The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Capital G's Laela Sturdy on What Stripe, UiPath and Duolingo Taught Me About Company Building and Investing | How to Analyse Valuation, Market Timing, Sizing and Exiting | Life Inside Alphabet's $7BN Growth Fund

Aug 16, 2024

In this engaging discussion, Laela Sturdy, Managing Partner at CapitalG and a trailblazer in venture capital, shares insights from a decade of investing in notable companies like Stripe and Duolingo. She reflects on critical lessons learned, including the importance of timing and market sizing. Laela emphasizes the need for strong leadership and collaboration within organizations. The conversation also covers challenges mid-sized companies face and the intricacies of navigating valuations and growth, showcasing her depth of experience in the venture capital landscape.

55:49

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Episode guests

Laela Sturdy

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Quick takeaways

Investing in growth-stage companies necessitates recognizing current capabilities while being mindful of historical data to seize innovative opportunities.

Successful market expansion requires startups to maintain a solid core business and realistic expectations about competition in adjacent markets.

Navigating the transition from private to public markets involves adapting governance and communication strategies to meet heightened performance accountability demands.

Deep dives

Pattern Recognition in Investing

Investing relies significantly on recognizing patterns, but it's crucial to balance historical insights with an open mind for innovation. The speaker reflects on experiences with companies like Stripe and Credit Karma, which possessed strong core businesses that mitigated risks associated with future product expansions. This balance between existing performance and potential growth drives successful investment decisions, emphasizing that focusing solely on past data can lead to missed opportunities. The investor's approach has evolved to prioritize the evidence of a company's current capabilities over mere speculation on future successes.

Spikiness Supersedes Balance

00:56

Base Reality Fuels Investment Decisions

00:59

Beware the Illusions of Expansion

01:18

Seek Differentiation Amidst Doubt

01:35

Intro

4min

Striking a Balance in Venture Capital

20min

Navigating Growth Challenges for Mid-Sized Companies

2min

Navigating Roll-Up Strategies and Series B/C Investment Challenges

2min

Navigating Valuation Challenges in Venture Capital

15min

Navigating Venture Capital Dynamics

9min

Leadership Dynamics: Loyalty in Hard Times and Innovations in User Experience

4min

Laela Sturdy is Managing Partner of CapitalG, Alphabet’s $7 billion independent growth fund, where she has invested in Stripe, Duolingo (DUOL), Gusto, UiPath (PATH), Webflow and Whatnot. Laela joined CapitalG shortly after its inception in 2013 and was promoted to Managing Partner in 2023, making her one of few women to be promoted into the sole leadership role within an established multibillion-dollar venture firm. Before joining CapitalG, Laela served as Managing Director of emerging businesses at Google and held leadership roles on the YouTube and Google Search teams.

In Today's Episode with Laela Sturdy We Discuss:

1. Lessons from 10 Years Investing:

What does Laela know now that she wishes she had known when she entered VC?
What is the biggest miss for Laela? How did it change her mindset and approach?
What are Laela's biggest takeaways from Stripe and UiPath? How did they change what she looks for in companies today?
What is Laela's biggest advice to all new entrants to venture today?

2. How to Build a $100BN Company: Market Timing, Sizing and Staging:

What does Laela mean when she says she will never take a risk on a company being able to complete a "second act"?
How does Laela approach market sizing? How does Laela think about the notion that the best companies will always expand their markets?
Is Laela willing to take market timing risk? What have been her biggest lessons on timing?
Does Laela prefer founders who are new to a market and have optimistic naivety? Or prefer an expert in a market who knows every element of it?

3. The Deal: Pricing, Sizing and Upside:

How does Laela think about price today? When is she willing to pay up vs not?
What price did Laela pay that at the time seemed super high but turned out to be super cheap?
What price did Laela pay that seemed super cheap but turned out to be super high?
What upside is Laela underwriting towards? What does she need to see in base and best case?

4. VC Value Add: Is it all BS:

Does Laela believe that the best founders really need help from their VC?
Who is the best board member Laela works with? Why are they so good?
What are the core areas where the VC and the founder are misaligned?
What would Laela most like to change about the relationship that founders and VCs have?

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