All-In PodcastE141: State of Series A's, VC dry powder, IPO window opens + more with Bill Gurley & Brad Gerstner
CHAPTERS
- 0:00 – 1:18
Friedberg’s $10 haircut disaster + opening banter
The episode kicks off with Friedberg getting roasted for an ill-fated bargain haircut at a teaching salon. The group riffs on bleeding neck cuts, tipping, and the absurdity of being wealthy but going cheap on a haircut.
- •Friedberg’s teaching-salon haircut story and mishap details
- •Chamath and JCal pile on with jokes about value and tipping
- •Sets the casual tone before formal topics begin
- 1:18 – 4:44
BG² arrives: what Bill Gurley’s up to + book projects
Jason welcomes back Bill Gurley and Brad Gerstner ("BG squared") and asks Gurley about stepping back from Benchmark’s next fund. Gurley explains he’s still active on boards, doing a few angel deals, and writing a book focused on career/dream-job advice.
- •Gurley’s current role: boards, selective angels, and book writing
- •Book thesis: pursuing and succeeding in a dream job
- •Themes teased: studying history and intense networking
- 4:44 – 16:14
Biography recommendations, writing advice, and founder craft (plus a Chamath cameo)
The besties trade influential biographies and talk about what makes business books useful (war stories vs generic principles). Chamath briefly “Zoom bombs” from overseas to keep his attendance streak alive, then exits as the group returns to book and craft recommendations.
- •Friedberg on Jobs biography impacting his CEO cadence and decisiveness
- •JCal recommends Kurosawa, Steve Martin, Stephen King’s On Writing, Malcolm X
- •Brad discusses writing a software-operator playbook and how to structure it
- •Chamath pop-in via Starlink, then leaves
- 16:14 – 22:26
Kurosawa film detour + cold plunge / wellness trend debate
The conversation veers into Kurosawa films as startup metaphors (persistence, teamwork) and Hollywood remakes. It then shifts to cold plunges and other elite wellness trends, with Gurley skeptical of the medical benefits but amused by the fad cycle.
- •Seven Samurai as a leadership/persistence parable for founders
- •Kurosawa influences: Shakespeare adaptations and Hollywood remakes
- •Cold plunge routines, endorphin rush claims, and Gurley’s skepticism
- •Jokes about the ‘abhorrent 1%’ lifestyle stack: sauna, bikes, pickleball
- 22:26 – 33:43
State of Series A in 2023: stabilization, AI outliers, and “promise vs performance”
Using Carta data, the group assesses Series A medians falling from 2022 levels but not collapsing. Gurley and Gerstner argue early-stage remains competitive while late-stage is tougher, and that AI deals distort averages with 2021-style pricing.
- •Carta stats: median Series A size and valuation down YoY
- •Gurley: still competitive; AI deals likely inflate pricing averages
- •Gerstner: late-stage dried up more than early-stage; narrative vs metrics
- •Framework: founders sell “promise” early and “performance” later
- 33:43 – 39:36
Dry powder isn’t cash: drawdowns, marking incentives, and LP liquidity stress
Gurley explains why VC ‘dry powder’ sits with LPs until capital calls, and how IRR clocks and fee structures shape behavior. The group digs into the misaligned incentives around private-market marks, why nobody pressures markdowns, and how LP liquidity needs (e.g., 5% endowment distributions) create friction.
- •Dry powder mechanics: commitments vs drawdowns over a fund’s life
- •Private-company ‘marks’ are crude and incentive-misaligned for GPs and LPs
- •LP bonus structures and the quiet preference to avoid markdowns
- •Liquidity crunch risk for endowments heavily allocated to illiquids
- 39:36 – 49:10
Deployment slows, software buying tightens, and the denominator effect hits LPs
Brad Gerstner describes moving slowly despite having capital, because fewer companies meet quality bars amid enterprise belt-tightening. The group connects this to a software recession (seat-based contraction, vendor consolidation) and explains the denominator effect that reduced new VC commitments after public markets fell faster than private marks.
- •Altimeter’s bar unchanged; fewer companies qualify due to macro headwinds
- •Enterprise buyers consolidate vendors and renegotiate harder
- •Software recession dynamics: layoffs reduce per-seat SaaS spend
- •Denominator effect: VC allocation swells as public markets drop faster than private marks
- 49:10 – 1:03:19
IPO window cracks open: cap-table complexity, down-round IPOs, and banker incentives
The discussion shifts to whether IPOs are returning, with examples like Arm and Instacart. Gurley argues complex unicorn cap tables and liquidation preference stacks make private financings hard, so going public can “clean up” structures—often via down-round IPOs—while bankers now need IPOs to price attractively to rebuild demand.
- •Unicorn cap-table complexity (liq prefs, derivatives) deters new private money
- •IPO as a reset mechanism: common conversion and market pricing transparency
- •Down-round IPOs (e.g., Instacart) become socially/board acceptable again
- •Banks must price IPOs to ‘work’ to bring buyers back
- 1:03:19 – 1:22:23
Venture’s cyclical reality: liquidity discipline, IRR, and benchmarking vs public tech
Gurley and Gerstner zoom out on why venture is inherently cyclical and why returns often come from narrow windows. They debate hold-forever rhetoric versus taking liquidity, discuss distributions at IPO, and argue VC should be benchmarked against tech indices (QQQ) with an illiquidity premium—raising questions about whether the asset class is overfunded.
- •Venture outperformance concentrated in brief, crowded cycle windows
- •“Hold forever” founder-friendly rhetoric can conflict with fund return math
- •IPO distributions let LPs decide to hold/sell; GPs lose informational edge post-IPO
- •Benchmarking VC vs QQQ and the implied illiquidity/risk premium
- 1:22:23 – 1:26:11
Maui tragedy and extreme heat: wildfires, sea temperatures, and climate reality
Friedberg pauses the markets discussion to acknowledge the Maui wildfires and the loss of Lahaina. He then cites extreme global temperature and ocean heat anomalies as evidence the planet is warming and that the impacts are becoming more frequent and dangerous.
- •Lahaina burned down; personal reflections and condolences
- •Record or near-record heat events across regions
- •North Atlantic sea surface temperatures and storm risk implications
- •Firm stance: warming is real; debate shifts to solutions (saved for later)
- 1:26:11 – 1:33:11
Macro wrap: inflation cools, effective tightening, deflation risk, and debt overhang
The episode closes with a macro check-in: CPI disinflation signals, market expectations for rate cuts, and the idea that quantitative tightening makes the ‘effective’ rate higher than the headline Fed funds rate. They flag recession/slowdown risks alongside record household and government debt burdens that become painful at today’s interest rates.
- •Core CPI cools; ‘summer of disinflation’ narrative emerges
- •Effective funds proxy rate includes QT and credit availability constraints
- •China disinflation raises global demand/slowdown concerns
- •Record household debt + high credit card APRs; looming government refinancing wave
- 1:33:11 – 1:35:59
Sign-off and final jokes: Gurley’s All-In street recognition
Jason closes the show with thanks and a nod to future discussions on climate and macro. Gurley ends with a story about being recognized not for his investing career, but as “that guy they sometimes talk about on All-In.”
- •Plans to continue macro and climate discussions in future episodes
- •Maui well-wishes reiterated
- •Gurley’s Austin anecdote about All-In’s cultural reach
- •Playful outro banter among the hosts
