Sam Lessin on Venture Capital & Investing

Essays

From the Podcast

This is Foucault. It's like, once you can see something, you tax it, okay? If it's hard to see income, then you can see it, you tax it. The state will control what it can see. And so the fact that, like, now wealth is seeable means that... And, like, by the way, K-shaped economy, wealth compounds 'cause capital's compounding fast in labor. It seems i- intellectually inevitable that you end up with an asset tax, but it will also be a fucking disaster, and it's deeply un-American and unfree. So that's your problem.

— Sam Lessin, More or Less Ep 172

We carved up, there's four sections, we gave it to the four people who are, like, investing partners to, like, do sections. Everyone wrote their section. I wrote mine, and then I was like, "I'm just gonna see if my bot can, like, take my slides and punch them up and, like, a little bit." So I did that, and I was like, "Wow, that's really good. You know what? What would happen if I just let the bot start from the cover slide and write the entire AGM deck?" And I'll just write and put it in the slides, the entire AGM deck. I didn't tell it anything. It was a single prompt, truly a single prompt. I was like, "Look, I slow AGM, just, like, write the entire investor update deck." It came back, it's stunningly good. It was so much better than the deck we wrote ourselves. I was, like, blown away. So then I had Max lesson my bot, like narrate it and turn it into a video. But it's funny, 'cause you're talking about you don't wanna talk to-

— Sam Lessin, More or Less Ep 172

But Dave, I think it is more than marketing. I think there's something in the middle I'd say about it, which is I think there is, like, an undercurrent of this that will drive business and culture and who wins and who raises capital and stuff. So I don't think it's just, like, some isolated thing off to the side.

— Sam Lessin, More or Less Ep 171

... where this person was like, "The 30-year is trading at, like, 5%. Should I be worried?" And, like, the account was like, "No. You have no assets. You're poor. This is not your fight." And then it's just like and it's, like, this whole thing about how, like... And the whole point is the economy's rigged, all this shit is crazy, so, like, let's just make weird memes, right? And, like, I just think understanding that that cultural undercurrent is there. Like, maybe what's happening right now, in some ways, with the stock market and some of these even IPOs, the Anthropic, that was, like, the last hurrah, the most extreme version of winner take all meaningful moment, right? We're like, "Oh my God, Anthropic OpenAI is gonna be the only company left in the world." And there's a bunch of people our age who get sucked into that narrative and believe it to some degree, and they get really into it, and that becomes, like, the dominant narrative that capital flows. But then this new wave, right, of like, "Oh, shit, like, all this AI is fine. Lots of stuff will change. None of this is the greatest or the worst. It's all just whatever. Let's make weird memes," is kinda like culturally the moment we're entering, where, like, Gen Z takes over effectively. At which point no one knows how to trade anything, right? 'Cause it's like, "Uh, like, what are we doing?"

— Sam Lessin, More or Less Ep 171

Everyone's gonna launch all the things, and, like, the consumers are already at the point where, like, it just doesn't matter. Like, the stuff is all good enough, right? Which is classic race to the bottom. There is no lock-in. And then you have, like, the Anthropic's and, and OpenAI's, like, their whole pitch has been the infinity story of one company takes all because they can't possibly justify their existence if that's not true. I think all the things are just coming home to roost that we've been talking about for months, and in some cases, years, right? The problem is is it's kind of like I'm ambivalent about it because the party being over makes me poorer 'cause, like, all the numbers are correlated, right? Like, the reality is there are no numbers. The numbers are just baseline other numbers, right? So it's just a really interesting moment we're in, where sobriety and rationality is starting to show up, which is good, but that sobriety and rationality with a $40 trillion debt and the structure of our current markets and what the markets need and narratives, capitalism, all that stuff, are just, like, not super stoke-ful for everyone who's around the table.

— Sam Lessin, More or Less Ep 171

Yeah, it was. Well, this was about a decade ago. But I was, like, really hot and heavy angry about investing in Zipline because it was, like, completely out of scope for our fund, and Dave was like, "We're doing this." And we did it, but we didn't do enough. But Dave, that's my mea culpa to you there.

— Sam Lessin, More or Less Ep 170

Look, typically, I'm an early stage venture capitalist. I think it's extremely fun. I also don't like the idea of having a book I have to look at every day, because I like my relaxation time, right? Like, I'm not, I'm not envious of the hedge fund people. But you just read their letters and, like, they're pretty good. I don't normally read them, but, like, I'm an investor in a bunch of these funds. You know, they, they... I've just been getting a bunch of quarter letters, and I was like, "This world is so weird. I'm actually curious what these managers are saying." And it's just really interesting. Like, I think they have really sophisticated takes.

— Sam Lessin, More or Less Ep 170

But, like, the average venture capitalist I don't think is that smart. I guess that might be true of the average person trading on Wall Street, but the average hedge fund manager, I think, is just, like, smarter.

— Sam Lessin, More or Less Ep 170

Well, I just generally think that people who do venture capital, the average IQ is pretty low, right? That doesn't mean there aren't-

— Sam Lessin, More or Less Ep 170

I feel like half LPs in the world only do early stage investing for the option on possibly getting, like, co-invest later.

— Sam Lessin, More or Less Ep 170

If I'm an LP in a fund and you use my capital to find the thing, I'd kinda want you to offer it to me as an SPV before you give it to an entirely different investor stack.

— Sam Lessin, More or Less Ep 170

Well, it's usually what actually makes the deal work. Like, that's the irony of a lot of things is, like, a seed fund without any follow-on, the math, especially in these capital-consumptive days, unless you're in, like, a crypto project, really is pretty damn hard if you can't follow on.

— Sam Lessin, More or Less Ep 170

Here's the thing I find funny about this. So when Slow Ventures does seed deals, we always put pro rata rights in.

— Sam Lessin, More or Less Ep 170

This is the ultimate wild part of capitalism, right? Is that it's such a good system 'cause it encourages people to push the edge and invent new things and meet the market. But the whole point is that it tends towards zero profit, which is why you have to keep doing new stuff to meet the market and kind of the edge, right? Like, that's the fundamental con- It's so cool, right? But that is, like, the structure of it. And the problem is, is if you collapse relationships to zero and everything becomes commoditized, then Hilton has to figure out how to innovate, or they can't afford to, or they can't afford to provide their service.

— Sam Lessin, More or Less Ep 170

This is, like, the downfall of Open Graph. This is the same story over and over and over, right? Which is, like, the technology is not a... When you talk about all these agents spinning up, we don't have a technical problem. We can send bots on the internet to do lots of commerce for us now, right? Like, and everyone can do it. There's no... I mean, and, and Muse might be slightly better, but, like, it's all the same stuff. The question is now business and politics. You either have a set of people who are like, "Look, I need volume at all costs. And by the way, maybe I'm a hired gun CEO, so I only care about the next three years anyway, and then I'm gonna retire. So fuck it, let's, like, let everyone rip on our website and book whatever they want." Or you have people who are, like, stewards of capital in companies who are like, "Eh, like, I kinda need that relationship to the customer myself, right? Like, I can't be part of a perfect market."

— Sam Lessin, More or Less Ep 170

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