20VC: The Memo: Bill Gurley, Doug Leone, Keith Rabois; Investing Lessons from Prior Busts, How Their Investor Psychology Changed, What Can Be Applied To Today's Market

This podcast episode emphasizes the need for caution in the current market cycle due to high-priced assets and stretched valuations. It compares the current market situation to previous crises, pointing out common factors such as excessive liquidity. The potential effects of rising interest rates on risk assets and crypto are also discussed, highlighting the importance of risk management. The episode concludes by discussing the lessons learned from past crises and the importance of adopting a nuanced approach to investing, including maintaining a consistent investment pace and building strong partner relationships. Takeaways • Valuations in the marketplace are at all-time highs, suggesting the possibility of a market contraction. • Caution should be exercised with high-priced assets, and taking profits should be considered. • Appropriate valuations in growth rounds and considering the funding landscape and milestones between rounds are important in investing in different stages of companies. • Market cycles are inevitable, and valuations eventually revert to the mean. • Recognizing similarities between the current market and previous market crises can provide insights into potential risks and market trends. • Rising interest rates can have an impact on risk assets and crypto, with the extent varying depending on the risk spectrum and income generated by the assets. • The crypto space may experience a larger effect on its value due to rising interest rates, but there is still real value being created in the industry. • Downturns present investment opportunities, and it is important to maintain a constant investment pace, develop strong partner relationships, and support founders during uncertain times. • Having sufficient reserves and capital on hand is advantageous during downturns. • A nuanced approach to investing and staying confident are key in navigating turbulent market conditions.