Sam Lessin on Venture Capital & Investing

Essays

From the Podcast

Well, and what's really interesting, right, is you have this thing where, like, take Bending Spoons. Bending Spoons is making really good business deals offering, like, a tenth of the private price because there's no liquidity. They're the liquidity provider and, right, and for this type of business. And then you have a lot of people who are like, "There's so much money with asymmetry on the minds." And if it... Drying up is more of a macro event than it is a tech event, right, is the interesting thing from my perspective. I don't know. I don't know how the ballgame ends. I mean, I know that we're so disconnected from any semblance of normal capitalism or reality, and I know it's gonna drive an unbelievable amount of, like, fear, loathing, anger, and, like, resentment in all sorts of ways. Like, this makes the dot com bubble look quaint. But who knows? Like, I'm open to the fact that this could go on for years. Or it just could be we've hit a too big to point fail, and this is the greatest stories ever told, right? The greatest stories ever sold.

— Sam Lessin, More or Less Ep 167

I'm, like, finding things at zero and giving them money, and then want them to create businesses and number go up, and then every once in a while someone pays a lot for the business or whatever. But I, I, like, I haven't changed our investing that much. And you know what? In the Silicon Valley ecosystem, financially, that's, like, insanely wrong right now. This is all, like, secure your bag, get liquid. There's a deep market to buy this shit on the other side, especially as a seed investor. I am currently wrong, right? I'm betting I become right But I could stay along for a long time. I just don't like the trading game, and maybe that makes me bad. I don't know.

— Sam Lessin, More or Less Ep 167

I'm investing, but you know what, Dave? You and I have not made gajillions of dollars because we're not trading on AI. Like, we're doing fine.

— Sam Lessin, More or Less Ep 167

What do you think? I think the really interesting thing is just everyone's trading and no one's investing.

— Sam Lessin, More or Less Ep 167

Well Look I Think it's interesting SUdSud has Built A Pretty Cool Portfolio AND THERE'S ALOT HERE'S I Have THIS Problem RIGHT NOW Right BECAUSE WE In Early Stage Investing Which Is WHICH I think You'RE Speaking To A Little Bit WHICH IS LOOK You Love Team You LOVE Theme Right YEAH LIKE IS this Person Freaking Awesome Right Do THEY REALLY Weirdly Care About THis Problem IN SOME Deep Passionate Way AND then thematically IS thIS Correct AND THe problem IS tHAT AI IS kind OF Washing IT ALL Y Combinator STARTED MAKING IT REALLY HARD TO KNOW wHat was Good AND Bad BeCAUSE IT KIND OF TAUGHT EVERYONE hOW TO Pitch NOw We'Re At ThE POINT WHERE Every Company SEEMS Reasonable BEcause it's All Passed Through Eighty Seven AIS AT ThiS Point BEFORE yOU SEE IT SO IT'S NOT ONLY The Deck It's ALL THIS STUFF Seems reasonable ANd then the FOUNDER Thing IS hard becaUSE SINCE Everyone AND their Mother nOW Wants TO Found Companies it's N O longer the Era Where it's Uncool YoU HAVE ALL THESE founders tHAT seem ReALLY GOOD AND S O I THINK WHat you Know you're Pinning TO IS YEah C I IS A Problem ThaT Gets Talked ABOUT A Bunch IN various CIRcles IT IS A PROBLEM W e Can ALL Agree thaT A Bajillion LiN EA LOT More CODE IS BEING Pushed NOW Than EVER Before AND A bunch OF Shit's BREAKING BuT tHEN YOU'RE WHO ARE yoU Betting ON AND ThemAtically WhAT Take On are you TAKing AND I don't kNOW I'M Kind OF INTO The LOok it's The RiGHT PERSON AND The RiGHtProblem I Don't EVEN KNOW the Details

— Sam Lessin, More or Less Ep 165

We're last of the ranked, which is, like- .... so funny 'cause it's like Sequoia, 200 unicorns. Slow Venture is, like, 35.

— Sam Lessin, More or Less Ep 165

By the way, Dave, did you notice this ridiculous ranking of venture firms by number of unicorns?

— Sam Lessin, More or Less Ep 165

So the question is, there has to be a shock. You need something. You need either a better narrative which sucks the wind out of the old narrative, which can happen, but is super hard when the narrative of AI is everything. Like, it, what's, what's more than everything, right? Like, or you need, like, something to go very badly that then people start having to rationalize, which is unclear how that plays out. So I'm with you. I, I think it's very difficult to defend stock prices that you'll never see financially make sense in numbers, in profit. So you either believe that, like, we're just ha- holding onto the chip 'cause there's a one in three chance it pays out, which is very venture capital, by the way. But you kind of still value the chip 'cause it still might pay out. It's, like, not impossible, right? That it pays out.

— Sam Lessin, More or Less Ep 163

I do think there is something with the devices, though, Brit, to your point, with OpenAI, 'cause again, they're great narrative capitalists, is like, it's a classic buy the narrative, sell the news, right? Which, again, makes these things hard to be public, which is, like, the argument that they will never release a device is because it will only hurt their stock price if they're public. It's hard to imagine a world, like... Which is very, very different than, like, I think Elon pulling off some rocket. Like, he has the downside of rocket blow up.

— Sam Lessin, More or Less Ep 163

You got a barbell. You're like, "Look, if this AI stuff works, we might as well have our hat in the ring here." Like, it doesn't mean they're not. And like, so I think they'll be able to raise capital and get out on a meme, but, like, these are gonna be stocks that, like, wildly hit and then wildly miss their quarters. You know, OpenAI, I think if you unwind the tr- the real story of OpenAI, which I give Sam Altman a lot of credit for, it's the greatest fundraising story in the history of the world, right? And to do that, right, the narrative was AI scary. It wasn't always consumer. It was enterprise, then it was consumer, then it was kind of, like, floating, figuring it out. It was get all the talent and tell the story there'll be one winner in AI, and it will be us 'cause we will compound and be so far ahead we're uncatchable. That's clearly not true. And Anthropic did a different strategy, which was just focus on the part that was working, which is, like, coding and business applications where people, like, there's a lot of spend, da, da, da, da. They're crushing it with that strategy. Will that last forever? Who know? I mean, like, technical people like Codex more now, right? But it doesn't actually matter. It doesn't matter who's in the lead right now. What matters is that no lead is secure, and projections don't mean anything, right? And so I think that's the real story is it's too easy to switch, leads don't matter, it's gonna be impossible to financially price any of this stuff, and I think OpenAI missing massively on quarter and getting so eclipsed is just... It's like if Uber got hit by a Lyft, right? That wasn't supposed to happen. It doesn't tell the story of, like, how growth is supposed to work in these things.

— Sam Lessin, More or Less Ep 163

My basic point is it's incredibly capital efficient. So you have, like, the guy who is one of the most important characters or whatever maybe gets 10 to 20 times as much money as the guy who very smartly takes no infrastructure and wraps a router on top, which is not that technical, but did a great job marketing it. That's kind of a funny 10Xer, right? A 10X, 20X difference. Like, what Dario did is a lot harder.

— Sam Lessin, More or Less Ep 163

Was it really that expensive? I guess they really did have to raise that much capital. Like, that's what it comes down to.

— Sam Lessin, More or Less Ep 163

Oh, you'd be surprised, Jess. All venture capital firms do is talk shit about each other. I want someone to declare Slow Ventures an unfair monopoly in venture capital. This is the greatest marketing you can- I declare it. I will call the Justice Department. Occam's Razor says the only plausible answer is that Marc Andreessen actually planted this 'cause it's great marketing. You're like- For sure ... we're such a great venture capital firm that it's a competition issue. You know? Like, that's gotta be it. 100%.

— Sam Lessin, More or Less Ep 163

What is the point of a private market if you can't have conflicts of interest? No, I knew we were gonna talk about it, I just don't understand. Like, what are they... Like, w- why? They're very angry that the sky is blue. They're gonna like write, like... Venturecopalis has board seat on two competitive companies. What do we do?

— Sam Lessin, More or Less Ep 163

It's like they don't understand that, how venture capital works. Yeah, it's like, what's the famous John Doerr-ism? No conflict, no interest.

— Sam Lessin, More or Less Ep 163

Tweets