Nicholas Chirls: Why Big VCs Ruin Startups, VC is a Ponzi Scheme Today & Most VCs are Bankers |E1198

ℹ️ EPISODE INFO

Released

September 6, 2024

Duration

1h 9m

Channel

The Twenty Minute VC

Watch on YouTube

▶ Open ↗

📝 EPISODE DESCRIPTION

Nick Chirls is the Founder of Asylum Ventures, a new venture firm dedicated to the creative act of building companies; treating founders like artists, not assets. Asylum raised $55 million to invest $1-2 million in early-stage founders practising the art of making startups. Prior to Asylum, Nick co-founded Notation Capital, one of NYC’s most successful pre-seed firms. ----------------------------------------------- Timestamps: (00:00) Intro (01:20) Starting Asylum Ventures (04:19) The Ponzi Scheme Structure of the Venture Capital Industry (13:15) Multi-Stage Funds Are Tightening Margins for Pre-Seed Investors? (36:18) Why Do Big VCs Favor Funding Capital Inefficiency? (46:43) The Myth of VC Value-Add (55:05) Raising Money as the Default Path for Today's Founders (01:04:07) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Nick Chirls We Discuss:

1. Why Venture Capital is Broken Today: Why are most VCs sheep and have lost all creativity? Why are most investors today incentivised to get dollars out of the door and not to make great investments? Why are services functions within VC firms total BS? Why do no VCs provide significant enough value to a company that it is needle-moving?

1. How to Make Money in VC in 2024: What are the two ways to make money at seed in 2024? Why do founders in unloved markets care more than those in hot markets? Why will large institutions lose a ton of money investing in the large firms of today? Why does Nick believe VCs should always sell when their founders sell shares?

1. Lessons from 3xing a Fund on One Check: Why does Nick think about not purchasing preferred shares and only buying common shares? Why does Nick believe that investing in competitive markets is stupid? What does Nick believe are the conditions you must accept if you are doing a $5M on $25M seed? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Nicholas Chirls on Twitter: https://twitter.com/nchirls Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #nicholaschirls #venturecapital #partner #founder #competitivemarket #notationcapital #asylumventures #ponzischeme

🎤 SPEAKERS

• Nick Chirls

  guest

• Harry Stebbings

  host

🧾 EPISODE SUMMARY

In this episode of The Twenty Minute VC, featuring Nick Chirls and Harry Stebbings, Nicholas Chirls: Why Big VCs Ruin Startups, VC is a Ponzi Scheme Today & Most VCs are Bankers |E1198 explores nicholas Chirls Explains How Mega VCs Distort Startups And Incentives Nicholas Chirls, founder of Asylum and previously Notation, argues that large venture firms now behave like banks, prioritizing fund size, fee streams, and rapid capital deployment over true company-building and returns. He describes venture’s current incentive structure as a "Ponzi-like" system where management fees and TVPI-driven behavior distort decision-making for both VCs and LPs. Chirls contrasts this with a small, artisanal, thesis-driven model: backing obsessed founders early in markets no one cares about yet, staying lean, and aligning tightly with founders on trust, ownership, and exit decisions. He also explores misalignments between founders and VCs, questions the real value of VC “platform” services, and calls for more honesty about risk, capital intensity, and who should actually be founding companies.

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