The Host

And all they do is sit there with like a toothpick in and they hate on each other and make fun of each other. I've seen this. It is the funniest bit in the history of the Chappelle's show. All right, let's keep the train moving here. CRV is... giving back or maybe not calling down 275 million from their LPs, Charles River Ventures, shout out to my pal, George Zachary and Greek brother from CRV.

Historically, they invest in early stage startups, they did DoorDash, Airtable, Twitter back in the day. They had two funds that they raised back in 2022 billion dollar early stage fund and a 500 million growth fund. Sometimes people call that an opportunity fund or a select fund.

Historically, they invest in early stage startups, they did DoorDash, Airtable, Twitter back in the day. They had two funds that they raised back in 2022 billion dollar early stage fund and a 500 million growth fund. Sometimes people call that an opportunity fund or a select fund.

The New York Times reported CRV is going to give back about half of that $275 million to investors or technically probably not call it down. The four partners at CRV gave an exclusive to the New York Times. So either getting ahead of this story or maybe, you know, who knows what the motivation here is.

The New York Times reported CRV is going to give back about half of that $275 million to investors or technically probably not call it down. The four partners at CRV gave an exclusive to the New York Times. So either getting ahead of this story or maybe, you know, who knows what the motivation here is.

But the reason they gave is that the market conditions for late stage have worsened dramatically and that the valuations are still too high. Yes, the rent is too high. And that there aren't any exit options, as we just talked about, with the administration, no IPOs, no M&A. And that VC map doesn't work in the late stage. So I'll just stop there. There's a bunch of other notes here.

But the reason they gave is that the market conditions for late stage have worsened dramatically and that the valuations are still too high. Yes, the rent is too high. And that there aren't any exit options, as we just talked about, with the administration, no IPOs, no M&A. And that VC map doesn't work in the late stage. So I'll just stop there. There's a bunch of other notes here.

Obviously, this isn't the first time this has happened. I think Founders Fund cut the size of its eighth fund in half from $1.8 billion to $900 million. They didn't actually give the capital back to VCs like they're saying CRV did here. Again, I'm not certain if that's what's happened or not.

Obviously, this isn't the first time this has happened. I think Founders Fund cut the size of its eighth fund in half from $1.8 billion to $900 million. They didn't actually give the capital back to VCs like they're saying CRV did here. Again, I'm not certain if that's what's happened or not.

They put the extra $900 million into its ninth fund if they decide to raise that, which I'm assuming Founders Fund will. Chamath, do you have any thoughts on this, I guess, trend? We got two stories here, so I don't know if it's a trend or not.

They put the extra $900 million into its ninth fund if they decide to raise that, which I'm assuming Founders Fund will. Chamath, do you have any thoughts on this, I guess, trend? We got two stories here, so I don't know if it's a trend or not.

Peanut butter getting spread a little bit thin there. Any thoughts, Freeberg, on this trend, if we can call it that? Or is this like maybe they're reacting right as the market is changing and valuations are getting more reasonable and the exit opportunities are getting more reasonable? It seems like this was the right reaction two years ago, but maybe it's the wrong reaction now.

Peanut butter getting spread a little bit thin there. Any thoughts, Freeberg, on this trend, if we can call it that? Or is this like maybe they're reacting right as the market is changing and valuations are getting more reasonable and the exit opportunities are getting more reasonable? It seems like this was the right reaction two years ago, but maybe it's the wrong reaction now.

What do you think, Freeberg?

What do you think, Freeberg?

And to just explain this math before I get Sax's thoughts on this, if this was a $500 million fund, let's say they were putting $25 million into each, we'll take management fees out of it, $25 million into each opportunity at a billion dollar valuation, they would own 2.5% obviously of those firms.

And to just explain this math before I get Sax's thoughts on this, if this was a $500 million fund, let's say they were putting $25 million into each, we'll take management fees out of it, $25 million into each opportunity at a billion dollar valuation, they would own 2.5% obviously of those firms.

They need to get probably a $30 billion power law exit of 30x SACs in order to just return the fund. There'll be some dilution, obviously, along the way. That's why it's not 20x. And the number of companies that go from a billion to 30 billion per cycle is incredibly low. Uber, Coinbase, Airbnb. It's a really short list, huh, SACs in recent history?

They need to get probably a $30 billion power law exit of 30x SACs in order to just return the fund. There'll be some dilution, obviously, along the way. That's why it's not 20x. And the number of companies that go from a billion to 30 billion per cycle is incredibly low. Uber, Coinbase, Airbnb. It's a really short list, huh, SACs in recent history?

The Tigers and that sort of cohort, SoftBank, Masayoshi-san.