Chapter
The Falsehoods of Startup Investing
Investor Mark Suster claims that many startups are betting on derivative plays of big platforms, leading to a high mortality rate of 50-60%. He predicts that four in five early-stage startups have less than 12 months of runway and will go out of business by late 2023/early 2024.
Clips
The analyzed business has a cash flow yield of 3.5%, and if they continue to generate free cash flow gains and control costs, they will accumulate large amounts of money, already visible with their $40 billion buyback announcement.
30:21 - 33:23 (03:01)
Summary
The analyzed business has a cash flow yield of 3.5%, and if they continue to generate free cash flow gains and control costs, they will accumulate large amounts of money, already visible with their $40 billion buyback announcement.
ChapterThe Falsehoods of Startup Investing
EpisodeE114: Markets update: whipsaw macro picture, big tech, startup mass extinction event, VC reckoning
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
According to a Q4 survey of 450 founders, four out of five early stage startups have less than 12 months of runway.
33:23 - 38:33 (05:09)
Summary
According to a Q4 survey of 450 founders, four out of five early stage startups have less than 12 months of runway. Mark Suster predicts a high mortality rate of around 50% for seed and series A and B companies funded in the last four years due to an excess in capital that artificially lowered loss ratios in the last seven years.
ChapterThe Falsehoods of Startup Investing
EpisodeE114: Markets update: whipsaw macro picture, big tech, startup mass extinction event, VC reckoning
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Successful venture investing requires more than just focusing on hot deals and climbing valuations.
38:33 - 41:01 (02:27)
Summary
Successful venture investing requires more than just focusing on hot deals and climbing valuations. Investors need to consider the cash generation potential, scalability and platform ability of the companies they invest in to ensure a positive net return on their investment.