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Back to 20VC: David Tisch on Why High Ownership and Concentration is BS | Why No Manager Actually Wants to Stay Small | Why Competing with the Mega Platforms is a Losing Game | Why the Lean Startup is a Fake?, with David Tisch.

Why Is Today's Venture Market Not a Repeat of 2021?

David Tisch says the venture market now has nothing to do with 2021. It is a standalone condition, funky and interesting and maybe frothy or insane, that investors have to read on its own terms.

He has done early stage investing for 17 years. People keep forcing the present onto an older cycle, and he rejects the 2021 comparison because 2021 had its own macro and micro drivers. Going back through 18, 15, and 2010, each moment was different. He can argue the job has totally changed and, equally, that the job is still whatever the current market presents: see and meet great founders, decide whether to invest, and beg them to take the money.

Harry Stebbings calls 2021 bubble-like, a good time to sell and a bad time to buy, with no fundamental technology innovation and only short-term behavior change from COVID. Tisch refuses the simple split between real craziness and a market that is still early. Every moment has good companies and bad companies. For an early stage investor, the macro is less impactful than the micro. What matters is whether the company is the good one, the great one, or the most important one. Company quality transcends the macro, which he treats as portfolio analysis.

Grokipedia·David Tisch·Harry Stebbings

Transcript

20VC: David Tisch on Why High Ownership and Concentration is BS | Why No Manager Actually Wants to Stay Small | Why Competing with the Mega Platforms is a Losing Game | Why the Lean Startup is a Fake? ·

The Twenty Minute VC: Venture Capital | Startup Funding | The Pitch

More from this episode

  1. Why Do Later Startup Rounds Dilute Founders Less?David Tisch says fast-growing companies now give up far less of the company in later rounds, so an early check gets diluted less.
  2. Why Does David Tisch Think High Ownership at Seed Is Overrated?David Tisch says trying to buy 10 to 20 percent of a true outlier in the seed round, and beat the best venture firms to do it, is a bet he has never understood.
  3. Is the Lean Startup Method Fake?David Tisch says the lean startup was a total fake.
  4. Why Does David Tisch Take 1 Percent Ownership?David Tisch will take a 1 percent or 2 percent stake when the founder is unbelievable and the opportunity is amazing.
  5. Why Did Box Group Stop Funding Brands?David Tisch says Box Group has stopped funding brands, and he does not think the brands are small.
  6. What Is Rogo in Finance AI?David Tisch was in the earliest round of Rogo, a company building AI for finance.
  7. Does Pro Rata Help Founders More Than Firms?David Tisch says having pro rata in the documents helps the founder more than it helps the firm.
  8. Should Seed Investors Sell When Founders Take Money Off the Table?David Tisch does not sell early, even when founders take money off the table. He works for the LPs who invest money in the firm, and his customers are founders.
  9. Why Do New Venture Managers Outgrow a Small Fund?David Tisch says new venture managers do not plan to stay with a small fund. Very few people get into venture wanting to keep doing the same thing.
  10. Why Does David Tisch Ban Negativity in Seed Decisions?David Tisch bars negativity when his firm decides on early stage deals.
  11. Why Is Y Combinator Different From Every Other Venture Firm?David Tisch says Y Combinator is the only differentiated product in venture because no one else gets the ownership Y Combinator gets.

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