20VC: The Memo: How to Raise a Venture Capital Fund (Part I) | The Core Lessons from Raising $400M Over The Last Four Years| The Biggest Mistakes VCs Make When Fundraising | How To Find and Build Relationships with New LPs
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch11 Jan 2023

20VC: The Memo: How to Raise a Venture Capital Fund (Part I) | The Core Lessons from Raising $400M Over The Last Four Years| The Biggest Mistakes VCs Make When Fundraising | How To Find and Build Relationships with New LPs

How To Raise a Venture Capital Fund

Over the last 4 years, I have raised around $400M across different vehicles from many different types of investors. Today I am going to break down the early stages of how to raise a venture capital fund and then stay tuned for a follow-up to this where we will break down a fundraising deck for a fund, what to do, what not to do etc. But to the first element.

Your Fund Size is Your Strategy:

The most important decision you will make is the size of fund you raise. So much of your strategy and approach will change according to your fund size target (LP type, messaging, documentation, structure etc). Remember, your fund size is your strategy. If you are raising a $10M Fund, you are likely writing collaborative checks alongside a follower, if you are raising a $75M fund, you will likely be leading early-stage seed rounds. These are very different strategies and ways of investing.

MISTAKE: The single biggest mistake I see fund managers make is they go out to fundraise with too high a target fundraise. One of the most important elements in raising for a fund is creating the feeling of momentum in your raise. The more of the fund you have raised and the speed with which you have raised those funds dictate that momentum. So the smaller the fund, the easier it is to create that heat and momentum in your raise.

LESSON: Figure out your minimum viable fund size (MVFS). Do this by examining your portfolio construction. In other words, how many investments you want to make in the fund (the level of diversification) and then alongside that, the average check size you would like to invest in each company. Many people forget to discount the fees when doing this math and so the traditional fund will charge 2% fees per year and so across the life of the fund (usually 10 years), that is 20% of the fund allocated to fees.

Example:

We are raising a $10M Fund.

20% is allocated to fees for the manager and so we are left with $8M of investable capital.

A good level of diversification for an early-stage fund is 30 companies and so with this fund size, I would recommend 32 investments with an average of $250K per company. That is the $8M in invested capital. Big tip, I often see managers raising a seed fund and are only planning to make 15 investments, this is simply not enough. You have to have enough diversification in the portfolio if you are at the seed stage. No one is that good a picker. Likewise, I sometimes see 100 or even 200 investments per fund, this is the spray-and-pray approach, and although works for some, your upside is inherently capped when you run the maths on fund sizes with this many investments.

A big element to point out in this example is we have left no allocation for reserves. For those that do not know, reserves are the dollars you set aside to re-invest in existing portfolio companies. Different funds reserve different amounts, on the low end there is 0% reserves and on the high end some even have 70% of the fund reserved for follow-on rounds.

In this example, given the size of the fund being $10M with a seed focus, I would recommend we have a no-reserves policy. Any breakout companies you can take to LPs and create SPVs to concentrate further capital into the company. This is also better for you as the manager as you then have deal by deal carry on the SPVs that are not tied to the performance of the entire fund.

So now we know we know $10M is our MVFS as we want to make at least 30 investments and we want to invest at least $250K per company. Great, next step.

Set a target that is on the lower end, you can always have a hard cap that is significantly higher but you do not want the target to be too far away that LPs question whether you will be able to raise the fund at all. This is one of the biggest reasons why many do not invest in a first time fund, they are unsure whether the fund will be raised at all.

The Team:

Alongside the size of the fund, the team composition is everything, simply put, LPs like managers who have invested in the stage you are wanting to invest in moving forward. They like to see track record.

IMPORTANT: I see so many angels write checks into breakout Series B companies and then go out and try and raise a seed fund with this as their track record. Do not do this, this does not prove you are a good seed investor but merely shows you have access at the Series B. These are very different things.

With regards to track record, in the past, TVPI or paper mark-ups were enough, now there is a much greater focus on DPI (returned capital to investors). LPs want to see that you have invested before at that stage and they also want to see that the team has worked together before. You want to remove the barriers to no. If you have not worked with the partners you are raising with before, LPs will have this as a red flag, and as team risk, it is that simple.

Navigating the World of LPs (Limited Partners)

The size of the fund you are raising will massively dictate the type of LPs that will invest in your fund.

MISTAKE: You have to change your messaging and product marketing with each type of LP you are selling to. A large endowment fund will want a very different product to a Fund of Funds.

Example: If you are a large endowment, you will invest in early funds but you want the manager to show you a pathway to them, in the future, being able to take not a $10M check but a $50M check from the endowment. Whereas the Fund of Funds will likely want you to stay small with each fund. So when discussing fund plans, it is crucial to keep these different desires in mind.

If you are raising a $10M fund, you will be too small for institutional LPs and will raise from individuals and family offices. An LP will never want to be more than 20% of the LP dollars in a fund and so the size at which an institutional LP (really the smallest fund of funds) would be interested is when you raise $25M+ and they can invest $5M. Generalisation but a good rule of thumb to have.

LP Composition of Your Fund:

Speaking of one LP being 20% of the fund dollars, it is helpful to consider the LP composition you would like to have for your fund. The most important element; you want to have a diversified LP base. A diversified LP base is important in two different forms:

  1. No LP should be more than 20% of the fund at a maximum. That said you do not want to have so many investors in your fund it is unmanageable. LPs need time and attention and so it is important to keep that in mind when considering how many you raise from. Some LPs will want preferred terms or economics for coming into the first close or being one of the first investors, if you can, do not do this. It sets a precedent for what you will and will not accept and then for all subsequent investors, they will want the same terms and rights.
  2. You want to have a diversification of LP type (endowments, fund of funds, founders, GPs at funds etc). Why? In different market cycles, different LPs will be impacted and so if you only raise from one LP type, if a market turns against that LP class, then your next fund is in danger.

Example:

We will see the death of many mico-funds ($10M and below). Why? The majority raised their funds from GPs at larger funds and from public company founders. With the changing market environment, most GPs are no longer writing LP checks and most public market founders have had their net worths cut in half by the value of their company in the public market and so likewise, are no longer writing LP checks. In this case, the next funds for these funds will be in trouble as their core LP base is no longer as active as they used to be. We are seeing this today.

Prediction:

  • 50% of the micro-funds raised in the last 2 years will not raise subsequent funds.

Going back to the question of diversification, my preference and what we have at 20VC, the majority of dollars are concentrated from a small number of investors. Of a $140M fund, we have $100M invested from 5 large institutions. These are a combination of endowments, Family Offices, a High Net Worth Individual and a Fund of Funds. The remaining $40M originates from smaller institutions or individuals, for us we have over 50 making up that final $40M. For me, I really wanted to have a community around 20VC Fund and so we have over 40 unicorn founders invested personally in the fund as LPs.

Bonus Points: The best managers select their LPs to play a certain role or help with a potential weakness the manager has. For example, I was nervous I did not have good coverage of the Australian or LATAM startup market and so I was thrilled to add founders from Atlassian, Linktree, Mercado Libre, Rappi and Nubank as LPs to help in regions where I do not have such an active presence. If you can, structure your LP base to fill gaps you have in your ability.

Status Check In:

Now we know our minimum viable fund size, we know the team composition we are going out to raise with, we know the LP type that we are looking to raise money from and we know how we want our desired fund cap table to look.

Now we are ready to move to the LPs themselves.

Fill Your Restaurant with Friendlies:

As I said, the appearance of your raise having heat and momentum is important.

Mistake: The biggest mistake I see early fund managers make is they go out to large institutional investors that they do not have an existing relationship and spend 3-4 months trying to raise from them. They lose heat, they lose morale and the raise goes nowhere.

Whatever fund size you are raising, do not do this. Fill your restaurant with friendlies first. What does this mean? Go to anyone you know who would be interested in investing in your fund and lock them in to invest. Create the feeling that progress is being made and you have momentum.

BONUS POINTS: The best managers bring their LPs with them for the fundraise journey. With each large or notable investor that invests in your fund, send an email to the LPs that have already committed to let them know about this new notable investor. This will make them feel like you have momentum, they are in a winner and many will then suggest more LP names, wanting to bring in their friends.

MISTAKE: Do not set a minimum check size, some of the most helpful LPs in all of my funds have been the smallest checks. Setting a minimum check size will inhibit many of the friendlies from investing and prevent that early momentum.

The bigger the name the incoming investor has the better. You can use it for social validity when you go out to raise from people you know less well or not at all. Different names carry different weight, one mistake I see many make is they get a big name invested in their fund but it is common knowledge to everyone that this LP has done 200 or 300 fund investments, in which case, it does not carry much weight that they invested in your fund. Be mindful of this as it can show naivety if you place too much weight on a name that has invested in so many funds.

Discovery is Everything:

The world of LPs is very different to the world of venture. 99% of LPs do not tweet, write blogs or go on podcasts. Discovery is everything. When I say discovery I literally mean finding the name of the individual and the name of the organization that is right for you to meet.

This can take the form of several different ways but the most prominent for me are:

  1. The Most Powerful: Create an LP acquisition flywheel. What do I mean by this? When an LP commits to invest in your fund. Say to them, "thank you so much for your faith and support in me, now we are on the same team, what 3 other LPs do you think would be perfect for the fund?" Given they have already invested, they already believe in you and so 90% of them will come back with 3 names and make the intro. Do this with each LP that commits and you will create an LP acquisition flywheel.

Bonus Point: The top 1% of managers raising will already know which LPs are in the network of the LP that has just committed and will ask for those 3 specific intros. They will then send personalized emails to the LP that has just committed. The LP is then able to forward that email to the potential LP you want to meet. You want to minimize the friction on behalf of the introducer and so writing the forwardable email is a great way to do this.

  1. The Most Likely to Commit: LPs are like VCs. When one of their portfolio managers makes an intro and recommendation to a potential fund investment, they will place a lot more weight on it than they would have otherwise. So get your VC friends to introduce you to their LPs, it is that simple. Remember, you have to remove the friction from the introducer. So, make sure to send the email they can forward to the LP. Make this personalized and concise.

Mistake: Many VCs do not like to introduce other managers to their LPs as they view it as competition. This is moronic. If the manager asking for the intro is really good, they will raise their fund with or without your intro. If they are not good, then you can politely say it would not be a fit for your LP and move on. Do not be too protective of your LPs from other managers.

  1. The Cold Outbound: I am not going to lie cold outbound for LPs is really hard. Here is what I would suggest:

  • Pitchbook: It is expensive and many cannot afford it but if you can, it is worth it for LP discovery. They have thousands of LPs of different types on the platform all with their emails and contact details. Those are less useful as a cold email to an LP is unlikely to convert but just finding their names and the names of their organization is what is important. You can then take that to Linkedin to then find the mutual connections you have with that person and ask for a warm intro.
  • Linkedin: Many LPs have the funds that they have invested in on their Linkedin profiles with the title "Limited Partner". If they are invested in a fund that is aligned with the strategy that you are raising for, there is a strong chance they might be a fit. For example, I invest in micro-funds and have invested in Chapter One, Scribble, Rahul from Superhuman and Todd's Fund, and Cocoa Ventures, so you see this and see I like sub $25M funds with a specific angle.
  • Clearbit: Often you will know the name of the institution but not the name or position of the person within the institution that you are looking to raise from. Download a Google Chrome Plugin called Clearbit. With Clearbit you can simply insert the URL for the organization you would like to speak with and then all the people within it will appear and you can select from title and their email will be provided. Again, if you do not want to cold email, you now have their name which you can take to your community, to ask for the intro.

MISTAKE: LPs invest in lines, not dots. Especially for institutional LPs, it is rare that an institution will meet you and invest in you without an existing relationship and without having followed your work before. A mistake many make is they go to large institutions and expect them to write a check for this fund, it will likely be at best for the fund after this one or most likely the third fund. This does not mean you should not go to them with your first fund but you should not prioritize them and you should not expect them to commit. I would instead go in with the mindset of we are not going to get an investment here, so I want to leave the room understanding what they need to see me do with this first fund, to invest in the next fund. The more detailed you can get them to be the more you can hold them to account for when you come back to them for Fund II.

Example: If they say, we want to see you are able to price and lead seed rounds and we are not sure you can right now. Great. Now when you come back to them in 12 months' time, you can prioritize the fact that you have led 80% of the rounds you invested in, and their core concern there has been de-risked.

In terms of how I think about LP relationship building, I always meet 2 new LPs every week. I ensure with every quarter, I have a check-in with them and ensure they have our quarterly update. This allows them to follow your progress, learn how you like to invest, and communicate with your LPs. It also really serves to build trust. Doing this not in a fundraising process also removes the power imbalance that is inherent within a fundraise and allows a much more natural relationship to be created.

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20VC: The Dubsmash Memo: Scaling to 43M Users in 10 Days, Why TikTok Was a Competitor Like Never Seen Before, Good vs Great Consumer Products and What Every Consumer Product Needs & The Future of Consumer Social with Suchit Dash

20VC: The Dubsmash Memo: Scaling to 43M Users in 10 Days, Why TikTok Was a Competitor Like Never Seen Before, Good vs Great Consumer Products and What Every Consumer Product Needs & The Future of Consumer Social with Suchit Dash

Suchit Dash is the VP of Core Product Experience at Reddit, responsible for the surfaces that millions of users interact with daily. Prior to Reddit, Suchit was a cofounder at Dubsmash, a short video platform that was used by millions globally and acquired by Reddit in December 2020. In just 10 days, Suchit scaled the product to an immense 43M users, and gained fans such as Neymar and Jimmy Fallon. Suchit previously held roles at Soundcloud and PayPal. In Today's Episode with Suchit Dash We Discuss: 1. The Founding of Dubsmash & V1: How did the founding of Dubsmash come to be? Suchit scaled V1 of the product to 43M users in 10 days, what was the secret? What worked? What were the first signs that all was not right? How did the team respond to the realization that their retention numbers were terrible? What are Suchit's biggest lessons and pieces of advice from this massive V1 and launch? 2. Data: Retention, Cohorts and The Smiley Face: What specific data did Suchit and the team really use to understand their level of product market fit? What level of retention were they looking for? What is average, good, and great in terms of retention in consumer social? What is really important for founders to try and observe and analyze in net new user cohorts? When and why did the team start to see the hailed smiley face of consumer returning to the app? 3. Battling TikTok: Despite the resurgence, TikTok was roaring, what did TikTok do so well to take the market? How did TikTok leverage both FB and Snap's ad platform to acquire so many users so fast? What did TikTok not do well? What could they have done better? How did TikTok pay and incentivize the creator community? What are some of Suchit's biggest lessons and advice for founders battling a better-funded incumbent? 4. The Decision to Sell: Being Acquired by Reddit: Ultimately, why did Suchit decide to sell the company to Reddit? Why did the first two acquisition attempts fail? What are 1-2 of the biggest pieces of advice Suchit has for founders debating whether it is right to sell their company? What do all founders being acquired need to remember? With the benefit of hindsight, if Suchit could do the acquisition process again, what would he do differently?

13 Sep 202355min

20VC: Lessons Building Nubank to the Largest Neobank in the World, How AI Changes The Future of Finance, Leadership Lessons from Sequoia's Doug Leone & What European and US Fintech Can Learn From LATAM with David Velez, Founder @ Nubank

20VC: Lessons Building Nubank to the Largest Neobank in the World, How AI Changes The Future of Finance, Leadership Lessons from Sequoia's Doug Leone & What European and US Fintech Can Learn From LATAM with David Velez, Founder @ Nubank

David Velez is the Founder and CEO of Nubank, one of the largest and fastest-growing financial institutions in the world. 1 in 2 people in Brazil alone have a Nubank account. Nubank's purple credit card in Mexico is the highest-rated NPS product of any consumer product in the world. Before founding Nubank in 2013, David was a partner at Sequoia Capital between 2011 and 2013, in charge of the firm's Latin American investments group. Before Sequoia, David worked in investment banking and growth equity at Goldman Sachs, Morgan Stanley and General Atlantic. In Today's Episode with David Velez We Discuss: 1. From Sequoia Partner to Creating One of the Largest Financial Institutions: What was the Sequoia interview process like? What questions did Doug Leone really dive into when hiring David? What impressed David most about how Sequoia interview and win talent? What are 1-2 of David's biggest lessons from working with Doug Leone? 2. From a Small House to a $BN Public Company: What does David believe are the 1-2 core but non-obvious reasons why Nubank scaled so fast? What does David believe are the most non-obvious but massive opportunities Nubank has to 10x from here? Why does David believe emerging market fintech providers will be more valuable than Western fintechs? What does David believe Western fintechs and regulators can learn from BRIC economy fintechs? 3. How AI Changes The Future of Financial Services: How does David believe AI will change financial services? What products are the lowest-hanging fruit? Which products will be harder for AI to serve? How will AI handle the ambiguity of which master to serve; the consumer and their experience or the bank and their fees and profit motive? Will banks need to own and operate their own models? If using other models, what will differentiate them when they are layers on top of someone else's technology? 4. David Velez: The Leader and Father: What does it mean to be a great listener? How does David approach it? What has been David's biggest lessons from Sequoia on culture? What works? What does not? What are David's biggest pieces of advice to raise kids that are not spoiled and are hard-working and humble? How does David think about "efficient giving" with the philanthropy he does today? What is the big paradox and challenge in philanthropy today?

11 Sep 20231h 4min

20Sales: Why Everyone is Responsible for Demand Generation, How to do Great Sales Discovery, How to Reduce Sales Cycles and Create Urgency and Deal Reviews; Good and Bad Reasons to Lose a Deal with Doug Adamic, CRO @ Brex

20Sales: Why Everyone is Responsible for Demand Generation, How to do Great Sales Discovery, How to Reduce Sales Cycles and Create Urgency and Deal Reviews; Good and Bad Reasons to Lose a Deal with Doug Adamic, CRO @ Brex

Doug Adamic is the CRO @ Brex and leads the company's revenue and growth strategy. Prior to Brex, Doug was most recently the Chief Revenue Officer at SAP Concur, a provider of travel spend management solutions and services. During his 16-year tenure oversaw an organization of 600+ employees. He was responsible for all aspects of revenue, generating go-to-market strategies and departments. Prior to SAP Concur, he had a five-year tenure as an Enterprise Sales Manager for Kronos, Inc. In Today's Episode with Doug Adamic We Discuss: 1. Entry into Sales: Does Doug believe that love of sales is innate or can be learned? When did he discover his love? What does Doug know now about sales he wish he had known when he started? What are 1-2 of his biggest takeaways from leading 600+ people at SAP? 2. Discovery, Pipeline and Qualification: What are the three core reasons why companies buy software today? How do the best sales teams use those needs to get deals done fast? What does great sales discovery mean today? Why do you have to make customers feel uncomfortable to understand their true needs? What are the biggest mistakes sales teams make when asking questions, determining customer pain, willingness to pay etc etc? Why does Doug believe that everyone in the company is responsible for demand creation? What are the core pillars to success in qualification? Where do so many go wrong? 3. Getting Deals Done: Why does Doug disagree that now is the hardest time to be selling? Are companies buying new software today? What is the secret to opening up organizations that say they are not open for buying new software? How can sales teams create multiple champions in a prospect? How can they determine who is really a buyer vs who is an influencer in a prospect? What are the biggest tactics that can be used to reduce sales cycles and create urgency in a sales process? 4. Discounting, Trust and Deal Reviews: What is a good reason to lose a deal? What is a bad reason to lose a deal? How does Doug and Brex conduct deal reviews? What makes a good vs a bad deal review? What is the fastest way to lose trust either with prospects or with customers? Why does Doug believe discounting is BS and should not be used?

8 Sep 202353min

20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Nikhil Basu Trivedi is Co-Founder & General Partner at Footwork, an early-stage focused venture firm investing its first fund. In his venture career, he has invested in the early rounds of several companies that have exited or are currently valued at over $1B, including Athelas, Canva, ClassDojo, Color Health, Frame.io, Imperfect Foods, Lattice, and The Farmer's Dog. Prior to Footwork, Nikhil was a Managing Director at Shasta Ventures, on the investment team at Insight Partners, and on the founding team at Artsy. In Today's Episode with Nikhil Basu Trivedi We Discuss: 1. From Summer Intern to Founding a Firm: The 13 Year Journey: How did Nikhil first make his way into venture as an intern at Insight Partners in NYC? What does Nikhil know now that he wishes he had known on his first day in venture? Why does Nikhil advise all young VCs to "not look at their business card"? Why does title not matter in venture? Should founders meet with Juniors as well as GPs and more senior people? 2. Small Funds Outperform Large Funds: Why does Nikhil believe that small funds outperform large funds? Why is AUM the biggest bullshit metric in VC? How does Nikhil advise seed stage founders who have offers from seed firms for smaller rounds at lower valuations and are weighing them against larger rounds with higher valuations from multi-stage funds? Does Nikhil believe that platform value-added services really provide any value? 3. The Art of Investing: What has been Nikhil's biggest investing win? How has it changed his approach to investing? How does Nikhil prioritize between people, traction, and market? What is most important? What has been Nikhil's biggest investing miss? How has that changed his approach? Does Nikhil believe the great founders are immediately obvious? Why is market size the single question that keeps Nikhil up the most? 4. The Dysfunctions of Venture Capital: What are the single biggest areas of misalignment between GP and LP? What do many GPs see and know well that LPs should know and see more of? What are the biggest ways that decision-making breaks down in a venture fund? Why does Nikhil believe that so much of the investment in AI is going to go up in flames?

6 Sep 20231h

20VC: The $3.1BN Meeting That Led to an Uber Acquisition, The Battle With Uber; How to Outcompete When You Have 10x Less Cash & The Marketing Campaigns That Led to Pakistan MDs Fleeing and Elon Musk Fanboying with Mudassir Sheikha, CEO @ Careem

20VC: The $3.1BN Meeting That Led to an Uber Acquisition, The Battle With Uber; How to Outcompete When You Have 10x Less Cash & The Marketing Campaigns That Led to Pakistan MDs Fleeing and Elon Musk Fanboying with Mudassir Sheikha, CEO @ Careem

Mudassir Sheikha is the CEO and Co-Founder of Careem. Over the last 11 years, Mudassir has scaled the service to more than 80 cities in 10 countries, with 1,400+ colleagues and more than 2.5 million Captains. With such success, in 2020 Uber announced they would be acquiring Careem for a reported $3.1BN. Prior to Careem, Mudassir co-founded "DeviceAnywhere", a company that was acquired by "Keynote" in 2008 before joining the management consulting firm "McKinsey & Company" in Dubai. In Today's Episode with Mudassir Sheikha We Discuss: 1. From McKinsey to $3.1BN Exit to Uber: What was the founding a-ha moment for Mudassir with Careem? What does Mudassir know now that he wishes he had known at the beginning? What does Mudassir believe he is running away from? 2. Finding Product-Market Fit: What is the single biggest mistake founders make when trying to find product-market fit? Does Mudassir believe you have to do things that do not scale, to scale? What did Careem do? What are some of Mudassir's biggest pieces of advice to founders on finding a core target audience and doing customer discovery the right way? 3. Competing with Giants: How To Win When You Cannot Outspend: How did Careem beat Uber when they had 1/100th of their budget? What advice does Mudassir have for founders who have competition that is much better funded? What is the story of spending the night in bunk beds and barely sleeping before raising $300M the next day? How did that happen? 4. The Acquisition: How it Went Down: How did Mudassir and Dara @ Uber first come to meet? How did Dara's approach contrast with the prior approach of Travis Kalanick? Why did Mudassir decide to sell and join Uber? What were the main reasons or arguments against the acquisition? 5. Talk to me About: Careem's Pakistan MD having to flee Pakistan for his safety post a marketing campaign? Elon Musk likes one of Careem's promotional videos and why? An investor who wired $1M with absolutely no paperwork? The catch up meeting that turned into a $3BN offer?

4 Sep 202347min

20VC: Spending $2M to Train a Single AI Model: What Matters More; Model Size or Data Size | Hallucinations: Feature or Bug | Will Everyone Have an AI Friend in the Future & Raising $150M from a16z with Noam Shazeer, Co-Founder & CEO @ Character.ai

20VC: Spending $2M to Train a Single AI Model: What Matters More; Model Size or Data Size | Hallucinations: Feature or Bug | Will Everyone Have an AI Friend in the Future & Raising $150M from a16z with Noam Shazeer, Co-Founder & CEO @ Character.ai

Noam Shazeer is the co-founder and CEO of Character.AI, a full-stack AI computing platform that gives people access to their own flexible superintelligence. A renowned computer scientist and researcher, Shazeer is one of the foremost experts in artificial intelligence (AI) and natural language processing (NLP). He is a key author for the Transformer, a revolutionary deep learning model enabling language understanding, machine translation, and text generation that has become the foundation of many NLP models. A former member of the Google Brain team, Shazeer led the development of spelling corrector capabilities within Gmail, the algorithm at the heart of AdSense. In Today's Episode with Noam Shazeer We Discuss: 1. Entry into the World of AI and NLP: How did Noam first make his way into the world of AI and come to work on spell corrector with Google? What are 1-2 of his biggest takeaways from spending 20 years at Google? What does Noam know now that he wishes he had known when he started Character? 2. Model Size or Data Size: What is more important, the size of the data or the size of the model? Does Noam agree that "we will not use models in a year that we have today?" What is the lifespan of a model? Does Noam agree that the companies that win are those that are able to switch between models with the most ease? With the majority of data being able to be downloaded from the internet, is there real value in data anymore? 3. The Biggest Barriers: What is the single biggest barrier to Character today? What are the most challenging elements of model training? Why did they need to spend $2M to train an early model? What are the most difficult elements of releasing a horizontal product with so many different use cases? Where does the value accrue in the race for AI dominance; startups or incumbents? 4. AI's Role on Society: Why does Noam believe that AI can create greater not worse human connections? Why is Noam not concerned by the speed of adoption of AI tools? What does Noam know about AI's impact on society that the world does not see?

31 Aug 202335min

20VC: Why AI Models are not a Moat, Where Does the Value in AI Accrue; Startups or Incumbents, What the World Has Got Wrong About AI, Why AI Needs a New Story and Who is the Right People to Tell it with Cris Valenzuela, Co-Founder & CEO @ Runway

20VC: Why AI Models are not a Moat, Where Does the Value in AI Accrue; Startups or Incumbents, What the World Has Got Wrong About AI, Why AI Needs a New Story and Who is the Right People to Tell it with Cris Valenzuela, Co-Founder & CEO @ Runway

Cris Valenzuela is the CEO and co-founder of Runway, the company that trains and builds generative AI models for content creation. To date, Cris has raised over $285M for the company from the likes of Lux Capital, Felicis, Coatue, Amplify, and Nvidia to name a few. Runway's customers include academy-nominated movies, TV shows, media companies, and creatives across industries. In Today's Episode with Cris Valenzuela We Discuss: 1. From Childhood in Chile to Founding one of the Hottest AI Startups: What was the founding moment for Cris with Runway? His investors described Cris as an "outsider". Does Cris believe he is an outsider? What are the biggest pros and cons of being an outsider? What does Cris believe he is running from? What is he running towards? 2. Models are not a Moat: Models 101: What does Cris believe is more important; model size or data size? Why does Cris believe that models are not a moat? How does Cris think about the lifespan of models? Will any used today be used in a year? Are hallucinations a feature or a bug? What are the nuances? 3. The World Has Got AI Wrong: We Need Different Stories: Why does Cris believe the world has got AI wrong? Why do we need different stories for what AI can do and will be? Who should tell them? Why do groups like screenwriters riot and protest if the tool is empowering and not replacing? 4. Company Building 101: Hiring and Fundraising: What are the biggest pieces of startup advice that are total BS? What has been the single biggest lesson Cris has learned when it comes to fundraising? Does Cris believe that VCs really add value? What have been the single biggest hiring mistakes that Cris has made? How has Cris structured their interview process to make it the best interview process in the world?

28 Aug 202341min

20Product: Enterprises are not Adopting AI Yet, When Will AI Break Into Enterprise, What are the Blockers, What Do Enterprises Need from AI & Why Services Companies Will Win in the Next 10 Years of AI Implementation with Howie Liu, Founder & CEO @ Airtabl

20Product: Enterprises are not Adopting AI Yet, When Will AI Break Into Enterprise, What are the Blockers, What Do Enterprises Need from AI & Why Services Companies Will Win in the Next 10 Years of AI Implementation with Howie Liu, Founder & CEO @ Airtabl

Howie Liu is the Founder and CEO @ Airtable, the fastest way to build apps for your business. To date, Howie has raised over $1BN with Airtable with the last round valuing the company at $11BN and an investor base including Benchmark, Thrive, Caffeinated, Greenoaks and Coatue to name a few. In Todays Episode with Howie Liu We Discuss: 1. Scaling into Enterprise: What are the single biggest challenges when moving from PLG to enterprise? Why does Howie believe you have only truly hit enterprise when you sign $1M contracts? How long did it take for Airtable to sign their first $1M ARR contract? How can founders know when is the right time to scale into enterprise? How does the product need to change with the scaling? 2. Enterprises: Do They Really Love AI: Why does Howie believe that enterprises are not jumping on AI yet? When does enterprise interest turn into enterprise buying and purchasing? What are the single biggest barriers to enterprises buying AI solutions today? Post-purchase, what are the biggest implementation challenges for enterprises with AI? 3. The Changing Sales Process: Are we seeing the bundling of tools within large enterprises today? Which categories and vendors are most vulnerable? Which will survive the cuts? What do vendors need to do to prove to CFOs that they need to remain in their budget? How has the customer success process changed over the last year with tightening budgets? 4. Howie Liu: AMA: Airtable famously got Benchmark to lead their Series C, how did this come to be when they famously always only do Series A? Why does Howie believe that it is total BS to suggest post-PMF, everything is good? What does Howie know now that he wishes he had known when he started Airtable?

25 Aug 202339min

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