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

20VC: David Friedberg on The Framework for Business Value Creation, The Bifurcation in Venture Today That No One Talks About, The Impact of Interest Rate Hikes on Venture and Step by Step; How TPB Incubates, Funds and Exits The Next Generation of Companie

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Mar 14, 2022

David Friedberg, founder and CEO of The Production Board, discusses his journey from academia to entrepreneurship, emphasizing lessons learned from scaling The Climate Corporation. He analyzes the effects of interest rate hikes on venture capital and shares insights on the changing landscape of capital deployment. Friedberg also critiques traditional venture models, advocating for a focus on sustainable growth and partnerships with scientific experts. He delves into the balance between happiness and wealth, highlighting the personal fulfillment found in service and innovation.

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ANECDOTE

From Astrophysics to Tech

David Friedberg transitioned from astrophysics to tech after seeing dorm-mates get rich during the dot-com boom.
He started in investment banking, then Google, and finally founded The Climate Corporation.

INSIGHT

Dot-com Bust Lessons

The dot-com crash showed Friedberg that startups are not always successful.
He witnessed public companies being sold for less than their cash balance due to flawed business models.

INSIGHT

Tech Disruption and Interest Rates

Modern tech companies are disrupting entire industries, not just selling technology.
Interest rate hikes reset investment time horizons, affecting valuations across markets.

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David Friedberg is Founder and CEO of The Production Board (TPB), a holding company established to solve the most fundamental problems that affect our planet, by reimagining global systems of production. Prior to founding The Production Board, David founded The Climate Corporation, a 10-year journey that culminated in their $930M acquisition by Monsanto. If that was not enough, David is the Founder and Chairman at Metromile and also sits on the board of Soylent, Clara Foods, Tillable, Cana Technologies and more.

In Today’s Episode with David Friedberg You Will Learn:

1.) Origins:

How David made his way into the world of startups and technology from academia and physics?
What were David's biggest takeaways from scaling The Climate Corp to $930M exit to Monsanto?
How did the exit put pressure on David for all future companies he builds? How does he manage that?

2.) The Macro: Venture + The Economy

How does David foresee the impending rate hikes? What impact will this have on venture and the economy?
What segment of the market will be first to be hit? Why is growth investing last to be hit? How does early stage play out in this very new environment?
How will we see the velocity of capital deployment change in this new period? What does David believe are some of the crucial flaws of the venture model?
How does David reflect on his own price sensitivity? What lessons has he learned from deals he has done or missed that have changed his perspective?

3.) David Frankel: The Business Builder

What is David's rubrik for business value creation? How has this changed with time?
How mentally plastic does one have to be around the time it takes to see margins, unit economics etc change from negative to positive?
How does David and the team approach building new companies at TPB? Where do they find the founding teams? How do they incentivise them?
How does TPB approach continuous funding for the companies they create? What milestones need to be hit? How do they assess them?
How does David approach liquidity with regards to exits for the companies they create? Why does their holding company structure mean they have different incentives to VCs?

4.) David Friedberg: Father and Husband

How does David reflect on his own relationship to money today? How has it changed over time?
What have been David's biggest realisations on what provides him true happiness?
How did having children change his operating mentality? What does being a great father mean to David?

Item’s Mentioned In Today’s Episode with David Friedberg

David’s Favourite Book: Zen Mind, Beginner's Mind