E80: Recession deep dive: VC psychology, macro risks, Tiger Global, predictions and more
- May 12, 2022
- 1:41:14
- Full Episode
0:00 Bestie catchup and Friedberg intros! 4:40 Breaking down current macro risks, Great Recession comparisons 31:55 How a historically large amount of dry powder is impacting VC firms as the market shifts, problems with mega funds 41:31 Tiger Global's historic loss and where they might have gone wrong; Sacks' gives his playbook for raising capital in a downturn 58:35 How startup employees can protect themselves in a down market, questions to ask and metrics to know while evaluating startups to work at 1:13:21 Psychological impact of investing after taking huge losses 1:29:00 Predictions on how the market shakes out
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Intro Video Credit: https://twitter.com/TheZachEffect
Referenced in the show: https://twitter.com/cullenroche/status/1524441227931774976 https://www.axios.com/2022/04/08/consumer-debt-soars-credit-cards https://www.bls.gov/news.release/realer.nr0.htm https://www.federalreserve.gov/releases/g19/current/default.htm https://www.longtermtrends.net/home-price-median-annual-income-ratio https://www.bloomberg.com/news/articles/2022-05-12/musk-seeks-to-scrap-tesla-margin-loan-with-new-twitter-funding https://twitter.com/Jason/status/1523780820112007168 https://fred.stlouisfed.org/series/CIVPART https://www.dol.gov/ui/data.pdf https://twitter.com/TheBenSchmark/status/1522669777478684672 https://twitter.com/AndrewE_Dunn/status/1523653942252826624 https://twitter.com/mattturck/status/1524773379416408064 https://twitter.com/jonsakoda/status/1522625236130144256 https://cloudedjudgement.substack.com https://techcrunch.com/2022/05/10/tiger-global-hit-by-17b-hedge-fund-losses-has-nearly-depleted-its-latest-vc-fund/ https://twitter.com/ZoeSchiffer/status/1523017143939309568 https://twitter.com/BurryArchive/status/1524504399070081025 https://www.usatoday.com/story/money/2022/05/04/dow-rallies-fed-ups-rates/9649150002/ https://twitter.com/Airbnb/status/1524379284260892674
Brief Summary
The episode discusses economic challenges, consumer credit bubbles, and startup strategies amid market corrections.
Key points
- Market Collapse Discussion. A deep dive into the rapid decline of stocks and crypto, and its implications for consumers.
- Looming Credit Crisis. Experts discuss the potential for a credit crisis and its implications for consumers.
- Job Market Dynamics. The conversation shifts to the state of the job market and employment rates post-pandemic.
- Investment Challenges. A reflection on the difficulties of investing in a fluctuating market and the implications for venture capital.
- The Rise and Fall of Venture Capital. Venture funds have rapidly deployed capital, but now face significant corrections. 'The public comps were all wrong.'
- Market Corrections and Their Impact. The venture capital landscape is shifting as funds become more discriminating. 'Founders just are not accepting the reality of the situation.'
Episode highlights
- Market Collapse DiscussionA deep dive into the rapid decline of stocks and crypto, and its implications for consumers.“Stocks and crypto have plummeted!”4:36May 12, 2022
- Looming Credit CrisisExperts discuss the potential for a credit crisis and its implications for consumers.“I think we may have a looming credit crisis.”22:17May 12, 2022
- Job Market DynamicsThe conversation shifts to the state of the job market and employment rates post-pandemic.“You can't possibly have less unemployment.”25:41May 12, 2022
- Investment ChallengesA reflection on the difficulties of investing in a fluctuating market and the implications for venture capital.“Investing is very hard in an up market.”38:32May 12, 2022
- The Rise and Fall of Venture CapitalVenture funds have rapidly deployed capital, but now face significant corrections. 'The public comps were all wrong.'“The public comps were all wrong.”44:23May 12, 2022
- Market Corrections and Their ImpactThe venture capital landscape is shifting as funds become more discriminating. 'Founders just are not accepting the reality of the situation.'“Founders just are not accepting the reality of the situation.”53:31May 12, 2022
- Understanding Startup ValuationsEmployees must grasp the preference stack and company valuations before joining startups.“How much money have they raised?”1:03:20May 12, 2022
- The Importance of Employee Carve-OutsCreating corridors for employee participation in acquisitions is crucial for morale.“30% of any acquisition price for this company is going to go to the employees.”1:08:21May 12, 2022
