Podcast, Other
E26: State of Venture Capital, plus fan questions on longevity, decentralization & quantum computing
- Jason Calacanis anticipates concluding the current podcast episode and expects David Sacks to return to the seat approximately 10 minutes after his dog's walk.
- A world tour is planned with scheduled stops in Las Vegas, the Royal Albert Hall in London, and Miami.
- David Friedberg expects his current regimen of Metformin, statins, Vitamin D, preventative head-to-toe MRIs, and Heart Flow scans to extend longevity and enable early health issue detection.
- Aging is viewed as a biological process that could theoretically be stopped or reversed through emerging stem cell therapy research.
- Head-to-toe MRI scan prices, currently ranging from $1,500 to $2,500, are predicted to decrease to the hundreds of dollars.
- Machine learning advancements are expected to reduce head-to-toe MRI scan times from 90 minutes to as low as 40 minutes.
- There is a less than 5% probability that a quantum computer capable of cracking RSA 2048 will be built before 2040, with an estimated availability window between 2040 and 2060.
- Quantum computing breakthroughs for material science simulations are expected this decade, whereas cryptographic breaking capabilities remain decades away.
- The commercialization of AI and machine learning is projected to occur rapidly due to revenue-generating opportunities, contrasting with the indefinite, non-commercial R&D stages of fusion and quantum computing.
- GPT-3 is expected to function as a platform similar to AWS, enabling small seed teams to build viable AI products.
- Large capital-intensive technology projects should be de-risked by the government, similar to the Manhattan or Apollo projects, while the private sector handles commercialization.
- Companies raising hundreds of millions or billion-dollar-plus valuations before shipping a product are viewed as presumptively fraudulent due to insufficient R&D de-risking.
- Venture capital is characterized as a milestone-based model where seed money funds prototypes, Series A covers customer acquisition, and Series B supports scaling.
- Current noisy qubit computers, often containing around 100 physical qubits but less than one logical qubit, will require future quantum error correction.
- Companies are expected to work on quantum cryptography solutions throughout the period leading up to the 2040s.
- D-Wave (founded 1999) and IonQ are identified as specific companies to monitor within the quantum computing sector.
- Technical cruft from projects 20 years in R&D is expected to be scrapped and rebuilt from scratch as technology and personnel evolve.
- The average age of tech founders is approximately 42 years old, with older entrepreneurs generally viewed as better prepared to iterate unless possessing a unique network effect idea.
- Continuous learning is cited as a primary predictor of entrepreneurial success, referencing figures like Bezos, Zuck, and Gates.
- Founding conditions are considered easier today than in the 1990s due to information proliferation and incubators like YC, though female decision makers have grown by over 2x while 80% of venture firms still lack Black investors.
- The total number of venture firms and capital has scaled significantly since the early 2000s, increasing the number of opportunities despite diversity challenges.
- While the average quality of funded deals has improved, the average quality of startups has declined due to market proliferation.
- Founders who do not build or sell the product are expected to contribute minimal work.
- Top firms like Sequoia and Andreessen Horowitz remain attractive as full-stage entities, whereas mid-tier and lower-tier firms are expected to struggle in the current market dominated by crossover investors.
- The rise of crossover investors and the Soft Bank Vision Fund has enabled capital proliferation in early-stage venture.
- SPAC volume is projected to have grown from $10 billion in 2008 to $80 billion last year and $100 billion in the current quarter.
- Average deal sizes have tripled over the last 10 years, with late-stage rounds seeing a 5x increase.
- The average pre-money valuation for growth stage deals has risen from $100 million to $570 million over the last decade.
- SaaS exit valuations are now routine at $10 billion to $30 billion, exceeding the $1 billion to $2 billion outcomes common a decade ago.
- Total venture capital exits are expected to have grown from $43 billion in 2010 to $290 billion in 2020, a roughly 7x increase.
- Venture capital total assets under management are predicted to reach 1 trillion by 2030.
- Technology is now considered the industry itself rather than merely an enabler due to the digitization of every market.
- Undifferentiated capital in Series B and C rounds is expected to be replaced by non-dilutive financing options like Pipe and ClearBank.
- The ideal funding strategy involves taking seed and Series A capital from experts, funding growth rounds non-dilutively, and going public via SPAC.
- Founders are expected to dilute 10% at the seed round and another 20% at Series A, leaving 70% before non-dilutive financing begins.
- Within nine months of launch, Pipe is expected to have connected 3,500 customers and over a billion of ARR to investors.
- ClearBank companies captured 55% more growth in 2020 than the prior year and have invested $1.6 billion to date.
- ClearBank is predicted to fund eight times more women than traditional venture capital firms.
- Every company with product-market fit is expected to be able to finance themselves non-dilutively in rounds B, D, and E.
- SPACs are expected to enable a path to public listing in seven or eight years, compared to the 12-plus years previously typical.
- SEC changes regarding equity crowdfunding and syndicates are democratizing investment, allowing individuals to invest under $1,000.
- Republic.co is expected to allow equity crowdfunding with a $5 million cap, down from previous limits.
- Arlen Hamilton is expected to sell 10% ownership in her venture capital fund startup for $5 million, granting buyers 10% of her carry and management fees in perpetuity.
- Startups are expected to generate 15% of CAGR, suggesting that investing in startup market beta could yield returns comparable to or better than the S&P over many years.
- The future of venture capital is expected to shift from organizations to individuals, making alignment with specific people at early stages highly valuable.
- The "middle" of the venture capital stack will see non-dilutive financing become the norm for growth rounds.
- Democratization of venture capital through syndicates is expected to alter the competitive landscape relative to China.
- All skills required to start a company are expected to be freely available online, with capital more accessible than ever before.
- A new combination incubator and early-stage venture firm called Punch Draft is expected to be announced, with founders submitting businesses via wetyourbeak.com for potential investment and non-dilutive growth.
- It is expected that the world offers significant opportunities for entrepreneurs to become wealthy if they stop watching television and learn skills.
- If the speaker sleeps during the podcast, it will be considered a "shit episode" by listeners.