Gil Dibner 🇮🇱
@gdibner
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Trying to help the few do the impossible; building @angularventures. Early stage. Enterprise. Deep tech. EU+IL. DMs open but better to find me elsewhere.
London | Tel Aviv
Joined March 2007
Angular Ventures II: Announcing an $80M first-check Fund II for Deep Tech Founders across Europe & Israel.
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Woke up to good news from Israel on ending the Coronavirus lockdown this morning, which I think should be shared widely in English.
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@paddycosgrave I was looking forward to participating in and speaking at WebSummit. In light of these comments that show a complete lack of moral clarity, I have no choice but to cancel my participation. I know I am joining several other people in making this decision. I unequivocally condemn.
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We talk to a fair number of LPs. If we connect the dots, it seems there is a huge explosion coming. Here's how it might unfold:.
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Low interest rates and a flood of fast dumb late-stage capital has jacked up artificial paper venture returns. This has had several effects:.
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A sad day, but I've unfollowed Paul Graham, one of my heroes. He fell on the wrong side of my "don't follow rabid antisemites on Twitter/X" policy. And I'm saying this as a pro-peace, left-wing, anti-Bibi Israeli.
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One of the smartest people I know said three interesting things today about GenAI and LLMs:.
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What I think is particularly notable here is that the Israeli government is treating citizens as adults: providing transparency and granting them agency in helping the country exit the lockdown.
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Just saw a seed round cap table. Founders 37%, lead seed VC 23%. All new investors 30%. Previous pre-seed investors 23%. This is a seed round. What are you people smoking?.
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You're not a real VC until something you hard passed on at seed stage goes IPO. :).
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It's not that I - as a VC - require you to have a deck to pitch me. It's that 9 times out of 10, you - as a founder - need to have a deck to give your most effective pitch.
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One of my most deeply held values as a VC is "do no harm." Accelerators that encourage early-stage startups to relocate to irrelevant/random geographies for almost no cash and little to no other benefits are among the worst offenders.
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Carta is single-handedly responsible for no one in tech/venture having any idea what any cap table actually looks like. Well done, guys! :).
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3. There is going to be a massive migration of GenAI/LLM activity from 3rd party models (like OpenAI) to on-prem proprietary models for nearly all enterprise use cases.
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Excited to announce Angular Vision Fund I! The first $100B seed fund, built to back founders in a critical but under-invested area: "Future of Human Civilization." If you are building a pre-idea company in the Future of Human Civilization, please contact us!.
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I have friends and relatives who have picked up rifles and kissed their families goodbye so they can go defend our country and our right to live safely and freely there. Not all of them will come home. I think of them every time I confront anti-Israel or anti-Jewish hate online.
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Stop worrying about whether or not your city is a startup hub and start worrying about whether or not your startup is a company.
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Nearly all the (enterprise) value is going to come from proprietary data (and models) and almost none of that data is going to make its way to the so-called "foundational" public models.
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Third: But even worse, the face pace of deployment has meant: little due diligence, higher prices, low ownerships relative to fund sizes, and - often overlooked - very bad time diversification. There are many funds out there that deployed THE ENTIRE FUND at peak valuations.
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New VC firm out of stealth today. Angular Ventures. Early stage. Enterprise. Deep Tech. European + Israeli companies with global (US) ambition.
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Deals coming out of YC at $20M on $100K ARR. 200x revenue multiple. Nothing to see here.
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Starting to see the direct impact of big funds that did $1M-$5M throwaway "seed" checks to buy optionality. It ain't pretty.
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VC Confession: Sometimes I stay subscribed to the investor updates of companies I passed on for years as they grow into massive businesses. Each successive update is like getting whacked in the face with an ever-larger baseball bat - but a good reminder to stay humble.
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For LPs, VC land is not pretty right now - and it's about to get a whole lot worse. For a lot of VCs, the only right choice is to return capital and focus on running a disciplined shop - but that is, psychologically, incredibly hard for a lot of these GPs to do. Buckle up.
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Family office: I'd like to coinvest with you. Please show me all your best deals. VC: What a great idea! That way, you can get all the benefits of investing in the fund without any of the costs in fees or carry, all with no commitment from you. Smart! .Family office:.
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How to get a VCs attention:.Warm intros are good. Cold emails are fine too. But if you are going to do a cold email, here are some piece of advice.
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The atmosphere of sheer panic among VCs these days is disconcerting. If I was an LP, I would be sitting on my hands right now. Up and down the capital stack, people have lost their wits, if not their minds.
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Third, it has convinced GPs and LPs of the flawed idea that venture can be scaled. This has never worked and it isn't working now, but the pressure to deploy coupled with a rising tide lifting all boats has driven an endless set of "let's scale venture" attempts.
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An email I just wrote started like this: "I hope you are well. Perhaps you remember me from my idiotic decision not to invest in your seed round. :)".
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I'm tempted to list them all, but it's literally every part of the ecosystem from over-inflated platform funds to single GPs; operator funds to accelerators; from premature promotion of investment professionals w/ zero mentorship to enormous debut funds with no differentiation. .
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Saw it again today. Founder raising $1.5M for 33% when they really don't need that much cash at this stage. These are suicidal dilution levels.
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Evidence of this is all around us. Nearly every VC fund/platform has scaled beyond its capacity to effectively deploy capital against its strategy or expertise.
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1. Right now people believe LLMs can do just about anything. The reality is that they can do a pretty small set of things very well. There are a ton of people messing around with LLMs for use cases for which they are clearly suboptimal.
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Second, it convinced GPs of their own self-delusions by making venture investing look and feel a lot easier than it really is. This is hard. But it hasn't felt hard for a long time.
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VC is back, baby! . How do I know?. Because 90% of the reported (and unreported) rounds in the past few weeks make zero sense. VCs are back to deploying capital at a pace and at valuations that are completely divorced from reality - and that render fund performance impossible.
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Worth noting: masks are required in public and there is a NIS 200 (~$60) fine on the spot for not wearing a mask.
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Seed investor Angular Ventures raises $41 mln for European Israeli startups - PE Hub:
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Again, I'm no expert, but these seems like a sensible set of guidelines - and it offers hope.
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Interestingly, lockdown relaxation will be allowed to continue only so long as new cases remain at 300/day or less and so long as the doubling time remains over 10 days (it is currently at 21 days).
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Wow. Hearing of case after case of "big boy" Series A+ VCs literally fighting to stick big checks into very early-stage companies I'm not comfortable putting small checks into. This market is . interesting.
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I'm starting a scooter company on the side. Me and some buddies. Nights and weekends. Looking for $250M at a $1B pre. I'm looking at you, SoftBank. Lets do this.
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Planning to be in Tel Aviv.Dec 20-28. Now more than ever. If you are an inception-stage company building something important for the world, reach out. We write $250K-$4M first checks. Two deals closing in Israel right now. My email is very easy to find.
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Another unpopular opinion: After we all decide the offices were over-rated and WFH didn't impact productivity so much, the small companies that insist on employees showing up and working together will suddenly experience tremendous competitive advantages.
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@paddycosgrave This terrible scene took place in Qatar, where @paddycosgrave plans to hold #WebSummitQatar in November.
The most horrifying video from the day of the massacre in Israel isn't the one showing dead bodies or assaulted women. It's this. Hamas leader Ismail Haniya and his associates, dressed in suits, watch the attack on TV. They witness the brutal murder of 1,300 civilians, the
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So LPs are looking at a world of inflated fund sizes, bloated teams, very high fees/carry, and very little actual deployment in good new companies over the past 12 months. They also know that TVPIs are super inflated, gross DPIs are going to be awful, and net DPIs even worse.
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The five hardest-to-land pieces of advice for founders:. 1. Raise less. 2. Cut deeper and faster than you think you need to. 3. Smaller teams can outperform bigger teams. 4. Never ever take venture debt. 5. (For B2B) Don't be afraid to raise your minimum price & fire customers.
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Signing for first exit as an angel today. That's nice. :).
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VCs ultimately fail when they focus on talking up to LPs instead of listening to and building for founders. Founders fail when they focus on talking up to VCs instead of listening to and building for customers. Keep your ears to the ground. Listen. Build. Create value.
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First, it helped convinced LPs to flood the sector with capital in search of these unsustainable returns. LPs are not blameless in the bubble collapse we're living through.
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Secret of early-stage investing in a four easy steps:.
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This morning government announced major relaxation of lockdown: Most businesses allowed to open with the exception of entertainment venues and mass gatherings. Selective lockdown remain on a few (mostly ultra-Orthodox) communities where adherence to guidance has been low.
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We put out a TS on a new Israeli company yesterday. We're leading the round. Solo. Israeli tech is open for business, and we are open for business. #nomatterwhat, .#Israelitechdelivers
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VC market has completely locked up. Growth stage bankers are reaching out to me (a very early-stage fund) to see if we want to join $10M rounds.
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Good morning! I've published a free 74-page slide deck of data on European and Israeli Venture investment, updated for 2017. I hope it's useful to those of you working in this geography, and would love your help retweeting it.
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But it gets worse. Fifth, we are hearing from LPs that a lot of funds jacked up fees and carry well above the standard "2 & 20%" that ruled the industry for decades. This means that NET DPIs are going to be even worse than they would have been had the funds not been greedy.
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I'm launching a new tech conference where participants take the day off, send $100 to a charity of their choice, and spend the day with their families. Who's in?.
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There are three really bad takes going around about SVB. I think it's important to take them on before they get out hand.
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There is no VC good enough to fix a bad company. And there is no team good enough to survive a bad VC.
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No words. The Heartbreaking Situation in Israel.Gil Dibner. This newsletter (and Angular Ventures as a firm) is committed to ambitious world-changing innovation in Europe and Israel. We try to keep politics out of our work and out of this newsletter. No one signed up to this.
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Lots of $12M Series A rounds that are scheduled for sometime in 2024 are just never going to happen.
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2. LLMs are trivial to build today. They are very expensive and very complex and very powerful, but they are ultimately trivial. Given enough capital, setting up a new general "foundational" LLM today is pretty simple given widely available tools and knowledge.
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The "fully baked" ones are well and truly fracked. The "half baked" ones have a new problem: what to do now? Hold reserves for the messed up ones or make new investments that are much smaller and more rationally priced? Bad performance is already baked in. not an easy choice.
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Thinking about giving a TED talk about something personal, but relate-able, that leads to a trivial observation that feels like an epiphany.
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I suppose it would be theoretically possible for a European VC to just constantly fly around Europe from conference to conference, year after year, talking about AI and disruption, and not actually create any value at all. Of course, this is just theoretical.
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First, a lot of VCs have gotten really big. I mean really big. We have heard of one case where a Fund II was raised that was 10x the amount of all the capital deployed by Fund I. Funds doubling (or more) in size from one vintage to the next is pretty common.
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All restaurants/cafes (including falafel stands) are open for take away only. Malls and covered markets remain closed. All other stores are open, but must have social distancing, temperature checks, and antibacterial disinfectant available.
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Now that I've raised an actual VC fund in Europe, I'll come out and say it: EU/UK regulations are designed to stop people like me from doing this.
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Maybe he's just bitter that Israel is basically one big YC with statistically better results against overwhelming odds while fighting off murderous terrorists on 6-7 fronts simultaneously. :).
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Is it just me and MY content world - or is A16Z totally dominating smart content creation in VC-land these days. Between Martin @martin_casado, @benedictevans, @pmarca, @cdixon, and the others . wow.
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Second, VCs have been deploying capital very fast. That means they have been coming back to LPs for capital more frequently than those LPs modeled. LPs are not happy with this at all.
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If y'all really were in stealth mode, your LinkedIn profile would say "taking a break" or "writing a novel" not "stealth mode CEO." Just sayin'.
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This fifth point is key: VC greed led to historically high fee & carry arrangements which are going to coincide with historically low gross DPI ratios to put net DPIs to super low levels. LPs are not happy.
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A look at Systems of Intelligence, barriers to entry, and enterprise VC investing in the post-SaaS world
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I just saw a founder refer to a $4M round as "pre-seed.".
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Suddenly the inability of the US Senate to get anything done is starting to look really attractive.
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We're at an inflection point - but because it's an inflection point, it's really hard to infer from what's happening now what is going to happen in the future. Stuff continues to evolve fast. Don't anticipate the future based on this very transitional present.
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VCs: I'm sorry but someone's got to say it: sending out super junior people to meet companies is a great way to clear the dealflow backlog, but it's usually a terrible way to identify potential outlier companies at the earliest stages. Especially in this climate.
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The opportunity for LLMs to have impact is HUGE, but it is also far far smaller than what most people believe (because what they believe is vastly inflated relative to reality).
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Correction: Most of the above is govt policy. The "points-based" system is apparently a proposal that has not yet been formally adopted. The rest of the measures are (as far as I can tell) policy:
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To my mind, the emergence of a powerful new tool that is simultaneously expensive, powerful, and trivial is kind of a new phenomenon - and therefore quite confusing to many observers - leading them to the wrong conclusions about its impact.
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The fear of making new investments is understandable, perhaps, but the effect has been that a of LPs have been paying what feels like a TON of fees over the past 12 months for very few (if any) actual deployments. Again, LPs are not happy.
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So here's the moment that some people over 40 are having right now. I'm having it. This is it:.
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Just overheard by one of the smartest guys I know: "The amount of money you raised in the past year means absolutely nothing about the quality of the tech you have and whether or not you are making the world a better place for anyone. " Amen.
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I'm secretly hopeful that while the events of Oct 7 have emboldened the vilest antisemites to be more vocal and brazen, they have also shifted the silent majority towards a deeper understanding of what we Jews and Israelis are facing and why we have no choice but to defend our.
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That's it. I'm officially adding the phrase "at scale" to everything I write at scale. See? Doesn't that make everything sound more impressive at scale?.
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Fourth, a lot of funds are either "fully baked" at stupidly high entry valuations and deal parameters or "half baked" at stupidly high entry valuations and deal parameters.
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Yo make sure that "accelerator" is actually accelerating you enough to justify the massive deceleration of your cap table. I suspect you could have networked your way to 2-3 "mentors" and a half-pilot without promising a pound of flesh, super pro rata, and your first-born.
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I was having a good day today - seriously, everything was fine - until I read the word "B2B2B2C" in a pitch deck just now. .
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There are two sides of venture capital: access and conviction. One is about getting into the deals everyone wants to get into - the other is about doing the deals no one wants to get into. Both are important.
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Berlin is a city that - like no other - bears the scars of the 20th century and carries the promise of the 21st.
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@talhof8 Hard to say. Very angry LPs. Lots of firms shutting down or raising smaller funds. Some funds might decide to return some capital. There should be an accelerated changing of the guard. A lot fewer VCs in the market. But this will take years to play out. Mostly under the surface.
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Unpopular opinion: We are about to see some VC vintages (particularly for early stage) with an unprecedented gulf between peak TVPI and ultimate DPI.
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Contrarian take? The covid era proves that technology is no substitute for in-person interaction when it comes to anything of substance or importance. Not in business, not in education, not even for social purposes.
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