On this episode of Run the Numbers, CJ sits down with Dave McClure and Aman Verjee of Practical VC to talk about the evolution of startup investing — from the PayPal mafia and Founders Fund era to 500 Startups, YC-style scale, and today’s secondary market.

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LINKS:

Mostly Talent: https://mostlymetrics.typeform.com/to/cLTxtAsN

Guests:https://www.linkedin.com/in/davemcclure/https://www.linkedin.com/in/aman-verjee/

Company:https://practicalvc.com/

CJ: https://www.linkedin.com/in/cj-gustafson-13140948/

Mostly metrics: https://www.mostlymetrics.com

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TIMESTAMPS:

0:00 Preview and Intro

3:00 Writing as a distribution strategy

5:17 How Dave's blog led to Founders Fund

7:24 Aman: writing at PayPal and law school

9:29 PayPal: the red pen of David Sacks

11:44 Sponsors — Rillet | Maximor | Brex

14:59 500 Startups: the original thesis

16:22 The volume strategy: more shots on goal

18:44 Twilio, Lyft, Sendgrid, Credit Karma

20:15 60x returns: right place, right time

23:07 Sponsors — Anrok | RightRev | Pulley

25:58 Accelerator ecosystem evolution

28:42 500 vs. YC: scale as a weapon

32:52 Globalizing the accelerator model

35:04 Seed to secondaries: how it happened

37:00 Scratching their own itch for liquidity

38:10 The secondary market explained

40:50 Types of secondaries

43:29 Why would a VC sell a winner?

46:07 Managing DPI as a late-stage manager

47:02 The five horse framework

49:15 Skipping the J curve

51:44 Imperfect information as a feature

55:22 Landmines: fraud, mismarked valuations

57:00 VCs lie about valuations three ways

57:58 Forward contracts and counterparty risk

1:00:29 Credits

Dave McClure and Aman Verjee on Angel Investing at Scale, 500 Startups, and Practical VC

Run the Numbers

Dave McClure and Aman Verjee on Angel Investing at Scale, 500 Startups, and Practical VC