The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures
Fri, 06 Sep 2024
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. In Today's Episode with Nick Chirls We Discuss: 1. Why Venture Capital is Broken Today: Why is VC a ponzi scheme 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? 2. 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? 3. 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?
Full Episode
Your junior partner, like a VP at Goldman, they are compensated and promoted based on money velocity, not money returns. What's an ideal company for that model? It's a company that requires insane amounts of capital, right? Like the foundation models are like a big, big VC firm's dream. They literally require billions and billions of dollars to go pie effectively NVIDIA GPUs.
What is the business model for large venture banks? Deployment. Yeah. Raise as much money as possible. Get that money out the door as soon as possible. Raise as much money again and rinse and repeat.
I mean, this is one spicy show today. We last had Nick Churls on the show nine years ago when he founded Notation. Today, he's back with the announcement that he's founded another venture firm, Asylum Ventures, a 55 million early stage firm in New York that's really focused on treating founders like artists, not like assets. And this show is spicy.
Why VCs are just like bankers, why venture has become a Ponzi scheme and how the mega firms ruin startups by funding inefficiency and even encouraging it. There is so much good stuff in this one and it is not to be missed.
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