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?