20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Mike Maples is one of the OG seed investors of the last two decades. As a co-founding Partner at Floodgate, Mike has been on the Forbes Midas List eight times in the last decade. Some of Mike’s investments include Twitter, Twitch.tv, Clover Health, Okta, Outreach, Chegg, Demandforce, and Applied Intuition. In Today’s Episode with Mike Maples We Discuss: 04:02 Does Seed Even Make Sense as an Asset Class? 05:16 Fund Size and Strategy: How to Do a 10x Fund? 08:12 Follow-On Investments: Are they BS? 16:41 Finding Inefficiencies in the Market 26:31 Exit Strategies and Liquidity Events: When to Sell? 35:14 How Floodgate Lost Billions Missing Airbnb and Pinterest 35:43 3 Frameworks for Evaluating Startups 36:23 Case Studies: Zoom and Okta 43:34 How to Truly Analyse Product-Market Fit 45:22 Challenges with Overfunding Startups 50:02 2024 in Review: Company and Fund of the Year 54:25 Predictions for 2025

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Mike Maples?

  To me, in all investing, there's two, right? One is you've got to get paid for the risk you take. And the other is always play offense with your money. Our business is hard in seed, but not complicated. 5% of our checks need to be 100x cash on cash on the first check. 10 to 15% need to be 20x cash on cash on the first check. You achieve that, you're 10x fine. You have to play the game that's on the field, but you don't have to play the way everybody else plays. Ultimately, if you're not finding inefficiencies in the game, you ought to be asking yourself, what am I doing? What am I in this for?

• 0:32Harry Stebbings?

  This is 20 VC in the first 20 VC of 2025. What a show we have in store for you today. Going back to our roots of early-stage venture. And who better to join us than the true OG of seed investing, Mike Maples? As a co-founding partner at Floodgate, Mike has been on the Forbes Midas List. Check this out, eight times in the last decade. Some of Mike's investments include Twitter, Twitch, Okta, applied intuition, and more. I always love my discussions with Mike. I think he's the most thoughtful seed practitioner in the business. But before we dive in today, it can be difficult to build a team that's aligned on everything from values to workflow. But that's exactly what Coda was made to do. Coda is an all-in-one collaborative workspace that started as a napkin sketch.

• 1:17Harry Stebbings?

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• 2:01Harry Stebbings?

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• 2:43Harry Stebbings?

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• 3:25Harry Stebbings?

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• 3:41Mike Maples?

  You have now arrived at your destination.

• 3:44Harry Stebbings?

  Mike, I cannot believe that we finally get to do this in person. Dude, you've known me for.

• 3:51Mike Maples?

  That's right.

• 3:52Harry Stebbings?

  Thank you so much for joining me.

• 3:53Mike Maples?

  I've known you since prior before you got a lot of downloads.

• 3:57Harry Stebbings?

  Oh my God, but literally I think you and my mother were probably the first few. But I want to start with the seed ecosystem today because it feels harder than ever. And I just want to start with the statement of, do you think you can have a seed fund? That's under a hundred million dollars today.

• 4:13Mike Maples?

  You can, as long as you're way less than a hundred million. So I think that you can do investment. Of less than 100K and we talked about this before, right? I mean, I imagine now with your major fund, Harry, you know, you probably don't let angels come in for much more than 100K, right? No way, not a chance. Like if you say, hey, I'm doing 750K rounds and I'm a, I'm an angel and Harry, let's go do deals together. You might say, hey, that's great. Good for you. I'll see you out there. But are you going to do that person any favors? Probably not. No, no, but because with the 500K that someone needs from a, you know, smaller fund, I can get five amazing angels in for 100K each. Yeah, but, but I suppose if, if you're investing less than 100K, let's say,

• 4:56Mike Maples?

  Tim Ferriss comes to you and says, I'm willing to do 100K in some project that could benefit from his brand and publicity. Probably 100%. Yeah. And so if you, if you say, hey, I'm, I'm doing 100K checks. I think that can work, but that's a fund size of probably $10 million, right? That's not 100. I completely agree. Why is your fund 150 when it was 70, 80? Basically to me, your fund size is your strategy. And I guess I'm kind of famous for saying that for a long time. I don't know if I've ever really expressed why that is. So here's why. The power law is real. People don't realize that Pareto is not just 80, 20. It's a curve. It's a continuous curve. So 80% comes from 20%.

• 5:40Mike Maples?

  But it's also true that 4% yields 64% because 80% squared is 64%. And 20% squared is 4%. And so when you have a fund, let's, let's just use ballpark figures. Let's say you have 25 investments in a fund. Your best investment is going to have to return 64% of all returns. That one deal. So if you want a 5X fund, that one investment by itself needs to return, you know, 64% of five times the fund in profit. That's why your fund size is your strategy. Your fund size is basically, it's kind of like if you're a pole vaulter. It's the height of the bar that you set that you promised to jump over. And if you don't jump over that height, you have a bad fund.

• 6:24Mike Maples?

  Did you ever feel like your fund size was not aligned to your strategy? I never really did. I, you know, It's weird, we're better at 150 million than we were at 75. I don't think that was really due to fund size. So like, trace our history. Our first couple of funds were just awesome. Tapped into the zeitgeist and hit the market at exact right time. You know, I was making a video this morning for Josh Koppelman's 20th anniversary. And I just marvel at the fact, we used to hang out at Ilford I O. And just marvel at the fact that nobody realized what a great business opportunity this was. We're like, are we just stupid? Are we just having delusions? Because nobody seems to think this is a good idea. And this just seems like one of the opportunities of the century, just right here.

• 7:07Mike Maples?

  And every time I would see something, I'd show it to Josh. And every time he saw something, he showed it to me because neither of us had any money. Like, we were just seeing all these things. Well, fast forward a few years, I'm on 22 boards. I just didn't have the sharpness of mind. When your phone's blowing up all the time and there's, if you're on 22 boards, it's blowing up all the time. There's always something totally screwed up. You're not as awake to the possibility of what Pinterest could be when you get pitched by Pinterest, right? And so our next two funds at about 75 weren't as good. And I remember at the time having some angst about it. So we flew out to Yale because the Yale Endowment is one of our LPs. And went to Dave Swenson and said, hey, look, I'm going to have regrets.

• 7:48Mike Maples?

  If I don't tell you, here's mistakes I think we're making and what we're going to do about it. And part of it was getting our fund size to an amount where we thought that we could really execute our model well. But we made some changes, you know, we changed the way we did follow on investing. We had a dedicated partner, Iris Choi, do follow ons and that's all. And she's accountable for follow on returns, which more seed funds should do.

• 8:12Harry Stebbings?

  I don't understand that, if I'm totally honest, because the point of the follow on, so we don't do follow ons at all. If you look at the data, we grossly overestimate our ability to pick our winners. But the point is you have asymmetric information and you should be able to pick better because you know the company better. So why would you lose that asymmetric information?

• 8:28Mike Maples?

  Well, yeah, so, so the pro rata rights are a right. And so the high order bit to me in all investing, there's two, right? One is you got to get paid for the risk you take. And the other is always play. Offense with your money. And if you're a seed fund, in theory, your first checks, you're playing offense with your money. If you're not, you've got no business. You're just not in business, right? But there's the occasional situation where, you know, you own shares in a great company, Applied Intuition, Figma, Twitter, Okta, one of these. And sometimes you just kind of know. And yes, the prices get bid up, but there are great firms are coming in. You have a choice whether you want to exercise that right. And keep in mind, it's a right that you have that nobody else has. To me, that would be an example, playing offense with your money.

• 9:13Harry Stebbings?

  The hard thing is when the rounds are priced as they're priced, and your fund sizes are still small, exercising that right can be several million dollars.

• 9:21Mike Maples?

  Correct. What I came to believe was that the first question you got to answer is, do I want to do follow-ons at all? You know, you can't have it be zero. That's one option. But you're giving something up when you do that. You're giving up a right that's worth something. The other way to look at it would be to say, I think it's probably higher than zero. And so then the question is just how much higher. And so we settled on 70% upfront, 30% in reserves. But Iris is accountable for that 30%. Anne and I can't strong armor into trying to, you know, protect some investment that's not working. She's like, look, Maples, you know, you guys are holding me accountable for returns on this basket of money.

• 9:59Harry Stebbings?

  But you know, I think there's so much context that's lost. So like, you know, you could look at the numbers, you could look at the data, but actually, I know the founder better than anyone. I know the speed of contract progression. I know all of these nuances which aren't in the data that Iris doesn't know.

• 10:13Mike Maples?

  Well, Iris knows, right? She's part of Floodgate. She gets to know the founders, and she looks at every investment that we make as if it were her pipeline. And so some of these, like Applied Intuition, she actually bought super Pro Rata. She found ways to get more ownership than our initial first check, because she's like, look, this is the best company in Fund Six, and we should own as much as we can. Here's the thing, right? Most seed funds would say, I know more about this company than the market knows. That's why I'm going to give this company money, even though it can't raise. And in those cases, I used to say, you know, I think you know things that aren't so. Right, so I give the market writ large a lot of credit for knowing what a good

• 10:56Mike Maples?

  Series A deal is. You're talking about firms like Benchmark at Sequoia and General Catalyst and A16Z. If none of them want to invest in a given company in our portfolio, I'm like, okay, who's more likely to be right about the progress of that company? Having said that, if they decide they really do want to invest aggressively, that's a pretty strong signal too, because they're picking not just from the companies we invested in, but from every seed investor. And so they're judging that to be among the very best outcomes of all seed investments. And in those cases, I think you got to at least look at, do I want to exercise my prorata right? You can't just blindly follow Sequoia and Benchmark and folks like that. But if they're saying, hey, I think this is one of the best projects

• 11:41Mike Maples?

  in the private landscape right now, having the right to invest in that is worth something. Do you not think you should just blindly follow if you got a tier one? Uh, no, but that's closer to right than not. If I look at Fund One, what was our top performer? It was Demandforce. Who followed me in Demandforce? Bill Gurley at Benchmark. What was the second best performer? Twitch. Who followed us in Twitch? Ethan at Bessemer. Okay, let's talk Fund Two. What was number one in Fund Two? It was Lyft, who followed us. Naveen at Mayfield Fund, Founders Fund, A16Z. Okay, what was the second biggest winner? Okta. We did that with A16Z, then Sequoia came in. Greylock at Sequoia. And so, one way to think about it is, your follow-on dollars might be best thought of as a subset

• 12:24Mike Maples?

  of where the best firms follow. Because we've had the best firms follow and the companies not do well. Verage sale, Sequoia aggressively followed and it didn't do well. One way I think about follow-on investing is, for a seed fund, it's closer to index investing than people think. And if you say, okay, I'm going to index off of the very best funds, as you kind of point out, more often than not, if that's all you did, you'd have massively better follow-on returns than most. Most firms, if the LPs knew, if they tracked, what's the return on follow-on checks versus first checks? There'd be pitchforks and like revolts in the street. It's so bad.

• 13:03Harry Stebbings?

  Do you agree with the ethos that every check has to be a fund returner?

• 13:07Mike Maples?

  Um, ish. Here's the way I would phrase it. Our business is hard in seed, but not complicated. Five percent of our checks need to be a hundred X cash on cash on the first check. Ten to fifteen percent need to be twenty X cash on cash on the first check. You achieve that, you're ten X fund. Now, the loss ratio is about the same between a three X fund and a ten X plus fund. What matters is the magnitude of your big winners, but it kind of goes back to this Pareto idea. If your best company returns, say sixty-four percent of your fund, the follow-on check in that company is going to probably be a twenty bagger.

• 13:43Harry Stebbings?

  The hard thing with this assumption is that it's, it resumes, you know, outcome scenario planning and you never know how big your winners can be.

• 13:50Mike Maples?

  You never know, but, but you can say, we have a way to hold ourselves accountable. Ann and I, we're measured on what we call picking skill, which is what fraction of our first checks become twenty baggers or hundred baggers? Iris is measured on what fraction of follow-on dollars go in the best companies? And that's completely objective, right? You can just say, here's a stack ranking of the companies by their current value. What percentage of our dollars are in those top companies? That made a big difference in our returns.

• 14:21Harry Stebbings?

  So do you do outcome scenario planning when you're investing?

• 14:24Mike Maples?

  That sounds fancier than what we do.

• 14:26Harry Stebbings?

  Do you think, hey, how could this be a five billion dollar company and work your way there?

• 14:30Mike Maples?

  No, I say, I say, um, for this to make a hundred X on the first check, what would have to be true? The way I think of scenario planning on a first check is I say, okay, given that it's eighty-five percent likely, it's not in the top fifteen percent. You know, if I say every investment is going to be in the top fifteen percent, it's just simply not true, right? It's not grounded in reality. The better discussion to have is to say, look, given that it's eighty-five percent likely to not be the fifteen top percent, how big does it need to be if it is in the top fifteen percent? And is there a world where that could happen? What does that world look like? And this is why, you know, there's all these, I believe, false debates about valuation. Everybody says, well, if the company is awesome, you can pay any price. And I'm like,

• 15:13Mike Maples?

  that's true to the extent that you can make a hundred X on the first check. To me, that's the higher order bit. If we're going to invest one to two million bucks, can we make a hundred X on the first check? And if we're doing it at forty post, like we did applied intuition, okay, they just raised it six billion.

• 15:28Harry Stebbings?

  The thing that I find really worrying with that, though, is that that assumes that companies are going to be $5 billion companies because there's a couple of in-bait assumptions here, which is that you're going to get diluted probably quite a lot, say half.

• 15:40Mike Maples?

  Or more, yeah.

• 15:41Harry Stebbings?

  Or more. And so if we're doing that, it needs to be a $5 billion business.

• 15:46Mike Maples?

  So we forecast that, but, but this is why price matters, right? So it's a lot easier.

• 15:51Harry Stebbings?

  Because our entry price is 25 now.

• 15:53Mike Maples?

  In the case where that's your entry price, that's what the exit needs to be.

• 15:56Harry Stebbings?

  Yeah.

• 15:57Mike Maples?

  Yep. And there's no escaping that. And people say, well, that was then, this is now. I'm like, no, I've studied venture returns for the last 50 years. And the physics of what a good fund looks like has not changed.

• 16:09Harry Stebbings?

  Do you just think then ventures are less an attractive investment category then?

• 16:13Mike Maples?

  I don't think so. I just think that a lot of people have forgotten what the right goal is. I sit there and I say, look, I need to make 100X on my first check. There has to be a way I can do that if everything goes my way. I'm not going to get that by acting like an efficient market operator. To the extent that seed investing is an efficient market, it's not going to be a good business. And so you've got to find inefficiencies for it to be a good business. And then people say, well, what if, what if I can't find inefficiencies? I'm like, okay, then you shouldn't be a seed investor because the idea is not to invest as an active investor in efficient markets, right? Like if you're an active investor, you have to find inefficiencies in the market or you've got no business investing.

• 16:54Harry Stebbings?

  I mean this with total respect. You sit in the middle of San Francisco, in the heart of the seed market, in the most efficient market. It was inefficiencies when you and Josh started and it was those early days. Neither of us are in inefficient markets.

• 17:07Mike Maples?

  The mistake that people make is to think of startups as a quote unquote market. More of the companies are fully priced today than they were when Josh and I got started. But to me, that's just part of the fun of it. That's part of the spirit of the game is to see what other people aren't seeing, or at least to try to do that. Or maybe occasionally to get into something that not everybody can get into. But to me, that's the fun of it. It's, it's like solving a puzzle or a riddle. There are so many startups. There will always be 30 or so every year that are great.

• 17:37Harry Stebbings?

  Will you do a much smaller check if you think it can still be 100 bagger?

• 17:41Mike Maples?

  I'm more likely to do that, yeah.

• 17:43Harry Stebbings?

  So you're right. Okay. So you can get 100K in a super hot.

• 17:47Mike Maples?

  I'm unlikely to do that. Like I need to think that it could move the needle on the fund. You know, I need to, you know, probably about as low as I would go is half a million bucks.

• 17:55Harry Stebbings?

  Have you lost great companies because of that?

• 17:57Mike Maples?

  That's a great que- you know, I, I can't think of a single time.

• 18:01Harry Stebbings?

  It's been our biggest mistake. I look now, we could have done 11 Labs, which is a three billion dollar company, probably the best company coming out of Europe now.

• 18:09Mike Maples?

  Yeah.

• 18:09Harry Stebbings?

  Could have done it 25.

• 18:10Mike Maples?

  Would it have been 100 bagger?

• 18:12Harry Stebbings?

  Uh, now 150.

• 18:14Mike Maples?

  Okay, you should have done it then.

• 18:15Harry Stebbings?

  Yeah, yeah, yeah. And we could have done a 250K check.

• 18:18Mike Maples?

  I believe that there's always, and I don't know what your fund size was back then, it's probably.

• 18:22Harry Stebbings?

  30.

• 18:22Mike Maples?

  Okay, you should have done that deal.

• 18:24Harry Stebbings?

  Yeah.

• 18:25Mike Maples?

  I like to say, you know, our business is hard, but not complicated. 100 baggers on the first check, 5% of the time. In order to do that, you have to, you have to pick opportunities that can be big enough if they work. But you also have to care somewhat about the price.

• 18:38Harry Stebbings?

  How do you think about these inception rounds? Ad Simgul, some inception rounds, which is like the 10 million dollar starting round. We see many, especially in AI, that are much more than that. How do you think about them?

• 18:49Mike Maples?

  Can it make 100X on the first check?

• 18:51Harry Stebbings?

  Will you do these rounds?

• 18:52Mike Maples?

  If I think it can make 100X on, if it was Cass or Unis, I would. But I'm like, okay, so like this will happen sometimes. Some of our younger folks will come to me and say, hey, look, here's a round that's done at 10 at 40 post. And we did applied intuition at 10 at 40 post. Then I say, okay, is the founder Cass or Unis? Because I think Casser is one of the best founders I've ever worked with. They're like, well, I don't know if he's Cass or good. But I'm like, okay, it's not worth 40 post. You know, 40 post was like a real stretch for us. And, and we're like, this company is going to have to be worth north of $5 billion, at least for that bet to have been justified. Because here's the other thing, Harry, is let's say that I, I thought, okay, I can't make 100X, but I can make 20 and he's that good. There's an opportunity cost, right? My fund, I only get 40 shots on goal.

• 19:38Mike Maples?

  And if I take one shot that I don't believe has any chance of being 100X, now I have 39 shots on goal. And I have one fewer way to make 100X. If I'm going to raise 150 million dollars, I need to know what game I'm playing and I need to be honest about it and play that game with integrity. There's a few things that give you a real advantage today that didn't matter as much then. I think today, having a temperament advantage makes a big difference.

• 20:03Harry Stebbings?

  What do you mean a temperament advantage?

• 20:05Mike Maples?

  Like in 2021, we're seeing all these projects and they're they're raising money at 30 and 35 and 40. Ann and I are just looking at each other like, we don't have to do that. Some of the young associates and principals are like, we haven't done any deals this year. I'm like, that's okay. You know, we haven't found any that meet our conditions. I think that Ann and I have done this long enough to be like, okay, we don't have anything we need to prove to each other. And we don't need to, you know, have points on the board this quarter, this month, this year. Silicon Valley will make more. We'll be there. And so I spent a lot of time, as does Ann, thinking about what's our circle of competence? What are the situations where we've made money historically? And what are the situations where we think we're well set up to make money in the future? And we need to see projects that meet those conditions.

• 20:51Mike Maples?

  Did you agree with Gurley that you play the game on the field or not? You have to play the game that's on the field. But what if the field is not your conditions? Well, if the field's not your conditions, you just have to be more discerning. Buffett said it well once, investing is like a game where there's no called strikes. And so you just let pitch over pitch go by. And everybody says, swing you bum. Everybody else is swinging. And you say, no, I don't have to swing. I don't like, I don't see my pitch. I'm just going to wait until a meatball comes over the plate and just swing at it with all my might. And if one doesn't come, well, I'll wait. Some will someday. This is a great way to think about pacing because in 2009, everybody was in the fetal position. And Ann and I were seeing deal after deal where we're like, this totally meets our criteria.

• 21:33Mike Maples?

  This is awesome. Ann funded Lyft at five and a half million post money. How big was the check? Uh, she wrote 750K. So she did pretty well on that, right? She made like, um, 250X maybe on that investment. But we were in an environment where people were afraid to invest. People thought the world was going to come to an end, but because we were like, okay, this is the type of project that we think is attractive. When we see one of those, we don't care what the market's doing. We're going to, we're going to say yes to those. Similarly, in 2021, I only made one investment the whole year, uh, this company, uh, Hadrian. Why is that? Well, I just didn't find any companies that met my criteria. And so one thing that's interesting about having a circle of competence, and I actually learned this from.

• 22:15Mike Maples?

  Buffett and Munger is if you know what your circle of competence is, if everything's systematically overpriced, you do fewer deals because fewer deals meet your conditions. If everything's systematically underpriced, you do more deals. But that's the situation you want to be in.

• 22:29Harry Stebbings?

  How do you think about when playing the game on the field is just fundamentally a new game? And what I mean by that is, you know, when you look at AI today, the prices are nuts. The fervor, the excitement is nuts. But if this is the next generation of technology, as everyone is told, and this is the most exciting time in 30, 40, 50 years, Banyos is the most exciting time in his career, play game.

• 22:49Mike Maples?

  You have to play the game that's on the field, but you don't have to play the way everybody else plays. Ultimately, if you're not finding inefficiencies in the game, you ought to be asking yourself, what am I doing? What am I in this for? That's what we're paid to do. We're paid to find opportunities that are going to make money. Nobody's interested in indexing the broader overpriced seed market. That's not a good business. And so you got to find attractive opportunities. For us, a lot of that in the AI arena has been some of these enterprise, you know, so Applied Intuition was one, a more recent one was Cicero, which is kind of more focused on legal tech that, but we had a very specific set of conditions for what kinds of AI investments we would do and not do.

• 23:34Harry Stebbings?

  Were they crazy priced?

• 23:35Mike Maples?

  Well, Applied was expensive. It was 40 post.

• 23:38Harry Stebbings?

  When you look at your best deals, have they been the most expensive?

• 23:41Mike Maples?

  No, the reverse is true, but I don't know if that would still be the case.

• 23:45Harry Stebbings?

  Were they hot?

• 23:46Mike Maples?

  Well, Applied was hot. Casser would have raised money from anybody he pitched. He was that good and his idea was that good. He was that well-prepared. So he pitched two firms, got term sheets from both, decided to work with Mark. Mark joined the board and I kind of said, okay, probably the series B round is a little bit de-risked here. And so I should probably put in as much as I can get in on the round. And so that's what we did. And then immediately, as soon as our check cleared, Iris was trying to buy more.

• 24:15Harry Stebbings?

  Have you ever done a deal where you bought common, not prats? We're seeing more and more

• 24:19Mike Maples?

  Yeah, I've done that. Yeah. And then the other thing I've done is I've, I've been in a situation where the founder wanted me to do something with them. And I said, I'd like to work with you too, but the price is too high. And this is one of the things about convertible notes is I could say to that person, look, you know, you can issue convertible note at any price you want. You know, if you're raising at 20, you can sell me half of it at 20 and half of them at five. They might say, well, other people may not like that very much. I'm like, I understand that. But like you could, you, you can decide, but I'm not gonna pay, I'm not gonna pay that price that everybody else is paying. You know, you learn quickly whether they value your involvement in a differential way or not.

• 24:59Harry Stebbings?

  On the commons and prats, so you would buy commons because we had Nick Charles on from notation. It was like, we think you should be more aligned. You should buy common. I really like Nick, but I think that's bullshit.

• 25:09Mike Maples?

  I would, if it made a difference meaningfully in my ownership early, I'd do it.

• 25:16Harry Stebbings?

  It's the difference in winning and losing the deal.

• 25:18Mike Maples?

  It's not so much that. It would be, maybe I can say to the founder, hey, look, this is a way for us to have some type of a joint gain. I know you need to get the price you want to get. There are reasons that you want to get that, but maybe we can get some type of a blended price if I buy preferred plus common. And then I own more, I'm taking more risk. But if I believe in the company, I've never made money or lost money based on common or preferred, ever in the ones that worked.

• 25:44Harry Stebbings?

  Will you do uncapped notes?

• 25:46Mike Maples?

  Only in very rare cases.

• 25:48Harry Stebbings?

  Have there been any?

• 25:49Mike Maples?

  We would have done one for applied, like right after the series A, we wanted to own more. And so there are times when doing an uncapped note works to your favor. If you say, I have so much conviction, I'll pay a discount to whatever the next price is. I don't care. You know, otherwise, why is the founder going to give you any kind of preferential treatment when the round comes together? If you believe in the company, you got to position yourself for the next round.

• 26:13Harry Stebbings?

  Have you ever done a Chris Saka and done a nom nom? I call it the nom nom, which is when you go to Twitter employees and you just eat up, eat up, eat up everyone's early stock.

• 26:23Mike Maples?

  I've never done that, no. I was tempted to at times, but I never did.

• 26:26Harry Stebbings?

  You said there about kind of Anne's incredible investment, 750 into Lyft. You got to sell for that to be a 250X, respectfully, Mike, because I don't know what Lyft's market cap is today, but it wouldn't have been a 250X if you sold today. How do you know when's the right time to sell?

• 26:40Mike Maples?

  Yeah, so I think that there's a couple of things. And by the way, this is something we haven't really talked about yet that is good for seed. So let's imagine it's 2015. Lyft's stock at the time in the private markets was about 25 bucks a share. It was worth more than it is today by a meaningful amount. At the beginning of the year, we said, you know, we need to sell some of this. We're behind a billion and a half dollar preference stack. We're in this thing at a five and a half million dollar post my valuation. We're competing against Travis Kalanick, who's a freaking maniac. He's not a fun guy to compete with. This thing is going to impact our fund, right? We are way in the money on this thing. And so Anne had a Post-it note on her monitor that said IQ test.

• 27:22Mike Maples?

  And we put it on in January that year. And the IQ test was I need to find a way to sell some of our Lyft stock. So she ended up selling a fair chunk of it. I don't think half of our stake, but a fair amount in 2015. So one thing I think that a lot of seed

• 27:35Harry Stebbings?

  What price?

• 27:36Mike Maples?

  25 bucks a share. Let's say 5 billion, something like that. Yeah. It was really good, like the highest it ever got.

• 27:42Harry Stebbings?

  That returns the fund straight away, no?

• 27:44Mike Maples?

  Yeah. Oh, yeah. So we were like, okay, we need to sell enough to return all of fund to. So she did. One thing that I think a lot of seed funds don't get is there's two ways to make money. One is on entry pricing inefficiency, but the other is to arbitrage exit price inefficiency. And like with Lyft, A16Z was in Lyft. They couldn't have done that because the problem is A, it would have sent a signal and B, selling a couple hundred million bucks or whatever, it doesn't matter to A16Z. It doesn't affect their fund. And so one of the things that seed funds can do is they can start to say, hey, is the market about to value this thing as if it executes perfectly for all the next five years?

• 28:27Mike Maples?

  Because the capital markets are such that there's so much money that a lot of these companies, no matter how exciting they are, are going to get fully valued as if they're perfect for a very long time.

• 28:37Harry Stebbings?

  Do you think there's exit price inefficiency today, given the incredible excitement around AI?

• 28:42Mike Maples?

  So that's the thing, right? Like, this is the other thing I found, is that when the times you should be selling into some of those rounds, everybody wants a share of the company. What I learned was that it's actually a win-win for the founder, because you say to the founder, you can't just do it on the fly, you can't be transactional. But if you say to the founder, hey, look, let's be realistic here. You're better off in the fullness of time if certain players are in your cap table and not a seed fund. Fidelity, or, you know, folks like that. So what do you say? We get strategic about it. How about we put ourselves in a position where we can get somebody like that in when you raise your next round if it clears a certain threshold? What usually ends up happening is at first they're like, hmm, I don't know. But what ends up happening in reality is by the time the round comes together, the

• 29:27Mike Maples?

  founder is coming to you saying, dude, you got to do me a solid. You said you were going to sell. I need you to sell more. Because everybody becomes pigs. Everybody wants in. Nobody pays attention. So ironically, the times that it's easiest to sell in these really up rounds is probably the time you should think seriously about it when you're a seed fund. Iris came up with a term for it, actually. We call it an initial liquidity event. So it's an event that has the same impact on fund economics as an IPO. So it can't be just, you know, 10 million here, 15 million there. It's got to be something where it has the same impact on your fund as if the company went public.

• 30:04Harry Stebbings?

  The counter to that, if we were kind of just jousting, and so actually would be, Brian Singman often has talked to me before about the value of the next double. And actually, a company going from two to six billion is much easier than having another four billion in enterprise value gain in the rest of the portfolio. And actually, it can happen quite quickly. And if you look at Bessemer selling all of their Shopify stake at whatever it was Two to three.

• 30:27Mike Maples?

  Yeah.

• 30:27Harry Stebbings?

  That was probably the worst financial decision ever. They will say the same, I'm not.

• 30:32Mike Maples?

  Yeah. You never make a trade that you don't somewhat regret.

• 30:36Harry Stebbings?

  But you crushed it with Lyft, Mike.

• 30:38Mike Maples?

  Yeah, but you know, Lyft, Lyft traded up to like 75 when it went public and lockup, we got out at like 75. And so we would have done even better, but it was still the right decision. It was still the right risk adjusted decision. Once your funds in the carry and you're in the money and it's like, you've still got that upside.

• 30:57Harry Stebbings?

  Does your, does your psychology change when you're in the money?

• 31:01Mike Maples?

  I think it does a little bit, but I think that, that the other thing is it's like you get into these situations where the variance in the potential outcomes is so great. So I agree with Brian Singerman in one sense, which is some of these things can ride a lot farther and higher than you think. I agree with that. The issue though, is that sometimes both can be true, right? You can, you can be in a situation where you're a hundred times in the money in five years. And no matter how good the company is, it's just valued to absolute perfection. In those cases, I look at it like even if the Brian Singerman outcome happens and it doubles again, or even quadruples again, just have enough stock so that, you know, you're going to benefit from that upside too.

• 31:45Mike Maples?

  I just think that when you're, 100 baggers are pretty rare, right? I keep track of them. So I have a list. I can show you on my laptop, right? 100 baggers of the last 20 years.

• 31:54Harry Stebbings?

  How many have you got?

• 31:55Mike Maples?

  There's a little over a hundred that are exited and there's a little over a hundred non-exited that I track. Most of them I don't track because I don't think they're real, but.

• 32:03Harry Stebbings?

  How many hundred baggers have you got?

• 32:05Mike Maples?

  Uh, let's see, how many have I got? I've only got like three or four. Twitter was a little over 300X. Anne gets all the credit for Lyft. That was 205X. Applied is probably encroaching on 100X in the first check, which got close, but not quite there. It got to 94X. And there's a few others that I think have a shot.

• 32:25Harry Stebbings?

  Would you start to sell applied when it gets to 100?

• 32:28Mike Maples?

  Yeah. But here's the key, you've got to do it in a way where you're not just being selfish about it. You want to do it in a way that, in fact, we did sell some applied, but we did it in a way where it was in full cooperation with Kasser, right? I was like, I'm not going to do this behind your back, or I'm not going to do this against your good wishes. And so is there a way we can make this a win for you? But you can't have that discussion the day the round closes, right? You've got to, you've got to be like, hey, here's how I'm seeing things. Am I making sense? You know, Kasser is a grown up, right? He's like, hey, I get it. I understand. You've got a business to run. So do I.

• 33:02Harry Stebbings?

  A hundred percent. The best founders generally do understand.

• 33:05Mike Maples?

  They do, especially if you don't surprise them and you're just not greedy and transactional about it.

• 33:09Harry Stebbings?

  Or do it behind their backs.

• 33:10Mike Maples?

  Yeah. And if you say to them, if you say to the founder, hey, look, can we agree that all things being equal, this would be a good investor to have in your cap table after the next round? And this is a good way for you to get them without getting crazy massive dilution? What do you say we try to engineer those circumstances?

• 33:26Harry Stebbings?

  How does your psychology change when you're in the money?

• 33:29Mike Maples?

  Hopefully not much. I think that, that sometimes the place where I would also agree with Brian Singerman would be sometimes you get in the money and you lose sight of the fact that you can get a lot more in the money.

• 33:39Harry Stebbings?

  I think more, you see the side of you can be more in the money and you lose downside. I always think that, you know, we're very close to the guys at Secor and the team there. I think the reason they're so successful is because they've done so well, they're not fearful of downside. They just see what it could be. And it almost enables them to have this enlarged perceptual vision.

• 34:01Mike Maples?

  I think it kind of goes back to the first principles, right? You can make money on the buy and you can make money on the sell. And what most people don't understand is that the seed funds are actually better positioned to make money on the sell than anybody, better positioned than the multi-stage by a wide margin. That requires though, for the seed manager to be much more sophisticated than most are being. Most are just like, should I sell? Should I not sell? What you want to do is have an opinion, right? And you want it to be grounded in the facts. Why do I collect information on the 100 baggers? Because I'm like a train spotter. I'm like, you know, in Britain, right? You have those train spotters.

• 34:35Harry Stebbings?

  Do you like the structure to the selling? So we had Avi from On and he's like, I sell a third, I'm going to butcher it, but a third in a growth round, a third pre-IPO and a third post-IPO. There's a real structure to it. Do you like that kind of structure or do you think it's a case by case?

• 34:49Mike Maples?

  I think it's case by case. I think, I think you should say to yourself, okay, there was a time when we were sober. And we kind of said, if the following things happen, we might be sellers and that's happening now. So.

• 35:01Harry Stebbings?

  What was the least sober decision you made?

• 35:04Mike Maples?

  Most of my mistakes have been in our early funds, we followed on in too many rounds and the companies that weren't going to make the difference.

• 35:12Harry Stebbings?

  What was the least sober decision?

• 35:14Mike Maples?

  Our biggest failures have been failures of imagination. You know, it's like when I passed on Airbnb, date a dog.

• 35:20Harry Stebbings?

  Do you blame yourself for passing on Airbnb though? And my reasoning around that is like, it was a nuts idea. He wasn't from a blue chip company. It wasn't a straight down the fairway deal at the time. It was cracker and you had to see some real.

• 35:33Mike Maples?

  The way I look at it is I need to understand what I didn't see and I need to be really tough minded about that. That's not about beating myself up. It's just saying, is there a set of frameworks that we embrace today? That would have caused us to say yes, but we do that, not just with Airbnb, we do it with all the hundred baggers. We do these hundred bagger deep dives. We did one on Marketta. We did one on Zoom. We did one.

• 35:58Harry Stebbings?

  What do you learn from them?

• 35:59Mike Maples?

  So we, what, one of the things we track is, okay, if you'd said yes at the seed round, what kind of a multiple would you have made? How soon would you have made it? What kind of a dilution would you have seen? Then you say, okay, here's our frameworks. One of our frameworks is, did they have an insight? One of our frameworks is, did it harness an inflection? One framework is founder future fit.

• 36:19Harry Stebbings?

  What is founder future fit?

• 36:21Mike Maples?

  So like, I'll give you an example. So like Zoom, Zoom, we didn't see, but started out as this consumer, every man conferencing thing called SASB. And that's when you would have had to invest in the seed round. So did it really harness an inflection? Hard to argue. Did he have a fundamental insight? Hard to argue. His initial vision for the product was just wrong. But like Eric had been at, at Cisco as part of Webex for 10 years. He'd been thinking about video conferencing all the time. So his founder future fit was actually quite good. So like what I founder future fit is it comes from William Gibson. He says the future is already here. It's just not evenly distributed. And what he means by that is that great startup ideas don't come from trying to think of a startup.

• 37:04Mike Maples?

  They come from a founder who's living in the future and who notices what's missing in the future and builds what's missing in the future. And it reminds me of Isaac Newton. He was supposedly at a party asked, when the apple fell on your head, why is it that you all of a sudden had this insight about gravity? And Newton said, it's because I was thinking about it all the time. And so the founders have founder future fit, they're like obsessed trainspotters in a rabbit hole, thinking about this stuff all the time.

• 37:34Harry Stebbings?

  Do you know what I find really hard is I've learned from you so much over the years, so many things, literally, but you literally shape something I do every day, which is I always ask, what's your insight development? How do you see the world in a way that's different to other people seeing it? The challenge that I have, Mike, is that so few can articulate it well in any way. And so even if they have it, I worry that I'm missing it because they can't articulate it.

• 37:57Mike Maples?

  It's really hard, right? I think there's a few, apart from just, do you think the founder's great? There's a few signals that are interesting, right? One is, does it harness inflection? Lyft harnessed the iPhone 4S had a GPS chip in it. So that happens outside of the startup. The second thing we look for is what do you know about the future that's non-consensus and right? And then the third is founder future fit. One of the things that I've learned in looking at these 100 bagger studies is some of these things become clearer later. And you have to figure out what's the real signal at the time you have to decide. And so you want to get a time capsule of that startup. You want to know what was the founder like at the time? What was the pitch deck like at the time? What was knowable about it at the time?

• 38:39Mike Maples?

  And quite often I've found in doing these that founder future fit is the best signal. It's the most discernible way to figure out if the founder's likely to figure this out.

• 38:49Harry Stebbings?

  And just so I get it, is the background of the founder can answer it to what we believe successful founders in this space will have?

• 38:56Mike Maples?

  Yeah. So like I look at it like. Almost every great startup is pursuing a future that's meant to be. And there is usually one team that's ideally suited to that future. So I'll give you a couple of examples, so like Okta. So I meet Todd McKinnon and he's with Todd and Freddie. And he says, I've been at Salesforce for all this time. All the early adopters of the cloud use Salesforce. And now they're using other cloud apps. There's going to be identity management problems for cloud apps. And I'm going to build a system. And I'm the VP of Engineering at Salesforce. These customers trust me. I know what their problems are. And I'm like, okay. Good pitch. Pretty damn good pitch, right? And I'm like, okay, if anybody can do it, he can do it. And if anyone knows, he knows. If anybody knows, he knows.

• 39:41Mike Maples?

  So what was true about Todd? First of all, he was living in the future with those customers. And when you live in the future with those customers and you're intrinsically motivated by that future, you're more likely to understand what you should build, number one. Number two, you're more likely to attract early believers because you're more credible. And so I look for founders who are living in a valid future, are intrinsically motivated by the future they're pursuing, are more likely to notice specifically what to build and are more likely to convince people to believe that they've built the right thing. If that team is present, I say, is this team the most likely team in the world to make this future real the quickest? Does that exclude first time founders who've not done anything before?

• 40:25Mike Maples?

  Uh, no, because let's take one, uh, Marc Andreessen, right? He was at the University of Illinois. He'd never run a business before. He was in a supercomputer lab. At the time, the internet had just been made legal for business. So it could only be used in universities and academia. And Mark is trying to make a collaboration software for a team of researchers. And so he starts tinkering with the early technologies of the world wide web. And he creates a browser, but was Mark going after a market for browsers? Heck, no. Mark didn't know what markets were at the time, right? He was just trying to build what was missing about the internet. He was, he was trying to make the internet immediately more useful for him and his team. So why is that important? Well, Mark was living in a time machine.

• 41:10Mike Maples?

  It turns out that he was using machines similar to the machines everybody would have soon. He was on a network similar to the kind of networks everybody would be on soon. And he was using the type of web protocols everybody would be using soon. And so his knowledge about that, that domain knowledge of the future was more important than any business person's knowledge of improving the present. Everybody thought AT&T is going to build a digital highway or that Time Warner or Microsoft Network or AOL, or maybe the government should build the digital superhighway. Everybody just assumed it would be a top-down extension of what is. And nobody assumed that some kid making minimum wage as a programmer in a supercomputer lab would have the better answer.

• 41:52Mike Maples?

  It wasn't going to be tops down, it's going to be a messy bottoms-up web of stuff. And that was the paradigm, that was the winning paradigm. Mark's advantage was not born of his experience in business, it was born of his experience with the future.

• 42:05Harry Stebbings?

  Where is your biggest weakness in how you analyze founders today?

• 42:08Mike Maples?

  My biggest weakness has always been that I'm too optimistic about whether people can pull it off. It's just exceptionalism is so rare and so few people are truly great. And so few people just have the willpower and the grit and just the...

• 42:24Harry Stebbings?

  Will you invest in people if you don't like them?

• 42:26Mike Maples?

  Oh yeah, yeah, there's nothing to do with it. There is an aspect of great founders quite often where they're disagreeable. Because when you think about it, a breakthrough startup is a provocative act. It's a disagreement with the present. And the more of a breakthrough it is, the more disagreeable it is. Quite often, these founders are disagreeable people. Because the present will fight back and it won't fight back fair.

• 42:49Harry Stebbings?

  What do you do when you lose faith in a founder? When you invest in a company, they don't turn out to be what you thought?

• 42:55Mike Maples?

  I have this saying, detached with love. So I'm like, hey, you know, it seems like I'm not able to help much here. I'm not just going to sit here and tell you that you're not doing a good job and that we disagree about everything. And so that's okay. It's nothing personal. And if you change your mind and I can be helpful, let me know.

• 43:12Harry Stebbings?

  Do you find the messy middle is where the most value often lies? I've found that, you know, the winners, very clearly from the offset, are in the messy middle because the ones that really break out clubhouse, hop in, be real, it's unsustainable. And then the losers are very clear. The winners immediately obvious.

• 43:31Mike Maples?

  No, but you can't affect it that much regardless. I've never worked with a company that got product market fit that wasn't wildly successful. And so that's kind of the only thing in the early days.

• 43:41Harry Stebbings?

  I didn't get that. I've heard you say that before, but I have several companies with product market fit, which are not successful. We mentioned them clubhouse. I got product.

• 43:50Mike Maples?

  I don't think they have product market fit.

• 43:51Harry Stebbings?

  Really?

• 43:52Mike Maples?

  No.

• 43:52Harry Stebbings?

  I mean, they have millions of users engaging daily for hours at a time. I would say that was product market fit.

• 43:59Mike Maples?

  Do they still?

• 44:00Harry Stebbings?

  Absolutely not.

• 44:01Mike Maples?

  No, but so they didn't. They just had a temporary, they were like a solar flare.

• 44:05Harry Stebbings?

  So then how do you sustainably define product market?

• 44:07Mike Maples?

  You know, it's funny. I was talking to a Bajubat last week, you know, one of the co-founders of Robinhood.

• 44:13Harry Stebbings?

  I like him.

• 44:13Mike Maples?

  Love that guy. We were talking about product market fit and he goes, when we got it at Robinhood, I was like, oh, that's what product market fit looks like. And so.

• 44:22Harry Stebbings?

  I just think it's like stages. It's like a chapter in a book and you have to continuously own the next product market fit chapter.

• 44:28Mike Maples?

  But like if we go back to the kind of the notion that I think you were getting at, can I help the founder get product market fit? Not that much in my opinion. There are some things I can do. Part of what I can do is addition by subtraction. I can remind them that, you know, no matter what everybody's saying, that is the thing. It's like Vince Lombardi used to say, winning isn't everything. It's the only thing. Product market fit isn't everything. It's the only thing. Get product market fit, eliminate distractions. What can I do to help? And last time we talked, you said, this is the bottleneck between us getting strong product market fit and today, is that still the case? How can I be helpful there? The other thing though, is, and I've heard some of your prior guests get to this, being a founder is not a fun job. It's almost like being an artist, you know, it's almost sometimes.

• 45:12Mike Maples?

  Is almost more of a curse than a blessing. And it's almost like you have to do it because you're called to do it. But it's a hard freaking job and it's not a fun job. It's a it's a shit job.

• 45:22Harry Stebbings?

  One of my biggest concerns right now is that we are seeing a a generation of growth ambassadors. Or funds that were series A who've now raised billions and billions. Who assume that the efficiency of dollars is the same regardless of company stage or how much they have raised. And so they go, fuck it. We need to deploy 50, 75, 100 million. Sod it. Let's put it in this company that's doing really well. I know we're paying well ahead of time. I know we're paying two years out. But we can still see a three X if we pay three billion from here. Sod it.

• 45:53Mike Maples?

  Yeah.

• 45:54Harry Stebbings?

  But when you drop 100 million into a company, suddenly they do 10 other things. They are. And that 10 billion exit massively reduces in likelihood because they're now way less.

• 46:03Mike Maples?

  Right. And this is why I really appreciate some of these founders that I've worked with who've done a good job, you know, like Kasser. I mean, he has enough money to do whatever the heck he wants. But in fairness to the CEOs of those companies. A lot of them never had any influences around them that said, hey, you're about to raise a bunch of money. That's cool. But like, let's not you and I be breathing our own fumes. We don't have product market fit yet. We we don't have an objective way to say, yes, check the box. We have product market fit. And so if we're not careful.

• 46:34Harry Stebbings?

  Or even if we do have product market fit, taking in 150 million dollars, you've got to find a way to use that.

• 46:40Mike Maples?

  Yeah. But what but what usually happens that's even worse. Is these companies raise a lot of money before they have legitimate product market fit and they hire ahead of achieving it. And now all of a sudden they're doing a bunch of wacky nonsense. That's not contributing to product market fit and they just become culturally broken. Right? They just they just end up never developing any muscle memory for what an attractive customer is. How you should find one, what which ones to avoid, what features are going to be added to the strategy, which ones won't.

• 47:09Harry Stebbings?

  What happens to the generation of companies that have raised these 100 million dollar plus rounds? At billion dollar plus prices, but he didn't really have product market fit. What happens?

• 47:18Mike Maples?

  Um, I think most of them won't clear their preference stack.

• 47:21Harry Stebbings?

  But they've got five years of runway. Seven years runway. So they just kind of keep going and GPs are just telling LPs it's fine. It's fine. They're

• 47:28Mike Maples?

  The problem is there's an element of this where everybody in the game has an incentive to keep, keep the plate spinning. It goes back to the first thing we were talking about. My business is hard. Your business is hard, but it's not complicated. Hundred bagger on the first check and it's like, if we get one or two or three of those in a fund, we're going to be successful.

• 47:47Harry Stebbings?

  Have you ever had a company without product market fit be successful?

• 47:51Mike Maples?

  Oh, yeah.

• 47:52Harry Stebbings?

  What one comes to mind?

• 47:54Mike Maples?

  We had one that was struggling and we were about out of money. Co-tweet. And so this is kind of a funny story, actually. So talk about in the US football, right? I have this expression, I call it a forward fumble. So Steve Anderson, a baseline is talking to this company, co-tweet and he's like, hey, you know, what do you think the valuation ought to be? And I said, I don't know, man, they don't have a lot of traction. I don't think I would do much more than three million pre if I was you. So Steve comes back and says, they accepted our offer. And I was like, what do you, what do you mean our, our offer? I thought you're just looking for my just side about just what the price ought to be. I didn't say I was offering anything. He's like, come on, dude, you know, like you can't,

• 48:38Mike Maples?

  you can't leave me hanging now. Jesse's like, we're both in this thing. And so I'm thinking, shit, I really like Steve a lot and I think he's really, really a great guy. Brilliant. I was like, I'm kind of interested in it, I guess, and I don't know. And I need to think about this. At least the price is pretty good. So we do this thing together. You know, I probably put in a few hundred thousand bucks and Steve put in more. Not that much later, co-tweets pretty much out of money. And Steve's like, hey, we kind of got this problem. We're almost out of money. And I'm thinking to myself, damn it, you know, I can't believe I let him talk me into this. This is the dumbest, I'm never going to make this mistake again. And then next thing I know, Steve says, hey, well, it looks like Exact Target is going to buy this company.

• 49:21Mike Maples?

  At the time, I've never heard of Exact Target. They're going to buy them for stock. And I'm thinking to myself, great. The last thing I, at least we're not out of business. But now I have Exact Target stock that I've never heard of, some company in Minneapolis. Exact Target buys them and then Exact Target goes public and I'm like, wow, they're going public and I'm like, how soon can I sell, right? Cause I know nothing about Exact Target. Well, before the lockup expires, Salesforce decides to buy Exact Target. So we end up making 23 times our money. It was like when you fumble the football, it just bounces end over end up the field, just keeps going and going and going. And every time we're like, oh man, I wish I could get out of this. We couldn't. And it just kept going.

• 50:02Harry Stebbings?

  I love that. So listen, I want to do 2024 in review. I'm going to say a couple of different statements and you're going to give me your thoughts. What was the company of the year in 2024?

• 50:11Mike Maples?

  SpaceX. They are starting to blast a lot of rockets into outer space. I mean, what they have done is just so incredible and I don't have to squint too hard to see a world where they're the most valuable company in the world. I mean, because if you're the most important, dominant company in outer space, that's a big deal. You look at like North Carolina, you know, has this hurricane. We've passed some, what was it? $40 billion build broadband better bullshit bill. Nobody's built any broadband connections I'm aware of. And everybody's like, Elon, can you help? Puts his satellites above and like, you know, kind of makes it free. You know, he helped with Ukraine. You know, it's like.

• 50:50Harry Stebbings?

  Do you worry about the power that one man has? He controls the digital town hall. Now with Trump, he just controls the physical town hall.

• 50:56Mike Maples?

  Well, that's a different question, but, but like, if you're asking me the company of the year, it's SpaceX in my view. You know, if, if, if people are saying, look, the, the problem with SpaceX is they're too powerful and that they dominate the skies and all that stuff. To me, that, that kind of underscores the year they had, but, but also just like the impact that they have, right? Just their ability to just provide broadband arbitrarily anywhere, anywhere in the world. And, and by the way, it's not going to be just broadband. They're going to be able to launch payloads of all kinds of things. Bajubat's new company, he's trying to have these satellites that have these solar panels that beam lasers down to earth, you know, for energy anywhere at these base stations. And so who's going to put those things up into outer space? It's going to be SpaceX, you know, putting the

• 51:41Mike Maples?

  payload out there. And so. You know, you get to a world where SpaceX becomes a platform dominant supplier for outer space, and I think that's pretty, pretty impressive.

• 51:51Harry Stebbings?

  What do you think was the fund of the year?

• 51:53Mike Maples?

  I'm gonna go with 20 VC. Dude, $400 million fundraise, this bump for the win, man. I mean, I mean, you're just barely not even a kid. And, uh, you know, and you're doing this in Europe and I mean, 400 million bucks in Europe? That's something. You should be proud of what you did.

• 52:10Harry Stebbings?

  I remember when we met in the battery years ago, I was desperate for you to give me a job.

• 52:17Mike Maples?

  Well, if you had come to America, I would have done it.

• 52:20Harry Stebbings?

  Very, very kind of you.

• 52:21Mike Maples?

  It's interesting. I, I don't know if, if you feel this, but some situations I've had when things worked my way, you didn't always let yourself be fully aware of it at the time. You didn't stop and say, hot damn, that was something. I really did something there. And, you know, maybe you're not doing that when it comes to this 400 million dollar fund, but you give yourself some time to come up for air and be like, hot damn, I did that.

• 52:45Harry Stebbings?

  I feel the desperate responsibility.

• 52:48Mike Maples?

  Yeah.

• 52:48Harry Stebbings?

  Like it's huge, huge amount of money, which I'm very grateful and appreciative of. But like the work starts now.

• 52:54Mike Maples?

  Yeah, but also it was legendary. What you did was legendary. You still have a lot to do. Every now and then it's good to come up for air and take it in.

• 53:04Harry Stebbings?

  From you, that means the world to me. Founder of the year?

• 53:06Mike Maples?

  Elon. And, you know, an investor of the year as an homage, I'd say it's Charlie Munger. Because I, I think the world's really gonna miss him. Probably of all the investors, you know, I'd say that, that, uh, Charlie Munger and Howard Marks have influenced my view of how to be a good all around investor more than anybody.

• 53:28Harry Stebbings?

  How has Howard Marks most influenced you?

• 53:30Mike Maples?

  His memos for Oak Tree Capital are just insane. A lot of the ideas, um, in Pattern Breakers were a realization that startups are all about being non-consensus and right, but in a much more massively disruptive way. And so Howard looks at it through the lens of second level thinking and knowing something that the market doesn't know when you make an investment so that you can outperform. But what startup capitalism is about is refusing the premise of the current rules and showing up out of nowhere and changing the subject. And the only way you can do that is to be non-consensus and right. You can't. Only by being radically different can you make a radical difference. And a lot of that thinking I internalized from Howard.

• 54:11Harry Stebbings?

  M and A or exit of the year.

• 54:13Mike Maples?

  I don't think I have as good of an answer for that.

• 54:15Harry Stebbings?

  I'm gonna go with loom.

• 54:17Mike Maples?

  Okay.

• 54:17Harry Stebbings?

  975 million. It's a lot.

• 54:20Mike Maples?

  Yeah, that's pretty.

• 54:20Harry Stebbings?

  Great timing.

• 54:21Mike Maples?

  I think they definitely optimized their outcome.

• 54:25Harry Stebbings?

  Predictions for 2025. What will we see?

• 54:27Mike Maples?

  I continue to be intrigued by what could happen with Bitcoin. When I think about the way venture capital has thought about crypto, most of the really smartest people I know have been focused on Ethereum and so on. And I look at Bitcoin and it just feels to me like it's the thing hidden in plain sight. It feels to me like there's a world where Bitcoin becomes more valuable than gold and then some. Where there's an entire financial ecosystem and rails around it. And if that happens, Bitcoin's got a lot of room to run, but I think that there would be a lot of startups that could create an ecosystem around it that would be interesting.

• 55:03Harry Stebbings?

  I asked Reid Hoffman this morning, 2025, end of year, what is the price of Bitcoin?

• 55:07Mike Maples?

  End of the year or the highest point in the year?

• 55:09Harry Stebbings?

  End of the year.

• 55:10Mike Maples?

  130.

• 55:11Harry Stebbings?

  He went with 200.

• 55:13Mike Maples?

  Yeah.

• 55:13Harry Stebbings?

  What happens with Doge? Success or not a success?

• 55:16Mike Maples?

  To me, success would be it changes the cultural norms of what's acceptable from an accountability standpoint. Like, I don't think that Elon is going to be able to do what he did with, say, Twitter. Fire a bunch of people and change all the rules and.

• 55:31Harry Stebbings?

  Bring in a sink?

• 55:32Mike Maples?

  Yeah, and he might be able to do that.

• 55:34Harry Stebbings?

  Am I the only one who saw the picture of him bringing in the sink going, God, you were thin?

• 55:37Mike Maples?

  Let that, yeah, let that, yeah, let that sink in. Here's what I think is happening. And by the way, it's not just Doge, but like, I think, for example, what Lonsdale, Joe Lonsdale is doing with his project Cicero is really good. One of the problems that we have with government in the US is you'll have a government entity that has a bunch of money that produces terrible results that are only getting worse and they keep hoovering up more money. At some point, we need to get to a place where we can say, can we agree that if we put money into something, we should have a goal? If the entity achieves the goal, it gets more money. And if it doesn't achieve the goal, it gets less money. Can we agree that that's true? Republican, Democrat, whatever?

• 56:19Mike Maples?

  Can we agree that we should even at least try to see what the goal is? Hold people accountable for making those goals. Now, you'd be surprised, like, imagine, like, the crappiest company you ever saw. Now imagine that company, and the worse it does, the more money it gets. And the worst departments in the company get the most money because they say, well, the problem is that we're underperforming because you guys are underinvesting in us. That's what, like, so much of the government is like today. And so it's not just Doge in terms of the federal government, what Elon's doing, what Vivek Ramaswamy's doing. What Lonsdale's doing is important, too, because he's trying to take it to the local level. You're not going to be able to solve this stuff overnight, but what you want to create is a culture and a set of mechanisms for accountability and for a natural way

• 57:04Mike Maples?

  for things to recede when they're not effective. And if you could create a permanent change on that front, that that would really be a big deal, I think.

• 57:12Harry Stebbings?

  What damaging element of venture needs to recede?

• 57:15Mike Maples?

  Right now, there's just too much money, but but I don't I don't think it's ever going to recede enough.

• 57:21Harry Stebbings?

  Do you not think it's getting worse?

• 57:22Mike Maples?

  I think it might be.

• 57:23Harry Stebbings?

  Yeah, I speak to so many LPs, new sovereign wealth funds, new pension funds, new endowment funds, who have sub 3% exposure to venture today, who want to take it to 10 to 15.

• 57:33Mike Maples?

  The thing that I think that most people don't have a handle on yet is exits are cyclical, too. Throughout my career, you have these 15-year windows where close to half of the exit profits are made, like, in an 18-month to two-year window.

• 57:47Harry Stebbings?

  Horsey Bridge are brilliant in terms of their analysis on exit markets, and they've found that, really, ventures are a very challenging asset class, but brilliant when you take advantage of very constrained liquidity windows. That is where you are able to have.

• 58:00Mike Maples?

  That is the business. So, so, you know, every 15 years or so, you get this window of about 18 months to two years. And if you want to do really well, the secret is to have a bunch of very good companies in flight when that happens. So a lot of these big multi-stage funds, the problem they're going to run into is they raised money on exits predicated by 2020 to 2022 exits. There's a lot of evidence that's just not going to happen, that there's going to be a long window of time before we ever see that again. The multi-stage funds will, over time, feel pressure to rationalize their fund sizes. They'll do it slowly and they'll do it, quote unquote, deliberately.

• 58:42Harry Stebbings?

  I do juxtapose that, though, just with the thought that like, you know, 15 years ago, it was insane to have a $150 million seed fund. Now it's like, obviously, how could you not have a seed fund over $100 million? Before it was a trillion-dollar company, Mike. Are you serious? Well, now we have five, six.

• 58:59Mike Maples?

  Well, and the other thing that's happened is I think a lot of people have forgotten what a seed round even is. And so now you have seed rounds that are like four or $5 million. To me, the purpose of a seed round is you have an insight about the future and you have a massive risk that you're hoping to take out. The ideal seed round is one which provides slightly more than the minimum viable amount of money and time to take out that risk. And the reason is that that's the riskiest time in the company and it's also the most expensive time to use capital because you never get more diluted than you do in the seed round. What founders should do with their seed round is they say, I've got an insight about the future that's non-consensus. I need to prove that I'm right.

• 59:42Mike Maples?

  Because once that you prove that you're right, you've taken the single biggest risk factor out of the business. You've done the most value-added of possible thing you can do to the company. You'll raise at will at a much higher price.

• 59:52Harry Stebbings?

  I agree, but I disagree. You've proved that you're right, but then you need to scale into enterprise and then you need to prove that you're right again. And then you need, like, this is why I think.

• 1:00:00Mike Maples?

  But the problem, but here's the problem. What happens more often is people raise $4 million bucks and they just go do a bunch of stuff. They just don't have a clear line of sight. Like, what you want to be able to say is, I need to establish that my insight is true. And if I establish that my insight is true, now I've done more than any single thing I can do to take risk out of this. And that is the best thing I can do to enhance value creation. If that means they raise a lot of money after that, okay, fine, so be it. That's a different discussion. Then the question becomes, what is the value strategy, value creation strategy for Series A? But what's happening now is people are raising $4 million because that's what it takes to dilute 20%.

• 1:00:41Mike Maples?

  That's just stupid. It's not a good way to get started and it hurts the founders even more than it hurts the VCs because the one thing you never get back as a founder is your time. And if you raise $4 million, you know, you're three years in, you're doing seed extensions, you've hired a bunch of people, you're much better off, if the insight was wrong, you're much better off knowing that within a year.

• 1:01:04Harry Stebbings?

  But then raising more money gives you more time to tinker and iterate. I look at Klaviyo, I look at UiPath, I look at ServiceTitan.

• 1:01:10Mike Maples?

  Most of those didn't raise a lot of money before product market fit.

• 1:01:13Harry Stebbings?

  They didn't at all. But if they had have done, they would have had more comfort in terms of...

• 1:01:16Mike Maples?

  I think they'd have been worse companies.

• 1:01:18Harry Stebbings?

  So did they. I asked every single founder.

• 1:01:20Mike Maples?

  Oh, good. Okay, then they got my back.

• 1:01:22Harry Stebbings?

  Every single founder and they were like, yeah, no.

• 1:01:23Mike Maples?

  They got my back. You know, constraints are powerful in the early days and constraints are the thing that allows you to understand what the true laws of physics are for your company. And if you operate in the early days without constraints in terms of time and profit and finding desperate customers, you'll be a worse business. You'll just be a worse startup. It just is true.

• 1:01:43Harry Stebbings?

  I totally agree. Mike, I could talk to you all day. So I want to do a quick fire. I say a short statement, you give me your immediate thoughts. What do you believe that most around you disbelieve?

• 1:01:52Mike Maples?

  I believe that more people should pay attention to the core tenets of Christianity. And I don't mean that in a religious way. I mean it in a philosophical way. There were some things that Christianity introduced to the world that were important. One is this idea of the forward notion of time rather than cyclical time. The other thing that Christianity introduced was human rights as an inalienable right. The other thing that it introduced is this idea of unconditional love, which is a little bit harder to explain in a soundbite, but it's it's sort of this idea that real love doesn't have conditions. And I think that those ideas are really important for sort of...

• 1:02:35Harry Stebbings?

  Do you believe that real love doesn't have conditions?

• 1:02:38Mike Maples?

  I do.

• 1:02:38Harry Stebbings?

  But if you don't set the boundaries to your love, then someone will.

• 1:02:42Mike Maples?

  Yeah, so boundaries are different from conditions. So like a condition would be, I get my feelings hurt somehow, so I say something intentionally mean to hurt hurt you back. Well, if you buy into the premise of unconditional love, you'd say it would be irrational for me to ever do that. Because I love this person. Why would I intentionally want to harm that person? If they say something bad to me, I can say, hey, look, something's clearly going wrong with this conversation. We need to have this conversation some other way. This isn't working for us. But like unconditional love is a really powerful way to think about stuff because it causes you to realize that if you love somebody, that you always want what's best for them. That doesn't mean you always agree with them. That doesn't mean you always put up with their crap.

• 1:03:24Mike Maples?

  But it means that you sincerely want what's best for them, no matter what they do. And that you try to show up in the world in a way that that's true. And one of the things that I really like about the teachings of Jesus was, he basically said, when you step back, that's really true about everybody. That you should try to be that way about everybody. That doesn't mean if somebody's hostile to you and you got to defend yourself, you defend yourself. But you do it through the lens of saying, I regret the fact that I have to harm you because you've made a choice that gives me no alternative. But what you try to avoid is calling them names and you know, all this other stuff. I think that that is a really profound idea.

• 1:04:05Mike Maples?

  And not enough people have internalized that idea and how powerful philosophically that was. But like, everything around us in the Western world, much of it came from Christianity. And by that, I don't mean Jesus is a religious figure, but Jesus is more like a philosopher king.

• 1:04:21Harry Stebbings?

  I saw a picture of your father and he was a very early Microsoft employee, I think, wasn't he? What was your biggest lesson from your father?

• 1:04:29Mike Maples?

  Um, that's another good one. It was, um, do your best. So what my dad helped me realize, so, you know, in, um, another Brit, Adam Smith, did you ever read The Wealth of Nations?

• 1:04:40Harry Stebbings?

  Yeah.

• 1:04:40Mike Maples?

  Yeah, it's pretty good, right?

• 1:04:41Harry Stebbings?

  Fantastic.

• 1:04:42Mike Maples?

  Pretty legit. And so, one of the things that he talks about in The Wealth of Nations is this principle. Of comparative advantage. I think most people have the wrong idea about competition. If you think about it, you have your strand of DNA. I have mine. Nobody in human history has ever had the same DNA as anybody else ever. And so that means every single one of us is like a node on a network, completely unique, which means that everybody in the world, everybody, I don't care who it is, has some set of comparative advantages. And so the failure mode that a lot of people get into is they try to be the best. What I learned from my dad is that what you want to do is do your best, because there's only one you, and you can't be better than your best. I think Peter Thiel is really smart,

• 1:05:27Mike Maples?

  but I'm never gonna be better at seed investing than Peter Thiel by trying to study, you know, Strauss and like Gertha and like Nietzsche and like all these historical economic sort of trends and macro stuff. He's gonna beat me at that game. But if it's like, who's the better philosopher king about seed? And like what makes greatness in a seed round and what makes greatness in a startup? I think I can win that game against anybody, right? And so what I learned from my dad was that you as a person have intrinsic motivation. You as a person can provide something that the world wants, that values, that you can get paid to do. Part of honoring the limited time you have in this life

• 1:06:10Mike Maples?

  is to figure out how to show up every day to honor the gift of your time by being your best, by doing the best you can do.

• 1:06:16Harry Stebbings?

  Final one, and it's a, it's a hard one, but I find it quite revealing. What about the way that your parents brought you up? Did you deliberately decide to do differently in the way that you bring your children up?

• 1:06:27Mike Maples?

  That's a good one. Yeah, there's one thing I could tell you later, but I'd rather not say. The one thing that that I think would have been good would have been, and I still need to do better about it, but just to get outside more and do more sports and stuff like that. My dad was very cerebral into computers and everything we talked about was computers and the computer business and programming and stuff. He was not like into sports. That's something that I'd like to do a better job of over time is to kind of promote that a little bit more.

• 1:06:57Harry Stebbings?

  Mike, I could always chat to you all day. It's such a joy to have you here. Thank you so much for doing this.

• 1:07:02Mike Maples?

  Thanks for having me, Harry. Thanks for putting up with me.

• 1:07:06Harry Stebbings?

  I mean, I just love my discussions with Mike. And if you want to see that conversation live in the studio, you can check it out on YouTube by searching for 20VC. That's 20VC on YouTube. But before we leave you today, it can be difficult to build a team that's aligned on everything from values to workflow. But that's exactly what Coda was made to do. Coda is an all-in-one collaborative workspace that started as a napkin sketch. Now, just five years since launching in beta, Coda has helped 50,000 teams all over the world get on the same page. With Coda, you get the flexibility of docs, the structure of spreadsheets, the power of applications, and the intelligence of AI, all built for enterprise.

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