Cursor Acquired for $60BN | Anthropic Hits $1TRN in Secondary Markets & Figma, Adobe, Canva Dead?

I'm not sure they're buying them for 60 billion. There's a lot of stuff going on between these companies.

If your stock is valued at 100 times revenues, you can buy things that are trading at 10 or 15 times revenue all day long.

I think there'll be a hundred billion dollar deal in the next 12 months.

I think this will stand as the high water mark of private M&A for a decade.

It's too early. We shouldn't overthink. I mean, basically what it is is they have an option to acquire Cursor and if they don't, they pay $10 billion for the work. But it amounts to the same thing, right? And yeah.

Well, we'll see. We don't — listen, it's very interesting because first of all, this is an epic deal, right? If it happens, 60 billion in about three years from seed funding. I mean, we thought Wiz was big, guys. We thought — I mean, when we started the show we were talking about Windsurf, that was two and a half billion. Now it's 60. I mean, these are numbers that we have not seen. Three billion from founding. Now, having said that, look, we haven't read whatever the deal is, right? To me it looks a little — it looks — I'm not sure they're buying them for 60 billion. There's a lot of stuff going on between these companies. Senior engineers have already quit and gone to XAI. It appears that Cursor may be at least notionally the largest customer for Grok for coding. Okay, their market share has fallen and they've already committed to using a lot of the million GPUs that SpaceX, whatever we're calling it, is in Colossus. So there's a lot of stuff going on here and what this call and option is and how much it's tied to Cursor having enough of a state-of-the-art model that they're worth buying because an IDE isn't enough. There's a lot up in the air and it's probably why the deal is structured like this, beyond the fact that SpaceX is going public, which adds to the complexity. There's just — there are a lot of moving pieces here. So I wouldn't be surprised if it doesn't close because I think there are big milestones that need to be hit that Cursor needs to make progress. And maybe I'm wrong. Maybe I'm wrong.

Wow. Such a lot to unpack, but I'm in no particular — I want to actually cover all this. But first of all, the first sentence is: this is the biggest private acquisition ever in venture. It used to be Wiz at 32. Before that, it used to be WhatsApp at 16. I mean, individual private check before going public. Now it's a $60 billion outcome in three years. You're right. So start with: if this deal closes in three months, this is the biggest ever privately held venture acquisition. Period. Full stop. End of story. An amazing result. So you're right, Jason. Before you get into the noise, that's the venture takeaway.

Jesus. And I know, and wow. And we'll come back to who's — it didn't even take 20 years like most of our funds take. This was — this will be three and a half.

Big picture here, guys, it actually makes sense. I mean, I was actually thinking last night of doing like a little cute tweet before I got your note, Harry. It's like, you know, you got these guys called Cursor walking down the street saying, 'Hey, good news, we got an exploding business, couple billion dollars in ARR, but bad news, we have shitty gross margins because we need our own model and we need compute.' And Elon goes, 'Hmm, hold that thought.' This is a guy walking around with a whole bunch of compute, a reasonably good model, and literally no revenue. It's like a marriage made in heaven, you guys. I mean, because look, let's get real here. There's not a whole ton — like, it's one of those deals that makes sense for both sides, which is why I think it'll close, right? Which is different than saying it makes full financial sense. I'll come back to that. But if you think about it from SpaceX's perspective, all the narrative has been, you know, SpaceX is amazing, Starlink is amazing, WTF with this X.AI, why did they stick in Twitter and X.AI? I know Elon loves AI, but it makes my head hurt, right? Because the truth is they'd spent 20 billion plus or minus on the most amazing data center, the Colossus data center with literally hundreds of thousands of GPUs, but they're not doing a very good job of selling them. So they have relatively little business, right? Which, you know, all other things, is a bad place to be. Now, you know, capacity is scarce. So I'm sure they could have found kind of, you know, white label work selling to, you know, one of the hyperscalers. But instead, they found this company that's in the mother lode, the mother of all AI markets, which is coding, that has customers, has revenue, but has shitty gross margins because it doesn't have yet a full standalone model and massively needs compute. So they put this on top of their thing and the vertically integrated thing just looks a lot more attractive. You literally have a company that's making three billion in revenue and spending three billion on gross margin, and you have another company that's burning 18 billion. You put them together and the three billion gets canceled and at least they have some revenue. It's still not enough to cover the X.AI nut in terms of — unless they can grow this thing, but at least it looks like a business now. And I think what's really clever from SpaceX's perspective is they couldn't do it before the IPO because you can't close that deal. It delays everything. It's actually a very clever structure. So they're basically going to be able to say to the public, you know, you love Starlink and you love our space business and you didn't like this other thing, but we got a plan to fix it. Once we close for two trillion, we'll exercise our option, we'll buy this thing, and suddenly we'll be a $4 or $5 billion revenue AI frontier lab, which my Claude Code equivalent is called Cursor, and I actually have the rest of the stack, and there I told you I'd make a good business out of this.

Which is an important note just for people to understand that this is not a transaction closing today. This is in six months post going public, and it's a very strategic way for them to do it because they can't do it now just before going public.

And that's why I think of it as an option. And you're right, Jason, there's been some commentary that said maybe this option is in part Elon doing a try before you buy. Let's see if the model works on our stuff and vice versa. And if it doesn't, we'll just pay you 10 and walk away. I don't know. I'm not going to guess. And there's probably some of that. But fundamentally, it's costing you nothing today because you're not writing the check today. And what Elon is basically saying is, if my IPO happens, and it probably should, and I want to buy this thing, I will because I can. And if it doesn't, I'm promising $10 billion that I don't plan to have to give unless, God forbid, the IPO doesn't happen. So it kind of mentally says, I haven't fixed this story today, but I have a plan to fix it. You can see the plan to fix it. So stop bugging me in the road show about X.AI. Let's talk about rockets and space.

Yeah. I mean, look, you're right. I think, listen, Elon walked away from the Twitter acquisition, so he'll walk away from a bad deal, don't get me wrong, if things change. But you don't promote it the way SpaceX did all over X if you're not basically saying this deal is going to close, right? This isn't a change. Otherwise, if it's just vendor financing with an option to buy, you bury it. You bury it because it's roundtrip revenue so that someone will use our Colossus for model training, right? You'd hide it if it was just a vendor deal, right?

And even though I don't think the whole — I'm going to say something weird. Even though I don't think the whole business effort here makes sense, right? Trying to enter this market, you know, trying to be the third or fourth foundation model player, you know, as X.AI SpaceX, I don't think it made sense. But once you've decided to do that, this deal makes sense at the margin because you've incurred all the negative parts of being a subscale hyperscaler with 20 billion in burn, and now at least you have a business. So I'm with you, Jason. I think they're pushing this because they're like, 'Oh, this makes sense and actually solves a problem for us and obviously solves a problem for Cursor in the sense that it, you know, makes the P&L of their business look very different.' And therefore it's a win both sides and it closes. I mean, we can talk about —

Tru. Okay, I was watching something on Twitter with him and Garry Tan a year ago. Okay, Garry Tan's got a big job, right? Garry Tan looks like he's aged eight years since the video. Michael looks the same. This is the time to sell because you don't — listen, this is maybe a little meta, but what I've learned as a founder is you don't get it — it doesn't hit you until around year four to five. This is just the way humans are, okay? And he's young, but look at founders you've invested or met with around year four to five, the weight's there, okay? You can see it in the bags under their eyes, whether they're 21 or 61. And you got to double down. At four to five years in, you got to sit around and say, 'Do I want to sign up for another tour of duty?' These guys don't even have to do a second tour of duty. They're out at 80 billion. This is a pretty good deal, Harry. If you're 10 or 15 years in, you know what to do. Three years in, you go — you got to go home. There's no — guys, you've got to go home after three years for 60 billion. Three years. Three years after 60 billion.

Can I help you on this? You asked which of the two is getting a great deal? And the answer is they're both getting a great deal for two —

No, I'll tell you who's losing. Give me — hear me out. There's two reasons they're doing a — there's two reasons they're getting a great deal. Everyone's getting a great deal. The first is it actually industrially makes sense. The two things go together well, right? So there's like some business logic whether or not the SpaceX Elon team can manage these kind of researchers over time. You know that's TBD given how the X stuff has unfolded so far. But it makes industrial sense for these two companies to come together, right? Why are they both getting a great deal? Answer: you're missing the point because there's a third player in the game here that you're not mentioning. The future SpaceX public shareholders are valuing a $20 million revenue company at $2 trillion, which is 100 times revenues. If your stock is valued at 100 times revenues, you can buy things that are trading at 10 or 15 times revenue all day long, right? As long as SpaceX is worth two trillion, then if Elon wants to scratch an itch to clean up a subsidiary of SpaceX that isn't quite working out and he can chuck 60 billion on the table — it's, for context here, it's 3% of SpaceX's alleged market cap in return for 15 to maybe 20% of their total revenues.

Yeah. When you have a high-priced stock, you can buy any pretty things that you want. And what happened here is like — and you should —

And you should absolutely — well, you should because it may not last, right? This is the opposite. When we did the other versions of the pod, we were talking about how so many public software companies, if you're now trading at 10 billion, you can't even spend a billion to buy a couple of kids, right? For Elon, this is immaterial to SpaceX's market cap, to Rory's point, and at the margin it helps that he doesn't care if he makes them billionaires.

That's another — it's a microlearning, but there are issues in making targets billionaires. It is an issue. As long as SpaceX is worth that kind of multiple, it's revenue accretive, story accretive, you know. And the reason — another reason it makes sense to Cursor is the number of people who can write a $60 billion check for a roughly break-even gross margin business can be counted on the fingers of one hand, removing at least one or two of them. Right? Offset fingers, right? And of those acquirers, most of them in most situations would be unable to do so for the DOJ. This is the only game in town, right?

It helps to be founder-led too to write a check like this.

Yeah, totally. Yes. This is a —

You're going to Google again. You're like, I know we did Wiz at 32 billion and it's crushing it, but we want to buy Cursor for twice that. I mean, it's a tense board discussion, right?

You're getting a lot of money. I mean, look, you're getting your cash if this deal closes, I think, in six months, which is, you know, back end of this year, assuming the IPO happens in June. You're ecstatic. It means — I mean, it's —

Well, you're almost certainly getting stock. Again, I'm going to opine on that without looking because the IPO is 75 billion allegedly. Again, we haven't seen a printed S-1 yet that's been publicly unveiled, but the idea is it's highly unlikely that you're going to raise 75 billion and write a check for 60 billion. So almost certainly you're getting stock. So then the second-order questions are: is it registered? If you're getting that stock in the restricted period, is that going to be restricted too? Because the whole dynamics of the SpaceX lockup given the size of the round are going to be one of the most interesting parts of the whole transaction. There's talk of, as you say, employees getting out early. There's also, to be fair, talk about some shareholders being held in for much longer because the combination of a two trillion — I mean, it's going to make a difficult problem around float management slightly more complex because a 75 billion raise on a $2 trillion valuation is a teeny tiny float, right? And going from there to the other 97% of the company being freely tradable in six months just doesn't work. So I'm sure there's going to be a convoluted float management thing and then this stock will probably go into that. So I wouldn't be surprised to discover that as investors in Cursor — congratulations, you are now investors in SpaceX and, you know, you've got that fluctuation risk for six months plus or minus, but, you know, on the other hand, you are getting $60 billion. Shut up.

I don't know.

That's what I — I don't know all the machinations, but I guarantee they're tied. They're tied in some fashion.

One that said — can I stop you there? I think I saw one that said it's not happening because this obviates the need for it. Because if you think about it, they probably had reasonable — I'm just winging it here — but they probably had pretty good cash on the balance sheet, but they knew they had to spend a lot in compute. And now one of two things is going to happen in September, October, six months. A, you're going to get 60 billion and you have all the compute you'll ever need from Elon. And B, you're going to get 10 billion in cash, in which case you can buy some compute then. So they can probably do some forward contracts. So if the round hasn't closed, it probably won't close now because there's no point to it and no one would want that stock because that's just basically like buying SpaceX. You'd prefer to just wait for the IPO.

If you wanted that action, you got more of it. And if you don't want that action, you're going to bite your nails. Look, you — I mean, you're —

You wrote a blank check to Elon for the take-private of Twitter. Of course you're going to go long on Elon now, right? You're doubling down on the same founder. It's not even — I don't know the cap tables, but for Andre, it's almost like merging two portfolio companies at a meta level. Maybe not accurate, but intellectually it's like that, right? But as yet, Harry, you are right. And look, this is where the beauty of being in early at a low basis comes in. If you're in — I mean, I looked at — if you're in at the B, which is where the A was, Andre and Thrive, the B, Thrive led the C, I can't remember who led, but basically the C is roughly a 5x, the B is a 20x, I can't even calculate the A, but it's huge, and then the most recent round is a 2x. If you're into SpaceX at 2 trillion and that's only a 2x, you're scared because there's a lot of volatility in that stock. So that's the thing. You could end up — I mean, I'm going to say something heresy — you could end up breaking even. The stock could go down. IPOs do go down apparently at times. I mean, Facebook went down plus or minus I think 40% from their IPO price in the first six months before 10x-ing subsequently, just as a reminder. So you got risk in that deal. On the other hand, if you're sitting there at 20 times in the case of the B or 50, 60 times in the case of the A, you're like, 'Oh, well, so if my 80x becomes 40x, it's still a 40x. I'm fine.' So you can roll that dice. Does that make sense?

Thinking through that, or it's almost, you know, it's almost a defensive move. If you're like Andre, you've added value to your net asset by combining these on paper, right? You're shareholders in both, right? You have an IPO, it has risk. You threw this crazy asset in there that's very immature where the debt is exploding, right? Your balance sheet has been blown up. How can I de-risk my IPO for a couple percent dilution, right? It's just a couple percent dilution to de-risk my massive investment. Done. My sense is that entire — I think you're correct in your analysis, though my comment is the entire sentence implies that Elon consulted with anyone. My sense is Elon solved Elon's problem and everyone else is along for the ride. So they'll get the shareholder consent in the DocuSign and they'll say thank you very much, sir, and sign. But you're right — if I owned a lot of SpaceX, oddly enough, I mean, to say it succinctly, I'd have been pissed at the X.AI merger because I didn't need that dilution. But having done the X.AI merger, I'd be like, clever deal with Cursor, dude. You had this negative thing. Now at least you've got a full-on full-stack story. You know, is it the best story ever? No. Would I prefer on a standalone foundation model lab bet — would you prefer to own Anthropic than X.AI plus Cursor plus the Frankenstein of Twitter? Yeah, you would. But at least it's a full-stack story now. So, you know, this is a clever deal, again, enabled by the 100x valuation you have, or at least allegedly have, but at least 50x. I mean, even at the low end, I mean, if you play it out here, even if SpaceX trades shah to horror at a trillion, which is a 50x revenue multiple, and even if Cursor gets to 6 billion by the year end, so it's a 10x revenue multiple, SpaceX is still buying stuff at 10x with stock that's trading at 50x.

It's a great country.

Those arbitrages are real. You really should do a deal or two in those moments in time because they don't last — one way or the other, they don't last, right? At the risk of stating the obvious, there is a lot more differentiation in putting rockets in the sky than there is in forking an open-source IDE and running it on top of Claude Code. So I think the boys and the folks at SpaceX have done a much harder task. So they deserve a higher revenue multiple. But nonetheless, it's why you can write the check with such gay abandon.

And look, if the next deal's at 120 billion, all is good. I think —

Going to your point earlier though, Rory, of comparing it to like Wiz, the other thing that's just amazing is like the scale. It's not like a little bit more. It's double Wiz, give or take. I mean, literally 32 versus 60. I mean, it's double the largest before.

And again, it is back to the — it's like I was thinking about this this morning, you know, for arguably a much less defensible business. And I think the truth is this: it's why venture capital is amazing. If you — it's the A's don't play small ball. If you play in the big markets, if you lean into the risk in the part of the cycle where the big guys want to win and want to catch up and want to be relevant in the space, then this kind of exit can happen even if the fundamentals aren't great and the gross margin — I mean, you know, Sequoia, who you might think of as the dean of the whole industry, always say we hate negative gross margin businesses, right? This is a break-even gross margin business, but it worked because the overarching comment is AI is the biggest story of the last five years and big tech wants to be a player and Cursor is a player in the biggest markets. Don't overthink it. You know, it's like the SAS motto: who dares wins. Those guys dared and they won, right? And all the other questions aside, now the minute the tide goes out — you know, we saw this in '99 too — you know, once the tide goes out and people are like scared of dot-com or scared of AI, you know, all these high-burn, high-growth companies can get a real hit. But what you're selling now, what they were selling, is a ticket to matter. And X.AI won the ticket. So to your comment on all the other guys, the Factories of this world, there are 10, 20 — this is where Jason's point is right. There's 10 or 20 other companies that are staring at irrelevance over the next three to five years because they're all part of the old software development lifecycle and they — you know, maybe they can't pay 60 billion, but they're going to all have to buy themselves or build themselves into relevance. So I think a lot of these can still have decent exits. The lad's right, you should be thinking about this, but, you know, I don't even know what Computer Associates does now as part of Broadcom. But however people make software in 2021, they're making it different today. And I'd prefer to be in something like Factory leaning in than in some old-school code development tool that doesn't matter anymore.

Another way to flip it around: on the one hand, sure you should sell. On the other hand, there's six leaders with market caps above two trillion, right? And we're adding SpaceX, so there'll be seven maybe above two trillion. They can all afford to pay a hundred billion dollars, 5% of their market cap plus or split it with some cash to not fall behind. But Jensen's stressed about Tanium. He can spend a hundred billion, right? He already did a small deal, a $20 billion tuck-in. Nvidia, Apple, Meta, Amazon, Alphabet, Microsoft, all can buy a startup for a hundred billion. This might be. And I remember back in the day at SaaStr Annual, Ryan Smith came and Qualtrics had just been acquired for 7 billion and our jaws dropped back then. That was a lot for a software company. And I asked Ryan, will this ever happen again? He's like, I don't see why there won't be one for 14 billion next month. He's like, it's just getting good. And he was right. It kept the party going, to Rory's point, until it ended. I think there'll be a hundred billion dollar deal in the next 12 months. Which one it is, I don't know. But you have to — there'll be a hundred billion dollar deal. This is going to be one of three. That's my prediction. And I may be wrong. And I may be wrong, but there's seven folks that can do a hundred billion dollar startup.

I think this will stand as the high water mark of private M&A for a decade. There. I'll take the other side.

This clip is going to embarrass you, Rory.

I used to be embarrassable, but now — but why me? Because I just think it's anomalous in the sense of, you know, it's a combination of the absolute amount and the revenue multiple. The number of — you know, I just think the number of people who can write — the number of people who can — let's do it here. The number of people who can write a check for less than 10% of their market cap where that's greater than 60 billion is by definition people above 600 billion. There's only eight or 10 companies above a trillion, right? So it's a very finite group of people who can do those kind of deals. Everyone but Elon trades at under 10 times revenues plus a min. Yeah, pretty much min. So they're not going to do a 60 times. So if you're going to be — I might actually contradict myself in a second. Watch this. If you're going for — with the exception of Elon because he can overpay because he's trading at 100 times or at least plans to be trading at 100 times. I want to spend a little time on that in a second. Everyone else trades sub-10. So you're not going to buy anything greater than 10x, which means to pay 100 billion you have to buy something worth 10 billion, right? So any rounding down as I did that, I realized, hmm. And at that point, a privately held company has to be doing — let's say, let's round down again — 5 to 10 billion a year to be worth 50 to 100 billion a year to kind of meet the Jason criteria of bigger than this. If JP Morgan wanted to buy Stripe, you actually would be right. So I can imagine a few — yeah, but and then you also have the, um, whatchamacallit, the DOJ stuff, which is obviously suspended for a while, but there you go. So you're not impossibly wrong, Jason, but I just think this is such a special circumstance. It's a combination — I mean, it's a combination of a couple things. It's a company trading at an amazing price feeling the imperative to execute a transaction in an amazing space where there's a company willing to transact like that, right? Because the other thing I was thinking about is one of the big ahas on this is Elon is so risk-on. I mean, and, you know, at what point — I like how you put this. He is — I would use the expression in poker when you're on tilt, when you're just, you know, maybe it's not going well and your response is to double down and double down, right? If you look at the whole Twitter X transaction, unlike, you know, SpaceX, which has been a work of genius from day one, you know, it's been: I bought Twitter, I didn't want to do it. Fuck, now I have to do it. That's 44 billion. Well, if I'm going to do that, then I'm going to want to do the AI thing and I'm going to spend 20 billion on capex there. Got no revenue. Let's put them together. Ooh, that's not working. Let's flip them into SpaceX for 250 billion. It feels notional, but whatever. That's not great. So let's buy Cursor for another 60 billion. This is a guy — he's basically going to keep doubling down until he wins in AI. It's astonishing. It's terrifying if you're a shareholder, but that's the game he's playing and it's his company.

Let me just tell you why you're wrong about the hundred billion dollar deal, Rory. Just process-wise, okay? And I think your math suggests I might be — like, I hadn't even thought about JP Morgan Stripe. That literally could happen tomorrow. Like, we could open up our X accounts. It would make some sense, right? So that's one I even missed. But here's what happens when times are good but of stress, which is what's happening with all the leaders. Okay. Microsoft, Google —

Yeah. Yeah. I agree.

I've been the one thing I have been that I don't think you guys have been. I know Harry. I've been a senior VP on the other side at a big tech company during moments of change. And what you talked about all the time is who the hell can we buy to get ahead? And so I will tell you in all of these boardrooms, especially Zuck, you could already imagine in your head they are saying, I'm willing to pay up to — I want to buy something that is going to actually effing move the needle for us. We'll do some tuck-ins. You guys can all have a chip. You can go buy a little thing for 50 million, 500 million, maybe even a billion. Like, leave me alone. The scale — you know, what's his name from Scale — can go buy something for a billion. I don't care. But I want something that will move the needle in AI. Now bring me your candidates and they will be debated, but if it is above the line, those deals will get done for 5% or less of your market cap. I guarantee you the discussion is happening because I was there. It happens every week. Yes.

First of all, even though I disagree on the number, I 100% agree with you on the description. That is exactly what happens. You wake up as the leader of this big company. You've got your $2 trillion market cap to defend. There's a technical thing that could make you obsolete. If you can spend 5% and de-risk that, you do it. So I totally agree. And a large part of why venture makes money is every once in a while you find yourself with companies that are kind of in the to-do list for corporate America and they just write huge checks. So I do agree with you. I was pushing back on the hundred, but do I think it's kind of like the Overton window — a 10 or $20 billion acquisition from Zuck tomorrow morning, people wouldn't even blink. They'll be like, yeah, of course he's going to do that. So you're right. I mean, so I do agree. I was just being, as you know me, annoyingly precise about a hundred billion, but I agree with you. Every other CEO is looking at going, hm, what do we do now in coding? What do we do now?

Yeah. I mean, the other crazy thing that happens, I know it sounds crazy, but it is true. On the other side, on the acquirer side, big company, right? Once certain numbers are breached, it doesn't mean you also get 60 billion. It does not — like, you can't walk into the meeting and say, 'I'm better than Cursor.' But it does psychologically change the break point for what it — because when people go into deal mode in big companies, as long as they can afford it, they want. And if they've identified the perfect target they like — remember, it's minor, but remember when Benioff was willing to give his firstborn to buy LinkedIn? He tried everything he could, every share, every piece of debt, he couldn't get 30 billion to buy LinkedIn. That's a hundred billion dollar deal today.

You're exactly right.

Benioff would — if Benioff could get a hundred billion to buy something to change the face of Salesforce, the LinkedIn of AI, he would do it tonight. I guarantee you because he already tried to do it with LinkedIn, right? He will do 100 billion if he had it. All these guys have 100 billion. So it literally — you go in a meeting and I saw it at Adobe as cloud took off, like, the people's views of price changed in my tenure as a VP. As soon as you see a Cursor deal, every — we don't give a fuck. It's — we're not the founders. It's not our money. It's not even our dilution. We don't care. What does it take to buy the next Cursor? 68 million. Done. Like, boys, I'm the corp dev team. Stepping and lumping, I'm the corp dev team. Close the damn deal. When you're fighting for relevance and defending an existing business to some extent, you do what you have to do. I don't think that I — as you say, and even if I don't think they get to 100, the fact that someone's done something at 60 means something at 10 or 15 will seem like, yeah, that seems like a good idea. Let's get it done. Right. So yeah, I think it's expanded the Overton window of doable in M&A. Yeah.

Last thing to say is this: great outcome for the VCs. Great outcome for — I mean, OpenAI — just as a reminder everyone, Sam Bankman-Fried did the seed. Poor Sam. They and they liquidated his job and sold it for a 1x that could have been a couple hundred x. OpenAI did the A, I think. Actually, OpenAI did another seed. Andre and Thrive did the A, then Thrive led the B and doubled down the whole way through. I don't know what the returns are on the A, but on the rest of it, I think they put in a billion and got 800 million and got roughly a 4x. You know, great outcome for everyone. It's a great venture story and, you know, all credit to the founders. I mean, this is a pretty good three-year run. The two best deals that Thrive have that are amazing are this one and OpenAI. And, you know, the aggregate return on OpenAI, I think they're at a 4x, maybe 5.2x, I can't remember which. And on this, excluding the A — I saw the announcement, but it excludes the A, which is fucked because the A is going to be a 58. On the rest of the money, it's a 4x. What it says is there are small numbers of growth funds that can deploy masses of capital, hundreds of millions of dollars, and get a high-end, you know, kind of venture return of a 4x, which is a good return, which is — if you're doing an A or a B, that would be a — yeah, that's a high end of good outcome, not yet great. You want a 10x plus on your best stuff. But the fact that you can do it on a billion dollars is what makes this special. It's not that you're going to outperform some little seed like NEO. If you want to, again, it's the classic thing, Harry. It's actually why even though you think it's simple to one-dimensionally measure venture return, it's actually not. Because if you have only $1 to invest, right, and you can give it to NEO and get a 16x or you can give it to Thrive Growth and get a 5x, you give it to NEO, right? And that's why from that perspective, you just rank on pure return. But if you're sitting there with two billion dollars to invest, it doesn't matter what you do with NEO. And Thrive has proven they can take two billion and turn it into six billion and you're like, give me that net to the limit and like give me that product all day every day, right? From a, you know, personal net worth perspective, if you run the math as being the lead GP on Thrive, it turns out to be a remarkably good business.

Different products for different folks. But I just got to call it to the last comment on Thrive. If, quote, all they'd done was the late-stage stuff and gotten that four or 5x blended, that would be wildly impressive. But the fact that on top of that they were in the A alongside Andre is almost proof — you know, the typical rap on only doing late is you're only doing late, you can't get the early round. It's very impressive to have shown up for the A and then stuffing the money in like a freighter from the B and beyond. I mean, that's really — that's the best way to play that growth stage if you have enough ground game to get in even under the tent for the A and then you can start a billion dollars in from there on in. That's the way you get the best of both worlds. You got some action on the table with a 40x or 50x is my guess, and then you got a lot — and, you know, on 10 million, yay you, maybe 20 million, yay you. Right. And then you got all the action in the world on the table of 800 million at an aggregate of a four or 5x and that feels great. Don't mind you. You will be sweating that SpaceX lockup. You will know the day and the hour when it expires.

Well, look, Rory probably has better thoughts than me. I think there's on the one hand, he's 65, right? So obviously the board has been talking about this for years, right? They found their successor inside. They didn't go through the chaos of Shantanu resigning from Adobe when they still don't have a CEO, right? They did it all the right way. They did it at the perfect age optically. But the big question along with Reed Hastings and Shantanu and others is like, folks turn over every year. And I'm sure Rory's going to say that. But are they all leaving because they don't have an AI strategy? I think they are. I don't think Netflix has one. I don't think Apple has one. I don't think Adobe has a great one. Even though they have AI — like, actually I learned this week AI in Illustrator is great. Like, AI in Adobe Illustrator is a 10. It's like, it's great, but it hasn't changed the trajectory of the company, right? So what would you do if you take an Apple from whatever, you know, 12x its market cap, successfully chaperone the Jobs agenda to epic heights, and AI is changing the — this show gets stale like less than a week. We got to do like four of these a week. Like, I would think about — so I just don't know if this is normal retirement or deep down folks are like, Jesus, I'm not up for this. Because I think most CEOs I work with are not up for it, is the truth. Most pre-AI CEOs are not — they're not up — you guys know this too from your portfolio. Not all, but most are not actually up for the massive amount of — what's more than 996? 128? I don't know what it is, but most humans aren't up for it.

I think as a general comment on kind of —

I think you're right. I think on the specifics of Kirk, I think he's been operationally excellent the whole way through. He was operationally excellent taking over the job. He's run excellence for 15 years, and I think he's operationally excellent on exit. And the proof of that is the stock barely budged. Right. I was thinking, right, there's some fun examples of people thinking positive things in the short term and then totally wrong. But you know, the fact is that he resigns, not unexpectedly in the aggregate given he's 65, but unexpectedly in terms of immediate timing, and the stock moves less than 0.5%. It basically says organized, well-managed transition, and I think he was smart. I think you get out in a high, recent quarter's great, as you say, you can't argue with. I mean, you're right, it's 12 or 13, it's three or 4x the revenue, 3 or 4x in 15 years, three or 4x the operating income. It's 12x the market cap, and just as a reminder, because they buy back shares, it's 20x the stock price as a holder of the stock throughout that entire period. God bless you. So, you know, just a great run and handing over an internal successor, which as you say is proof that you had your [__] together and you had, you know, a couple of options and they went with this option. One of the other guys had pulled back recently. I think getting out in a high is not to be underestimated at 65. I think it's a home run the whole way through. And so you just give credit where credit grew. It's one of the great runs, right? And you can tell I'm smiling because I own a lot.

And you know, remember, I mean, it's been funny because I did some kind of thinking on stock price moves up and down and how they are. And you know, there was angst when he took over. I mean, when Jobs came back the first time, the stock popped 30% in four weeks. When Jobs stepped back, obviously tragically because he was ill, the stock was, and Tim took over, 5 or 7% down, which is quite outside the norm. And in this case, perfectly fine. So competent execution the whole way through, kind of delivering to plan. And I think, yeah, I mean, second comment to you, there is still some pending, you do have an AI strategy, but honestly Jason, I mean, I'm going to commit heresy now, right? If you look at the three companies you named, Netflix, Apple, Adobe, I would argue that Adobe has to have an AI strategy, it's existential. Apple is somewhere in the middle, you know, yes it's pathetic that Siri is not good, but you know, you continue to build the hardware platform that everyone kind of gets AI on, I think, for a long time to come. I don't think they're going to be replaced by the OpenAI mobile phone anytime soon. And Netflix, I think it's the least AI-centric problem out there. I mean, they have interesting challenges. Didn't get that big acquisition done. They're a media company. They have media challenges, as Benedict Evans says so well. So, big picture, I don't think, I mean as I say, it's in the middle in terms of AI terror.

On Netflix, Harry, not that we want to be yahoos on Apple and Netflix. Let's stick to the code. But Blockbuster, I don't mean to use the old analogy. Blockbuster peaked in 2004 with 994 stores. Six years later was bankrupt. I think what's happening, what happened with Netflix, and I'll tie this together to a macro theme that Harry brought up on Twitter and others. I think all that has to happen is for these leaders to be maimed or for there to be stealth churn. I'll give you an example. I've paid for Netflix. I'm embarrassed to say how many years I've paid for Netflix, right? I think since it came on flash drives or CD-ROMs, I've been paying for infinity, and its price has gone up, but it's not worth my life to churn, right? But I watch so much YouTube, and on YouTube it's becoming more and more AI-generated content. I've stealth churned off Netflix. I'm still paying. I may pay for another year, but as more and more folks stealth churn off Canva because they're using AI tools. As we stealth churn, you know, Amelia was looking, now that we've moved to Claude, she hasn't used OpenAI in four months. So, we're paying for OpenAI because it's 100 bucks a month, but she's stealth churned. So, my caution is, and I think this is why so many leaders are at risk, is stealth churn is everywhere. If you're, and not to ramble, but I used to think as a B2B guy, MAUs and WAUs and DAUs were the dumbest metric. I'd get an investor update with, hooray, our WAUs are up, and I'd be like, you know, I know Mamoon used to cheer that at Slack, but that's a sign of a struggling startup. Like, show me the revenue, right? Show me the money. Now, I want to see the MAUs and WAUs. I want to see your usage of your Illustrator, of Figma Make, of Netflix, of Canva. I want to see those going up faster than revenue. This, I think, is the ultimate B2B test or anything. Is your MAUs, WAUs and DAUs growing faster than revenue? If so, things are probably working for you in the AI age. If they're declining, just like net new customer count, right? If it's declining, you're hiding. And I think Netflix just bought Ben Affleck's startup for like 300 million bucks, right? Or something like that, Harry. Like they're well aware that folks are watching AI-generated Star Wars content on YouTube and not watching Netflix. So, I don't know. I would step down too. I just might. I just might.

Well, look, just two others to, I mean, the fun thing in all of this, and I put fun in air quotes, is it's so fluid. So, Sam just said, 'Codex usage is up 50% in one month.' Okay. As we're taping this, OpenAI is going to launch autonomous agents, OpenClaw on steroids 24/7. Okay. Three, I've done an experiment over the last week. I've run my own workflows through both APIs. I don't care, right? So, our ability to predict what we thought two weeks ago when there was turmoil, executive turmoil, everyone was using the Anthropic API. It's just better. Claude, when we started the show, I was the only guy that used Claude. You guys probably thought Claude was ridiculous. Like, what? Why is this weird guy? It's less than 1% of the market. Now, everyone's using Claude, right? I don't know what 90 days is going to bring. But everything could change in our development environments in a week, and OpenAI could win in agents, in autonomous agents. We're just starting, like agents are just getting autonomous. All these goofballs on X with their Mac minis and Mac macros and 11 of them stacked in their closet. Look, what have they shipped? Nothing. Okay, it's performative art. But autonomous agents are what we all are going to live with. We built some, and they could win. I mean, literally, they're shipping it today. It could be the best thing in autonomous agents. Claude has a few now, too. I mean, Anthropic, but that war's just started. It's just started. So, I can't honestly predict 30 days out. So, does a trillion feel like Anthropic? Did that feel like a good deal on our last show? Yes. Am I sure it will three shows from now? I don't know. Maybe they'll invert.

And if Jason is correct, look, I believe both of you are correct. You're correct in the sense of, you know, AI is the biggest story out there and Anthropic has, you know, in the last six, nine months been credited as the new winner in that space. So by definition you're going to have huge demand for that stock. So you're accurately representing the facts, right? You know, whether or not that will prove to have an overall holding period return from here that outpaces the S&P 500 adjusted for the risk is something entirely different, right? You know, I think, look, it's hard to do in venture. I mean, I think the trajectory from here is actually pretty straightforward, which is, you know, when you've got this level of white heat, you go public, right? Because up until now, as I think I said in a tweet recently, there's just been no way, we've had an entire life cycle of a technology explosion with very little access to it in the public markets, right? And it's hard to imagine going through the entire cycle of a boom and bust without letting the retail investors lose their money as part of the show, right? So that's clearly the part that's coming up. So my assumption is Anthropic will go public and it will be a fabulously successful IPO, which is different than saying at a trillion dollars you'll feel regret about holding it six months later. It can be an amazing company. It cannot be worth a trillion dollars and it can trade at a trillion dollars for a period of time. All those things can be true.

Your job as an investor is to tell you what something's going to be worth four years from now, right? Your job as a banker is to tell you what it's worth today. And those are different skills. One is about projecting the future. The other is about valuing the now, right? I'm not going to try and project the future on this now. My guess is I come with a lower number, but Harry is right about the present. Today, if it went public today, right, you would be fighting them off at a trillion dollars. You would have a fabulously successful IPO. And because those guys are wildly smart, you know, really nice profile of the CFO recently. And because the other thing that's happened is the big counterattack on behalf of OpenAI has been, you know, compute is the ball game. These guys don't have enough compute, right? And my guess is the Anthropic guys are saying, hey, we got the better software, how do we get as much compute as possible? It takes money, this is America. Jensen will take a road provided we give them cash, and therefore go public. So my assumption is these guys are going to go public, as we said, October, Q4 time period, if they can, as soon as it's humanly possible, which is of course why they're not taking the 800 billion valuation. I mean, why even pause for breath? I mean, especially if it gives any kind of rights, which actually at this point I doubt it does. They are, you know, I assume heads down preparing to go public because as long as this mood lasts, you will probably raise money in the public markets for that stock at a price you mightn't see three years from now with three years of execution. They should go after the IPO. What are they going to do? Are they going to do massive secondaries? Are they going to do pipes? Are they going to do weird debt hybrid equity preferred deals? Because this isn't the last chance, they're going to need epic amounts of capital, right? And so maybe it's minor, but we're talking about an IPO like it's an event, which of course it is. But the ultimate, I think the meta question is where is it easier to raise ongoing capital, like perpetual capital? Is it really easier public than private for these guys? Not traditionally the answer is of course, but for these guys is it?

Yes. I think I'm going to say again, being opinionated on this one. Yes. I think it will be, even though so far it hasn't been. I mean, so far the most stunning fact so far is the biggest IPO in history is talking about raising $75 billion and the biggest private round in history raised $122 billion. What that says is the biggest private round is bigger than the biggest IPO. That is bizarre, and we've kind of grown accustomed to it to the point where we don't even focus on that fact. But it is of course absurd, right? Given that logic, you would say, 'Oh, stay private. You can raise more.' But I absolutely don't buy that. As you know, I said, I mean, yes, Anthropic could get one more round done. But the truth is the big liquid markets are public. And Jason, to your point, I think they go public. You raise a big slug of equity out of the gate. You raise more, you know, you obviously expand the capital base over time, and then you have access to a whole bunch of other things. You have access to convertible preferred, you probably can do more compelling debt structures, you become a viable player for more people to lend against. So if your business model is, as they think perhaps insanely but whatever, I need to raise $200 billion, $300 billion, and at some point you have to go public, why don't you go public when the FOMO is at its peak, when your relative kind of desirability is at its peak? It would be hard for me to imagine a better moment to go public if you're Anthropic than like this minute. But I'll give you a counter-argument that I might be wrong on, that admittedly I might be wrong on, which is Figma and the need for capital. So if Anthropic does not need any more capital, go public Q tomorrow to your point, right? Or Q4 when you're ready. Go public. Go public at a trillion. Trade up like Figma did to two trillion, right? Up and ride it out. But Figma's down 87% from its trough. Imagine for some reason something like this happens to Anthropic. It still grows. I mean, Figma is still growing at top 5% rates, right? But the market has fallen out of love with Figma. What happens if Anthropic IPOs at the perfect time for a company that does not need capital, but the markets fall out of love with it? They get worried like the construction costs go up. Those space centers they're arguing over don't work as well. Rory was right about the space centers, and it falls 87%. Like, just what happens to capital raising?

Yeah. Okay. Respectfully, no. Right? Because if everything that you articulated happens, right? Then the person who's public wins and the people who are still private are existentially screwed. The Figma example is driven, the Figma sound bite, which I hate, of the 83% decline is more accurately represented as follows. Figma priced at 35 with sensible people. Idiots drove it up to north of a hundred bucks a share. Then the same idiots sold it down. And so that's one factor, right? But then second factor, at the same time, Figma was at the tail end of a 20-year cloud software boom where the zeitgeist switched to the AI boom and the world fell out of love. So that took it from 35 down to where it is now, which is 20, right? That explains Figma. I don't imagine, look, if there is a world where the AI zeitgeist goes out, and I think we're at the start, well maybe not at the start, but we're at the AI zeitgeist, we're not going to hit a stage in the next year or two where people are saying, oh my god, the story is dead, we've moved on to the next thing. You're closer to the start than the finish of the zeitgeist, so I don't think you have, I don't think even, I think there could be a hit to the stock, and I'll come back to that in a second, but I don't think it's the same as Figma where literally it's like, I mean, what's happening at Figma is everyone's saying your operational results are amazing, but we're in love with someone else, so we're just not even going to talk to you, right? I think if Anthropic were to go out and if the stock were to go down, it would be because, oh my god, it's overvalued and this revolution is going to take 20 years, not five, so maybe overpriced. And in that case, you'll sit there, and I've been in much smaller scale on this, when you go, that's really bad, our stock is down, on the other hand, we've got 50 billion in cash and our head-to-head competitor is still losing money in private. We win. So, no, there's no argument. There is no argument for overstaying your welcome in the private markets at this point.

Well, look, I leave with a lot of anxiety over Figma and others, but not for the reason the yahoos on Twitter said. If you use, here, let's be clear about two things about Claude Design if you haven't used it. One, it is definitely better than the design tools that were in Claude the day before. You've always been able to design a website that looks exactly like every other website built with Claude artifacts and purple gradients and the same, they all look the same. Okay, half of demo day looks like it was built in Claude artifacts at most. Okay, you can smell them in 60 seconds. But design was always there. It just wasn't what a lot of designers would call design. You could always design a website. Now, Anthropic did something which is important. We'll see where it goes. They didn't just improve it. They built an application. Claude Design is an application. There are only so many Anthropic and OpenAI applications. There are skills. There are workflows. There are prompts. There are little things you can do. They went to the trouble to build a design application that works. It is, whether it's 50% better or 200% better than the day before. You can design better websites, better properties in Claude than you could before. Does that mean you can build what you can build in Figma, let alone Illustrator? No. So, a lot of the yahoos are like, the other thing a yahoo said on Twitter is, of course this isn't a threat to Figma, because we're all about taste now in AI. Taste. We have no threats because of taste, and the combination of taste and moats means we're unassailable. So will your typical, you know, hoping to afford tickets to Coachella designer that takes two weeks to respond to a ticket to develop an asset, are they going to switch? Maybe not, right? They're not going to switch from these things. But it means normal people can design stuff and get into production much faster. So I think it is an existential threat. It is. It will maim and nibble at Figma more and more because like if the three of us wanted to build an app together and we don't want to wait for a designer to turn it around in 30 days and give us a Figma file or a still, what the hell do I even do with the Figma file? I can't stick it in Replit. Now I can just do it myself. So we will bypass designers more and more. That's the risk. But I do not believe Anthropic will ever build a direct Figma or Illustrator or Adobe competitor. They don't have to maim them. And so yeah, is it a design tool? Maybe it's design-to-production like some folks called it. Who cares? If it maims you, it maims you, right? And I think people are missing the point. The meta question is, and then I'll just say one last thing that I saw no one talk about. It is an application. It comes up as a full application. It has sharing. It has users. It has hierarchy. It can save assets. Maybe there are, I do not believe there are many other applications that Anthropic or OpenAI built. And this, if you look at what the public markets are, they're scared about a lot of things, but we make fun of vibe coding, oh, we're going to vibe code our Salesforce, but what if they start building tier-one applications, not just prompts, not just outputs? Like, it is something to reflect on. It is something to reflect on. And I'll just, sorry to ramble, but I'll give you one last story to compare. So the oldest piece of software uses Mailchimp. Okay, terrible email marketing service. About two weeks ago, it started to violate the CAN-SPAM Act. I started to see things on tweets: 'Jason, how come I can't unsubscribe to your goddamn SaaStr newsletter?' And they ping me again. I'm like, I don't know. And then you get more of them, right? So that's when a bug's been introduced in the system two weeks ago. We flagged it for Adobe Mailchimp. They said it was unfixable. CAN-SPAM violation. Okay, this was a week ago. Then they said they would only help us if we got on the phone with their engineering yesterday. We did. They did nothing but blame Salesforce and said they could not commit to a fix. So my point is, this is what old software looks like. Okay? And as if Anthropic and OpenAI are going to build applications, sell them all as a bucket. Like, keep the gems, don't get me wrong, but they're coming for old software. They're coming for old software. This is an application. This is not a prompt. But nor is it going to maim Figma next quarter. Like, there's just, but those both can be true. Those both can be true that we won't see it in Figma's numbers next quarter and that over four, six, eight quarters it will maim its growth. We won't want to use grandpa's software anymore.

Well, first of all, kudos to Canva. If you use Anthropic, I mean Claude Design, it exports to Canva. So, you can import from Figma and you can export to Canva, right?

Yeah. But what's happening is product teams and engineering teams are already, like, okay, if we go back 12 months ago, you had design. Okay. Back in the day when I worked at Adobe, there was a design group. We weren't allowed to design anything that was public-facing. You'd face a ticket and 60, 90 days later you'd get a PDF of what your website had to look like. Okay? Then your product team would have to figure out what to do with that PDF, argue with your engineering team, and months later you could. That's the way software used to work until not too long ago. Then as everyone started working in Claude Code toward the end of last year, product and engineering teams just started to work in the code together. Product teams first would vibe stuff in Replit and Lovable on their own. Right now, a bigger and bigger deal is they're committing to the codebase. Product teams are able to do this. And so these PRD teams are becoming more cohesive, and then design is still way out over there in their own hipster land. As these combine, everyone's going to want to work directly on Claude Code and Claude Code. It's not going to be this designer enforces a collaborative hierarchy on Figma because the designers hold the PRD organization hostage. They held them hostage before AI. It's the worst.

Yeah. It's worth just pointing out at a high level comment here, when you're saying design, implicitly what you're saying here is it's the Figma digital design, websites and apps world, the software part of design, not the part of Canva that is printing out real-world pictures, posters, and, you know, the physical design where it's decoupled from software.

You're right. Design's such a confusing term, right? It's a bigger threat in the short term to things like Gamma. It already makes slides like Gamma. Okay. It's not a threat to Canva today, but every single thing you do in Claude Design that you don't do in Canva or Figma or Gamma is a threat to them. Even if it doesn't kill them, every single thing you do.

It is meaningful. And again, I'm not diminishing that. I always thought one of Google's interesting strategies for a decade and a half was the strategy with G Suite. It was email, you know, and effectively a docs and a spreadsheet which just gnawed away at the bottom end of the Microsoft Office suite. And if you fast forward a decade and a half, you know, you get both sides of it, though. They yanked basically, they could spend a billion dollars yanking Microsoft's chain on a $40 billion business. It's exactly what Jason says. I'm messing with your head. I'm maiming you, and it's not core to me. So, I don't have to win here. I just have, you just have to lose, right? On the other hand, 15 years later, your Office is still a plus or minus $40 billion business, lower growth rate. So my point is simply this: there is a range of outcomes from it. It gnaws away at the low end, takes away a lot of users but only 5% of the revenue, to it bites 30% of the users, 25% of the revenue, and it really impacts. And those are big differences in terms of value creation, you understand me? So the...

True. We'll have a maim meter in board meetings. How much have we been maimed this quarter? And it'll go from 1% all the way to 50%. And our agents will decide. We don't let the founders decide because they're always at 1% or they're the overactive one. 50.

There's a cue for the Monty Python. It's only a flesh wound sketch. You know.

It is. It is like that. That's only a flesh wound. I lost my arm and my leg this week to Claude. But you are right. I mean, look, anything, I mean, I remember thinking anytime they come at you, anytime... there's two things you said that resonate. One is anytime someone can give away something at the margin for free that takes away some of your, there's just an impact to that, right? Bundling is a [__] and they're effectively bundling here. The other thing that I think is more important that you said is, and I hadn't internalized this, but if the design flow is a preamble to a technology build workflow and the technology build part of that workflow is already automated using code, Claude Code, then you're right, the incentives where you get scary as a standalone company is if the other guys have a better-together story. And you're right, to the extent that design, product, and engineering can all be in the same tool, there's probably a whole bunch of embedded efficiencies there. And from the perspective of the company building that product, it makes sense to, like, because the thing that often happens in these deals is, I mean, look, OpenAI did a ton of these, and if you look back on it, it's just fun to do it now, the GPT store, the GPT plugins, every single time Twitter goes all excited, this is the end of everything, XYZ company is screwed, right? And it turns out, you know, two years later, no one even remembers that and the thing's been deprecated. But you're right. In this case, if you think of design not as a standalone category like Canva, but as the front-end window into product and eng, and if you think that software is the mother lode and software coding is the mother lode of enterprise adoption, then you probably get enough effort behind it to build a credible product. I mean, that's what you're saying. I mean, put bluntly, at some point when even Anthropic has to start allocating resources at the margin, you implicitly are saying there'll be a big enough team here to build, as you say, all the app features to make it a viable competitor.

Yeah. And not only does it export to Canva, you can just, it exports to Claude Code. They're integrated. So if we're moving quickly, we're not going to wait. Listen, I still want my human designer to deliver my amazing homepage of my app, my amazing splash screen, my amazing assets, but we're shipping features every day, guys. I don't have time to wait anymore. We're going to do it in Design. It goes straight into Claude Code, which we already run our company on. We already ship on, right? It's fully integrated. And if the humans have time to redesign it later and make it better, great. No one's saying it's pixel perfect. Don't have time. I don't have time. I don't have time. So, we'll see. But they could abandon, the only reason I think they won't entirely abandon it is it's part of the core. It's part of the Claude Code core and it is something you can already do in Claude Code or even just Claude, just crappily. So they're improving. The closer it is to the core, the higher the chance they'll maintain it. And it's not a coincidence, right? Not only are the decliners stressed, not only are, you know, Dylan and Mike Knoop stressed, they're stressed at Lovable and Replit and Vercel and Gamma too, because they're, you know, the rate of competition is like we've never seen before, right? And I will say one thing I know from all these founders, I mean, they're brutally aware of it. The older CEOs are hiding from it. Oh, our next agent will catch up. Oh, we'll catch up later in the year. Oh, you haven't seen our next... This is what I hear from pre-AI founders. We'll catch up in the next release. They say so confidently, right? As they go off to complete their triathlon. The AI-native cos, they're freaking out about this. Okay, in 60 seconds, you get a Slack back. They actually know what's coming a month later that all their competitors are launching. They're already all over it. They're already, I hate the 4D chess game, but if you don't play 4D chess, if you're at the core of AI, you're going to lose. So they're all playing this game. But it just gets harder every week.

It's definitely the game today. It's definitely the leaders see it. Obviously the question is, is it correct? But yes, I mean, it totally, yes. As long as you think it's correct. I think it's, I mean, directionally yes, people are saying private longer, outcomes are bigger, so capitalism is doing what capitalism should do, it's raising money to put into these companies, right? Do I think the return, I mean, the thing about growth is this, when growth is sexy and attractive from a fundraising perspective, it tends to be hard to make money at. And when growth, you know, when everyone has it, the way growth makes money is either overall valuations are down, like 2022, or there's some insight that the growth investor has that the wider market hasn't figured out yet, like ChatGPT really matters and you should buy OpenAI, right? It's a lot. So both of those conditions were true in '22 and '23, which is why those funds are going to be awesome, right? If you have a situation where capital is plentiful for those rounds and everyone understands AI is amazing, then by definition you've eroded the two things that gave you excess returns. I'm not saying you still won't make great returns, it won't be as clear or as compelling as it was when it was unpopular. The other thing is there's room for the capital. And what I mean is if you look back at 20VC Fund One, a $10 million fund, right? I'm speaking for history for Harry. Back then the strategy was to get into hot seed or A rounds where he could write a 50k check, 100k check. There was always room. There was always room. And to some extent that's still true today. It's just those hotter checks are at much higher valuations. Fast forward to today. If you're a relationship builder, if you drop by and meet with Dario, if you schmooze with Sam, there's room in the round. Like, you get cut out. Don't get me wrong, people are getting cut out of these rounds, but if you're Sequoia or Accel and you're a good schmoozer and a people person and you show up to poker night and you do all the right things, not most of these rounds, you're going to get an allocation. You may be the fourth name on the press release, but you're going to get an allocation. And so, you know, and in a way, the fund sizes don't even sound that large. If you get 20 or 30 checks, they're not even that big.

And that's totally fair. For five or six, you're exactly right, Jason, is that there was room when you're raising $122 billion, right? It turns out there's room for everybody. Even when you're raising a miserly $30 billion in the last Anthropic round, you're right. There's room for everybody.

Well, people get cut out. To start, they're desperate to get into Anthropic. But if you have the relationship, and you really build it over a period of time, when they look at the spreadsheet for the round, they're going to put you above the fold because we like Rory. He's great on the 20VC. He came by the office. He loves us. We're going to, well, fine, we'll give 20 million to Rory. It's... No. Did you disagree, Harry?

No, he doesn't. Because his first sentence, his comment was, going back to Harry's LP who's monotropic and nothing else. I mean, what I like about Sequoia, they know how to make money, right? They're like, 'Let me get this straight. I have a good relationship with these mega companies. I'm a name that they'll want even at this stage, and I got a bunch of LPs sending me, the only thing I want is this.' And I'm in the middle. Hm. Let me think about this. I should take their money and give it to these guys and charge my percentage and call it a day. As long as that works, the marquee names who can do that are going to do it, right? Some of the package pricing on these SPVs for Anthropic has just been the most egregious face-ripping I've ever seen. I mean, it's like, it's just... Oh, I mean, like 8% up front.

Well, first comment, is this the new bar? Well, it's not going public right now, but I think let's step back even one level beyond the IPO. I think what this sentence, if true, and you never know, but I believe it to be true, exposes the whole 'SaaS is dead' meme is [__]. Right? Low-growth SaaS is bad and high-growth SaaS is good. Right? This is a market where we can talk about the reasons why if you're doing a billion dollars growing at 78%. Then collapse of the entire discussion about, you know, SaaS is going away, SaaS is bad, what's it worth, right? What it really points out is the real objection to these public companies, the public SaaS companies, is not 'oh my god, you're SaaS,' it's that your market is now top-stop and your growth rate is 10%. If Rippling is growing at that rate, that's amazing. It's compelling and they'll get an excellent IPO.

And they're accelerating. The crazy thing is they're accelerating. So, if they were at less than 500 11 months ago, which I do know, right? And they're at a billion growing 70-something%. Do the math with me, Rory. They're accelerating. It's not just 70, which is enough. They're accelerating, right? And you can say that's great for SaaS, and it is, right? As Parker said to me, not bad for a SaaS company, right? Kudos. But, you know, and we can talk about what that means. I'm not even sure what it means, but not that many are accelerating like this, right? So, this is not good news for anybody not accelerating at scale, right? Let's not, it's not even 70%. It's accelerating from like under 50 to 70 in a year. I mean, you know, candidate for CEO of the year, right? Not to disparage Dara, but candidate for CEO of the year to drive that level of acceleration. I don't even know how to do that unless there's people buying, unless there's people buying tokens. I don't even know how to do that in today's world.

Yeah, but that driving acceleration, like they've just launched their agent, driving that level of acceleration without a massive AI tailwind, like just blowing your phones up, right? I, you know, bring them on, we'll talk about it. I don't know. I don't know how to do that without AI, right?

I think it's what they refer to in sport in terms of against the run of play, against the odds. You're playing the SaaS game where everyone's walking around saying the world is dead. Yes, Anthropic's putting up 600, 700% growth, but you put 78% growth and acceleration up in a category where most ill-informed people were saying you can't do that. So maybe the better, clearer expression is highest outperformance relative to quote-unquote market expectations. I think that's a clear example.

And it's better than Figma by the numbers, right? It's better than Figma by...