The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified 481. Co-Founding Meritech, Betting Early on Facebook and Salesforce, Avoiding Shiny Objects, and Thinking Like a Public Market Investor (Paul Madera)
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May 5, 2025 Paul Madera, co-founder and general partner at Meritech Capital, shares his insights on late-stage venture capital after backing tech giants like Facebook and Salesforce. He discusses the challenges in navigating market valuations and the importance of understanding public versus private market dynamics. Madera emphasizes avoiding distractions in investment decisions and advocates for viewing AI through a strategic lens, considering its disruptive nature and evolving role in SaaS. His thoughts on defense tech's resurgence also highlight the complex balance between innovation and regulation.
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Paul's Danaher Investment
- Paul invested his first $15,000 in Danaher stock after learning from the Rails brothers at Stanford.
- The stock has performed exceptionally well and remains in his portfolio today.
Price Matters in Late-Stage VC
- Price absolutely matters in late-stage investing, even when investing in great companies.
- Without a reliable public market feedback loop, valuing late-stage companies is very challenging today.
Engage Early with Public Markets
- Encourage late-stage founders to engage with public market analysts before going public.
- Public markets provide a valuable feedback loop that helps improve business growth and leverage.
