On this special segment of The Full Ratchet, the following Investors are featured:
- Mike Droesch
- Sandeep Patil
- Jill Chase
We asked guests to discuss the factor that could cause the most disruption to the industry going forward and how that will change the next decade of venture.
The host of The Full Ratchet is Nick Moran of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area.
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Transcribed with AI:
0:19
Welcome back to TFR on today’s special segment, we ask guests to discuss the factor that could cause the most disruption to the industry going forward, and how that will change the next decade of venture here’s the segment called disruptive forces.
0:38
On today’s special segment, we have Mike drosh of Bessemer Venture Partners, Mike, what factor could cause the most disruption to the VC industry, and how will that make the next 10 years look different than the last 10? Yeah,
0:50
well, I’m obviously biased as I you know, I’m pretty bullish on the VC industry going forward. I but I think the as I think about what are the things that could be truly, really disruptive. I think about, you know, people talk about the potential for AI, you know, if we see massive leaps forward in in AI, and particularly in agents to actually do a lot of work for us, could you have people founding the, you know, the next billion dollar startup with 10 people, with two people, three people, you know, like that, kind of like just dramatic step function change, and how many people are required to build a really big business? I don’t know how far away we are from that, or how realistic that is, but, but I do think if there are, if there’s potential for that, and we see just dramatically more efficiency there may just not. Mean you may not need as much capital, frankly. I mean, you know, if you’ve seen like this mid journey, for instance, more on the consumer side, that’s like a really impressive business at scale now. And I don’t know how many employees they have right now, but I know they haven’t, haven’t had to raise any money to get to, I believe hundreds of millions of dollars of ARR, like, that’s an impressive business. And I think we could see, I think we could see many more of those in the future, which just begs the question of, like, we’ve raised a lot of capitalism industry does that? You know, if that is no longer necessary, obviously, that’s pretty disruptive. But that said, I’m pretty bullish that we’ll continue to have the need for lots of humans being put to work in the venture back industry. Do you
2:22
think we’ll see the one person $100 million startup, or one person $1 billion startup?
2:27
I still, you know, I think it’s a really provocative headline, so I think it’s interesting to think about. I still think it’s, gosh, humans are still really important for lots of things, judgment, communication, I think, I think it’s nearly impossible for me to imagine like an enterprise software company, where enterprise buyers are going to be engaging with a one person company. So in the in the short term, my answer would be no. I’m skeptical maybe we’ll see some kind of more wild consumer breakouts that are like the 10 person consumer company that I think is totally possible, but I think it’s particularly in the enterprise with B to B world, I have a hard time imagining the one person, billion dollar company at least today.
3:12
On today’s special segment, we have Sandeep Patel of QED Sandeep, what factor could cause the most disruption to the VC industry, and how will that make the next 10 years of VC look different than the last 10 what factor
3:25
could I think there are okay? So I think the factor that could be most disruptive to venture capital is the way, the way capital flows are stuck right now. So right now, I think there’s a lot of concentration of capital at really early stage, which is seed, maybe a little bit of a, and then there’s a set of capital available, series D plus, but we observe a slight lag in capital, slowness. And capital are Series B, Series C, so and so forth. And that then is sort of feeding in pessimism and series A and seed investors, because they don’t see the valuation jumping going up round after round for the series D guys, they don’t see enough pipeline coming through, and that is a slowdown in innovation. So I think if this gap persists, that will be an issue. I think we need to sort of have a continuous curve, as we used to have, probably before the madness of 2021 2020, 2021, like where you had, like a sensible flow of capital all through the company stages, which then supported a pipeline of companies all the way across the stages. So that’s one thing I would highlight perfect
4:36
on today’s special segment we have Jill chase of capital. G so I know you’re an AI expert, maybe there’s an aspect within AI that you can focus in on for this question. But I’m curious what factor you think can cause the most disruption to the VC industry, and how that will make the next 10 years of VC look different than the last 10. I think
4:55
there will be. And this is, I think is in particular true for AI. I think. There will be a brand new set of business models around how AI products go to market. And I think it stems from this thing that we’ve talked about sort of throughout this this past hour, on really getting to a point where you have, like, a full agent, or an autonomous, sort of virtual agent, you can’t really price on seats anymore, because it’s kind of antithetical to, like, what you’re providing, because the whole point is that you’re trying to have the company you’re selling, to have fewer seats. And so I think, you know what, we’re already seeing this with Sierra, and I think we’ll see with more companies doing sort of more outcomes based pricing. And I think that will be really interesting. I think it will change the growth curves of companies. I think it will make it sort of, you’ll have to look at sort of quality of revenue in a different way. And underwriting will be very different. And I’m excited for I think it’s for the better. I’m excited for it, but I think it will change quite a bit about how folks think about underwriting in the VCU ecosystem.
5:58
That will conclude this installment of investor stories. If you’re enjoying the program and would like to see it continue, take a moment and leave a five star review in iTunes. Okay, that will wrap things up for today until next time over. Prepare, choose carefully and invest confidently. Thanks for joining me.
