Chapter
What Venture Capitalists Need to Think About in a Post-COVID World
19:20 - 29:31 (10:10)
Venture capitalists need to start considering which companies are of low or high quality and are more likely to survive this volatile business environment, and give low-quality companies a high-cost capital or they will fail. Instacart was, in fact, the seventh amidst the existing instant delivery companies, and these late-stage private valuations may have to renegotiate because of the current inflation and fluctuating growth in the business industry.
Clips
The issue with instant delivery companies is that they are being funded at high prices, which leads to a fragile and non-resilient business model.
19:20 - 22:24 (03:03)
Summary
The issue with instant delivery companies is that they are being funded at high prices, which leads to a fragile and non-resilient business model. Physical world companies, which are capital-intensive and operationally intensive, have suffered in this regard.
ChapterWhat Venture Capitalists Need to Think About in a Post-COVID World
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Allocators and venture capitalists need to differentiate between high and low quality tech startups, analyzing their balance sheets for sufficient cash and path to profitability, and considering changes to public market multiples and risk premiums.
22:24 - 24:28 (02:04)
Summary
Allocators and venture capitalists need to differentiate between high and low quality tech startups, analyzing their balance sheets for sufficient cash and path to profitability, and considering changes to public market multiples and risk premiums. Free cash flow growth is a critical metric in evaluating a company's potential for future success.
ChapterWhat Venture Capitalists Need to Think About in a Post-COVID World
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The volatility of owning high-risk assets, such as private companies, can cause anxiety for investors.
24:28 - 27:13 (02:44)
Summary
The volatility of owning high-risk assets, such as private companies, can cause anxiety for investors. Thus, some investors are turning to safe and credible assets, an example being public SaaS companies, where they can avoid such risks and still make profits.
ChapterWhat Venture Capitalists Need to Think About in a Post-COVID World
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The late stage private market requires a premium above the 8% early stage venture to justify the risk of investment, especially with company reprices down by 40-60%.
27:13 - 29:31 (02:17)
Summary
The late stage private market requires a premium above the 8% early stage venture to justify the risk of investment, especially with company reprices down by 40-60%. Brad suggests that investors need to clear 20% to make it worthwhile, as you can withstand a little inflation for software business worth tens of billions.