One thing we know about Elon for the last 30 years is when he hears the word more risks, he says, "Yes, please. I'll have two."
I think the IPO nominally will be a dud. I don't think it will trade up dramatically.
So, what do we have on the cards? SpaceX begins their $75 billion IPO road show at a whopping $1.77 trillion valuation. Next, is the future of AI always on as Sam Altman thinks? OpenAI ships Dreaming V3? Next, Apple rebuilds Siri on Google. Thank god, Siri being what it is is a disgrace as it turns on on my device. And then finally, we have Ramp raising their latest round at $44 billion.
There's always money when people aren't afraid. When things get scary, it's not that money runs out, it's that money gets scared. I'm kind of contentious of startups that need to be fat. I'm like, what's your excuse? In any business, there's only two things that happen. People are either making stuff or selling stuff. If AOL becomes the next hot thing, I mean, these guys are geniuses.
Anyone who hasn't churned from AOL now ain't churn until they die.
Ready to go.
Okay, we are back and what a week it is. We have the largest IPO road show in history. We have to start with SpaceX. Um, we're speaking and this is important to say Rory's going to have a fit because we're speaking on Tuesday and obviously SpaceX is going out on Thursday and so there is going to be some time discrepancy there and so what we say will be able to be scrutinized in intense detail by the time you're probably listening. True.
Ado to start with the interesting point. One of the things is there's usually two questions you're asking at this point. What's it going to price at and what it going to trade at. And the funny thing is unlike 99% of IPOs, the first question's already been answered. Elon has decided that instead of doing price discovery where the bankers build the book and then they pick the price and they announce the price, you know, right at the end the night before, the IPO pricing typically takes place the night before the trade opens. So then everybody gets to buy who participates in the IPO at that price and then it opens next day at whatever price up or down from that. In this case, Elon has decided in advance of getting anyone's input um that the number should be I think 135 um bucks a share. So um which values the company at 1.8 trillion. In other words, he's kind of shortcircuited the price discovery process and instead we're not doing price discovery. I'm telling you the answer and the only question is how much of it do you want to buy at that price? So one thing we can't get wrong is that how
Is that a wise move? He's leaving a lot of room for markets to move in between that. That's why you normally leave it obviously as close as you can because you don't want an Iran-Israel, a Broadcom moving markets and then putting you in a precarious position. It feels unwise but Elon is a master. So I'm I'm not going to
Yeah. I mean, calling someone unwise is about two days away from becoming a trillionaire is a big call, Harry. But I I think what it is is, you know, it it it's no surprise given a it's ballsy. You've got just way more error creep in. You could be wrong to the high, you could be wrong to the low, you could leave, you know, maybe all the orders flood in. You've left money on the table. Maybe on the other hand, you're struggling to get the orders in and it feels very high and it opens down. It's more risk. But the one thing we know about Elon for the last 30 years is when he hears the word more risks, he says, "Yes, please. I'll have two." Right? And this kind of must appeal to him. So, I'm telling you the answer in advance and I'm taking the risk and that's how he became a trillionaire. Is it wise? We'll see.
Well, obviously it's it's a it's a huge amount of capital, Rory. But if it if it's really only 2x subscribed or over I'm not even sure over subscribed is the right word. If it's only 2x, right? Um, plus Elon picking the price that that suggests to me it it you know, we'll see. That suggests to me this this one won't pop. There's just not there, you know, I do believe the day traders will drive it up ultimately, but uh it doesn't feel like there's a there's there's a there's a there's there's an excessive demand at 2x. In most IPOs, it would be uh would be almost insufficient to to to close the IPO.
Agree. And but there's two separate things in that Jason, you're right. I mean one is the decision to pick a fixed price logically reduces the probability of a pop with no other information because the whole point of the banker process is to pick the price the night before that allows the pop next day and you simply aren't doing that because you don't have the information. You're right. But then the second thing you added is some information that's come out which is you know to date the book is two times covered and your comment is that feels low compared to normal IPOs.
I mean I mean traditionally you want 8 to 10x to to get the deal that you want but you're not raising the vast amounts of capital Elon's raising either.
Yeah. No, it's hard to get 10x oversubscribed on 10 billion on 75 billion. I mean just so yeah what you're saying is I mean to to be really direct what you're saying is you're pricing something on a fixed price that's not taking into account demand where you're looking for a very large amount of money such that you only have a small amount of coverage. You're right. You look at those circumstances and you say there's a non-trivial chance that it pops to the downside. Is it 30%? I don't know. But if you think about it, normally bankers bend over backwards to try and have the damn thing pop, right? So they're trying to get a 105% pop and near 90% plus of the time it pops. But still 10% of the time it breaks IPO, they get it wrong, right? Even trying to fix the game, they get it wrong. In this case, they're not even trying to fix the game, right? And you know, time will tell on Thursday night, are they too high or too low? There is obviously by definition some probably higher than 10% chance that the on the day people go everyone who put in for it put in for it and it's not impossible to trade something. It's just if you use mechanism A that's designed to create a pop and it works 90% of the time and now you use a mechanism that's designed to be in that doesn't have the information to allow you to make a pop because you've done a a fixed price then by definition the probability of it going wrong goes up. That's all
I think what will happen if that's accurate and 30% to retail I think the IPO nominally will be a dud. I don't think it will trade up dramatically, but but I do think I do think every time there's great news, more satellites in space for SpaceX, more things, it will it will begin an inexorable rise up. Uh people will will be excited, especially if if the upside is tied to potentially significant revenue, right, as the last announcements have been with Anthropic and Google. I think I just don't think it's going to pop that first week. I think there's just uh there's just not enough not enough buyers out there in in this universe or at least in this galaxy uh at this price at 2x. Um we'll see. I I haven't read anything that says those 2x are all 100% binding. I guess if they're all binding uh every single order then I guess I guess it would lead to a pop. But uh typically it's not right.
It is. I mean when you submit an order you know you typically
Yeah. Maybe they'll all get filled.
Yeah. They'll get filled.
I have it backwards. All the orders will get filled unlike a normal.
I kind of hate I'm going to step back. I kind of hate that we got and I I caused it so I apologize. Got into the technicalities of the of the IPO cuz zoom out a million miles here. This is amazing. This is an amazing technical company. It's, you know, the iconic company of its generation. It's going to go public this week. It's a huge moment, you know.
Yeah. I mean, what do you say to Elon? Congratulations. What do you say, you know, everyone involved? Congratulations. I mean, it's just an wildly impressive company. I mean, look, I am skeptical of the valuation, but step back. I mean, you know, I've watched some of the launches on, you know, on my little on little YouTube and I'm like, they're just so the whole thing's so impressive and it's, you know, at the risk of sounding a little Sorry, Harry, at the risk of sounding a little partisan American, this really is an only America moment, right? Where you could, yeah, I can see your little face, Harry, but you know, who else is going to find the capital to take that kind of risk to go for it, right? And and frankly, also to have a big enough capital market to fund it, a big enough addressable market to sell to. It's it's a great outcome. It's an amazing company. It's a real asset to America.
End of day one prediction and end of day 90 prediction.
I actually think it's an end of day. I don't. So, you really are determined not to let him have his great moment. You just want to See, you're like those commentators in politics who won't talk policies. All they want to talk is the horse race. All you want to do is talk the horse race here, Harry, because you know that's what sells. You're such a little media [__]. Um, but just to to I I'll I'll answer. I don't think it's knowable end of day one. I think all three scenarios are equally likely. You know, one third it just goes down just because there's weird pricing mechanism. So, they don't have demand. One third it's flat because whatever and then one third to your point retail enthusiasm it goes up. There's no information here. Now I will make a call though I think over the next 12 months I doubt it will retain this price there. I will make that step. I disagree with you. I think fundamental value here reasserts itself. I mean was two reasons I say that. One is again I always go back to the base rate. The base rate on IPOs in general is you know you do see quite a lot dip. The base rate on IPO is more than 10x forward sales. Even more dip. The base rate on IPO is at 70 times forward sales. There hasn't been any, but you got to believe there's a dip. So I think valuation reasserts itself over the medium term and the probability of it being higher than the IPO price 12 months in my gut is lower significantly lower. So I would say I haven't a clue day one. It'll it's a tactical thing based on the mechanisms. And I think over the medium term, this amazing company might shock horror only be worth one shirly instead of 1.7 and it's still a huge win. That's what I think.
I'll tell you maybe just two thoughts. I don't I don't know what you guys think. One is um it would listen, there are many great IPOs like Facebook and Google that IPOed with a whimper, right? It would not surprise me if this IPOs with a whimper at the end of the day. It doesn't matter for SpaceX. We will have multiple layers of generational wealth created. Elon will get his liquidity, right? It'll all be great whether it whether it's a whether it's a nothing burger IPO or not. I guess it might uh hurt hurt um OpenAI the most because they've been so aggressive on their valuations and so aggressive on their capital raise. If that means they have to cut back their aspirations for the amount of capital raise, valuation maybe doesn't matter as much, but they are they are related. That could be the biggest negative effect. It just they they need so much capital too um that it just could be uh it it could take some of the wind of the sails out of out of OpenAI. Um, the other thing I'll just say briefly, I was before I I'm I'm in Hong Kong as we record this, but before I got on a plane, I I spoke to one of my LPs who's who's getting getting lots of getting lots of cash here, got cash in Sarabus, getting cash in all these other deals. And um it does kind of tie to a conversation we had before, which is the the expectations are so high now for performance and I think that will permeate through the ecosystem. And um again I I think I do think it's a minor negative um but but I do think it's something for founders and others to understand that the it's not a free lunch right the bar the bar will continue to go up after these events when when LPs are looking for 7 to 8x routinely from GPs which is hard to do right outside of anomalous periods of time the expectations that GPs will have from founders continues to go up um and uh you know uh you Well, as this as this LP said to me, I don't know that little 5 to 8 billion dollar IPOs really make it make this math work anymore, right? And so, we've talked about it, but to hear it from a large LP did did sort of it it echoed in my ears of of how this how how the bar goes up.
I don't think you can take a once in a decade event and start extrapolating it as a norm. I think in life you should take this as the once in a decade.
There's like four or five of these once in a decade events. There's going to be Anthropic, OpenAI back.
It's interesting that you say that, but because the opportunity, the once in a decade, I mean, SpaceX was once in a decade. It was last decade. Reminder here, founders wrote that check in 2008, right? It's now 2026. It's 18 years ago, right? So, for that kind of huge return, I mean, yes, there's been a 10x.
When was the Merced check written again? Remind me.
The Merc 3 years ago. Yes.
So, maybe they do happen more than once a decade. There they decade seem to be shrinking. I think you're going to have one trillion dollar outcome from the last decade and two it looks like from this decade if it all happens according to plan. But my point is yes, you you you probably can't assume 10. You don't run your business on the expectation that every check you write is going to be a trillion dollar outcome. If you're really smart and you get one, you should say yay. Right? So I think $8 billion outcomes will make everyone perfectly bloody happy. Right? Obviously unless you have a $10 billion fund, in which case it doesn't. I mean, that's why fund size, the amount of Yeah, fund size dictates the level at the amount of market cap it takes. It's a Josh Kopelman thing from ages ago. You know, the venture arrogance index, whatever, right? Um, the bigger the fund, the bigger the deal there has to be to make it work. There's nothing surprising here. Will this have knock-on effects in terms of LPs direct investing more and see an increase in fund investments from LPs? You've got Ohio teachers who will make I think over $10 million from their SpaceX.
To clarify, I know you think the entire Midwest is the same, Harry, but I think it's Ontario teachers, right? Um,
But no, at this point, you're conflating Canada and America, which is an easy mistake to make because we're making it ourselves, starting with the president, and it does begin with O, and it's kind of in the middle. So, I understand your ignorance, but let's go back.
He's just a big Fallout player, too. Who knows?
Easy. But the bottom line is yes, Ontario Ontario Pension nailed it. I mean, they're going to make, you know, a magnificent V and there's a bunch of others. It's great. University of Washington, they have a extremely savvy CIO who, and by the way, Washington, Harry, just to confuse you further, is not in either Washington state or Washington um city, but we'll keep that for now. But yeah, look, by definition, these are going to be the best co-investments ever cuz it's the best deal ever. I mean, there's nothing surprising in it. I know some of RLP
RLP is going to come back and go those that will get liquidity from this go hey we're going to reinvest more and more
And and will all their brethren be like hey we're going to join this cuz we want the next generation even if we didn't have them
Yes cuz everyone's just going to go wow that looks amazing as I say again it's back to the the extrapolation from the unique event of course they are cuz it is going to be amazing I saw I think in a journal this morning I think this is um the not University of Washington Washington University what has again I'm not going to confuse like it's 10 or 15% of their endowment it's awesome it's awesome right yes this is the best venture capital deal ever in terms of absolute return and yeah anyone involved is going to do really well and even if you know even if it has in price they're going to do extraordinarily well
Speaking of a once in a lifetime or once in a decade moment as Rory very articulate put another once in a decade moment is obviously OpenAI filing to go public um uh not so confidentially. Anything to say here that we haven't covered?
The only thing I don't understand is maybe it's a question for Rory. I cuz I don't get it. What What I other than the Captain Obvious element, uh what's the point of hedging your bet on the timing, but filing? I I mostly get it, but I don't totally get it. Right. U yeah, oh, we may we may want to stay private. We want flexibility, but we're going public.
I think it's actually all they're doing is being smart a little bit and managing expectation finally, right? Which is I read that as we're fine to go public. In a perfect world, we'd love to go public as quickly as we can, but if it's delayed for whatever reason, we don't want to have a whole bunch of negative stories then that says see it's slipping. So if you preemptively say manage expectations and say we're filing but we're not committing to a timeline. We're not all going to be sitting here in late October going they said they'd be going public in early November. WTF is going on. The big aha here and we said it two weeks. Everyone's suddenly gunning for the door. At some point you need the capital markets, the public capital markets cuz the scale involved is such that that's where you got to go and everyone's just hit that point and they're going for it. I think going back to your comment earlier on does SpaceX it feels like the market is very risk-on. I mean we had that little dip last week and then everyone got over it in two days. So it's as good a time as any you know it there's no obvious you keep cranking while you can and see if you can get it done. I mean I'm sure that they made that caveat of we'll take our time but they made that statement in the press department. My guess is in finance and legal the mandate is get this puppy done as quickly as possible so we have maximum optionality right and so there with the SEC and worth pointing out by the way the SpaceX S-1 went through the SEC very quickly and normally that's I mean I remember when that used to be a painful process with multiple iterations and it seemed to happen here extraordinarily quickly probably because we don't regulate anything anymore so go team so you know this may all process through real quickly In which case, brace yourself for a fun fall. Rory's on fire this morning.
Hey, gosh. I really want to touch on on something kind of beneath on the product layer for OpenAI, which is, you know, Sam Altman's been driving towards kind of persistent and always on AI. Um, they shipped Dreaming V3, biggest memory architecture upgrade since launch. I'm just intrigued, Jason, in particular, to hear your thoughts on this. Is the future of AI continuous persistent 24 hours a day fabric of life always on in your mind? And how how do you see this and that?
I think we all believe it. Um I think that um and um I mean we can make fun of Apple this week basically uh uh repackaging Gemini and giving up on AI, right? If that's the way we want to view it. But but that's a little piece of wanting ultimately AI to be persistent 24/7. We we we do want this. We already we already live little hints of it. And um it it's pretty silly that AI for the most part lives lives in our browser, right? This which is if you think about it very dated very I mean it's so dated that we still use browsers. I mean who would have we got to get Marc Andre I mean the fact that we still live in the era of Netscape in so many ways. So I do think it's exciting. Um I do think as this show continues the you know the whatever we would want to call it the token apocalypse um I think it will morph into just standard business practice right at some point there's IT budgets can only be so large there's only so much even if we lay off half of the you know unemployment I mean employment keeps growing we're going to have to manage spend so there is a conflict but um I do I do think we're going to look back in two years and think of this non-persistent AI as is almost archaic, right? As almost sort of desktop like
Yeah. I mean, yeah, because you you threw in a lot there. We several faces there for for the audience listening. Rory's facial.
No, no, no. It's just that Jason as he often does covered a lot of different things and I'm just processing through it more slowly is that on the on the memory thing and kind of what Jason is that it it just totally makes sense, right? And the question, yeah, if you step back, you know, you have the core models and then you have what people are calling all the harness, which is all the stuff around it to make those models effective. And part of that and it can either be in the it should be in the model or it could in theory be in the harness is just understanding memory so that you could and the impact of that and I think why Jason went to the token economics part of it is part of the thing should be you should get better answers with memory and part of the thing it should be more cost effective in terms of token because you're not passing through all the context all the time you can perhaps it's part of a I mean I think a lot of the trend on this harnesses will be adding stuff to minimize your pass on frontier models and part of that will be having memory, right? It also leads to a better experience, right? I think that I actually just went in and tried to see um have it has it been switched on in mine yet because it just makes ton of sense. You should know who I am after I after I look up 58 20 VC podcast, you know, I'm probably here to look at my 20 VC podcast research here, guys. So, it just makes a ton of sense.
Most people know who you are now.
No, no, I'm saying but but but but my OpenAI sometimes does them. So yeah, it's a really it's absolutely it's one of the necessary to-dos and they're doing it and it's great. I just want you pulled a face when Jason said about Apple giving up on AI with Gemini.
You're right. You're moving on to that. That was an interesting one. Ben Thompson, he did a really good piece on it this morning. I was reading is that I think to some extent they're give in the sense of they're paying Google a billion dollars to use their model as the default model but reminder Google pays them I think 12 or 20 I used to know the number $20 billion to be the default search engine so it's a minor offset I give them credit I actually think that they're making some yes it would be better if they had their own model but they're making progress on the use cases that just make a ton of sense for the consumer and I think it was you I think the amount of context you have when you're on someone's phone is such that they can they should be able to deliver a unique and compelling consumer experience for the kind of things they demoed on the thing about knowing context on which Rory it's like it's like to your memory comment Jason it's like you knowing which Rory how he's talking about knowing your calendar knowing everything and deliver a much better experience now should they have been able to do it with their own model yeah but the bottom line is They control the handset and for the consumer it's a pretty powerful product. So I think they're in a good position to make products. I don't think they're giving up. I actually think they're pragmatically saying we kind of screw it up and not have our own model. But that's actually not what matters for us for Apple. What matters for us Apple is delivering an amazing experience to our consumers because if we do that they'll keep buying handsets and if keep buying handsets we can probably afford to give someone a billion bucks a year, right? So I give them credit for getting their [__] together. I mean, yeah, it is stunning that Siri is so bad for so long. So, I think actually trying to fix it is just awesome. So, I I give them credit for step in the right direction, right? Is my take away from it.
So, the opposite. I don't think they're giving up. I think they're doing what it needs to win coming from behind. And they have a great position. I think it's interesting. The person you have to think about this a lot with obviously is if you're OpenAI versus if you're Anthropic because Anthropic has made the enterprise bet and OpenAI in part has made the consumer bet and you know I like my OpenAI subscription cuz you I sit at my desk and I do research but for a lot I mean it was a great line and give Ben Thompson credit. He said very clear I've thought it but he hadn't read anyone say it clear. He said consumers don't want to work. There's not a big market for consumers in their non-working life to do a whole bunch of, you know, complex, you know, research or kind of using AI for productivity. They just want, you know, delightful experiences cuz they want to relax and entertain. So, I think actually, you know, the the consumer space is going to be a tougher space for OpenAI the the enterprise space has really been validated because in enterprise is all about automation, efficiency, and the consumer space, it's about experiences. Apple's well placed to do that. OpenAI's got to compete with that and compete with Google. And you know, it's a it's it's a tough space, especially if Apple's getting their [__] together.
Well, speaking of consumers not wanting to work, soon they won't have to. Uh Uber cuts 23% of HR.
Make Jason happy. We can now
I I I'm so sorry. Obviously, it's people losing jobs. It's terribly sad. But I'm the one who [__] said no great CEO likes HR and everyone got angry at me and then everyone starts cutting HR. Anything of note here from Uber cutting 23% of HR remote work rescinded 3-day in-office mandate. Company denies AI played a role despite 95% of engineers using it daily. Anything of note there?
Well, look, a HR and um recruiting, right, which let's consider them different are are the easiest things to cut, right? They're the they're they're recruiting is, you know, you always you always see any any any any big tech leader stumble a little bit and they lay off 30% of the recruiting department. Well, you're going to you often want them back. I always wonder I always think this is I mean, it makes sense on paper, right? Um the HR one will be interesting. I mean, we've we've put out a call for someone to report to our AI VP of marketing, and I've gotten my head cut off a lot on social media for that by people not it's okay not really listening to what I'm saying about that. Um, but I do think HR is one of these areas that in many parts of it will be better managed by AI. I think an AI can be a better VP of HR for certain parts of the job uh than a biased human. I think there are advantages to having an AI VP of HR. Not not not I don't want to get rid of all of the humans or even lay people off, but um it's it's an AI VP of HR can can evaluate every single thing you've ever done, every little bit of your work, all of your issues, whether an AI VP of HR can figure out, hey, maybe it really is your your idiot boss, Jason. You know, may maybe it really maybe that really is the problem. It's not it's not you. An AI VP of HR can find out a lot of things and process of ass. So I don't I think it's a an it's under discussed versus area other areas but um it should be massively disrupted.
The big picture question in all these areas is you know how much efficiency do you get? My go it it felt 23% I doubt everyone is automating and saving 23% using AI in the non-engineering departments because adoption there isn't as strong as engineering. Do I think there's some? Of course I do. So my bottom line is I my guess is some portion of this is quote unquote AI automation. I doubt it's 20% because I'm always calibrating off you know what is I mean it's what percent it's the Dario number what percentage of quote unquote knowledge work is going to be automated and it's knowledge work tasks and then knowledge jobs is it five is it 10 is it 50 as Dario has said 23% felt like a lot but whatever again what you don't know is how much of it is just too many folks there and they're just partly rationalizing so it's a data point. I mean, I think the other data point from Uber is far more interesting, right? Which is not the AI for HR, but the AI for autonomous driving that they continue to make progress on autonomous driving.
Which stat was that, Rory?
No, there's the one you you'd mentioned. I'm sorry. You you'd you'd made a point there that they're they're actually rolling out some more autonomous driving experience in Europe in Madrid, I think. Right. So, you know, and they're kind of partnering with I think it's a WeRide or some of the technology providers, but you know, it's the the big I mean, you know, if you want to talk automation, driving is one of the biggest targets in terms of the number of humans that do that job. And you know, when you see Uber making experimental progress on robo taxi in Europe, you know, it's something obviously to keep an eye on. It's all it's worth pointing out this stuff is still moving way slower than I think people anticipated. It hasn't been you know Waymo in San Francisco resulting in you know Waymos everywhere within 6 months. It's been a long steady progress for Waymo and Uber's doing what it should do which is it obviously this is exist I mean the Travis Kalanick devotees would say the failure the the cutting of their autonomous project in 2016 or 17 was a fatal error for Uber. I'm not sure. I think 10 years later they can pick up the thread and which is what they're doing and catch up on that because it's not like the technology tipped like a domino. But I think they're smart to now start, you know, pushing robo taxis and partnering with technology providers. And this is the because, you know, the the question on the Uber stock is always, oh my god, is robo taxi existential, which is the bad scenario or the good scenario is lots of people build robo taxi technology and Uber is in a wonderful position to be the coordinating thing because it's the app we use and if they just add you 10,000 robo taxis to the fleet, then things continue just fine. Frankly, it's good to see the Europeans do something. I mean, I said this respectfully, Harry, but typically, you know, Europe is the slow technical laggard, especially on stuff like that. So, go Madrid.
Should we discuss the Revolut 115 billion 115 billion, you know?
I I think you're doing that I'm going to push it. I think you're doing that defensively. You felt I was dissing on you in Europe and you're you're basically implicitly saying, "Oh, look at Revolut. It's amazing. Correct. Correct. And it is amazing. And you know why it exists? Because the European banks, unlike the American banks in general, are so crappy. There's a reason that Revolut's worth 115 billion. Cuz the incumbent European banks were fat, dumb, and happy and making margin off their customers. And there's a reason why Chime is worth 5 billion. Still a great outcome, by the way. That's because the US banks on average a little more efficient.
That's also why Nubank is such a valuable business because
The Brazilian banks were inefficient. I think all these fintechs they can be I mean it really is a I mean it's proven markets it's a function of how egregiously priced the incumbents are and you know Europe especially when it had non-single currency you had all this foreign exchange because you guys aren't into Euro you had you know the FX charges you had all this transporter [__] and Revolut just blew a hole through that so I I think it's amazing and I know you're big fan of the CEO and I I think it's I I wish them all the best and pound those old school European banks into the dirt. I mean, at some point we're going to have to deal with the fact that the largest bank by market cap doesn't do much lending. And that's actually going to be a real problem in the aggregate. Um because the whole point is of banking is to recycle savings into lending. And right now, Revolut is not a long-term lender, but that's that's by the buy. They're killing us.
I'm fascinated to hear Jason's thoughts on this one. What's dominated my Twitter over the last week is Greg Eisenberg's original tweet about a horror story of uh venture fundraising. It led to a slew I mean hundreds and hundreds and hundreds of founders sharing horror stories uh including the Cloudflare CEO um who said about you his experience with Kosla and Vinod Khosla. Jason, I'm really intrigued to hear your thoughts on this one. I'm sure you have some. How did you feel about this slew of founders bluntly saying how terrible a VC experience they had in certain cases?
Well, I'd say a couple things. Um first of all I have I you know as when I was in the most intense phases of founder I had those stories too. Uh I I really uh we forget how how deep some of these things cut these slights. Um the the folks that are friends of ours now that we co-invest with I I thought terrible things of at the time literally. um uh one that we both know really well would constantly use me just to do diligence on another investment constantly and at and now I'm pretty zen about that crap the founder is I'm like just take the meeting and do reverse intel like if you're just being used for a competitor then sit down with him and just find out about your competitor you know get get the exact information but man that stuff really it really burned me um and founders whole you know so a couple things first of all the the whole thing with um the co of Cloudflare just Remember, founders hold grudges. I still do. I'm just getting over them now. I'm just getting over my founder grudges. So, founders hold grudges in a way that VCs actually, I think, don't because VCs, you miss the deal, you got to find another bus, right? Having said all that, um, get over it because it's it's sales. The only thing that to really have a grud a true grudge on is if you got fired. Okay, that one that one I think I think the folks that hate Benchmark uh from Uber, I think they deserve to hate Benchmark. I think there there's others. But if you were treated poorly during a fundraising, get over it. It's sales. Have Have you never sold This is what I say to people. Have you never sold anything? Have you ever never thought a customer deal was going to close and it didn't? Have you ever not talked to a prospect where they told you, "Rory, of course, we're going to buy by the end of the quarter." and then you just send them 28 emails and 87 texts and the deal never closes. How is it any different selling stock um than anything else? So there's a bunch of issues to separate the grudge, the firing which is a niche issue and learn to sell man grow some.
In one sense you're right, Jason, but I think the difference for the founder and I think ton of what you said super insightful. The difference is the founder in this case isn't selling their product. They're selling themselves. So I think you're right about one thing. The rejections cut deeper. Right. And there's no doubt. Even under my side, I remember an old VC 30 years ago said to me, you never forget the LP turndowns. And 30 years later, he's so right. You remember those people who turned it. It's just a personal thing because you're not just selling your product. You're not selling Ford cars on the dealer lot. you're selling yourself and when you get turned down it hurts. So I totally await you Jason is that you do have to grow a pair. You do have to get a thick skin but I totally get the way founders even if it's something doesn't go wrong in the process. I totally get rejection sucks, right? And and as yet, so that's the founder side and I thought you you were super sympathetic there. And then just to put the other side of the table, every venture person is in a business where we turn down 99 out of 100 deals that we look at. So rejection is our default mode. It's why I always wrestle with these ratings businesses, right? You know, the kind of rating VCs. It's doable and I think there actually is appropriate ways to do it. But you do have to remember that the default is a no. And it's really hard to high customer sat when 99 times out of 100 you're going to tell the customer no. It's why no one ever loves the bank that they apply to the lending money cuz a well-run bank turns down, you know, five out of six customers. No one likes that experience. Rejection sucks, right? So it's set up for failure out of the gate. Sometimes, you know, in the course of turning down two 300 people a year, you get some stuff wrong.
