Seed Investing Model:

  • The seed model of a "factory line" is broken according to Sam Lessin.
  • The previous era of seed funds operated as a factory system, where companies were packaged and passed along to the next stage predictably.
  • This model was based on the idea that technology and platforms could manufacture successful companies.
  • However, this model has proven to be flawed, with many companies failing once they went public.

Round Construction:

  • Sam Lessin believes party rounds have come to an end, while Jason Lemkin disagrees and thinks there will be more than ever.
  • Sam also believes the factory model of YC churning out companies is over, while Jason sees value in the YC model.
  • Multi-stage funds entering the seed market have changed the dynamics of round construction.

VC Value Add at Seed:

  • Jason believes all talent arms in venture firms have failed.
  • Sam believes that no VCs provide value and that the best founders don't need help.
  • There is disagreement between Jason and Sam regarding whether VC value add is valuable for founders.

Future of Seed Investing:

  • Jason believes every manager can write off their fund from 2021.
  • Winners in seed investing in the next 10 years will be those who bet on AI or invest in Meta or Microsoft according to Sam.
  • Companies without product-market fit but with long runways may face challenges in the future.

Additional Notes:

  • There is a discussion about betting on IPOs. Some believe there will be 26 good companies that can IPO in 26 weeks, while others are more skeptical about the timing and frequency of IPOs.
  • The importance of capital efficiency at low levels of scale is highlighted by Frank Rotman. He suggests that narrative-driven fundraising may only work at the seed stage, with results becoming crucial starting from Series A.
  • Sam Lessin expresses excitement about funding early-stage companies with unconventional ideas that may not receive funding from others. He believes these companies can be highly profitable and create option value in the long run.
  • Jason Lemkin wishes for more concentration in his investments, allowing him to have double-digit ownership in seed companies. He believes this would increase his chances of making money.
  • There is a discussion about the current state of venture capital fundraising and LP pullback. Some funds are facing challenges raising capital due to depressed track records and rationalization by LPs.
  • The potential impact of AI on public market investments is discussed, with some suggesting that betting on established tech giants like Facebook, Amazon, Google, and Microsoft may be a safer bet than investing in smaller companies with risks.
  • The future of venture capital is debated, with predictions ranging from a shift towards roll-ups and private equity-style investments to the continuation of large-scale IPOs once the IPO window opens up again.