Neil Mehta
speaker
321 appearances
2 recordings
2 series
first heard Apr 2025
last heard 4 May
Neil Mehta’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 1 in all, peaking in May 2026 with 1.
Appearances
What are the takeaways in terms of competitive advantage for OpenAI's model on a comparative basis to others? That's a really interesting question. But what we try not to do at GreenOaks is get excited about that development. and then deploy our time and effort, eventually invest a lot of capital just based on that.
We try to bring the abstraction level back up to what does this mean for customers? And then we work backwards from that. So when we talk about the model companies, our reaction has been like these large CapEx spends. My feeling has been, and by the way, I've been wrong.
If you look at the valuations of these businesses, the investment that you have to make versus the payoff you get, and then the fact that you have to make that investment 12 months later, and there seems to be like a pretty fast catch up. It just didn't strike me as in the laws of business is a great business model.
Of course, ChachiBT has proven that you can build a consumer business on top of it.
I used to think about this a lot, especially when we were starting, because in our first many funds, people would ask us. They'd have a list of other firms they'd ask us about and be like, what about these guys? What about these guys? I found that, first of all, if we're going to screw it up or lose, it's usually something we're going to do internally.
It's almost always we've internally messed something up that has led us astray. And just getting this stuff right internally, that's hard enough. So I don't spend that much time anymore thinking about the competitive dynamic in our industry. I would actually argue it has become much less competitive. It's counterintuitive. Think about what we're doing.
We're scouring the world for founders that we think are going to build future S&P 500 companies at the exclusion of everything else. But if you think about the job to be done in our industry, it's been layered. People that have injected complexity in ways that are so counterintuitive. There are firms whose only job is to do fintech in Brazil.
There are firms that their only job is to do everything that comes out of Y Combinator. Their only job is to do New York City consumer startups. It's become this specialization of our industry. That goal I mentioned, that Green Oaks goal, of course, I don't think everybody would agree that that may be their end state goal, but they have maybe a different job to be done on a day-to-day basis.
Our industry is more like, I think this is investing generally. Investing, it's a game of reducing complexity. It's a game of reducing noise. There's too much noise.
And I find the people that are willing to have the intestinal fortitude to dramatically reduce the noise and make their job extremely simple and have the temperament to allow it to be so simple, to know that you only need 110 points of IQ to do this, the number of people that I feel we compete with on that is very, very low.
These were 100 times. I think it was $2 billion when Don Valentine did NVIDIA, and now it's $200 billion or something like that.
Two things are allowed to be true at the same time, which is... Our space has too much capital and it's actually less competitive for great companies. And I'll try to explain those, the economy. A lot more companies are getting funded. Thousands of companies will get funded by really great investors.
And if you look at the matrix we just described, you divide by sector, industry or whatever, it's geography, stage. By and large, people are doing investing. It sort of looks like painting with numbers or something like that. You're looking for certain types of characteristics around growth rate. And by the way, venture capital didn't invent this.
Summit and TA have been doing it on the growth side for a long time. Insight's pretty good at it. On the private equity side, the entire industry works this way. If it's a 21 IRR, you do it. It's a bulge bracket private equity. If it's 21 IRR, you do it. And if it's an 18 or 17 unlevered, you don't. Maybe that's even true. But those are kind of the numbers. I think the mistake people are making...
is this is not the private equitization of our industry. These are founders building companies. Now, private equity goes to the highest bidder. Every company essentially goes to the highest credible bidder that could move fast and straightforward. In our industry, I can't think of a single company in our portfolio, not one. Tell me if you can think of one in yours that took the highest valuation.
They took some combination of the partner, brand, speed, the understanding, the capability of that firm, and valuation. Now, that doesn't mean you could be the lowest valuation. That's certainly not what I would claim. In fact, I think in some cases, we are the highest valuation too. But we have differentiated insight on why we are willing to pay that without sacrificing returns.
That comes from understand. And if you are driving for coverage, if your job is to make sure you don't ever miss a series A, and you're doing that by hiring a very large number of people, then what you're sacrificing is fidelity and insight. It's impossible. You can't scale that with an entire organization to like a couple individuals. I've never met a firm
that's had more than a few good investors. It's so hard. So you end up just doing a lot more. And it's not clear to me that any firm is that good at figuring out what's good and what's truly exceptional immediately. Figure it out over time. I was looking back at a lot of our Series Bs that we've invested in. Most of what we do are Series Bs in ours.
I was looking back at every round that we had done for the better part of 13 years and Every single one of those had some other company that traded in its sphere of competition that traded at approximately the same turn within the same 12 months. Isn't that crazy? The best companies and the worst companies at the Series B or Series A trade at approximately the same amount.
So there's exceptions here and there, but by and large, very few people could actually tell the difference between the two. Now, if you and I were evaluating Coca-Cola, you might know 10 times more than I know about Coca-Cola. If we both had to figure out what earnings per share were in 10 years, we wouldn't be that far apart. It doesn't matter that much.
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