256. A Proprietary Tool to Source Startups, The Commoditization of Capital, and the New Exit Environment (Villi Iltchev)

Villi Iltchev of Two Sigma Ventures joins Nick to discuss Using "George" a Proprietary Tool to Source Startups, The Commoditization of Capital, and the New Exit Environment. In this episode, we cover:

• Walk us through your background and path to VC
• What’s the thesis at Two Sigma?
• Tell us about George.
• What's George's biggest blind spot?
• What is your decision framework on investments?
• What characteristics do you look for in markets when identifying new sectors/spaces of interest?
• How long after investing in/working with a company do you tend to know whether it's going to work or not?
• Do you attempt to handicap execution risk vs. technical risk vs. commercial risk?
• Capital is a commodity and, largely speaking, there doesn't appear to be a lot of differentiation in venture.  How do you combat the commoditization of venture?
• Aside from bankers... who do you think stands to lose the most from the increase in SPACs and direct listings?
• Any other downsides, unintended consequences, or problematic issues that could arise from the increase in SPACs?
• A decade from now, will the U.S. be the best country to start a tech company?  If it shifts, what are the prime candidate countries to replace the U.S.?
• International investment strategy for Two Sigma?
• Three data points...  hypothetical investment scenario
• • Let’s say you’re approached to invest in an enterprise SaaS startup.
  • Founder has a great background.
  • MRR is $200k, growing 20% MoM.   LTV:CAC is 5:1.  Quick Ratio greater than 4.
  • Catch is, you can only ask 3 questions for 3 specific data points, in order to make your decision.  What three questions do you ask?