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

20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024

Aug 11, 2023

53:50

Creator website

Episode guests

Sam Lessin

Jason Lemkin

Frank Rotman

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Podcast summary created with Snipd AI

Quick takeaways

The seed investing model is broken and needs to shift towards a more bespoke approach that focuses on unique and innovative ideas.

De-risking businesses systematically and efficiently is crucial for successful seed investing, requiring a reset and refocus on de-risking businesses at each growth stage.

There is a growing recognition of the importance of capital efficiency in seed investing, with a focus on building great businesses in niche markets that have been overlooked due to TAM limitations.

Deep dives

The Evolution of Seed Investing

The traditional factory model of seed investing, where seed funds act as the first step in a predictable production line of startups, is no longer effective. This model relied on the ability to manufacture good but not great companies that fit a certain market demand. However, it has become clear that this approach does not produce the desired outcomes in the long run. Seed investments are now shifting towards a more bespoke approach, focusing on unique and innovative ideas that may not follow the traditional factory line. The emphasis is on finding interesting and off-theme opportunities that have the potential for massive returns.

Pov: seed $ to De-Risk and resell downstream is dead

01:46

The Challenges of Hiring Salespeople for Startups

01:13

How to Make Money at Low Levels of Scale

01:41

The Role of Y Combinator in Venture Capital and Company Formation

01:00

Introduction

5min

The Rise and Fall of Seed Investing

2min

How to De-Risk a Company in Stages

2min

The Importance of Sequential Investment Banking

3min

The Correction in Pricing

3min

The Problem With the Seed World

2min

How to Make Money at Low Levels of Scale

2min

The Future of VCs

2min

The Importance of Seed Investing

2min

10.

The Importance of Fund Size

2min

11.

The Importance of Diversification in the Venture World

2min

12.

The Home Run Derby Mentality

2min

13.

The Future of Venture Capital

2min

14.

The Fallacy of the Lifestyle-Esque Business

2min

15.

The Importance of Anti-Proof

2min

16.

The Importance of Party Rounds in Venture Capital

2min

17.

The Importance of Investing in Factory Line Formation

2min

18.

How to Make Money in Inventure

2min

19.

How to Hire the Best Founders

2min

20.

The Pros and Cons of Early Stage IPOs

2min

21.

The Future of Facebook

3min

22.

The Repercussions of Underfunding

2min

23.

The Most Important Trend in the Venture World That Not Many People Are Paying Attention To

2min

24.

How to Make Money at Low Levels of Scale

2min

25.

Coda AI: A Work Assistant That Helps You Finish Tasks and Make Progress

3min

Sam Lessin is a Co-Founder and Partner @ Slow Ventures with a portfolio including the likes of Airtable, Robinhood, Slack, Solana, PillPack and many more unicorn companies. Prior to Slow, Sam was a VP Product at Facebook having sold his company to Meta.

Frank Rotman is a founding partner of QED Investors, one of the leading fintech-focused venture firms investing today with a portfolio including the likes of Klarna, Kavak, Quinto Andar, Credit Karma and more. As for Frank, prior to QED, Frank was one of the earliest analysts hired into Capital One and spent almost 13 years there helping build many of the company’s business units and operational areas.

Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds focused on SaaS. In the past, Jason has led investments in Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few. Prior to SaaStr, Jason was an entrepreneur, selling EchoSign to Adobe for $100M where it is now a $250M ARR product.

In Today's Discussion on Why Seed is Broken We Discuss:

1. The Seed Model Was Broken and What Comes Now:

Why does Sam Lessin believe the model for seed of a "factory line" was broken?
What does he believe will replace it?
Why does Jason Lemkin argue that this might not be the case for SaaS and enterprise?

2. Round Construction: YC, Multi-Stage Funds and Party Rounds:

Why does Sam Lessin believe we have seen the end of party rounds? Why does Jason Lemkin disagree and we will see more than ever?
Why does Sam Lessin believe the factory model of YC churning out companies is over? Where does Jason Lemkin believe the value lies in the YC model?
Will the multi-stage funds remain in seed? How has their entrance and deployment changed the seed market?

3. VC Value Add at Seed: Is it BS?

Why does Jason believe all talent arms in venture firms have failed?
Why does Sam believe that no VCs provide value?
Do the best founders really need help? Why do Jason and Sam disagree?

4. What Happens Now:

Why does Jason believe that every manager can write off their fund from 2021?
Who will be the winners in seed in the next 10 years?
Why does Sam believe if you want to bet on AI, just bet on Meta or Microsoft?
What will happen to the many companies with no PMF but 10 years of runway?

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

20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Evolution of Seed Investing

The Importance of Efficient De-risking

The Shift Towards Capital Efficiency

Capital efficiency and the importance of proof

Shift towards smaller, profitable businesses

Pov: seed $ to De-Risk and resell downstream is dead

The Challenges of Hiring Salespeople for Startups

How to Make Money at Low Levels of Scale

The Role of Y Combinator in Venture Capital and Company Formation

Get the Snipd
podcast app

AI-powered
podcast player

Discover
highlights

Save any
moment

Share
& Export

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podcast player

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

20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Evolution of Seed Investing

The Importance of Efficient De-risking

The Shift Towards Capital Efficiency

Capital efficiency and the importance of proof

Shift towards smaller, profitable businesses

Pov: seed $ to De-Risk and resell downstream is dead

The Challenges of Hiring Salespeople for Startups

How to Make Money at Low Levels of Scale

The Role of Y Combinator in Venture Capital and Company Formation

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Save anymoment

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