E73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner
- Mar 25, 2022
- 1:36:18
- Full Episode
0:00 Bestie Guestie Brad Gerstner is filling in for Friedberg 1:34 Understanding public SaaS and Internet multiples, Instacart's cuts its valuation by 40%, understanding reality of overvalued late-stage companies 21:52 Capital allocators at fault, how crossover funds are reacting, late-stage price discovery, investor and founder behavioral psychology 40:37 Sacks' burn multiple, managing growth spend, new VC qualifications, lessons from the COVID bubble 53:58 Russia/Ukraine: US potential non-ceasefire strategy, Zelenskyy's revelations in CNN interview, rhetoric getting more aggressive 1:08:58 How will Putin withdraw without redacting the sanctions? What is the offramp? Zelenskyy's posture on global war 1:24:18 Understanding China's recently announced tax cuts, All-In Summit talk
Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg https://twitter.com/altcap
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Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg
Intro Video Credit: https://twitter.com/TheZachEffect
Referenced in the show: https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200 https://substack.com/profile/11803623-jamin-ball https://twitter.com/nfergus/status/1506243619384037378 https://www.bloomberg.com/opinion/articles/2022-03-22/niall-ferguson-putin-and-biden-misunderstand-history-in-ukraine-war https://www.rand.org/pubs/research_briefs/RB10014.html https://twitter.com/samramani2/status/1507378113893871617 https://www.reuters.com/world/europe/russia-says-first-phase-ukraine-operation-mostly-complete-focus-now-donbass-2022-03-25/ https://www.wptv.com/news/national/russia-ukraine-conflict/zelenskyy-warns-of-world-war-iii-if-russia-ukraine-peace-talks-fail https://www.realclearpolitics.com/video/2022/03/20/zelensky_ukraine_failed_putin_talks_would_mean_a_third_world_war.html https://www.politico.com/news/2022/03/20/zelenskyy-ukraine-zakaria-interview-00018716 https://fortune.com/2022/03/25/russia-g20-summit-putin-biden-indonesia-bali-china-ukraine/ https://www.nytimes.com/2022/02/23/world/europe/putin-speech-russia-ukraine.html https://fortune.com/2022/03/24/putin-russia-natural-gas-europe-imports-pay-in-rubles-sanctions/ https://www.wsj.com/articles/saudi-arabia-considers-accepting-yuan-instead-of-dollars-for-chinese-oil-sales-11647351541 https://www.nytimes.com/2022/02/23/world/europe/putin-speech-russia-ukraine.html https://www.cnbc.com/2022/03/24/biden-says-us-would-respond-to-russia-if-putin-uses-chemical-or-biological-weapons.html https://www.washingtonpost.com/news/post-politics/wp/2014/03/09/blinken-u-s-would-not-recognize-crimea-secession/ https://www.wsj.com/articles/biden-sticks-with-longstanding-u-s-policy-on-use-of-nuclear-weapons-amid-pressure-from-allies-11648176849 https://www.bloomberg.com/news/articles/2022-03-21/china-embraces-supply-side-economics-with-tax-cuts
Brief Summary
The episode covers market impacts from the Ukraine war, venture capital challenges, and predictions for future investments with insights from Brad Gerstner, David Sacks, and Chamath Palihapitiya.
Key points
- The Impact of War on Markets. The discussion highlights how the war in Ukraine is affecting global markets and investor sentiment.
- Market Predictions for 2022. Experts discuss the uncertainty and volatility expected in the coming months.
- The Rise of Neobanks. Neobanks are facing challenges as their business models become unsustainable with rising rates.
- The Shift in Venture Capital. Venture capitalists are reevaluating investments in low-quality companies amid changing market conditions.
- The Complicated Process of Unwinding. We're at the beginning of a very complicated process of unwinding the distortions we've lived through.
- Clapping is Not a Strategy. Investing requires more than just enthusiasm; it demands a disciplined approach.
Episode highlights
- The Impact of War on MarketsThe discussion highlights how the war in Ukraine is affecting global markets and investor sentiment.“We cannot ignore the war that is occurring in Ukraine.”1:36Mar 25, 2022
- Market Predictions for 2022Experts discuss the uncertainty and volatility expected in the coming months.“We're going to have to get through this next 6, 12, 18 months filled with volatility.”7:13Mar 25, 2022
- The Rise of NeobanksNeobanks are facing challenges as their business models become unsustainable with rising rates.“When their cost of capital is two or two and a half or three percent, the whole business implodes.”20:21Mar 25, 2022
- The Shift in Venture CapitalVenture capitalists are reevaluating investments in low-quality companies amid changing market conditions.“The late-stage private financing market is closed due to a buyer-seller standoff.”26:57Mar 25, 2022
- The Complicated Process of UnwindingWe're at the beginning of a very complicated process of unwinding the distortions we've lived through.“The distortion that we've lived through is infuriating.”38:11Mar 25, 2022
- Clapping is Not a StrategyInvesting requires more than just enthusiasm; it demands a disciplined approach.“Clapping is not a strategy.”51:28Mar 25, 2022
- No Bouncing BackThe market won't return to its previous highs; clarity is needed for recovery.“There is no bouncing back to where we were.”53:35Mar 25, 2022
- U.S. Strategy in UkraineThe U.S. aims to prolong the conflict to destabilize Russia, risking greater humanitarian crises.“The administration will continue to supply the Ukrainians with anti-aircraft stingers and anti-tank javelins.”56:51Mar 25, 2022
