YouSaid · the spoken record

Nick Chirls

lines on the record: 66
first: 2024-09-06
most recent: 2024-09-06
sittings or episodes: 1
sources: podcast

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“Thank you so much, Harry. Sorry I went a little dark for a few years there as I was sort of planning my new thing, but it's been so good to reconnect and I'm so grateful that you offer me the opportunity to do this”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“There's actually a very personal story here. I grew up in New York City, and my mother worked at an investment bank. She passed away, actually, when I was a teenager. And I think in many ways I went to go work at Lehman Brothers to feel closer to her. And ultimately, what I walked away with is I couldn't help but think that there was no possible way she wasn't mistreated or dehumanized over the course of her career at these places. And ultimately, I was obviously deeply disappointed. I went there to be closer to her and I actually came away feeling like in some ways we both must have been mistreated. And I think that has likely led to my 20-year revenge arc now against bankers and these big banking firms because I think ultimately they do a disservice to the people working in these places.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I met them when they were an avatar app. So that one was a pivot. Runway was also a little bit of a pivot. I mean, they were both sort of pivots, but they were poking around a market that was genuinely interesting. Like AI had been rapidly evolving even before LLMs. And those would have represented, I think, really interesting bets on how AI might evolve in the years to come.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, because they're so hot. I miss both hugging face and runway at preseed, which is painful to both New York companies absolutely represent the thing I'm describing, which is they were building things before anyone actually cared. Great teams.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“From a selection perspective, I think that 12 or 13 years of data now, of hands played that I can go back to. And I think I've learned a thing or two there. And I also think I'm just more patient than 90% of VCs in the market.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't do a startup unless you absolutely need to and find a person that you truly trust to either do that with as a co-founder or with your first investor.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“This has changed over time, but right now, probably Andy Weissman and Bryce Roberts. I think they represent many of the things that I just described about being the alternative to the big AUM firms. They think independently and they have the guts to be themselves and do it their own way.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Talked about various versions of this, but I believe actually the less institutional and bankerlike you can look to founders over the next decade, the more likely you are to win. So I think that most of venture is deeply focused on becoming institutional. It feels more professional. The more you can avoid that in the next 10 years, the better.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, those are rarer these days. But I'm saying the very early days of notation. I was about to say shit. Those are rare these days. No, these are rare these days.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Think I've made some mistakes around. We talked about valuation. I think I've made some mistakes about being too precious around valuation. There's a big difference between $5 million posts and a $25 million post. Like that, I think you need to really think about and consider. If it's five or eight and it means you potentially winning the investment or co-leading or whatever, you don't need to overthink those. And I think there was a stage in my career earlier on where I got too into the minutiae around is it five or five and a half or ten or eleven like these small”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Hey man, you can bring that learnings for you forever. I think my two biggest mistakes at notation over the last, call it 10, 12 years, and I was an investor at BetaWorks before that. I think my mistakes tend to be getting antsy. So I haven't made an investment in a while. And I start to think about that and it gets in my head. And now I'm much more aware of it. But I don't make many investments a year. I make three to five investments a year. And when that happens, and sometimes those come in chunks. So like there'll be long periods where I haven't made an investment. I think it is human nature to start thinking, am I not seeing the right stuff? Am I overthinking these things? What are my LPs going to say? What do they think I'm doing, right? Like these are toxic, toxic little people in your head. I've learned to listen to them and understand where I'm at and to be patient. So I've made some mistakes there.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Think that's fair. I think that's fair. There's been situations in which it's very small amounts. I'm mainly talking about Series B or C when the amounts become meaningful”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“The way valuable to us and to our investors, and it allows us to continue to do what we do. We never sell all of it. That would be, I think.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“My view has always been trying to find alignment with the founder. Now, when a founder is selling a company, right, you're selling with them, right? So that's aligned. We have sold shares in founders companies over the years a number of times. We will only do that when the founder is selling. But I will say when the founder is selling, we almost always do it. I want to be aligned with the founder. I think there are many investors that are that are actually terrified to have even those conversations, which also, again, goes back to honest conversations and trust. My approach has always been if I built trust with the founder, if they are choosing to sell shares in a round, I give them a call. Every situation we're basically the first investor in the company. And I say, hey, look, you're selling a little bit. Hey, it would be really helpful and valuable to us if we could sell a little bit alongside.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“So, why would you do that? Why would anyone do that? Because they're obsessed, because they need to do this thing because they will be up all night, every day thinking about this thing. There's a problem that they just can't not do. Those are the people that should start companies for sure. And I'm deeply grateful to those people that do. I think our job, in addition to trust, by the way, is to make that experience just a little less shitty. Like it's that simple. Build trust with a founder and try to make what is going to be an awful experience. And I think our job is to be a steady hand, a place of calm, a place of trust, and to try to create an environment in which the founder can do their best work. I think that's our job and that's about it.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I have more respect for the founder journey than I ever have. Like it actually even just really thinking about it makes me like a little sick to my stomach, like actually physically sick. I'm like, this is going to be a truly awful experience.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“No, we've talked about this. I think there's another Silicon Valley meme where everyone should be a founder, just everyone. I think similar to like the meme back in the day where everyone needed to learn to code. We've been playing around with different taglines at asylum, one of which is don't do this. I think that might get cut. But like the basic idea is that people say this, but I don't think they really internalize it. Like building a startup is truly awful. It's like a truly truly bad experience and it will ruin your life basically in various different ways. And by the way, that's if it goes well or if it doesn't go well. Either way, it goes well. Problems get harder huge teams, often lots of capital raised, lots of pressure. It is going to take a lot out of you. And I've seen this through relationship breakups, founder breakups, divorces, bankruptcies. Like what I will say is after many years of doing this,”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I can speak for what I view as the median inventor. And certainly I think you see this in the big AUM firms. I think there are many companies in the market that could get to where they are.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Can if you don't make that many investments, you can't do everything if you make a ton of investments every year, which the average venture firm does.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“In my experience, actually, it's a smaller percentage that actually destroy. When I think about lots of VCs in the community that we work with, there's not a long list of folks where I'm like, oh, this person is going to be like dangerous to the company. I actually think the biggest issue is just not caring. That's the thing that actually bothers me. They just don't care. Don't care about the people. Don't care about the investment. Oh, it's 1% of my fund. They just don't care.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I think having a track record of building real trust with founders is extraordinarily valuable. To you and to the founder. Now, it's really hard to pitch trust, actually, right? Like whenever you hear someone being like, just trust me, you're like, holy fuck. I'm not going to trust. In other words, it's much easier to say, look at our team. We have 100 business development executives here. It's much harder to say, like, you should work with me because I'm highly trusted. We're going to do the right thing. And that's really important. Like, it's not as good of a soundbite. I also think it's a way to just not do the work. Like, just don't bother me. You need some help with like a BD thing. Don't bother me. Go talk to the BD people.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, let me say one more thing on VC value add. And it's related to that question. And I think that there's different ways to define it. What I don't think moves the needle is services. I don't think that services, a business development team, a recruiter, et cetera, are actually going to be the difference between success failure of a company. Now, I do believe that there is value. You mentioned Doug Leone. I do believe there is value in having a really trusted partner or people around the table for a founder to make good decisions both for the company and financial decisions. Now that doesn't just need to be VCs, by the way. That can be other founders. That can be independent board members, but it can sometimes be VCs, right? It can be Doug Leon. I think one of the most important, we talked about this earlier, I think one of the most important pieces is there's a financial component to venture and I think there's a trust component to venture.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“But like that enterprise value would have been created regardless. The question is who does that enterprise value go to? So that might have been a very financial savvy decision around accruing more of that 165 billion in enterprise value. It was not the difference between whether or not that company would get to that value.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“That may have helped maximize financial returns. That was not the difference between success and failure of that company.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“No. I have never found that any investment we've made ever, I've never seen any VC be truly the difference between success and failure of a company. Period. You can maybe help around the edges. Would Coinbase not have been successful if they hadn't taken money from Andreessen Horowitz and USV? No, I think they would have been just as successful. I think either no doubt those firms helped around the edges. They weren't the difference between success failure, that company.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I've made founder benz, right? But the founder, those founders will often do a really good job of explaining it in simple terms. So I think if you really don't understand it, if you really can't understand it, in some ways, like it's the founder's job to explain it in really simple terms. If they can't do it, even for really technical things, like we've invested in some bio companies and others, I'm not a scientist, but like those founders, they can explain that thing to anybody in simple terms. And they have to. It can't just be for the investor. It has to be for employees. It has to be for customers. You have to be able to explain the special unique thing that you're doing that no one else understands yet. If you can't explain that and make me a dummy understand it, there's a bigger problem than just me not understanding it.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I would really like to understand it if I can. I would really like to understand the thing I really want to understand. What is the question? What is the thing that we believe about this market or this product or this category that the market doesn't care about yet? So Bison Trails is such an easy example, right? It's we believe that this form of mining and doing consensus on blockchains, proof of stake, is as good or better than the existing way to do it, proof of work in the market.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“That was the same fund. There was no competing over to get into it. Anyone. So my view is that if you're doing the hot five on 25s, the 10 on 30s, whatever, you've got to know that that's consensus. The market already believes what you believe and you've got to really believe that one is going to be the winner against inevitably lots of competitors that are doing the same thing because it's already well known in consensus. So if you have a strong belief that that's the one, then that can work. In my history, I have never done a good job figuring that out. I'm much more comfortable investing in a thing. By the way, in every fund, I get like 25 of them. So I can be wrong a lot. Like I can be wrong almost all of them, right? We just need one or two or three in a really great fund where, oh, that thing that no one cared about turned out that.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we don't talk about this stuff that often. I mean, you can whatever. I don't mind people knowing. But anyway, Bisintro is one example. There's been a couple others like Bison Trails”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Was a small preced. We effectively helped the company get going. We actually had the same founding team we had actually previously all as basically a side project built a Bitcoin mine together in Oregon. And so there was a long history. I had actually backed their previous company. There was a long history of working together.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I tell this story often this is an ideal investment, right? And also lucky and also lucky. But Bison Trails was the first crypto staking company. At the time, there was one crypto network that was a proof of stake network. It was an early crypto project called Tezos. If you had done the TAM analysis there, you would have found the global TAM for bison trails was probably a couple hundred thousand dollars a year. If they got 100% market share, they would have been making about $200,000 of ARR that year. Okay. 18 months later, they were doing almost $30 million in revenue. And they were a monopoly on the market. Tezos proved that proof of stake compared to proof of work was a much more efficient way to run blockchains. And within 18 months, there were 40 or 50 blockchains that either had changed or had launched with a proof of stake consensus algorithm rather than proof of work.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Been hard for me to convince founders to do anything else. I've had a similar experience in that, again, going back to the way I believe really true early stage venture has to be done, right? You need to find the things no one else cares about yet. Our largest outcomes, realized outcomes to date, have been a company called Bison Trails that was sold to Coinbase for a huge amount of money. I don't know if they've ever reported this and is now Coinbase Cloud.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“The returns need to just look like about the NASDAQ. It just needs to be. It just needs to be roughly in line with the NASDAQ for them to continue to raise. And by the way, that's true for all of Venture. That's true for all Aventure, which again is why how many venture firms actually have Alpha in their returns? It's just literally beta to the Nasdaq. And by the way, it's a way worse investment. It's illiquid. It's much riskier than investing in the Nasdaq. I think as long as they perform in the range of the Nasdaq, venture firms will continue to raise money.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“American dynamism and defense tech as a theme, it's just a great category for huge venture firms to be able to deploy insane amounts of money so that they can go raise their next fund.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“It's very simple. What is the business model for large venture banks? It raises as much money as possible. Get that money out the door as soon as possible, and then raises much money again and rinse and repeat your junior partner at these big firms, a VP at Goldman equivalent. They are compensated and promoted based on money velocity, not money returns. What's an ideal company for that model? It's a company that requires insane amounts of capital. Like the foundation models are like a big, big VC firm's dream. They require, they literally require billions and billions of dollars to go buy effectively NVIDIA GPUs. And that's a dream. And so I believe that the big venture firms, defense tech is great. Defense tech, those companies are going to be insanely capital inefficient. They're going to require insane amounts of money. My view is like”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there is more money. There's money in this. And I think it's become all about the money. I think winning has become all about the money. I think there's many VCs that are playing a short-term game to maximize profit in the short term. I would say most of the market is doing that. So you might say that's the optimal decision. Now, there's many folks that I will never work with again. And maybe that doesn't matter to them, but like I think it will. There will be a company, there will be an opportunity where someone wants to work with a company that we work with. We'll never work with them again. There's more than a handful.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, you want to win? I want to win. We're also, I think, playing a very long-term game. I'm playing a very long-term game, decades long game. There's also a mentality. I think Silicon Valley is another banker comparison. I think Silicon Valley has become very zero-sum thinking. I think that is very representative of banker thinking at Lehman Brothers in 2007. Every single thing that happened there was someone won, someone lost.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely. I mean, I've been doing this a long time more than once. There's one that comes to mind around AquaHire that you kind of talked about many years ago. We actually introduced the portfolio company to the acquirer. It was understood the cap table would sort of get taken care of. Again, not make any money, but like get a little bit back. And at the last minute, the deal was changed. So the investors got nothing and the founders got really big retent backers. I think there was probably an opportunity for the founders to push back. Look, it did not end up moving the needle for us. And so I generally move on from these things pretty quickly. I think it could have been handled differently. And I won't forget it.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I found that more often than not, a real truthful conversation between a founder and an early investor where there's actual real trust often leads to a place where the shooting in the head at the end of that doesn't happen.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“That actually represents as best a founder can all the different parties. I'm totally fine with that. Even if I'm not getting the best deal, these are not contemplated in legal agreements. So I'm like all the legal agreements don't matter. Maybe preferred in common doesn't matter that much. And really all we're talking about is trust.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I hear you. And I think in some ways I value the way in which we come to that conclusion and the communication through it more than the actual decision. So like if a founder saying calls me and says, hey, look, here's the situation. It's a difficult decision. Like I'm not sure there's a right and a wrong. Can we talk through it together? Can I hear your perspective? As long as there is an honest, real transparent conversation between a founder and investor, there's going to be over the course of a lifetime of company. There's going to be lots of different friction. There's going to be lots of disagreements. And there's going to be lots of opportunities to either destroy trust or improve trust. So my view is that as long as there is a way to communicate through it and to listen to each other honestly and to come to a place where both people feel like they've been heard, their perspective has been heard and there's been a decision made.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. Every single time a company gets acquired, there is a dance, right, between how much goes to retention for the founders and how much goes to the cap table. Almost every time, unless it's like a true at scale company. And so you are hoping, relying on the founder to treat you well, to do the right thing. And founders many times, it goes both ways. Founders are relying on investors to do the right thing. So my view is if you are in situations where the founder is doing the wrong thing, right? The legal agreements are not going to help you out and you have actually made a bad investment decision at the very beginning to have worked with someone that won't do the right thing.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“My experience over the last 10 years, the legal agreements don't matter. They don't matter. There are always ways. There are always ways for an investor to quote unquote screw over a founder or for a founder to screw over an investor. It goes both ways. The illegal agreements do not matter.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I have not seen that in my experience. Here's the debate in my head, right? Like you are right, right? So here's one example of being able to get some return from a company rather than having it be a zero with common, like that allows you to recycle back into the fund, right? So this is like, this is one reason why we haven't done it yet. The debate in my head is if we just invested in common, would that on the margin help us better align with a founder win an investment or two that maybe was on the margin we might not have and be in the right companies? Will that offset some of the capital maybe that we didn't get back to be able to invest in the fund? I don't know the answer to that, but I think if the answer is yes, then we should just be buying common.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I disagree. I've actually been thinking about this. We have not done this yet, but I've been strongly thinking through like whether or not we should just be buying common shares rather than preferred like the vast majority of investors in the market. My view is that as you know, there's a few that really matter. There's a few in every fund that really matter, at least matter from a financial performance perspective. When they really matter, the common is exactly the same as the preferred, is exactly the same as the preferred two, the series A. They're all worth the same. They get acquired or they go public. Those are the ones that really matter. Why are we putting all this structure and fighting over different structure and cap tables for ultimately situations that are not going to actually matter?”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“And they did a few things, right? They gave artists full creative control. They had a very clear sense of taste, and they treated the artist like an actual human. In stark contrast to the big Hollywood movie studio.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's always another LP to replace those folks even if they go away. I think they are big enough brands. There's enough money globally. Maybe a couple of them will go away, right? Lehman and Bear Stearns went bankrupt or got swallowed up by the others. But the big folks, the Goldman equivalents, Morgan Stanley equivalents, I won't name specific names, there'll always be another dollar for them. So I don't think they're going anywhere. And I think this is our new reality. Now, I also think they provide an incredible opportunity for funds. Asylum would not exist without the big banks. Okay, so like the best comp that I often use, and we've talked about this, Harry, but I think the best comp is A24. A24 could not exist without the rise of the massive Hollywood movie studios. They were built in reaction to that. They were built as an alternative to that for creatives and artists.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think there's LPs that are probably making a lot of decisions that are not specifically related to financial performance. And then quite frankly, sovereign wealth is a totally different piece. There are people perhaps there that are getting incentivized meaningfully, but sovereign wealth will invest for lots of different reasons, including very strategic reasons, that also have nothing to do with financial returns. So you have a market where a lot of the participants are not making rational financial decisions.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“I totally agree. I totally agree in the sense that, I mean, so I was actually looking the other day, I was looking at, I was looking at Cambridge Associates data. You know, they send out their quarterly thing. And I was looking back to notation one was a 2015 fund. So I was looking back to 2015. The top quartile, okay, the top quartile, the best 25% of venture firms from the 2015 vintage have not returned their investors all their money. We're nine years in. The top quartile has not given their investors their money back. So yeah, if you think about the 2021 vintage, I think a 1x fund will be top quartile. I think returning your LP's money on almost any timeframe will be top quartile. So in that sense, probably 70, I would guess 75% of the funds raised in 2020-2021 won't return money.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source
“Way I've figured out how to do this. The other advantage of that, by the way, is that the founders are real, right? Like if a founder is built obsessed with a little thing that no one else cares about, like that's real. It's much easier to figure out what that founder's incentives are and why they're doing that thing. I think for independent-minded investors and for independent-minded founders, it actually does not matter how much competition there is in the market. You need to find the things that no one else cares about yet.”
2024-09-06 · The Twenty Minute VC · 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures · IDENTIFIED FROM THE TRANSCRIPT · source