Episode
E73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
1:36:18
Published: Sat Mar 26 2022
Description
0:00 Bestie Guestie Brad Gerstner is filling in for Friedberg 1:34 Understanding public SaaS and Internet multiples, Instacart's cuts its valuation by 40%, understanding reality of overvalued late-stage companies 21:52 Capital allocators at fault, how crossover funds are reacting, late-stage price discovery, investor and founder behavioral psychology 40:37 Sacks' burn multiple, managing growth spend, new VC qualifications, lessons from the COVID bubble 53:58 Russia/Ukraine: US potential non-ceasefire strategy, Zelenskyy's revelations in CNN interview, rhetoric getting more aggressive 1:08:58 How will Putin withdraw without redacting the sanctions? What is the offramp? Zelenskyy's posture on global war 1:24:18 Understanding China's recently announced tax cuts, All-In Summit talk Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg https://twitter.com/altcap Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://sacks.substack.com/p/the-burnmultiple-51a7e43cb200 https://substack.com/profile/11803623-jamin-ball https://twitter.com/nfergus/status/1506243619384037378 https://www.bloomberg.com/opinion/articles/2022-03-22/niall-ferguson-putin-and-biden-misunderstand-history-in-ukraine-war https://www.rand.org/pubs/research_briefs/RB10014.html https://twitter.com/samramani2/status/1507378113893871617 https://www.reuters.com/world/europe/russia-says-first-phase-ukraine-operation-mostly-complete-focus-now-donbass-2022-03-25/ https://www.wptv.com/news/national/russia-ukraine-conflict/zelenskyy-warns-of-world-war-iii-if-russia-ukraine-peace-talks-fail https://www.realclearpolitics.com/video/2022/03/20/zelensky_ukraine_failed_putin_talks_would_mean_a_third_world_war.html https://www.politico.com/news/2022/03/20/zelenskyy-ukraine-zakaria-interview-00018716 https://fortune.com/2022/03/25/russia-g20-summit-putin-biden-indonesia-bali-china-ukraine/ https://www.nytimes.com/2022/02/23/world/europe/putin-speech-russia-ukraine.html https://fortune.com/2022/03/24/putin-russia-natural-gas-europe-imports-pay-in-rubles-sanctions/ https://www.wsj.com/articles/saudi-arabia-considers-accepting-yuan-instead-of-dollars-for-chinese-oil-sales-11647351541 https://www.nytimes.com/2022/02/23/world/europe/putin-speech-russia-ukraine.html https://www.cnbc.com/2022/03/24/biden-says-us-would-respond-to-russia-if-putin-uses-chemical-or-biological-weapons.html https://www.washingtonpost.com/news/post-politics/wp/2014/03/09/blinken-u-s-would-not-recognize-crimea-secession/ https://www.wsj.com/articles/biden-sticks-with-longstanding-u-s-policy-on-use-of-nuclear-weapons-amid-pressure-from-allies-11648176849 https://www.bloomberg.com/news/articles/2022-03-21/china-embraces-supply-side-economics-with-tax-cuts
Chapters
In this episode of the All In Podcast, Brad Gershner is the guest speaker, sharing his insights on stocks and bringing balance to the equity market.
00:00 - 00:48 (00:48)
Summary
In this episode of the All In Podcast, Brad Gershner is the guest speaker, sharing his insights on stocks and bringing balance to the equity market.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
With COVID-19 rates expected to eventually normalize, experts also fear hyperinflation and the unpredicted war in Ukraine has added to the uncertainty, risk premiums, and concerns over future inflation.
00:48 - 04:27 (03:39)
Summary
With COVID-19 rates expected to eventually normalize, experts also fear hyperinflation and the unpredicted war in Ukraine has added to the uncertainty, risk premiums, and concerns over future inflation.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Entrepreneurs starting their seventh or eighth business may face difficulty going public if previous companies have been unsuccessful, resulting in the need to pay a high price.
04:27 - 14:43 (10:15)
Summary
Entrepreneurs starting their seventh or eighth business may face difficulty going public if previous companies have been unsuccessful, resulting in the need to pay a high price. However, adjusting the willingness to pay for growth assets may be necessary in environments with a stable inflation and interest rate rate environment.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The main takeaway is the significance of stock and company choice, especially for companies with high valuations and untested business models.
14:44 - 19:20 (04:36)
Summary
The main takeaway is the significance of stock and company choice, especially for companies with high valuations and untested business models. Additionally, IPO ratchet is a term that denotes investors receiving the equivalent of the original shares at the pre-agreed price if a company cannot IPO at the same price.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
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.
19:20 - 29:31 (10:10)
Summary
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.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The decrease in valuation multiples of early-stage private companies will force them to become more efficient, cut staff, and focus on their core products to see profitability.
29:31 - 34:40 (05:09)
Summary
The decrease in valuation multiples of early-stage private companies will force them to become more efficient, cut staff, and focus on their core products to see profitability. However, this may lead to a death spiral when they don't have enough resources to maintain growth and altitude.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The qualifications for becoming a venture capitalist do not necessarily require the ability to pick successful businesses or operate and run a company.
34:40 - 43:18 (08:37)
Summary
The qualifications for becoming a venture capitalist do not necessarily require the ability to pick successful businesses or operate and run a company. Often, venture capitalists are unsophisticated about investing and are more focused on the ability to write a certain number of checks per year, rather than being a disciplined, discerning allocator of capital.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Chamath Palihapitiya, CEO of Social Capital, believes that portfolio managers are focusing on companies they know with absolute certainty, and that entrepreneurs need better judgement when selecting investors to work with.
43:18 - 51:28 (08:10)
Summary
Chamath Palihapitiya, CEO of Social Capital, believes that portfolio managers are focusing on companies they know with absolute certainty, and that entrepreneurs need better judgement when selecting investors to work with. He believes investing is fundamentally determined by whether decisions are marginally good or destructive for a company.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The current market volatility will eventually resolve, but it will take time to recover from.
51:28 - 56:38 (05:09)
Summary
The current market volatility will eventually resolve, but it will take time to recover from. Investment strategy should shift to focus on quality companies rather than overbidding on risky assets.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The current economic sanctions put in place by the West against Russia have far-reaching impacts beyond the Ukraine crisis.
56:38 - 1:02:28 (05:50)
Summary
The current economic sanctions put in place by the West against Russia have far-reaching impacts beyond the Ukraine crisis. The US government may have an incentive to prolong the war as it wants the Russian state to bleed out and be destabilized.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The Russia-Ukraine conflict has entered its second phase where the strategy is to bait Russia into doing something really bad.
1:02:28 - 1:06:04 (03:35)
Summary
The Russia-Ukraine conflict has entered its second phase where the strategy is to bait Russia into doing something really bad. The grudges held for a long time dictate the situation and rhetoric between the countries.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The speaker suggests that Putin cares about reunification, and that constructing a "golden bridge" for the Russian people to explain the deaths of military soldiers is a priority.
1:06:04 - 1:11:09 (05:05)
Summary
The speaker suggests that Putin cares about reunification, and that constructing a "golden bridge" for the Russian people to explain the deaths of military soldiers is a priority. He also speculates that lifting sanctions is part of this goal.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Ukrainian President Zelensky warns that the Ukraine conflict could escalate and lead to World War Three if a peace deal is not achieved.
1:11:09 - 1:18:58 (07:49)
Summary
Ukrainian President Zelensky warns that the Ukraine conflict could escalate and lead to World War Three if a peace deal is not achieved. He also expressed concerns over the potential use of nuclear weapons and the need for a resolution to the conflict.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
President Biden, during his 2020 campaign, vowed to work towards a nuclear policy that would solely exist to deter or respond to an enemy nuclear attack.
1:18:58 - 1:24:41 (05:43)
Summary
President Biden, during his 2020 campaign, vowed to work towards a nuclear policy that would solely exist to deter or respond to an enemy nuclear attack. Biden, since taking office, has stepped back from that vow and has adopted the long-standing US approach of using the threat of a potential nuclear response to deter a variety of dangers, including conventional and nuclear ones.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The Chinese government has extended tax cuts and plans for a stimulative economy, but this has resulted in decreased buying power for consumers.
1:24:41 - 1:29:23 (04:41)
Summary
The Chinese government has extended tax cuts and plans for a stimulative economy, but this has resulted in decreased buying power for consumers. This mirrors global trends of plummeting consumer confidence and retail sales, leading to questions about potential tax cuts in the US.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Kimball Musk discusses his nonprofit DAO and the Besties event, which will feature rotating speakers discussing important topics with no pre-set themes.
1:29:23 - 1:32:54 (03:31)
Summary
Kimball Musk discusses his nonprofit DAO and the Besties event, which will feature rotating speakers discussing important topics with no pre-set themes.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
A discussion about paying Drake $2 million to perform at an event and the profitability of such an investment.
1:32:54 - 1:35:09 (02:14)
Summary
A discussion about paying Drake $2 million to perform at an event and the profitability of such an investment.
EpisodeE73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The speaker talks about a joint he smoked decades ago, that was so powerful that he got stoned even from 10 feet away.
1:35:09 - 1:36:08 (00:58)
Summary
The speaker talks about a joint he smoked decades ago, that was so powerful that he got stoned even from 10 feet away. He spends the rest of the time saying goodbye to his listeners and offering words of encouragement.