving of your answer that I wanted to get in. I think what Kotu’s doing or Dragonear’s doing right now. I think you’re a fucking you’re fucking Switzerland. I am Switzerland. Why, but I need it, and I’m probably forgetting like a hand, but I mean it. I think there’s a tier, Greenoaks, right? I could easily just say Greenoaks is the answer to your question. No, because I’m asking you, I want money, dollar for dollar. Where am I going to make the most money? I think it changes in every market. Like, no, but I can give you mine. YC, I agree with you for ownership. No one gets the ownership they get. But I think YC is the only differentiated product venture. And then I think Benchmark for Series A, and then I think Sequoia for Series B and beyond. That’s fine. So you’re discounting Sequoia’s early stage investing. I’m not. I’m giving them credit for both. I’m suggesting I would rather be in YCs than Sequoia seeds. Yes. So I think I think the real answer to your question is you’re in a period of consolidation venture, and the best firms are going to continue to compound in every which way because they’re going to access the best founders, they’re going to access the best scaled LP capital, and it’s going to turn into the best set of returns. And there’s going to be a halves and have nots in venture, and I think there’s probably you know 20 to 30 names that are competitive, and probably 10 that are outliers amongst that 20 to 30. What was the single most memorable founder meeting in the last 12 months? First founder meeting, like in our firm, my partner Greg, you know, got to spend time with Noah from Instinct early, and I think for him that was the like mind blowing initial meeting and conversation, and we were lucky.

[4440s - 4560s] Enough to be part of that early round. Woo, baby! Well done. I think for me, the things we’ve done in the past twelve months are not mature enough yet to talk about because they’re coming. And but just like which which founder did you find most mind blowing where you were like I left like wow. I have to be as excited every time I say yes. So I actually I don’t operate like that. I operate like this, and if something rises above this, you lean in, and if something doesn’t, you lean out. And so I view my job is a continuum of like steadiness in order to make the right decisions. And so it’s not I I think what to this point satisfies me the most to answer your question is like the relationship that comes out of it. Do you click with a early stage like we funded this twenty two year old who’s building a game that’s going to release in like two months, like a single game level difficulty one trillion right to win a game business. But like he has been thinking about this game for a long long time, and we’re going to see if it like hits and if it hits, it’s going to be awesome. But like low probability of market, all these factors are negative. But he’s awesome. And then I met this woman who’s building this really cool piece of hardware that goes in like your home. It’s a point solution that’s like huge market. Everybody has a need for this. But like again, level difficulty impossible. And then you meet like veteran founders who are building a foundational model for uh you know a physical world application, and you’re like, well, that’s crazy, and you guys seem like totally the right people to do this. And then you have someone in science who’s doing something. So I really do believe.

[4560s - 4680s] Leave. You have to be excited about everybody in some form equally. Who do I like hanging out with? I like, I like. I’m a consumer mindset. I find the consumer founders the most interesting because they’re nuts because they’re they’re going after the biggest, most confusing end user. And I think you know that that’s like I learned from them. We’re an early investor in a company called Triumph. I think spending time with Jake is like an amazing. I love talking to him. I love hearing about what they’re doing. I think they’ll start making a lot of noise in the coming year and sort of be one of those halves. What are you most excited about in the next ten years? I think seeing this play out, right? Like, where where are we going? Where is the world going? It’s like such a curious uncertainty right now, and like that’s what makes this job a special opportunity. Is you get to meet the people who are going to answer that question and get to be part of their journey. I don’t know. What is certain in the next five to ten years? What should be like autonomous driving? That should be like it irritates me that it’s not today. Like it would save lives. It would save. It would like the data on autonomous driving would save hundreds of thousands of lives worldwide if we just mandated it. But yet, like freedom and all these other factors go into holding that back. But the technology is a solved thing. Well, I mean, I’m not being. I think it’s a society. The technology is not like quite a solved thing for ambiguous cities for challenging weather conditions. Pretty solved. Pretty solved. Like from a from a like a safety profile.

[4680s - 4800s] File perspective, it’s pretty solved. It’s not perfect, but pretty solved. Like, if I told you, pretty solved equals decrease of eighty percent of the deaths that automobiles cause, pretty solved. But freedom, like, I don’t like that. As a society, we don’t adopt future things because we hold on to the wrong establishments. Well, it’s because incentive design is is skewed in a lot of frameworks, and there are existing incumbents. I think modernizing society long term is the the the right way to to think. I think like, and you know what you know, I agree with you, and I think it’s kind of like the roll up play versus an entirely new company play. I think it’s much easier to create an incredible AI first school from nothing than try and incentivize innovation in stale architectures. Or would you do both? You know, you can try both, but it’s much easier to just move forward, right? And I think I think like the politics, the social dynamics, the economics dynamics of all of the challenges in the world would be best served with like practical decision making than charged decision making, and that I hope is where we find ourselves over time. Because if you end up in the age of abundance, I think it’s important to figure out like how does that benefit everybody and not just a few. And I think technology generally is a equalizer and a positive force. And I think hopefully AI can move in ways that impact health, impact science, impact every industry, such that it benefits a global population in you know great ways. Dude, I I think this was probably the.

[4800s - 4842s] Most low-friction conversation we’ve had. There wasn’t like a dramatic. Should we fight at the end? Why? I don’t know. I feel like we should at least try. Yeah, we we fought over you deciding. It was the most nerdy venture fight. We we fought about ownership versus diversification in portfolios. You’re like, all right, guys, calm down, dude. I love chatting to you. I have so much, regardless of me being wrong. I have so much respect for the business that you’ve built. Thanks for having me. No, dude, not not at all.