The Unicorn Club 10 years later with Cowboy Ventures’ Aileen Lee | Equity Podcast

This episode is sponsored by Morgan Stanley atwork visit morganstanley.com Assessment to get your free transaction Readiness assessment [Music] Today hello and welcome back to equity a Podcast about the business of startups Where we unpack the numbers and the Nuance behind the headlines my name is Alex and this is our interview show Where we sit down with a guest think About their work and then unpack the Rest but before we do introduce Our Guest I have to say I have brought along My dear friend marann as aeto marann Hi How are you and why is it not Friday yet I'm doing great and super excited to be Here how are you I'm hanging in there It's a 21 degrees Fahrenheit here which Means that I have turned into a human Popsicle but the good news is is that we Have a podcast to keep us warm and fun People to talk to well I am super Excited to be joining you and talking to Aen I can't wait unicorn is just this Term that we've all been saying for Years and years and just to get to talk About how it came about how it's evolved What's ahead I'm excited and you just Let the cat out of the bag we do have Aen Lee from Cowboy Adventures today she Is a managing partner and before she did 10 years a cowboy she was at Kleiner Perkins for 12 or 13 years aen welcome

To the show oh thank you I'm super Excited to be here so first of all you Were up late finishing this massive post That just went up on Tech runch today I'm curious just because I'm a writer When did the process of putting it Together start and when did the process Of put it together end first of all I Have so much respect for you all due Because I write like a snail and so we Actually started working on it last Summer wow pulling the data together and Then you know you have to constantly Refresh the data because obviously Valuations change public market caps Change all kinds of stuff but just Giving us time to kind of marinate on What does the initial data poll look Like what's popping out and then Continue to go back at it and think About about what could be learned so Yeah I I'm glad this is a podcast Because you would see I have like very Dark circles under my ass right now yeah We were joking earlier that if you're Not tired your job must be amazing and We should all get one of those but the Reason why this is so exciting is we've Just passed the 10year anniversary of The time you wrote the original piece That when you kind of called startups That reached a billion dollars in value Unicorns and kind of brought that term Into I would say our shared lexicon

First of all how has it been 10 years That's insane I remember when that piece Came out Ah but there's also a lot of stuff that We want to talk about so Maran I want to Give you the Baton first as we pick Through some data points because there's A lot to get to yeah I mean first of all Um we've seen a massive growth of course In the number of unicorns since you First wrote that original piece alen one Thing that I'm curious about is when you First came up with that before we get Into the data did you think it was going To become so I guess popular or Mainstream or so used in the VC and Startup world no not at all basically I Had this relatively new fund with very Few Investments so I kind of had what You would like in the olden days you'd Call like an open dance card right and You know and I was talking to LPS and Other GPS about you know anecdotally I've heard that when you put together a Fund I think one of the original Founders of cler called the first fund Two peaches in a bucket of piss Basically the idea was like anecdotally You invest in 25 companies in a fund and It really is like two or three that Matter that wind up being these breakout Hits these outliers that are worth a and Other ones don't matter so I went around Talking to people about is that the case

Like I'd love to see the data and people Were like yeah it sounds about right I Don't track the data or I don't have the Data and you know our industry is so big We managed billions of dollars I was Like how can we not have the data I kind Of want to see it and so I just started Hand pulling it and putting it into a Spreadsheet about if I had started 10 Years earlier what are the best Companies I could have possibly invested In and how would I have found them who Were the founders where did they go to School how did they meet each other Where did they work before was this the Original idea did they pivot it how much Did they raise and so I just kind of Started collecting the data over months And so we called it the learning project I had interns helped me with it and I Mean the industry was so much smaller Back then and I knew I still know a lot Of the founders and there wasn't a lot Of data so I would actually call people Like I think I called Drew house and I Was like hey how did you guys meet was This the original idea how many other Ideas did you ever have a summer job did You ever start anything before like you Could actually it was a really small Data set relatively speaking and then I Shared the learning project post with a Bunch of friends and I had substituted In the word unicorn because basically

The post was doing about researching Companies that were less than 10 years Old that were VC backed and us-based and That's just a really awkward phrase to Write over and over again in a post and So we needed to shorten her and so I Thought about like home run Godzilla Monster hit you know like and unicorn Just made it so much more fun to read And also I think it captured that kind Of like that elusive magic when things Come together because there as you know There are so many incredible people in The tech industry who work so hard at Building a successful company and Sometimes it just doesn't come together Right it's a very special thing when you Actually are able to build that much Value and also as we now know keep it so At the time there were only 39 unicorns Right yeah I mean that just seems Inconceivable to me um and now there's 532 32 okay so how much faster was that Growth than you expected oh my gosh That's partially why actually in this Piece I tried to think more about what Might happen next because I think at the Time I didn't think oh how many more Will there be in the future and if I had Pushed myself I don't think I would have Thought oh 30% year-over-year growth so We'd have 532 in 10 years so it's pretty Astounding I want to make a small Point Yeah people who are listening may have

Heard unicorn counts north of a thousand Different sites have different kind of Counters and so forth the difference There is that A's team is tracking as She said earlier us-based companies Versus the entire world that's right Both are valid ways to go about things Just clarifying for folks who were like Wait a minute I thought it was 1300 just Talking us companies here that's right And also less than 10 years old it's a Totally different exercise to count Every company that was ever started that Became worth a billion dollars and so we Look at ones that are just 10 years old Or less and in that group that we're Discussing there has been a really Interesting shift in what they do CU in The first unicorn post there was a lot Of consumer companies represented and Now when we look at this new data set I Think you said 78% are actually Enterprise focused or B2B focused if if You will I'm shocked by that enormous Flip and I'm curious if we've now Reached a point where we're too balanced Towards Enterprise versus consumer or if Originally we were just lucky to see That many consumer wins to make the data Appear as it once did so Marian and I Were just talking before we started About you know being three cycle kind of Folks in the tech industry I joined Right before the doom boom and then live

Through the Great Recession and then we Just are living through a third cycle so We have seen the pendulum swings right There are booms where there's just Something in the air and Founders come Up with these incredible consumer ideas And there tend to be a couple years Where there's just tons of interesting Consumer things and then things kind of Quiet down so I am very excited that Maybe consumers is going to come back in The next couple years because it has Been relatively quiet versus in 2013 When like there was just so much Activity in consumer and then I think Enterprise was quite ripe one of the big Standouts in the original analysis was How Capital efficient the Enterprise Companies had been so basically if you And invested a dollar into an Enterprise Software company you would have gotten 26 back from the first set so it's like Wow investing in Enterprise software Seems like a really good way to make Money and that's a pretty attractive Thing because the margins are great in Enterprise software historically and Also the customer retention is a very Sticky product and so there's a lot of Attractiveness then plus cloud and I Could go on about all the attractive Qualities of enterprise software Companies but I think there's a bunch of Reasons I has that changed dramatically

Because the data you guys put out said That the capital efficiency for Enterprise companies fell from 26x to 7x Over the timeline that we're discussing Which is a simply insane amount of Compression in terms of value created And I can't figure out if this means That you know unicorns today in the Enterprise world are just forced to Spend more on customer acquisition if Net retention has become simply less Possible to achieve or did something Else change in how we build these Companies because if it was 26x to 20 I Would say Okay prices have changed Whatever but 26 to7 what broke yeah I Know it's fascinating I think it did Because it was a rising time there was a Lot more competition so people had to Move faster than ever right they spent More on marketing than ever they hired More Engineers than ever they you know Go to market all those things but money Was basically almost free and then funds Which we write about in the piece as Well when interest rates were so low Investors LPS were looking for places to Be able to invest money where they could Generate a better return and they looked At Venture and historical Venture Returns and said hey that looks like a Really good place to park a bunch of Money and so they called Venture funds And said I'd like to give you more money

And Venture firm said yes I would like To take your money and so venture firms Broke records and how much they raised Both in terms of pace funds used to Raise every three years and then because People were saying I'd like to give you More money and then you look at public Markets and all those companies were Flying so high investors are like I'd Like to get an earlier rather than Having to buy the public price let me Buy the supposedly cheaper private price So I'm going to put a bunch of money Into Venture Capital so I can get an Earlier and so funds swelled and then They deployed it we funded I mean that's Part of the reason why we have so many Exciting unicorns is because there was So much available capital And companies got big fast but one of The companies that we actually missed in The original analysis was Viva which I Admire so much because they were crazy Capital efficient I think Viva raised $4 Million and basically got profitable on That and it's a multi-billion dollar Company which is for the investors and For the founders and for the employees Who work at those companies you make so Much more when you have less dilution And you raise less so I'm not saying That every company has to be built that Way or should be I mean look at how much Amazon raised over the years and how

Much money they lost in their early Years and that was a very smart strategy So how much you raise is a strategy and I think people didn't talk about it as Much as they possibly maybe should have Or could have in the boom years you also Mentioned another phrase I had not heard Before in your piece called zeric Corns and do you like that I I like that And I I wanted to hear you explain a Little bit more about what a zeric corn Is so a zporn is zp so basically went Through a period in 2021 heading into 2022 when interest rates were almost Zero and that just changed a lot of Things so it did make the cost of Capital very low and so it kind of Changed and then a lot of you know in Software and how a lot of financial Investors think about making Investments Is actually through a discounted cash Flow and the interest rate is basically The rate at which you discount the value Of future cash flows so when the Interest rate is high it really changes The equation versus when the interest Rate is almost zero so so how you think About Investments is just a completely Different mindset in zerp and an Astoundingly high percentage of the Companies that are in our new unicorn Analysis basically raised their rounds When interest rates were almost zero and Therefore Tech public market caps were

Flying super high companies were trading At 30 times 50 times in some cases 80 Times revenue and so then people looked At that and said okay maybe that's what I can get in the private market and so Companies you know with a million Million in Revenue were worth a billion Dollars in some cases yeah it's just Crazy yeah so of this set of 532 there Are a lot of zeric corns companies whose Last round valuation is was basically Set in that period and it's kind of Shockingly 93% what we call paper corns Which is privately valued unicorns that Have not yet been bought or gone public That's a lot yes it's a lot yeah it's an Enormous number I mean it's almost a Little bit scary to think about and part Of the reason why we are seeing so many Paper corns is because exit volume as a Percentage of total unicorns in the data Set has gone down dramatically yeah I Forget the actual data points you guys Said but it seemed to have flipped Entirely I think from 66 to 7% yeah 66 To 7 percentage wise that's a that's a Huge drop so on the one hand I think There's a lot of sober lessons in the Data but there's also a lot of goodness So when we crunch the number and look Under the hood of this set and how many Are paper corns how many are Zer corns How Capital inefficient a lot of Companies have been how companies are

Kind of running out of Runway and also Looking at how many Fallen unicorns There are how many shutdowns there have Been just in the past year we think this Herd will slim down quite a bit so two Three years from now the companies in This batch they a lot of them will fall Out unicorn maybe 400 yeah zombie corns Sorry people may be groaning out there You know this set May slim down to 400 Or 350 companies but still 350 or 400 is A lot of unicorns it's still 10x and These are going to be thriving healthy Companies that will go public or will be Bought that will grow into or beyond Their valuations that speaks a lot to How much the tech industry has grown and Will continue to grow and have impact on Society I want to double click on Slimming down because one data point you Guys had was that 40% of unicorns are Currently trading under their $1 billion Valuation on secondary markets so one Way to read slimming down would be that They'll just become worth less than a Billion another way to slim down is to Die or to combine with another company And kind of live on as part of a a Hybrid entity so by slim down when we Talk about that herd reduction what's The mechanism that you think is going to Be the leading way we see that number Fall well one I don't know what is g to Be leading I'd love to hear what you all

Think I mean one way is people hit the Wall yeah right I I saw a friend who's a Lawyer at Fenwick and West last week and I said you know what are you all seeing You're sitting around a lot of board Tables and the lawyer said yeah I've got Four companies about to hit the wall oh Man yeah and then folks are going to try And do Recaps there is a lot of what we Call dry powder sitting on the sidelines Venture funds raised a lot of money and They haven't invested it because in the Piece we note a lot of people kind of Froze over in 20123 and didn't make a Lot of Investments but you know Investors are weighing should I invest In something that's been around the Block and has had some challenges versus Something fresh and some prior investors In those companies may not want to see The markdown or the Down Round the Founders and the management team may not Want to take the hit and so I think Founders have to be really sober about How hard it is to get a recap or a Down Round done and give yourself lots of Time just be really open-minded to Figuring out what your options are and Don't be too attached to the Past Speaking of Founders unfortunately we Didn't see a lot of change in the Composition of founding teams compared To 10 years ago we're not seeing I guess How many were actually founded by women

For example do you do you remember more Than before which was good and there are Also some there are more female CEOs Than before which is good but it's still Quite pathetic I think there's more CEOs Named like John Andrew and Mike than There are female CEOs so that's not Good so if you are a minority person of Color woman other kind of Underrepresented minority out there like You should be a Founder like we're Rooting for you and I think that there's More openness and more support than ever There's so much research to show that Diverse teams do deliver better results Especially in trying times so I think When you're putting together a founding Team it's like being cognizant of Different backgrounds and putting Together a team that's going to help you Come up with the best decisions and Recruit the best team yeah I was not Surprised to see the data on gender Diversity in particular but it was just A little bit dispiriting because you Know I'm only a two cycle Venture Reporter I don't have the third cycle so I only have such historical context Under my under my wings but we've been Talking about this for so long now I Know and yes there are some gains like For example if you look at mixed gender Teams the amount of capital that they're Raising raing is going up but all female

Teams just don't raise that much capital And we keep talking about it charting it I'm tired of writing that post you know Like I just I know I would love to write A post I was like holy crap look at how Fast this data is changing women raise So much money we've really turned the Corner but instead it's this Conversation again so aen looking ahead Yes is there any reason to think that as We head into this next cycle coming off At the last one that will make material Progress on the diversity front would we Consider unicorns and also I would say Smaller companies I would say the Optimism I have is in looking at the Geographical spread in the sector spread You know there are now unicorns for Farmers for nurses for upscaling hourly Workers in factories like there's just There have been businesses that you know The original set was such a tight group Of just very generalized software that Was kind of one-size fit all for all Kinds of customers and the markets are Global now and industries generally have Not had good software and so people with Specific information specific insights About how accountants workflow looks or How business Works in a hospital or how Finance works for you know they're Basically coming up with new software And actually AI is going to change the Game even more to actually build really

Delightful Innovative incredibly Efficient software for specific markets And those markets the software is going To be so much better than what everyone Has the adoption is going to build Really big companies and so I think What's really telling about this set is How much the her spread and when you Also look at founder backgrounds the Founders I mean there's only a hundred Founders in our original set and now There's 1,300 wow 1300 and they they're No longer all technical Founders they're Actually not nearly as Tech so there's This myth that you have to find some guy Who went to Stanford and studied Computer science to be a Founder like The data shows that's actually not who The founders of this set of unicorns are And I can think that will continue to Change so that like more diverse Backgrounds I think is going to build All kinds of different companies I think Also just the fact that we saw venture Capital in the last cycle really spread Out across the world I mean I was Covering a lot of rounds in Africa and Other Latin American countries that I Hadn't heard from before you always hear About Brazil Argentina Mexico but it was El Salvador you know like it was cool to See the spread which will diversify the Pool I'm just a little worried that as Venture contracts after its last cycle

That we're going to see some of those Less deep areas of venture activity Evaporate and I'm just hoping that People don't lose the momentum in the Meantime I want to grab the conversation And pull it back to AI but before we do That a very short break and then we're Back with aen Lee is your company planning to go Public or conduct a shareholder Liquidity program within the next 18 to 24 months did you know that proactively Planning for your next private company Liquidity event or IPO can help you Maintain greater control over timelines And outcomes Morgan Stanley at work Believes that when you have the right Technology and systems in place working In harmony leading up to a transaction You can prepare and execute with more Accuracy and ease visit Morganstanley.com for/ assessment to Connect with their issuer strategy and Excellence team for a free assessment to Find out if your company is transaction Ready again that's morganstanley.com Assessment to get your free assessment Today we talked about how Zer and SAS And the mov of the cloud powered the Enterprise boom in the last cycle tons Of fun I love myself a SAS S1 I we get a Bunch of those this year but when we Look ahead I'm thinking that AI back to What you said about that going to help

Build more particular software for Different categories I wonder if the AI Technology of today is going to be the Driver of the return to Consumer because It does seem that there's a lot of stuff Out there that regular folks are very Excited about in the AI world and want To use so maybe AI could be the Catalyst For the yeah pendulum sping back to Consumer and again as kind of like a Technology history nerd when you think About it the iPhone is like less than 20 Years old like it's kind of amazing how Much our world has changed in 20 years Yes I think the iPhone created this Incredible consumerization of all kinds Of software because people got used to Something that's basically so fast so Powerful can basically figure out Anything like there's no latency and Then they went to work and they were Like God why do I have to use this Shitty software right and so it just Like it created this incredible demand And I think as everyday consumers for All kinds of tasks are using chat GPT And other AI products they're going to Go to work but also whether it's booking Travel or learning stuff for school like They're going to say like I use this Other super wizzy thing with AI I want Everything that I use to have ai in it So I think the landscape of companies And what they do and how they work 10

Years from now is going to be as Dramatic as the past 10 years have been Well your first set of unicorns only one Became a super unicorn right and that Was Facebook Y and looking ahead your Prediction for the first Super unicorn Of the decade is open AI yeah I mean I Think it's it's probably not such a Wild well no not at all I mean I think We all uh would agree with you there but Do you think that this is really going To be a lasting Trend I mean we have These hype Cycles we see like these Bursts of investment in certain Industries and then things sort of taper Off do you think that's going to happen With AI or is this just is this going to See some longevity I think it's the Evolution of software you know we had Mainframe software and then we had Mobile and cloud and the next evolution Is going to be basically everything's Going to have ai on it I mean when you Just think about everyday workers have To log into a terminal let's say if they Do the same job for five years every Morning they log in they have to click And then click and then click and then Click and go to this one screen that They go to every single morning that's Not going to happen in the future AI is Going to take you exactly where you need To go it's going to be able to predict Both your individual behaviors and maybe

Also share share with you the wisdom of The crowds of what other people at work Are doing because it's like humans still Perform so many roote tasks and the Software is not actually learning in the Background what your behaviors are and It's completely capable of doing that so This yields a very interesting question Will AI in the future and I know we're Off the Unicorn track here a little bit But we all get excited about this stuff And it's fun to talk about the future so Will AI end up staying at the Application Level or will it end up more At the operating system level learning About my activities across all the Applications that I use and therefore Helping me not only get past rot tasks On a per application basis but really Accelerate my entire experience as a Compute user oh that's really now now We're in the creepy element of the of The Podcast I mean I'm excited I think People are going to try all kinds of Things and so some of it's going to get Blocked by privac like well-founded Privacy concerns and other things but I Definitely I think there's going to be a Ton of innovation and I'm all here for It so then if that's the question then Here's what I want to know clearly open AI is going to make it to100 billion do In value it'll hit that super unicorn

Level it's already at 80 or 90 or Whatever is there room in the market for Another Foundation model company to hit A similar threshold an anthropic or a Mrr it sounds like anthropic is very Close so I think there will be multiple Okay I mean Maran to your point meta was The only company that got there within 10 years but then basically after our Analysis three more companies in that Data set became super unimportant so Basically four out of 39 which was more Than 10% so if you think about 539 will 10% of them become super unicorns that Would be kind of insane that would be Crazy that would be a lot I did you know I was looking at the Fortune 500 list And it's less than 10% tech companies so When you think about if we are living Through a new Industrial Revolution Powered by new software all the leading Companies in every sector oil and gas Education Health Care will become they Will basically potentially be disrupted By Tech native companies in the next Decade or two yeah is the Fortune 500 Ranking based on market cap or Revenue I Don't think it's Revenue I forget Because I was gonna vet that on a couple Different things I will look into that And I will put it in the show notes Everybody don't worry I do think it's a Very good point though I wonder what the Natural resting point for an economy

That's developing should be in terms of The ratio of its companies that are the Most valuable or biggest should be from Tech I think at least a quarter would be What you would hope for it seem like Don't you think 10% seems too low it Seems much lower than I would have Expected and and this is in the States Where there's like more tech companies And I mean all the trillion dollar tech Companies are here you know well another Interesting when I was looking at this Fortune 500 thing it seemed like the two Biggest places where they are based are California and New York and so I thought It was another interesting thing about How much New York grew as a unicorn Hub In the past 10 years that is interesting It did quite well it kind of blew me Away 19% of unicorns are based in New York in the world's worst city too I Mean hot damn as a person from New Jersey I would not agree with you but You know there are a lot of people in San Francisco who are fighting to try And regain a lot of San Francisco's lost Glory and I hope this is fodder for them To realize like this is at risk if we Don't clean up San Francisco we're going To lose more unicorns and we have a Window because of AI because the most Valuable AI companies are based in San Francisco if they can keep them in San Francisco and if people go back to work

You have this cross-pollination of People meeting each other so I think That's a shot for San Francisco but we Got to get it together well I mean okay I have to say what is wrong with more Unicorns not being based in San Francisco though right nothing I mean I Think it's great I was so like there's a B it was all San Francisco last time and Then the next biggest city only had Three and then there was like one in Another city and now there are a bunch Of cities that have more than 10 so I Think that's super exciting and kind of Through the earlier conversation about Kind of the democratization of tech Think it's very exciting I just love the Idea of unicorns being spread out all Over the country and in all sorts of Different parts of the US different States but you know I hear you like San Francisco was kind of in Silicon Valley Really yes that was the place to be if You wanted to grow your startup and Raise money it was always Silicon Valley And then I remember the startup Migration to San Francisco started Taking place around that time right Early like 2010 11 is is when they Started moving more up to San Francisco And then I think Co changed things a lot Too right where anybody could be Anywhere so I just find it really Interesting I I don't get me wrong I

Love San Francisco and I know it always Will be like probably the base for most Startups and unicorns but I also love The idea of more of them being based in Other places but I guess we can if we Could shift really wa no no no no no no No no no I have to jump in on that so Okay absolutely we are not leaving that There I moved to San Francisco in 2012 I Think it was so right when the whole Tech world was shifting up the peninsula To San Francisco and I lived there until I was pulled away by my lovely spouse And now live on on the East Coast but I View myself as a temporary export to the East coast and a West Coast child at Heart even though I'm from Oregon Originally San Francisco is my spiritual And and heart home if you will and so I'm happy to share and let other places Have a unicorn or two as long as the Center of gravity remains exactly where It should which is somewhere on vanest Near my old dive bar and it likely will Alex it likely will don't worry but you Know it's okay to have a little spread The wealth spread the wealth I mean Austin's doing fine we all know that we Can have both we can have both yes we Can have both we can have both Absolutely but the cross-pollination That aliens arguing about does require a Certain density to have critical mass And so I guess maybe the right question

Is SF won't lose that New York has it Will there be another place in the States thinking this in a US context Where we see a similar amount of frion Apart from the Boston area I'm not sure Frankly yeah I can't think of anywhere Offand I mean there's a lot of cool Tech Hubs like Atlanta and Pittsburgh that Are unexpected and people don't always Talk about but I can't see any Necessarily you know reaching that level I'll add though like a couple of our Most successful portfolio companies are Not based in either one Guild based in Denver dat based in San Diego oh and Those are growing hubs yeah with amazing Talent exactly yeah but um so I'm Excited also I just want to talk a Little bit about VC firms right okay Right now we've got over 2500 today Compared to about 850 in 20 3 that's not A surprise not at all but it feels like We're going to start seeing this number Go down we're we're seeing closures We're seeing shrinkage in the industry What are your thoughts on that yeah I Don't think it's going to shrink that Much you know the industry has gotten Really big and much more specialized and Now there's more preed firms you when we Started in 2013 being a seed fund there Were very few and now there's more seed Funds so I'm fortunate to have been Apprenticed in Venture where I kind of

Grew up at Kleiner and I learned a lot From working with really smart Experienced Partners about how to due Diligence how to make investment Decisions how to be a great board member How to deliver what we call like a post Investment service to Founders and teams So a lot of people joined the industry Pretty quickly and didn't have the Chance to get that training I'm excited For Venture investors to unfortunately Have lived through this cycle and to Figure out more about what the job is About also we've added a lot of Diversity to the industry which I think Is also really great so I'm hoping that Those people stay and are very Successful and that we get back to doing A great job for Founders All right so I Want to close off with actually a cowboy Question if I can yeah so I was looking Back through the history of your funds 40 million for the first one 55 million For the second just over 90 for the Third and then comes fund for and also Your first opportunity fund for a Combined 260 now that is not a pile of Money in Venture Capital terms there are Larger funds but certainly shows Progression and I would say a surprising Amount of Capital Growth during this Period in which many other firms are Contracting so why are you raising more Money now and what does that tell us

About what you think about what's going To happen in the next couple years I Mean relative to the universe of venture Firms we are pretty small potatoes and You've probably heard the phrase like Your fund size is your strategy y so I Would say we're actually quite Disciplined when it comes to our seed Fund is 140 and we'll probably keep it That which is relatively small for Venture funds and that's because we Don't you know we're a curated fund We're not a volume shop and we're not an AUM shop is people call like aggregating Assets under management we don't make a Ton of Investments every year but we Kind of put all of our energy behind the Companies that we do commit to and we're Staying seed focused instead of kind of Changing our mandate and doing Multi-stages so the seed rounds got Bigger and partially it was because Venture firms got bigger the people who Do A's no longer want to write a four or Six million a check right they'd rather Write a 15 or $25 million a check and Then they also a lot of them will hang Back and wait for the be Y and so a lot Of seed stage companies did wind up and I think that's probably going to stick I Think seeds will come down a little bit But they need to raise a little bit more So that they can actually get to a place Where an a person is going to say this

Has got the right traction and it's Deest enough for me to want to do it Versus waiting for the B and so we sized Up a little bit partially because as our Nose has gotten a little bit more Confident we still co-invest a ton and We love to co-invest with people we're Not sharp elbowed and say like we want The whole round we'd much rather partner With people that's kind of our our Jam But we have gone up a little bit in Ownership but also just to adjust to the New environment and seeds getting bigger Seeds getting bigger and also the way This was explained to me recently was That you know seed valuations can only Fall so far until the implied delution From a reasonable size seed round Becomes so oppressive that it's not fair And so there's almost like a floor on Seed valuations given median investment Amounts so I'm sympathetic to that it's Funny you know when I started at C A's used to be $4 million oh yeah and it Was very common for Founders to sell a Third of their company in their first Round wow y things have changed a lot That's just nuts yeah is that why you Used to hear about Venture capitalists You know like with their Fleet of Private jets and now when I see venture Capitalist on Twitter they're in like an Uber like X is that is that much changed Really that's marketing no saw the

Number of how much more fee income was Generated during the boom times all Right we got a call it there thank you Again for coming on the show an absolute Treat folks if you haven't seen it her Massive post from her firm is on Tech.com aen for folks who want more From you where can they find you on the Great wild internet we are at Cowboy.vs on LinkedIn but thank you for Having me it is such a pleasure to chat With you I admire and appreciate you so Much we are so happy to have you thank You yeah and for everyone else Equity Will be back Friday morning as always This is a special episode we're bringing To you right when the data Dr dropped so Don't worry nothing's changing our Roundup will occur as always in the Meantime if you want more from us we are Equity pot on X and threads and we have Two sister shows chain reaction on all Things crypto and then found talking to Founders about how they built what they Did all right we'll see you tomorrow Morning bye Bye Equity is hosted by myself Editorinchief of Tech rench Plus Alex Wilhelm and Tech runch senior reporter Mary and aeto we are produced by Teresa Loans solo with editing by Kell Bryce Durban is our illustrator and a big Thank you to the audience development Team and Henry pette who manages Tech

Wrench audio products thank you so much For listening and we'll talk to you next Time