Ramtin Naimi

So there's some survivorship bias there.

What you need to ultimately look at is that probably 80% of the companies got announced because that's just what ends up happening in ventures.

So let's assume there was 1,000 companies

And Uber was in that bucket.

And if you wrote an equal-sized check into every single one of those 1,000 companies, you would have gotten a 3,000x just on Uber.

So you would have actually had a 3x net venture capital portfolio blanketing the entire market.

There was also Airbnb and Dropbox.

and so many other companies and Instagram that were funded in that window, there is no world in which you could blanket an asset class and should be able to generate a three, five, seven X. So that was very clear sign that deals were too cheap back then.

And as anything, as markets get more efficient over time, deals start to price a little bit more accurately.

And I thought that seed funds were holding on to those low prices a little too drastically.

And multistage funds had a bit more of the right idea.

Now, if you start to think that

a 3,000x multiple on a seed deal like Uber gave you a 3x across a blanketed coverage between 2008 and 2011, then you could argue seed deals need to be 3x more expensive as a floor.

But if you mix in all the other companies, you probably assume that seed deals should be 5x more expensive as a floor.

And by the way, even if that's the case, that means that an average entry valuation of 25 million, if you blanket the entire market, you should be able to break even on your money, which should never be the case because as you know, investing is challenging.

So now we're in a market where you actually need to be better at picking than you were historically.

In terms of what we started to do in the early days, what I did was I looked at the last few hundred companies that were backed by the multi-stage tier one venture capital firms.

And I started to identify patterns that existed in the founders they were backing.

And venture is a pattern matching business for better or for worse.

But what I started to notice was that they liked founders that went to one of these schools, got one of these degrees, worked at one of these companies and one of these roles and one of these periods of time in that company's inflection.