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

20VC: GV's Tom Hulme on Why Investing in Foundation Models is like Investing in "Power Stations", The Conventional Wisdom in VC that is BS & Lessons from a 24x Angel Track Record, 255x on Robinhood and Making Billions on Uber

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May 8, 2024

Tom Hulme, Managing Partner at GV (Google Ventures), shares insights from his impressive background in angel investing. He discusses the importance of empathy and feedback in both personal and professional growth. Hulme challenges conventional VC wisdom, debating the idea that you should never sell your winners. He also examines the complexities of navigating investor relationships and the evolving venture capital landscape, especially in AI technologies. Lastly, he reflects on cultural debt in startups and the impacts of remote work on company culture.

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INSIGHT

VC: Founder on Antidepressants

Venture capital mirrors the founder experience but with moderated emotions.
It involves highs and lows, but less intense than those felt by founders themselves.

ADVICE

Three Types of Investors

Determine your investor type early on: smart and active, or passive and supportive.
Avoid being a passive investor who interferes.

INSIGHT

VC Approaches

Most VCs prioritize fundamental investing principles, but the percentage fluctuates with market conditions.
Passive investing increased during low interest rates, but the focus on fundamentals returns as capital tightens.

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Tom Hulme is a Managing Partner of GV (Google Ventures), and leads the European team. Today, GV has over $10BN in AUM and Tom has led investments in Lemonade.com (IPO), Snyk, Secret Escapes, Blockchain.com, GoCardless, Blue Vision Labs (exited to Lyft), and Currency Cloud (exited to Visa). Prior to joining venture full-time, Tom was one of Europe's most successful angel investors with a 5x DPI track record and 20x+ TVPI.

In Today's Episode with Tom Hulme We Discuss:

1. Lessons from a 24x TVPI Angel Track Record:

What are Tom's biggest lessons from his biggest winners angel investing?
What are Tom's biggest takeaways from the 0's in his angel track record?
What is the biggest advice Tom would give to angel investors starting out today?
What are the single biggest mistakes Tom sees angel investors make today?

2. The Four Pillars of Venture Capital:

What does Tom believe are the four key components of being successful as a VC?
Why does Tom describe VC as "being a founder on anti-depressants"?
How does Tom categorise the three different types of investors that exist?
Sourcing, selecting, servicing: What is Tom best at and what is he worst at?

3. The Conventional Wisdom in Venture That is Not True:

Why does Tom believe it is BS that you should never sell your winners?
Why does Tom believe he has never had complete conviction in any of the companies he invests in?
Why does Tom believe the "everything has to be a fund returner mindset" is BS?
Why naivety doesn't lead to great founders? Why employees at rocketships are the best founders?

4. AI: Foundation Models, Generative AI, The Incumbents: Where Does the Value Go:

Does Tom believe there is money to be made investing in foundation models?
Why does Tom liken investing in foundation models to investing in power stations?
Where does Tom believe there is value in the application layer?
Why does Tom think that generative AI is largely a sustaining innovation?
Why does Tom think Microsoft will win the next wave of AI? Who else is well-positioned?
Why does Tom believe there is a correlation between those that fear monger around AGI and those that need funding for their businesses?