20VC The Memo The State of the VC Market Why Seed Funds Can't Invest in Hot Startups Anymore, Why Series A & B is Terrible, Why the IPO Market Will Explode in 2024 & Why VC DD is BS & Every VC Has More Fraud in their Portfolio with Jason Lemkin

In a dynamic conversation on "The Memo" with host Harry Stebbings, Jason Lemkin, founder of SaaStr, dissects the current state of the venture market. Lemkin predicts a resurgence of IPOs in late 2024, despite the current challenges in Series A and B funding, where investors seek discipline and founders hold high expectations. He also expresses skepticism about the work ethic of the current generation of tech workers, suggesting a preference for hiring individuals with adversity experience. Additionally, Lemkin discusses the strategic fundraising shifts among LPs, the role of sovereign wealth funds in sustaining mega venture funds, and the prevalence of confirmatory due diligence in VC, which often overlooks potential fraud. The episode also highlights innovative AI-powered platforms like Sauna and contract management solutions like Ironclad, emphasizing their efficiency and transformative potential for businesses.

• Seed investing remains vibrant and active despite perceptions of a slowdown.
• The slowdown at AMB is not due to a lack of money but because many capable individuals already have funds.
• Jason Lemkin predicts a significant number of IPOs in the latter half of 2024.
• Harry Stebbings discusses the monthly show "The Memo," which deep dives into specific topics, with this episode focusing on market states from seed to IPO and M&A.

"Anyone that thinks seed isn't happening, they're out of their minds. I don't think seed investors can participate in hot startups anymore. The reason there's a huge slowdown at AMB is not because the money isn't there. Everyone that's good has a fund, but it'll be an IPO week in the back half of 24." "My word, what a show we have in store for you today. This is the memo with me, Harry Stebings. Now, the memo is the monthly show where we deep dive on a specific topic or company, and today it is the state of the markets themselves, from seed to IPO and M&A what is happening, what is not happening, and what can we expect?"

The quotes emphasize the ongoing activity in seed investing and the anticipation of a future uptick in IPOs, setting the stage for the discussion on market trends and expectations.

• Sana is an AI-powered learning and knowledge-sharing platform that integrates with company apps and can generate content for employee programs.
• Ironclad is a platform that transforms contracts into valuable data sources, streamlining operational efficiency and decision-making.

"Sana is an AI-powered learning and knowledge-sharing platform. Think of it like Chat GPT. For all your company's knowledge, Sauna integrates with all your company's apps in under five minutes and can search through every single file, doc, pull request, video, and more in under 100 milliseconds." "Ironclad is a platform that helps companies harness the power of contracts to drive better business outcomes."

These quotes describe the functionalities of Sana and Ironclad, highlighting the importance of AI in improving business processes and knowledge management.

• Jason Lemkin advises new managers not to rush into deals during their first year to avoid burning the fund with mediocre companies.
• Despite this advice, Lemkin had a successful first year with multiple unicorn investments.
• He suggests that new investors with a strong network or brand should capitalize on their advantages early on.
• Lemkin emphasizes the importance of getting into a winning investment early in one's career, as it can define a venture capitalist's success for years to come.

"Don't worry about doing a deal your first year. This is what the traditional GPS tell you, because the last thing they want you to do is to meet with 28 pretty good companies and burn the fund." "I did five real unicorns in my 1st 13 months. I did pipe drive, which exited for like 1.25 billion. And then Algoe was my second. That's worth 2.5 billion. It will IPO next year. I did talk test, worth 10 billion. I did Parkland Greenhouse, which will IPO next year. They're at 200 million. And I did Sellsoft, which sold for two and a half billion of cash."

Lemkin's personal experience contradicts the traditional advice given to new venture capitalists, demonstrating that with the right network and brand, it's possible to make significant early investments that pay off.

• Lemkin highlights the importance of having time to focus solely on new investments without the burden of managing existing portfolios.
• He stresses the need to stick to one's sweet spot and invest in types of founders and products that are well-understood.
• Knowing the type of deal that fits an investor's profile is crucial for maintaining a consistent risk profile and success rate.

"All you have to do is hunt and meet founders, right? I think that's underestimated in the industry." "And then I think just really sticking to your sweet spot is core right. And I knew I only wanted to do a certain type of founder at a certain stage doing products I intuitively understood."

These quotes reflect Lemkin's approach to venture investing, focusing on areas of personal expertise and leveraging the freedom to meet with founders without existing portfolio distractions.

• Seed investing is not experiencing a downturn and continues to be split into smaller, more numerous investments.
• The increase in wealthy tech individuals and executives has led to a proliferation of angel investing and seed funds.
• Founders are advised to close rounds with available funding rather than waiting for ideal lead investors.
• The emergence of many new managers with liquidity has changed the landscape of seed investing.

"There's no downturn in seed whatsoever. No matter what. Twitter's wrong. Seed is more vibrant than ever, and we can talk about why." "Every week there's more liquid tech folks that want to invest in seed, either directly or creating funds."

Lemkin argues against the perception of a seed investing downturn, pointing out the continued enthusiasm and increased participation from successful tech individuals.

• The economics of venture funds are impacted by fund size and the types of investments made.
• Lemkin discusses his two investment categories: traditional seed and late seed, each with different revenue benchmarks and check sizes.
• The challenge in today's market is the inflated valuations, especially for companies with significant revenue.
• Lemkin advises against worrying too much about valuations as long as ownership targets are met.

"What's 2% of the fund per check? And so for me, I learned there were two types of investments I wanted to make." "But I think the last thing you want to do is pass on a $30 million post deal where everything's great."

These quotes highlight Lemkin's pragmatic approach to investment, focusing on meeting ownership targets and not getting overly concerned with valuations, as long as the fundamentals of the deal are strong.## Venture Capital Math and Big Wins

• Venture funds need to invest in multiple big winners each year to achieve successful returns.
• Significant ownership in these winners is crucial for the math to work.
• It's challenging to balance early-stage investments with large, concentrated bets on winners.
• Distractions from seed investments can be detrimental if they prevent funds from investing heavily in the most promising companies.

"You need double digit ownerships of four to five massive $5 billion plus outcomes per year." This quote emphasizes the necessity for venture funds to have significant stakes in a few very successful companies to reach their financial goals.

"The math is just awesome." This quote reflects the potential high returns from investing in big winners and owning a substantial share of their equity.

"It's great if you can start in seed, but if it distracts you from putting 100 million into the winner, it's not worth the distraction." This quote suggests that while seed investments can be beneficial, they should not take away from the opportunity to invest larger sums in more certain winners.

• Big funds are facing challenges with refinancings, board positions, and inexperienced team members leading rounds.
• These funds are encouraged to write smaller checks, leading to less price discipline at the seed stage.
• The influx of less experienced investors is changing the dynamics of seed investing.

"The big fund partners are saying I'm underwater with refinancings, with board positions, with company dojas, with rifts, principals and associates who haven't led rounds before. Go and write one to $2 million checks. Go and spray cash." This quote describes the pressures big funds face, leading them to distribute smaller investments across a broader range of companies, potentially diluting their focus and discipline.

"And that's leading to less and less price discipline at the seed, because you've got this whole new entrant of less." This quote highlights the consequence of big funds' strategies on the seed market, where the influx of capital from inexperienced investors is eroding price discipline.

• Outsiders, or non-traditional entrepreneurs, often offer more reasonable prices and can be the best entrepreneurs.
• Insiders are usually priced to perfection, which can be challenging for traditional seed funds.
• The venture market has evolved, and collusion among firms to control pricing is less common.

"Most of the world is not privileged, Harry. Most of the world did not graduate from Stanford, or stripe, or Y combinator." This quote emphasizes the existence of talented entrepreneurs outside the traditional elite circles, suggesting they can offer better investment opportunities due to more reasonable valuations.

"Insiders are priced to perfection. But if we take a pause, shouldn't they be the venture markets have changed so much in my career." This quote reflects on the changing venture capital landscape, where insiders command high valuations, potentially making seed investing in these companies unviable for traditional seed funds.

• Seed investing is experiencing an increase in supply from operators and multi-stage funds.
• Traditional seed investors need to adapt by finding undervalued opportunities, often by looking at outsiders.
• Price perfection at the seed stage may not be sustainable for seed funds and could be more suitable for mega funds.

"Seed then we have this increase in supply from operators, a temporary increase in supply, but still an increase in supply, no matter how temporary, from multi-stage funds." This quote indicates a surge in the number of players in the seed market, which affects the traditional seed investing approach.

"I don't think seed investors can participate in hot startups anymore." This quote suggests that seed investors may no longer be able to compete for the most sought-after startups due to inflated valuations and competition from larger funds.

• Venture capitalists have different preferences for how they like to be approached and evaluate potential investments.
• Some prefer decks, others short emails, and some want extensive information before engaging with founders.
• The effectiveness of cold outreach varies depending on the stage of investment, with growth investors being less responsive to unsolicited pitches.

"Keith, how do you do it? David, Sacha, Eileen, they all have done some of their best investments from cold inbound." This quote reveals that even successful venture capitalists can find valuable investment opportunities through unsolicited inbound pitches, although their preferences for the format of these pitches vary.

"No one in the world at Softbank or Tiger or even the better ones, the iconics, I can't imagine any of them respond to raw inbound emails." This quote indicates that at later stages of investment, such as with large growth funds, cold outreach is less likely to be successful compared to earlier stages.

• Seed investing may not revert to being high-risk capital for high-risk ventures, contrary to some predictions.
• The landscape of seed investing has changed, with hot startups commanding high valuations and potentially being out of reach for traditional seed funds.

"I don't agree at all. It's possible he's reacting to the 700 million dollar seed. I don't think seed investors can participate in hot startups anymore." This quote expresses disagreement with the idea that seed investing will return to its high-risk roots and acknowledges the challenge of participating in highly valued seed rounds.

"I just don't think you can make money in seed investing in hot seed startups." This quote underscores the difficulty of achieving returns from investing in popular seed-stage startups due to their high entry valuations.

• Seed funds face challenges due to the high valuations of insider-led startups.
• Strategies include investing in outsiders with more reasonable prices and avoiding investments priced to perfection.
• Seed funds may need to adapt to the changing venture market by seeking undervalued opportunities.

"But maybe their job is not to invest in the perfect high profile, obvious, perfect seed fund, maybe." This quote suggests that seed funds may need to reconsider their investment strategies and focus on less obvious opportunities rather than chasing high-profile startups.

"Go find Jody before his first one, not his second one." This quote encourages seed investors to discover talented entrepreneurs early in their careers before they become well-known and command higher valuations.

• Inbound pitches can lead to successful investments, but preferences for engagement vary among venture capitalists.
• Cold inbound is less effective at later stages and with larger funds, while it can be a valuable source of deals for VCs at earlier stages.

"All of them. Now they all like different things." This quote highlights the diversity in preferences among VCs for evaluating inbound pitches, with some favoring concise communications and others wanting more detailed information.

"But it was one of them, right?" This quote implies that even among a multitude of inbound pitches, there can be valuable investment opportunities that lead to successful outcomes.

• Categories in the startup ecosystem are reinvented every few years, leading to crowded markets.
• Investing in crowded categories can be challenging, and strategies may involve waiting for a breakout company or investing later when the category leaders are more apparent.

"Categories get reinvented, right? They get reinvented every four to five years." This quote acknowledges the cyclical nature of innovation within startup categories and the need for investors to adapt to these cycles.

"The more crowded a category, the later I would invest." This quote reflects a strategic approach to investing in crowded markets by waiting to see which companies emerge as leaders before committing capital.

• There's a shift in software purchasing from unbundled to bundled solutions as companies look to optimize spend and workflows.
• This trend may have reached its peak, and spending is beginning to increase again, driven by innovation and new demands such as AI.

"We are bouncing off the bottom. We are bouncing off these lows." This quote suggests that the trend of cutting back on software spend and bundling is reversing, with companies beginning to increase their investment in innovative solutions.

"We have bounced off the bottom how high we're going to bounce." This quote indicates optimism for the future of software purchasing, with expectations for a rebound in spending and innovation.

• The Series A and B markets are currently challenging, with a disconnect between what investors want and founders' expectations.
• Founders still expect to raise significant funds at high valuations, while investors are seeking more rational pricing and reduced risk.

"I think it's terrible." This quote bluntly assesses the current state of the Series A and B markets, highlighting the difficulties faced by both investors and founders.

"A and B's want a return to rationality, and founders aren't there yet." This quote identifies the gap between investors' desire for reasonable valuations and founders' expectations for their funding rounds.

• Startups with excessive funding and low traction face an uncertain future.
• The phenomenon of startups having years of runway without corresponding traction is unlikely to recur soon.
• Founders should consider the ethical implications of their funding and whether offering to return capital is the right decision.

"There should be a massive wave of startups with twelve months of Runway and no traction, but not a decade of that was a zerp phenomenon." This quote critiques the recent trend of startups receiving extensive funding without demonstrating significant progress, attributing it to a unique economic environment.

"Founders today don't respect venture capital anymore. And it's one of my least favorite parts of the industry." This quote expresses concern about the changing relationship between founders and venture capitalists, with a perceived lack of respect from founders towards the venture capital industry.## Venture Capital's Shift in Perception

• Venture capital used to be highly revered, almost to the point of idolization, by founders.
• The current generation of founders often lacks respect for venture capital, viewing it as an unlimited resource or a game.
• The shift in attitude is partly due to a culture that teaches founders that the specifics of fundraising are less important than the act itself.
• Some founders do not consider the implications of their valuations until they are faced with the reality of lower exit values.
• There is a disconnect between the perceived ease of raising funds and the actual challenges of achieving successful exits and providing returns for investors.

"In my day, venture capital was so hard to get. We over respected it."

This quote reflects the past reverence for venture capital, contrasting with the present scenario where founders often undervalue it.

"It's just this disconnect for what anything means, what an exit means, how hard it is."

Jason Lemkin highlights the lack of understanding among some founders regarding the significance of fundraising, exits, and the responsibility towards investors.

• Young founders sometimes have unrealistic expectations, like raising at significantly higher valuations in a short period.
• A founder's lack of concern for investor returns is symptomatic of a broader cultural issue within the startup ecosystem.
• The anecdote about a founder with ten years of runway not understanding why an investor would care about returns illustrates this disconnect.
• There is a preference among some investors for older, more experienced founders or serial entrepreneurs to avoid the naivety and disrespect for capital that some younger founders exhibit.

"But for where you're at today, I can't do it for a variety of reasons."

Jason Lemkin explains his decision not to invest in a founder with unrealistic valuation expectations, emphasizing the importance of aligning investment with company progress.

"You got to have some hoodspa sometimes to be a founder."

Despite recognizing the need for confidence among founders, Jason Lemkin points out the issue with founders not understanding the gravity of investment and exits.

• Serial entrepreneurs are often preferred by investors because they are less likely to make novice mistakes that can be costly and time-consuming.
• Experienced founders may command higher valuations, but investors might be willing to pay the premium to avoid rookie errors.
• The debate revolves around whether a fund's strategy allows for paying a higher price to mitigate risks associated with first-time founders.
• Jason Lemkin believes in his ability to help first-time founders navigate common pitfalls, potentially reducing the risk associated with their inexperience.

"Does your fund strategy in size and risk profile permit you to pay two x to derisk that investment?"

Jason Lemkin questions whether an investment fund's strategy aligns with paying higher valuations for experienced founders to reduce risk.

"I feel like I can help mitigate that risk by working with them."

Jason Lemkin expresses confidence in his ability to support first-time founders, thereby justifying investments in them despite their lack of experience.

• There is a distinction between founders who need investors and those who want them, with the latter being preferable.
• Founders who require investor assistance for key hires or strategic decisions may be seen as less desirable investments.
• True outsiders, such as international founders new to a region, may benefit from an investor's network and experience without it being a sign of dependency.
• The role of investors can be to accelerate the growth of a company by providing access to resources and connections that would otherwise take time to develop.

"If you're a true outsider, if you just showed up in the Bay Area from Lisbon or even London or Estonia or Paris, and know nobody, you didn't even get to go through YC, you know nobody."

Jason Lemkin acknowledges the challenges faced by founders who are new to a startup ecosystem and how investors can play a crucial role in their success.

"It's outsiders versus insiders. If you have to help insiders, it's embarrassing."

Jason Lemkin contrasts the support needed by outsiders to the expectations of self-sufficiency from more established founders within the ecosystem.

• The fund's strategy and size dictate the types of investments it can pursue, including the decision to pay higher valuations for seasoned founders.
• Building a larger team can help manage a bigger fund, but it may not align with personal goals or the desired fund structure.
• Larger funds are often necessary to sustain a team and provide the capital required for larger investments.
• The decision to grow a fund and team is not solely driven by fees but also by the need to support the operational needs of the fund and its staff.

"It's because that's what it takes to sustain a team."

Jason Lemkin explains that the growth of a fund is often necessary to support a larger team, not just for the sake of increasing management fees.

"I consider myself a founder first and an investor second, and I just couldn't do it."

Jason Lemkin reflects on his personal preference for staying true to his identity as a founder rather than becoming a large fund manager.

• Series A is considered a prime investment opportunity in the current market, especially in cloud and SaaS.
• There is a discrepancy between the abundant capital available for seed rounds and the discipline exercised at Series A.
• Founders must adapt to the disciplined investment environment or risk being unable to raise funds.
• The concept that each subsequent funding round should be more challenging than the previous is not consistently observed, as evidenced by the ease of raising in 2021.

"Series A is the best place to invest today in cloud and SaaS."

Jason Lemkin identifies Series A as an attractive investment stage due to market dislocations that create opportunities.

"Every round is supposed to be harder, but in 2021, every round got easier."

Jason Lemkin comments on the abnormal ease of fundraising in 2021, contrasting with the traditional expectation of increasing difficulty in each funding round.

• Due diligence in venture capital is often merely confirmatory and not always taken seriously.
• Investors may ignore red flags raised during due diligence if they are intent on proceeding with an investment.
• The pace of the market and competitive deal-making can lead to inadequate due diligence and potential investment in fraudulent companies.
• The issue of fraud in venture capital is pervasive, with many VCs having at least one fraudulent company in their portfolio.

"Every VC diligence call is like that, right. And then there are certain spaces where I know something about."

Jason Lemkin shares his frustration with the superficial nature of due diligence calls in venture capital, where his expert advice is often disregarded.

"The truth is, they only do confirmatory due diligence."

Jason Lemkin criticizes the venture capital industry for conducting due diligence that seeks to confirm pre-existing biases rather than rigorously evaluate potential investments.

• The venture capital industry is rife with fraudulent activities, ranging from misrepresentation to outright lies.
• Founders may misrepresent their company's metrics, such as ARR or gross margins, in order to secure funding.
• The reluctance of VCs to confront fraudulent behavior is compounded by the fear of damaging their founder NPS (Net Promoter Score).
• The personal and professional costs of addressing fraud can be high, leading some investors to avoid confrontation or to distance themselves from toxic investments.

"Everyone's got a founder that claimed they had ARR, that really mashed months together, that their financials were not accurate, that misrepresented a plan that was impossible."

Jason Lemkin points out the commonality of fraudulent behavior among founders in the startup ecosystem.

"My NPS has been damaged from it. I've had multiple times when the company was going to drive the car off the cliff, I had to have the talk, and it saved the company."

Jason Lemkin acknowledges the impact on his reputation from taking a stand against fraudulent or misguided founders, indicating the personal cost of such interventions.

• The growth stage investment landscape is characterized by specific boundaries and a ceiling on valuations.
• Traditional cloud and SaaS companies at the growth stage may find investment opportunities at 15x ARR if they are not excessively burning cash.
• Growth investors are selective, focusing on companies with reasonable valuations and efficient operations.
• The scarcity of suitable candidates for growth investment is partly due to previous overvaluation and a lack of operational efficiency.

"For traditional cloud companies, SaaS companies, at growth, I would say, generally speaking, there's a 15 x ARR ceiling."

Jason Lemkin outlines the current valuation ceiling for growth-stage investments in the cloud and SaaS sector.

"Today, 15 x is not a bad deal. The public averages six x."

Jason Lemkin contextualizes the 15x ARR valuation for growth-stage companies as reasonable compared to public market averages.## SaaS Company Growth and Investment

• Jason Lemkin and Harry Stebbings discuss a hypothetical scenario of running a SaaS company at $40 million ARR.
• They consider an investment offer from a growth fund that wants to buy 20% of the company.
• The discussion revolves around the timing for taking investment and the associated pressures of reporting to new investors.
• Founders may prefer to wait for a higher valuation and less stressful time to sell equity.
• There is a lack of urgency for some companies to take growth rounds at their current valuations.

"Harry, you and I are running the SaaS company, we're at 40 million ARR. We're kind of breaky even and nice guy. Growth fund wants to buy 20%, but then we have to do more and we have to report to them." "Let's do it at 60. Let's wait till we're next year. It's feeling pretty good. Harry, why don't we do it at 60 or 70? Like, this seems like a stressful time to do it at 40 or 30."

The quotes discuss the strategic decision-making process regarding when to accept investment and the potential downsides, such as increased obligations and stress.

• Growth investors are looking to buy out early investors (seed guys) in SaaS companies with revenues north of $30 million.
• There is a trend of cleaning up the cap table at favorable valuations by offering secondary deals to early investors.
• Founders are often hesitant and consider delaying secondary deals, possibly waiting for better terms in the future.

"If I can't get 15 x deal from the company, I'm going to try to get it from the seed guys." "The companies I have that are efficient north of 30, they're overwhelmed with folks often not to me, although sometimes to me, but from anyone else trying to clean up the cap table at the valuation they want."

The quotes highlight the strategies of growth investors to secure deals with early investors and the overwhelming interest in secondary markets for successful SaaS companies.

• LPs (Limited Partners) have varying preferences for liquidity and returns.
• Some LPs, particularly the most successful ones, prioritize high returns over immediate cash liquidity.
• There is a misconception that all LPs are seeking immediate distributions (DPI) rather than long-term value increase (TVPI).
• The fundraising environment has become more challenging compared to the boom years, but it is still easier than in the past.

"The best lps want. Best lps want these six x eight x ten x funds. They really do. And they're more appreciative of how rare they are than we all thought it was." "I recently had a conversation with one of my lps last week about a secondary offer that was, whatever, ten figures. A ten figure secondary offer. Okay. And we both agreed no was the answer."

The quotes reveal insights into the perspectives of LPs on liquidity and returns, and the decision-making process regarding secondary offers.

• Some LPs are dropping successful managers or changing their investment strategies.
• There is a trend toward concentrating on a smaller number of high-performing managers.
• Different LPs have different strategies and reactions to market conditions, influencing their investment decisions.

"My three largest lps, okay, who Again, I all met with, and they all said don't take the secondary, the billion dollar plus secondary." "One said, which is a wildly successful university endowment for their category. Number one. Okay, they're dropping two managers this year. Good managers."

These quotes discuss the strategic decisions made by LPs, such as not taking secondary offers and dropping managers, to focus on a concentrated portfolio of high-performers.

• The venture capital industry is witnessing a shift in the types of funds that are successful in raising capital.
• There is a belief that mid-sized funds may have an advantage due to their potential for higher returns and manageability.
• Sovereign wealth funds and other massive pools of capital are seeking reliable returns, which may benefit larger funds.
• The venture capital market is diverse, with different players looking for different outcomes.

"It's never been so hard to fundraise since the.com boom." "I think it's very dependent on lp type. You have certain lp types, foundations, endowments that have annual payments for, scholarships for." "I actually had lunch with one of the kind of biggest fundraisers gps in the world who raises billions a year."

These quotes discuss the current fundraising climate for venture capital funds, the challenges faced, and the differing needs of LP types.

• Jason Lemkin predicts a significant opening of the IPO window in the latter half of 2024.
• The public markets are anticipated to be receptive to top-tier companies, potentially leading to a series of successful IPOs.
• The success of these IPOs depends on several factors, including market conditions and the performance of leading companies.

"It'll be huge in the back half of 24. It'll be huge." "I think it'll be a good IPO a week, at least a good one that we've heard of in the back half of 2024."

These quotes offer a prediction on the opening of the IPO market, suggesting a significant increase in activity in the latter half of 2024.

• Jason Lemkin expresses concern over the current work ethic in the tech industry.
• He believes that many workers are not willing to put in the necessary effort and are distracted by side hustles.
• Lemkin emphasizes the importance of hiring individuals with a strong work ethic and a history of overcoming adversity.

"I just don't think most of the current generation of folks will ever work hard again." "Everyone has a side hustle. Everyone's working 20 hours a week." "This is where I sound like a fuddy duddy, but this is what's broken in venture."

These quotes reflect Lemkin's perspective on the challenges of hiring in the tech industry and the perceived decline in work ethic among the current generation of workers.

• Tiger and Softbank are known for their distinct investment strategies in the venture capital space.
• Momentum investing, as practiced by Tiger, is seen as effective until the momentum ceases.
• Softbank's future is uncertain, but such strategies may re-emerge when market multiples increase again.

"I kind of admire the tiger strategy. Massive momentum investing." "Softbank? I don't know. Those things are going to die. And then when multiples get insane again, they'll all reappear."

The quotes discuss the investment strategies of Tiger and Softbank, highlighting the cyclical nature of their success and challenges.