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

20VC: CapitalG's Laela Sturdy on The Current State of Growth with Crossover, PE and Hedge Funds All Entering, How To Think Through Upside and Downside Scenario Planning at Growth & The Biggest Challenges Startups Face Post Product-Market-Fit but Pre-Scale

Jul 8, 2021

Laela Sturdy, General Partner at CapitalG and former Google executive, shares her journey into venture capital and insights into the competitive market landscape. She discusses the influx of crossover funds and hedge funds in growth investing, analyzing how these changes affect pricing and strategy. Laela also dives into CapitalG's unique portfolio construction approach and the importance of maintaining strong relationships with founders. Lastly, she addresses the challenges startups face after achieving product-market fit and the need for effective scenario planning.

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INSIGHT

Capital and Scaling

While increased capital allows for risk-taking and faster growth, it can also lead to undisciplined scaling.
Founders must balance rapid growth with building strong teams and sustainable business models.

ANECDOTE

Stripe Investment

Laela Sturdy co-led Stripe's Series D at a $9B valuation in 2016, which seemed high at the time.
However, Stripe's latest valuation is $95B, proving the importance of assessing valuation relative to total opportunity.

ADVICE

Choosing Investors

Founders should choose investors not just for valuation, but for partnership and resources.
Chemistry, complementary skills, and the firm's resources all matter.

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Laela Sturdy is a General Partner @ CapitalG, Alphabet's independent growth fund with investments in the likes of Stripe, UiPath, Looker, Robinhood and Lyft to name a few. As for Laela, she joined CapitalG shortly after inception in 2013 and has led investments in Stripe, Duolingo, Gusto, UiPath and Unqork, to name a few. Prior to CapitalG, Laela was at Google as Managing Director of Emerging Businesses and held leadership roles within YouTube and search.

In Today’s Episode with Laela Sturdy You Will Learn:

1.) How Laela made her way into the world of venture and came to be a General Partner at Alphabet's independent growth fund, CapitalG?

2.) The Market: With the rise of crossover funds, hedge funds, private equity, all entering growth stage venture, how does Laela analyse the current state of the market? How has the increase in capital supply impacted pricing at growth? How do CapitalG compete in a world where competitors pay 2x the valuation and have different outcome expectations?

3.) Portfolio Construction: Given CapitalG's single LP and evergreen structure, how do CapitalG think about portfolio construction? What is the right level of diversification? How doe CapitalG structure internal investment decision-making? How does this change for re-investments? How do CapitalG think about attribution internally?

4.) Upside and Downside: Given prices being so high, when outcome scenario planning, how does Laela think about good vs great when it comes to multiple expectations? How has this changed over time? On the flip side, how does Laela think about loss ratio at growth today? Has this changed with rounds becoming more and more pre-emptive?

5.) Scaling Unicorns: What are the commonalities in the biggest challenges founders face post-product-market fit but prescaling? What are the clear signs to Laela that a founder is uniquely skilled at hiring? Does Laela agree that the best founders do not need help on hiring? How does Laela feel about the future of venture being services platforms?

Item’s Mentioned In Today’s Episode with Laela Sturdy

Laela’s Favourite Book: The Great Gatsby

Laela’s Most Recent Investment: Webflow