Distilling Venture Capital

The episode makes a few genuinely substantive points - post-money valuation was always a rough proxy, never designed to represent market cap, and the Stanford findings are striking - but the core argument is repeated three or four times with heavy filler and preamble, diluting the insight-per-minute ratio considerably.

“The Post Money valuation was never intended to be used for the purpose that it is Today that is trying to come up with a market value um, for these companies”

“it was always considered a rough, uh, back of the envelope, uh, way to value a company and maybe was a very rough approximation of its future potential or future success. But in no way did it represent market value. Everybody knew that and no one tried to suggest that it was market value.”

The practitioner angle - 'I was a venture debt lender for 20 years and we always knew post-money wasn't market cap' - is a mildly fresh framing, but the underlying critique is largely a retelling of the Stanford study without additional first-principles analysis or genuinely contrarian claims.

“I have known about the concept of the Post Money valuation, that term, for more than 20 years during my time as a venture debt lender. The Post Money valuation was never intended to be used for the purpose that it is Today”

“in no way did it represent market value. Everybody knew that and no one tried to suggest that it was market value. Now in this era of unicorn mania, in this freak show, since well uh, 2013 really when the term was coined”

This is a solo monologue episode with no guest; the host cites 20+ years in venture lending starting pre-bubble which is a legitimate background, but the episode provides almost no demonstration of that depth - credentials are asserted, not evidenced through nuanced practitioner insight.

“As a venture lender for over 20 years, and I started in the business in 1998. So even before the Internet bubble”

“90 to 95% of all the deals we did, all the loans we made to these venture capital backed technology companies”

A handful of concrete data points anchor the episode - the 135-unicorn Stanford sample, 100% overvaluation rate, 65 companies losing unicorn status, and WeWork's $47B valuation - but beyond these the episode relies heavily on generic assertions about financial metrics without named funds, dollar figures, or further named companies.

“all 135 unicorns that were uh, evaluated in the study were overvalued. So 100% of the sample was overvalued”

“WeWork, which I analyzed in episode six, August 2020, there was no path to profitability for that company, and yet it had a $47 billion valuation, uh, and then dropped it, dropped it, dropped it before pulling its IPO in September of 2019”

This is an unstructured solo monologue read from handwritten notes, with no guest, no probing questions, no follow-ups, and no productive tension; the host repeatedly loses his thread mid-sentence and the format adds zero conversational value.

“let me, let me go to my notes here”

“Um, yeah, stay far away from anything. That's an index unicorn that bills itself as an index of unicorn tech companies.”