All-In with Chamath, Jason, Sacks & Friedberg E146: Did the Fed break the VC model? Plus IPOs, M&A, revaluing unicorns & more
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Sep 22, 2023 The hosts discuss the current GOP primary landscape and its candidates. They recap the All-In Summit 2023, highlighting the insights gained. The recent surge in IPOs and acquisitions like Cisco's $28 billion deal for Splunk raises questions about the 'great reopening.' They dive into whether the Federal Reserve has disrupted the VC model and the valuation of unicorns. Exciting advancements in autoimmune disease treatment also take center stage, showcasing potential game changers in healthcare.
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Critique of Recent IPOs
- Chamath criticized the structure of recent IPOs (Instacart, Klaviyo, Arm) for their small floats, lack of anchor investors, and absence of lockups.
- This led to initial price increases followed by a rapid decline as mutual funds and hedge funds sold off their shares.
Reasons for IPOs and Consumer Concerns
- David Sacks believes companies went public due to investor demand for liquidity, accepting lower valuations.
- He questions the consumer's ability to continue propping up the economy given rising debt and interest rates.
LPs Should Look Beyond Short-Term IPO Gains
- Friedberg advises LPs to evaluate funds based on their overall business performance, not just short-term IPO valuations.
- He states that long-term value creation is what matters.
