Stu Ellman, Co-founder of RRE Ventures, shares insights on the evolving landscape of venture capital since 1994. He discusses the rise and fall of tech valuations, revealing the impact of the 2008 financial crisis and the emergence of 'zombie unicorns'. They explore the necessity for resilience in navigating market cycles and reflect on the transformative challenges post-COVID, including how AI and asset tokenization are reshaping investment strategies. This inside look highlights the critical need for adaptability in today's fast-paced venture ecosystem.
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volunteer_activism ADVICE
Invest Through All Market Cycles
Invest in great companies through all market cycles.
Avoid waiting for perfect timing; consistent investing is key.
question_answer ANECDOTE
Outsourced Diligence Gamble
Some venture capital firms in 2017-2020 outsourced diligence for deals, putting in term sheets after just one day.
Those firms accepted very high valuations without deep vetting, driven by the hope of landing the unicorn deal.
insights INSIGHT
The Law of Thirds in VC Returns
About one-third of startups lose all investor money and another third fail to return capital.
The remaining third must generate enough return to make the entire fund profitable.
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In this episode of The Real Eisman Playbook, Steve Eisman and his guest, Stu Ellman of RRE Ventures, delve into the intricate world of venture capital, exploring its evolution, the impact of market crashes, and the changing dynamics of investment strategies. They discuss the rise and fall of tech valuations, the effects of the 2008 financial crisis, and the current state of venture capital, particularly in relation to AI and tokenization. The discussion highlights the challenges and opportunities within the industry, emphasizing the importance of adaptability and foresight in navigating the ever-changing landscape of venture capital.
00:00 The Landscape of Venture Capital
02:41 The Evolution of RRE Ventures
05:52 Navigating Market Crashes
08:53 The Rise and Fall of Tech Valuations
11:46 The Impact of the 2008 Financial Crisis
14:46 The Go-Go Years of Venture Capital
17:50 The Changing Dynamics of Investment
20:46 The Current State of Venture Capital
23:35 The Future of AI and Tokenization
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