Gurley says late-stage private funding behavior is very reminiscent of the late 1990s bubble.
“And the behavior that you'll see for the competition in those dollars is very reminiscent of the late 90s.”
Gurley says capital available to late stage private companies is unbelievable with behavior reminiscent of the late nineties.
“the amount of dollars available to successful late stage private companies is unbelievable. And the behavior that you'll see for the competition in those dollars is very reminiscent of the late 90s.”
Gurley says the late stage private market is the frothiest he has seen since the late 1990s.
“the late stage private market continues to be the most frothy thing I've seen since the late '90s.”
Gurley argues firms investing two hundred million per deal cannot pay attention to smaller series A investments.
“And once the center of gravity goes there in a firm, you know, and you're investing 200,000,000 a clip, Can you imagine the Monday meetings?”
Gurley cites Sequoia's investments in Elon's companies at $50-100B range as departure from historic venture model.
“I look at someone posted the just the investments Sequoia has made in Elon's companies, and they were rounds that were in the, you know, $506,100,000,000 dollar range, and there were three or four of them. And once again, just not not the historic venture capital model.”
Gurley questions whether overfeeding startups with cash leads to poor execution citing companies spending $20M monthly.
“And we talk a lot about focus and constraints and how that leads to better decision making.”
Gurley says successful companies now routinely pressured to raise $500M or more, fundamentally changing venture model.
“I think you're gonna, until this change, I think you're gonna have very few companies that are considered to be doing well that aren't asked by the industry to raise $500,000,000 or more.”
Gurley says late-stage VCs force-feed companies fifty to hundred million despite no capital need, like foie gras geese.
“They just wanna cram money in. I I I thought about it. I I learned how they force feed geese to make for gras.”