The Twenty Minute VCWill Quist: Why 95% of Venture Capital is Not Really “Venture Capital” | 20VC #924
CHAPTERS
- 0:00 – 2:41
Will Quist’s path into venture: Bay Area roots, startups at Berkeley, and joining Slow
Will shares his unconventional route into venture, from growing up around Sand Hill Road to discovering startups through Berkeley’s incubator. He traces key early career steps—including a stint as a professional water polo player—and how those experiences ultimately led him to partner with the Slow Ventures team.
- •Sixth-generation Bay Area upbringing with little early awareness of venture mechanics
- •First hands-on startup exposure via Berkeley/Haas incubator support work
- •Year playing professional water polo in Hungary before returning to career-building
- •Early desire to be an operator before moving toward investing
- •How complementary skills and relationships led to joining Slow Ventures
- 2:41 – 4:26
The Red Herring crash course: reviewing 1,000 companies and learning to “pick stories”
Will recounts working with the founder of Red Herring (a ‘90s-era TechCrunch analog) during media’s transition online. Running the Top 100 list process gave him repeated reps meeting founders and evaluating startups, cementing his love for company selection.
- •Red Herring as a major startup/venture media brand in the ‘90s and early 2000s
- •Evaluating thousands of submissions; meeting hundreds of companies in person
- •Learning to decide, rank, and write up companies—early pattern recognition training
- •Exposure to notable companies (e.g., early Pandora/Savage Beast)
- •Realization that investing—backing and selecting companies—was the path
- 4:26 – 6:35
Industry Ventures and the “private markets changed forever” thesis
After investment banking, Will joins Industry Ventures as it bets on companies staying private longer and the resulting secondary/later-stage capital needs. He describes how broad exposure across deals, sectors, and LP relationships became a formative venture education and set him up to build independently—before Slow’s fund launch pulled him in.
- •Transition from banking to venture via the finance/markets angle
- •Industry Ventures’ early thesis: longer private timelines create new capital needs
- •Rapid learning through high deal volume across stages and sectors
- •Building a track record, LP relationships, and senior responsibilities early
- •Timing: planning to start his own fund as Slow moved from personal capital to institutional
- 6:35 – 9:14
Why “95% of venture capital isn’t venture”: defining Venture Classic vs New Venture
Will lays out his definition of true venture: financing a founder’s testable experiment where the outcome can dramatically change enterprise value, with strong equity efficiency over time. He argues much of the market is instead capital seeking modelable, data-heavy outcomes and deploying in equity-inefficient ways more akin to growth investing.
- •Venture’s purpose: fund experiments against knowable/testable hypotheses
- •Best historical performance comes from long-duration, equity-efficient value creation
- •Much capital seeks extrapolatable data, not novelty (actuals over theories)
- •Equity inefficiency and very large late rounds don’t match “classic venture”
- •Growth-style piling on can be rational—but should be labeled differently
- 9:14 – 10:17
Venture is “simple but hard”: a clean formula, complex contextual judgment
Will explains that while the conceptual model of venture is straightforward, the difficulty is in weighing contextual trade-offs across product strength, market size, founder fit, and more. The craft lies in disciplined questioning and balancing multiple interacting levers to price and decide correctly.
- •Simple definition, hard execution: balancing risk/reward across many levers
- •Deciding which factors dominate is contextual, not formulaic
- •Examples of trade-offs: great product vs small market vs founder background
- •Discipline: asking the right questions consistently across deals
- •Pricing and decision-making are intertwined with uncertainty
- 10:17 – 13:31
Where did the rebels go? Scale, playbooks, and why capital games converge
The conversation shifts to why venture attracts fewer “rebels” as firms scale and become more playbook-driven. Will argues all capital markets evolve similarly: early collaboration when volatile and sub-scale, followed by consensus strategies and more zero-sum behavior once scale and formulas emerge.
- •“Lack of rebels” is partly proportional: more firms, same number of rebels
- •Capital markets progress from volatile/non-consensus to scaled/consensus
- •Early-stage: collaboration is necessary because no one has enough capital
- •Scaled markets: incentives push toward zero-sum competition and playbooks
- •Strategy axes: collaborator vs zero-sum and generalist vs specialist
- 13:31 – 16:02
Does New Venture compress returns for Venture Classic? Conflicts, incentives, and looking ‘silly’
Harry challenges whether new models and scaled multi-stage behavior erode classic venture outcomes. Will emphasizes the scaled incentive to avoid novelty, the career/brand penalty of being wrong, and how large firms converge on similar narratives—paralleling investment banking’s consensus underwriting behavior.
- •At scale, firms have incentives to avoid novelty and early conflicts
- •Even small early checks can “conflict out” of larger future opportunities
- •Reputational downside: being wrong in a competitive market has a penalty
- •Consensus narratives form because relative games punish novel underwriting
- •Large-firm dynamics resemble other finance sectors (e.g., bankers’ consensus stories)
- 16:02 – 17:33
How seed managers compete: concede the consensus game and go “one click” out
Will advises seed investors not to fight on pure price for consensus deals against multi-stage players with low price sensitivity. Instead, the edge is to hold a defensible belief system that is slightly further from consensus—funding hypotheses before data hardens and the discount rate collapses.
- •Competing head-on in consensus seed rounds is structurally hard
- •Slow’s stance: concede consensus and seek a ‘click’ further belief
- •Classic venture: underwriting credible theories earlier than others
- •Seed advantage comes from financing experiments that convert theory into data
- •The reward is biggest when you fund hypothesis-to-proof transitions
- 17:33 – 25:23
Five levers of enterprise value—and how venture answers differ from public markets
Will introduces his framework (inspired by universal investing principles) for evaluating enterprise value through five core levers. The key venture distinction isn’t the questions themselves, but which answers you’re willing to accept as sufficient—often betting where evidence is still anecdotal or theoretical.
- •Five levers: arc-of-history tailwinds, product value, market, defensibility, business model
- •Market sizing lens: start with historical spend; then debate growth drivers
- •Defensibility sources: network effects, IP, regulatory advantage (walls vary in height)
- •Four “answer states”: first-party longitudinal data, strong third-party data, anecdata, theory
- •Venture differs by accepting more uncertainty on at least one lever to price earlier
- 25:23 – 28:38
Market vs founder and the role of black swans: when one lever shuts the deal down
Harry shares a painful lesson that market constraints can overpower even great founders; Will reframes it as any lever producing a ‘fatal’ answer can negate the rest. They discuss how weak, hard-to-sell value propositions and capital-inefficient markets can doom outcomes, while acknowledging true black swans exist.
- •Any single lever can invalidate the whole investment case
- •Value proposition clarity (‘give $1 of value, charge $0.90’) as a core driver
- •Some markets are structurally capital-inefficient regardless of founder quality
- •Macro/political shocks exist but shouldn’t excuse weak fundamentals
- •Venture complexity: a large option tree with many interacting failure modes
- 28:38 – 31:34
Risk matrix thinking: stacking theories is exponentially harder than being right once
Will outlines how he evaluates risk by mapping which core questions are still theoretical versus supported by real data. He argues novelty is hard to get right once, and being right on multiple novel dimensions simultaneously compounds difficulty—creating a natural limit on how many uncertainties you should finance at a given price.
- •Risk assessment: count how many levers are theory vs data-backed
- •Novel + correct is rare; two novel truths is exponentially rarer
- •Pricing becomes impossible when too many key answers are purely theoretical
- •Success can improve odds: experience and information can create a ‘winner’s edge’
- •Great companies often show strength across multiple framework ‘columns’
- 31:34 – 33:32
Loss rates, optionality, and pricing when consensus is lower
They explore the implications of investing ‘one click out’ from consensus: higher loss rates should be expected. The offset is not necessarily more line items, but greater aggregate optionality—either through bigger potential payoffs or a more indexed approach—and ideally being compensated with better pricing (though markets can misprice risk).
- •One-click-out strategies should have higher loss rates
- •Portfolio response: seek more aggregate optionality, not automatically more lines
- •Optionality can come from massive winners or a more indexed construction
- •In theory, more risk should mean better entry pricing; in practice noise disrupts this
- •Brand firms often minimize uncertainty by betting on only one key theoretical lever
- 33:32 – 39:31
Venture’s next 3–5 years, LP incentives, and the shift from underwriting to ‘winning deals’
Will predicts scaled “new venture” will continue to resemble other finance sectors: a bigger pie concentrated among fewer dominant platforms with clear strategic quadrants. They connect this to LP behavior—large funds offer deployable exposure with acceptable returns—and Will flags a troubling trend: the industry’s pivot from careful underwriting to competitive deal-winning dynamics.
- •Future resembles investment banking/PE: concentration among dominant scaled firms
- •Firms that choose a quadrant and build around it will outperform; the middle struggles
- •Platform shifts (internet/mobile) temporarily expand opportunity and mask weak edges
- •LPs trade off upside for deployable exposure and career safety; scale changes expectations
- •Disturbing trend: competing to win deals replaces disciplined underwriting (elk vs squirrel hunting)
- 39:31 – 42:46
Collaboration, ownership, and price sensitivity: classic venture vs scaled ‘packs’
Will argues collaboration declines as firms become fully capitalized and vertically integrated across stages, reducing the need to share risk. Classic venture remains more collaborative due to smaller capital pools and higher uncertainty, but trade-offs emerge around ownership, fund construction, and allocation discipline—often more important than the nominal entry price.
- •New venture is less collaborative as large firms ‘want to do all of it’
- •Classic venture collaborates more due to higher risk and smaller check sizes
- •Ownership vs number of bets: concentrated vs broader seed portfolios
- •Pricing mistakes often show up as allocation mistakes (position sizing vs valuation)
- •Missing great deals can be the hidden cost of price discipline
- 42:46 – 49:44
Hits, misses, and operator lessons: LiveRamp win, Deel miss, and scaling mindset shifts
Will highlights LiveRamp as a major win driven by resisting category-level dismissals and digging into fundamentals, while citing missing Deel due to price sensitivity as a painful lesson about when price matters. They also discuss organizational reality: changing strategy is faster than changing internal mindsets, and Will’s ‘special forces vs infantry’ metaphor for scaling execution.
- •Big hit: leading LiveRamp Series B when ad tech was broadly dismissed
- •Lesson: avoid sweeping category judgments; analyze customer value and defensibility deeply
- •Big miss: being too price sensitive on Deel’s seed—price ‘matters until it doesn’t’
- •Mindset lag: organizations don’t change overnight after strategic pivots
- •Scaling metaphor: special forces (0→1) vs infantry (repeatable 11→100 execution)
- 49:44 – 55:18
Secondaries and reserves: avoid ‘hold mode,’ think like a buyer or seller, and know your bullet cost
Harry asks about selling secondaries after regretting not taking liquidity; Will advises against a passive ‘hold’ mindset due to emotional and structural difficulty of selling in illiquid markets. They extend the discussion to reserves, framing it around opportunity cost, GP-specific ‘cost of a bullet,’ and whether the manager’s edge is early selection or later-stage underwriting.
- •Secondaries: ‘hold’ is a weak posture; selling is emotionally/intellectually/structurally hard
- •Adopt a buyer-or-seller mindset; when you wouldn’t add, start planning exits
- •Heuristics: consider selling after certain fund-return thresholds, but beware cutting the tail
- •Reserves debate: more early options vs disciplined follow-ons at higher prices
- •Key variable: your opportunity cost of capital and what underwriting stage you’re best at
- 55:18 – 1:08:44
What Slow wants to be + quickfire: Sequoia admiration, Tiger outlook, branding, and a new deal
Will explains why he most admires Sequoia as an investment management business with durable strategic positioning, but clarifies Slow isn’t trying to become a competitive multi-stage platform. In quickfire, he covers his favorite book, an underrated angel, Tiger Global’s path, what he’d change for founders, his renewed respect for branding, and a recent investment in Fair Square Medicare.
- •Sequoia as the most admired: elite execution, business discipline, and continual innovation
- •Slow’s direction: avoid multi-stage arms race; marry classic venture craft with collaborative generalist value
- •Favorite book: The Success Equation (operating and decision-making framework)
- •Tiger Global: likely retrench/private at smaller scale; core growth-model thesis partly right
- •Branding: importance is rising again; timing depends on validated value proposition; recent deal: Fair Square Medicare
