YouSaid · the spoken record

David Frankel

lines on the record: 105
first: 2024-10-14
most recent: 2024-10-14
sittings or episodes: 1
sources: podcast

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“Raising 20 to stop. Yeah. I mean, I have to strong arm my partners into like putting $5 million into a company. But yeah, we can.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“So, Harry, I'm reading the path between the seas by David McCalloch. The book was written in 1974, it won the National Book Prize in the US, and it had been recommended to me so many times. It is about the building of the Panama Canal between 1870 and 1914. Just to give you a sense of this, France spent $250 million and effectively went bankrupt, 20,000 people died, mainly from yellow fever and malaria. The Republic of Panama was like America doing”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I've got a good book. You go to good books? I've got a good book for you. Oh, gosh. And you've got to talk about that. What's the favorite book you're reading this at the moment? I mean, like, I'm obsessed.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“And when I do do it, like, do I have every single question answered? No. It's sometimes emotion versus intellect. And at some point you've got to go, I'm going to run with the emotion here. And conversely, if you don't have that, like, I think about this as going up the mountain instantly, we have this incredible rapport. Like I just leave that meeting feeling like so energized. And then I go home and I sleep the night. I wake up the next morning. I'm like, this will kill you. This will kill you. This will kill you. You'll never take them on, right? Like you're dead before you start. And you're like, I just talk myself. I drive to work. I talk myself out of it the whole way there. And then by that off, next afternoon, I'm going, oh man. But like Harry's amazing, right? Like he's unbelievable. And at some point, to ignore the emotional visceral response is also wrong.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I really thought about it. It's a great question. The unmade decision. Honestly, I look back and I go, every great decision was never binary. It was always weighing up scales. And I think getting to conviction is confusing for people because they listen to this and they go, oh, you're binary about that. Like you knew unequivocally. And the truth was like the biggest decisions, it was 51%. So leave South Africa and go back to live in Boston. Take up the offer to start found a collective with Eric. Was that like binary no-brainer? Well, the seduction of wanting to be in business with Eric definitely was. But everything I was leaving at home, burning bridges and like burning the boats is, it's insanely difficult. And I think that the older you get, the tougher it is to take binary decisions. And I think that the good part of that for a founder is when we give a termsheet, when I say I want to be on your board, man, it is hard thought through. I do not do that flippant.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh my god, I'm going to really have to give thought to that. Hun made decision. I literally have got to think about that. It's a good question. Yeah, it's a great question.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Our biggest loss was probably Pinterest. There have been so many. So, what is my biggest loss? I met Marty Ardlin, who was starting running tide. He was a mechanical engineer, first individual in his family who'd gone to college and just one of the most thoughtful guys in applied ocean that I've ever come across, third generation lobster fisherman. And I was just very, very seduced by this. I reversed the truck for Marty. And what I think I underestimated is translating a product vision into something that was truly commercial didn't happen. We lost all of our money on running tide.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a long, long journey, and even post IPO hang on. When you think your company has a real moat and is very difficult to compete with, don't sell suit. Don't sell too soon.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Jake Saper from Emergence on Regal, who's been just an incredible augmentation, just been a fantastic partner to have on the company. So Jake sourced Zoom for emergence deserves a lot of that credit, reversed the truck on this portfolio company, and every bit of hiring, every bit of advice, it's literally like he can't do enough for a company at a later stage. He chooses very carefully. He doesn't do that much. And when he does, like through thick and thin, this guy just gets involved.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I find this easier to answer at the company level. So if I think of applied AI and I think of some of those companies, Micah Rosenblum on Vicada comes to mind, that is applied AI to camera. Josh Wolf, who did Andirol out of Lux, that's like applied to drones. Again, if I look at Josh Kushner, billion on 100 billion, I wouldn't bet against that. So my answer is company-based”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I used to think that PE firms were like the enemy of the seed stage, and I've changed my mind on that. We've got some PE firms in two vertical SaaS companies that I'm involved in, their rigor, their financial discipline, and the help they've given to those companies has been great for the entire cap table. So PE can be very, very valuable in portfolio companies”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I agree with that. I think all things being equal in the rearview mirror, you look at the Trade Esk versus Olo and you go, the Trade Esk is like, it's this infinite TAM, right? You could literally be Google, Facebook, and TrayDesk. And then you look at Ola and you go, okay, vertical SaaS restaurants, is that TAM limited? Probably all things being equal, but there you go. Totally, but both made you made you.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“We do. I've seen a bunch of times where funders will look at TAM and they'll walk away from a deal and they'll say because the TAM wasn't big enough. One of my favorite examples of this is Media Radar. I was in it with Bain Capital, pre-founder collective. It's one of the biggest vertical SAS plays, if not the biggest in the world in media now.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“It depends on the context again. It depends on how hot the deal is. I think you're describing a hot deal in a tougher time like helitosis is better than no breath at all. So, you know, like if you're doing your buddy a favor and that person's putting $5 million into my deal and I have struggled to fundraise, like bring it on.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“You need to know that it's Light speed. Totally. So you need the science and you need the art. You need the science of going, I'll take you to the right partner. Because of course hit rate with the wrong partners and happens all day long is like Harry's busy. You're on a deal. You're not that particularly interested in that vertical or whatever. Done, finished. But there's the art as well, right? And ideally, this is sales, right? This is testimonial sales. I'm saying Harry is awesome. Harry is awesome. Like it's not Harry going, oh, I'm awesome, right? It's me saying Harry's awesome. And by the way, I have to believe that for that to be really authentic. So that's why our testimonial sales with our better companies, with our companies that are performing, are better than, you know, when we're trying to kind of sell a company that's not performing. So it comes down to performance.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Right? So it's basically like call option time all day long. Whereas if you look at us, if you look at seed funds, right, our whole incentive is to get you funded. Harry, I promise you, I imagine a lot of your time is like, oh, think about that fund. Think about that fund. Think about that partner to the point that over 15 years we've operationalized this. Like our software, I don't care if you use Monday, Airtable, we use Airtable, but our Airtable and the number of people in our organization who are just like full-time dedicated to this, to finding you not to the right phone, but find you to the right partner, right? All we do. Like, I'm like a glorified matchmaker on steroids. That's all I do.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Invest at the market clearing price. And if you're not hot, I'll get a deal. And otherwise, I'll just won't invest at all.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so when you're a small fund and you're not going to invest round after round, right? Like whole MO is make introductions all day long. If you think of like a lot of what I'm doing is making introductions to other funds. I'm like a glorified matchmaker. So some of the thought over there was what's the difference between, and maybe it's stage specific funding, but like what I get from you, what I get from Sequoia? Well, Sequoia will never ever send you, will never matchmake for you. Sequoia will, if you take your check from Andreasen, Sequoia, Axel, you name them. They will never, they have no incentive to matchmake. They have no incentive to take you to another fund at some point because at every stage, right, they either want their pro rata and they want their pro this is the difference between kind of totally financial investors. And I'd say a lot of the ecosystem has become that. It's like have my pro rata. Let me wait for you and go to the market, whatever. And if you're hot, I'll then”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I was thinking about this. I actually just wrote down matchmaker here. Like the small fund versus the big fund and this, the concept of the big fund, the lifetime investor fund really has no incentive to matchmake for you. They have this incentive. What do you mean by this?”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I think they could come out. Harry, I think the era gave rise to that, unfortunately. There's so many brands that are around this.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Gave every cent back. But here's the thing the degree to which I felt taken care of by this guy who was an expert, I think sometimes, and I think he felt great that like here was this helpless capitalist, like hit by a freight train in terms of this bankruptcy. If we can do that once in a while, the joy of that, right? Sometimes this is about financial returns and it sounds like completely ridiculous to say it's not, but sometimes the gift of that, right? And the chemistry that that unlocks, we'll do every company together after that.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“In a career, I've been through one bankruptcy. One bankruptee. So in a career, in hundreds of investments, I've had one bankruptcy. And Micah Rosenblum, my partner's father, Lou Rosenblum, was one of the best bankers. He's out of Chicago, one of the best bankruptcy lawyers. And I remember thinking, oh my God, I do not know what has hit me here. This is like a freight train. There was an enormous fraud in the company. The CFO committed suicide. The CEO is still in jail. I mean, like, huge story, right? Like, they were literally fraudulently putting KPMG on fraudulent financials. I remember that moment when Micah said to me, Lou's going to take you under his wing. I'd been paid out a couple of million dollars. The first thing Lou said to me is, you're going to give back every last cent. You're going to be the first person who gives back all the money and all the other investors are going to hate you for it, but that's the first thing you're going to do. So I had taken secondary, it was 4XR investment on the secondary.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't think about dilution much. We really don't. Our MO has been we dilute alongside the founder. As a seed stage fund, we get involved at the beginning and it's been a strategy and we don't think about dilution. We think about time and we love the alignment of coming in very early and hopefully being economically aligned with the founder. And then it's the exact same strategy, exact same thinking as we'll dilute alongside the founder. By the way, I can't afford in my fund if I've done my job right and you are raising your next set of capital at 3x or 4x. I just can't afford to actually maintain my percentage ownership.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you have to have that economic alignment to start off with. So I don't think you should ever take a board seat where you own too small a percentage or the size of that potential outcome vis- ⁇-vis your fund is too small. So I really think you have to have the economic alignment because it means every time you sit down, it's like us for a founder to know.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“You remind me a little bit of when I started our ISP with my co founders, and we went to like the biggest banks and we offered them internet service and hosting and all sorts of e-commerce options. And then we went to the national kind of railway owner. And they said, look, I've got a network. I own a network. I've got fiber on every single railway. I own a network that just dwarfs you, right? I can do all of this. Like what I need you for. And I remember it was like, okay, like walk out six months later, they'd done nothing, you know, a year later they'd done two years later. The answer is there'll be the short-term thing where again everybody goes like, I don't need you like, is there a business in terms of smart software solutions? And yeah, that's all over the place still.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't agree with that. I think some of the tools are actually very commoditized. So I think that the vertical SAS or horizontal SAS or data owners will be able to access the underlying tools reasonably cheaply at some point. And you may disagree with that, but I think if you look at some of the open source software around this, it's like, it's going to become more and more commodized, the underlying tools. So you could go and say, well, why can't every single company do that? I don't think you can, but I think there are going to be software providers that enrich their tool set that are going to do unbelievably well.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Things with AI. I think short term defensive. Short term defensive. If you enrich that and you're the one to do it and you retain your customers and because of the enrichment, you increase your revenues and you increase your customer base. Look at the great companies, Tesla, I don't know, look at Netscape, right? At some point, freemium. It's like Freemium on steroids. I think the right play is defensive to start. And then once you retain those customers and you've enriched the data, I think there's a lot to consider.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“And the fascinating thing there is like it goes back to the Andreessen, you know, like soft. Andreessen said software is eating the world. Like I have this and the have-nots around data. And you look at some of these vertical SaaS companies or horizontal SaaS companies. The truckloads of data they have, it's theirs to lose. So Mark Bernioff, Salesforce, you write that off at your peril because the amount of data they have, they throw in these AI tools. They're doing their own stuff, right? Their opportunity is enormous. And I've seen this in some of our vertical SaaS plays. Like if we give the customers enrich data, if we don't enrich the data, like we're out of business. But we enrich the data we have and you look back, you're like, whose opportunity actually is this in terms of AI? If you've got data and you drop the ball, like, you know, only blame yourself.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's the haves and have-nots. So I think if you have AI, right, like it's changing, I think, again, if you're a vertical SaaS company doing $50 million, right, the multiples, the listed multiples are constraining you. You're not getting a 20x multiple, dude, because that listed company that I own shares in is at 6x7X. That's the multiple. I see this.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. Oh, man. Those guys were just like a casino, right? Like it was insane. John was doing, I kid you not, we did a 20 on 80 two weeks. We did one the one week and we did one another week. And Otto was one of them. But like in retrospect, you go, how do those founders know what to do with that money? And they have that money and they're going, no one would have like expanded in the US if you didn't have that money. But you go and you open an office in the US and you go, before your model's working beautifully in the UK, you're trying it over there. So the sin, like the last era, like the boatloads of capital, like that's the sin of the era.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“And quite rightly, they said fine. Yeah. Yeah. We had this. The biggest sin of the lost era has been the huge amounts of capital. These boatloads of capital. I'm going to meet later with Sam, you know, Sam Franklin from Otta. Great founder. Lovely business. And I remember the other investors were talking about 10 on 40, right? Like one call to John a tiger, like 20 on 80, no problem. And Sam at the moment thought I was like the superstar investor of all times. He was like a seed investor across the, you know, biggest name investors involved there and like in a second did that. In retrospect, what a sin? What a sin? Him to do that deal. What a sin even for me to like, and I was caught up in the moment. But to so”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“My rule of thumb is, you know, there's a heart, big deal going down. Again, this feels anachronistic because this was happening on steroids. If things go south later on, then LPs look at it and investors look at it and go, like, I wish Harry didn't take $5 or $10 million off the table. But I don't mind if Harry took a million or two million. By the way, I always say the first million dollars, like when the first million dollars makes it binary. It makes all the difference. It's partially selfish. You know, it sounds like I'm so generous in saying take as much money as you want, but it's actually very self-serving as well. If that founder is going home and worrying about the mortgage and under pressure from the wife or husband or whatever it is or partner, we alleviate that pressure in giving them secondary and encourage them to take secondary. So I'd say it's self-serving for the investors as well. Next thing you've taken some secondary, the mortgage or whatever the issue is. And of course, if you're like in your early 20s and you don't have these problems, the context matters.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Whilst TradeDesk, I regret every single share I sold. Uber, I regret every single share I sold. Hindsight is just the most precise science. These are great moat companies. Why would you bet against those?”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“In fact, in an ideal situation when there's insane heat and something that we've gotten earlier, like that's a great moment to take secondary, if you can. Sometimes you can't. But if I speak to teams about this all day long, so like you've got a billion dollar valuation and you're doing 50 million or 40 million revenue, forget like you're losing money. This is an awesome time for you to take some money off the table. And in certain situations, we've had the founders say to us, look, there's a little leftover because there's such heat here. You know, there's 20 million to go between. Do you want to take some money off? And we have been able to take a third of, but do we get that right all the time? Well, the answer was, you only know that in the rearview mirror. I won't mention the name of the company. We did take a third off the table. We were right over there. But we've got it wrong as well. We took secondary and some of our biggest names. We shouldn't have sold a share.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a great test. I'm very impressed. Sometimes, if you love the deal and there's heat for the right reasons, to take a smaller amount is doable. But I think, so I think the problem with that comment is it doesn't, it ignores the context and the context matters. So in a vacuum, that's a fine comment. And I agree with it. But in the context of there are lots of other people interested, including some collaborators who may go, actually want them in this deal with me. And by the way, that is under pressure when people have got funds that are too big and the deals and there's less collaboration. But I think there really are people who you want alongside you because they're smarter and more experienced than you. If you're having to throttle down a little bit for that, I have no problem with that.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if I look back and I go, I love the what, I never really loved the who, I've really learned this the hard way. It's Copelman called them, are they like red button or green button entrepreneurs? They call it like 7 p.m. just before you're having dinner with your family. Do you take the call? Well, if it's you and I go like, I love this guy. I'm taking the call. And I say, like, I'll call you back after dinner. But if it's red button, oh, made a mistake. I look at that and I go, don't want to have lunch or dinner with that entrepreneur. That's a big mistake for me. When I look at it and I go, I fell in love with a what? Like I fell in love with a what, but I really didn't love the entrepreneur at the beginning. And I wasn't, you know, the chemistry wasn't there. That's a mistake. When I look and I go, look, that was just such an extraordinary entrepreneur. That person was so compelling. I was so energized by that person. And the context was wrong. We were too early. Like we gave it our best shot, but the incumbents just killed us. And never look back at that and go, that was wrong. I look back and there go,”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't even know what it is now. We have definitely lost companies. And we've lost good losses and there's bad losses. The bad losses where you look back and you go, my judgment wasn't good.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the one thing I don't think about much, but I think it's the most unfair feature of capitalism, Harry. The most you can lose is all your money. The most you can make is 3,000x, unlimited. If you just look at that, it is such an unfair feature of capitalism. And my LPs maybe go, I don't want to lose money for anyone, but I sometimes think exactly the opposite. If we're not losing, are we taking enough risk?”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I just think it's insanity. Like, I think you market those winners, and again, it's great PR fodder, it's great to attract the investors in the next fund, but I think it's insanity to go. It's like that huge, people don't even use the word unicorn anymore. It's that huge company or bust. I think it's insane. By the way, I also think it's like boring. It doesn't take you in a whole range of like fascinating directions where at the beginning you go, look, these guys are crazy. But could this be a 10x? Yeah, it could be a 10x. I think that just provides this much easier on-ramp into these very interesting situations.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“You're reminding me again of Eric, right? Where Eric has this lens, it's so simple. We look at a company who go, can we 10x that? Can we 10x? And if we can't 10x, then we shouldn't invest. And I think that is alignment with the entrepreneur. There is so much flows from that. Like the economics, the size of the deal, the size of the valuation, if we can't with high conviction 10x, we shouldn't invest. That's how we create the alignment. That is Eric's ruling.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Any Waymos. And now it's like way more. If you get into a Waymo in California, your mind is blown. So I think to discount AI in the next 10 years, man, you've got to be crazy. Like, I think it's going to have profound, profound changes. The difficulty is it's always Hollywood. There'll be one in a thousand companies that'll be off the charts and there'll be like one in a hundred that's amazing. And that will launch so much capital being involved in that. We're too disciplined to be involved in like figuring out which is the one in 100.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly that. Yeah. And I think, by the way, all the way through the ecosystem. So it's not just the hyperscalers, right? It's like downturn. David said it well, like down to the data centers, down to the steel, down to the chips. I think in the short term, it's going to disappoint. I think in the long term, Harry, every one of these waves, by the way, it reminds me of like self-driving cars. I remember taking a bet with Eric and he said, self-driving cars in five years. And I said to him, the last 5% is very difficult. And like we're getting to self-driving cars now. So it takes forever. But as well as well,”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's short term and long term. So I think in short term, we're going to be underwhelmed right now. I think if you look at the amount of CapEx that's being spent and you look at the actual earnings that will be generated in the short term, there's just no way it makes sense.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh my god. I start now. So I have a range of tools. But if you say to me, where do you start? I start on ChatGPT and I'm going to browser. That's where I start.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think you break the rules and you get right on a 250 million post, and you get a 10x. That's why I go, Josh on a billion. If he makes 2x there and you go like, that is the company. That is the company. Would you bet against OpenAI right now? No way. So it depends on the customer base for OpenAI. If they distribute well and more and more people say, look, chat GPT, it's on my phone, download that, start using that. Like, you know, when my wife and my kids start to use it and like go, oh my God, like I'm going here before Google and not sure that Microsoft can think of it only as their plaything. If people are leaving Open AI and open AI is not scaling and not creating more and more revenue, you may be right. But if OpenAI continues to grow the way it is, I don't know the Microsoft can ignore them. I think in some ways Microsoft are going to have to say, this is terrible, like because we wished we owned 100% of it, but this is our play. And, you know, who knows? Like, the next thing could be a merger between OpenI and Microsoft. I don't know that they want that.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, if you break the rules and you're right, you've done unbelievably well. By the way, again, if you broke the rules and it was a 10 post and you broke the rules and it was like, you know, 250 million post, like the return to you and your fund is infinitely different”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“But what if it's Overall, I admire discipline. I think rearview mirror on this, you can't build a fund on this. Rearview mirror, you can think about that one that you missed. And there are one or two in a generation. There are these generational companies, or maybe it's one a year. And if you're in that company, awesome. But can you build a fund strategy? I don't think you can. Not at seed.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Pretty much out. Again, team versus theme. So there are rare instances where we see someone who's just like, you cannot ignore. You wake up in the morning, you go, oh my God, like, how can I not be involved? But for the most part, 99% of the time, we're not involved. But you just can't make money in a seed fund at those numbers. I don't see how you can make money.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“We're off piece. We're non consensus. We're contrarian. So when I see those rounds, if I see a round at five on 20, that's in our pitting range. When I see those rounds at like 25 on 100, pretty much.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source
“Phone. Basically, make things like scanning or translation very realistic and on your phone, even when you're not connected to the internet. You need capital for that as well because the programming overhead of that, the number of engineers you need to create something tiny is huge.”
2024-10-14 · The Twenty Minute VC · 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective · IDENTIFIED FROM THE TRANSCRIPT · source