20VC: Inside Carnegie Mellon's $4BN Endowment | Why 90% of LPs Shouldn't Invest in VC | The $140BN Problem with Multi-Stage Funds | The Hidden Math Behind DPI, TVPI, and Illiquidity with Miles Dieffenbach

24:53You know, it's the magic of venture, right? That's how I think I see most of it. I agree with you, which is why in some respects, I do think it is a young person's game because it's about pounding the payments, being there, showing up at 7 a .m. that takes use in a lot of ways. Because picking is the next element difficult to unpack in a lot of ways. Who do you think is the best picker that you know? I love the way Mike Mabel's discusses picking in his the way he thinks about these companies that are going against the grain of the universe and are inherently not going to be super attractive or super hot because it is against the grain and it is dysfunctional against the way that our human minds work today.

25:34I'll never forget. I mean, when I first heard of Uber, I thought it was the stupidest idea I've ever heard. I mean, that's how you know I'd be a bad venture capitalist. I mean, I was in, you know, late in college, I'm gonna get in some random person's car and they're gonna drive me some same way there being beat. I'm gonna go to some random person's house. I'm just gonna sleep in their bedroom. I mean, this is the craziest idea ever, right? Those are the people and investors, you know, signed banister, another one, like who, and a lot of those companies Uber, right? That we mentioned, like, their ability to see into the future is something that not a lot of people can do and it's a superpower.

26:06How do you unpack whether someone's a good picker? Is it just looking at track? I think it's looking at track, understanding the true thought behind what were they thinking when they made that investment and when they met that founder? And then we speak to founders. And so we want to hear from their side of the story as well. What was that pitch like with the broader community? They'll usually tell you no one would even pick up the phone for us. No one will respond to our emails and you know, Sian or Harry, you know, sat down and they had a blink in their eye and they saw the idea They believed in us before everyone else did we really want to understand the depth and granularity of those stories often get bad references Yes, D.

26:49Yes, wow the way we think about referencing you know when we do a new fund We're looking for at least 20 references calls right 20 reference and we'll we'll take five from the GP which those are the worst references we'll get, right? Yeah, Miles was great. Yeah, he asked us, great. And by worst, I mean, they're gonna be padding Harry on the back, right? He's also the godfather of my travel friend. He's my best friend in school. So, you know, those ones we don't spend too much time on the golden references or the off -sheet references. And thankfully, Venture is such a networked community that you spend enough time in the asset class.

27:21You're able to build those networks pretty quickly. And so we are proactively trying to shoot deals. about other people's perspectives on other GPs. Like vanishing to vanishing, does that make much? Perspective on strategy, not so much. We are very much trying to find interpersonal risk and partnership risk. Those are two things that we are really doing. We wanna know, are they a good person? Have they created a bad persona? Amongst other people, have they wronged others in a pretty malicious way? And then understanding the partnership dynamic, things that they will never tell us on a phone call.

27:59We could ask them blunt to their face. Is there any risks in the partnership? Do you, you know, does Harry like Sally? Does, you know, how is the match? Oh, it's incredible. This is the best partnership ever. We love each other. We sit down every day. We've never disagreed on a deal. We spent a lot of time trying to understand that partnership risk. What is the number one reason you think partnerships break down in incentives? In incentives and who's working the hardest? Those are going to be the two every time. Do you think we have a generation of venture firms where the partnerships are staying together for the kids.

28:28I mean, I personally think you've seen partnerships. What's the word I'm looking for? I mean, the amount of change you've seen at partnerships over the past two years is the most I've seen combined in my eight year history. So don't be. How do you justify that? How do you reason that? I think there's a lot of reasons. I think one, folks who had made a lot of money didn't want to deal with the crap that you're dealing with today, right? These three years of no liquidity, dealing with broken cap tables, dealing with founder transitions, like it's just a lot of hard work, gritty work that if you made a lot of money and why do it?

29:02I think too, if you were a newer GP, you were promised a certain amount of compensation for your role and part of that was variable carried interest, that carry has evaporated, right? And as performance has come down and now you're getting paid 70 % less than what you thought you were. And so why not start fresh why not start with a new book or why not start my own firm? Why not start your own firm? We're seeing a lot of spinouts too. Do you love spinouts? I think they're drastically overrated. Yeah, we historically have not done many if any spinouts call it from Yeah, you know, you're your tier one maybe clean spinouts right you know Kevin Hart today stars is Is a new partner of ours and he was a founder so much for a few years he wasn't there that long he was still And he was kind of tinkering over fire.

29:47We both love Kevin He was always a founder. Yeah, exactly. And so, yeah, I mean, we traditionally have not done many spin -offs. When you think about getting a good read on that, time helps. How do you think about your willingness to write checks fast versus the need to build a relationship over time with the knowledge that they might scale if you wait for your funds? It's a risk we take openly. I'd say half of our new funds that we commit to, we will not invest right when we meet them over a six to year period and investing their fund that year. and the other half will take either one fund or two funds into the future.

30:20So three to six years will build that relationship over time. And so, you know, the way we think about it is if you're in our early stage venture fund, it's going to take at least 15 years for that fund to be wrapped up, probably 18, to be fully done, all position -liquidated. And when we back a new manager, we want to back them for at least three funds, so call it 25 years of an E -liquid relationship. It's longer like twice the length of like an average marriage in the US. I don't know what marriages are like here in Europe, but I think we're less than seven probably less. Yeah, so one thing we're more proactive than Americans Yeah, so like we really need to be sure who we're partnering with you know What's fascinating about that given the duration you mentioned there is also LP John L.

31:03P. John is freaking real right now Yeah, oh my god. How should GPs think about L P John one? it's good to have a relatively diverse file P base, which protects you from that, right? So a mixture, and not everyone can choose their LP base, right? Sometimes it's, you know, take money's green, right? But like in a best case scenario, you've got a mix of endowments, foundations, family offices, founders, maybe a couple GP checks in there from some venture phones, a mixture of folks who are aligned to your long -term vision. And inherently, stuff's gonna happen, right? Like, you know, folks are gonna have liquidity crunch, the family office, the family's gonna say, you know, fuck, venture, we don't want to, we don't want to play in this asset class anymore.

31:45Like, you're gonna have some things come up. Being open, open to that and trying to still be as good of a partner as you can is pretty important. How much is the right amount in terms of concentration from your biggest investor? Anything more than 30%. 30%. Wow. Yeah. I'll never forget Mickey Malcar. I think it was telling me 10%. Yeah, I mean, best case scenario, you don't have anyone more than 10%, but if you're raising a $50 million phone or a $100 million phone And you can you know secure a 10 20 30 million dollar check in their long -term line, you know, that still makes sense But best case scenario.

32:20Yeah, I was lucky. We did 10 % on the back of Mickey. Yeah, fantastic advisor Okay, so totally get that and so we have the 10 % there in terms of stability I was always taught that in downwind funds are like the blue chip for stability Is there a rubric? How do you think about advising managers on stability amongst different asset gloss of LPs? Yeah, I mean, I think you're right historically. Endowment's being quite long -term oriented. The Endowment model in the U .S. today has headwinds. In particular, certain endowments where they're going to start getting taxed at about 8 % range. That's five endowments.

32:56That's a headwind to their model, to a sense. It's not as bad as the 20 % that it was going to look like a month ago. Would you expect them to cut positions down size? It's all going to depend what they do with their draw, right? So an endowment is mandated every year. 5 % of the endowment goes to campus to support scholarships, professors, salaries, buildings, and that can range anywhere from 4 % to 6%, but most endowments have stayed right at that 5 % number forever. But if it turns out we're going to start getting taxed 8%. We could lever our draw down to 4 .5%, versus 5%. because the real risk you run as a diamond is eating into the purchasing power in the endowment.

33:36Right? The way an endowment works, you've got a 5 % draw every year, and then inflation is called 3 % for higher education here in the US. So just to maintain the corpus, the purchasing power of that endowment, you need to rate 8 % return. Most, you know, endowments are targeting 8 % to 10 % return over the long term 10 or 15 years. And so when you start getting closer to that number, you run into some real risks. And so it'll depend on what they do with their draw. you know, if they don't reduce the draw, I think venture probably will be okay. It'll still be the idiosyncratic headwinds of there's just no capital coming back from venture.

34:10That's the headwind to the asset class for LPs re -uping today. What do you advise managers in terms of closes? First closes, many closes, one close. I mean, I think GPUs should be spending the least amount of time fundraising as possible. That's not your job and you make your money investing. But some people are not as fortunate to just do the one and done closes, right? And so I think it's very much dependent on your situation. That's case scenario. You have a very crisp timeline. You know, we're going to do our first close here, you know, lining up your LPs and being sure they're committed to that process and doing work on the sub docs and the legal work prior to that.

34:45Really important. And just setting clear timelines. Do you mind if a manager's episode part of the manager and company? Yes. Absolutely. Massive red flag for us. And I would say most institutional LPs. I'm not going to speak for everybody, but No, it is, but it's just one of those ones where I see so many first -time GPs bullied into it by one large investor, often a family office, and then really regret it over time. It's the one thing where I'm like, no, no, no, never. The magic of a partnership is the caring interest. And you are now giving that caring interest away to a silent partner who is not going to be like we said grinding and you know taking 100 calls a week and working 996 like you.

35:23Yeah, baby. So how do you feel when you deliver incredible returns and a silent partner is getting a decent chunk of that care and interest to problem? How do you think about the rise of multi -stage platforms, dude? And you mentioned there that 8 -10 % that these kind of endowment funds in the end of model kind of relies on to keep that kind of corpus the same. Everyone says, oh well, it's going to be fine because basically, yes, they will have worse returns being multi -stage funds 8 -12 % say. but the LPs they have are different now, and that's good enough for them. How do you think about that?

35:57It worries us. The funds are extremely large today, and I think it's hard to assume the same returns you had from 2010 to 2017. I think, you know, Masha and Softbank, I would put is the flag in the ground, Vision Fund One, when all the other venture firms saw that as the opportunity to just absolutely scale their capital base, it's wrong to assume the returns you had from those years were most all ventrphones were basically raising a $400 million a year as they found all the premier funds and maybe they had a 400 million growth fund attached to it but the funds I just stayed basically the same for a decade and so it worries us tremendously.

36:33Do you think they will post as good returns than I? No, I'll walk you through a very simple math that other LPs can put in their back pocket but for how we underwrite these big funds now today, simple math but I'll walk you through it. So, and this is a live manager, I won't share their name, but this is a manager we under wrote a year ago. So we'll look at their fundraiser. So this manager was targeting a $7 billion fundraiser. And so what we do is we do a dollar weighted entry ownership across their different funds. So this had a billion dollar early stage fund, a two to three billion dollar growth fund, and the rest was an opportunity fund.

37:06And as an LP, most LP's have to invest peripassue across those funds. So like equally as a percent of the fund across those funds. And so inherently your smallest check is going to be to that early stage fund. Your largest checks are going to be to the growth and opportunity funds. And so what we do is we look at the early stage fund, so this fund call it had 15 % entry ownership for that fund. The growth fund had about 6 to 7%. And the opportunity fund had about 2 and a half, 3 % ownership. And so we dollarweight that on the funds, and then we look at our check. What is the average entry ownership our check is getting within those funds?

37:40And so this fund was about 5 % across those vehicles dollarweighting. And so the very Every simple mass there is 7 billion divided by 5%, which is 140 billion. That's the enterprise value. That is the market cap of companies that the size of those companies, they are just deploying that fund into 140 billion. For us, when we do a venture fund, our target is a 4x net. That's our goal. If we want a 4x net, these funds, the early stage funds, charge 2 .5 and 30, growth funds charge 2 and 20. So you're going to need a 6x gross at least to get a 4x net on that fund, you know, 140 billion, you know, time six, you know, you're close to, you know, 800 billion of market cap needed to return a 4x net for those multi -stage funds.

38:24Now for reference 2021 the best exit year of all time. There was 850 billion ish of market cap exit value from that year. Okay, you need an entire year of IPOs in M &A just for this, you know, one manager clearly is going to be broken off of numerous years, but that's a staggering number. My counter to you that would be your assessing performance today on the current outcome size, not projecting forward to what it could be in 10 years time. In other words, now we have 9, 10, $1 trillion companies. We didn't have any 10 years ago. The outcome size is as much bigger than they've ever been. If we project forward a decade, it's a very real chance that Microsoft is worth 10 trillion.

39:07And actually we have 50 trillion dollar companies. If that's the case, we could see that play out. It could. We acknowledge that we could be wrong and SpaceX and opening our eye and anthropic go public at that trillion dollar vacations. What we look at, and like I said, this is backwards looking data, but we'll give you a few data points. There's been 11 50 billion dollar IPOs venture backed. 11. The two largest venture backed IPOs ever or Facebook in 2012 and Alibaba in 2014. So we've got a decade, one of the greatest venture bubbles of all time, 2021, and we still haven't had a bigger exit. Then we were getting in 2012 and 2014.

39:47So my guess is that a $100 billion IPO or from the next 10 years is still going to be a generational outcome. And so the question I throw back is, you know, do you think there's gonna be $10, 20, $100 billion plus IPO's? I do not think so. You know, you look at the trillion. I think there'll be 10, 20 way more, actually, 100 billion dollar plus outcomes. Because I think what I'm fine so worrying right now is bluntly, there are so many exciting companies that I would love to be a part of, whether it's your anthropics, whether it's your open AI's, whether it's your SpaceX's, can't get access to them, given the extension of private markets.

40:22These are all companies that would be in the 100 billion dollar IPO price range for straight SpaceX. Open AI, those are all 100 billion dollar companies today, for sure. But where does the rub of meat the road there? Some, at some point the liquidity can has to be passed to someone who goes, fuck it, I need it. Yeah, and even still, 2021 is a good learning opportunity. Most, if not all, call it except maybe Palantir and a few others. These very large 2020 IPOs are down significantly. Still today, from that price. These were the greatest venture assets of that vintage. And so to say that it's a guarantee that opening eyes is going to be worth a trillion in five years.

41:01There is a lot of risk involved in that. And so what we've pos it back to our team is, what is the margin of safety? Great investors, Warren Buffett and Benjamin Graham kind of coin in these terms. What's the margin of safety we want investing in a fund for what we have to believe in to achieve our desired return? I would rather not have to believe in 800 billion of market cap IPOs and M &A transactions to get a 4X net versus other funds where, maybe we have to believe in, maybe it's a billion dollar fund, but kind of the entry ownership is 10 % and we have to believe in, you know, 10, 20, 30 billion, right?

41:33And anything above that is where you get the real alpha. And so it's hard for us to imagine on these very large multi -stage funds having that kind of alpha. Here is the single best performance you at scale. Index, I think they have to be. I mean, the performance they've put up in the last 12 months is... I've in a market that is as bad as you hear in the news and from all the folks on the podcast, the performance that they've delivered and are delivering here in the future is unbelievable. I mean, Larger Shareholder and Figma, Larger Shareholder in Dream Games, Larger Shareholder in Wiz, Second Larger Shareholder in Scaly High, Revolute, it's unbelievable and I give index all the credit in the world for not scaling.

42:15They even reduced their latest fun size. They reduced it after the 2021 era. The credit I give them for not, they could raise as much capital as they want to. And they don't, they are the most performative culture that we see. And so I give them a ton of respect for that. Danny has been unbelievably good to me since I was very, very young, 18, 19 years old, which I think is testament to him helping the next generation amazingly. My question to you on the back of that is, do you think they're in for a hard time and not singling them out, but the funds that are in that, billion to billion range, where they're sizable, but they're not that sizable.

42:52When you are GC, light speed, soft bank, your cost of capital is just like to throw out a 10 million dollar check. I'm sorry, thanks for the coffee. When you're in the index range, you're not one or the other. You're in the middle ground. How do you assess and think about that? I absolutely think they will continue to survive and thrive at that range. I think you have enough capital to write big checks, right? So you can participate in the abnormally large seed series A series Bs. And you You have enough, excuse me, it's a limited amount where you can still drive extreme powerl outcomes within the fund.

43:28And I think the performance -driven culture and what that brand stands for being the backer of some of the most generational companies of all time. You had Vlad on the show recently. Should I ask him why did he go back to index for his new math company? He could have gone to probably a cheaper source of capital. And gone, make me tell him to fuck off. You probably could have gone to a cheaper source of capital and raised from Massa, Toffbank, or John O 'Connor, or you name it, right? But just to be clear, you don't actually inherently believe in that fun size range. You actually just think index is so good.

44:02In what do you mean? You don't love the $1 .2 billion fun sizes. You just think the index are so good that they'd make anything work. Whoa, I mean, most people, most funds can't raise $1 .2 billion, right? So so most are inherently going to be in the lower end and then the ones that can they've had good enough performance Most of them scale. Most of the big funds have not got great performance. I think so. I think we've looked at all of their returns But I mean these people deserve to raise larger funds, right? I mean they've they've produced really strong performance So when do you say enough to enough?

44:35I'm out. It's too big. It's not my game One we lean on the math where even if you do own 10 % of a generational $20 billion outcome, which is still gonna be general, you know, Figma, generational company. It's probably gonna, we'll see where it prices, call it 20 to 25 billion. You know, if you're a GC, and there are last funders of $7 billion, say you're in 10 % of a Figma, which is a generational company, $2 billion, you know, they're gonna take 20 % of that. I mean, you've returned what? 0 .2x, you need 15 Figma's. It's my, it's my modeling to me. I mean, my favorite also was Wiz, which was obviously a $30, $31 billion outcome in the GDP of the country.

45:15And it returned the third of Insight's fund. And you're like, oh, I'll be really pissed. If I was the guy that led ways and I'm like, oh, thanks for the third. I'm sure he's happy enough that he still did it. Listen, I'm sure he is, but I'm just like, oh, yeah. So you go back to cool mask. We go up to core math and really what we try to understand, this is more qualitative, but at some point, the alignment breaks, in our opinion, between the GP and the LP. And when you think about let me let me put this clearly. I don't ever blame a GP for raising bigger funds I am a I love incredible business models.

45:49I study I live I eat I breathe investing These business models these GPs are creating are some of the best high margin businesses ever created and they're stacking fun So you think of a firm that has raised you know seven billion this fund they raised five billion their prior fund They raised three billion before that 15 billion of capital. They're charging full fees on all that right So they're making called 400 million a year, a year in fees. But often like 506 polytons, what 80 % of the feed stream goes. Yeah. We really try to understand, has the magic bond been broken between GPs and LPs, which leads us to, like we think the feed structures need to change to accommodate for that.

46:29Why do you think the feed structures need to change? Because when you're investing at that size and scale, so when you're a fund that big, you are inherently setting up for $100 million checks into very well -established, well -run, well -oiled companies. You are essentially acting as a long -only public equity investor, right? You're not actively managing the company. They've got their own HR team. They're doing all their own hiring. They've got a 20 % product team. They've got a 10 % BD team. This is a well -oiled machine. These are what public companies would have been 10 years ago. And so you're charging two and 20 on basically passive investing, right?

47:07You're not actively managing most of those positions for the most of the time. I don't think the early stage managers are actively managing. And I don't think they should be. I work with many and when they actively manage, they do not get the right decisions. They push managers to do things they shouldn't do. They push them to go enterprise before they should. Push them to do more products. Push them to scale faster. Take more cash on because they want markups. I think you won't pass it. Yeah, but you still need the fees for that, in a $400 million phone, right? You need a team to go out and meet all these people.

47:40What? You need it in office to bring these people in. So like, with a $400 million dollar phone, Harry, like you're not become a billionaire off of that. Right? Yeah. If you had 15 billion in AUM, which, you know, God bless, I hope you do someday, you're gonna become a billionaire off of that phone, off those funds, right? And that's the difference, right? Is you need that capital as a true or at least the advantage capital? They're utilizing it. But that's why I get you totally, but fundamentally leverages everything and these firms can raise the money without changing the fees So they're not just going to do that.

48:09It's really advice. Fuck you. Yes. Yes. Absolutely. So we're never going to get this fee structure change. I you know the performance like do you puke when you see three in 30? Yes. Yeah. Yes. And that's nuts. Yeah. It's remarkable. Right. But you suck it up and pay this is this is this is the word I the Renaissance tech, right? You know, the best hedge fund of all time. They were so good that at one point, I think they were charging like 60 or 70 % carry and like 20 % management fees. And they kept increasing it. They kept increasing carry and increasing managers to incentivize their LPs to get out of the fund because they wanted all the capital for themselves.

48:47Like the performance is so good that folks would pay them whatever they wanted to be in that fund. And so what's hard for us to understand today is Like I do I share the performance data with you performance is you don't look at that data on a seven billion dollar fund and think God like we will pay whatever we need to get into those funds and so what our hope is and the hedge fund industry Went through this cycle after the global financial crisis where there were thousands upon thousands of hedge funds They were all charging two and twenty performance was incredible for a very long period of time all the funds increased competition.

49:22Returns came down, the global financial crisis happened, and you had a complete bottoming out of the hedge fund industry, which obviously rose to these incredible multi -street hedge funds. But fee structures changed dramatically from 05 to 07, then at 2010 to 2013. What will fee structures be in venture in 10 years time? If you're raising, you know, that early stage fund, the core, $500 million here is a fund. Charge us two and a half and 20, and if you're good enough, two and a half and 30, we're okay with that, right? But those those growth funds that are really for scale businesses that are mature assets like you should be charging long only public equity fees which are one in 10 and if you really love your LPs It'd be it'd be zero in 10 but or budget based right based on based on the team But 10 % care.

50:06I mean that's that's the number for a passive long -only investor going back to the size and we scale Out of you so to speak when you're too large is there ever a case for LPs where I say you know If you've made us so much money before, even though we may not believe, like we're in for loyalty. You know, I think certain LPs, yes, us, no. I mean, we are in extreme performance, driven culture. But if a fund does, you were six or seven X net, which is amazing. And then they raise a big ask fund, which most would do post that great number. Do you ever like, we've got to come back, you're just on a six seven X net for us?

50:40It depends. It depends on how different that fund is and how different the strategy is, right? and it very much is dependent on the situation. How do you think about, I have a lot of LPs, whether like I want to be in a S -brand name, and I'm like, that's not the best risk of just a return. There's an opportunity cost to a cash. I think you should be in one of these three names, and they go, then you don't get it. I don't care about the performance. I just want to be in Andreessen, in Succoa, in index. How do you respond to the brand -driven nature of LP allocations? I get why. I think it goes back to an incentive problem in the LP industry.

51:15From me personally, I could be your janitor here at 20 BC offices and I'm going to be the best janitor you've ever had. These are going to be the cleanest floors you've ever had. This is going to be the cleanest table you've ever had. If my name's going to be on it and I'm going to be a part of it, I am going to put my 150 percent. But maybe there are certain people that are incentivized to part capital in brand names that won't get them fired. No one gets fired from buying IBM, right? That's the classic quote. That's a problem. And frankly, there are, For you, is it easy for you to get a check done into ex -brand name versus saying, hey, I love cyan.

51:50I'm going to go out on a limb and get long journey in. We have an investment committee that we go to for approval. That's our governance committee. We write a detailed memo for any re -up or any new name in the portfolio. We've got to present our merits and concerns. We've educated our governance, which is such an important part of any LP that's wanting to get in dementia, having the proper governance setup to allow you to take these very long -term bets. We educate them on the math and the risk -adjusted return of the funds in the fee structures. And so, you know, they're very understanding of our strategy and how we think about the room.

52:24To help ease, not realize some managers are doing 30, 40, 50 million a year in fees in terms of like back to them at the large multi -stage and to help ease hate it. I think certain LPs choose to just not even think about it frankly and and so certain LPs You know such as ourselves. I will never blame you Harry for raising 10 billion dollars Like I will give you a you're not gonna write me one better. No, come on. Come on We have never I'll never blame you for doing that and I'll never blame a GP for never bash a GP saying how dare you right? It's the market like it and you're you've obviously done something well enough that's allowing you to to race that capital?

53:03It's our choice to determine, is that the right place risk adjusted for our capital? I think not enough people see this as a game of levers. And what I mean by a game of levers is like, you can have a smaller fund, but deploy it more quickly. And actually, kind of play that lever game to actually just a massive e -game in the AUM game. How do you think about temple diversification? We saw a real shift from three to deployment. How do you think about that? I think it's very important. It all stems from, What did that GP tell you they were going to do? If they told us that, this is a two year fundraiser cycle, they're investing in two years and they come back those two years later, we're okay with that, we underwrote that, right?

53:42But if this is a three to four year investment period and you told us it was gonna take three to four years and you come back in two years, then we'll have some questions for you and we'll want to work with you to understand why. You know, what's the reason? Because time diversification is extremely important. What happens if that's slower? It's not bad. No, I don't think so because a lot of people say I'll play the game on the field right I think certain folks would have in it today Bear hugged their GPs for not playing the game on the field in in 2021 You know, we're not investors, but Mark Suster I give him all the credit in the world He's been in the game for a long time.

54:17He saw 2021 as an insane period and he strip sailed like majority of his portfolios and his funds for a very good price DPI in the pocket, like all of his LPs are bare hugging him for that. Brutal market. Does that have brutal market? Yes. You look at the data, both at European venture fundraising and US fundraising. We'll see what Q3 and Q4 look like. But in the US, this is going to be the lowest year since 17 in Europe. Same. It goes back a bit further, maybe to 2016. But it all goes back to liquidity. What's the takeaway to that? Is that the lack of liquidity? is that the concentration of capital to a few number of names you've scaled and just eaten up more of that dollar allocations?

54:58What is the kind of conclusion from that? A lot of different reasons. I think the main reason is liquidity. 2002 to 2004. You had more dollars raising the public markets for my POs than you did from 2022 to 2024. And with an asset class 10 times the size. And just for reference, like the dot com bubble, it took you 13 years from the peak of the the dot com bubble to get back to par on your public equity position in the Q user or the NASDAQ. That was a real downturn. It makes, you know, obviously, 2021 look like pennies and you had more IPOs raised the three years following that. And so something clearly is broken in the industry, given how bad the liquidity was over the past three years.

55:37And I think what really frustrated LPs is you watch the public markets continue, especially the factor exposure of technology has done tremendously. And I am not a believer ever that the IPO markets are closed. It's purely a function of price, right? That is the problem folks paid significantly to high prices during the peak growth has slowed down You know, there's not much of a market for a hundred million dollar ARR SaaS company growing 15 % with break even free cash flow When you can buy Microsoft growing top line at 14 % growing earnings at 17 % with real gap profits buying back one percent of the company every year with the strongest competitive mode in the world.

56:17People get frustrated when it's like, oh, no one's going to give me eight times ARR, ten times ARR for this business. We'll look at the alternatives. What investors could invest in the other similar factor to your company? I think P is not coming to save us, let everyone thinks it will. I think people always also have lower expectations of what it takes to buy good companies. Like you said, that you need to be 20 % grower and profitable. And there are so many companies where they're bluntly at 10 and not profitable. That's a tough spot to be in. Yeah, I mean, we look at the data. Historically, how close do you get to the underlying portfolio companies?

56:50Very close. We ask for trending revenue, trending gross profit, and trending free cashflow for the top 10 ads. Every fund of, we underwrite. Does every LP do that? No, definitely not. So when you look at that, do you think you are able to predictably tell good manages in real time. Yes, because they've got great assets. Even though you have the ones like Circle say, well, for years it's like, eh, eh, maybe like, okay. And then it turns into an absolute freaking model. There's always going to be an extreme distribution rate tail outcome in these funds that is going to be impossible for us to underwrite, right?

57:29And that's the beauty of a venture capital. So we acknowledge that. We're not going to, you know, our valuation of the company, we know it's probably going to look quite different, three, five years down the road, but we just want to know, are these good fundamental businesses that are growing in value and that give us conviction in that these are going to be real, durable businesses one day? How did you analyze the yails and the halveds doing sales without financial portfolios? I think there's a lot of factors that go into it. One being the headwinds we talked about to the endowment model, but you look at Harvard selling one billion.

58:02It's a $50 billion now. I mean, so one billion, it's not like some monumental thing for them. That's probably just a refresher of the portfolio. But I think there's real lessons learned. I mean, there was an article out today about Yale and CalPERS. CalPERS was the buyer, a piece of Yale's portfolio. And I was on the phone with our CIO this morning. Just take a step back. We had a venture capital fund that we committed to in 2012. This fund was in its tail life 13 years old. We hadn't looked at this fund in three or four years. There was one asset left in the phone who's basically fully realized we have a great analytics team and our analytics system that Tracks are underlying portfolio companies, but the company have to be over a million bucks in nav to us for us to be it in our system And so this company wasn't even showing up circle the company We're talking about in our system because it was below a million bucks flash forward You know they were holding it the manager at a 30 % discount like I said you saw it on TV I know I was reading this one my my son woke me up one morning and I was up early And so I'm reading the S1 kind of as just, you know, for fun and I'm looking through the cap table and I see our GP on there.

59:06And I'm thinking, oh my gosh. And so I go and start looking through the quarterly reports. And so they were holding at a 30 % discount plus or minus to the last round valuation, which was, I think their last price range was around $5 billion, you know, three and a half billion ish valuation. And you know, you look at at Circle and it's a $50 billion company today. This is a 13 year fund that is essentially going to do an extra three turns on the fund in its 13th year. Un -be -leavable. And so the article with Yale and in CalPERS was CalPERS bought a very large piece of their portfolio of which part of it was General Catalyst and Circle was the largest position in that fund and essentially in, you know, a two -month time frame, I think it said in the article they bought 500 million, you had a hundred million dollar right up from Circle alone.

59:50That's the risk of selling secondaries as a long -term venture investor is that you're gonna have these crazy right -tail outcomes in the fund that could come to fruition at years 8, 9, 10, 11, 12, 13 that you're traditionally even, I said to Chuck, I mean like, I'm not that smart, right? But like we would under, we would have under wrote circle if we were looking to sell that fund a year and a half ago. And we probably would have sold like who would have guessed that circle was going to trade it a hundred times EBITDA in the public markets and that stable coins in a year and a half, we're going to be like the hottest sector in crypto.

1:00:24So you could not have predicted that. So I imagine Yale probably did the same. They probably under wrote that and they're like, there's probably not a lot of juice left to squeeze here. I have friends at Yale who I'm crying for. And I have friends at Calpis who I'm crying for with happiness. I'm sure I'm sure. You know, I'm sure Yale would do well. It's a fantastic team with a great portfolio, but it just goes to show the risk of these fat tail outcomes in these phones. To 10 % discount, I think it was the reported number. How did you analyze that? How did you solve it? than you thought much higher than I thought.

1:00:54You thought it was higher. You thought it wow. No, sorry, much, wait, I think it's a good deal. No, that's a great deal. That's how I meant, yeah, sorry. Yeah, that's fantastic. Yeah, fantastic deal. I, you know, I'm not knowing the underlying GPs and that fund and not knowing the mix between, you know, buyouts, real estate or venture, you know, I would have guessed, you know, Yale's got incredible managing in their portfolio rate, so they'll have some pricing power. I would have guessed 20%. You know, that would have been probably the number that I would have put on the board. Do you think we will see many more of these large institutions doing strip sales as that venture portfolio is?

1:01:27I'm not sure. Certain ones with real liquidity needs, I think they'll have to, right? And so that'll be a forcing function. But still, I mean, there's not a ton of secondary capital out there that's going to be able to swallow all of that net, right? So if every, you know, billion dollar down, it comes out and says we're selling 10 % of our venture book, I mean, pricing there. It's a supply demand market, right? There's only so many buyers. You said about the liquidity problem and that being a driver in terms of the brutality of the fundraising market scale Dream games figma Revolute secondaries a circle Cool weave hench health which IPO'd chime are you just that drowning in distributions now?

1:02:08We are thankful to say that we're now self -funding in our venture book this year Which is which is give us a round of applause and it's the first time since 2021 I think that's so that's a positive But on the flip side, there's still a lot of liquidity that sure, it's been announced, but the Wiz deal, that's going to be a Q1 2020, 26 event. That's got to go through FTC approval. Vigma hasn't gone public yet. Dream games set in the article. They've got to get European approval. For that. 2020, 26 will be a year without liquidity really has. Yes. And what's exciting me is, and this is a crazy statement, so it's not that I agree with the statement, but it reminds me of just Mania.

1:02:46Yeah, exactly. For the longest period of time, private market capital was cheaper than public market capital, which is the most mind -boggling statement as like a fundamental investor ever. It's hard to fathom that, right? But that was the case. That is why the best companies in the world didn't go public because you could get a cheaper cost of capital. You didn't have to do quarterly earnings calls. You didn't have to go through all the hoops to go public. Why would you go public? We speak to founders. We understand why they don't want to go public. But the public markets are now pricing risk very differently than they have over the last three years.

1:03:16You look at circle, you look at nebius, you look at coruwebe, you look at palantir, you look at cloud flare. Like these are all businesses trading at extremely healthy multiples. So my message here to all venture capitalists now is the time. Please take your company's public. My question to you on the back of that is Rory, Jessica from Scale, who is also me. He says, my favorite thing about hiring, he goes, yes, so what about me? And I specialize in that. So what about me? If we have this liquidity dropping in 26 the year, does that mean 27 you'll have a load of LPs flush with cash coming back to the venture asset class going?

1:03:54Let's fund some more funds. I mean, inherently it will help clearly. And particularly as is maybe folks take back needle moving on not already. I mean, it's been such a dearth of liquidity over the past three years that like one year is not going to solve the industry's problem. So we're going to need multiple years of really good liquidity to get back to a normal state. So there's still a lot of wood to chop here, but it'll help. Undoubtedly. Absolutely. Do you love thematic funds like every other LP does? We are agnostic. We do not have a mandate or a rule saying, you know, we're only going to do thematic funds or we're only going to do generalist funds.

1:04:31We're a best athlete. So when we find really great partners aligned with us for the long term who we think have an incredible skill set that aligns With what they're trying to do in the fund whether that's a general is fun whether that's a sector focus fund We'll do it and so I mean I inherently you know we've done One new sector focus fund over the past three and a half years and so it hasn't been a huge part of our portfolio But we are absolutely open to it. What is the best ever performing fund you've been a part of? We had a a fund out of China that produced over a 20x net return to LPs. Wow.

1:05:09I hope you sent them a Christmas card. We did. Yeah. How do you think about China? It's a very high bar for us today in a very hard place to invest. I mean, there's a couple, you know, really big headwinds one is the US executive order, you know, mandating US dollars can't go into artificial intelligence or semiconductor related companies or defense companies there, which we completely understand and align with. But the big problem with so unique about the China venture capital market that maybe a lot of founders or maybe LPs who haven't spent time there don't know is that in China these GPs raise USD and R &B funds alongside each other.

1:05:43And these R &B funds are from local governments and municipalities. And most of the time for the past 15 years since the China venture industry has been around, those funds were a pair of pursuits. They mostly invested in the same securities. That isn't the case today, especially now that US dollars cannot go into these AI companies which I think are the last that I check 70 % deals in the US or AI companies like it means to everything. And so that's a big alignment issue, right? What are we getting exposure to in that fund? That's a big worry. Totally agree on that. Super interesting. I'm actually more bullish on China than most people give credit for.

1:06:18Yeah, I mean, we've got, we have incredible partners there that we've had for a long period at a time that are extremely hardworking, extremely smart, and have been great partners to us. It's a hard market today, and frankly, a lot of the best Chinese founders have chosen to raise elsewhere, whether in the US, Singapore, London, it's a tough place. We mentioned the liquidity. The thing that's also kind of weird and paradoxical to think through is you mentioned the public market's players just having apps that you ripped. You see a matter throwing out $14 .9 billion for scale. It's like 45 to 50 days of free cash flow.

1:06:51It's really not very much for them. Your Google's buying windsurf will, I say, a coffee. They put three and a half billion dollars into RayBan at the same time and no one paid any attention. My point being we have these kind of opposing worlds of liquidity, starvation, or drought, and then the glut of these public market players who just are playing with market caps that are too trillion. How do you think about that? If Wiz gets approved, every other large Mac 7 company is going to see a green light in in regards to making big splashy acquisitions again, which is a good thing. You look at Google, Microsoft, Amazon, and Meta combined.

1:07:27I mean, they're doing 600 billion of operating cash flow, just cash coming off the company every single year. And I think they would much rather make very strategic acquisitions than buy back 50 basis points of the company, right? The big worry that I think those companies see today from our purview is that the AI landscape is changing so rapidly that the 12 -month time period, it could take to go through a review to get that acquisition done. That company could be obsolete in 12 months. Did you sell this with winds off? It changed a lot in a couple of months. Lots of great AI companies have been very hot and they're not hot.

1:08:05Stability AI, lots of companies have gone through these waves and there will be many more. That chance and you look at the whiz deal, there's a 10 % break up fee there. Largest break up fee ever for an M &A transaction. So, you know, say that someone else wants to do a $30 billion acquisition of perplexity. And perplexity says, oh, we have to wait 12 months. Our board's going to recommend a 15 % break -up fee. Now, will those big companies risk a $4, $5 billion break -up fee and 12 months where this company might not be what it was 12 months ago? I think that's what is the reason these folks are acting in such a fast way in regards to take the top talent, license the IP, license the tech, get these people building within our company.

1:08:48Now, day one. I think it's the most smart maneuver around it, but it only works when the people in the tech of the assets are not the revenue and the customers. In the Wizards case, the revenue and the customers of the asset don't get me wrong. The team and the technology is too, but it also helps us in our company. Sure. But like without the revenue and customers, it's not worth $31 billion. dollars. I do want to ask you said to me before open AI could still be a zero. When you think about that, what did you mean by that? You know, the way we think about it is we very much spend time on new economics and from what we see with open AI, new economics are improving rapidly, which is great to see.

1:09:27But still when you take into account catbacks, you know, why has open AI raised two of the largest venture capital rounds ever in a span of 12 months? Not because they want interesting and then come from the cash on the balance sheets because they're burning five to $10 billion a year, right? In my opinion, the music will stop eventually, right? This would be the ultimate anomaly if a bubble did not pop in AI, right? You look at past historic, incredible technological moments, right? You think of the railroad, you think of cars, you think of electricity, you think of steamboats, you think of the internet, every single one of those, there was a bubble that popped, every single one, that impacted the equity markets at that time.

1:10:07You know inherently for the long term it's a good thing right like it shows that this AI thing is real and People are going to over invest and so I I would find it extremely anomalous if if there was not a bubble that popped here And so if if folks align with a bubble will pop eventually if you do not have control of your own destiny And if you're sitting like open AI and your prefs stack what's their prefs stack today 70 or 80 billion? You know stuff hits the fan and no one's willing to write you a 40 billion dollar equity check anymore because the capital markets have completely gotten smoked.

1:10:38Like, what happens? Do you think there is a chance that I was honestly like, we need to look at space ice. I have so many. Space X is self -funding. They don't need cash. That's what I mean. And you look at Google and Meta, right? When they went public, Google and Meta had like 30 to 40 % gap operating margins. Those were like, these were the most profitable companies ever. They had complete control of their own destiny, right? So, capital markets, whatever happened, it didn't matter. They could not be killed. SpaceX cannot be killed. Starlink has reached escape velocity. That's a very high margin product.

1:11:10They do not need cash. They're doing secondary tender offers. Open AI needs cash. Will open AI and Un's Ropec be independent companies in five years' time? To say like slam dunk, these are going to be trillion dollar companies. Five years from now, there is a lot that can happen within that five -year period. We would say there's still a good amount of risk in both of those businesses. If AI can, it masses, kind of, talked about this before, about kind of AI's impact on global GDP. And if it hits 10 % GDP productivity growth, then it's about 10 .7 trillion of $107 trillion labor, kind of a segment.

1:11:46Do you think AI will have that global impact on GDP within the next 10 years at that scale? 10 years gets closer to, I thought you were going to maybe say three or five, which I'd say, No, right? I think these technological transitions take a pretty long time historically to bleed into GDP creating industries. Nobody has an obviously incredible company, but they burned up all their GPUs in April because people were making emojis. They were making cartoon figures on the app. That's not a GDP boosting product. Clearly they're making end -roads, right? But all these things take time. But I think the problem is time is not your friend.

1:12:27And when you look at the hyper scalars, just take them, for example, you look at, you know, 2024 or the 2027 estimates, it's a trillion dollars of cat -backs they're putting into the ground. And then you add on ventures and industry, you know, investing, you know, say they run rates of $100 billion here in the US and 80 % of that's going into AI companies. Now, sure, not all of those are going to be cat -backs in 10, it tends to maybe some of those will be application companies, but that's a lot of money to invest that sum if this does not come true for 10 years. There will be a lot of pain that we spoke about in video This is why we push back when you also on Nvidia which you said that's too highly priced if you believe AI you buy in video I do not think that it's too highly priced for the business today One of the benefits of of our roles were generous, right?

1:13:11So we get to invest across you know buy out hedge funds real estate Pop activities and so if we get to witness some of the best investors in the world across the world And so, a man from your hometown, Chris Hone, this guy's one of the most incredible investors of all time. And he thinks a lot about peak earnings and peak multiple, which is a common theme obviously in the public equity industry, but Nvidia is a cyclical business at the end of the day. You look at their historical financials over the past 20 years. Essentially like every three years, they've had extreme negative year over year revenue growth.

1:13:47Now it rebounds, right? but this is a hardware inventory cyclical business. And so back to my question, if folks agree that an ad bubble will pop at some point, and the largest buyers of these GPUs are advertising driven companies, Google, you know, Meta, you know, Amazon is now a very large income revenue line of advertising and advertising, which is also a cyclical business. And you have a global downturn, like there is a really plausible scenario that revenue drops 20%, I think that would be conservative, 20 to 30%, and so then earnings, if they don't react on their op -x quick enough, maybe earnings drop 40%.

1:14:26I looked this morning, they're trading it like 38 times earnings forward. Maybe it drops to a trough multiple of 24 times, which has been a trough multiple for our Nvidia. You just blunt and you just had a 70 % drawdown. So to think that that's not a possibility in the future, I wouldn't say that, I'm not gonna guarantee you that's going to happen in one year, two years or three years, but I think it's a possibility. One final thing I want to touch on before we do a quick fight is found a friendly. Everyone loves to say how found a friendly. They'll have found a friendly that GPs are. How do you think about the found a friendly tagging that's in Venture to stay?

1:14:58My background comes from a sports background. I play football growing up in college and I was used to hard coaching. Hard coaching, you don't love it in the moment. You don't love a coach MFing you and you know, scream at you and telling you you're, you know, you're playing terrible and you need to do this better. You need to do that better. But it's better for you, right? And you know it's coming from that coach wants the best for you. Like they don't want you to fail. Like they are incentivized for you to do the best work possible. And so like I love getting coached hard. I told our CEO Chuck Kennedy when I first joined.

1:15:34Like he shouldn't have hired me to begin with. And so I told him when I joined, like in my mind, I had a pretty good thought. I was like, there's a probably a good chance I don't make it like six months. Like, but I'm gonna try my best. And so I told Chuck I was like, Chuck, I need you to criticize me. Like I need you to coach me hard. And he looked at me with like crazy eyes. Like I've never heard anyone say this to me in my life. But like I love her coaching. No founder is gonna be perfect, right? Founders are gonna have weak spots. And if you can have, you know, people that are from a loving perspective close to the business and can supplement certain weak spots and can bend the trajectory on a company even a bit.

1:16:08Why wouldn't you, I wouldn't you push for that? Those are gonna be tough conversations, right? But tough conversations aren't bad things, right? When we're sourcing and we're redoing reference work, that is not something we, we try to dig out, like we want, we want the most founder of Rennley GPs. That's not something we, we source for. I'm so glad. Thank God I'm sure mine would not say I'm the most founder. Harry says 996. I'm so tired. I'm so tired. I'm so tired. Dude, I want to do a quick fire with you. So I say a short statement, you give me your immediate thoughts. Which fan should firm charges 3 and 30 and shouldn't any fund that raises over 4 billion?

1:16:44I think that's a pretty easy answer. There's firms that do over 4 billion. No, no, no, excuse me, on their growth funds, right? So the early stage funds, but they do 3 and 30 on growth funds. No, no, they're charging 2 and 20. I don't think they should charge that. I think a core early stage fund, if they have produced incredible returns over the past 15, 20 years, they deserve 3 and 30. What's the biggest line GPs tell LPs during fundraising? Oh, that's a great question. I would say, miles, this is the perfect fun size for us. We want to be a union square. We want to be a benchmark. 300 to 400 million.

1:17:20This is the perfect sign. We're never going to raise a bigger fund. I hear that. I kid you not. At least every other intro meaning I take with a firm. And it's 99 % bullshit. But 99 .9 % bullshit. What's one red flag in a GP that others keep ignoring? I would go back to alignment. I think we talked about, kind of, a piece of looking the other way, but alignment GP commit is one form of alignment. It is. Interrupt G. Yeah. How do you guys feel about that? It's a very important data point for us. The nominal number is not important for us as what does that number mean to that person? Very important to us, right?

1:17:57Frankly, we have two quantitative data points it's outside of fun size and past returns that are the best forward looking indicator for future returns of our funds. And one of them is GB commitment. Yeah, it is an important factor for us. Who is the most underrated emerging manager today? Well, probably raise a bigger fund. Well, I'll say, I think Kevin Hartson A stars. I think they've done fabulously well as a partner. And they think makes him so good. Kevin, please, if you're listening to this, do not use this to raise a billion dollar fund. When I think what's interesting about that team, you know, you've got Kevin Hartz, you know, multiple time founder, took in his company's public, been through a lot, seen a lot.

1:18:38You've got Gotham, who was, you know, COO, CFO of Uber, you've got Bennett, who did some incredible deals at Co2, and I think it's a very heavy team, a very powerful team for a right -sized fund. I don't think there's many of those funds around, frankly. And so I think their ability to have really premiere access that traditionally a multi -stage fund is going to have 99 % of I think is pretty rare. When you think about a fund investment decision that was a mistake, what did you not see that you wish you'd seen? The key thing we go back to is people really trying to understand who are the people driving the returns at that fund.

1:19:17Do you think you get more attribution? that we've gotten much more sophisticated on our reference work. We built our own attribution tables, right? So like, that is another like a huge red flag in lie that like we get from, it's not an outright lie, right? But like they will give us attribution and you have one partner leave who retires or goes to another firm and like you're getting this attribution from this new person who clearly we know was not the partner on this home run deal. We understand why they do it. Like they have to assign somebody to it, but it could be very misleading to a new LP coming into that fund and saying, oh, these incredible partners who led these incredible deals are also here.

1:19:52And so we through reference work and through longevity, we build our own partner attribution. Would you roll the back of 25 year old first time manager or a 55 year old unicorn founder? Well, if it's Harry, you know, that makes the decision a little bit tougher. I'd say in general, we would lean to someone that has been through multiple cycles and has the scar tissue of that. And so I'd say we'd probably lean to the 55 year old, but we're open to everything. What did you believe about fund investing that you've changed your mind on? So like for me in investing it was like there's people, there's market and there's products say, and I used to kind of weigh them equally and I've completely changed my mind around that.

1:20:34Market's changed, product's changed, and this is for seed. I just massively overindice on people. Like really. You know, when I first started, from a first principles perspective, I was drawn to the data, which we laid out here in the beginning, and you can't over index that data too hard, similar to what we've talked about. And so I would go back to, at the end of the day, this is a people driven business, you can do all the data work you want, which is important, clearly, as we've stated, really leaning on the qualitative reference and people work to really and in speaking to founders. Like we don't take a lot of founders time, right?

1:21:11They have a lot of better things to do than speak to you know measly LPs like us But really understanding like why did you choose that partner? Why did that partner choose you? What's that relationship been like and and understanding that dynamic is critical for us? What fund do you know then that you wish you were in? Union Square easy one. Yeah. Yeah What's the wildest GP behavior you've seen in a fundraising process? Oh, I've got one good and in one bad Oh, go on. Okay. What do you want first? Start with the good. Okay. The good, you know, long journey ventures, which an incredible partnership between Lee Jacobs, side vanister and in Ariel Zuckerberg.

1:21:50We had a celebratory dinner out in San Francisco and we get towards the end of the dinner and somehow we got started talking about ping pong. I'm a pretty good ping pong player and I brought up that when I was in college I won the Pennsylvania State ping pong championship, which is true. I did Lee

1:22:10immediately was like, there's no way you're a better ping pong player than me. I am a really good ping pong player. So, cyan was like, well, we need to settle this. And I'm like, it's like 9 p .m. like we just finished dinner. And I'm like, yeah, I mean, I don't know how we do this. She's like, I'll find a ping pong bar. Sying gets on her phone, finds a ping pong bar. We all go to a ping pong bar at 9 .30 p .m. in San Francisco, in Lee and I played ping pong for about an hour. You won? I won. Yeah. And then you wrote the jam. Exactly. We got to just count on Managing Fees. If he beat you, you check, cancel.

1:22:42That is unbelievable. I love it. I also love the Americans that you're like nine o 'clock. Dinner was finished. In Europe, it's like, that's when you start drinks. That's so funny. The bad one, I mean, this one forever stands out was we underwrote a manager in 2023 that was holding OpenC at 13 billion, which like that one was like. And you questioned them on it? Yeah, obviously. And they came back. They said we're gonna revise our valuation policy and we're gonna revise that mark. That was that was a crazy one Yeah, dude that is absolutely wild. Listen, I so appreciate having you in the studio.

1:23:17I so appreciate the friendship This has been so much fun to do so thank you so much for joining me man. Thanks for having me. This has been a blast We could talk about a lot of day The best podcast or when you hear from people who never go on podcasts and you hear something truly unique Inside Carnegie Mellon's incredible endowment deployment there. I appreciate you listening. You can check out the episode on YouTube by searching for 20VC, that's 2 -0 VC. But before we leave you today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the project that we're working on across dozens of platforms, products and tools.

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1:25:52Head over to acuityscheduling .com, Fortslash20VC for a free trial, and when you're ready to launch, use the offer code 20VC20 to save 20 % off your first acuity scheduling subscription, and speaking of incredible companies, don't forget what really keeps those customers coming back. Trust is the ultimate currency in business, and today customers expect it faster than ever, and that's why over 10 ,000 global companies trust Vanta. Vanta automates up to 90 % of the work for in -demand compliance standards like SOAP2, ISO 27001 and more, using smart AI to centralise workflows, manage risk and get you audit ready in weeks, not months.

1:26:35So you can stop chasing paperwork and start closing deals, and a new IDC report found that Vanta customers achieved $535 ,000 per year in benefits. That's insane, and the platform home pays for itself in 3 months. Whether you're growing fast or getting started, Vanta connects you with trusted auditors and experts, support to help you build trust with customers. Get a thousand dollars off your first year at Vanta .com, Ford slash 20Vc, that's Vanta .com, Ford slash 20Vc. As always, I so appreciate all your support and stay tuned for an incredible episode coming on Wednesday with the one and only Rory O 'Driskel and Jason Lankin.