Roelof Botha

I listened to one of the shows you guys had recently, and I think there's a huge problem with the venture industry that there's too much money.

You guys have talked about this before.

Venture industry as a whole invests right now between $150 to $200 billion a year.

It was the last number as I saw.

If you think about reasonable assumptions for returns, let's just say 12% per annum net, which isn't great.

Might as well invest in an index fund.

The math basically implies that you need 3.5 to 4x funds to make that math work over a reasonable time frame.

So if you're investing, let's just say, $200 billion a year, the industry needs to give back $700-800 billion a year.

VCs don't own 100% of the company, last time I checked.

So that means that the aggregate exit value is north of a trillion a year.

So Figma went public recently.

They're worth $25, $26 billion.

You need 40 Figmas a year for the industry to make the returns work, which means that they don't.

So in my opinion, investing in venture is a return-free risk.

You shouldn't.

They're basically only about 20 companies.

You said return.

Return-free risk.

Exactly.

If you look at every single decade, there are only about 20 companies that end up getting exit values north of a billion dollars.