20VC: Inside Accel's $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN-$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements

Summary

The Twenty Minute VC (20VC) – March 9, 2026

Episode: “Inside Accel’s $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN–$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements”
Host: Harry Stebbings
Guest: Miles Clements, Accel Partner

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Episode Overview

This candid, in-person episode features Harry Stebbings in conversation with Miles Clements, leader of Accel’s growth investing practice. The episode delivers an unusually forthright look at Accel’s strategy, mistakes, and wins, focusing on current topics like disruptive AI trends, the debate about "dead" verticals and the realities of value creation at the growth stage. Key discussion threads include assessing value in fast-moving AI markets, what it means to miss a generational company like Rippling or ElevenLabs, the “Cursor is dead” meme, IPO market realities, and portfolio construction for mega funds in a dramatically changing environment.

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Major Themes

• Evaluating Value in Rapidly Changing AI Markets
• The Truth about Cursor: "Cursor is dead is total BS"
• Venture Misses: Lessons from Rippling & ElevenLabs
• Growth Fund Strategy and Mega Outcomes
• IPOs, Liquidity, and the Death of the $2–10BN Public Exit
• Portfolio Construction Nuance
• The Role of the Investor/Board Member
• Regrets, Wins, and the Human Side of Venture

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Key Discussion Points & Insights

1. Valuing AI Companies in a Transient Market

"Investing is an art and a science. The science is understanding how to properly value a company and the art is understanding when to break the rules."
— Miles Clements, (00:15)

• Framework for AI Company Evaluation:
  • Focus on time to value and durability of value.
    • Example: Legal/Accounting AI: long time-to-value, but durable if sticky with professionals.
    • "Vibe coding" tools: rapid time-to-value but poor durability; quick initial usage but little staying power.
  • Coding as the Key AI Vertical:
    • Coding tools (Cursor, Claude Code, etc.) shine on both axes—quick to benefit, durable, and with compound usage effects.

“[With Cursor] you can start using it in an afternoon and by that evening you’re ten times more productive. The time to value is very short, and then the durability of that value compounds.”
— Miles Clements, (05:55)

• Market Expansion:
  • AI tools are expanding user bases; "people who would not have been software developers a year ago today can be software developers with these tools." (07:22)

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2. Cursor Is Dead? Miles’ Take on the Trend

• Debunking the ‘Cursor is Dead’ Meme:
  • Industry chatter (e.g., Chamath, Jerry Murdoch) is overblown.
  • Cursor is not dying; metrics show intense engagement—90% of users are daily active Agent users, agent product grew 15x in a year, new Cloud Agent feature responsible for 35% of merged PRs within three months (08:15).
• Cursor’s Multimodal Advantage:
  • 50% of developers switch AI models daily; Cursor empowers multimodal use, providing "an index of AI innovation."
• On Building Proprietary Models:
  • Cursor aims for specialized, not generalist, coding models—a distinct edge for enterprise/pro users.

“Cursor is going to build specialized coding models that are going to serve specialized coding tasks, especially for a lot of enterprise users. Their models are there for professional coders to do professional work.”
— Miles Clements, (10:23)

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3. Underwriting Growth Bets and Platform Aspirations

• How Accel Underwrote the Cursor Deal:
  • First round price: $9.5M (“We were underwriting to the idea that this could be the engineering platform company, which never existed before.”)
  • Was not about near-term financials: “The financials of this company to me are purely a reflection of the product market fit and it’s unlike anything I’ve ever seen.” (12:58)
• On Mega Outcomes & Fund Size Pressure:
  • To return mega-funds, you need $50B+ companies, but the size of possible outcomes has drastically expanded in the last decade.

"A decade ago there were zero companies worth a trillion dollars. Five years later there were six…today there’s a dozen."
— Miles Clements, (16:43)

• Nuance in Portfolio Construction:
  • Balance “breakout leader” bets with differentiated, less obvious winners (e.g. bootstrapped companies in unexpected geographies).

“The best funds in the world, the best investors in the world, embrace the nuance. The right answer is always somewhere in the middle.”
— Miles Clements, (15:35)

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4. Investment Discipline and “Breaking the Rules”

• When to Break the Rules:
  • The art is in judgment on when to let go of strict ownership thresholds or pricing discipline to access unique founders and markets.
  • Reflects on missing Rippling: "We stuck to our knitting on the investment framework. The ownership thresholds, the opportunity to get involved was going to be at a high valuation...would have required us to break a lot of rules." (23:00)

“Generally speaking, sticking to your rules is a good place to be...Breaking the rules is something you should do very, very rarely.”
— Miles Clements, (23:59)

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5. Lessons from Missing Generational Companies

• Missing Rippling:
  • Points to underappreciating the “marginal ease of ARR accumulation”—seeing only the current product/growth and missing Parker Conrad’s margin insights.
  • “Nobody in the world does that better than Parker Conrad...he has this innate sense for pockets of margin that other people wouldn’t go build companies around.” (21:56)
• Missing ElevenLabs:
  • “We haven’t spent enough time with the founder, which is our loss. I think we really regret that one.” (55:31)
• Pain of Missing:
  • Losing—being in the running and failing—stings more than simply not seeing the deal. (56:01)

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6. AI, Market Extremes, & The Death of the $2B–$10B IPO

• Is the $2–$10BN IPO Dead?
  • Many strong companies going/staying private longer; public market thresholds have shifted higher ("line of sight" to $5B+ is now crucial).
  • Secondary/tender opportunities make liquidity less dependent on IPOs.
• Private vs. Public Markets:
  • "There are things that public companies can do that private companies can’t, and vice versa. But for the 10–20 best companies, they can access liquidity and capital without going public." (43:13)
  • The “casinoization” and irrationality of public markets: “The public markets are no longer rational. It’s not good or bad, it’s just a different asset class and stick to what you’re good at.” (48:03)

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7. The Nature of Risk, Misses, and Investing "Where You’re Good"

• Swinging for Home Runs vs. Hitting Singles and Doubles:
  • “Focus on hitting singles and doubles and let the home runs take care of themselves.” (32:55)
• Don’t Just Momentum Chase:
  • "There are companies where it is justified to chase momentum [e.g., Anthropic]...but ascribing those characteristics to everything at Series A is dangerous." (34:16–35:18)
• On Regret:
  • Still time for generational bets: "I believed that all of the generational investments in AI had been made...That was really stupid...there is still time to be a part of some of them." (40:20–41:02)

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8. Investor Role and Board Behavior

"There’s basically these bumper decisions that come up a couple of times a year...having a good investor or just a good partner to the business can be really useful."
— Miles Clements, (49:39)

• Role of Investors:
  • Not needed for every decision—only key, inflection-point calls.
  • Best board members are not most vocal—wisdom and professionalism matter.

“There’s generally an inverse correlation between how vocal somebody is and how helpful they actually are.” (50:51)

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9. Human Story: Rewards, Regrets, & What Excites Miles

• Best Win:
  • Linear: “It had been the worst couple of months that I’d experienced in a long time...when Kari called and said he wanted to work together, it was pretty euphoric.” (56:48)
• What Excites Miles Most:
  • Watching younger partners at Accel flourish: “I’m not smart enough to predict where the world is going to be a decade from now, but I’m proud to know them.” (59:09)

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Notable Quotes & Memorable Moments

• On Fads & Substance:
  “Growth can obscure and blind you to a lot of underlying ills in the business.” (00:09, 25:42)
• On Market Churn:
  “Cursor is going to build specialized coding models that are going to serve specialized coding tasks...Their models are there for professional coders to do professional work.” (10:23)
• On Breaking Rules:
  “The art is understanding when to break the rules.” (00:15, 23:43)
• On Missing the Generational AI Bets:
  “We beat ourselves up over it...but we’ve course corrected.” (27:32)
• On Portfolio Construction:
  “The best funds in the world, the best investors in the world, embrace the nuance.” (15:35)
• On Founder-Run Companies:
  “There is unmistakably something special about a founder-led company.” (39:47)
• On Personal Meaning in Deals:
  Linear: “That one on a personal level was maybe the best week...It had been the worst couple of months that I’d experienced in a long time.” (56:43)

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Timestamps for Key Segments

| Time | Segment/Discussion Topic | |-------------|---------------------------------------------------------------| | 04:42 | How to ascertain value in AI & Miles’ frameworks | | 06:30 | “Cursor is dead” meme debunked | | 08:00 | The move to Agent-driven AI usage | | 10:08 | On Cursor building proprietary models | | 12:56 | Why financials matter but don’t drive Accel’s investment case | | 15:35 | Portfolio construction nuance & mega-fund pressure | | 17:08 | The expansion of outcome sizes in tech | | 21:13 | Missing Rippling—what was overlooked? | | 23:43 | When to break the rules in investing | | 32:55 | Focus on “singles and doubles” vs. only home runs | | 38:09 | The humbling effect of the new market reality | | 43:13 | IPOs, secondaries, and private company liquidity | | 48:03 | Rationality of public vs. private markets | | 50:45 | How to spot bad board behavior as a founder | | 55:31 | Missing ElevenLabs regret | | 56:43 | Linear win—personal impact | | 59:01 | What excites Miles about the future at Accel |

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Additional Memorable Moments

• On Losing vs. Not Seeing:
  "Losing stings more." (56:01)
• On Who He’d Add to the Team:
  "I’d probably try my very hardest to talk Mike Cannon-Brooks into retiring from operating, into being an investor. He would never do it." (53:30)
• On Boardroom Wisdom:
  “The coin box that rattles loudest has the least in it.” (51:06)

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Conclusion

This episode is packed with honest, practical, and philosophical lessons from building a mega-fund practice at Accel—tempered by open reflections on both missed wins and euphoric successes ("Cursor is dead is total BS"), while mapping the terrain of IPOs, portfolio nuance, and inevitable market humbling. Miles’s authenticity and the freewheeling in-person banter make this a must-listen for anyone at the growth/late-stage intersection of venture and operating in this defining era of AI and tech investing.

Transcript

[Miles Clements]

Sometimes getting overly fixated on the financial metrics in this environment can leave you just like with an unsatisfying taste in your mouth.

[Mike Krieger]

Growth can obscure and blind you to

[Miles Clements]

a lot of underlying ills in the business.

[Mike Krieger]

I think you can actually be successful in this market.

[Miles Clements]

Investing in Consensus Investing is an art and a science. The science is understanding how to properly value a company and the art is understanding when to break the rules.

[Mike Krieger]

Focus on hitting singles and doubles and

[Miles Clements]

let the home runs take care of themselves.

[Harry Stebbings]

They this is 20 VC with me, Harry Stebbings. Now today I'm thrilled to welcome a dear friend to the show, Miles Clements. Miles helps lead Excel's growth investing practice where he's backed some of the best

[Jason Lemkin]

in the business, including Atlassian Linear Cursor

[Harry Stebbings]

and many more incredible companies.

[Jason Lemkin]

Now Miles is an old friend and

[Harry Stebbings]

so this was a very, how do

[Jason Lemkin]

I put it, no holds barred discussion. I think he put up with a

[Harry Stebbings]

lot of very pressing and prying questions

[Jason Lemkin]

and I don't think you've ever heard an Excel partner be quite as open and honest as this, which was just fantastic. Mars really was very special to have on.

[Harry Stebbings]

But before we dive into the Show Today, over 80% of Fortune 100 companies are running their businesses with Airtable. Airtable combines AI with the scale of an award winning, infinitely flexible no code system. A platform where you can see all of your data in one place and use it to make really big picture decisions. Think of it like mission control for your company. Airtable goes beyond organization and automating repetitive tasks. It lets you use your data to inform strategy, monitor progress and take action. Every cell is capable of performing hundreds of AI powered tasks like web research or localization and using those results to inform and update hundreds or thousands of other cells and workflows in real time. Unlock the true scale of your [e-mail] 20VC. Airtable, the infrastructure of innovation and just like Airtable, organizes your workflow data, organizes your conversation insights. This episode is brought to you by Metaview, who says hiring has to be fair. Every founder, VC and exec I speak with knows this. Your ability to hire is the biggest constraint on your company's growth. But recruiting is slow, it's subjective and only getting more competitive. And that's why teams like Elevenlabs, Brex, replit, deal and 5,000 other organizations use Metaview, the AI company, giving high performance teams a real unfair advantage in hiring. Metaview's built a suite of AI agents that behave like recruiting co workers. They proactively Find candidates. They take interview notes automatically and they help you surface the best candidates in process for the first time, AI handles the recruiting toil and gives you a single source of truth. That means hours saved per hire and a team focused on what matters most. Winning the right candidates as fast as possible. Don't let your competitors out. Hire you. Metaview customers close roles 30% faster. Try Metaview today and get a free

[Jason Lemkin]

month of sourcing at Metaview.

[Harry Stebbings]

Metaview AI20VC after Metaview captures what was said, Turing helps you build with the people who can deliver after it. Frontier Labs keep facing the same limitation. Models perform well on benchmarks, but they fall short once they enter real coding tasks, real tools and real workflows. That disconnect between synthetic evaluation and actual system behavior is now a core block off for agentic models. That's why Nvidia, Anthropic, Salesforce, Gemini and other leading lab partners partner with Turing. Turing is the research accelerator focused on post training reliability. They build realistic RL environments, next generation data quality systems built from real world operational traces and coding datasets that stress models under conditions where failures matter, state changes, workflow branching, brittle tool calls and the coding errors that break RL agents but never appear in benchmark reports. In reality, a model may demonstrate correct reasoning in your evaluation setup, yet still select the wrong parameter or mishandle a code update in a realistic interface during Turing makes that failure visible and gives teams the signal they need to fix it. For labs advancing agentix systems, Turing provides the structure required to understand why these failures occur. To find out how, visit turing.com 20vc that's t u r-I n g.com 20vc

[Mike Krieger]

you have now arrived at your destination.

[Harry Stebbings]

Miles, we are in person.

[Jason Lemkin]

I love it when you are in town. It's so lovely to see you man. And it makes it so much more special doing it in person. So thank you for joining me.

[Mike Krieger]

Yeah, thanks for having me. Always fun being here.

[Harry Stebbings]

Now I want to start with the

[Jason Lemkin]

core question that I think every investor is thinking about, which is how do we ascertain true value in an AI world where technology seems so transient and revenue seems so endurable?

[Mike Krieger]

I think in terms of evaluating these AI categories and companies, there's a pretty useful framework which is basically trying to understand a company's time to value and

[Miles Clements]

then the durability of that value.

[Mike Krieger]

So I think that a number of

[Miles Clements]

these companies sort of shine on different dimensions.

[Mike Krieger]

If I were to look at legal AI, accounting, AI, a company like basis

[Miles Clements]

that we just invested in, I actually

[Mike Krieger]

Think these companies don't have immediately quick time to value. And so when you look at like the deployment cycle and getting lawyers and getting accountants sort of sold on the technology, that can take a little while, but once it is hooked, the durability of that value is like transformational to these firms. On the other end of the spectrum, I would take some of like the

[Miles Clements]

very early vibe coding companies, right?

[Mike Krieger]

Very quick time to value. Like, you start vibe coding, all of a sudden you have a weekend Warrior pickleball app ready to go overnight, you can start using something very quickly. But bottom just fell out for a

[Miles Clements]

lot of these apps because there was no durability of value.

[Mike Krieger]

The reason that I think coding has

[Miles Clements]

become like the vertical in AI is because it shines on both dimensions.

[Mike Krieger]

Like, you can start using Cursor in

[Miles Clements]

an afternoon and by that evening you're ten times more productive. The time to value is very short.

[Mike Krieger]

And then the durability of that value

[Miles Clements]

compounds as the team starts using it.

[Mike Krieger]

So Claude Code, Cursor, all of the

[Miles Clements]

great products out there.

[Mike Krieger]

Like, I think this is why coding

[Miles Clements]

has become the vertical that is the battleground in AI today.

[Jason Lemkin]

Jerry Murdoch on the show said from Insight the other day, not me, but like overheard from my portfolio, no one's using cursor anymore. Everyone's using crawl code. We just saw Chamath tweet last night. We're going to have to move off cursor because it's just simply too expensive. And the Twitter sphere seems to have turned against Cursor with the cursor is dead meme.

[Harry Stebbings]

But then they hit 2 billion in ARR.

[Jason Lemkin]

I'm trying to understand what is going on here.

[Mike Krieger]

I think there's a couple of things at play. You know, I saw the Chamath tweet.

[Miles Clements]

I listened to the Jerry Murdoch show.

[Mike Krieger]

With all due respect to those guys, I think there's a few things at play. First of all, this market is growing enormously, and I don't think a lot of these companies are actually experiencing success

[Miles Clements]

at the expense of the others.

[Mike Krieger]

Take cloud code as an example. First of all, what an amazing product. Cloud code has absolutely captured the imagination

[Miles Clements]

in part driven by Opus 4.

[Mike Krieger]

5.

[Miles Clements]

Opus 4.6.

[Mike Krieger]

Like, I think the success of Claude

[Miles Clements]

Code is also very much tethered to the success of the underlying model.

[Mike Krieger]

So it has captured the zeitgeist.

[Miles Clements]

Like, that's unmistakable.

[Mike Krieger]

With that said, I think these things are so market expansionary that it's not

[Miles Clements]

necessarily coming at Cursor's expense.

[Mike Krieger]

And I think they're market expansionary on two dimensions. First of all, they're bringing so many

[Miles Clements]

new cohorts of users online.

[Mike Krieger]

So people who would not have been

[Miles Clements]

software developers a year ago today can be software developers with these tools.

[Mike Krieger]

They're also expanding the market in terms of consumption. You hear the ARR growth leaked for both companies. A lot of that ARR is not

[Miles Clements]

like net new companies paying per seat pricing. A lot of that ARR is consumption, which is off the charts for both tools. I think that's one thing that's going on.

[Mike Krieger]

I think another is this sort of misunderstanding about Cursor being tied to the ide. In some ways, Cursor is a victim

[Miles Clements]

of its own success.

[Mike Krieger]

Like they were so disruptive and so

[Miles Clements]

innovative around the IDE like a year ago that people can't help but overmake the assumption.

[Mike Krieger]

What is happening though very clearly is

[Miles Clements]

like the world is moving to agents.

[Mike Krieger]

No one has been more vocal and

[Miles Clements]

thoughtful about that than Michael Truhl from Cursor.

[Mike Krieger]

I just sort of look at the numbers. According to like Michael's post which was

[Miles Clements]

public on Twitter a few weeks ago,

[Mike Krieger]

there are two times more people using Agents and Cursor than using the tab feature.

[Miles Clements]

90% of cursor users are daily active users of the Agent product.

[Mike Krieger]

The agent product grew 15x last year. You know, the cloud Agent product, which

[Miles Clements]

was new as of like October 30th, so it's only been in market for

[Mike Krieger]

three months, is now responsible for 35%

[Miles Clements]

of merged PRs in cursor. Those are happening by cloud agents. All due respect to Jerry Murdoch, I think he said like, well, you know,

[Mike Krieger]

I thought about these metrics and this company needs to pivot. All due respect, I thought about playing

[Miles Clements]

in the NFL, but instead I walked

[Mike Krieger]

onto a college football team and was

[Miles Clements]

the fifth string inside linebacker.

[Mike Krieger]

You're not looking at any real metrics. Who are these people to make these judgments? So I get a little bit spun up about it. The thing that's so cool about the team is they are focused, they are

[Miles Clements]

unfazed, and they're just building.

[Jason Lemkin]

Do you think they are fundamentally challenged because of their reliance on bluntly anthropic in their models and what that does in terms of cost inflation for end users of Cursor?

[Mike Krieger]

I don't think so. I mean, I think in a number of dimensions.

[Miles Clements]

The beauty of Cursor is their ability to be multimodal. I think it's valuable for a couple of reasons.

[Mike Krieger]

First of all, we put this survey into the market.

[Miles Clements]

You'll have to have me back on the show to give you the full readout because it's only 90% of the way complete.

[Mike Krieger]

We just wanted ground truth on what's

[Miles Clements]

going on with the mindset of developers today.

[Mike Krieger]

And one of the things that we're learning is 50% of developers switch model

[Miles Clements]

families on a daily basis and 95% of developers switch models on a daily basis.

[Mike Krieger]

I think the world wants to be

[Miles Clements]

multimodal and that experience is fundamentally enabled by Cursor.

[Mike Krieger]

The other thing that comes from being multimodal is you basically become like an index of AI innovation because you get

[Miles Clements]

this compounding product benefit where every new

[Mike Krieger]

feature, every new enhancement that the Cursor

[Miles Clements]

team makes, that obviously improves the product

[Mike Krieger]

experience, but every improvement with the underlying

[Miles Clements]

models also improve the capabilities of Cursor. And so you get this, like, compounding product flywheel. That's very unique.

[Jason Lemkin]

Was Cursor wrong to focus on building their own models?

[Mike Krieger]

I don't think so. I think what they're going to be

[Miles Clements]

able to achieve is incredible.

[Mike Krieger]

I also think we need to frame in the right context what their aspirations are with these models. There are generalists and there are specialists. Cursor is going to build specialized coding

[Miles Clements]

models that are going to serve specialized

[Mike Krieger]

coding tasks, especially for a lot of enterprise users. They don't need for their models to

[Miles Clements]

be good at poetry or teach you how to make an Apple piece. Their models are there for professional coders to do professional work.

[Mike Krieger]

And I think that, like, that's very powerful and will continue to make the

[Miles Clements]

product experience really differentiated.

[Jason Lemkin]

When you are investing at what was the first round price?

[Miles Clements]

9.5.

[Jason Lemkin]

When we're doing like a 9.5 and a 27, what are we underwriting it to? If I was your partner, I'd be

[Harry Stebbings]

like, totally get it.

[Jason Lemkin]

And this is super exciting. But like, what's the upside here? How did you think about that?

[Miles Clements]

There's a couple of ways to frame the upside.

[Mike Krieger]

One is that you think about like

[Miles Clements]

platform companies that are publicly traded, that own their domains. There's very few of them out there.

[Mike Krieger]

So Salesforce historically has been like the

[Miles Clements]

go to market platform company. Crowdstrike and maybe Palo Alto are like the platform cybersecurity companies. There has never been a platform company for engineering as a vertical and engineers are like, I mean, this is the fastest growing, most dynamic vertical there is

[Mike Krieger]

and no one has ever owned that. Now you've had companies that have built

[Miles Clements]

tremendous value biting off pieces of the stack. You know, Atlassian, hugely valuable company that we love Began around issue tracking, datadog around monitoring.

[Mike Krieger]

These have been like 50 to $100

[Miles Clements]

billion companies built over time addressing like one portion of the engineering product stack.

[Mike Krieger]

No one has built the platform company

[Miles Clements]

to own it all. And we think they have that aspiration. So that's one thing.

[Mike Krieger]

The other is like we were also joking before the show that I think

[Miles Clements]

sometimes getting overly fixated on the financial metrics in this environment can leave just like with an unsatisfying taste in your mouth.

[Mike Krieger]

Actually this company is growing so quickly

[Miles Clements]

that on a multiples basis our first

[Mike Krieger]

Investment was at 4 times, 5 times year end.

[Miles Clements]

ARR.

[Mike Krieger]

That wasn't like anything that we talked about or part of the underwrite because

[Jason Lemkin]

now it's at 2 billion and you did it at 9.

[Mike Krieger]

Essentially the company said I think a

[Miles Clements]

week ago or it was leaked that they passed 2 billion. So yeah, that's a fair assumption.

[Jason Lemkin]

What was it when you did it? Just because you need to have that mental plasticity.

[Mike Krieger]

We had a conversation with Michael where

[Miles Clements]

we sort of said where is the business today commercially? And he told us and it was, I'm not evading the answer, I don't specifically remember but maybe it was like 100 of ARR.

[Jason Lemkin]

Give or take. Yeah.

[Miles Clements]

You know, we said what do you

[Mike Krieger]

think is realistic for the end of the year?

[Miles Clements]

He said, I think maybe like our aspiration is, you know, these assumptions go right and these are the products we're going to launch. I think we can get to 500. And Andrew Braccio, who I was working with, you know, Andrew and I sort of looked at each other and we were like, I think we should haircut and call it 300. Like getting from 100 to 300 would be extraordinary for this kind of a company. You know, they ended last year somewhere in the billions I think has been reported. But it really never was about and still isn' not about financial metrics.

[Mike Krieger]

The financials of this company to me

[Miles Clements]

are purely a reflection of the product market fit and it's unlike anything I've ever seen.

[Jason Lemkin]

When you are so off in your ability to predict revenue at year end, how does that change your go forward investor mindset? Do you just place no value on revenue predictions? How do you think about that?

[Mike Krieger]

I think revenue predictions are important in

[Miles Clements]

that they sort of encode a lot of business assumptions.

[Mike Krieger]

If we get this product right, if our pricing here is correct, if our penetration of this customer segment works out, we should be at this rough revenue scale. But you know, the idea of having a budget so that you can go hold the founder's feet to the fire quarter after quarter and is just not really relevant. So to me the less important thing is if a company finishes, you know, 10% below plan, 10% above plan.

[Miles Clements]

Like we're not public market investors, we're not managing to earnings calls.

[Mike Krieger]

We care a lot about the inputs that go into the assumptions, but the output is a little bit less important

[Jason Lemkin]

when we think about that and the revenue numbers that you see there, it makes other things seem quite boring. It does. I mean this is the sad case. Are we in a world where triple, triple, double, double is dead when you can have a company like cursor going from 100 to a billion?

[Miles Clements]

Absolutely not.

[Mike Krieger]

I mean, send me all of your

[Miles Clements]

triple, triple, double, double companies that you're not interested in investing in.

[Jason Lemkin]

Like I was thinking this last night.

[Harry Stebbings]

Everyone says this on the show.

[Jason Lemkin]

I guarantee you'd be like, no, no, no, here's why.

[Mike Krieger]

I think you can actually be successful

[Miles Clements]

in this market investing in consensus.

[Mike Krieger]

And I think you can actually do

[Miles Clements]

really well investing in like non consensus. I think you get hammered sitting in the middle.

[Mike Krieger]

You know, a company that's not growing 15x year over year, that's fine. There's all these other really important inputs

[Miles Clements]

that go into it that I think can make for like a really interesting investment outcome.

[Jason Lemkin]

I'm sorry, I still don't quite understand. If you have a pot of money and you can put it in companies that are growing 15x to then put it in companies that are growing 3x 3x 2x 2x. The opportunity cost of your cash is real. As your partner, I'd be saying why are we doing that?

[Mike Krieger]

Yeah, but this is where, you know, we're ignoring like all of the other

[Miles Clements]

important inputs, right, like quality of the founder. What market are they in?

[Mike Krieger]

What ownership are you getting in the investment? All of these other things factor in too. So I, I think one thing that's happened in our market is like investors have tended to just flock to the extremes. Either like we're AI maximalists, we're going to buy the basket, ownership, valuation be damned.

[Miles Clements]

We want everything.

[Mike Krieger]

Or like we hate the valuations, they make no sense. We're going to sit on our hands

[Miles Clements]

and wait until things cool off a little bit.

[Mike Krieger]

But the reality is like the best

[Miles Clements]

funds in the world, the best investors in the world, embrace the nuance.

[Mike Krieger]

The right answer is always somewhere in the middle. Constructing a basket of companies where maybe some, they were undisputed breakout leaders and you didn't get the ownership that you wanted.

[Miles Clements]

But you, you wanted to be a part of that company and you wanted to be partnered with that founder. There's room for that in the portfolio.

[Mike Krieger]

But there's also bootstrap companies in Little Rock, Arkansas where you can have a different ownership threshold and work with a really special founder and build the company

[Miles Clements]

in a different way.

[Mike Krieger]

And you can do very well that way too. We don't really run from the nuance.

[Miles Clements]

Like we embrace the nuance and there's a lot of benefit to being a multi stage, multi strategy firm.

[Jason Lemkin]

That's wonderful. But your funds are too big to embrace nuance, dude.

[Mike Krieger]

How so?

[Jason Lemkin]

I'm sorry, you need to have $50 billion plus companies to return your fund sizes.

[Mike Krieger]

I think we will. I mean think about this. Like a decade ago, how many trillion

[Miles Clements]

dollar companies were there in the world?

[Jason Lemkin]

No, and you're right, I use this stat too and like the expansion of outcome sizes.

[Harry Stebbings]

But like, dude, they're very, very rare

[Jason Lemkin]

and they take 17 to 20 years when you look at.

[Mike Krieger]

But this is the cycle repeating itself.

[Miles Clements]

And like, to answer my own rhetorical, which nobody asked me to do, you

[Mike Krieger]

know, a decade ago there were zero

[Miles Clements]

companies worth a trillion dollars.

[Mike Krieger]

Five years later there were six public

[Miles Clements]

companies worth a trillion dollars.

[Mike Krieger]

Today there's a dozen companies worth a

[Miles Clements]

trillion dollars in the public market.

[Mike Krieger]

Plus you have the labs, you have

[Miles Clements]

SpaceX, and you know, companies in the private market.

[Mike Krieger]

So the sizes of the outcomes are enormously bigger. And I absolutely think that firms can make substantial returns in the late stage

[Miles Clements]

business given those outcomes.

[Mike Krieger]

And I will say it's really hard if that's the only thing you do, if all you're doing is buying late stage momentum companies, I do think that's hard. There are people that do it well, but it's hard. I think being a multi stage, multi strategy fund where you also have a

[Miles Clements]

really focused early stage effort and a

[Mike Krieger]

growth effort, I think you can absolutely

[Miles Clements]

continue to support companies at every phase of growth and make a lot of money.

[Jason Lemkin]

But can you do vertical SaaS growing? Triple, triple, double, double.

[Mike Krieger]

I wouldn't write off a company purely

[Miles Clements]

because that's the growth profile.

[Mike Krieger]

Now I see the point.

[Miles Clements]

You have to focus on large outcomes. And I agree with you there.

[Jason Lemkin]

I'm like to the team, we need to do two things. One, we need to replace seats, we're replacing labor. And then two, I need to see a billion in revenue. Before it was like 100 million. And we can sell it for a billion or IPO a billion dollar ICE. It doesn't do shit for us.

[Mike Krieger]

Now, yeah, I agree with you. As much as I enjoy sparring with you, I agree with you on this point. If you can't articulate the big outcome

[Miles Clements]

and if the founder can't articulate the big outcome, that is probably a sign that you don't want to be involved with the company.

[Mike Krieger]

But I think that what you're describing

[Miles Clements]

is basically the mistake that we made on a company like Service Titan.

[Mike Krieger]

We had fallen in love with R and Bahe. We were chasing this round.

[Miles Clements]

It was going to happen in the

[Mike Krieger]

$250 or $300 million range. And we had these rigid rules about like, you definitely can't pay more than six to eight times forward for vertical SaaS. And you definitely can't pay more than 10 times forward for vertical SaaS. We lost it because we sort of got queued on price and then that went on to be a $9 billion company. If you really understood the depth of

[Miles Clements]

the market and if you really understood

[Mike Krieger]

what they were disrupting in that era,

[Miles Clements]

you would have done it even though it was a vertical SaaS where you might have otherwise historically thought it was constrained.

[Jason Lemkin]

When we said about Cursor, I liked your description of the platform company for engineers and I see it and I see that ground play. But then it kind of goes against something that we kind of noted down before. You said, who will win is a narrow minded framing of the market. Are they not paradoxical? Like if you think about Cursor being that engineering platform company, totally get that. And I believe in that view of the world.

[Harry Stebbings]

But I don't believe the who will

[Jason Lemkin]

win is narrow minded view.

[Miles Clements]

I think Cursor will win.

[Mike Krieger]

I think there's huge value to being

[Miles Clements]

the winner in these markets.

[Mike Krieger]

But the reason I think the conversation

[Miles Clements]

is like the framing is overly simplified

[Mike Krieger]

is people forget we don't operate monopoly

[Miles Clements]

markets in this country.

[Mike Krieger]

Like the forces of capitalism don't permit it and if they did, then the federal government wouldn't permit it. So like I think the best software

[Miles Clements]

company in the world is AWS.

[Mike Krieger]

AWS has like 35% market share. Everyone aspires to win. And you get into business with these

[Miles Clements]

founders because you believe that they can win.

[Mike Krieger]

But I also think the way that

[Miles Clements]

a number of these verticals are going to play out in a number of

[Mike Krieger]

the AI categories, there's going to be

[Miles Clements]

a couple of really big companies in several of them.

[Jason Lemkin]

Do you not think we do legitimately operate in monopoly markets? I mean, let's look at like Nvidia, let's look at Apple for consumer Hardware. You know, Salesforce for CRM. You know, Salesforce is a $250 billion business.

[Mike Krieger]

Yeah, but I think it's different when you get into, like, the mega cap companies.

[Miles Clements]

Like, there are monopoly conversations, and that is, you know, what the federal government is there for. Some would argue. I would not argue, but that's what the federal government tends to do these days.

[Mike Krieger]

You know, I think in the private

[Miles Clements]

markets, at the scale of companies that

[Mike Krieger]

we're talking about, I just don't think so. And, like, I'll give you one framing

[Miles Clements]

for, like, the winning conversation we've talked

[Mike Krieger]

about, and you talk on the show

[Miles Clements]

a lot about deal.

[Mike Krieger]

People say, like, deal is won. The market, Alex, is phenomenal.

[Miles Clements]

Deal is one.

[Mike Krieger]

We're not investors in the company. I think it was published that they

[Miles Clements]

passed, like, a billion dollars of ARR.

[Mike Krieger]

It's incredible. It's like, welcome to the big leagues.

[Miles Clements]

ADP has $20 billion of ARR.

[Mike Krieger]

Like, you are 1 20th the size of ADP. And by the way, in this market, you've got, like, Paychex is a $60

[Miles Clements]

billion company and Paycom and Paylocity.

[Mike Krieger]

And I think the venture framing of

[Miles Clements]

this company one is not always, you know, I think it can be a little bit oversimplified.

[Jason Lemkin]

Do you reflect on those two? You're not in deal or rippling separate conversations?

[Mike Krieger]

We're not in deal because we're in

[Miles Clements]

remote, and I'm thrilled that we're in remote. I think Yob and Marcelo are, like, very special. I think their product vision is very different and unique. The rippling one? Yeah. I think about this one a lot. I mean, this one stings.

[Jason Lemkin]

Why?

[Mike Krieger]

I think a lot about, like, the

[Miles Clements]

physics of these businesses and, like, the product mechanics behind a lot of these companies. And what I mean by that is

[Mike Krieger]

I think a lot of investors tend

[Miles Clements]

to look at, like, what's the product, what's the growth rate, et cetera, et cetera.

[Mike Krieger]

No one really has an appropriate appreciation for.

[Miles Clements]

For what I think of as, like, the marginal ease of ARR accumulation. What are the downstream levers that you're putting into place that you can pull on in the future that will allow you to grow at these crazy growth rates in year 4, 5, 6, 7?

[Mike Krieger]

And, you know, how do you build

[Miles Clements]

this growth mechanism that is better than, like, I put in a marketing dollar, and I get out a dollar and 20 cents of revenue? I think nobody in the world does that better than Parker Conrad.

[Mike Krieger]

So, you know, the first time he

[Miles Clements]

sort of outlined the vision, I was like, this is really compelling.

[Mike Krieger]

I think that's what he does. He has this innate sense for pockets

[Miles Clements]

of margin that other people wouldn't go build companies around like laptop provisioning and, and physical IT leasing.

[Mike Krieger]

That would be a tough standalone business.

[Miles Clements]

But like as a revenue line item

[Mike Krieger]

for a company like Rippling, it's really interesting. I just think that Parker is a

[Miles Clements]

generational founder and we don't get it right all the time, but he's certainly someone I wish we were in business with.

[Jason Lemkin]

Why are you not? Was it because of the remote situation or price or.

[Mike Krieger]

I think it was a couple of things. Parker previously had a reputation. I'm not going to opine on whether

[Miles Clements]

it was deserved or not, but he

[Mike Krieger]

had a reputation that I like to

[Miles Clements]

think he's now totally overcome.

[Mike Krieger]

That just came up in the conversation. And in a market where Mamoon was moving very quickly and other people were moving quickly, it probably made us a step slow. I think this is also one where we stuck to our knitting on the investment framework. The ownership thresholds, the opportunity to get involved was going to be at a high valuation. And maybe there was, I don't remember the specifics, but there was a mechanism

[Miles Clements]

where you could invest more over time

[Mike Krieger]

and it would have required us to break a lot of rules. Rules. And I think, like, I don't regret not breaking the rules in general, but, you know, this would have been a time when it could have been worthwhile.

[Jason Lemkin]

Slightly confused right now as to whether we should break the rules. On Series A's, the prices have gone from 20 on 100 to 20 to 40 on 200 to 400. And I'm forced every day to question should we break the rules on ownership for these incredibly fast growing hot AI companies? And we go back and forth on it. We're friends sitting in a coffee shop. What would you say to me if I was debating that?

[Mike Krieger]

Yeah, I'm chuckling because there's this funny

[Miles Clements]

quote that comes to mind. I've been very lucky at Excel to learn from a lot of really great people.

[Mike Krieger]

One of them is Jim Breyer. Jim used to say this thing, which

[Miles Clements]

I think he was paraphrasing from somebody else, but it was basically that investing is an art and a science. The science is understanding how to properly value a company and the art is understanding when to break the rules.

[Mike Krieger]

I just think in this market you got to do that, that constantly, generally speaking, sticking to your rules is a

[Miles Clements]

good place to be.

[Mike Krieger]

Now, I do think you know the vocabulary around what a Series A is in this market.

[Miles Clements]

Is just very different. And so I would actually, you know, I think there's, like, multiple subcategories of investing that goes on in Series A

[Mike Krieger]

land, and you just have to decide

[Miles Clements]

what you want to participate in and what you don't.

[Mike Krieger]

It's okay to say no. Like, you don't have to be in every single round. So I think that, like, breaking the rules is something you should do very, very rarely.

[Harry Stebbings]

You said that kind of the brilliantly

[Jason Lemkin]

wanky phrase, the marginal ease of ARR accumulation. I'm going to give you five tequilas and then ask you to say that again.

[Harry Stebbings]

Sounds wonderful.

[Jason Lemkin]

Where did you think there was marginal ease of arrr accumulation? Where there maybe wasn't. And what did you not see?

[Mike Krieger]

I think as the market has gotten more competitive, the pressure to be right,

[Miles Clements]

to pick correctly, has never been greater.

[Mike Krieger]

It causes you to extrapolate.

[Miles Clements]

You have to extrapolate from early data points.

[Mike Krieger]

There have been investments where a company went from they had a million dollars of ARR and then in the period

[Miles Clements]

before they fundraise, they had, like, a $4 million quarter, and it's like, they've got it like the product market fit snapped. Like, they, this is it. This is the time to forward, invest, and you can extrapolate these trends.

[Mike Krieger]

And then it turns out sometimes they

[Miles Clements]

just had an anomaly quarter. I have fallen into that trap before.

[Jason Lemkin]

Do you have that more and more now when we see companies being maimed by others so significantly?

[Mike Krieger]

Yeah, yeah, definitely. I agree with this. I mean, I think this is why the benchmarks that used to give us

[Miles Clements]

all comfort are largely obsolete now.

[Mike Krieger]

And so, like, you have to be really clued into the usage intensity of your product and really understand how people are using it, because growth can obscure

[Miles Clements]

and blind you to a lot of underlying ills in the business.

[Mike Krieger]

So I do think that being clued

[Miles Clements]

into, like, how people are engaging with the product, whether you're an enterprise company or a consumer app, is more important than ever.

[Jason Lemkin]

Do you find it hard, the binary nature of this world? Honestly, we come into work sometimes and we're like, what the fuck are we doing? I'm being serious. I was talking to my dear friend Jason Lemkin the other day, and he's like, fuck this. I've had enough of this. I just want to do an anthropic SPV and go home. I don't want to pick the winner in a SaaS company. Oh, my God.

[Harry Stebbings]

My God, we feel so unimportant.

[Mike Krieger]

I have to be honest with you.

[Miles Clements]

No, I fucking love it.

[Mike Krieger]

To be really honest, I'm so lucky to be in this industry and the competitive thrill of chasing down these founders

[Miles Clements]

and chasing these deals, it's awesome. How lucky are we to get to do this? So, no, I understand where you're coming from, but I love it when we

[Jason Lemkin]

look at the big exits this year. You've got databricks, you've got anthropic, you've got OpenAI and you've got SpaceX as a partnership. Do you guys lament that you're not in them?

[Mike Krieger]

Of course. I mean, we are in some of those companies, but we, yeah, absolutely. Nobody is harder on on us than we are.

[Miles Clements]

We want to know where we went wrong.

[Mike Krieger]

We also though we do that in

[Miles Clements]

the interest of getting it right going

[Mike Krieger]

forward and when we look to the

[Miles Clements]

future, there's a lot of things that we're really excited about. A lot of companies where we are sort of the investor of record. We intersected them very early, continued to buy up all the way through the growth stages and we're excited about those. But absolutely, we hold ourselves accountable when we miss companies.

[Jason Lemkin]

I spoke to one of your LPs before and they said, help me understand why we're not in any of the foundation model companies. Why are we not in anthropic and OpenAI as an Excel lp? Was that just like a miss or was that a belief that they wouldn't be good companies?

[Mike Krieger]

A lot of firms miss the model

[Miles Clements]

companies early and we're guilty of it.

[Mike Krieger]

Nobody has looked in the mirror harder

[Miles Clements]

than we did and course corrected.

[Jason Lemkin]

Can I ask when you did, is it like you're like partnership meeting, have we fucked up or is it like an unspoken rule like the British people when it rains and we just pretend

[Harry Stebbings]

it doesn't rain and we walk anyway?

[Mike Krieger]

No, like it's the most important conversation there is. So it's a global off site where every partner at Excel sits in a

[Miles Clements]

room together and we say, how did

[Mike Krieger]

we not get this right and how

[Miles Clements]

do we fix it going forward?

[Mike Krieger]

What are the 50 best private companies

[Miles Clements]

in the world right now and for

[Mike Krieger]

how many of those companies are we not just a passive shareholder, but like the investor of record and what is our score? And then what do we think is

[Miles Clements]

the next set of 50 companies and how many of those are we going to win?

[Mike Krieger]

And like, if we're not getting better, no one will beat us up more

[Miles Clements]

than we will ourselves.

[Mike Krieger]

So that's what the conversation is. I mean, it's the most important thing

[Miles Clements]

for the entire partnership globally.

[Jason Lemkin]

Are you Playing a coverage game. You know, when we had Aneesh from Andreessen on the show, he was 100%. We are playing a coverage game. We get split up fiefdoms and we get split up stages and split up categories and you are expected to see 100% of yours. And if you miss it is not acceptable. For me, for example, we play a different game. I don't have to see 100%, but I need to hit one of the big ones.

[Mike Krieger]

Yeah, we're organized a little bit differently, but of course we hold ourselves to

[Miles Clements]

the same standards of coverage.

[Mike Krieger]

I mean, the aspiration is 100% coverage, 100% win rate.

[Jason Lemkin]

Right.

[Miles Clements]

No one in the industry does 100% of both. But if we're failing on one dimension or the other, we're going to talk about it and understand where we need to be better.

[Jason Lemkin]

What's your win rate today?

[Mike Krieger]

How would you measure it when you

[Jason Lemkin]

go for a deal with a term sheet, Put down mine.

[Mike Krieger]

Individually or as a firm? As a firm, I think a healthy

[Miles Clements]

win rate would be like 80%.

[Mike Krieger]

And the reason it's not 100% is

[Jason Lemkin]

because no one's gonna have 100%.

[Mike Krieger]

Some people have come on this show

[Miles Clements]

and said that they have 100% win rate.

[Jason Lemkin]

Andreessen.

[Mike Krieger]

Well, I wasn't trying to call him out specifically, but I've just heard it said before.

[Jason Lemkin]

Well, if I said I never lost a deal, I'd be happy if someone said it.

[Mike Krieger]

I don't mean to be combative about it. I think my, like my polite and professional response would be, I think if you're not putting yourself out there in

[Miles Clements]

losing, sometimes you're not chasing competitive enough things.

[Mike Krieger]

I really like sticking my nose in competitive.

[Miles Clements]

In a competitive fight like that, I have no right to win. I really like doing that.

[Mike Krieger]

But I also really find a lot of joy in finding these founders who

[Miles Clements]

are just doing things a little bit differently.

[Mike Krieger]

Maybe they've bootstrapped the company. Maybe they're located in some geography that's

[Miles Clements]

far away from Silicon Valley and having

[Mike Krieger]

these non consensus ideas that other people might think are silly or they might

[Miles Clements]

not really have their heads wrapped around.

[Mike Krieger]

I think that's great too. But part of that is that kind

[Jason Lemkin]

of growth equity, like technology venture, not inherently the most fucked in this AI world.

[Mike Krieger]

I think that business has gotten harder. And I think that was like, frankly, that was the core of our early growth strategy.

[Jason Lemkin]

Unbelievable. Like the bootstrap.

[Mike Krieger]

Like 1.

[Jason Lemkin]

Password Qualtrics.

[Mike Krieger]

Totally nowhere.

[Jason Lemkin]

Amazing. I love this.

[Mike Krieger]

Absolutely. And that is still out there and we still do a lot of it

[Miles Clements]

and we aspire to be the best in the world at it.

[Jason Lemkin]

Is it still out there in the world?

[Miles Clements]

Yeah, it is.

[Mike Krieger]

This is the funniest thing. Every time we have an off site

[Miles Clements]

or a strategy conversation, we keep saying

[Mike Krieger]

like, there's no more bootstrap, there's no more bootstrapped. And then like you find a Laravel, like they are still there, they're really hard to find.

[Miles Clements]

And I think we're like the best in the world at finding them.

[Jason Lemkin]

And it makes sense from opportunity cost of capital to put your money there versus just putting another 100 million into

[Mike Krieger]

cursor nuance in portfolio theory. A part of our business will always be doing that.

[Miles Clements]

It's very distinct.

[Jason Lemkin]

What's the growth fund?

[Mike Krieger]

At the moment we have a $1.4

[Miles Clements]

billion growth fund and we have a larger sort of later stage pool of capital.

[Jason Lemkin]

No, 100% is 1.4. And then you've got leaders, which is like 3 or 4. It's the growth fund subscale then, because David George has got six or seven to play with and Josh has got nine to play with. Is that subscale or should we think of leaders as the growth fund in the same way?

[Mike Krieger]

In many ways the market today is

[Miles Clements]

like what the venture market was in 2000, but inverted.

[Mike Krieger]

So the idea was like, I'll do my Series a, I'll get 30% ownership,

[Miles Clements]

I'll take a bunch of dilution and when the company goes public, I'll own 20% of it. That was like roughly the math.

[Mike Krieger]

Today you have to back into 20% the other way. You do what the market will allow

[Miles Clements]

in the earliest possible investment.

[Mike Krieger]

You sponsor a tender, you do a

[Miles Clements]

growth round, you do an IPO round

[Mike Krieger]

and you can ladder your way up to 20% ownership. You have to be a multi stage

[Miles Clements]

fund to do that.

[Jason Lemkin]

Or you hope and pray that the expansion or like the multiple or the size of the exit. Sorry. Is so much bigger than it was. It's not a billion to 5 billion, it's 50 to 100. That actually having 5% is actually just as meaningful as having 20% of the prior.

[Mike Krieger]

Sure. I think you won't be surprised to find that like, I don't think hoping

[Miles Clements]

and praying is a great strategy.

[Jason Lemkin]

Dude, we are all fucking hoping and praying right now. I'm sorry. That is absolute. Like Figma is an $11 billion company. The unbelievable, unwaveringly brilliant founder of Dylan, and this was the swan song of software is 11 billion, which is incredible and incredible. Incredible. You know, it doesn't return your growth fund.

[Mike Krieger]

But we're arguing two separate points and

[Miles Clements]

I agree with you on the FIGMA case study and all these like fundamentally incredible businesses out there that have gotten beat up.

[Mike Krieger]

That's a separate point that we should circle back to. The other point is like do you

[Miles Clements]

have to swing for the fences?

[Mike Krieger]

You know, I go back to Arthur

[Miles Clements]

Patterson, co founder of Excel, always says

[Mike Krieger]

this thing, focus on hitting singles and

[Miles Clements]

doubles and let the home runs take care of themselves.

[Mike Krieger]

And what he means by that is if you're just constantly stepping to the

[Miles Clements]

plate and trying to.

[Mike Krieger]

I can see at the Series A that this is going to be a

[Miles Clements]

hundred billion dollar exit.

[Mike Krieger]

You will just overswing and you will fail.

[Jason Lemkin]

No, but isn't that what I'm deliberately paying? I'm not actually. I'm actually just fundamentally disagreeing with that. That is like not what venture is about.

[Harry Stebbings]

Especially at the Series A.

[Jason Lemkin]

You want to have a diversified portfolio enough that you have one or two of them hit, but you want 30. Swing the fuck out of this and it could be 100 billion. We're not here to do the singles and doubles.

[Mike Krieger]

I think different ways to practice the craft. I do think the market has evolved

[Miles Clements]

a little bit and a single and double today might look different than it did did in the year 2000.

[Mike Krieger]

I think what he means is like know what you're good at. Focus on founder relationships, stick to whatever

[Miles Clements]

your particular strategy is and just try to do that really well.

[Mike Krieger]

Don't just go sling it into things that are momentum chasing opportunities where you're

[Miles Clements]

not going to be any better than the next investor. And I think that advice is fair.

[Jason Lemkin]

Do you not think we're all momentum chasing? I mean like if we look at the AI entry for you guys and then the defense entry with hellsing, like, like we're all slightly momentum chasing.

[Mike Krieger]

I would go back to nuance, subtlety, portfolio theory. Like there are absolutely companies where it

[Miles Clements]

is justified to chase momentum. We don't like to use that vocabulary

[Mike Krieger]

but we see a company like Anthropic and how valuable they are as technology

[Miles Clements]

partner to like every other company in our portfolio. The momentum is very obvious but the business logic and sort of the business intrinsic are also very obvious. So does it make sense to have a relationship with Anthropic? Absolutely. So guilty of that.

[Jason Lemkin]

You did the 180 round.

[Miles Clements]

We've invested in a few rounds of Anthropic.

[Jason Lemkin]

What was the first round you did 180 when you were doing that As a team, how did you think about outcome planning there and sizing that?

[Mike Krieger]

I think that company and a small

[Miles Clements]

handful of companies in the private market today are operating on a different plane. I think it is not bombastic to say that some of those businesses could be trillion dollar companies. You know, people who are underwriting these rounds believe that. So I think that is like a different category. But the danger in this business is ascribing the characteristics of an anthropic or an anduril or an OpenAI or a stripe to like the things that don't really fit the paradigm at the series A.

[Jason Lemkin]

But when you're doing an anthropic round at 180, are you saying we fundamentally think this can be a $2 trillion company in a 10x?

[Mike Krieger]

Implicitly, yes.

[Jason Lemkin]

What do you need to see to write the check? It's like, you know what, 3 to 5x is enough on growth.

[Mike Krieger]

There's never a partnership conversation where we sort of say, hey, we've built a

[Miles Clements]

model and squinted our way to a 3x outcome. Like, that's just not exciting.

[Mike Krieger]

The reality is that I do think like a lot of these funds revert to the mean. If you're. If you can generate 3x net funds,

[Miles Clements]

that's a pretty good business to be in.

[Mike Krieger]

But if all you do is aim

[Miles Clements]

for 3X investments, like, of course, that's not really the math that gets you there.

[Mike Krieger]

If we can have a conversation about this company is special, its reach is

[Miles Clements]

unprecedented, its founders are very, very different.

[Mike Krieger]

The comps for this business would be

[Miles Clements]

platform companies like Google and Microsoft and Amazon. Then of course you want to participate in those companies in the private markets.

[Jason Lemkin]

You said about Spice. Do you feel better or worse to be an anthropic shareholder post anthropic versus the Pentagon?

[Mike Krieger]

Yeah, you were definitely going to give me some spicy ones.

[Jason Lemkin]

I can feel your compliance team just shit themselves. They're just crying.

[Mike Krieger]

Look, I don't want to be, I don't want to answer this question. How can you not admire the founders

[Miles Clements]

for sticking to their knitting on and sticking to their conviction and sticking to their principles? Now, I have no idea how this is going to shake out. Right?

[Jason Lemkin]

I mean, like, did you not write Dario's memo for him ghost ridden?

[Miles Clements]

I'm definitely not intelligent enough to ghostwrite anything for Dario.

[Mike Krieger]

I think this is an opportunity for a lot of these companies. They signal virtue and they believe in

[Miles Clements]

a world where AI is going to be a force for good.

[Mike Krieger]

And then there are commercial opportunities where that gets put to the Test. Can you really blame a founder for

[Miles Clements]

saying, I'm sticking to the mission. I get it and I respect it.

[Jason Lemkin]

I mean we're seeing it bluntly play out for him in terms of loyalty, in terms of talent.

[Miles Clements]

Totally.

[Jason Lemkin]

Consumer adoption. Mike Krieger put they're doing a million a day in net new consumer signups.

[Mike Krieger]

Yeah. I mean they passed GPT in the App Store.

[Jason Lemkin]

Isn't it ironic that this is what was needed for them to surpass?

[Mike Krieger]

No, I don't actually believe that they were doing it for that reason. I don't think they did it as

[Miles Clements]

a calculated business move.

[Mike Krieger]

I think this comes down to.

[Jason Lemkin]

No, I think it was an accidental bit of luck. It worked out well.

[Miles Clements]

I think it comes down to like ethics and principles and call me old

[Mike Krieger]

fashioned but if you behave the right way, call me old rewarded. Yeah.

[Jason Lemkin]

Are you in OpenAI as well?

[Mike Krieger]

We're not.

[Jason Lemkin]

There are a lot of businesses today that we're in historically which I don't know what's going to happen. I love sneak, I love miro, I love 1Password. But they were done at such high prices and the new reality is very real. How do you opine and think about businesses like that? When you sit in the partnership meeting,

[Mike Krieger]

the market has gotten so humbling.

[Miles Clements]

The greatest companies of three, four, five years ago, many have gotten totally beat up in the public markets. I believe many are oversold.

[Mike Krieger]

I think this is where it comes

[Miles Clements]

back to this being a human business. Who is the founder that you've gone into business with? What is that founder going to do when their back is against the wall?

[Jason Lemkin]

If you look at a sneak, I'm in guy's new company but he ain't there. What do you do? It's 300 million ARR growing 15%. His last price was 7.

[Mike Krieger]

I think this is in some regards, as the founder of the company, we lose sight of this. That's not a great setup for people

[Miles Clements]

who might have invested at $17 billion. But it's a great business with a

[Mike Krieger]

great product, with a great customer base. You know there will be an outcome for that company.

[Miles Clements]

It is humbling relative to, you know, the valuations of the 2021 era.

[Mike Krieger]

But again, who is the team that

[Miles Clements]

you're in business with and.

[Mike Krieger]

And how are they behaving and how

[Miles Clements]

are you behaving more importantly as an investor? When the team back is collectively against

[Harry Stebbings]

the wall, what happens is it, do

[Jason Lemkin]

these businesses go public? Do they get taken out by M and A? What do you think is the route for them?

[Mike Krieger]

I think it's probably a good time

[Miles Clements]

to be in the LBO business. I think it's probably a good time to be in the Tahoma, Bravo Vista, Blackstone, KKR business.

[Mike Krieger]

There will be homes for a lot of those companies who get themselves to

[Miles Clements]

a sustainable place and they will find homes.

[Mike Krieger]

These homes for a lot of companies

[Miles Clements]

will be different than what the aspiration was when the founder started the company. That's just a real of this market.

[Jason Lemkin]

I totally agree. Are you with me in the camp of when the founder goes, my conviction goes. Now when Andre is at Miro, I'm like, Andre is still batting. If Andre is still batting, I'm still there.

[Mike Krieger]

There is unmistakably something special about a founder led company.

[Jason Lemkin]

Mike being at Atlassian, when I interview him, I'm like, I still feel that and his passion is still there.

[Miles Clements]

Never bet against Mike Cannon Brooks. Absolutely not.

[Jason Lemkin]

But when the CEOs there, I'm like,

[Mike Krieger]

it's not that it can't work. There are incredible professional CEOs. Like if I could have, if I could have Frank Slootman come be the

[Miles Clements]

CEO of a number of companies I

[Mike Krieger]

work with, I bet the founders would

[Miles Clements]

say, yeah, that's a great trade.

[Mike Krieger]

I mean there are incredible professional CEOs.

[Jason Lemkin]

What have you changed your mind on most in the last 12 months as an investor?

[Mike Krieger]

I believed this thing a year ago

[Miles Clements]

that in hindsight I feel very stupid

[Mike Krieger]

for having said I believe that like

[Miles Clements]

all of the generational investments in AI had been made. You know, I looked at my partner, Dan levine, incubating scale AI, building a relationship with Alex Wang in 2016 in making that investment, you know, the early

[Mike Krieger]

investments in the labs, I sort of thought, listen, the bets were made eight

[Miles Clements]

years ago and it's too late. And now we're all sort of fighting for what's left over.

[Mike Krieger]

That was a really stupid thing to

[Miles Clements]

say and I no longer believe it. That's probably the thing that I've, you know, fundamentally changed my mind on both

[Mike Krieger]

because those companies will be bigger than

[Miles Clements]

the outcomes that I probably envisioned a year ago. And there is still time to be a part of some of them.

[Mike Krieger]

And because the innovation flywheel is just

[Miles Clements]

getting started, we are barely scratching the surface.

[Jason Lemkin]

When you had the scale exit for context, $14.9 billion, amazing exit. Dan was unwaveringly the first investor there from the dorm room style moment.

[Harry Stebbings]

Epic

[Jason Lemkin]

when you had that. So the company's got an offer for $14.9 billion. Is there like high fives and this is awesome around the table?

[Mike Krieger]

No There is an appropriate congratulations and acknowledgement to Dan, There is a huge loud, full throated thank you to Alex, and then everybody gets the fuck back to work. It's a humbling industry and you are

[Miles Clements]

only as good as the next thing that you do.

[Jason Lemkin]

How do you analyze that market today?

[Harry Stebbings]

Because there's one that I really struggle

[Jason Lemkin]

to get my head around in a way that not cynically not paranoid. I just don't know. There's so many different providers that are all at very meaningful revenue scales.

[Mike Krieger]

Yeah, the scale Merkur market.

[Jason Lemkin]

Yeah. As we said with your mercures, with your Turings, I mean there's 10 or 12 of them micro ones.

[Mike Krieger]

I probably struggle with services businesses in general getting valued on like extreme, extreme, extreme are our multiples.

[Jason Lemkin]

You said about the value of different revenue multiples and we've spoken a lot about Mike at Atlassian before. There are clearly things that Mike is not able to do because he's public, that private company founders like the Collisons

[Harry Stebbings]

are able to do.

[Jason Lemkin]

How do you think about the benefits of public versus private today? And given the liquidity so inherent within secondary markets like we're seeing with even as early as your linears where you're doing tenders for them, Clayhouse has tenders and then Stripes on bigger scales has obviously much more liquid markets, why would anyone go public?

[Mike Krieger]

Well, the reverse is true too.

[Miles Clements]

There are things that Mike can do as a public CEO and the public companies can do that private companies cannot.

[Mike Krieger]

But I think you're asking the right question. I mean, I think there's a reason

[Miles Clements]

a lot of these founders are staying private longer.

[Mike Krieger]

What are the things that you typically

[Miles Clements]

needed to access the public markets in

[Mike Krieger]

order to do liquidity for employees?

[Miles Clements]

You can certainly do that now as

[Mike Krieger]

a private company, M and a currency

[Miles Clements]

and just increasing your valuation benchmarks or your valuation mark, you can totally do that as a private company.

[Mike Krieger]

So I think that is all true. With that said, I think that applies

[Miles Clements]

to like the 10 best private companies in the world.

[Mike Krieger]

Like databricks can do those things. Stripe can do those things. There's a lot of companies that just

[Miles Clements]

do need to get public.

[Jason Lemkin]

The trouble is those companies need to get public, but they're in the like $2 to $10 billion range. Does anyone care about the $2 to $10 billion range?

[Mike Krieger]

I think you've seen this phenomenon where

[Miles Clements]

I would actually peg the range a little bit lower. These companies that have gotten public in the like 2 to 4, $5 billion range and then they never really break out. I think that's a difficult. That has been a difficult threshold for a lot of these companies to break through.

[Mike Krieger]

And I do think this is why

[Miles Clements]

you see a lot of good companies waiting.

[Mike Krieger]

People say, oh, it's because the investors will be underwater.

[Miles Clements]

I don't think that's actually the reason.

[Mike Krieger]

I think it's because generally speaking, you

[Miles Clements]

want to go public and you want

[Mike Krieger]

to be able to have fairly clear

[Miles Clements]

line of sight to hitting the $5 billion threshold and trading beyond that because it's murky below that.

[Jason Lemkin]

Is this aspocalypse an overreaction or is it actually the fact that we were just bluntly valuing them far too highly on actually relatively mediocre 18 to 20% growth rates? And this is a realization of that

[Mike Krieger]

fundamentally people are valuing the future cash

[Miles Clements]

flows and the future terminal value of these companies differently. And I don't think that's wrong, but I do think this has been an over rotation.

[Jason Lemkin]

What is the most oversold stock?

[Miles Clements]

We are not a part of figma but have a lot of respect for that company. But I know that Dylan is a generational founder and it's a very important company with an incredible financial profile and it just feels, for a lot of ways, for a lot of reasons, oversold.

[Jason Lemkin]

We mentioned the liquidity inherent within companies now as it goes later and later stage. How do you think about when's the right time to take chips off the table?

[Mike Krieger]

I think you have to operate from

[Miles Clements]

the first principle of what is best for the company.

[Mike Krieger]

Now if the company is saying, hey, we're going to do a big tender and a secondary round, that it's okay if investors want to sell, I think in those circumstances it's generally wise to diversify. But I think that like it's got to be the right thing for the

[Miles Clements]

company and for the founders first and foremost.

[Jason Lemkin]

Can I ask you. I'm sorry to be so annoying. I used to be so nice. You should have done the show five years ago when I was a sweet little boy. That's just not true. When you look at say a wework benchmark, were fantastically smart to get out of it. When you look at a lightspeed and Jeremy Liu selling with Snap, they were very wise to get out of it. We're seeing prices so far ahead of company traction now. It's not in their interest for the investor to sell. Jesus. We're paying four years ahead of time. Totally. It's in our interest and we. But it.

[Mike Krieger]

But it's so situational. So like as a principal do I think it's good to get liquidity back when it's available. I do, but it's so situational. You use the WeWork example.

[Miles Clements]

Like we were not a part of we work.

[Mike Krieger]

But had I been a shareholder in

[Miles Clements]

that company when it was worth like $50 billion, I don't know a whole lot about the commercial real estate market and the office, the office space market, but I probably would have been seeking liquidity.

[Mike Krieger]

Like that just feels rational.

[Jason Lemkin]

But you know, it did not seem rational to seek liquidity at mirror at 17 basically billion.

[Mike Krieger]

I think that was, you know, we didn't take liquidity out of Miro at 17 billion. But again what was Andre doing?

[Miles Clements]

What was the founder doing?

[Mike Krieger]

What did he, you know, what was

[Miles Clements]

the, the course that he wanted for the company? And that's like the only thing that matters.

[Mike Krieger]

The example I would point to is CrowdStrike. Samir Gandhi and John Lock intersected CrowdStrike

[Miles Clements]

when it was, you know, there was

[Mike Krieger]

like a million dollars of software revenue

[Miles Clements]

and There was a $9 million consulting business and like that was the company. And I think they invested in in

[Mike Krieger]

2011 at 160 post. Now there have been nonstop opportunities to

[Miles Clements]

diversify and sell CrowdStrike stock. It's a public company, you can do that today. But Samir and John led the next round. They led the next round. They bought in the IPO and it's $100 billion company today. We're sure glad we didn't take chips off the table.

[Jason Lemkin]

The question there of like you mentioned, obviously buying into the IPO and kind of the decision to hold thereafter. Obviously Sekora have the Evergreen vehicle which, which there's been a lot of talk about. Do you think that venture firms should have the responsibility of managing the book into the publics or do you think it should be a distributor LPs and it's discussed from there.

[Mike Krieger]

Yeah, I think fundamentally we're in the

[Miles Clements]

business of identifying outlier founders.

[Mike Krieger]

If you're a multi stage fund that gives you the flexibility to stick with

[Miles Clements]

some of those founders for the long run, you should definitely do it.

[Mike Krieger]

I think in the George Kurt case, absolutely worth doing. In the Mike Cannonbrook Scott Farquhar case, absolutely worth doing. But not every company has the mechanics

[Miles Clements]

to compound for a long time. You can't just do it as a blanket rule.

[Jason Lemkin]

I don't like public markets right now

[Harry Stebbings]

and I think it's just a bad

[Jason Lemkin]

place to be because you're seeing the casinoization of public markets where a Citrini report can wipe billions of dollars off Anthropic. Doing a security release impacts crowdstrike.

[Mike Krieger]

I think the public markets are no longer rational. Yeah, to me it's not good or

[Miles Clements]

bad, it's just different asset class and it's stick to what you're good at.

[Mike Krieger]

And I don't think we would be

[Miles Clements]

excellent stock pickers, but I think we're pretty good at what we do in terms of early stage technology investing.

[Mike Krieger]

So I just think it's an asset class that I'm never going to be

[Miles Clements]

best in the world at understanding public stocks and I think that's okay.

[Jason Lemkin]

Who's the best sourcer inside Excel sorcerers finding great companies?

[Mike Krieger]

Christine Esserman.

[Miles Clements]

Really, really good eye for companies and she is relentless in getting in front of founders. She's great.

[Jason Lemkin]

Who's the best picker?

[Miles Clements]

Andrew Braccia, by far. Andrew is wise. Andrew has seen success at incredible scale.

[Jason Lemkin]

He's our best picker when it comes to winning. Core part that we don't talk about enough. I don't think who's the one you're like, okay, we need to win the deal. We need to bring in.

[Mike Krieger]

I think Samir Gandhi is incredibly compelling

[Miles Clements]

and hits it off with founders in a very special way.

[Jason Lemkin]

Do you think the best founders need your help? I was going through the pillars of venture there in terms of sourcing, selecting, securing and servicing. And I was like, you think the best founders actually need your help?

[Mike Krieger]

I think need our help is an

[Miles Clements]

overstatement, I think, of the role of a good investor.

[Mike Krieger]

There's basically these bumper decisions that come

[Miles Clements]

up a couple of times a year.

[Mike Krieger]

Like if you're a founder, your life is a bunch of little decisions and

[Miles Clements]

then a couple really big decisions.

[Mike Krieger]

The little decisions are like, you know, design decisions about the product and pricing and should we dial up CAC and should we make this higher? You don't need an investor micromanaging you

[Miles Clements]

through all the little decisions.

[Mike Krieger]

I do think every year there's probably a couple of like big decisions where having a good sounding board can be really useful. Should we do this partnership?

[Miles Clements]

Should we make this acquisition?

[Mike Krieger]

Do we need to pivot in there? Yeah, I think having a good investor

[Miles Clements]

or just a good partner to the business can be really useful.

[Mike Krieger]

It's all about striking the right balance.

[Jason Lemkin]

You'd like being a board member?

[Miles Clements]

Yeah, I love it.

[Jason Lemkin]

Who's the best board member you sit on a board with?

[Mike Krieger]

The best board member I've ever seen in action. My friend Ravi at Sequoia is a

[Miles Clements]

very good board member. He was at Sequoia. Now he's doing his own company.

[Mike Krieger]

He's done a lot of different things. He's been an operator, he's been a buyout guy, he's been a growth equity investor. But I think it's more about his demeanor and the humility with which he delivers feedback. He has this way of sort of saying, let me politely make an observation. And you can sort of choose to accept it or reject it. There's just sort of like wisdom and

[Miles Clements]

humility in how he communicates, which I appreciate.

[Jason Lemkin]

If you're a founder listening to this, what advice would you give them on how to observe for potentially not helpful behavior from a board?

[Miles Clements]

There's a lot of bad board members. I think there's generally an inverse correlation between how vocal somebody is and how

[Mike Krieger]

helpful they actually are. So the person who just has to

[Miles Clements]

get the first and last word in and shows up at the board meeting

[Mike Krieger]

and has to teach you something that

[Miles Clements]

you didn't already know, like, I don't actually think that is the model for wisdom as a board member.

[Jason Lemkin]

It's a brilliant one. The coin box that rattles loudest has the least in it. Another one that a fan told me the other day I thought was helpful is like, my lesson from boards is VCs are great at identifying when to hire someone and they're awful at identifying who to hire. Your buddy is probably like the CRO of Atlassian. That's not great for my 10 millionaire.

[Miles Clements]

That's exactly right.

[Jason Lemkin]

That's not a good thing.

[Miles Clements]

That's exactly right.

[Jason Lemkin]

So, yes, dude, I'd love to do a quick fire with you.

[Mike Krieger]

I'd love it.

[Jason Lemkin]

So seed firm. Series A firm and growth firm that you have to invest in and it can't. Obviously, obviously you put all your money in Excel. Yeah, yeah, of course.

[Mike Krieger]

Seed fund. I really like the guys at Liquid too.

[Miles Clements]

Nate and Matt Mulvey.

[Mike Krieger]

Those guys are prolific.

[Miles Clements]

They have an incredible network. They have great taste in companies and they are kind, enjoyable people to work with. So when they send me something, I take it very seriously.

[Jason Lemkin]

Series A.

[Mike Krieger]

The vocabulary on what a Series A is these days has evolved. So I'm not sure how you would bucket these guys. I really like the team at Maritech.

[Miles Clements]

I think they have very good tasting companies. They do some series B and later stage things also, but great tasting companies and they are gritty and they hustle. I would say it's not coincidental that Max and Alex were also trained at Summit Partners. I really respect, respect that part of their pedigree, but I really like those Guys, growth.

[Mike Krieger]

How can you not acknowledge how successful Josh has been at Thrive?

[Miles Clements]

I really admire the way that they have scaled a business that not only can initiate investments and invest across funds, but like really reflect their conviction at the late stages.

[Mike Krieger]

So, you know, we compete with them fiercely. We also work with them.

[Miles Clements]

I've gotten to work with Miles Grimshaw through the cursor board, which has been a great experience.

[Jason Lemkin]

Miles is amazing.

[Mike Krieger]

He's great. He is my much more articulate, intelligent VC alter ego. The other Miles, but we have a

[Miles Clements]

lot of competitive respect for those guys.

[Jason Lemkin]

He's also like a marathon runner in like 2 hours, 10 minutes.

[Harry Stebbings]

This guy is like a. I could

[Mike Krieger]

finish a marathon in 2 hours and

[Miles Clements]

10 minutes, like on a motorcycle. But it's different.

[Jason Lemkin]

Honestly, I see Marsman like, I need to be better as a human being.

[Mike Krieger]

Different strengths.

[Jason Lemkin]

I totally agree.

[Mike Krieger]

I could win in an arm wrestling.

[Jason Lemkin]

If you could add one person to your team, who would you add? This can be completely hypothetical. It can be Pat Brady, it can be Josh Kushner, it can be Eli Gill. They are going to most move the needle in our ability to win.

[Mike Krieger]

I'd probably try my very hardest to

[Miles Clements]

talk Mike Cannon Brooks into retiring from operating, into being an investor. He would never do it.

[Mike Krieger]

If I could go to war side by side every day with somebody, it would be Mike.

[Miles Clements]

Never better against Mike.

[Jason Lemkin]

What about other VCs? I agree with you. I think might be amazing. I'd probably take Neil Mater. I don't know anyone who has the investor breath that Neil has from doing Windsurf's first round and sticking with them throughout many pivots to doing Carvana in the public markets and having that breadth of aperture.

[Miles Clements]

This is actually a really fucking good question.

[Jason Lemkin]

Or Mickey Malka. Mickey Malka's ability to see trends so early is just exceptional.

[Mike Krieger]

I'm going to answer this one, but it's a really good question I hadn't thought about. Do you ask this one a lot?

[Miles Clements]

This is a really good one.

[Jason Lemkin]

Thank you. I saved it for you.

[Miles Clements]

Thank you for that. This is great. I'm jet lag discombobulated and I didn't prepare for this.

[Mike Krieger]

I think somebody who I not only have a lot of professional respect for,

[Miles Clements]

but somebody who I personally just like a lot. It's actually Matt Borenstein at Andreessen.

[Mike Krieger]

Do you know Matt? He works with Martin.

[Miles Clements]

He's deeply technical and very thoughtful. Was instrumental in there finding the cursor investment. Matt doesn't like admitting that he also has an MBA from Harvard, but we Sat next to each other for a semester at school.

[Mike Krieger]

I really like him.

[Miles Clements]

I enjoy spending time around him and I think he's really, really smart.

[Jason Lemkin]

What advice would you give to someone starting their career in vanture today?

[Mike Krieger]

I would give the same advice that

[Miles Clements]

Arthur Patterson gave me and says all the time to us as a firm, which is it's just about professionalism.

[Mike Krieger]

Arthur says this thing that anybody, any

[Miles Clements]

firm can be professional over short periods of time.

[Mike Krieger]

But his aspiration in starting Excel with

[Miles Clements]

Jim was to maintain a standard of professionalism over long, extended periods of time. That means respecting the process, respecting the

[Mike Krieger]

partner meeting, respecting the portfolio review, respecting

[Miles Clements]

the rituals of the firm and going about the job in a professional way. I would give that same advice.

[Jason Lemkin]

Tell me, what deal did you not do that you wish you'd done in the last 12 months?

[Mike Krieger]

I think 11 labs is a clear

[Miles Clements]

company that we wish we had been a part of. We haven't spent enough time with the founder, which is our loss. I think we really regret that one.

[Jason Lemkin]

Did you try and do the 11 billion round?

[Miles Clements]

We didn't. We didn't. You know, as I said, nobody has a perfect success rate like this is one that at the next off site we will beat ourselves up over.

[Mike Krieger]

But as I understand it, very special

[Miles Clements]

founder, very clearly an important part of the modern AI stack. So that one stinks.

[Jason Lemkin]

What's worse, losing or not seeing it? It. Because losing. Everyone says not seeing it, not seeing it. But losing really sucks.

[Miles Clements]

They're equally bad, but losing stings more.

[Mike Krieger]

Having had the opportunity and failed stings,

[Jason Lemkin]

can I ask which loss hurts the most?

[Mike Krieger]

I don't know that I would characterize it as we lost. But the company that I really, really

[Miles Clements]

loved, the founder and we didn't get there, was Shiv and abridged. We actually hosted this AI dinner a couple of weeks ago and I was like, I'm going to manipulate the seating chart and get to sit next to Shiv because I think he's generational and very good and I regret that we didn't get to work with him.

[Jason Lemkin]

What Win feels the best. That moment of jubilation.

[Mike Krieger]

There was one where I was going through some personal things and happened to

[Miles Clements]

be able to compete for and ultimately win the opportunity to work with linear.

[Mike Krieger]

That one on a personal level was maybe the best week. It had been the worst couple of

[Miles Clements]

months that I'd experienced in a long time.

[Mike Krieger]

There was this very surreal week where it felt like Kari might decide to raise capital. I basically decided that I was going

[Miles Clements]

to go park myself in Southern California, you know, he lives in Del Mar, outside of San Diego, until he basically decided whether or not he was going to raise money.

[Jason Lemkin]

When you say park yourself there, I didn't mean it's bad. He'd be like, he literally parked outside of his apartment.

[Miles Clements]

No, I, like, got a hotel room somewhere. And I would get up and go for runs and see if he wanted to hang out and try not to bother him, but.

[Mike Krieger]

But in the event that he said,

[Miles Clements]

yeah, I'd love to get lunch, like, I just wanted to be nearby. It's a little bit creepy, as I say it out loud, but at the time, you know, it seemed right.

[Mike Krieger]

And I had a lot of stuff going on at home.

[Miles Clements]

It was my best friend, my best friend Craig's birthday. Craig, by the way, is the only reason I got into this industry to begin with. He got me my first job and then my second job, and, you know,

[Mike Krieger]

I was flying back and forth. I would. I would go home, see my kids, go to San Diego, sit there, try to hang out with Kari, go home, attend Craigslist birthday, which he wouldn't have

[Miles Clements]

cared about, but he's my best friend and I needed to do it, go back down to San Diego.

[Mike Krieger]

And there was just a lot coming

[Miles Clements]

to a boil in my personal life. And when K called and said that, you know, he wanted to work together,

[Mike Krieger]

Mike, it was pretty euphoric.

[Miles Clements]

I will always remember that week.

[Mike Krieger]

And it's been a special company to

[Miles Clements]

work with, but on a personal level, that one felt pretty good.

[Jason Lemkin]

The two companies that I've never had more requests for intros to is that I had just carry every. Every growth and us. I wanted to meet him before that round. It was like. It was annoying, to be honest. And then lovable was really annoying. That was really annoying. But pre the round that Zhenya did, because we were in the round before, it was just embarrassing. I mean, like five to ten a day. And it is very awkward because who

[Miles Clements]

else are you getting bothered about right now? I should go see them while I'm here.

[Jason Lemkin]

Yeah, there's two or three. And it's so funny, you see the ambassador wins, where it's just like, you don't bother sending it to the founders because it's like, I'll send you a list of names of people who. Who want to.

[Miles Clements]

Yeah.

[Jason Lemkin]

And it's even worse for me because I often have them on the show. And so people assume that you're great friends.

[Miles Clements]

Yeah, yeah, I know.

[Jason Lemkin]

I just met, like, you know, whoever it is, when we did the show.

[Mike Krieger]

I just assumed you were best friends with everyone who comes on the show.

[Jason Lemkin]

Best friends. Final one for you, dude. What are you most excited about? When you look forward, I think it's really important to be optimistic. Optimists make money. Pessimists are right. What are you most excited about?

[Mike Krieger]

Honestly, the thing that I'm the most

[Miles Clements]

excited about is watching the younger team I at Excel flourish.

[Mike Krieger]

I'm not smart enough to predict where

[Miles Clements]

the world is going to be a

[Mike Krieger]

decade from now, but I can tell

[Miles Clements]

you that Christine Esserman and Ben Cuazzo and Josh and Rohan and a bunch of folks of the team Gonzo and everyone who's gonna be mad that I'm leaving them out. Like we have such a talented team. They are the unsung heroes of the firm that don't get necessarily the attention that they deserve. I'm so excited to see what they're doing a decade from now and like I'm proud to know them.

[Jason Lemkin]

Dude, it's such a pleasure to have you on. It's so nice to see you in person. Thank you for having me joining me.

[Miles Clements]

Dude, this is a blast. Thanks. And

[Harry Stebbings]

but before we leave you Today, over 80% of Fortune 100 companies are running their businesses with Airtable. Airtable combines AI with the scale of an award winning, infinitely flexible no code system. A platform where you can see all of your data in one place and use it to make really big picture decisions. Think of it like mission control for your company. Airtable goes beyond organization and automating repetitive tasks. It lets you use your data to inform strategy, monitor progress and take action. Every cell is capable of performing hundreds of AI powered tasks like web research or localization and using those results to inform and update hundreds or thousands of other cells and workflows in real time. Unlock the true scale of your [e-mail] 20VC. Airtable, the infrastructure of innovation and just like Airtable organizes your workflow data, Metaview

[Jason Lemkin]

organizes your conversation insights.

[Harry Stebbings]

This episode is brought to you by Metaview who says hiring has to be fair. Every founder, VC and exec I speak with knows this. Your ability to hire is the biggest constraint on your company's growth. But recruiting is slow, it's subjective and only getting more competitive. And that's why teams like 11 Laps, Labs, Brex, Replit, Deal and 5,000 other organizations use Metaview, the AI company giving high performance teams a real unfair advantage in hiring. Metaview's built a suite of AI agents that behave like recruiting co workers. They proactively find candidates. They take interview notes automatically, and they help you surface the best candidates in process. For the first time, AI handles the recruiting toil and gives you a single source of truth. That means hours saved per hire and a team focused on what matters most winning the right candidates as fast as possible. Don't let your competitors out. Hire you Metaview customers close roles 30% faster. Try Metaview today and get a free month of sourcing at Metaview AI20VC after Metaview captures what was said, Turing helps you build with the people who can deliver after it. Frontier Labs keep facing the same limitation. Models perform well on benchmarks, but they fall short once they enter real coding tasks, real tools, and real workflows that disconnect between synthetic evaluation and actual system behavior is now a core blocker for agentic models. That's why Nvidia, Anthropic, Salesforce, Gemini, and other leading lab partners partner with Turing. Turing is the research accelerator focused on post training reliability. They build realistic RL environments, next generation data quality systems built from real world operational traces and coding datasets that stress models under conditions where failures matter, state changes, workflow branching, brittle tool calls, and the coding errors that break RL agents but never appear in benchmark reports. In reality, a model may demonstrate correct reasoning in your evaluations setup, yet still select the wrong parameter or mishandle a code update. In a realistic interface, Turing makes that failure visible and gives teams the signal they need to fix it. For labs advancing ajantic systems, Turing provides the structure required to understand why these failures occur. To find out how, visit turing.com 20vc that's t u r-I n g.com 20vc.