20VC: Instinct Raises $1B at $10B Valuation | AMD Buys Fei-Fei Li's World Labs for $8.2B | Meta Poaches MongoDB's CEO | Bessemer Raises $5.75B | Oura Pulls IPO & Nubank Eyes $8–12B Monzo Takeover

AGENDA: 00:00 Highlights: Jack Altman Joins The Trio 05:00 Anthropic's S-1 Leaks: $8B Operating Loss and $518B in Compute Commitments 10:00 Instinct Raises $1B at a $10B Valuation to Take On Meta 25:00 AMD Buys Fei-Fei Li's World Labs for $8.2B 39:00 Meta Poaches MongoDB's CEO as Shares Plunge 20% 43:00 AI Startup Seeks $10B Valuation Just One Week After Seed 47:00 Modal Hits $15B Valuation as Baseten Eyes $26B 54:00 OpenAI Reopens Its $200 Plan—and Halves What You Get 57:00 Oura Pulls IPO After Targeting a $16B Valuation 01:03:00 Nubank Eyes $8–12B Monzo Takeover 01:08:00 Bessemer Raises $5.75B as NFX Switches to Its Own Capital 01:14:00 Anthropic Founders Move to Lock In 50.1% Voting Control

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

• 0:00Speaker 00

  I thought you'd tiptoe in and I gotta hand it to you know when we're embracing this thing, we're fucking embracing it. It's 10 billion pre, pre revenue, big ass check, no mincy little, little steps here. It's all in on day one. So congratulations. It's like coming off the dry and embasing the booze.

• 0:17Speaker 01

  We're definitely not investing at the right speed. We are either investing way too fast or way too slow.

• 0:22Speaker 00

  Returns are going to be highly skewed. Variance is going to go up with AI and many of you will fail.

• 0:27Speaker 01

  There are like 10 companies that can do $10 billion acquisitions and want to.

• 0:32Speaker 00

  Money is a signal, price is a signal and price is sending a signal. Everybody go right here.

• 0:37Speaker 01

  It's a talent war in the most insane way right now.

• 0:40Speaker 02

  I think open source has reached its maximum as a market share. I think it's gonna keep going down. No one wants to run on open source models there, at least Chinese, China-based, nobody.

• 0:49Speaker 01

  It's kind of all just gonna come down to like who's got the compute.

• 0:52Speaker 02

  Even a billion starts to sound small for seed funds if you believe 30 millions of seed.

• 0:56Speaker 00

  If we're willing to fucking trust them not to blow up the world. And they've already said they might and it's only a 10% chance. I think we can trust them to with the votes.

• 1:04Harry Stebbings?

  This is 20 VC with me, Harry Stebbings. It's my favorite show of the week. Rory O'Driscoll, Jason Lemkin and a special guest in Jack Altman from Benchmark joins us in the hot seat. So what do we have on the cards today? Well, Anthropic's draft S1 leaks, we break that down. AMD, baby, they are in the market to buy. Fei-Fei Li's World Lab sells to AMD for 8.2 billion in stock. And then ka-ching, Mr. Mark Zuckerberg decides to whack out the checkbook to hire MongoDB's CEO and pinch him for Muse Enterprise. This and so much more in a blistering episode out today. But before we dive into the show today, when you're building a company, you learn that trust is what closes deals. You may have the best product, but no buyers will sign these days without proof of your security.

• 1:49Harry Stebbings?

  Here's what happens if you're not prepared. A prospect asks for proof of compliance. The deal stalls when you scramble. Your engineer gets pulled off the roadmap to audit prep. Every enterprise conversation turns into this horrible fire drill. That's where Vanta comes in. Vanta is the leading agentic trust platform that not only gets you compliant fast with frameworks like SOC 2, ISO 27001, HIPAA and GDPR, but keeps you compliant by continuously monitoring your controls. So your deals keep moving and your engineers really keep building. Now access the Vanta agent everywhere you work, even if your team lives in Claude or Cursor. And that's why Vanta is trusted by more than 16,000 companies like Ramp, Harvey and Writer.

• 2:30Harry Stebbings?

  So prove you're ready for business and get $1,000 off Vanta when you go to vanta.com/20vc. That's vanta.com/20vc. While Vanta keeps compliance covered, Deal helps you hire globally. We get it. Global IT can be a headache. New hire in Tokyo, but the laptop, well, it's stuck in London. Someone left the company last week. Wait, is that access already revoked? Deal IT handles hardware, software and access to across 130 countries from one system. You have the right to be impressed. Brands like 11 Labs are already managing their global IT at scale with Deal. It's one system, one source of truth with zero vendor gaps or manual workarounds.

• 3:15Harry Stebbings?

  So build your global team with Deal. Visit D E E L dot com slash 20 vc and start expanding your business today. While Deal builds the team, Framer builds the site. If you want AI that builds your real website, not just a throwaway first draft, that's Framer. Framer is the AI website builder that helps creators, teams and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit and publish in one place at a whole new pace. Agents and humans work in tandem. Agents bring speed and scale. You bring taste, judgment and control. The work lands on the canvas and stays editable. Build custom code components, manage CMS content,

• 3:59Harry Stebbings?

  optimize SEO and audit for issues all in one place. Enterprise-grade hosting, security and 99.99% uptime SLAs trusted by leading brands like Perplexity and Miro. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/20vc for 30% off a Framer Pro annual plan. That's framer.com/20vc. Rules and restrictions may apply.

• 4:28Speaker 00

  You have now arrived at your destination.

• 4:31Harry Stebbings?

  Boys, I am so excited for the show today. A, we have a surprise guest in Mr. Jack Altman. So Jack, thank you for joining us.

• 4:38Speaker 01

  So happy to be here. Yay. Longtime listener.

• 4:41Harry Stebbings?

  That's very sweet, Jack. Thank you. You know, don't worry, Rory will ruthlessly give truth to me today while we go through the news. But we have a lot of news to get through. Now, number one, Anthropic's draft S1 leaks. I think every, every venture nerd was so excited for this moment. 4.6 billion of 2025 revenue, 8 billion operating loss, 518 billion of compute commitments.

• 5:08Speaker 00

  Genuine comment. Not a single piece of information in that leak. Not a single piece of useful act other than one minor comment, which I'll come back to, like the 2025 numbers long since spent. I mean, lots of shitty, bad takes, the whole, oh my God, they're losing 40 million, billion when 34 billion of its non-accounting law, an accounting loss. The rest of it was exactly what you thought. Four and a half billion in revenues, eight in compute expense, five in other expense, blah. The only interesting factoid in that was that two customers did 25% of the, of the revenue, which means someone spent half a billion dollars on Anthropic last year, which is pretty impressive. But the only thing that counts is not even Q1 and Q2 of this year, because I think everyone knows Q1 and Q2 has Anthropic killed it.

• 5:50Speaker 00

  The Q3 numbers, which haven't been finalized yet, are the monologue, are the, the only thing you need, you need to care about. Because obviously the story now is, Jack, now opening eye, killing it, really exploding in growth. And you know, there's very nascent data from, well, I think one of ticker trends or something that Anthropic kind of flattened out. The Q3 revenue number is 90% of the data required to make a decision on pricing on Anthropic. And everything prior to that, in particular 2025, is so leaked at this point that there was no data in the writers thing. It was fun, but no data. Go people.

• 6:25Speaker 01

  This is gonna be one of, one of the nice things about these companies going public is that I actually think the public market investors will be a little bit more long-term oriented than the private investors. I think like we are all hand wringing month to month about what these companies are doing. And in a weird way, I think the public market investors will think a little bit more long-term, a little bit more structurally. You think about both, you know, Anthropic and OpenAI and it's like each month, it's like the narrative is just all over the place. And it's so easy to, to flip like that. I think at least in my conversations with public market investors, they're gonna be thinking a little bit more, at least quarters, maybe even years. And so I agree with all of that, but I think people are gonna mostly be oriented towards like, what is the market structure of these things? And hopefully it'll, it will be a little bit calmer.

• 7:08Speaker 02

  My only thought, and listen, this could be completely wrong. When I read all the press, right? Yeah, like to Rory's point, we learned nothing. And to Jack's point, just getting the public investors excited to hold an epic asset long. But man, it really reads negative, you know, not just the, the risk factor that there's existential risk to humanity. I mean, that one is a little jarring to, to see, but it may be like the, the Facebook IPO in that at least on the retail side, the negatives come to the top, you know, and we're all investors, right? So we're all playing for the upside, aren't we? You know, why is instinct worth 10 billion? Well, it's the upside. The jaw dropping losses that frankly, I don't think the four of us care about, right? And maybe a lot of long public markets don't care about. I just think the retail market, everyone that is anti-AI

• 7:49Speaker 02

  may see these negatives as a reason to sour. And I don't know if that can really drive the stock down. But I worry that the IPO will be, it's a minor worry, but I worry the IPO will be successful. They'll hit their number, whatever they ask for. It'll be over, more than oversubscribed than Aura, you know, 10X. But then a month or two in with no real change, we may see a drift below the IPO price just because of the negativity. The massive spend, the CDSs are at Oracle, some default on data centers. And all of a sudden the negatives overwhelm the, the life-changing positives. That was my only thought is we're gonna see a lot of stuff like this, right? After the IPO, much more than we have before.

• 8:25Speaker 00

  I almost think the people who are gonna be big buyers of the stock are not an overlapping circle with the people who are dealing with all the kind of fallout from the noise and the negativity. And let me say it even more directly, right? 70% of Americans might think data centers suck, but they're not running fidelity growth. A small number of highly compensated managers are the buyers of their stock, right? And retail people excited for the thing. Well, I do think you're right, Jason, is it's not so much that directly the, the dislike of AI kind of impacts the stock directly, but the indirect comment is, I do think there is a non-trivial political backlash brewing. I think it was super interesting to see the guy in Florida file basically a suit to stop opening iron on topic for middling models.

• 9:08Speaker 00

  There's gonna be a whole lot of, you told me in a legal document that this thing was not safe. Therefore I'm entitled to believe you and if it's not safe, you should stop. So I do think indirectly you're right is that because they have to spew out all these negatives just to cover their ass. Though I'm not sure who's gonna sue you if the end of the world actually happens. You're probably pretty good on litigation side. But because they have to skew out all this negativity, people are gonna be reading that and saying, huh. This is the first S1 I've ever seen that poses existential risk and where the product lies to me. Maybe I should, as the Attorney General for the great state of fill in the blank, sue these guys and say, stop. And I think we're starting to see that. So it will be way more of a public participatory moment. Everyone's gonna have a goddamn opinion on this, perhaps in a way that everyone doesn't have an opinion on.

• 9:53Speaker 00

  You know, when a semiconductor stock goes public, 95% of the people can barely describe what it does. Everyone's gonna have an opinion here.

• 9:59Harry Stebbings?

  Speaking of topics that everyone has an opinion of, I think everyone seems to have an opinion on Instinct right now, and Instinct versus Muse and the future of agents and personal AI assistants. Instinct closes a billion-dollar Series C at 10 billion. Noah Shin, 23-year-old founder, amazing generational talent, raises a billion at 10 billion, takes on Muse and Alex Wang and Zuck. What do we think? Jack, I think you've got a check from Benchmark.

• 10:27Speaker 01

  Yeah, we did. My partner's Peter and I've led it, and we were all extremely excited about it. And I mean, first of all, goes without saying, on the point of Muse and Meta and them waking up, they've done a phenomenal job, and it's a great product. They've sort of reinvigorated the organization. I've got a lot of friends there. Like, that is an awesome company, and they've done a great job. But I think in a lot of ways, to me at least, when I see that, it kind of reminds me of what happened with coding and with Cursor and cognition and the face of the labs. And our view was kind of, this is such an important new paradigm, where you've got, you know, these consumer agents that are, I think Ben Thompson described it as like the aggregator of aggregators. But, you know, basically, it's like these agents that can interact with the entire third-party internet. That's

• 11:11Speaker 01

  like a pretty important new paradigm shift, and the implications are big. It means that you can have it do things for you. It's not just talking to it anymore. I think like a lot of the younger generation was already using AI in this kind of way. And I think this kind of brought it to the masses, where it's like, this is something that primarily does things for you. And so I think that it's a big new paradigm. What we've seen in general, whether it was with coding or a bunch of the application areas, was just when something's that important, a lot of things can win. And so my view is basically something like, there can be an amazing independent player, like Instinct. You're also going to see, you know, the labs have some sorts of offerings around this. But if this is the main way that, you know, broad, you know, consumer bases use the product, I think

• 11:53Speaker 01

  it's going to be really important. So, you know, we'll see how it plays out. But, you know, our view is that this is like a really big new paradigm, kind of on the level of chat and coding and these other things. And I think a lot of players will win.

• 12:05Speaker 02

  This is my meat and potatoes view of the big winners today, is the ones that are winning today, and this is, and I'm a Muse fan, I haven't used Instinct, I'm hoping to get an invite, but I have 22 agents, I'm all in on the agents, right? But the ones that win, and this is an open question, are the ones we use all effin' day long. So if you look at coding, even me, I'm running my coding agents 10 hours a day now, right? I run, and legal, I got wrong in a sense, because folks are running Harvey and Legora, like Harry's partner, like she gets home, she's on the sofa, running it all effin' day long. And there's lots of wins as VCs we're going to make for sporadic use. And this is just a question. I don't know, it's not even a criticism, but will we run Instinct, Muse, eight hours a day? If we do, I guarantee it wins, right? But I think this is the second

• 12:50Speaker 02

  generation. Generation one was OpenClaw, no one knew how to run it, right? Other than destroying, you know, all your security and credit card. This is generation two. And then Gen three, I think we'll figure out. But I don't know that we're going to do the use, this may change in two weeks, but I don't know if we have an eight-hours-a-day app yet here. I don't know.

• 13:05Speaker 01

  I think you described it exactly right, which is, it is super early in its cycle. If you think about like when chat first launched, like how much did we use it then versus how much do we all use it now? You know, Legora and Harvey, you know, which are, you know, when they started, if you did the reference calls on their customers, when they were at a million of ARR, the customers were like, the thing barely works, we don't use it that much. And now you talk to them, and they're like, I run my whole life out of it. And these businesses are at hundreds of millions of ARR, growing really fast and all of that. I think same with coding, like at first it could do a little bit, now it kind of does everything. In the future, it's going to be like, you know, times 100. So it's an open question on this stuff. And I think you're exactly right. The question will be, does it make it from where we are right now to you can autonomously trust these things to run your life? And if it can, it's big, and if it can't, it's not.

• 13:48Harry Stebbings?

  Does it not massively cannibalize the chat usage? I'm so sorry for any awkwardness, Jack. I used to be a massive OpenAI, it's kind of like, you win both sides, so forgive me for this. I used to be a massive OpenAI user on ChatGPT, and now I just live my life through Instinct. And you see a lot of people cannibalize that chat usage, no?

• 14:04Speaker 01

  I think it does to some extent. I mean, I think they're like, on some level, we're each only awake for so many hours a day. And like, we are all on our screens so much at this point, that like, there are not, you can't really get us out of the like perks where we're playing soccer too much anymore. Like, it is all coming from other time that we were spending on the internet. So yes, it does to some extent.

• 14:23Speaker 00

  Jack, you put the qualifier in, what did you say right at the end there?

• 14:26Speaker 01

  I was going to say the form factor cannibalizes. That doesn't mean that these products cannibalize the other companies, but it does mean that the form factor takes some amount of the space, whether the labs do it themselves or not.

• 14:36Harry Stebbings?

  Can I be a dick? Isn't this what OpenClaw was meant to be? And the founder Pete Stipeet and like, no, but like, dude, they've been watching from the sidelines for six months.

• 14:46Speaker 02

  Yeah, but OpenAI didn't give everyone an entire virtual CPU in the cloud, right? And storage and everything. This is just, these guys looked, they were all inspired by OpenClaw, we all were. They just, Instinct did it, Jack can have the story. And the whole Muse team said they're inspired the next hour to build Muse. Muse was built since OpenClaw. It's just, OpenClaw didn't make sense for any of us.

• 15:04Speaker 00

  But I think, to be clear, Harry, what you're saying is not OpenClaw standalone. What you're basically saying is, when OpenClaw got subsumed, and OpenAI shouldn't have done this.

• 15:13Harry Stebbings?

  Yeah, 100%. You were best placed to do this. That was the most strategic thing with the person who did OpenClaw.

• 15:18Speaker 01

  I actually don't have the sort of full inside scoop here, but OpenAI's Dev Day is, you know, today. And so we'll see, you know, what, you know, their sort of reactions to all these things are. But, you know, also back to Jason's point, it's like, there's generations at these things, and they keep moving, and everybody learns from each other, and it happens in like two seconds. You know, when Cursor came out, they had like a long window before the labs caught up. Now, you know, you look at the Instinct to Muse window, it's short, these cycles are only getting shorter.

• 15:43Speaker 00

  First of all, I just got to say in passing, Jack, I got to hand it to you guys, you know, I've known Benchmark since 95, when they started, right? And when you guys said after 30 years, you're going to embrace growth, I thought you'd tiptoe in. And I got to hand it to you, no? When we're embracing this thing, we're fucking embracing it. It's 10 billion pre-revenue, big ass check, no mincy little steps here, it's all in on day one. So congratulations. It's like, coming off the dry and embasing the booze. You know, big party night, first night.

• 16:13Speaker 01

  Yeah. And what's funny about it, so, yeah, and, you know, we invested, you know, first at two and a half and 10. And what's funny is, in our minds, it was actually kind of an early-stage investment. And I know that sounds psychotic, but yeah, but that's kind of how we saw it.

• 16:26Speaker 00

  Genuine comment here. And actually, one of the things that's been funny is, in this cycle, we've had investments with early-stage, of course, risk requires super late-stage capital, which is just definitionally a strange time to be playing. But yes, I think, you thought you were raising a growth fund, in fact, you're just expanding the early-stage fund, because it just takes bigger checks now. And good on you guys for doing it. Because I thought your logic at the end is basically some version of, if this matters, it'll matter a lot. And if it doesn't matter, it won't matter at all. And there you go. I just push it, I was, I listened to the Noah interview, and I'm going to make the boring point, and then I'm going to kind of backtrack it. The boring, when you're listening to an interview, and you talk about monetization and travel and all that, and then you go away and you do the data on, you know, the number of Americans who fly more than one or two times

• 17:09Speaker 00

  a year, which is pretty small, the fees available from that, the number of Americans who book not just dining, but fine dining, it's, you know, it's like 10% or less of total dining experiences are fine dining. You don't need a reservation from McDonald's or Applebee's. So if you start thinking, and he mentioned, if you think of it as travel monetization, you could get pretty angsty about market size here. I mean, you guys were smart enough to do OpenTable 20 years ago, 26 years ago now, Jesus. You know, it's a billion-dollar business today. You'll be pretty bummed if you're only doing a billion dollars in restaurant bookings on Instinct. So does implicitly some level of, yeah, we'll get all this travel revenue, but there's something more here? Because you guys run the same numbers, and you know one, right? Is there a part of the monetization that's

• 17:54Speaker 00

  just finger in the air and says, if this matters, good shit will happen?

• 17:58Speaker 01

  So, I mean, back to the point before, which is slightly tongue-in-cheek, but slightly totally true, which is like, do you think of, is this a, is this a growth investment because it was billions of dollars of valuation? Or is this an early-stage investment because it's like nine days old? And both are kind of true. And if you think of it as a growth investment, you say, okay, how do I underwrite this, you know, relative to, you know, public companies that have two and a half billion of ARR, and they're worth 10 billion. And so, you know, you kind of logic that out. If you're thinking of it as an early-stage investment, you say, gosh, this paradigm, we just have no idea. And so I think in our heads, it was close, yeah, it was closer to that, where you say, we are so early innings here, where there was OpenClaw, there's the, like, you know, between now and Christmas, there's going to be like three more evolutions of the whole thing. It's like, you don't

• 18:42Speaker 01

  even try to guess all of that.

• 18:44Harry Stebbings?

  How do you think about sizing it then, when you're writing growth checks at early-stage risk material?

• 18:50Speaker 01

  You still, to the extent that you can, I'm a believer that this is sort of like something I've kind of picked up from the crew, that you still, you still need enough investments, no matter how, you know, accurately you think you can pick. At the early stage, let's define this, forget the price, but, you know, early on in a company's life, you just need enough shots on goal to get something that's going to really matter. And so on some level, I would say the sizing is constrained by wanting the fund to have enough chances to get something great. And so that's the constraint. And then like the upper bound is, you know, these rounds are big, you need to matter in the context of the round. And if the valuation's already high, you got to put more dollars in to sort of get some ownership. And so those are kind of the boundaries.

• 19:30Speaker 00

  It was a very good, articulate, not quite answer, but exactly the right questions. Absolutely. No, I think you're exactly right. It's that you do some kind of Kelly betting, and then you kind of, you know, how certain, what's the upside, and how certain are you it's going to happen, edge of our odds? And then you say, do I have the stones to do full Kelly, or do I back off?

• 19:49Speaker 01

  Yeah. And I think like sophisticated public markets investors probably spend as much time thinking about their sizing as their actual positions. We obviously don't. But, you know, we try to at least give ourselves some boundaries, knowing that we're going to, you know, sizing correctly almost every time.

• 20:02Speaker 00

  And it's probably actually the hardest one to size, because you're right, you have high upside, which leans in, super high variance, which leans out, but still a requirement for meaningful dollars. You're right, the sizing discussion must have been almost everything. Have you disclosed the dollars, total dollars in the deal?

• 20:19Speaker 01

  I don't think we did. I'll find out if we didn't. If we did, we can like stitch it back in here with some AI. But I don't think we did disclose it.

• 20:25Speaker 00

  Got it. Yeah. Think it aloud in real time to make it something we all could talk about rather than the guys with the big checks. It's that, how would you think about that bet as a percentage of your fund? If you're typically doing 20 deals, which means 5% on average, you know, you look at the capital needs, you say, hey, maybe I need to do 10% of the fund in this. You look at the risk and you say, maybe I need to do two and a half. Harry, you always jump on me with these kind of real time questions. What percentage of your fund would you put in instinct at 10 billion pre as a percentage of the fund? Cause that's the way a Kelly better thinks.

• 20:56Harry Stebbings?

  Super easy. I'd do 5%. If it's meaningful enough that it returns the fund with the upside, it's got to be 5%. Obviously is, I think if you can project out where it is. But then on top of that, I think you have real downside protection here. It's only raised like a billion and a half. It's clearly a really phenomenal team. The bet that Microsoft or any of the large providers would buy, I think is very clear. So you've basically got a 50x upside on it being the WeChat of the West that we've all hoped for for many years. And downside protection on a 1x plus, I think.

• 21:26Speaker 00

  By the way, just as I know I'm being a jumper, you do it to melt them. If you really believe in that risk profile, 50x upside, 1x downside, the Kelly bet answer is probably 30% of the fund, just to be clear.

• 21:38Harry Stebbings?

  But this is what I think founders don't understand, which is like, it's nuanced. Like for me, at my stage of career, if I did a 30% of the fund bet, my LPs would shit the bed. You Rory, respectfully, because of the incredible tenure that you have and the many, many years, you know, as you said, you've known Benchmark since 1995, a year before I was born. You have slightly longer relationships, so maybe it does differ.

• 22:00Speaker 01

  I wouldn't have the guts to do that at all. So no.

• 22:03Speaker 00

  I wouldn't want to let it lie. No, I think, look, I can see, I would come out, I mean, 5% typically 20 deals in the fund, 5% is a full whack deal.

• 22:10Speaker 01

  I think the other thing that I was going to say, you know, that sort of like in support of kind of Harry's view on this is we're in a moment in time where a lot of investments are shaped like this, where like relative to other times, I think it is much more dispersion on these investments and things are both really expensive. And then the upsides like apparently look very high. And so one of the things that we, you know, think about and I scratch my head about a lot is we're in a moment in time where valuations are extraordinarily high and then traction and, you know, outcomes and all of these other things are extraordinarily high. And so, you know, people are like, do you think we're, are we investing, you know, the right speed? And I'm like, we're definitely not investing at the right speed. We are either investing way too fast or way too slow.

• 22:55Speaker 01

  But when both sides of the equation are this out of whack, the odds of having it right are zero.

• 22:59Harry Stebbings?

  I'm really sorry. Every venture investor is in a WhatsApp group right now, saying the market is totally fucked, just to be super clear.

• 23:06Speaker 00

  Yeah, but those will be the same, to Jack's point and the skits are free. Those will be the same investors who get out of their WhatsApp group and then wire another check for 50 million bucks to a Neo Lab, right? So yeah, look at what you do, not at what you say, as Harry Haldeman said about Watergate. But to your point, Jack, it's funny, we actually just did a annual meeting and we had Tyler Cowen, the economist speak, and he was great, just great. But one of my partners who was doing the meeting asked just a tangential question on venture, what's going to happen in venture? And he just quietly said, as economists do, you know, returns are going to be highly skewed, variance is going to go up with AI and many of you will fail. And then just moved on to the next question, some of you will get rich and many of you will fail.

• 23:45Speaker 00

  Well, thank you for clarifying that, Tyler. Jack, you're right. It's like the highest variance time, which, which speaks to even when you're doing these bets with the upside, having enough to do 20 is key. Which is why I don't get the, we've talked about this before, it's why you write about instinct being an early stage bet despite the price. It's not yet at the stage where you can have the concentration discussion. You know, the folks having the concentration discussion are really talking about OpenAI and Tropic at the last two pre-IPO rounds. But you're right, even at 10 billion pre, if it's where it is today, you don't want to put 30% in.

• 24:17Harry Stebbings?

  I also think like, this is not the round that worries me. If you would look at the instinct cohorts, which I haven't seen, but I imagine the usage is incredible. I imagine the depth of usage is like we've never seen before. What worries me is when you have three rounds in three weeks with no material movement in between and no data suggests there's been anything different. That's what worries me. The people who say, oh, 10 billion, 14 people, like, it's just like people who said, you know, a billion for what? For Instagram was stupid. It's like, yeah, you don't know that smart today.

• 24:43Speaker 01

  16 billion for WhatsApp.

• 24:45Harry Stebbings?

  Exactly. But you know what I love? I love the fact that I actually had your partner, Ev Randall, on the show and he said, oh, we're going to look back at Andreessen and General Catalyst and Lightspeed. And he retweeted it, which is so humble and like non VC like, where he was like, maybe I was wrong to say that Andreessen won't do a 5x in this vintage. Because Mr. Martin Cusado is making us look bad because the man has had OpenRuda. Obviously last night had Fei Fei with World Labs and then he had Cusser. So for the news story of the day, AMD buys Fei Fei Lee's World Labs for 8.2 billion in stock. That first big Neo Lab exit, two and a half years into the company's journey.

• 25:29Speaker 00

  Let's focus on the entrepreneur first. I think it's great for Fei Fei end of day. I mean, I've only met her once. I thought she was awesome, very humble. I love her book, if you read it, very moving book about being an immigrant to the US. I was myself, so I know it and kind of came up from nothing. As someone pointed out, it's not an overnight success, cranked through ImageNet, kicked off the whole damn thing. Cause the entire AI resurgence was really kicked off when that ImageNet project that she built, when the winner of that was Ilya and two or three other people, I think in 2012, where their model using neural nets just kicked ass and blew past everyone else. And it was the first hint that this technology, this deep learning technology was going to blow everyone away.

• 26:11Speaker 00

  And she kind of set that up, didn't monetize that, has, you know, worked at Stanford, worked at Google. And then, you know, midlife, quit, did this two and a half years ago and nailed it. So I think it's just an awesome story. Just a reminder, yet another wildly successful immigrant story coming to the US, making a ton of money. So I'm stoked for her. We can come to the venture money later, but that it's just a great story. And it would be pretty criminal if we had the biggest boom in AI history and Fei Fei Lee didn't get a big ass check. So I think comic justice has been restored and it's good, right? Cash the check.

• 26:44Speaker 02

  Well, just one thing, you know, AMD was like one of your grandpa's investments, right? You know, he and his buddies from Fairchild or I don't know what the exact, but this is an oldie moldy. It's up 279% this year to 1 trillion. So I don't even know whether they're going to continue the 3D world models or they're, they're just going to be their counterpart to Nvidia's model team. But whatever it is for 8% of that market cap, 8%? Yeah. Getting a world-class team to make sure that 279% run continues, like it's cheap if it's the right team, right? It's a moment in time to Jack's point, right? If AMD was up 3% this year, they ain't going to be spending 8 billion. But this is a run that you, you know, it's epic, but you got to maintain it, right? They've got to be number two to Nvidia or whatever the goal is.

• 27:25Speaker 02

  And it's a habit trail that keeps going faster. So I'd certainly invest 8% of my market cap to keep the good times going.

• 27:31Speaker 00

  And I think it's the first of a few. We've talked about this a couple of times. You look at these investments and candidly, I don't think the World Lab companies, not the World Lab in particular, but they're kind of those World Lab type companies would on a standalone basis, have anything like the trajectory of Entropic and OpenAI, where there was a very quick path from here's an amazing AI technology to here's chat and that can monetize. And then, oh my God, here's coding and that can monetize like a mother, right? I don't think the path would have been as clear, which is why I've been a bit nervous about those deals over the last couple of years. But in retrospect, the thing I think has now become obvious is I think all the big foundation model companies are probably in the market to acquire some kind of robotic foundation model story.

• 28:14Speaker 00

  I think that, as you say, AMD just wants to be relevant to Nvidia. So I think that wouldn't surprise me if there was a ton of acquisition interest. I mean, there's still 100 Neo Labs, so you got to be in the 10 that win. But I think there will be a bunch of these big ass acquisitions over the next six, 12 months, if the market continues to hold.

• 28:32Harry Stebbings?

  Do you? Cause I invest with a brilliant French partner, Paul, who is incredibly cynical just by nature of being French. And he wrote this report on 102 Neo Labs, $70 billion plus raised. And my question is just like, just how many of them can get acquired when they were 10 to 12, but yeah, it'll be okay. 102, we all going to have downside protection?

• 28:52Speaker 01

  It was very easy when all the sort of Neo Labs got started and the trend took off to just say this is total insanity. And to your point, Harry, we don't yet know what the like net balance sheet of the whole thing will be. But we are definitely starting to see data points like World Labs and many others where like there is real interest. And I think part of, part of what's so different now than certainly any time I've ever seen, maybe there have been other points in history like this. But there are just a lot of acquirers. There are like 10 companies that can do $10 billion acquisitions and want to. And that's just so different and it's much easier than going public and it's quicker. And you don't have all of these long cycles and the hand wringing and that has really changed things.

• 29:35Speaker 01

  And obviously, you know, like extremely impressive run by Martin. And it's just shown that like, you know, in these infrastructure lab type companies, there's, there's a lot of room to run. So I, I don't know how it will go, obviously any better than anybody else, but I'm definitely, I'm hesitant to be too skeptical at this point, given what's happening.

• 29:51Speaker 00

  I agree with that. And I think when you deal with the 100, and yes, there might not be 10 or 20 acquisitions, but it's the, this is where, you know, people, they use the word consensus in a negative sense. But there is no doubt that credentialism matters. Like you got Fei Fei Lee, you know, I could write that press release. Originator of the whole AI, I think it's a little like, you know, the quality folks at OpenAI and the topic. So I think the other part of this is in the Neo Labs, making sure you have the pristine tech asset versus the gritty team. A lot of the stuff I do in the apps level, I love my gritty teams. I think for something like, you know, building a world model, you need to have proven technical success because that's both what it needs to deliver and frankly, what it needs to navigate and be the desired acquisition candidate.

• 30:36Speaker 00

  And I'm not sure that's not true overall, but it's just something I've observed.

• 30:40Harry Stebbings?

  I was talking to one of the best CIOs in the world last night and he just said to me, "The honest takeaway, dude, you really think you can play in venture with less than a billion-dollar fund now?" And candidly, when I look at many of these companies, the first round for this and Faye Faye was like 65. I had my team say to me the other day, "We can't find anything under 100 million." I said, "Wow, seed prices are expensive." They said, "No, no, 100 billion, round size."

• 31:02Speaker 00

  Pushing back a little, I think the weird thing about this tech is, because I've been thinking about this a lot too, as a 900 million dollar fund size, you've got two kinds of businesses. You've got businesses where you can ship a product on less than 400-500 million dollars, like huge Neolab raises. But you've also got to admit the following, which is also true. You've got companies that use that Neolab and that OpenAI and Tropic technology that are shipping products on relatively little capital in. You know, you guys are in Higgs field. You run into a bunch of these guys who are like, "Well, we took 10 million dollars, but we shipped the product for 3 million bucks. And then the customers took off and shit, we still got 5 million bucks in the bank, but we're going to raise 50 anyway because we can." So it's not like everything is 100 million dollars just to spin up some GPUs. There's a whole bunch of 10 million

• 31:46Speaker 00

  bucks got us a long way and then maybe we're raising 100, but for different reasons, because we can, right? So it's not consistent. It's almost two different worlds. And it kind of makes sense. The big technology lift up front from the guys raising 10 billion is what's setting everyone else up to do amazing shit on relatively little.

• 32:03Harry Stebbings?

  Yes, I would say that just bunny talent costs are so much higher than they've ever been because of a lot of the alternative options for the talent, that you can't do a 2 to 3 million dollar round anymore.

• 32:12Speaker 02

  You know what the challenge to that though, Harry? I agree with the math and Rory made the point last week, and I want to hear Jack's thoughts, that I think nominal inflation's like 2.5x in ventures since 2010. It might be, maybe, sometimes I get my nominal and non-nominal confused. All true, but if you look at the undiscovered gems, okay, I think seed rounds, and maybe they're called pre-seed or pre-pre-seed or post-inception, but whatever we call it, there's still, what does it take three to four folks to get 18 months down the road? It's the same thing. And if you're coming out and you're lucky enough to get a million dollars of free tokens from whatever, a half million from OpenAI and Tropic to start a company, you get all these other things, you can still get pretty far for a couple million bucks, especially if you're willing to, I'll share an

• 32:54Speaker 02

  8,000 dollar a month apartment in San Francisco. So it's not that I disagree with the math, but the truth is you can do as much, I think, for 2 to 3 million bucks as you could 10 years ago. And if you don't have folks dying to give you capital outside of Demo Day, that may still be the natural atomic amount of capital for, well, I get the terms wrong today, but a seed round. It still should be 2 to 3 million bucks.

• 33:13Speaker 00

  Yes, in certain markets, I mean, just at the risk of being a pedant, yes, in certain markets where you can ship a product leveraging everything else, but you know, it's a couple hundred million minimum to enter the Neolab space and it's 500 million to enter the semiconductor space. And you know, I'm just making a point is that the weird thing to Jack's point, there's such a range of different financing things you got to get your head around. You know, you want to put 100 million in a semiconductor company to still pre-tape out at 2 billion. Hmm, let me think about that. And then tomorrow, let me look at 5 million dollars for a seed round for a software company where maybe they can get a product out the door and consumer revenue on nothing more.

• 33:46Speaker 01

  The characterization that Harry opened up with, I mostly agree with, which is basically that the initial rounds have gotten so extreme. And there's two reasons. One is that there's like, you know, you all are saying there's these labs where, you know, you can't do anything for less than 200 million, and so that's the first round. The other reason is there is a set of founders that are very like in the Silicon Valley network that don't necessarily need to raise, you know, a 50 million dollar seed, but they can. And so they skip the first round, they skip the six at 40 or whatever that round used to be, and they just don't raise it. Or maybe they raise 300,000 dollars just to like get a month in and then they raise the money. And so in many lanes, I think that round has kind of evaporated. And so I think there is a cohort of the market where

• 34:31Speaker 01

  traditional seed investing, where you're going to write 3 to 6 million dollar checks by, you know, 8 to 15%, where I just think that is fully broken slash just isn't there anymore. All of that said, there is another part of the market, which, you know, Jason, I remember reading your blogs like way back when I was starting Lattice, you know, 12 years ago, 10 years ago, whatever. And, you know, a lot of it was just like, you know, trying to get my head around what the venture math was. And it's, you know, a small fund, you buy 10% of a company, you hope it's worth a billion or two, you get 100 to 200 million, you do that a couple times, you know, out of a basket. I actually think that that might still exist, but the way that it exists is not in the things that we're reading about on Twitter and in headlines. It is these rounds

• 35:14Speaker 01

  where at the moment, they for one reason or another can't go do that round. They're either not in the right markets or the shape of the company isn't quite right. And then, you know, they somehow pivot or they get more traction than you thought, and it just kind of gets bigger, but it happens the slow way. Like, we have now gotten accustomed to all of these stories playing out in a year or three years. Like, you know, we're talking about instinct. It's like, you know, these stories play out so quickly, they get big. But even if you take a company, you know, like Lagora, which, you know, obviously I know Harry knows well, and you know, these stories still play out in a short number of years. And we've all gotten used to that. But, you know, there is another part of venture that takes place over 10 to 20 years, where a software company just kind of compounds slowly. And so do I think that there's a 3 at 30 round happening today where

• 35:58Speaker 01

  in 2041, that company is just going to have quietly compounded in the market of police or fire departments or libraries? Like, yeah, I probably do. So it's just, it's just a different, it's just a different part of the market and it has really had a big dispersion.

• 36:12Harry Stebbings?

  I just don't think that's an industry. I just think that's an anomaly. And we're in an industry. And I don't want to bet on a potential pivot three years down the road that might lead to a misshapen company that then becomes shapen again. I can't bet on slack pivots.

• 36:25Speaker 00

  Jack, every time I try and pitch a story to Harry, he clubs me just like that.

• 36:30Speaker 02

  It's bullshit.

• 36:31Speaker 00

  You know, and I want to believe in it because we've made some magnificent bets on companies like that. But I do agree that the table at the moment is 80%, the fast action table and 20% the slow action, which makes sense because in 2022, there was a discontinuity and everything before that became obsolete. So by definition, anything at this stage, four years in, is fast action by definition because it started in 22.

• 36:57Harry Stebbings?

  Also, if you want to go for that model, your numbers will be crap for quite a long time. And we always forget that we're in an opportunity cost game where people can put money into your Saragoyes and your benchmarks of the world. And while you guys post numbers that are just never before seen, I was messaging Chatham last night, Jack, being like, "Oh God, just stop. The latest fund is just ridiculous." We're an opportunity cost. You can be in those, well, you can't be in those funds, but you know, you can try and be in those funds. And so trying to be smart where no one else is.

• 37:26Speaker 00

  There's a lot agreed. It's about, yeah, the giant sucking sat, basically money is a signal, price is a signal, and price is sending a signal, everybody go right here. And everyone will go right here because that's the job of price. Mr. Hayek would be happy.

• 37:41Speaker 02

  The problem with the quiet compounder, to Jack's point, in my view, as someone who's pitched quiet compounding since 2012, is they're just not, they're just not stable. You have to build so much more software so much more quickly, right? Jack and I are both on the board of owner, which is, you know, a rocket ship north of 100 million revenue. But look how much effing software they have to build this year, right? How many folks can pull that off? How many folks can raise the capital? Like, and even if you have 10 times more competitors, right? I have another company at 100 million, they put up a competitor slide at the last board meeting, I never heard of eight or nine of the ones. I thought we had one competitor. Turns out we have nine, right, at 100 million. So it's not that I don't want to believe, forget about the fact that it's harder to raise LP capital, which is Harry's point. This instability is something that I think people

• 38:22Speaker 02

  under reflect on, right? That's the problem. It's just, it's so unstable that it's just, it's so undurable.

• 38:29Speaker 00

  Put it another way, yeah. If you're making a compounding play, the quid pro quo should be low risk. And if the world is such that the tech environment is changing so much that you get the compounding, not the hypergrowth, but you get the same level of risk, that by definition is a self-optimal game.

• 38:45Speaker 01

  Yes. And sort of to me, one of the most dominant reasons why I do agree with Harry here is it's just like, it's a talent war in the most insane way right now. It's just, these opportunities are just too enticing for great people.

• 38:57Speaker 00

  Which is a perfect segue. Perfect segue, Harry. Come on, figure it out.

• 39:02Harry Stebbings?

  Are you suggesting that Jack teed me up there, Rory, for a slam dunk?

• 39:05Speaker 00

  I am, but you were like missing it.

• 39:06Speaker 01

  Harry, I didn't see it either. And I also try to be a podcaster, so that was a hard one.

• 39:10Harry Stebbings?

  Jack, I think we're just a bit slower than Rory, okay? Professor O'Driscoll has, he's very sharp.

• 39:16Speaker 00

  We should remind, stop, stop, stop, stop, stop the bullshit. We should, for the viewers, our listeners, we should just say, look, what happened here is the CEO, the chief executive officer of a standalone, independent public company, MongoDB, a very successful 20 billion dollar market cap public company, who just took the job less than nine months ago, got an offer from Muse, hit the bid, moved over to Facebook slash Meta to run their enterprise division, and MongoDB stopped, dropped 20% in one day, and then Dev stepped back in, who'd been, not the founder, but the CEO for a long ass time, and is now back running it. But the point, Jack's point was, the money can exert such a powerful influence. It was powerful enough to persuade this guy to quit the top job, go work at Facebook, because I assume the offer was just earth-shatteringly

• 40:00Speaker 00

  compelling, right? And that's your point, Jack, is that when you have the hot stock, when you have the momentum, you can make people offers that just allow you to take whatever talent you want. And this is an example of that.

• 40:11Harry Stebbings?

  Do you think it is money? When you're earning 52, maybe I don't earn 52 million bucks a year, but I imagine if you're earning 52 million bucks a year, earning 120 million bucks a year, that's nice. But I think for him, when he looks at this, he's like, "Holy shit, I have the chance to impact far greater."

• 40:27Speaker 02

  Nah, I think it was a 52 million dollar package and he was offered a 500 million dollar package by Zuck to run enterprise. 10x is easy. What does it take? 520 million, then, done, right? No one wants to step down from CEO to be the chief executive enterprise products and tokens officer.

• 40:45Harry Stebbings?

  You think he's paid 500 million bucks a year?

• 40:47Speaker 02

  Yeah, it's 10x. It's 10x. I'm hitting the bid. Hit the bid.

• 40:51Speaker 00

  I'm just agreeing with Jason because you were going to go down some kind of MongoDB's not exciting and Meta enterprise would be exciting. I think that's true, but conversely, no one who's been a CEO goes back to not being a CEO. It's just, it's just so damn hard, right? So the answer is, it must have been just a compelling offer.

• 41:09Harry Stebbings?

  I mean, dude, we saw, we saw Nick Clegg, who was deputy prime minister, go and work as Mark Zuckerberg's, I mean.

• 41:15Speaker 00

  I mean, yes.

• 41:16Harry Stebbings?

  So like, you know, that's.

• 41:18Speaker 00

  Yes, I'm trying, yes.

• 41:19Harry Stebbings?

  Be careful what you say.

• 41:21Speaker 00

  I'm just trying to not be mean about Nick Clegg, our England, our David Cameron, our Mark Zuckerberg, and it's just too hard. So I'm just going to let it slide.

• 41:28Harry Stebbings?

  What should we take from this, though? That actually even the role of CEO is one where departure is normal now in face of money?

• 41:36Speaker 00

  You should take what Jack said. It gets back to the conversation you were making, because he segued it off your comment, an opportunity cost. The market is sending a signal that the only place to be is in these extraordinarily hot AI companies. And it's sending that signal via price and people are responding to price.

• 41:51Speaker 01

  Yeah, I mean, to me, I think it is it is the money and it's also the it's the attention and it's where the zeitgeist and it's like the white hot center. And I think that is so alluring to people. There's an entirely separate thing here, you know, with kind of the way that this all went down that I'm not close enough to at all to know the details of. And I think that's kind of its own unique beast. But in general, I just think that it is so alluring and the money is part of it, but it's it's not just the money. It's also it's the thing in all of the headlines. It's the products that we're all using. It's the thing that all of our families are talking about. And I think that it's just so concentrating. There's all of these short term things that are negative about it.

• 42:29Speaker 01

  One of the things that I will say, just kind of this is zoomed out broad positive, is that the much higher transition rate of talent that I think we've ever probably seen. One of the benefits of it is that talent feels very unstuck right now. You have all of these times in history where great talent gets very, very stuck in places that you might not want it to be. And we are probably in one of the higher liquidity moments in the market where great people are in fact going to the most important opportunities, which I think is probably on some societal level, very positive, even if in these like short term situations, you scratch your head and you're like, what's going on here?

• 43:05Speaker 00

  You're right, I tend to focus on the money, but you're right, it's not just that. It is the zeitgeist. I give you and Harry that point, yeah. It's what's good about here even versus the east, you know, I can't remember, was it someone on garden leave either in the east coast of the UK? The great thing about California, you got none of that. It's just like I go across the street and next day I start in the new company. What are you doing, Harry?

• 43:25Harry Stebbings?

  It's time for the investment committee.

• 43:27Speaker 02

  You already you already did one. You did a great one for instinct at the top of the hour.

• 43:31Harry Stebbings?

  Oh, no, no, that wasn't an investment committee. No, no, the the investment committee this week is Jev. Jev is in the market to raise at a $10 billion price. Jason, welcome to the room. Can you please present whether we should be doing this deal or not at $10 billion a week after the seed at about $200 million?

• 43:50Speaker 02

  Well, of course we should do it. What's the price 10 billion? At first thought, we should do 5% of the fund, but after the last 20 VC, I've decided to recommend up to 30% of the fund. You know, Jeff's already 17% of the traffic on open router. It's 20% of the traffic through for sales router. Many people will, of course, copy it, just like many will copy instinct and others. But we are reaching the point where as exciting as the Neo Labs are, as exciting as Anthropic's pending IPO and OpenAI, these AI costs are unsustainable. It doesn't matter if Sonnet 5.5 and the latest Opus is cheaper. It is unsustainable to spend these costs 10, 12 hours a day and the competitive bar just goes up. Jeff is a 70th of the price and 100 times faster. And listen, as my good friend, Jack Altman says, the pace of change is so fast or exploding so fast.

• 44:34Speaker 02

  Maybe Jeff isn't the winner next year, but this is exactly the kind of bet we have to do. We have 100% downside protection. Someone's going to scoop up this team out of X OpenAI, no matter what. 17% market share on open router. I mean, as much as I advocated instinct last week, this week, this is my deal. I'm all in on Jeff, 30% of the fund. I know it's risky, but I want to get the ownership and I do believe there's a 50x upside to 500 billion. So I defer into Rory. I say we do, well, 20 to 30% of the fund.

• 45:02Speaker 00

  Jack, I should warn you, for some reason, Harry likes this kind of soundbite and it plays well on the pod, so.

• 45:08Harry Stebbings?

  Jack, you know me so well. At the end of the day, I'm a clip clip monkey.

• 45:12Speaker 00

  You're a clip bitch. I would say, but going back, the funny thing is, in this case, you can do some basic math and it's not crazy. I mean, we talked about this last week. Spend right now, today is roughly $100 billion. And you do the analysis and 20% of that is relevant to Jeff. So 20 that's $20 billion of accessible revenue. Say they compress it five to one, that gets you a $4 billion bucks of accessible revenue. And what we've seen, it's been amazing, is the developer adoption has been lightning fast. I mean, rumor has that they're at numbers over the way it's $100 billion run rate. And given that the tokens are half nothing, that's a shit ton of usage, right?

• 45:51Speaker 00

  You know, you can credibly get to a billion dollar revenue line relatively quickly here by literally taking money that's already being spent and saving 80 cents on the dollar. So Jason's comments aren't wrong at all. I mean, he has to learn that if you spend 30% of the fund every week, in three weeks, you're out of action. But other than that.

• 46:09Speaker 02

  We're benchmark, we just go back to the LPs with one email and we have a new fund.

• 46:12Speaker 01

  Yeah, I was gonna say, Jason will just recycle something and it'll all work out.

• 46:15Speaker 02

  Yeah, we'll recycle something.

• 46:17Speaker 00

  Can you flip it in three weeks?

• 46:18Speaker 02

  We also recruited Martin to the team. He's gonna help, we'll just recycle.

• 46:22Harry Stebbings?

  Enstain, can you please email Li's new fund, please?

• 46:26Speaker 02

  We invest 150% of the fund.

• 46:29Harry Stebbings?

  Another big round is modal triples to $15 billion and base 10 talks at $26 billion.

• 46:36Speaker 01

  Yeah, I mean, it has turned out that there was a period where you look back and maybe we're still in that period. There was certainly a period where you look back and the right answer with investing was just put it all in the labs, just buy the labs. And every round, people were like, it's expensive, but the the correct answer was just keep buying the labs. It has now turned out in the last 18 months or whatever, the correct answer was just keep buying inference. You have modal, base 10, fireworks, foul together. It's just all worked. You know, my partner, Eric Vitri, had this line that I've been kind of whipping a lot lately because it's true, which is that like, it's all gonna work. It was like, is it this or that? And Eric's like, dude, it's all of it. And it doesn't mean that every company is going to work, not every sector is going to work, but in general, a crazy number of things are working.

• 47:21Speaker 01

  Inference has been a really great way to get an index bet on everything outside the labs. Jason just made the point, which is a big part of why these inference companies are doing so well, which is that the costs are just not sustainable. So you have them on one side, which is it's too expensive. And on the other side, you have this dynamic, which I think is, we have now crossed sort of the threshold in a lot of areas and more and more happening, where you get sort of like intelligence saturation, where it is now good enough to do the thing. You know, to take a simple example, your tax return is filed correctly or it's not filed correctly. Once you have filed it correctly, throwing more intelligence at that problem doesn't do you any good. If your job is to hit a nail in with a hammer, your hammer is good enough, making it a gold encrusted hammer that costs $30,000.

• 48:06Speaker 01

  Your whole job was just to get the nail in. And so we have more tasks like that. And as a result, you're going to see more open source. And as a result, you're going to see these inference companies. And you know, there's obviously been, you know, I can't remember who just mentioned it, but open source is doing tremendously well. By the way, this whole cost dynamic does not mean that open source just runs away with it. The labs are obviously also going to offer much cheaper versions of their own models. And I think people forget how cost advantaged they are in a lot of ways. Their access to compute is structurally very strong. Their access to users is very strong. They have a lot of different ways to make money and therefore can subsidize certain costs in certain situations as it makes sense. So it doesn't mean that open source will dominate, but it does mean that open source is going to be a big part of the market.

• 48:51Speaker 01

  And that means you're going to have great inference companies. So I'm long inference.

• 48:55Speaker 02

  I think open source has reached its maximum as a market share. I think it's going to keep going down.

• 48:59Speaker 01

  But even if it does, even if it goes down by 50% and total consumption goes up by 10x.

• 49:05Speaker 02

  Yeah, there's still good investments. I'm not saying that there's not, there's not an almost infinite amount of inference, but I think we've reached peak open weights.

• 49:11Harry Stebbings?

  What would Jason, why? Sorry, help me understand.

• 49:14Speaker 02

  Two reasons, Jack hit one of them and there's a second one. They're crystal clear. One is, at the end of the day, Anthropic and OpenAI are just deciding what they want to price their non-max frontier models. And they have many ways to compete directly. There's no reason they can't be as cost competitive as they want to be. Now, they're, you know, Anthropic's got its numbers. If you exclude 7,000 things that has 80% gross margins, okay, we can make fun of that stuff. But they have the ability to be as competitive as they want to be, right? It is, and Jack's right, for sure, there's a certain point where all that matters is resolving a task. But even that, I don't think is that is quite that simple. But they can price Sonnet plus 5.5, which just came out. I just tested it. It's it's only like 20% cheaper, but that's 20% cheaper in one week. They can do 30, they can do 40 if they want. That's reason number one.

• 49:55Speaker 02

  Reason number two is, boy, people really don't want Anthropic and OpenAI training on their own first party data. But they also, I mean, I just got back from Dreamforce and I got to tell you, I know there are a lot of Blazers there and ill fitting suits and stuff. No one wants to run on open source models there, at least Chinese, China based, nobody. Not a single person is comfortable with it that I talked to, okay? Founders aside, but no customer. So I think just those two trends mean we've hit the peak, right? To Jack's point, it's not that, I mean, it's ridiculous to say it. No one at OpenAI and Anthropic is stupid. They can twist the knobs and dials and do what they want and be as cost competitive and just, you know, there are arguments for, but I just, this anxiety at the C level is only going to increase. It's only going to increase and it's only going to increase as security becomes a bigger issue.

• 50:40Speaker 02

  It's only going to increase as Astra 5.1 was pulled back for security concerns and no one, listen, I know it's fuddy duddies, but it is the real world in enterprise. I asked him, no one wants to use an open weight model on the floor that I talked to, nobody. So I just think the market share has peaked. I'm not saying it's not material.

• 50:54Speaker 00

  Did you ask open weight or did you say Chinese open weight? Because I think there's a bunch of things going.

• 50:59Speaker 02

  I get your point. I'm simplifying that the vast majority of these models that we're consuming today are China origin models, right?

• 51:06Speaker 00

  Where some of those guys are also moving towards not being open weight themselves. But yes, I do think that's why the whole poolside Nvidia thing is interesting. It would be interesting to have a low cost US based alternative. And going back to Jeff, for it's not open weight, but it is US and it's not an LLM. But for a certain class of use case, it is a direct competitor, right?

• 51:27Speaker 02

  I'm not saying that they're destroyed to Jack's point. I just think they've peaked, they've peaked in market share. I think it will come down and I do not, I don't even think it's going to maim modal or base 10 or others. But I think these market share charts that have seemed crazy this year, there's been a lot of sources, but but I think there's a lot of structural benefits that OpenAI and Anthropic have here. And they're going to take advantage of it in the coming months, right? And OpenAI just hit 70 billion, they said, in enterprise, like it's a lot of traction there.

• 51:51Speaker 00

  On that, and again, I don't know the answers that provided you have opportunity at the frontier, you won't waste time with the second string stuff to some extent. You're probably more likely to spend time on, as you say, doing the tax return. If you feel you are asymptotic on some of the frontier stuff, because the thing that you're allocating at the margin is your compute. And if you're opening AI on topic, I'd love to know what the math is like on. Do you take this next chunk of GPU and build a model for biology that can cure cancer? Or do you take it and do, you know, Jack's tax return, which is a pretty finite, probably not a pretty finite task, actually, now your benchmark product is pretty infinite task, but yeah, within the context of AI, it's pretty finite and super interesting set of trade offs there.

• 52:35Speaker 01

  Yeah, I mean, I think a couple of other reactions are, one is that to the point of, you know, non-American models, I do think that there's a lot of anxiety there. I also think we are starting to see and will continue to see a lot of enterprises post train their own models and draft off of open weights and use inference, you know, companies to make their own models and then run them themselves. And so I think, I don't know how that will factor in, but I do think we will start to see more of that in the US and I think that will have, you know, some amount of impact. The other thing is you can kind of, you know, I often try to just kind of like step back, blur my eyes and like, what's like the one thing here? And I think one of the things you could look at here in general, it's kind of all just going to come down to like, who's got the compute?

• 53:17Speaker 01

  You know, if you look across all of the inference clouds, I think it's, you know, on the order of like a gigawatt or something like that. And I think open AI and tropic, you know, high single digits each. And so, you know, you could say maybe one's a little bit more efficient than the other. Maybe one's got better token efficiency, one prices a little bit differently, but on some level, this will also just come down to like, all of the compute is firing all the time and like, who owns it? I think is going to turn out to just be a dominantly important part of the equation.

• 53:46Speaker 00

  Yes, compute share probably proxies to your token share, probably proxies with a little adjustment to your revenue share.

• 53:52Speaker 01

  At least within two X or something like that.

• 53:54Speaker 00

  Yeah, yeah, yeah. Within, yeah, got it. That, that, that does make sense.

• 53:57Harry Stebbings?

  Speaking of tweaking the levers, OpenAI reopens its $200 plan that it paused because it ran out of compute for the latest Asher model, but halves what $200 buys.

• 54:09Speaker 01

  So Harry, you're right. So this is getting at the same topic, which I think is like, kind of on some level, the fundamental equation of all of this. I think it's extremely important. The other parts of it that we just don't know that are also updating variables continually are how many tokens do you need per task? And so it's like, as the models get better, they get much smarter at consuming a token. And then the other is like, what is the utility per token? So like, it is true that there are more tokens being consumed, they cost less dollars. And what we just don't know on the other side of it is like, how many do you need to like, file the tax return, for example? And that's just like an open, it's an open question to all of it. So can you get more intelligence out of a gigawatt?

• 54:49Speaker 00

  Yeah. And when you try and get to grips with that, you realize how hard it is. Cause you know, I'm a geek, I went away and tried to figure out, you know, your total cost going down, number tokens going up, token efficiency. And the truth is you're multiplying three numbers, each of which has an error bar that's pretty damn large. And if you're, if you're any intellectual honesty, at the end, you kind of go, I just don't really know. The only thing you can observe that's actually actionable is the buying decisions of people who are allocating their money. Cause I can't figure out, you know, multiplying three big numbers together, what it means. But you know, some buyer spent half a billion dollars last year on tropic. You got to assume they ran the numbers and are getting value from it, which is why in the end, I go back to what I said, the proxy for all this, and Jack, you're right, where

• 55:32Speaker 00

  the rubber hits the road is people allocating budgets saying at the margin, automating this task makes sense and it's worth spending, you know, half a billion dollars, half a million dollars, whatever it is to do. Cause other than it's just super hard to really convince yourself, you've done the math well enough to understand it, or more importantly, to predict it 12 months out. And that's why if you, if I could know one thing and go back to my comment over and over again, I would know the Q3 numbers for those two companies. And you are, Jack, long term, it doesn't matter, but short term, it matters a shit ton is my opinion, just from a momentum perspective. And you know, how those budgets are continuing to expand.

• 56:06Speaker 02

  You know what, it's worth for, just for fun, there's an app I'm trying to finish called Saster Connect and I just ran an eval my own, I don't know if you can call them evals, but I ran it on Sonnet 5.5, which just came out, right? Input tokens, 42% higher than before. Output tokens, 44% higher. So who knows if Jack's tax returns getting all that cheaper? Now there's benefits from it, right? It passed more of the blind test, right? Quality went up, which is what you'd expect. Cost went down about 10%, not 30% because more is used, but plus 40% more tokens. I just think the stuff's hard to predict, man. 42% is a lot from a, from a, to go from 5.5, right?

• 56:41Speaker 00

  And that's at the level of granularity of Jason doing his Jason's task. And it's 10x, 100x harder to say tasks in general from people I don't know, or I don't see their token spend, which is why you just got to look at what the Jersons are doing.

• 56:54Harry Stebbings?

  Today we have news on, on the flip side of like the incredible multi-trillion dollar IPOs, we have Aura pulling their IPO, which was planned for a $16 billion. Jack, I have to, whenever I basically say a new topic, I read Rory's face and it's always miserable, but it's just the extent of misery that I have to judge.

• 57:13Speaker 00

  I'll own it, I'll own it. You're right, we actually have.

• 57:16Harry Stebbings?

  Oh no, you've got some of Aura, don't you? Sorry. Yeah, yeah, yeah. Oh, I'm so sorry. We'll, we'll, we'll set up a GoFundMe page just for you, Rory, just so you can get some shackles in your pot to make up for it.

• 57:27Speaker 00

  You're all sweet, Harry. I know you care so deeply, but look, I just comment, yes, I'm in the position of having an ownership interest, but not in any way being actively involved. So not having any insider information, but I will admit this surprised me. I mean, it's super surprised me. Aura had planned to do an IPO, they were a long way down, meant to price this week, Wednesday, right? They went into it feeling very strong. In fact, for the record, they had Morgan, Stanley, Goldman Sachs and JP Morgan. I mean, all the people, I mean, there was no people left that you couldn't have, right? So it's not that they had the dummies here, people. And then the second thing is, you know, it's a profit, it's a big company, consumers know it, it's the kind of thing that should be very doable. And the third interesting thing is when they first filed, one of the largest investors, forerunner, whom I think are super smart, said they're going to sell all their position,

• 58:13Speaker 00

  which I've been doing a long time. I'd never seen someone in an IPO being able to sell all their position, right? So I was like, hmm, ballsy call and give you credit because you consume electricity is hard. But the fact that a priori, they'd said, we're going to do this. To me, you wouldn't say that unless you were highly confident the deal's getting done. Cause look, it's always harder to get a deal done when there's secondary action. And when the more secondary action there is, the harder it is to get a deal done. Do you understand me? So having leaned in upfront to say effectively, we're doing this with a primary and a bunch of secondary, right? And we think we're going to get a lot of secondary off the table, to have to walk it back to we're going to downsize the deal and now we don't like the price.

• 58:49Harry Stebbings?

  Do you think it's the right decision, Rory?

• 58:51Speaker 00

  Well, in one sense, because it was a huge secondary component, the secondary buyers who are venture people on the board, it really matters to them, the price they sell at, because they're actually crystallizing it versus, you know, if the company is taking 10% dilution and it leaves a little money on the table, then with all due respect to Bill, who has been prioritizing on this, I'm going to say something awful, no one really cares, the stock pops 20%, everyone moves on and the stock is trading nicely and it's set up nicely for secondaries down the line. That's the normal move, right? If you're actually selling your entire position at the IPO and you think you're going to get 22 bucks a share and suddenly you're getting 18, that's going to reduce your entire venture return by 20%. So you become very price sensitive. So maybe, maybe they felt they could get the deal done anytime and they only wanted to do it at a high price.

• 59:35Speaker 00

  That's the positive version of the argument, that the investors liked the deal, but just wouldn't pay up. And they decided, hey, at that price, we prefer not to transact. It's a totally rational outcome, but it's kind of a weird one.

• 59:45Speaker 02

  You really think Tom Hale decided not to do the IPO because forerunner couldn't get the price they wanted? I don't buy it.

• 59:51Speaker 00

  I don't know. I don't know. It's like, I'm trying to piece it through because.

• 59:54Speaker 02

  It's possible. Don't get me wrong. He's not a founder, but I find it, all the effort that went in, he wants his liquidity.

• 1:00:00Speaker 00

  If I'm the company, I'm bummed because I always think doing an IPO, I've been at IPOs that nearly pulled on the last day before. And you know, it's like those bobsled races, my opinion, I always tell people just the minute you unveil the S1, the minute it goes public, you're jumping in that bobsled and you're sliding to the bottom and there's very few easy way out. Before you unveil, you can do what you want, but once you unveil, well, this is the hardest thing to do, which is to pull a night or two before the thing. If it was an enterprise company, it would be even harder because then you get all these second order questions, are they at risk? Are the dynamics? But because it's consumer, consumers don't care that much, because it's already profitable, they're not at risk. So it's not fatal, but it kind of, I'm with you, it's like a whole bunch of hard work to get it this far and then a bummer at the last minute.

• 1:00:45Speaker 00

  It sucks. I'm like, I don't know why that happened. I'm a bit bemused, to be honest.

• 1:00:49Speaker 02

  It does soften it slightly. The employees had 534 million in tender offer just a couple of months ago. It does soften the blow, but it's definitely a bummer. Like the whole, if you've been on the other side of it, going public, there's just so much emotion, right? It's a bummer if the stock price was lower than you thought. It's a bummer if the pop is less than you thought. What I thought when I read it, I was like, man, there's just, there seems to be so much liquidity that we talk about all the M and A deals when we started it, but man, you can't get a damn IPO done.

• 1:01:17Speaker 00

  And that's what, I mean, Dan Primack made that point. He said, don't like it because of market conditions. We are 1.4% off the S and P all time high. The Schiller PE is at an all time high. I mean, how much better does it have to be, big guy? Cause I agree, it was like, huh? And it will be interesting to see any of these other non-antronic IPOs. I'm not sure what's up next. I know, was it new, is it new, not new scale, it's.

• 1:01:40Harry Stebbings?

  End scale.

• 1:01:41Speaker 00

  End scale. Yeah, yeah. The, the, that's another highly aggressive compute dependent one to Jack's point. The interesting to see when that one goes.

• 1:01:48Speaker 01

  What'll be interesting too, is we haven't really seen any of the like AI native companies go out yet. My guess is a lot of them would trade very well because public markets don't have enough exposure to them. But I think it's scary to be the first one. It's scary to do it before the labs have gone out and everybody can see how the markets react, all of those things. So I think there's a lot of companies waiting in the wings and I think if the market holds on, I would, I would expect that in 2027, there will be quite a few of these. We just, it's interesting that we haven't seen one yet.

• 1:02:17Harry Stebbings?

  Which will be the first, Jack?

• 1:02:19Speaker 01

  If I knew that, I'd be really good at my job. I'd be able to pick them all. I don't know. There are many that can choose to go out tomorrow if they wanted to, but it'll just be a decision with the management teams and the boards to the point of this, you know, the Aura conversation. It's, it is not a question of can they be public? It's just what price do they get and are they happy with it? So it's, there's a lot of companies who just, you know, it's at their option right now.

• 1:02:39Harry Stebbings?

  On the other end, you've also got Monzo, the British bank getting acquired for... Oh, Rory, why do you not like that one?

• 1:02:46Speaker 00

  I love that one. No, I think it gives me a chance to bitch. No, I know, no, I'm sorry about my face, Harry. I'm really excited to do Monzo. I have stunningly opinions on this.

• 1:02:54Harry Stebbings?

  For everyone, Rory has an astonishing RBF, which is a resting bitch face. But whatever you say is continuously just miserable. But Monzo, eight to kind of 12 billion, there's quite a range now on the suspected acquisition price by New Bank. Honestly, I was really surprised by this. David is very focused on winning the US. Buying Monzo, which is bluntly a phenomenal asset in the UK, a really strong, strong British bank, but it's in the UK. To buy it off the UK and the US at the same time, I thought was respectfully very strange. David's brilliant, so much better than me, so he knows what he's doing. But I was shocked to see this news.

• 1:03:32Speaker 00

  Put it another way, it is more surprising to see that New Bank wants to buy than it is to see that Monzo wants to sell. That's effectively what you're saying, Harry.

• 1:03:41Harry Stebbings?

  Oh, yeah, yeah. Monzo want to sell for sure. They're way too small to be significant in a US public market. And the European public market is the shit as. And so you're praying for someone to come and save you.

• 1:03:53Speaker 00

  Agreed. That's funny, because that's all you're going to take. That's exactly right. Yeah, so the question is why New Bank? Because in fact, and the interesting thing is the stock market agree. I think the New Bank stock went down on this, right?

• 1:04:03Harry Stebbings?

  Six billion dollars, yeah.

• 1:04:05Speaker 00

  The part, I'm going to make the argument and then you can tell me why it's dumb, because I think it is, is that, you know, you can make the argument that, look, the problem with the US as a neo-bank market is we're just so damn efficient in terms of our banks that there's not a lot of fat profit to be taken, which is why Chime, which I admire as a company, trades well, but not amazingly. I, five, six billion dollars. Whereas Revolut, which is sticking it to all the crappy old school banks in Europe, is making out like a bandit. So maybe the argument is, if I'm Monzo, the reason that it's so well in Brazil, it's another market full of crappy old school banks that overcharge. Maybe they're just focusing on the less efficient markets than the US. And that's possibly the argument. But you're right, even then, A, you're entering the UK, not Europe, because you guys left Europe, you silly people.

• 1:04:49Speaker 00

  And then B, you compete with Revolut, who, as you point out every week, Harry, is not exactly a shrinking violet when it comes to competition.

• 1:04:56Harry Stebbings?

  Oh, my God, terrifying.

• 1:04:58Speaker 00

  Jamie Dimon, but as a Russian, you know what can go wrong?

• 1:05:02Harry Stebbings?

  New Bank are down 23% over the year.

• 1:05:05Speaker 00

  Ooh.

• 1:05:06Harry Stebbings?

  Market cap is 47 billion. Over the week, they're down 12.6%. I'm going to buy this.

• 1:05:12Speaker 00

  Cool.

• 1:05:12Harry Stebbings?

  Real time, Jack, this is how we do business.

• 1:05:15Speaker 00

  I love this, yeah. Jack, you'll note the complex analysis you did here. He looked at a stock chart, so it was ready to pile in, exactly.

• 1:05:22Speaker 02

  30% of your public cash you're putting in?

• 1:05:24Speaker 00

  Do 30. I would do a full 30.

• 1:05:26Speaker 02

  30% of your liquid assets, 30% of your liquid assets.

• 1:05:29Speaker 00

  Yeah, you've got your all fun now. Third in Instinct, a third in Jav, and a third in New Bank, man. You're in, you're one-third liquid, you're golden.

• 1:05:37Harry Stebbings?

  Traded, done. Thank you very much. I'm out now. Thank you so much for coming, Jack.

• 1:05:42Speaker 00

  Yeah, exactly.

• 1:05:43Speaker 02

  You know, I don't know too much, honestly, I don't know too much about this deal. I can't add too much, but the one thing I will say in general is, it seems to me they're buying time, right? They're buying time to instantly have the British market. They're not buying just the revenue, right, or the customers. They're saving themselves time. And I think as venture investors, those are great for our portfolio companies. Because sometimes a company you have, it's not even growing that crazily, but it has a position and someone will pay up to save time. We need that for venture to work too, right? It's the only way people are going to buy the A minus, B plus assets is to save time. So, so thank you. And I have a few others that can save you time, that can save you years of time. I got them, and here's a deck.

• 1:06:24Speaker 00

  I also think one other comment on the Monzo side is that the whole, you know, boardroom drama, the originally founder, Tom, had retired. They put in a CEO, then the chairman swapped out the CEO, and then the investors were pissed, and then they reversed that, and then the chairman's retired. It's going to sound really odd. It's that UK chairman plus CEO role I've seen, which makes intuitive sense for well-governed, public, boring companies. But in my view, makes absolutely no sense for venture-backed deals. And you can tell what happened here under the surface, which is all the VCs were like, you did what? You know, we weren't backing the chairman, we were backing the CEO and you changed him. So I think there's a lot of board instability. And when you have that, especially when you've taken out the founder and you have a ton of board instability, and then suddenly someone says, I'll buy you out.

• 1:07:10Speaker 00

  You're like, hit the bid and the pain.

• 1:07:12Harry Stebbings?

  Well, I think everyone was thrilled bluntly when TS came in, just to be super clear. With the greatest of respects, the company turned around when TS came in. And then when TS got taken out.

• 1:07:20Speaker 00

  That's my point.

• 1:07:21Harry Stebbings?

  Oh, yeah, yeah, yeah. Mother of God, why the fuck did you take the guy who was competent out of this business?

• 1:07:26Speaker 00

  No, you're exactly right. Tom had done the founder thing, the company was doing 100 million, losing 100 million. They hired this guy, he kills it. And then they replaced him in the last few months, and it's like, huh. And I think all the venture investors are going, we didn't sign up to have a non-exec chairman, we placed the guy we backed.

• 1:07:41Harry Stebbings?

  Totally. Guys, there's two different spectrums here in terms of venture. Bessemer raised a fresh $5.75 billion, to the point of you only need one, or they think you need close to six. But a very, very modest $1.75 billion seed fund, Jason. So seed isn't for suckers. When you're doing about 40 million a year in fees, it ain't for suckers, baby. And then on the flip side, you've got NFX now just investing GP capital, not taking a new LP capital in new funds. So two different ends of the spectrum there.

• 1:08:18Speaker 02

  Well, the Bessemer thing is just what Jack talked about at the beginning. The learnings at Benchmark and going big on growth early. I think it's probably the same story. I mean, Bessemer, they weren't menlo into Anthropic, but that was a great one, right? The growth team accelerated, they blew up, the whole team's there, Samir and the whole team. It's been a win. So of course you put more money into it, right? They said that, I think they said the seed early was still mostly growth.

• 1:08:39Speaker 02

  But even there, to Jack's point, it's 2026. Imagine a seed around is 30 million. How many can you do with reserves in a 1.7 billion fund if you can't count on recycling? 30 with one-to-one reserves? You can't even, even a billion starts to sound small for seed funds if you believe 30 million's a seed. And that barely gets you a TechCrunch article. So the math sounds right, even if the returns may be some work.

• 1:09:02Harry Stebbings?

  That's why Rory's a pre-seed investor today, with his 900. Friends and family round, Rory's the first shackles in.

• 1:09:09Speaker 00

  Yeah, that's me, exactly.

• 1:09:10Harry Stebbings?

  And then, and then NFX shutting shop to externals?

• 1:09:14Speaker 01

  I mean, I agree on the, like, both of these moves make sense. Like, you know, for Bessemer, it is the market around you. And they've got, you know, a long history and tons of LP trust. And if you want to play the game, why not just go bigger and play the game? And then on the NFX side, you know, the Homebrew guys, I think, did this before, and that works out really wonderfully. And I think it probably changes the texture of how the game feels. And I think people also really care about that. When you're not managing external capital, you get to do things without any explanation to anybody. And I think that, you know, there's probably some ways in which that lets you, you know, freeze up your activities. But I also think some people just get to a place where they prefer it. And they want to say, you know what, this ownership stuff, I don't care. I want to put 100K into, you know, into Jav or something like that.

• 1:09:58Speaker 01

  And that's hard to defend out of a seed fund. But if you're investing your own capital, it lets you do it. So I do also think back to the prior point. I think money's a big driver, but I think there are also non-financial drivers for a lot of these things, so it makes sense.

• 1:10:11Speaker 02

  The only thing I thought about, this has nothing to do with NFX. I mean, I get the appeal of investing your own capital, right? And I think, frankly, I think anyone investing that has some resources has thought about it at least a little bit. If you've got a little bit of money, I'm like, F the LPAC and all this. Well, I'll just do invest my own money, especially if I have a hot hand. I'll get into these great deals and, you know, I'll get 100% instead of 25% or 20%. Everyone's thought about it. The only thing I always thought about, if it's such a great idea, why didn't Peter Thiel do it?

• 1:10:38Speaker 01

  Well, Peter Thiel did put a huge amount of his money into each founder's fund.

• 1:10:41Speaker 02

  But not all, but not all of it, right?

• 1:10:42Speaker 01

  No, not all of it. I think, um...

• 1:10:44Speaker 02

  It's just an example, right, of not doing all of it, right?

• 1:10:47Speaker 01

  I think you're right. I mean, I think what he would say is if you want to build a firm, you need outside capital. You need salaries to pay people. You actually need kind of the tension with stakeholders outside your firm to do it. So I think if your aspirations are firm-building, then you would say, I'm going to put in as much of my own money as I can because I believe in the strategy, but, you know, as much LP capital as we need. So that would be my guess.

• 1:11:08Speaker 02

  Yeah, it's like 30% of the fund that he funds or something like that. But the NFX thing, I did notice, I think they said goodbye to the team in the note. So to Jack's point, yeah, it's easier if you don't want to have a team, right? If you don't want to have a... And they have life goals too. It's not just the money. You can fund the salaries, but they have life... I mean, they want to be partners.

• 1:11:25Speaker 00

  I totally agree with what you just said, Jack, about people. You're building a firm, you have junior people, they want to have a goal, they want to have a career, you have to take outside money, you got to do all the things, right? I think, by the way, the beauty of putting 30% of your own money in is you can look the LPs in the eye and say, thank you for your opinion, but as the largest LP investor here, I'm very comfortable putting 20% of my fund in SpaceX in 2008. So duly noted that you're concerned, but hold that thought for 18 years and you'll be glad.

• 1:11:51Speaker 02

  Yeah. And, you know, by the way, I think a lot of this gets lost. You know, we, we rarely talk about, you know, LPs and all of those things. But the end result of all of this, you know, venture capital work is, you know, hopefully that you're generating money for, you know, groups that, that it matters for and all of those things. And if you're, you know, an employee at a firm where it's all the principal's money, you're kind of like a family office where if you do a really good job, you, you know, you enrich that person versus, you know, hospitals and endowments and all that stuff. I, I do think people care about that, too.

• 1:12:20Speaker 00

  Agreed. On both sides, I will say, just as a comment, you, you, you care about it a lot because you want to do really well for your LPs. And you also feel the burden of it, too, right? Is that, you know, you're not just letting yourself down. I mean, you know, I'm always conscious of the charities that many of our LPs embark in. And I have this mental model, if we're doing wrong, we're doing something that's not working out. I have a couple of charities that are super small, where I'm like, I know exactly where this money goes in some homeless program for teenagers in the Midwest. And I'm like, we're sticking it to them. Okay, people, let's get back to work and make this happen here. But you're right on that.

• 1:12:51Harry Stebbings?

  Jason, would you ever do this move? I think you're probably the closest to us in doing this move with the greatest of respect.

• 1:12:56Speaker 02

  You know, I thought about it. And to Jack's point, the reason is, and you rethink it, right? I'm like, okay, notwithstanding most of this conversation, if I want to be able to write a $5 million check to be relevant, that's too much for my balance sheet. It's too much risk. Okay. So, I mean, Homebrew, first of all, they, they were phenomenally successful, right? Small LP and some of their funds, right? They're comfortable with those diverse sized checks, right? I just didn't want to do them. Like, I don't get a lot of joy out of the, the 100K check that I do in 60 seconds. If I got joy out of it, then maybe I would do it. But I'm like, hey, I gotta be able to write a $5 million check, or I don't want to do this game. But if it wasn't for that, I probably would, I probably would. In fact, the Homebrew guys recommended I do it when I started. They're like, don't do this fun thing. Like, back in the day, you have enough of a brand, you have enough,

• 1:13:41Speaker 02

  just, just, just do it direct. So that echoes with me once in a while. But even if benchmarks change, you do, you do have to fund the check size that you're optimal at writing, right? Somehow you got to fund it.

• 1:13:51Harry Stebbings?

  Boys, what have I missed? Rory, Jason, Anthropic's founders locking up 50.1%.

• 1:13:56Speaker 02

  You know what's weird in that? You know what I didn't get in that story? Maybe you guys have some color. Like, why, why'd they wait so long? Why didn't they lock up the control a little bit earlier? Like, what am I, what am I missing in the, in the story, right? Did the guy from Skype not let him do it? And Duskin Moskovitz vetoed this? Like, what the hell happened? Why did it take so long to get voting control?

• 1:14:14Speaker 00

  That's because you probably actually have it in the pre-IPO structure. I'm willing to bet, just based on a bunch of different things. And then it's when you convert everything to common stock, that typically voting rights expire on the IPO. So what, my guess is they had a pre-IPO deal, and now you got to recreate a post-IPO deal, because everyone's cap structure changes. So I've, you know, I've been in situations where it's been in existence pre, and then you realize, oh, my gosh, everyone, all these preferred stocks that have minimal voting rights, or maybe two out of five board members, convert to common. Now it's just based on ownership. Oh, my God, in this case, I own 2% of the company. I think we're going to do it differently. And look.

• 1:14:53Speaker 02

  Could be. Yeah, could be.

• 1:14:54Speaker 00

  I mean, this, to me, at this point, look, if we're willing to fucking trust them not to blow up the world, and they've already said they might, and it's only a 10% chance, I think we can trust them to with the votes. You know, this is, this is so low down the list of, I mean, can you, as I sit up and draw the S1, having argued over founder control before, right? And is it a good term for the public markets? And as I've mentioned to you guys, I've changed my mind, and I've come to the conclusion it is, because of the activist pressure. In the case of this deal, it's literally item 17 on the agenda. Right? First, risk of blowing up the world. Second, risk of cyber attacks. Third, risk of hostile state actors. Blah, blah, blah, blah. Oh, item 17. Oh, by the way, we'd like to control all this. Yeah, right. I mean, everyone else is like, knock yourself out. Sure, you have charge of it. That's where they'll know who to indict.

• 1:15:40Harry Stebbings?

  Boys, it's a wrap. Well done. Thank you so much for joining us, Jack. You've been a star guest.

• 1:15:45Speaker 02

  Thank you for having me.

• 1:15:46Harry Stebbings?

  It's been so good to have you.

• 1:15:47Speaker 02

  You guys are awesome.

• 1:15:48Harry Stebbings?

  Awesome.

• 1:15:48Speaker 00

  Thank you, Jack, for joining.

• 1:15:52Harry Stebbings?

  But before we leave you today, when you're building a company, you learn that trust is what closes deals. You may have the best product, but no buyers will sign these days without proof of your security. Here's what happens if you're not prepared. A prospect asks for proof of compliance. The deal stalls when you scramble. Your engineer gets pulled off the roadmap to audit prep. Every enterprise conversation turns into this horrible fire drill. That's where Vanta comes in. Vanta is the leading agentic trust platform that not only gets you compliant fast with frameworks like SOC 2, ISO 27001, HIPAA, and GDPR, but keeps you compliant by continuously monitoring your controls. So your deals keep moving and your engineers really keep building. Now, access the Vanta agent everywhere you work, even if your team lives in Claude or Cursor. And that's why

• 1:16:37Harry Stebbings?

  Vanta is trusted by more than 16,000 companies, like Ramp, Harvey, and Writer. So prove you're ready for business and get $1,000 off Vanta when you go to vanta.com/20vc. That's vanta.com/20vc. While Vanta keeps compliance covered, Deal helps you hire globally. We get it. Global IT can be a headache. New hire in Tokyo, but the laptop, well, it's stuck in London. Someone left the company last week. Wait, is that access already revoked? Deal IT handles hardware, software, and access to across 130 countries from one system. You have the right to be impressed. Brands like Eleven Labs are already managing their

• 1:17:20Harry Stebbings?

  global IT at scale with Deal. It's one system, one source of truth, with zero vendor gaps or manual workarounds. So build your global team with Deal. Visit D E E L dot com slash two zero V C and start expanding your business today. While Deal builds the team, Framer builds the site. If you want AI that builds your real website, not just a throwaway first draft, that's Framer. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. Agents and humans work in tandem. Agents bring speed and scale. You bring taste, judgment, and control. The

• 1:18:05Harry Stebbings?

  work lands on the canvas and stays editable. Build custom code components, manage CMS content, optimize SEO, and audit for issues, all in one place. Enterprise-grade hosting, security, and 99.99% uptime SLAs, trusted by leading brands like Perplexity and Miro. Learn how you can get more out of your site from a Framer specialist, or get started building for free today at framer.com/20vc for 30% off a Framer Pro annual plan. That's framer.com/20vc. Rules and restrictions may apply.