Chapter
Public software companies worth over $25B
18:54 - 24:40 (05:46)
Out of all the millions of software companies that have been started, there are only 21 that are worth more than $25 billion dollars in all the public markets. The history of software shows that only very few companies reach one billion dollars in revenue.
Clips
The focus for venture capitalists has shifted to capital-intensive businesses, especially in the current economic cycle where trading off dollars makes more sense.
18:54 - 20:25 (01:31)
Summary
The focus for venture capitalists has shifted to capital-intensive businesses, especially in the current economic cycle where trading off dollars makes more sense. This shift has led to new investment opportunities that were not previously considered.
ChapterPublic software companies worth over $25B
EpisodeE81: All-In Summit: Bill Gurley & Brad Gerstner on markets, downturns & investment cycles
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The due diligence process for investing in bloated software businesses now includes questions about net dollar retention, long term operating margin, and free cash flow as crude price to revenue multiples are no longer sufficient metrics.
20:25 - 21:56 (01:31)
Summary
The due diligence process for investing in bloated software businesses now includes questions about net dollar retention, long term operating margin, and free cash flow as crude price to revenue multiples are no longer sufficient metrics.
ChapterPublic software companies worth over $25B
EpisodeE81: All-In Summit: Bill Gurley & Brad Gerstner on markets, downturns & investment cycles
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The tech industry has seen a trend of overvaluing private software companies that does not take into account the difficulty of building a company that generates over a billion dollars in revenue.
21:56 - 24:40 (02:44)
Summary
The tech industry has seen a trend of overvaluing private software companies that does not take into account the difficulty of building a company that generates over a billion dollars in revenue. This attitude is a result of formulaic term sheets and a failure to recognize the uniqueness of successful companies.