VC10X - Dancing Among The Giants with David Hornik, Founding Partner, Lobby Capital

I look at a thousand companies a year. If I were to be valuation insensitive across every company I encounter, and then I get it wrong nine times out of ten, there's zero chance that that tenth is going to make up the difference. And the likelihood that that tenth is a trillion dollar company approaches zero. It's more likely, as has been the case for me, a multi-billion dollar company. Man, dancing among the giants is very tricky. How do you see startups doing it? So I think you need to have some sort of proprietary position in the market. You either need proprietary data that says, hey, we are in a better position than others to do this, including the giants.

What's one unconventional view that you hold? I

actually think this is a moment in which empowering humans is going to be a big opportunity.

Hey everyone, this is Prashant and I will be your host for the VC10X podcast and today we have David Hornick with us. David is the founding partner at Lobby Capital, an early stage venture firm known for concentrated, conviction-driven bets. Before that, he spent 20 years as a general partner at August Capital, where he was the earliest investor in Splunk and backed companies like WePay, Bill.com and Fastly. David just closed lobby capital's second fund in one of the toughest healthy markets in years, and he's back to tell us how. We get into what's actually different this time versus the dot-com bubble he lived through in 2000, why he thinks most vertically-aged startups won't survive dancing among the giants, and the two deals he passed on that still sting, LinkedIn and Uber. We also talk about the Airbnb pass that became the biggest miss in his firm's history. While Lobby Capital has never used a formal voting system and his one truly contrarian take on where the real opportunity in AI actually is. So without wasting any time, let's dive straight in. This episode is brought to you by Podcast Enix, my podcasting agency for VCs. We help VCs start and run branded podcasts that can serve as their entire content engine. Turn the conversations you're already having into a machine. One recording becomes your presence on LinkedIn, Spotify, YouTube, and email. Don't just build another VC firm. Build a firm that can stand out to LPs and one that founders can brag about having you on their cap table. Check out our services at podcast10x.com. I'll put the link in the description below. Now, enjoy the episode. Hey, David. So good to have you on the VC 10X podcast. How are you doing? I'm doing great. Thanks for having me back. It's a pleasure having you back on the podcast. And let's get straight in. So the last time we spoke, you were preparing to raise Lobby Fund 2 with a strict commitment to staying small. How did that fundraise actually play out in one of the toughest LP markets we've ever seen?

It was a crazy market, I have to say. There had been a long string of non liquidity for the LP market. So leading up to that, we had the longest bull market that the US markets had ever seen. And so there was there were huge liquidity, a bunch of a bunch of increased valuations, etc. And by the time we went to raise that fund, I guess it was last year. It had been