00:00It's extraordinary how much money is being raised, but how much money is being spent on just a few companies.
00:06Yeah, it really is, right? And to your point of the data looking really great, and it does, but it
00:12really depends on where you're at.
00:1491% of the capital went to deals of 100 million or larger, so about 185.
00:19You had 73% of that go to five companies, all AI, if you include Databricks in there.
00:25You have investors that want exposure and LPs that want exposure to AI.
00:29And so what's getting left behind is the non-AI companies, whether it be your traditional enterprise SaaS that was
00:34hot in 2021,
00:35or different business models that are just not harnessing or not AI native like everyone wants.
00:43Everyone wants. So what happens? Is it a tale of totally two cities?
00:47Are there an awful lot of people out there who are receiving no funds, who are still languishing in down
00:51rounds,
00:51or not even to raise funds at all? Are there these zombie companies out there, Carl?
00:56Definitely. I mean, there's 25% of the unicorns, you know, about 900 unicorns now in the U.S.
01:0125% of those haven't raised since 2022.
01:04In a market that's really fast and really hot, like we're seeing right now,
01:07if you were a strong company and were leveraged for raising another round, you would do that.
01:12And so those companies are still trying to find a way to, you know, maybe they are going to take
01:17a lower exit,
01:19or, you know, find some way to go through a SPAC and reorganize themselves.
01:23But there's a lot of those companies that were strong and hot in the next big company in 2021 and
01:2922
01:29and have not raised since. And those are the companies that are really struggling in this market.
01:34We're just reflecting, Carl, that the data we're showing, the data you guys published is from the first quarter, right?
01:39And activity has been heavy more recently. You heard the reporting from Natasha and I last night, right?
01:48Our understanding from sources is Sequoia is doing $7 billion in an expansion to fund.
01:53But to go after that late stage, you know, the AI companies, what do you infer from that?
01:58You know, the necessity to have capital at those levels, I guess, because otherwise you're not buying in to the
02:05names that we're talking about.
02:07Yeah, there's a few things that tells me, right? One, companies are going to continue to stay private longer, right?
02:13And so those VCs that have access and exposure to companies that are then 15 years old and raising another
02:19private round
02:20are going to want to get into those companies again and continue to keep their stakes high.
02:24It also tells me that LPs want that exposure. They know these companies are not going to go public
02:29in the timely fashion that we might have seen five years ago or a decade ago, right?
02:34And so they want to make sure that they have exposure to the Anthropics and the SpaceXes and the Databricks
02:39of the world.
02:40Well, also, Kyle, those companies, they're going to probably go public this year, right?
02:46Yeah.
02:47How does that impact everything?
02:50I think that impacts a lot, right?
02:51I think, one, we're looking at those companies as the kind of market indicators if the IPO market window is
02:57going to be fully open this year.
02:58We have seen, obviously, SpaceX confidentially filed.
03:01We have seen Discord filed in January but hasn't got any movement.
03:05There's not really a backlog or a pipeline of VC-backed IPOs because everyone's waiting for these big companies to
03:10go public
03:10to see what the public investors want to support.
03:13You see how Figma has traded today after Anthropic announced their design studio.
03:18So that's the worry of a lot of these VC-backed companies.
03:22They're going to go public and they're going to not find the support for their high valuations
03:26and then have to contend with Anthropic and OpenAI launching something that's very competitive to their space.
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