Founders dish on VC bad behavior (and bring receipts)

0:05Today on Great Chat, we talk about the wave of VC pitch horror stories founders shared on Twitter over the past week. What does it say about this moment that these usually behind-the-scenes tales are being aired publicly? I'm Ashley, and I'm joined by Helen and Angela. Great Chat is brought to you by Mercury, radically different banking loved by over 300 ,000 entrepreneurs. We use Mercury to run this podcast and love recommending it to other founders and fund managers. It's free to get started. Try it for yourself and visit mercury.com to learn more and apply online in minutes. Hello. Hey, guys.

0:40Bye. Ashley did you survive Knicks Knicks mania last night kind of I moved recently and I'm now across from like a very enthusiastic sports bar which is actually perfect for me because I get all the energy of game night without actually having to participate and so I just sort of like second hand Knicks fandom but yeah now it's Knicks and Five Guys and I've seen some new rhymes they're good my mayor's Muslim my Bagels Jewish Christian Dior Nixon 4, and now there's like my Cream Cheese's Chives Nixon 5. I saw my president is still alive. Oh, no. Oh, my God. Oh, my God. No, I was following. We watched the game from San Francisco on our couch, and no, it was like vibes were so good.

1:37It was so exciting. All sorts of like narrative violations too, right? Because prior to this game, I think the stat was no one had ever come back 0-2 to win a game. So like, you know, history being made all around. Oh, Spurs? Yeah. No, we're like locked in a Knicks mania. I wonder how many millennials have been telling their kids like, the Knicks haven't been good since mommy was your age. Because I have said that 15 times in the last week. Anyways, but yay, go Knicks, I guess, just for the story. The Spurs have been good so many times in my life, so I'm just sort of like— Yay, Ashley, for not being trapped in a Midtown Manhattan office building, like, stuck at work.

2:21Oh, my gosh. That would be a nightmare, and especially if, like, the reason is President Trump, this insult to injury. So, yes. I mean, it really just confirms my worldview. I never go to Midtown. Last week, New York, I was there. It was New York Tech Week. And it just felt, it sounds like I escaped some windstorm that came on Thursday or Friday. But when I got back, I couldn't stop talking about how it was the best time ever. Because Knicks mania, everyone was so happy. The weather was perfect. It was New York Tech Week. So people were just running around and there were all these fun events. Yeah, it just felt very good.

3:01And then apparently there was some windstorm. I think this is getting dramatized. Like on Saturday evening around seven, there was like a brief, it was a thunderstorm, but it mostly manifested as wind. And our next door neighbors were having a housewarming and we watched them all run inside because it was so sudden and so intense. But it was over very quickly. So I forgot if I mentioned this, but when I went to Tokyo last week, there was an actual typhoon that hit Tokyo. So like all of us like went in person to meet in person. And then we ended up taking a full day of calls in our hotel room because there was a literal typhoon.

3:42There was a literal typhoon going through Tokyo so we couldn't actually get to the office. But yes, no, New York, I was there two weeks ago and the weather was amazing. And everyone was out in Central Park. And it was just it was one of those perfect New York days where I was like, yes, SF can't compete with this. just like the energy, the vibrancy. I think those are few and far between, but it was an amazing, like perfect New York afternoon. Well, and remember we had an especially shitty winter. And so I think we're all just like really, we're bringing like the early spring energy into June because no one takes this for granted.

4:19It was so bad for so long. I also think this is the first week that I've seen more headlines about like sports than AI, like the Knicks have revived, the New York 5s and have put AI like second place in terms of headlines. I have seen zero talk of robots taking their jobs. Oh, yeah. So that's a good sign. Athletes are still safe. For now. For now. For now. Yeah. Our grandchildren will be saying back in the day it was humans playing basketball. Great Chat Enterprises, like another idea for us is we will start the first robotic basketball league. I don't think it'll be robots. I think it'll be like simulations, like little digital simulations.

5:06Sounds so boring. I thought that about e-sports, but that's like, I guess, the biggest sport in the world now, which is sad. E-sports sound boring to me too, so I'm just not of the people. Speaking of being of the people, we're all Hunter Biden stands now, right? Yeah, I had like a unfortunate Twitter comment kind of take off, which was just a comment about how he's really hot and nobody's calling that out and I'm really sick of it. And then I woke up to many notifications and some followers. Wait, I missed this. I want to see this. I need to Google what Hunter Biden looks like now. I am bracing myself for some sort of like crypto coin grift reveal.

5:53I hope not. I hope not. I am not like a, oh, he's running. He's, you know, 2028. Like, no, I don't think so. I think there is something waiting for us. And it's unsavory of the crypto variety. Helen, I think you're just afraid to believe that something can be good and uncomplicated in these modern times. I'm looking for your tweet. Where is it? Was it a reply? It's a reply. Nerdy Escorts. Thoughts on Nerdy Escorts. We went from Hunter Biden to nerdy escorts. That is sort of a logical segue. But to me, the narrative violation was I thought AI girlfriends are taking off. So where is their room and where is their time for like actual IRL escort activity?

6:40Well, maybe it's both. It all comes back to the honeypot. Maybe this is how you scale yourself, right? Like there are only so many in-person hours you can give. but then you train your bot to provide companionship in the downtime. Okay. Also, I'm sorry, Helen. This is the first thing that came up, and I don't know if hot is the word that I would use. That's not a good picture. No, that's not a good picture. Okay, not to take us back. Angela, the thing that makes him hot, because I agree with Helen, is that he's like the opposite of a looks maxer. It's like he's like shooting these like selfies from like below his – Yeah, with a cigarette hanging out of his mouth and the ashes falling down.

7:23Yeah, he's just a guy and a guy who's like made a lot of bad decisions in life but, you know, seems to maybe be a good person at his core. But he like – he doesn't care that he's hot. And that's like so refreshing in our warped culture today. So take note, Gen Z men. This is at least what old millennial women want. I don't know. I can't speak for the Gen Z girls. Yeah, what a counterintuitive thought. To be hot, you should do the opposite of being hot. You should not care about being hot. Hasn't that always been the thing for men, though? I don't know. I mean, we've been through this with, like, metrosexuality and, like, other waves.

8:05But I'm sorry. I didn't mean to sidetrack us. Back to the honeypots, right? It was like this is the ultimate moment in time for attractive females to capitalize because there's all these like young male AI researchers and you can just like honeypot a lot of information. It's sort of like a new form of corporate espionage almost. And maybe it's not exactly escort, but I think it's like the new frontier for espionage. Like, you know, China can just send a bunch of attractive East Asian women to, you know, socialize and honeypot with these AI researchers. and get a lot of secrets. That was going to be like another great Chad Underprises side hustle, but it kind of crossed the legality border.

8:48Wow, wow. I told too much. Wait, so you're saying that that Forbes article was also like a counter-narrative to this other thing where like the escorts are being trafficked from overseas? No, I just mean that like there's a large population of young men and like it's just a ripe opportunity. Angela sees a business opportunity. She's like hot women plus lonely men with access to the best frontier models and research seems like a good way to get some information. I take the counter which is I think that digital experiences will continue to be the preferred way for people who are like 996ing and just basically living in front of screens.

9:38Have you invested in any AI girlfriends yet, Helen? No. No, I don't think it's healthy or good for society. But I think that I just see that being a lot. The escorts are a social good then. They're like countering this trend. Yeah, you could even say it that way. What an episode. So many counter narratives. It's also funny because I just made me like every generation or every wave has their version of this. Like when I was in my 20s. the like scandalous thing that was happening was at the rosewood down in the peninsula there was cougar night and like i used to like go to cougar night with friends to watch like like we were actually like it was like a zoo exhibit that is such a simple time that is so great yes i did the same thing i did the same thing at the time because you know i was in palo alto so it's on my way home there was the gift shop right and you'd like buy the buy the jewelry and then inside the restaurant basically like on your way into the restaurant.

10:40Yeah, exactly. And that's how like these transactions would happen was the man would go buy jewelry for the woman and then the woman would like return it or something at the end of the night. And so there would be no cash exchanging hands. I guess this was before crypto. So there weren't good ways to exchange in that capacity. So anyways, it's just funny because like that was a really big – like that was a scandalous, exciting story. And now there's this. And I think the most interesting part of this story, which I have no idea how like true this is beyond like the small population they interviewed, was that the woman who is the sort of central figure in this story turned to escorting because she saw that AI was going to replace her eventually in her entry-level finance job.

11:37And she did the math and she saw the writing on the wall. And so it's like everything has an AI angle. Everything has multiple AI angles. It's like the AI engineers are 996ing. The poor entry-level hot women are like worried about their future. And so, um, you know, that thus is born a new generation of escort services. It feels like she consulted Claude on how to, um, construct that narrative for this like meta narrative of, you know, AI coming for all of the jobs, um, except for, um, being an NBA player. Yeah. It's like, that's like catnip for a reporter. So she, oh my god i see the movie happening already like who who's going to be cast to play her like this is like hustlers like ai version okay just to up level the pod a little bit every week there is new ipo news and this week it's that open ai has confidentially filed um and joined the party so now we have three is it possible that open ai even though they filed technically after anthropic or they said that they did a confidential filing, that they could still do a regular S1 and go public before Anthropic, right?

12:56Well, everyone has to do a regular S1. This is just like the alert that you would like that. They could do that. They could beat Anthropic to the roadshow, yes. So anything can happen. Anything can happen. I don't think anyone will beat SpaceX because I think SpaceX is later this week. That train, I think, has lost the station. that that's that train is right everyone's gonna be tuned into the spacex market open yeah exactly i mean i'm i'm excited i'm like i i i just feel i feel like i have a front row seat um and it's gonna be wild because it's elon and it's data centers in space and like the biggest ipo of all time well what were some other ipos so like bending spoons i saw ipo they found their S1 yesterday.

13:45They actually released their S1. Yeah. So they're further along than, you know, Anthropic and OpenAI in the process. I think you don't have to do the tweet that both OpenAI and Anthropic did around alerting people that you've confidentially filed. You usually do that to get ahead of leaks slash sort of like warm people up. And it gives you a chance, even though you're not supposed to do this, to start like shaping the story in the background. And actually, even if you don't do the sort of we've confidentially filed, you are still beholden to quiet period rules. And so it's not like you lose anything by doing that tweet except alerting people.

14:25And so it is funny that both Anthropic and OpenAI have gone that route. It makes sense because, of course, this was going to leak, but also it's part of the jockeying for the order of IPOs. But yeah, Bending Spoons straight up dropped their S1. And this will be an interesting one because I feel like this is a kind of a fascinating company that's been buying up old internet companies, making headlines through that. And the most notable thing that I saw, which is what I shared in the group chat, was from their S1 that they said, as a positive, nearly all of our businesses and functions are led by people in their 20s or thirties, most of whom had little or no work experience prior to joining Bending Spoons.

15:12And I just thought that was such an interesting, proactive story to tell. And also interesting in the context of what their business is, which they've sort of buying up these like dying legacy businesses and breathing new life into them. So they're trying to throw, it's almost like they're trying to bring the sort of classic startup, first time founder, ignorance is your biggest edge energy into sort of of the PE world. But I don't know. Any thoughts on Benning Spoons? I mean, I think they're proud owners of AOL. They've kept that brand and company alive, you know? So that's impressive in and of itself.

15:51Well, I think Benning Spoons is doing what a lot of like people have been saying that they're going to go do over the past year when it's like, I want to do like, you know, buy out. I want to buy a bunch of cash flowing businesses, make them efficient with AI and flip them and it's like you just mean there are all these memes of like and you know new grad MBAs buying laundromats and things like that it's like well I'm doing this on the like software side and it's a world that I do not know and I'm not familiar with so I feel like I've been learning actually quite a bit watching watching bending spoons the thing that I thought was funny that I saw last night was perplexity said that they're gonna file they're gonna go public in 2028 no matter what.

16:37Like no matter how, no matter how these IPOs this year goes. Yeah, just no matter what. Was it 2028 or 2027? I think it was 2028. And I thought that was an interesting thing to put out there from a comm standpoint. It's such a funny way to like join the party. Maybe it was that. Maybe it was like, hey, don't forget about us. Well, I remember back in a much, like an earlier wave of box file to go public in 2014. We didn't actually get out until 2015. But there had been like a drought of IPOs for a while. And I think like probably sometime in 2013, there was an interview where someone was like, could you go public next year?

17:22And Aaron was like, we could. And it became a headline. And then it felt like every other CEO realized that if they ever commented on IPO timing, I'm not saying we kicked this off, but like it was a collective realization that you would get a headline. Like if you, if you called your shot, right? Like you could, cause like, you know, like reporters and editors are like dying to put like, especially there were some smaller, like ankle biter companies. There's this one called Ignite. That was like a file sharing company. Every year they announced they were going to go public. That's what they still haven't gone public.

17:52Um, but anyways, it was funny cause it was just like instant way to insert yourself into the conversation. And so it's kind of how I read this perplexity like don't forget about us we're here and they're just calling rasha a little a little further out but oh my gosh don't ever say no matter what because anything can happen um but also maybe it doesn't matter because it's not like anyone's gonna hold them to that yeah i mean i write it on tech name so thanks babe but i you know it was like the last thing i looked at before i went to bed but um so i didn't dig into details on exactly how that was uh worded so please don't quote me on it, but that was the gist of it.

18:29One thing I shared in the group chat was the OpenAI letter or blog post that Sam shared, I think, yesterday late afternoon after the news had settled around them confidentially filing, and I thought it was very good. And a question I asked was, what would have happened if they shared something like this or they were a little bit more proactive with this sort of messaging earlier. So like six months ago or 12 months ago. It was basically like, what are we focused on? Why do we exist? What to expect? Who are we for? It's like answering all the big questions and putting it in sort of like almost like a prospectus format that is to be absorbed by investors.

19:13But also I think he was pretty intentional about sharing that on Twitter so that it was absorbed by his users users and developers and customers. But I really do think that this was with a lens towards investors just because of the moment, right? You can't really deny that that was the primary audience. It's funny. I read this so differently. And Mac said she thought it sucked. So clearly very different thoughts. Yeah, Mac, if you don't join the pod, we're going to give your opinions for you. Yeah, exactly. Yeah, I feel like you were at one end of like, this is great. Mac was like, this is shit.

19:50and I was in the middle. The thrust of the post to me was like trying to correct the broader narrative around AI being both like, just it's going to automate everything. It's going to take all the jobs, but also it's going to, a lot of the conversation heading into these IPOs is like this massive wealth inequality that already exists and is going to be exacerbated. And that the thrust of the post that I took was that like, Sam wants AI to be for everyone. And he wants it to be like an equalizing force versus like a further polarizing force. My assumption was that was why you liked it, Hal, because we didn't like have a chance to really get into it on the chat.

20:27I thought the message was good. I just thought the details on how that happens or what that looks like were scant and were at a point in that. Oh, I don't think that that was a, I don't think that that was the right place to share the specific details. But I actually thought one of the reasons it was good was because of the level of specificity where they said, This is what we're focused on. And now anything they do, I am going to neatly bucket into one of these three categories. And if it doesn't fit into one of those three buckets, then it's going to feel off to me. But to me, this is kind of like, you train your audience.

21:01You say what you're going to do. It hasn't felt until this moment that they were in control and that they were being intentional about things. And this felt very intentional, which is why I thought it was great. Not because I thought it was an excellent piece of writing or a vision that was so inspiring. I didn't hate the post like Mac, but when I saw the title and I saw the lead-in, I was like, oh, there's going to be some teeth to this. I also think, yes, it's geared towards investors, but it's also geared towards a retail audience. This IPO is forcing OpenAI just as it's going to force Anthropik and SpaceX to care about a broader audience.

21:41of investors and future holders of their stock. And I appreciate, it seems like actually both OpenAI and Anthropic recently have been trying to correct the pervasive narrative of the past couple of years around all white collar work will be automated. You're going to get intelligence the same way you get your water and your electricity. It'll be a utility. Like these messages that have not been resonant. Well, okay. So I guess maybe in contrast, I thought Anthropic has said nothing and their talking points continue to be revolving around like AGI for good and ethical AI and respect for sticking to a message, you know, like consistency.

22:30But like it didn't do what I thought OpenAI did, which was make it feel inclusive and sort of at least attempt to directionally show how we all participate in this version of the future. I have been saying for the last couple of weeks with Anthropic, does the average person know that Claude and Anthropic are the same company? Does the average person know what Anthropic is? Is Dario Amode a household name? I don't have those questions for OpenAI, so I actually feel like this letter and this moment was well executed. And I'm not like an opening. I stand. I want to say I have no horses in any of these races, but I just, I thought it was like, or maybe it was the contrast of, I feel like they've been especially chaotic and seemingly, you know, like the executive leadership shakeups, like all of this speculation on other people leaving, like maybe it was just in contrast to that, like how intentional this moment felt.

23:24Yeah. I just love that we had such different responses to this both where I was like, this just feels like bland messaging with no. I mean, I guess they were specific in the sense that they wanted to build AI that could do AI research and someday everyone will have personal AGI. But I also, on a more meta level, enjoyed reading it, knowing the level of scrutiny that any new communications has to go through once you've confidentially filed, like because you're in the quiet period and like wondering how many lawyers looked at that post and what was like pared back. And maybe part of the reason why I was disappointed by the substance of the piece was there's been all of this like chatter in the background about Sam trying to get the US government to buy part of open AI and a way to like pass on some of the benefits to the American power.

24:24Like there are some like bigger moves that have been analyzed lately that like maybe are more creative and bold. But we'll just have to agree to disagree on this one. Angela had to bounce for a work thing. So this is not her recusing herself from this particular topic. But one of the things we saw in our feeds all last week, but then like with surprising staying power, I feel like usually when there's like a Twitter conversation that's happening, it's like one day, maybe two days. And I think this one is still going. No, I think that it was dead. And then the Cloudflare CEO bringing up receipts extended the moment yeah so i feel like we got another week of juice out of this one but let's say what it is first which is the founders sort of airing their like vc pitch horror stories on on twitter and it was kicked off by greg eisenberg who shared a story about pitching a top vc firm for his series a and one of the gps was just like fully asleep for like 30 minutes and no one acknowledged it and I think it was you know sort of like absurd I don't think he thought he was kicking this off but it was like absurd enough and if you pitched enough investors you probably have some crazy stories yourself and so a bunch of other founders jumped in with like their crazy stories and so we just got this like wave of mostly anonymous but some naming names to your point of how Matthew friends of tales from the like like pitching in the boardroom and so i i think this is interesting on two levels maybe more but the two that come to me are one these stories normally do not get told there's like a social contract that you social contracts but also like a power imbalance that maybe helps you towards like towards it not being in your interest to share and so like what does it say about this moment that founders were sort of like openly airing these grievances.

26:27A lot of the weirdness of pitch meetings, I think, flows out of how decisions are actually made in VC firms, especially these bigger VC firms. And that's often very opaque to the founders who are pitching. And so maybe we can get into both these things. But do you want to, since you brought up the Matthew Prince anecdote, do you want to give the summary on that for someone who missed it? To be clear, these are founders. This is what you say, Ashley. It's share these stories after you've made it. From a position of strength, yeah. From a position of strength. And I think Cloudflare is a successful company and a lot of early investors who pass on them would say that that was a miss.

27:08And so he shared a story about having dinner with Vinod Khosla. And when his two co-founders went to the bathroom in the middle of dinner, Vinod leaned over and said, we think you're great. We think your co-founders are not as good. I forgot what the details were. He basically offered better terms or maybe he... He was like, we'll lead you around if you get rid of them. Yeah, if you get rid of them. And we'll give you their equity. And frankly, that's not an uncommon story. I think that founders will probably have some versions of these stories where investors are meddling, right? Like, oh, I'm an owner in this company and this is what I think is best.

27:49And so he said he was so turned off by that, that he, you know, that's where like sort of the conversation ended. And Vinod, you know, called him many times, and then eventually had to block his number. And that was a crazy story. I think people were like, oh my gosh, that's wild. And then people started sharing more Vinod stories. I think then Vinod got on socials and basically just started like, either refuting some stories or saying like, you know, that's just the way it is. And in the background of all this, like a thought that I personally had, but I think others did too, was sort of the Midas list just came out last week or two weeks ago.

28:27He's like still top of the Midas list. And something that I think 2025, if I were to summarize 2025 and so much of the pod content that we recorded was like, wow, we really excuse a lot of bad behavior as long as you win, right? Like the whole deal rippling thing that seemed so scandalous at the time, nobody even remembers because Deal continues to crush. And it felt like... Deal passed a million ARR and all is forgiven. Yes. And like a lot of bad behavior by VCs that have been called out through the years or maybe like cancel culture from 10 years ago or whatever. Like it's all excused because those folks are like clearly dominating in the AI era.

29:08And so my thought was like, well, you know, Vinod, maybe he's allowed to do whatever he wants if he's continuing to dominate. And then when he sort of refuted pieces or maybe all of Matthew's story, Matthew comes back out again and says like, that's not true. And here's literally the term sheet you gave me after that conversation. So he saved the receipts. Also, I think Matthew tends to be like a very controversial figure on Twitter. But I thought he was nothing but respectful and not like instigating in this. He was just sharing a story. At least maybe I read it innocently. And it was only when Vinod defended himself or told his version of events that he came out with receipts that seemed a little bit antagonistic.

29:59But that, to me, has extended the cycle of this particular meme. I think I've seen Matthew do this. And I agree. He has a high tolerance for controversy. Online pain. Which I think we actually all need if we're going to participate in this chaotic town square. But he has repeatedly done a lot to shine a light on Michelle, his co-founder and CTO. And so it was like this story coming from her would not have worked as well, right? Like you never want to be the subject of someone else's bias. And so it was cool that Matthew did this. And he also, I mean, he named names three times. Like the first story he shared was pitching Sequoia and Sequoia saying like we don't, Sequoia partner saying we don't believe a woman can like run your TEP organization, something along those lines.

30:58The second one was not a like gotcha towards A16Z. It was more of a self-reflection where they went to go talk to Marc Andreessen and didn't realize it was a formal pitch. They just kind of thought it was going to be a chat and they show up as the entire partnership and they didn't have any slides prepared. And so that was kind of like, oh my gosh, we didn't really understand the game. And so I appreciated that there was some levity too. And yeah, he said he framed the rejection letter, which was also funny. Yeah. And then he also had that receipt. Like he shared that. And it's fun because I think there's so much appetite for this stuff because, again, you just don't usually get access.