Transcript: Startup Mistakes to Avoid: Overvaluation, Fundraising, AI & SaaS Pricing | Vanessa Larco Partner at NEA | Startup Project #96

I'm not a patient person. I have a very strong sense of urgency and uh being patient doesn't come naturally to me, but looking back, boy am I glad that I that I was patient, that I took on a set number of companies per year, that I diversified my portfolio across time. I think that is a really strong strategy that is underrated. and when you first joint venture, you don't quite understand why. Yes an entrepreneur years like, oh man, I'm really glad I only did one deal in 2021. If I look at my own career, I don't think I've ever felt a pivotal change on my career. Like is something I found a trend that is, okay, let's go all in on. I don't think I've seen that. I know web 3 was that for a lot of people, but I never felt that okay, I have to leave my job and go join Web 3. I know like people would say clean tech, but I never felt like okay, I need to go join but AI, I would say anyone who's young, just graduated, it's uh you know, they should they should close their eyes and go join an AI company. Pricing can now be a differentiator. Before if you were building app layer, it was just a given you were going to do per user per month. Now it's not a given and you can get more creative and you can figure out a pricing structure that really aligns you with your customers. I think I I actually have a slightly different opinion around commoditization argument because like storage, I work in storage and storage is a commodity technically for all use cases. But if you look at the three clouds and their storage businesses sizes, uh it's not actually easy to do storage at scale. Same thing still applies to LMs at scale and as I think as we people are imagining a future 15 years down the line when they say the commodityization, it still takes 15, 20 years to price to go for 100X down, right? So I feel like there's an over simplification when you know, we we say that it's going to get commodized.

My guest today is Vanessa. She's a partner at A where she invests in series A and series B technology companies. she was previously director of product and before co-founding Funloop. In this conversation we'll talk about various topics around venture capital and startups. we'll talk about uh some of the nuances around raising venture capital, what is the ideal size, how do you evolve as an early stage company to a late stage company. How is AI changing the thought process of investors in terms of how these companies should operate. What are the pricing model changes that we are going to see and some of the broader trends around it. we'll also talk about her approach to personal branding on LinkedIn as well. if this is your first time listening to startup project, don't forget to subscribe wherever you're listening to a podcast. It helps us to reach to more audience. Vanessa, welcome to the show. Thanks for having me. Uh so I guess uh a good place to start and I think which is more topical is um around AI and how it's changing. Um I guess everyone is talking about AI so uh but it's also such an important um topic. like if I look at my own career, I don't think I've ever felt a pivotal change in my career. Like is something I found a trend that is, okay, let's go all in on. I don't think I've seen that. I know web 3 was that for a lot of people but I never felt that okay, I have to leave my job and go join web 3. Uh and like people would say clean tech, uh but I never felt like okay, I need to go join clean tech. Uh and you know people will also say AR and VR. AR a little bit I felt it because I still I'm bullish around it but not as much as like an entire, you know, huge population should drive towards it. I would never say that. Uh but AI I would say anyone who's young, just graduated, it's uh, you know, they should they should close their eyes and go join an AI company. Um and that's something I strongly believe. So I think that's that's where we should start with AI. And I want to get your high level thoughts, you know, how did investing as a partner at a firm change around AI. I think there's a lot of excitement and we think VCs live in the future. Our job is to try to project where things are going and try to invest ahead of trends and all the traditional signals for a big platform shift, a big change popped up around AI. Um it unlocks the ability to do a lot of things that were previously not possible. Um and the adoption from the regular consumer has been so rapid and we're seeing people get really creative on how to use AI at in their personal lives and at work. and that's exactly what VCs want to see and it all happened it happened slowly and then it just happened really fast, right? When chat GPT came out, it it it it it just feels like overnight everybody's using it. So I think um what it changed was if you were in hunting around for opportunities in other areas, you see this and it's very hard to ignore it. So pretty much everyone overnight became an AI investor because how could you not be, right? Um and most founders were working on other problems were like, oh wow, if I apply AI to this, um, we can serve our customers way better. We can bring down our cost structure much lower. then there's so many unlocks that every founder then became an AI founder. Um, and I think there's various degrees of it. I don't want to overhyped it. Even though I'm a VC, I really don't want to overhyped it. I think there are um different flavors of adopting AI and being an AI startup. Um, but it did feel like for venture, it changed a lot of things overnight. There's also this um debate I think which is happening right now is around commoditization of um LMs. Um, you know every day we see open source sort of catching up to close source, some days it's open source is beating close source and you know the cycle sort of continues. And often there is this argument that LMs is not where the value will be captured. What are your thoughts on that? I don't think that's a wrong assumption. I mean like look when I look at the LLM companies, what are they all doing? They're all building applications on top of their LMs because it's harder to commoditize at the app layer. And so I think yes you have open AI and they're building great models and it is an allM company, but a lot of the revenue comes from chat GPT. A lot of the usage comes from the app that they're building and all the subsequent apps that they I think hope to build. Um, you know, even anthropic with Cloud. there there's a reason they're building these apps and I think I don't work either these companies, I'm not investor either company, but my hunch is um it's a hedge against being commoditized. I think I I I actually have a slightly different opinion around commoditization argument because like storage, I work in storage and storage is a commodity technically for all use cases. But if you look at the three clouds and their storage businesses sizes, uh it's not actually easy to do storage at scale. Same thing still applies to LMs at scale and as I think as we people are imagining a future 15 years down the line when they say the commodityization, it still takes 15, 20 years to price to go for 100 X down, right? So I feel like there's an over simplification when you know, we we say that it's going to get commodized because some implementing these things is still hard. Like you know and some companies are making it look like it's easy. but it's actually hard for everyone to do it. I think that to push you a little bit on this, I think there's a couple differences because it's so expensive, most startups, most companies, well, startups and more established incumbets operate a little differently. but we see startups they'll dog something or they'll create a beta version and they'll use one of the closed source models. Um and they'll pay up for it. But if they see that it's taking off and there's going to be a ton of usage, they very quickly try to figure out which open source to use and it makes financial sense to move off of the more expensive closed source to go to open source rather quickly. And a lot of the open source projects are easier to adopt than previous open source projects. And so I think the I've been amazed to see how rapidly people will switch from a closed source to open source when the cost structure just seems too scary because it does become then an existential threat to your business if the cost to serve rapidly outpaces what you're charging your customers. Um I think there's that. I I do think there's always going to be space for a close source. Um I think startups are technologies and they're rapid to adopt and they understand how to move between these things. I think if you have an IT department at a very conservative conglomerate that is poking around with AI, they're going to just feel more comfortable with a closed source potentially. Um and so they will and they will pay up for it and they won't be so price sensitive and they won't care too much to switch to an open source model. Um, and so I I think there will I think both will exist and I think they'll serve different purposes at different audiences. but I I don't think one will reign supreme and either of these. And I but I still think that these LM companies are like, yeah, we're still going to hedge our bets, right? the Tam for their closed source might be this, maybe it's this, maybe it's this. but for the app layer and especially if we own LLM like that could be a real winner take all market and that could be actually pretty massive and they have an advantage. So I think that um we'll see them investing a lot in app layer as well. And it's interesting to watch because most infrastructure companies aren't full stock. They're not infra and app layer. Um I think like Apple's kind of full stock, Microsoft kind ofish full stock but rare. Um so to see so many of these startups um adopting that kind of model has been really interesting to watch. And it's something that's sort of related point is uh startups are not full stack. They just focus on the problem that they're trying to solve and we have seen in the last like five, six years all the big companies and there's like this blew up of how many SAS subscriptions does a company have. Like like there's a explosion of how many companies how many startups are using how many other startups, right? Yeah. Uh and I think that's sort of you know brings to our another point which is like this whole the subscription pricing model of SAS. Um and you know, there's this whole argument I think probably Satya started it uh by saying, you know, every application is, you know, just a crud application hitting a database. Um, and you know, AI might be able to do that and I think there's this whole conversation around how pricing will change. Uh talk to me a little bit about that. So right now SAS is priced per seat, right per user per month typically. Um and the ROI is well we're making that person much more productive or this is what they need to get their job done. So it's like you have a person and then you have all the software they need to be performing at their best in the most efficient way. Um The other key part of the SAS model is that for SAS businesses to grow, they expect you to grow their customers should grow. And so the more people, the more successful their customers are, the more people they hire, the more people they hire, the more licenses they buy. And so your customers grow and then you grow alongside of your entire customer base. And so your net dollar retention typically should be above 100%, right? Like I get very excited when I see things above 120%, which just means that uh you're getting not not only net new people but your current um customers are upselling, right? They're just expanding their accounts, they're growing their accounts. key part of making the SAS model work. Now, what happens um when your software makes people so efficient that as you grow you don't need to hire as many. Like one person can then hire handle a whole lot more. or in the case of it being a little bit autonomous, uh you be able to do some of the work and offloading the work to these agents. Um then the more successful your customers does necessarily mean the more seat they're going to buy. And then the NDR starts falling apart. And when that happens, how do you grow your accounts? Then it's like well you have to launch new products, you have to sell them more things to stack on top of each other and that's not really how most software companies operate. and that's not how customers, they want these things to be bundled in, right? They don't want to be paying per additional feature that you launch. So um the the AI side of this can really disrupt that business model. So what people are going to or everyone's been talking about is, you know, usage based pricing. So um for every ticket my my software resolves for you, you know, typically will cost you $5. So we just pay for pertilization or per API call or per task done or per didup record record that we didup, like per thing, we charge you and companies up front by a bunch of credits and then they use these credits. Um doing pure usage based pricing is uh not ideal for both the customer and the startup. For the startup it's really unpredictable because it could be spiky usage and so it's very hard to project out. And then to hire the customer support people and all the infrastructure around these companies, all your customers if you don't know when or how they're going to be using the product. Um, for the customer it's hard as well because you can't um control the cost as well. And so like if one person on your team goes rogue and uses all the credits and you're just like buying credits and it's on auto buy and you're like, hang on, how am I supposed to create a budget around this? This is chaos, right? So it it has its pros and its cons. What we're seeing right now is people doing this hybrid approach where it's like a platform fee which is either per user per month or like you have this many employees, it's just like a bucket price of this much a month. And um and then there's a usage base thing on top. So if you use these like premium features, you will use some credits and you get this many credits per person. So it is more per person per usage per seat per month. Um a little complex, but I think it's important because the other thing that we've alluded to is this is pretty expensive to serve. And so if you're charging your customers a flat per user per month fee and their users are just like using these AI calls a ton, you may end up paying more on the back end than you're charging them. So this hybrid model kind of protects the company on the upside and the downside and it protects the customer from going beyond their budgets for the most part. So, what that's what we're seeing, it's a little complex, it's not as straightforward and as easy as per user per month. Um, and the world which everyone's excited about is um charging for uh the benefit you provide. So like per value pricing. So if I save you this amount of dollars, I'll charge you some percentage of your savings. And if I save you nothing, I charge you nothing. That is a very exciting um because it aligns the startup with the customer really closely. And it seems pretty clear how you do that on year one. It's like before you're using us, you're paying a million dollars. After you use us, you'll pay $100,000. So we're just going to charge you just a chunk of that savings. So what happens on year two? Right. Year two, you've been using me. I we use a lot of. the law of marginal utility. Exactly. And so there's still a bunch of things I think to figure out uh with that business model as well. but what gets me excited is that pricing can now be a differentiator. Before if you were building app layer, it was just a given you were going to do per user per month. Now it's not a given and you can get more creative and you can figure out a pricing structure that really aligns you with your customers and shows that you care about providing value. And that's just like now pricing people get to be creative. That was like something you didn't even think about before. Now now it is an element. Now it is a whole road map of decisions you have to make on how you want to price things. you know as as an investor myself I invest in companies and you know to a whole bunch of investors. Investors always as you said, you know live in future, but they are also like squinting their eyes and looking for very specific ideas because they know this is about to happen. you know, this is now possible. So why and you know Bill Gurly famously was looking for an idea like Uber to found. Um and he I think funded one before even investing in Uber. Um so are there any AI enabled ideas that you are chasing right now? I I think the obvious places are in enterprise software. It's really like clear to see where it fits. Um which also means that most investors that's where they're spending their time. Which makes me be like, yeah, that's cool and if I see something that that makes a lot of sense or I see my portfolio companies like tripping over themselves to get a hold of that then then it's something I will definitely pay attention to. but I'm really excited about what it means for consumers. Um and what kind of things it can unlock for them. specifically, you know, businesses that are very services heavy. Um accountants, service is heavy, lawyers is service is heavy. Uh but travel agents is service is heavy. And then what about things that you just do yourself because with the. Like meal planning, you like scheduling and all the personal tasks. I I'm a mom, I have three kids. like I think of all the like very menial task list that I have to tackle every Sunday. I I feel like you're painting a picture where I have to subscribe to more things and not less. I look, I don't know if it's subscribe to more. because I don't think that necessarily needs to be the business model, but if someone could just if I could have a travel AI agent that I'm like, here my three kids like age of my kids, this is what they're interested in. this is the date, this is my budget. Show me like 10 options in my budget range and then it just does it for me. And then if I book it, do maybe I pay the fee, maybe the hotels and um other experiences it books pays the fees, right? Like I think pricing isn't necessarily have to be subscription. Um for meal planning if I'm like here's like the I want to make three meals and this is the references that we like. This recipe hit, this recipe sucked etc etc. Um do I pay for it maybe per recipe? Do you serve me ads on things I can buy to make meal planning or snacks or whatever cheaper then like is it ad based? Could be? Um you can see the conversion directly there. So I I don't know. I don't know I don't necessarily believe it has to all be subscriptions. I think that there's it's going to be a lot of other business models. Yeah. Uh I I want to slightly shift gears and talk about you know you're working as a partner at A and A is, you know, one of the oldest firms. Um I want to talk about, you know, career as being a partner in a big form. Um so talk to me about you know what does it mean to be a partner at a firm like that and how is you know, as a partner who invest in like let's say preed is different from someone who's investing in series A and series B. Yeah, I think there's a couple of things here. there's stage. um preed you are investing in people and ideas. um and you're not your diligence looks very different. You're doing probably way more reference checks on the team and the founders and you're doing a whole lot more research on the space that they're trying to create. like is there interest there? As a partner, do you have like the independence to make a bet and take the final decision? Um It depends. Uh it depends on the check size really at big funds. Um if it's on the smaller end, you have much more autonomy to get those done. Um if it's in the mid-range, meaning like for us midrange is 20, 30 million. Um you want the backing of your partners. I think in general you want the backing of your partners even if it is a small check because you want everyone at your firm excited about the companies in the portfolio and willing to help everyone in the portfolio equally. So I tend to like to have my team excited about the things that I want to invest in. Um, you know if you really wanted to get something done and and title is in is misleading because you can be a partner and um invest in something that your whole partnership has like no understanding of and it can get very hard to get something through. Um you can be a partner that has been there. I've been at an A for eight years. People know what I like, they know how I think. They understand when I bring something through ever like, oh this is a totally Vanessa deal. We totally go. I she likes it. Um there's high level of trust and so and I know what people are going to say, you know what things they're going to be skeptical about. so I I do the prework ahead of time and I'm just like, I know you're going to ask this. Here are the answers. I know you're going to be worried about that. Here's the data I've pulled on that. And so you know as as you've been in your partnership for a really long time and as you build trust with your team, things get easier. And and if they really understand and you educated them on the thesis and the things you're looking for, they are also prepared. So when I bring an opportunity through, that they're like, oh yeah, we know about the space. you've told us all about it. And oh, these are the dynamics you're looking for. Yes, this company has those. So that just goes a lot faster than if I was brand new to the firm with a very senior title. Nobody understood, I don't know, space tech or something. And I come in and I bring in some crazy company and they're like, I don't know what I'm looking at. I don't understand what's happening here. So it the title, I think like most companies. It's a start, but the truth is it all really depends on the relationships with your team, the alignment of what you're trying to accomplish and how much space, foundation and trust there is around the topic and the person. Do you have like an anti portfolio where you're not able to convince your team to invest in but you you strongly feel that you have to invest in this particular company because you've been at an seeing almost like what five, six years now. Yeah, I do. I do. Um not web three though. Honestly. like I think if you dwell too much on those things you can get through your partnership. Um you don't move on. Do you guys as a firm like go back and look at the anti portfolio uh like to understand what we've missed versus uh is is that the practice. Um Yes. I mean it it's not we don't have it like on our calendar of like let's sit down and talk about a deal that we've missed, but we do have forums for those conversations and that always comes up. I think every investor talks about that. It's like the favorite topic for VCs to talk about. So there's never a missed opportunity to have those conversations. Uh but yeah, so we do off sites, we do strategy meetings, we do um thesis meetings, we we it inevitably always comes up. So um in terms of uh working with series A and series B companies, um talk to me a little bit about how how closely you're working with these companies. Are you part of the boards etc. how closely you're involved in the operations. Talk to me about that journey once you make that decision as a partner who led the deal. Uh what what does the post deal life look for you? Honestly it's my favorite part. I would say, I think every VC likes this job is like five jobs rolled into one. Um I think we really really like the sourcing, we really like the diligence and the competing for the deal. Um we really like the post deal. I I tend to really like the I I source and I do diligence and I fight to to win the deal just so that I can get to the post deal phase. Like that that is where I'm happy. That is what I want to be doing. Um and it varies. I mean I think a lot like product. you kind of have to be the PM your team needs you to be, not the PM that you think you have to be or like the job spec or what you've whatever. Um it's basically like you you fill the spaces to make people on your team more efficient. That's how I treat my PM role. what does this team need me to be so that we can deliver the best products to our customers? Um I think the same way in terms of venture. What does this founder, what does this company need me to be so that they can reach their full potential? And sometimes it's they need me to just be a good listener. And just like ask questions when I think that there needs to be a little more thought put into things or, you know, sometimes they need me to be a recruiter and I need to just introduce them to as many candidates, build up candidates. Sometimes um they need me to be much more involved in some like strategic decision or should we sell the company or should we keep raising or should we raise at this valuation or when should we raise? Um I would say most of the time my responsibilities lie in helping company sink through their fundraising roadmap. And I say it's a roadmap because there's a strategy. Like once you've closed a round of financing whether it's your A or your B, you immediately have to think through what are the milestones you have to hit so you raise the series C at the best price you can. And so a lot of founders are like, fundraising is done, I'm over it until I don't want to talk about fundraising again. like first conversation we're going to have is about your next fund raise and and then we don't have to talk about it for a while but but we do have to talk about it. So you you guys do series A, series B. Yeah. for someone who's doing preed there's no data, but when you're doing series A, you have some data. Um are there like how what type of attraction are you looking at and today like in the space what the valuations are looking like in terms of series A? Um you're going to hear this answer. It depends. Uh I would say I every investor looks for something slightly different. Um I almost equated to like everybody falls in love differently. Like everybody has their thing that gets them super excited about a company. Um my thing is obviously product. Um but I've learned enough to know that product isn't enough to build a successful company. So what I really look for is what I'm calling product market pull. And that can look that can be you show that in a bunch of different metrics, but I'm looking for your customers like having a sense of urgency for adopting your product. Like they need like what I want to see is like they needed this yesterday. People are like pissed at you because they're on the weight list and you haven't taken them off the weight list yet because they need this now. I'm looking for urgency around adoption. And I want to be really thoughtful about where does this fit into their work day or their personal lives. Like is this supposed to be a daily use case? Is this supposed to be a weekly? Is this supposed to be every hour and what's the value prop? And then I want to see in the numbers that people are getting that value proposition out. Um so I'm basically looking for like people really need this and you are delivering the thing you said you were going to deliver and I need to see that in metrics. Um and that can show up. Some people are like, well, it's a million AR. Like, well, a million AR maybe, but who is that million from? How are they using the product? How quickly did you get to that million? So there's these these misconceptions that you need to have a million are, you need to have this many users to raise a series A. and I'd say it's it's a lazy way of thinking about it. Like in specific to the companies like you know Rewind or Majury or ever know like what what's the traction? Like can you talk a little bit about you know, those as examples of like how much traction did they have and uh like what what was different in the each of those cases? Yeah, I I can't talk about the traction, but I I'll tell you what was about those companies at those stages that I got excited about. Um it was they had a pretty contrarian view about jewelry. specifically the jewelry industry catered to men and it was believed that um men are the ones that buy jewelry for women. The women would never buy themselves jewelry and as I did diligence calls and I talked to executives at all the jewelry companies you can think of. um every time I find a lady I'm like, well do you think women would buy jewelry for themselves? Unanimously they were like, no, absolutely no way. Why that'd be so sad. why would a woman buy themselves a piece of jewelry? That just means that nobody in their lives loves them enough to buy them jewelry. And I was like, well, I think they're wrong. I buy myself jewelry. I'm like, shit, I'm not going to tell them I'm buying myself jewelry because I must be a pathetic soul you like nobody loves me person. And then I talk to my friends and all my friends are buy themselves jewelry. And it wasn't costume jewelry. It wasn't like plastic. It was gold. It was pearls for their first job. It was um earrings, really nice earrings to go to a nice event or to a wedding. And so like, no, women do buy the I think my generation is buying themselves jewelry. I think the next generation is going to buy themselves jewelry. So, the incumbets were I thought wildly out of touch with the new generation. The new generation was waiting longer to get married. So like a lot of it is like husbands buying wife stuff and I'm like, well if we wait till we're 30, does that mean you never get jewelry till you're 30? That sucks. Um so I'm like the purchase power women going to workplace, women buying themselves jewelry, women wanting to stay. I'm like there's so many trends on why like the incumbets are wrong and Majury was like, yes, women are buying themselves jewelry and we're going to cater to women, we're going to sell to women, we're going to have a message of empowering women. And so I'm like that thesis the data like absolutely shows that that's exactly what's happening and the incumbetts are completely ignoring it. It's like right for disruption. And then their um their revenue traction had like a very steep inflection curve since launch. And then the other thing that got me, this is what got me really excited. This is what made me like, yes, I want to invest right away is the repeat rates are really high. There is a change in behavior and I think this is the unlock for me. When I see people changing behavior because now they either have access to something they didn't have access to, they can afford something they couldn't afford before. you're making something much easier for them, right? So it's it's really around access, you now have access to something and so this jewelry was affordable and accessible and people were buying two, three, four times a year. and the average like fine jewelry purchase of gold was less than once a year. So it's like, okay, that is showing me there's product market hold. People want this, they can't get enough of it. They're they completely changed the usage or the purchase patterns for this category had to. This is something. This is something that's happening. It's going to happen. It's going to be big. So for me, that's what I got excited about with Majury. Um when I think about Rewind, it it's an udacious idea. it you could think about it it's creepy or cool. It was very polarizing, but you ask people like, do you want to be able to sift through everything you've heard or seen? The answer is like, yeah, of course I would. do you want everything recorded? They're like, no way. Um but when people that were using it, people on the weight list, the early stage users like um I started using it. I I just have a million tabs open and I'm like, oh, if you're like recording everything I'm doing, I don't need to have a million tabs open. I can always search for that thing and it will bring the appropriate tab. Oh. That's amazing. I don't have to worry about forgetting where I read that thing. Um and we had I had some of my team that was doing a masters and they were like, oh for homework it's like the best. I read like I look through my lectures, I do all these things for school work, I read all these different papers, I do my different homework and I need to find something. I can just type it in and like boom, pulls all the relevant information up. And so I was like, okay, this is people who wanted it, really wanted it. like they wanted it yesterday. They're annoyed if they don't have access to it right now. And two, it's changing the way people do things, right? Like I hoard tabs after Rewind. I stopped hoarding tab. I changed a behavior because now I have to something I have access to before. So that again, I was like, this is kind of a crazy idea but it fits into like what gets me excited and and I invested in. And so every company I can talk through my portfolio had this element of like pent up demand and changing behavior because you're getting people access to something you didn't have access to before. You know, uh as I said, since you work with startups so closely, you're probably seeing more mistakes than a regular person sees in terms of what a startup makes. Like whether it's early stage or um you know, trying to raise series A or raising too much or raising too low or when what is the right time? Uh can you talk a little bit about you know what are the common mistakes it is you think some of the startups are making. This was the most common mistake and I think people have seen what happens when you make it enough now that it's less prominent, but raising at too high a valuation. Everyone talks about that all the time. they're like, of course see says that. No but truly um it sucks to put such a high goal post for you. It's better it's almost like when I was a PM I would sandbag my road map. I wouldn't tell you I was going to launch all these things in a year. I'd like promise like I'd because I wanted to like beat the plan. Right? And and founders when they do like their revenue or their growth projections, they they sandbag so that they can beat their plan to their board. Like if everyone's goal is always to beat plan, fundraising is also plan. And so when you set such a high bar, you're going to make it impossible to beat plan and the consequences of not beating plan for that one is way larger than not beating plan for a road map or for revenue or what not. Like that is one that you you can't come back from easily. And so you know, a lot of founders just took that for granted. they're like, yesVCs say that but no matter like we'll get the next round and it's a given that the next round will be higher and then we saw what happened in 2022 and now I think founders are a lot more thoughtful about what kind of valuation they want. Are you saying that Clubhouse should should not have raised at 4 billion? Yeah. It's exactly what I'm saying. With it with where they were? Yeah, no,