YouSaid · the spoken record

Nikhil Basu-Trivedi

lines on the record: 81
first: 2023-09-06
most recent: 2023-09-06
sittings or episodes: 1
sources: podcast

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“Yeah, for sure. Like, just how much substance is there really beneath the surface? How much does this founder actually care? How much do they really understand? There's a bunch of questions that I try to ask to suss these things out.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's not like that is a necessary precondition to failure by any means. But I think it's been a failure mode for me.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“The first thing that comes to mind, though, Harry, is there's this difference between the ability to fundraise and the ability to build a business. I have been sucked in and seduced by founders that can tell a great story that are great in a handful of one-hour sessions and in person for the first time who feel like they're magnets for talent, who know their business inside now, it seems, and who are great at fundraising. And so attract multiple term sheets. And what I've seen happen a handful of times is that they are not good at the fundamentals of building the product and building the team, actually finding product market fit or growing the product market fit that we thought that they had, and that there's that huge difference between fundraising and business building. And I think that's showing up all over the place right now, right? There were so many companies that were able to fundraise in 2021 that now don't have P&Ls and fundamentals to show the vision that they told.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right Well, so a couple things. One, this is precisely why I underweight Mocket. Does that make sense? Like, I weight market third on the three that you asked me about because I just think it's the hardest one to assess and predict for myself. And I think when you look at the investments you just described and some of the very great ones, that was true for those investors as well. You can imagine and dream the dream that the product market fit that this company has, the team that's building it, can expand the market beyond your wildest dreams, can actually create a whole new market. Those are oftentimes the most special companies. My thinking around this, it comes back to, well, this is exactly why I underweight market in the analysis.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Now, I should be clear about this, which is at Footwook, we only lead rounds, we only do early stage, we lead seeds NAs. So we've made 11 investments so far. We've done five series A's and six seeds. I think our average initial check is about four and a half million, and the range has been two to nine million. We've done later seeds and earlier A's precisely because we love this stage that I'm talking about, where there is a little something that's working, where the founders can articulate why and have a bunch of unique insights and where the why now is strong and where they have a big vision for what it can become. But there may be some level of market risk. It may not be clear how big it can become. I wrote recently, this is the question that keeps me up the most, like how big can this company be? Can it be one of the ones?”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a really good one. Yeah, I mean, you can literally Google and learn a ton about what's happening to a product in the wild without ever speaking to the company. And we always try to do that.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it's certainly not necessarily revenue, right? As I mentioned with Canva, there was no monetization. It is those early signals that you've built something that people love using. And so that can come in the form of high frequency of usage or high repeat usage or high retention, even on a really small base of users. It can come from word of mouth growth, even on a small base. It can come from just anecdotes like I could not possibly live without this now that I've tried it from customers. I'm not”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, like I remember having a chat with Keith Raboy about this, where he was just like, look, I just look for sort of founder plus keynote. That's my stage. Founder plus presentation plus idea. And as I keith that, I could never do that. I've made very few of any investments like that because I like to see the early sparks of something working. And I'm willing to take more risk on the market than I think other investors. And so I'm happy to unpack that if that's.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it can be if you're having the right types of honest, transparent conversations around it. And if you're seeing that the team is iterating an experimenting around something and moving quickly around something, it's okay to throw different ideas at the wall in an experimented phase when you realize the thing that you have that you thought was going to work is not working. I think it's not okay to not be operating with a sense of urgency and to not be able to have transparent conversations around it. Those are the two things that I would try to suss out and judge.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“It's kind of the conversation that we are just having, which is, do you want to feel like you are winning? Do you want to feel like you have momentum? Because that's what we want you to feel. And invariably the answer is like, yes, we want to feel that way too. And so the question is, are we banging our head against the wall at the same thing for too long? Should we move on? If so, we can move on and keep the capital. But at some level, I think you have to have that type of conversation.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Those companies have to find some product market fit somewhere to deserve to exist for a longer period of time. And I think there's a lot of companies that are just having really honest, hard conversations around this right now, or at least there should be, because the runway doesn't matter unless it leads to a takeoff or landing. And of course, ideally, a takeoff in startup land. The other thing is momentum and winning for companies, as I'm sure you've seen, is everything. Like if you do not have that, it is really hard to have a great culture at a company. It's really hard to hire the best people. It's hard to do your best work yourself as a founder. And so you just have to have that at some level. Have you ever had this discussion”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think so. I think we don't think the foundational model investments, for example, that are raising hundreds of millions of dollars in a seed make any sense. They don't make sense for sure for off of them, but we don't think they actually make much sense for the big funds either. I mean, the money is going to fund CapEx to NVIDIA 100s. It's going straight out the door in many cases. I don't get it. And so I'd love for you to have a bunch of those folks on your show.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“The variables that would go into my thinking are the firm, the partner, etc., sort of the match of that to the type of business and the capital match to the type of business, because there are some companies that actually do need more capital in the early days and that will benefit from that. But of course, based on footwork being a stage specialist firm at early stage, we only lead early stage rounds. We only lead and we only do early stage. I have a bias towards the stage specialists.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and we don't do those types of rounds. And we're not set up to do those types of rounds. So actually, in a strange way, I really like the constraint of off on size. I actually think it forces us to make better decisions. And I think there's a laziness and a lack of great decision making that can come from having a bigger fun. In the same way that it can come from having too much capital in the early days as a company.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“It is certainly a challenge, and it's something I think all of us have faced against the big multistage firms with billion dollar plus funds. What I'll say about that and what I try to explain to founders is I think that that's actually a misalignment between founders and these types of investors, which is oftentimes in the founder's best interest is actually taking less money, being more constrained in the early days to find product market fit, as we were talking about earlier, given just how big of a inflection that is. I mean, how many times have you seen a big early stage financing yield to nothing for the founders, nothing for the company? I just think there's very few of those rounds that actually have worked out historically.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“You have. Although I would say most venture firms have plenty of fees to cover the team and more, especially at that fund size scale. But more than that, I think there's this narrative in the industry, right, about how big your fund size is and how much AUM you have. And so it's really hard to go from even a brand and reputation standpoint in the market from having a $2 billion fund to having a $400 million fund. And the handful of firms that have actually made that type of decision historically, I think some of them have been really better off for it.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a handful will, and I think there'll be a very smart handful that will, but it's a really difficult and painful decision to do that.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's part of the issue, I think, which is if there was true alignment, it would be about maximizing the multiple. And that's certainly how we think about it at footwork.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but then people have made decisions and taken actions that would suggest that they don't believe in it, right? If the purpose of what you're trying to achieve as a venture capitalist is maximizing returns, therefore sort of maximizing carried interest.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, and there's so, so few companies that get to that stage. And so when you do that math, it just makes sense to me that small funds are going to outperform big funds on average.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“That's 6x gross, not net of carried interest and fees that LPs pay. And so 5x actually net is a high threshold than that. It's at least one Canva in that size fund”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm very biased here because at Footwork, we're still investing our first fund. It's $175 million fund. And my firm belief in my bones is that small funds outperform bigger funds. It is incredibly difficult to have 5x net return on a billion dollar plus fund. I think there's incredibly few of those funds in the history of venture.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Really special here. And if you put away the noise of everything you just described, I think what you would have seen is a really interesting product that has strongly signs of product market fit.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but I think when you dug beneath the surface on what was actually happening and people using the product, you could see what I just described, which is, wow, there's 100,000 people using this every month who are creating three to four hundred thousand designs on Canva every month. Those folks, it was about six months in after the product had launched. And you could see that those folks, their cohort retention in the first six cohorts looked very strong. It looked like it was flatlining of creators who just were using Canva on a very regular basis to design things. It was also fragmented usage. It wasn't just Facebook posts and infographics and social media content. It was also pitch decks. It was also posters. It was a lot of different types of media. And it was growing completely organically. The SEO thing hadn't yet been figured out, but it was still just growing through word of mouth from people using Canva, posting Canvas out in the wild and other people discovering Canvas as a result. And so all of those characteristics gave it some early signs of product market fit. And if you only stared at that, you could see that there was something”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Canva investment for us at Shasta was an exception on so many different dimensions. And so it's obviously the one that stands out for me personally, the company was based in Sydney, Australia. It was raising a convertible note at a $25 million valuation cap. It had no revenue yet. It had a bunch of early signs of product market fit, actually, like several hundred thousand monthly active users of Canva who were using the product really aggressively. It was growing 30 to 40% every month. But it”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“With them might actually lead to some learning for you as a founder, and it may even lead to an investment as it's done for me several times in my career on the venture side.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's case by case dependent. And there are so many folks who've grown up in the industry to become incredible investors, who started off at the bottom of the ladder at a firm. And so you just don't know who those people will be. And you're better off as a founder judging based on the actual conversation you have, which sometimes may be a lot better with the youngest person on the team versus the managing partner of the firm. I always give people a chance, whether it's the founders who come in through not that warm of an introduction or purely cold. I always try to review what they're saying and I'll quickly write an email back saying not interested comma thanks if it truly is not a fit. But I've always kept that mentality. I started at Insight Partners in New York where I was bottom of the ladder as a summer intern and then an analyst. And so I obviously have bias on this dimension. But I do think that there are people who are really young in our business who are really thoughtful and that a conversation”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“For the ones that just blow you away that feel like outliers that end up being the ones. And so I've always tried to have that in the back of my head, which is at the end of the day, all of what we're doing in our job is searching for the outliers and the truly exceptional companies.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Two things. One is actually a piece of advice one of my partners that Shasta gave me. Pretty early on, like probably in the first couple months, which is don't look at the title on your business card, which at the time was associate at Shasta Ventures. Just think about yourself as a venture capitalist and do as venture capitalists do, which is find, decide, win, help, and exit. So the five components of our day-to-day job and venture. And that advice, I think, was really profound. It sort of unleashed me and it's the advice I give young people inventure today, which is, again, don't look at your title. Don't think about exactly what the role is. Just think about yourself as a VC. And I think you'll be better off for that. And then the second one that came to mind is exceptional companies deserve exceptions. And it's a mantra that I've tried to always have in my venture career, which is, yes, you have this model of how you want to invest, this dream idea of portfolio construction and the profile of company that you're looking for. But it's so often the ones that you consider an”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“So much for having me, man. Yeah, it's fun to dug into the chats to see when we first connected, it was January of 2016. I called outbound message you on Facebook Messenger, which we realized, which is hilarious. And it's amazing to see where you've come since then.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“My firm belief is that small funds outperform bigger funds. It is incredibly difficult to have a 5x net return on a billion dollar plus fund. I honestly don't know if there's great AI first opportunities for us at Footwork to invest in. Just the insane hype cycle around it at the moment. We overrotated once again very, very quickly towards excitement here. I don't think that there's a lot of AI enabled companies that are going to be for us. Too expensive and there's just so much competitive noise.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source