– All-In Podcast Ep 80 & All-In Summit In Miami
– High-growth & low-burn vs moderate-growth & high-burn companies
– Money goes to the best founders and companies who may not want it
– Inflection AI (LinkedIn & DeepMind Founders) raise $225 million
– Album Recommendation: We by Arcade Fire
#allin #allinpodcast #allinsummit #davidsacks #davidfriedberg #jasoncalacanis #chamath #chamathpalihapitiya #startup #cofounders #saas #startups #startupfunding
Alright, hello Tyler Braden here for covering from steamy weekend. Thank you Canada and Mother Nature for some nice weather. I’m glad to see some sun and enjoyed it in the backyard. Now coming back into another week. Interesting, fun time. We’re in so a couple things that I want to talk about here today. One of the things that’s sort of a consistent in my life that have talked about is this this all-in-one podcast and they had a big one this week. After taking a week off talking about markets. They they got back to it and obviously again a very interesting time in this, like the timestamps, they broke it down about how I mean. So some firms who are not performing well some historic losses and then how employees should protect themselves in downturns like this, especially ones who are have a bunch of equity in the company and they’re in different stages of growth within that company. And then a lot of sort of yeah like macro trends and comparing themselves to the to the Great Recession and.
The fun thing was, well, first of all, the fun thing was Friedberg roasting everyone at the start. Some vicious hits on some of those guys, which was great, had a good laugh and you know, sometimes you put these. These people that you who have found success, you put them up on a pedestal and it was nice to see another one of them. I guess. Dismantle, dismantle that so they had their summit in Miami I believe. Is it still going on at 15th to the 17th? So it’s starting here with a bunch of talks, a bunch of great speakers and.
You know, it’s very, you know, I’m really interested to see what comes out of as someone who’s a big fan and who has followed along. And the tweets have started to now come out showing what’s happening here. So some lots of poker based on my poker. The other night. I’m glad. I’m you know, I would just embarrass myself there so no need. No need for that. But people traveling some some nice shots of adjacent and jamasi and each other in person and just a lot of a lot of good stuff. So definitely at one point.
It sounds like there probably won’t do this again, at least as we’ll see after this, but would definitely be great. I’m sure there’s a lot of great networking there, probably some some alpha energy, but they they did do their best to try to break it down a little bit by gender and and stuff here as well. So just something I thought it’s pretty interesting for anyone who you are fans of this. There were a couple of points that stuck out to me, really, you know, just really resonated throughout that. Conversation and it was actually a tweet that came. I feel like again too much of a little bit of a super fan here, but I just think they they have great perspective at a high level of dealing with all the companies that they’re interacting with. And it was talking about, yeah, high growth and moderate burn will get funded startups with moderate growth and high burn will not get funded, so there’s sort of this axis or this graph that you can you can play out and you can say.
You can say you know if you are exactly if you are. If you have low growth and high burn, you’re done. If you’re in these sort of separate camps, you have some success towards continuing funding. And then if you’re not, then you’re you’re most likely not going to be able to raise or it’s going to be a very unfriendly terms, and I think this was something that Sachs said here in this tweet. And also in this podcast, which is that it might come to it might shock founders in this second category.
Moderate growth and high burn that they won’t get funded, but times are changing and there was an amazing article about with SoftBank sort of losses in the first quarter that it’s the end of an era for VC’s and I think. What we’re seeing here is if you are not an elite and exceptional company, which has generally been the trend in venture funding and then that was broken throughout the last few years, your likelihood of continuing to raise rounds of funding, especially at. Friendly terms is over at least temporarily and so. What then you’re responsible for doing is obviously increasing growth and then cutting burn as much as possible, and we had to take steps here in our own business to do that. And as painful as it is, it’s an important part to extend the extend the life of the company and get you the path to to solve any problems or hone in on the things that you need to hone on and to make those make make that sort of a formula work out and.
And and generally, there’s an idea that it takes a few years to even fix a company, and whether it’s company debt or technical debt, whatever that is it, it has a time to actually be fixed. It can take time, and so there’s a lot of companies that don’t have that long to fix these problems, and unless they execute and just a supreme fashion and manner over the next few months, six months year, there’s going to be a lot of companies that we’re going to see go down here, and I think that’s only I think we’re still. In the early stages of this and more and more is going to come out. I think the reporting that comes out of quarter two that basically seems like it will confirm we’re in a recession. That will be another signal or another moment where this just becomes more and more profound, more and more clear so.
What came from that too was this very interesting discussion about how. Companies that are exceptional are the ones where that money will go and they used an example in this podcast about stripe and it makes sense. Just a fantastic company about investors, have nowhere to put their money because they need to deploy it. But because these companies, many of these companies aren’t hitting these metrics, they’re not gonna have the likelihood to survive. It’s not gonna hit the portfolio numbers that they need. They’re going to try to go and put money into some of these companies. And The thing is, is most of these companies are already well funded. They’re they’re great founders. They’re trying not to dilute their company. They’re trying to keep only, you know, the best investors on capital on cap table. So there will be investors going to these companies and saying, hey, we want to put some money in and that these companies are going to say no.
Especially in a time when valuations are deflated and and why would they if they don’t need cash? Take on money on on most likely evaluation. That is not the astronomical evaluation that they believed it deserve, or they could have raised that they’re just going to keep going through. They’ll most likely cut some of their own burn, or they’ll just turn on some of the levers there for growth so. I think there’s a really fascinating interplay of where money flows over the next little while excited to sort of keep on this trend. And there was another point that Friedberg mentioned in this in this episode about a lot of companies. There’s this idea of there’s all this dry powder and dry powder being money that needs to be deployed that is reserved to be deployed into portfolio companies. And this has happened before. But what happens when investors have deployed this money into portfolio companies?
Is that they have they’ve had losses, and so it’s almost like the sunken cost fallacy of I have this money I I can’t. I don’t have companies that I want to invest in completely new, so I’m going to reinvest in the companies that I’ve already invested in. And typically there are some bias or some emotional. Those personal relationships built in that and they, you know, they think this company struggling because of the conditions. So I’m going to put some more money into them. These these underperform quite spectacularly. We have, you know, 50%.
That’s kind of thing, so we’re gonna see that merge merge over the next little bit too, as these investors look to deploy, you know the largest pool of capital ever created to deploy some on very short timelines, which is pretty, which is pretty fascinating. Just to sort of elaborate this example, one of the things I wanted to highlight was a company that has been funded that I’ve followed for a little bit here, stumbled across them and it. It shows to me that money flows to the cream of the crop, so led by led by LinkedIn co-founder Reed Hoffman and and then DeepMind member Mustafa Suleyman and he like man the amount of papers. The amount of like citations that they have like he has is insane. Some of the work that he’s done in AI and then you’ve obviously read Hoffman just to me, a legendary entrepreneur. LinkedIn being one of my favorite platforms is one that will share this video on later.
And looking at human computer interactions, something I’m completely fascinated and in love with. And so they’ve, I guess, in a way come out of stealth with a $225 million raise in equity financing and is being think it speaks to this flow of money going to the best people or the most proven people? And so with this it went to inflection and so inflection interesting, you know very. You know, short on details right now, but looking at language and how humans and computers can understand it and then interact and then even like from a contact us, this just takes you to an email and if like you see if you know you’re interested in working there, they don’t even have don’t even have like defined roles, it’s just looking for people that are interesting. So if you are, you know, interested in this kind of stuff, I I definitely think it’s a worthwhile company to take a look at and follow to just come out with that.
You have a raise is amazing and it speaks to again the where the money’s flowing and the kind of founders and the vision and the team that is being put to put together here so. The last piece that I wanted to talk about this is just sort of a fun but stumble across this album I. I think there are actually so they performed on Saturday Night Live Arcade Fire. Great band, been around for a long time but for some reason this one just hit a little a little harder, some beautiful messaging in this album here, and very thematically grouped together with some amazing transitions and the tempo switches between the band and everything. It’s really, truly is. An incredible album I’ll maybe do a little bit of a deeper dive on it, but if you’re looking for some new music this week, it is a recommendation that I have. It’s only 40 minutes, 10 songs, but definitely has some pretty inspiring moments in it.
That I can’t say anything more about. I have nothing else to say around it, so this is the start kicking off the week. As always, lots of just interesting stories that will continue to emerge. This week. I’ve got some things that you know I’m continue to share and I’m interested in one of the things that I’ve I’m thinking about here is like how can I? It’s obviously localized, but you know, I start to look at OK, we’re coming up into June here. Even the last couple weeks of May. There’s events here in Toronto.
What are the great events for the tech community specifically looking at that and maybe trying to share this through video form but also with some links? Couple other things that you know, just sort of following as I’m posting to YouTube here. What is you know? What am I seeing? What am I learning from this? Is there any attraction? Is there anything so sharing a little bit about that journey as well too? And then lots of other things just happening perfectly personally professionally it was speaking. I have a couple things that are coming out over the next week that I’m excited to share and as always you know it’s it’s it’s.
Almost at the end of the week, I almost feel like I got nothing more to say and then so much you learn so much over the weekend. So much happened, so much changes that you come back with a fresh mind with a fresh pallet and you’re happy to do this again. So thank you as always for checking this out. Hopefully there was a good insights. There’s anything that you’d like me to sort of talk about or address in these please and feel encouraged to let me know I love for that and and and love the feedback. And I hope you have a great rest of the day. Thank you so much.