20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i
Eric Paley is the Managing Partner at Founder Collective, one of the world's most successful seed funds with investments in the likes of Uber, The Trade Desk, Coupang and Airtable.
Mike Maples is one of the OGs of seed investing. As the Co-Founder of Floodgate, he has backed the likes of Twitch, Okta, Lyft, Twitter and more.
Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds with a portfolio including Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few.
In Today's Episode on Is the Venture Model Broken? :
Is the classic seed model dead? Can seed funds play in a world of $25M valuations?
Why is having a firm grasp of the present the best thing an early-stage investor can have?
Why does Mike Maples believe no company with true product-market-fit has ever failed?
Why does Eric Paley believe "go faster" is the worst startup advice?
Why does Mike Maples believe there is a direct relationship between price and risk?
Why does Mike Maples believe that outliers by their very nature are lower priced?
Why does Eric Paley not focus on ownership? Why can it be dangerous?
What are the biggest risks for founders raising at valuations that are too high?
Why does Eric Paley believe we will have the biggest chasm between TVPI and DPI in the prior vintage of venture capital returns?
Why does Eric believe the majority of SPACs were BS and great companies can always go public?
Why does Jason believe that if multiples do not reflate, the venture model is broken?
Why does Jason believe we will see the biggest hiring spree in tech next year?
How has illiquidity allowed Eric Paley to make some of the best investment decisions?
What is Mike Maples biggest lesson from selling Twitter stock early at $1BN?
20VC: Venture Capital Is One Hell Of A Drug, What VCs Expect From Founders Once They Have Raised & Why Customers Validate Your Business Not Venture Capital with Eric Paley, Managing Partner @ Founder Collective
Eric Paley is the Managing Partner at Founder Collective, one of the world's most successful seed funds with investments in the likes of Uber, Hunch, Makerbot and About.me. Prior to Founder Collective, Eric was the Co-Founder and CEO of Brontes Technologies, later acquired by 3M for $95m. Following it's acquisition Eric began making angel investments and it was not long before Eric and David, 'super angel' at the time, saw the potential for a Founder First seed fund and Founder Collective was born.
In Today's Episode You Will Learn:
1.) How Eric made his move into the wonderful world of venture from founding Brontes Technologies?
2.) How does raising VC money affect the founders in both the long term and the short term? How does it alter exit expectations and time horizons?
3.) How does raising VC money affect startup management and burn rates? At what time is it too late to cut the burn? When should this moment of realisation be?
What are Eric's rough expectations of valuation uptick based upon VC funding? How does Eric approach the bridge round? What metrics are required for Eric to think it is an acceptable round? Is it merely a case of failing to hit Series A metrics?
5.) Does Eric believe VCs really need $Bn exits to succeed? What is the math behind it? How should founders think of exits with the investors hat on? What does Eric make of the rise of mega funds?
Items Mentioned In Today's Show:
Eric's Most Recent Investment: Crayon
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20 VC 089: Eric Paley @ Founder Collective on Outliers, Inspirational Founders and Pro Rata
Eric Paley is the Managing Partner at Founder Collective, one of the world's most successful seed funds with investments in the likes of Uber, Hunch, Makerbot and About.me. Prior to Founder Collective, Eric was the Co-Founder and CEO of Brontes Technologies, later acquired by 3M for $95m. Following it’s acquisition Eric began making angel investments and it was not long before Eric and David, 'super angel' at the time, saw the potential for a Founder First seed fund and Founder Collective was born.
In Today's Episode You Will Learn:
1.) How Eric made his move into the wonderful world of venture from founding Brontes Technologies?
2.) What does Eric make of early stage valuations? When creating a venture fund why did Eric believe the seed stage was the stage with the most opportunity?
3.) Question from the legend, David Hornik @ August: At such an early stage where Founder Collective traditionally put in $0.1m-$0.3m, does Eric feel they put in enough money to make it matter?
4.) Does Eric believe that by not doing follow on rounds they are missing out? Does this resistance to seed funds set Founder Collective apart? David did mention that you have begun to follow on now, so what makes you follow on with one portfolio company and not another?
5.) The Founder journey is testing both physically and emotionally, what elements of support do Founder Collective provide outside of the business relationship?
Items Mentioned In Today's Show:
Eric's Fave Book: Fooled By Randomness
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