Chamath

And it's broken the entire ecosystem now.

And it's broken the entire ecosystem now.

Well, Saks, right now we're seeing people do things like selling their early SpaceX or their early Stripe, whatever it is, to other VCs, to later stage funds, a lot of ways to try to secure DPI. What's your thoughts on the state of venture today, given all this data that we're looking at today?

Well, Saks, right now we're seeing people do things like selling their early SpaceX or their early Stripe, whatever it is, to other VCs, to later stage funds, a lot of ways to try to secure DPI. What's your thoughts on the state of venture today, given all this data that we're looking at today?

Well, two points. So first, I agree with Chamath that the amount of time it takes to generate an outcome for, I'd say, most startups is longer than the 10-year period of these funds. And these funds can be extended up to 12 years usually, but then what do you do after that? This takes a lot longer than that in a lot of cases to generate a meaningful outcome.

Well, two points. So first, I agree with Chamath that the amount of time it takes to generate an outcome for, I'd say, most startups is longer than the 10-year period of these funds. And these funds can be extended up to 12 years usually, but then what do you do after that? This takes a lot longer than that in a lot of cases to generate a meaningful outcome.

I just had two companies that I invested in in my second fund. So in 2019 and 2020, so four years ago and five years ago, just got marked up. And it was a big markup of the company's doing well. I call them late bloomers. It took four to five years for them to accomplish what they wanted to in terms of like building out the tech. I mean, I invested at like the earliest stage.

I just had two companies that I invested in in my second fund. So in 2019 and 2020, so four years ago and five years ago, just got marked up. And it was a big markup of the company's doing well. I call them late bloomers. It took four to five years for them to accomplish what they wanted to in terms of like building out the tech. I mean, I invested at like the earliest stage.

So that's how long it took. And now they just did growth rounds and they're kind of off to the races. But I could easily be 10 years from here to get to a liquidity event. So you're talking about more like 15-year funds. So I agree with that point. The second thing, though, is that The big thing that's happened in our industry is we had a bubble in 2020 and especially 2021.

So that's how long it took. And now they just did growth rounds and they're kind of off to the races. But I could easily be 10 years from here to get to a liquidity event. So you're talking about more like 15-year funds. So I agree with that point. The second thing, though, is that The big thing that's happened in our industry is we had a bubble in 2020 and especially 2021.

And we just had a ton of capital come into the industry because the Fed and the federal government airdropped $10 trillion of liquidity onto the economy in reaction to COVID. And not all that money went into VC. It went into a lot of places. But the VC industry was flooded with cash. And you see this in the deployments.

And we just had a ton of capital come into the industry because the Fed and the federal government airdropped $10 trillion of liquidity onto the economy in reaction to COVID. And not all that money went into VC. It went into a lot of places. But the VC industry was flooded with cash. And you see this in the deployments.

I mean, in those bubble years, there was something like $200 billion a year of capital deployment when normally it's $60 to $100 billion. So if twice the amount of money is going into the industry and is being deployed, and rounds are now twice as big, and valuations are twice as big, that has a huge effect on returns. So for example, the average venture fund is like a 2x return.

I mean, in those bubble years, there was something like $200 billion a year of capital deployment when normally it's $60 to $100 billion. So if twice the amount of money is going into the industry and is being deployed, and rounds are now twice as big, and valuations are twice as big, that has a huge effect on returns. So for example, the average venture fund is like a 2x return.

But if the entry prices were artificially double, then there goes your return right there. You get 2x times 1x. This is such a key point. Look, I think we're just in the hangover of this massive liquidity bubble that didn't originate in the venture capital industry. It came from, frankly, the federal government. But we're just downstream of that.

But if the entry prices were artificially double, then there goes your return right there. You get 2x times 1x. This is such a key point. Look, I think we're just in the hangover of this massive liquidity bubble that didn't originate in the venture capital industry. It came from, frankly, the federal government. But we're just downstream of that.

Now, what I would say is I do think we're at the tail end of working that out. And the good news is that we now have maybe the most exciting tech wave ever, which is AI. Definitely the most exciting tech wave since the internet. came along in the mid to late 90s. So the hope is we're finally going to have really exciting things to invest in again.

Now, what I would say is I do think we're at the tail end of working that out. And the good news is that we now have maybe the most exciting tech wave ever, which is AI. Definitely the most exciting tech wave since the internet. came along in the mid to late 90s. So the hope is we're finally going to have really exciting things to invest in again.

But yeah, look, I think we're at the tail end of the last cycle and the beginning of a new cycle.

But yeah, look, I think we're at the tail end of the last cycle and the beginning of a new cycle.