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Leo Polovets Profile picture
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23 Jan, 4 tweets, 2 min read
1/ I strongly disagree w/this take. Frankly, suggesting that it's somehow bad to spend resources on AI models for curing cancer is offensive.

I know people that survived cancer & people that didn't, and none of them would prefer having cancer to having big co's investing in AI.
2/ The argument is that wealth shouldn't have so much influence over innovation. But that's backwards. Most big innovations wouldn't exist w/o $ incentives -- which lead to wealth. What fraction of stuff we use was created by companies vs. govts, non-profits, etc? I'd wager 95+%.
3/ The market's incentives will lead to some accruing more relative wealth than others, but they also make everyone wealthier in an *absolute* sense. I'd rather be poorer in a world w/smartphones, refrigerated food, and cancer cures than wealthier in a world w/o those things.
4/ One of my fave posts is "You Are Richer than John D. Rockefeller." It reminds us that we have access to better food, meds, transportation, & information than the richest person 100 yrs ago. Incredible. Why? Because financial incentives drive innovation. fee.org/articles/you-a…

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More from @lpolovets

Leo Polovets Profile picture
11 Aug 20
1/ After reflecting for a while on @AngelList's rolling funds, I believe they will be very disruptive.

Previously the best way to start a VC fund was to build an investing track record. That takes many years. Rolling funds allow people to turn reputations into investing capital.
2/ The interesting development is that these reputations don't have to be investing-related. If you have a great network and you're well-known as an amazing founder or PM or ML expert, you can probably roll* that into a rolling fund.

* Sorry about the pun. I am who I am.
3/ Also, if you're a principal at a larger venture fund that doesn't have near-term partner openings, and you have 10k+ Twitter followers, why wouldn't you spin out to do a rolling fund? You can advertise your fund publicly, leverage your audience, and accelerate your career.
Read 6 tweets
Leo Polovets Profile picture
6 Aug 20
Surprising pattern in seed stage VC funds: if a fund is reasonably diversified, it'll need at least one $1b+ exit for a great total fund return. Regardless of fund size.

Doesn't matter if it's a $150m fund buying 15% stakes or a $10m fund buying 1% stakes.

Smaller isn't easier.
Assumptions:
- 50% of fund is for initial checks, 50% for follow-on checks.
- 30 investments.
- 50% dilution over time.
- In 90% of good funds, the top company returns the entire fund by itself. See comment below from a highly regarded fund-of-funds:
So the top investment is initially 1/60 of your fund, and eventually 1x+ your fund AFTER 50% dilution. For that to happen, the company's valuation has to grow 120-fold. At today's $8m+ seed stage valuations, this kind of multiple means a fund's top investment has to be a unicorn.
Read 4 tweets
Leo Polovets Profile picture
29 Feb 20
1/ The amount of great content coming out these days for founders, managers, and employees is incredible. Tons of 10+ and even 100+ page detailed tactical manuals, interactive guides, curated content databases, you name it. A few notable examples:
2/ How to Hire a Head of Sales by @jordanxwan on @AskAlmanac: askalmanac.com/articles/5949/…
@jordanxwan @AskAlmanac 3/ YC's guide to raising a Series A: blog.ycombinator.com/ycs-series-a-g…
Read 9 tweets
Leo Polovets Profile picture
25 Feb 20
1/ I started thinking about accredited investor requirements again after the tweet below. The requirements make SO LITTLE SENSE & needlessly block people from making investments they want to make. For fun, here's a list of 10 absurd consequences of our accredited investor system.
2/ As a reminder, in the US you're an accredited investor if you make $200k/year for two years (or $300k jointly with a spouse) OR if your net worth, excluding your primary residence, is $1m or more. You have to be accredited to invest in startups, hedge funds, etc.
3/ Consequence #1: if you make $200k you're accredited (and therefore "sophisticated" enough to make high risk investments); if you make $195k then you're not.
Read 13 tweets
Leo Polovets Profile picture
14 Feb 20
1/ Earlier, I was chatting w/someone about the math of cold emails. TLDR if you write a large number of *good* emails then you will get good results.

There are three groups of people:
1) never reply to any cold email
2) rarely reply to cold emails
3) very open to cold emails
2/ Right off the bat, maybe 75% of cold emails are ignored because the person you're writing to is in the first two groups.
3/ For the remaining 25%, the reply rate depends on the quality your email. The better the email, the higher the reply rate. If you have an above average email, maybe half of the receptive group replies; if your email is stellar, almost everyone replies.
Read 6 tweets
Leo Polovets Profile picture
5 Dec 19
1/ There are a few interesting discussions today about whether it's a good idea for the government to run grocery stores. I think the best way to think about this is to look at other government initiatives and how they perform. Let's dig in.

axios.com/government-run…
2/ Costs for government projects are typically very reasonable and exactly what you'd expect if private companies undertook the same projects.
3/ I should note that projected costs do sometimes escalate. Fortunately, the government doesn't have to worry about trivial things like financial viability since they can print more money or raise taxes. Talk about a competitive advantage! sf.curbed.com/2018/3/12/1711…
Read 7 tweets

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