Verdict lists ten of the most popular tweets by venture capitalists in Q3 2020 based on data from GlobalData’s Influencer Platform. The top tweets were chosen from influencers as tracked by GlobalData’s Influencer Platform, which is based on a scientific process that works on pre-defined parameters. Influencers are selected after a deep analysis of the influencer’s relevance, network strength, engagement, and leading discussions on new and emerging trends.
Top ten tweets by venture capitalists in Q3 2020
1. Chamath Palihapitiya’s tweet on Federal interest rates
Chamath Palihapitiya, founder and CEO of Social Capital, a venture capital and private equity firm, tweeted on investments and compared the risk-free rates of US government bonds and other securities.
He noted that investing in US bonds made sense in 2000 when the risk-free rate was 6%. In 2020, however, the risk-free rate of US bonds has fallen to 0.66%. The influencer opined that the Federal Reserve’s policies have destroyed people’s trust in US bonds and securities, while stocks of large corporates such as Apple and Amazon are being considered as zero default risk.
Palihapitiya noted that investors should structure their equity returns over longer periods as rates are low and vice versa. He added that investors are likely to buy equities in such a low interest rate environment.
1. Risk free rates are important.
2. Currently, risk free rates are ~0.
3. As rates go down, people tend to model equity returns over LONGER periods of time.
4. As rates go up, people tend to model equity returns over SHORTER periods of time.
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— Chamath Palihapitiya (@chamath) September 3, 2020
Username: Chamath Palihapitiya
Twitter handle: @chamath
2. Matt Turck’s tweet on successful start-ups being dependent on tech giants
Matt Turck, managing director at FirstMark Capital, a venture capital firm, tweeted examples of successful start-ups whose fortune could be traced to tie-ups with tech giants. Turck noted that although depending on a single tech giant is considered dangerous, start-ups such as nCino and JAMF have emerged successful.
nCino, a financial technology start-up, became a public company with $6.7bn in earnings by offering products targeted entirely at Salesforce users. Similarly, JAMF, a software company, became a $4.78bn public company by providing enterprise support for Apple products alone.
It’s considered very dangerous for a startup to tie its fortunes to one tech giant
* nCino just became a $6.7B public company built entirely on top of Salesforce
* JAMF just became a $4.6B public company focused on enterprise support for Apple products exclusively
— Matt Turck (@mattturck) July 22, 2020
Username: Matt Turck
Twitter handle: @mattturck
3. Leo Polovets’s tweet on information to start a VC fund
Leo Polovets, a general partner of Susa Ventures, a venture capital firm, tweeted on the things that he wished he knew before starting a venture capital (VC) fund.
He noted that portfolio construction is important for generating sufficient returns. He added that the initial deal flow will come mostly from investors than founders.
Polovets opined that VCs should reach a level where founders want to work with them and keep recycle and front load fees in mind, while investing.
Things I wish I knew when starting a VC fund:
– portfolio construction can make or break returns
– pace yourself
– most deal flow is initially from investors, eventually from founders; be someone founders want to work with.
– much of investing is luck
– front load & recycle fees
— Leo Polovets (@lpolovets) August 12, 2020
Username: Leo Polovets
Twitter handle: @lpolovets
4. Eric Paley’s tweet on pitching a start-up
Eric Paley, a managing partner at Founder Collective, a seed-stage VC fund, tweeted on how to pitch a start-up. The influencer suggested founders to practice pitching about their start-up in a short story in the first five minutes without holding back any important information that will create impact. The first five minutes earns the next 15 which in turn earns the final 40 minutes, says Paley.
Paley further noted that a pyramid style of pitching is preferable to linear flow. Each layer of the pyramid should focus on the entire story of the company, where a miniature form of the start-up is visible at the top, the middle layer consists of deeper insights, and the base consists of millions of data points.
When pitching your startup, instead of a linear flow, think of your startup’s story like a pyramid with many layers.
Each layer of the pyramid is the entire story of the company at different levels of resolution.
— Eric Paley 🇺🇸 (@epaley) July 2, 2020
Username: Eric Paley
Twitter handle: @epaley
5. Boris Wertz’s tweet on focusing on marketplace
Boris Wertz, founder, and general partner of Version One Ventures, a venture capital firm, tweeted on what side of marketplace to be focused on when starting a business. The influencer noted that focusing on both supply and demand sides of marketplace simultaneously is complex but can be achieved by focusing on the right side at the right time.
Wertz suggests to initially focus on supply side and then quickly shift the focus to demand side to aggregate demand by maximising marketplace participants happiness.
One of the most frequently asked questions from marketplaces founders is what side of the marketplace to focus on.
The answer is BOTH but at different times.[thread] 👇
— Boris Wertz (@bwertz) July 27, 2020
Username: Boris Wertz
Twitter handle: @bwertzx
6. Bill Gurley’s tweet on IPOs
Bill Gurley, general partner at investment banking firm Benchmark, tweeted on initial public offerings (IPOs) of traditional and Special Purpose Acquisition Companies (SPAC). He noted that SPACs are gaining popularity over traditional IPOs as all stakeholders including employees, investors and founders stand to benefit.
Further, companies benefit more through SPACs as they provide security with pre-determined terms, clear pricing unlike traditional IPOs, and have a simple IPO process.
Interesting thread. No question about it that the rampant/worsening underpricing of traditional IPOs has created a situation where SPACs actually have a lower cost of capital. SPACs are popular now & gaining steam/legitimacy. Wouldn't be surprised to see a VC raise a SPAC. https://t.co/cbVY002lOa
— Bill Gurley (@bgurley) July 16, 2020
Username: Bill Gurley
Twitter handle: @bgurley
7. Paul Graham’s tweet on Truepill raising funds
Paul Graham, a venture capitalist and author, shared an article on Truepill, a tech-enabled pharmacy start-up, raising $25m in funds. The start-up raised the funds from a group of investors including Optum Ventures, the venture fund of Optum Health, Initialized Capital, TI Platform Fund, Sound Ventures, and others.
Truepill is planning to use the funds to expand the capacity of its pharmacy distribution centres by building an automated distribution centre. It will also use the funds towards building a network of doctors and enable a shift towards telemedicine.
Software is eating the world even faster than you realize, because a lot of the transformation is happening behind the scenes at companies like Truepill.https://t.co/PNJvhvoaZ8
— Paul Graham (@paulg) July 8, 2020
Username: Paul Graham
Twitter handle: @paulg
8. Garry Tan’s tweet on the importance of selecting investors
Garry Tan, founder and managing partner of Initialized Capital, a venture capital and private equity firm, tweeted on the importance of picking investors carefully. He shared an example of a struggling founder who spent eight years in a moderately growing product overhauled by new entrants.
The founder experienced moderate growth coupled with an antsy team difficult to replace ultimately leading to low profits and limited exit options. Tan noted that the primary cause of the mentioned scenario was careless selection of investors and investment of money on zero outcome.
Pick your investors carefully. The scenario below plays out very different if you are mindful vs careless.
Also don’t waste capital on zero outcome experiments: that’s a sure fire way to find yourself in this situation too. 👇 https://t.co/NVt2oD4rqh
— Garry Tan (@garrytan) July 22, 2020
Username: Garry Tan
Twitter handle: @garrytan
9. Elizabeth Clarkson’s tweet on fundraising strategies
Elizabeth Clarkson, an investment banking analyst at Credit Suisse, a wealth management firm, shared an article on the fundraising strategies required for an emerging VC manager. Most of the managers focus on portfolio management and investment rather than fundraising as it is a critical task, opines Clarkson.
The article detailed the important steps to be followed by emerging managers, such as selecting the right marketing approach depending on the target audience, ensuring customer satisfaction, and getting a unique positioning in customer’s mind.
— Elizabeth Clarkson (@Beezer232) August 29, 2020
Username: Elizabeth Clarkson
Twitter handle: @Beezer232
10. David Sacks’ tweet on Social Capital Hedosophia II and Opendoor merger
David Sacks, founder of Craft Ventures, a VC fund, tweeted about Opendoor, a real estate technology company, going public by merging with Social Capital Hedosophia II (IPOB), a blank check company.
Opendoor will have an enterprise value of $4.8bn, equity value of $6.2bn and cash of $1.5bn, following the merger. Social Capital Hedosophia II will invest more than $1bn in the company.
Sacks opined that the deal provides high validation to late-stage technology start-up companies.
— David Sacks (@DavidSacks) September 15, 2020
Username: David Sacks
Twitter handle: @DavidSacks