E146: Did the Fed break the VC model? Plus IPOs, M&A, revaluing unicorns & more
Jason Calacanis (host), Chamath Palihapitiya (host), David Friedberg (host), David Sacks (host), Narrator, David Sacks (host), Guest (guest), Guest (guest), Jason Calacanis (host)
In this episode of All-In Podcast, featuring Jason Calacanis and Chamath Palihapitiya, E146: Did the Fed break the VC model? Plus IPOs, M&A, revaluing unicorns & more explores higher Rates, Broken IPOs, and Unicorn Resets Reshape Venture Capital Future The episode blends post-conference debriefs from the All-In Summit with a deep dive into the changing macro environment for tech, IPOs, and venture capital. The hosts argue that recent IPOs like Instacart, Klaviyo, and Arm were poorly structured, signaling that the long-awaited “reopening” of the IPO window is weaker than hoped. They contend that higher-for-longer interest rates, fiscal imbalances, and consumer pressure are forcing a regime shift from capital abundance to capital scarcity, breaking many late-stage VC assumptions and valuations. The discussion also touches on the coming reckoning for overfunded unicorns, platform risk in SaaS, union negotiations, and a promising new scientific approach to autoimmune disease.
Higher Rates, Broken IPOs, and Unicorn Resets Reshape Venture Capital Future
The episode blends post-conference debriefs from the All-In Summit with a deep dive into the changing macro environment for tech, IPOs, and venture capital. The hosts argue that recent IPOs like Instacart, Klaviyo, and Arm were poorly structured, signaling that the long-awaited “reopening” of the IPO window is weaker than hoped. They contend that higher-for-longer interest rates, fiscal imbalances, and consumer pressure are forcing a regime shift from capital abundance to capital scarcity, breaking many late-stage VC assumptions and valuations. The discussion also touches on the coming reckoning for overfunded unicorns, platform risk in SaaS, union negotiations, and a promising new scientific approach to autoimmune disease.
Key Takeaways
The recent IPOs were a weak reopening, not a true market comeback.
Instacart, Klaviyo, and Arm floated small percentages of their equity (often under 10%), spread allocations thinly, imposed no lockups, and quickly traded down to or below issue price. ...
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Higher-for-longer interest rates are permanently repricing tech and venture.
With the Fed signaling rates will stay elevated longer than markets expected, discount rates on future cash flows rise, compressing multiples, especially for unprofitable SaaS and late-stage growth. ...
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Late-stage VC has often destroyed value relative to simple index investing.
Using Instacart as a case study, Chamath highlights that many mid- to late-stage investors would have earned more by buying the S&P 500, once you factor in entry price, dilution, and illiquidity. ...
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Overfunded unicorns face brutal recaps that pit investors against each other.
Companies like Airtable, with huge preference stacks and valuations far above current public comps, are likely worth less than the money invested into them. ...
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Platform dependency is a hidden risk in otherwise excellent SaaS businesses.
Klaviyo is a standout SaaS company—high growth, strong NRR, and capital efficiency—but 70% of its business comes via Shopify. ...
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Consumer belt-tightening may be the next phase of the downturn.
The hosts believe B2B and software have already taken their hits via layoffs and efficiency drives, while the consumer has been propped up by stimulus and credit. ...
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A new ‘inverse vaccine’ approach could transform autoimmune disease treatment.
Friedberg highlights Nature research showing that glycosylated autoantigens delivered to the liver can reprogram the immune system to tolerate, rather than attack, specific self-proteins. ...
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Notable Quotes
“What could have been different? The banks could have forced these companies to sell up to 20%. They did none of it, and so the result is a lot of downward pressure… the grand reopening was a grand closing.”
— Chamath Palihapitiya
“We’ve gone from a regime of capital abundance to a regime of capital scarcity… and the Fed has dumped a bucket of cold water on the markets.”
— David Sacks
“When people do the calculations on what the true alpha of venture capital is, they’re going to come back with answers like this, which is, it’s not that great.”
— Chamath Palihapitiya
“Most of these unicorns are worth less than their total pref stack.”
— David Friedberg
“Self-esteem should come from achievement and not the opposite, which is that achievement should come from self-esteem.”
— Larry Summers (as quoted by Chamath)
Questions Answered in This Episode
If US IPO mechanics are so structurally flawed, what concrete reforms or alternative listing methods would best realign incentives for companies and long-term investors?
The episode blends post-conference debriefs from the All-In Summit with a deep dive into the changing macro environment for tech, IPOs, and venture capital. ...
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How should founders and boards at overfunded unicorns navigate recapitalizations in a way that preserves enough upside to retain and motivate core teams?
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Given the regime shift to capital scarcity, what should LPs reasonably expect as net-of-fees alpha from venture over the next decade versus simply holding public indices or credit?
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To what extent should platform-dependent SaaS companies like Klaviyo diversify away from key partners, even at the cost of near-term growth, to reduce existential risk?
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If the inverse vaccine approach to autoimmune disease works in humans, how might it disrupt current immunosuppressive drug markets and reshape the economics of chronic care?
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Transcript Preview
Did you just finish a good cry? 'Cause you have this wetness right here on your eye.
Oh, sorry, I just got out of my cold plunge and my sauna 'cause, you know, I hit a new record low weight, 169 this week.
Oh, hold on.
Oh, nice.
I gotta get in my weight.
What's your temperature on-
Uh, I don't wanna say.
... the cold plunge?
It's embarrassing. It's embarrassing. I don't wanna say.
No, what is it?
I've been doing like 56, 58.
That's great.
It's okay. I mean, I... All these lunatics, like, I don't know, they're at 45 degrees, 48 degrees. I think it's unnecessary. You get the same value, I think, at 50.
No, my two-year-old does 56. It's good. It's really impressive.
(laughs)
I consider an 80-degree pool to be a cold plunge.
(laughs)
I don't get in unless it's like 85.
That's actually... I've been to pool parties-
Oh, yeah.
... at Sax's house. There's no difference between the hot tub-
No, it's like a schvitz.
... and the pool.
It's a schvitz. It's a schvitz.
It's a full-on schvitz.
It's a schvitz. If it's not the temperature of the bathwater, I don't get in.
We're going all in. Let your winners ride. Rain man, David Sachs. We're going all in. And I said- We open sourced it to the fans and they've just gone crazy with it.
Love you,
... question. Queen of quinoa. We're going all in.
Yeah, it's a sch- schvitz. It's crazy.
(laughs)
And then I went in my infrared sauna, so now I've been going in-
You do the cold then the warm? I think you're supposed to do warm then cold, no?
They say end on, uh, cold. And so-
End on cold.
... I've been ending on cold.
Yeah, yeah, yeah. End on cold.
But I, I just do it like a cycle now. I do-
So you do cold, warm, cold?
Cold, warm, cold. Yes. But I, I'm now-
And what are you doing, like two minutes, 10 minutes, two minutes? Or what do you do?
Yeah. Exactly. Like one or two minutes cold plunge, four minutes you warm up, you get back to it-
Oh, okay.
... and then you jump back in. Yeah. It works pretty good, you know. I have to say, my energy level goes way up.
Have you been tracking your blood pr- pressure?
I have not. Um, but I have this, uh, executive health coach that I'm using. And so that's where I got those ridiculous glasses, the blue lights and my sleep better. I got some... I'm taking some supplements. Uh, I'm eating-
Estrogen?
(laughs)
(laughs)
Are you taking more estrogen, bro?
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