20VC Exclusive: Mercury Founder Launches First $26M Fund | Why Founders Should Take the Highest Price | Why Serial Entrepreneurs are Better | Why AI Is So Overhyped | The Future of Venture Capital with Immad Akhund

Unknown Source May 12, 2025 62 min

artificial-intelligence startup investment

🎧 Listen to Original

81 Companies

147 Key Quotes

3 Topics

2 Insights

🎯 Summary

Summary of 20VC Episode with Imad (Founder/CEO of Mercury)

This episode of 20VC features host Harry Stemings interviewing Imad, the founder and CEO of Mercury, who is also a prolific angel investor (350+ investments) and former YC partner. The core of the discussion revolves around Imad’s recent launch of his first institutional angel fund ($26M with partner Yash Toshi), his extensive experience as an angel investor, and his contrarian views on startup valuation and founder profiles.

Key Takeaways for Technology Professionals:

1. Investor Mindset & Founder Dynamics:

• Ego Removal is Crucial: Active investors must suppress their own ideas and truly listen to the founder’s vision. Imad learned this lesson early when his best investments (like Rappi) barely spoke to him because they were too busy executing their own plan.
• The “Pushback” Paradox: While young founders can be intimidated, a complete lack of pushback on an investor’s suggestions can be a red flag. However, investors must temper expectations based on the founder’s experience level; young founders often need more grace.
• The Best Founders Don’t Need You: The most successful founders operate independently. The value of a VC, therefore, shifts from dictating strategy to providing timely, high-leverage support (e.g., hiring advice, market context) when the founder chooses to ask.

2. The Value of Venture Capital Firms:

• Partner Quality Over Platform Services: The most valuable aspect of a VC firm is the quality and chemistry of the specific partner you work with (e.g., Imad values his consistent, insightful conversations with Elad Gil).
• Network Effects: The founder network provided by top-tier firms like a16z and Sequoia is an undervalued asset, facilitating valuable peer-to-peer connections.
• Sequoia Diligence: Top firms like Sequoia perform exhaustive diligence, which Imad respects, viewing it as a sign that the firm is making a serious, long-term commitment, not just chasing a quick deal.

3. Valuation and Fundraising Strategy (Contrarian View):

• Chase the Money (If You Can Handle It): Imad holds a contrarian view, stating it is hard not to chase the highest valuation. He defended his Series B at a “not rational” 120x multiple in 2021, arguing the key mistake is not raising enough money when you secure a high valuation.
• The “Raise Enough to Grow Into It” Strategy: The goal of a massive round is to raise enough capital so that, even if growth stalls, you have runway, or if you grow aggressively, you can spend into that valuation over time. This requires immense discipline not to spend the excess capital.

4. Angel Investing Lessons & Portfolio Strategy:

• Serial Founders are Preferred: Imad has a strong bias toward serial founders, especially those with a “chip on their shoulder” who have something left to prove, rather than those who have already achieved a massive exit and could retire comfortably.
• Naivety vs. Experience: Imad prefers founders with outside perspective (naivety in the specific market, like his own start with Mercury in FinTech) over seasoned pros, as deep industry expertise can sometimes blind investors to novel solutions. He missed out on Scale AI because he judged the young founders too harshly.
• Angel Investing Requires Scale: To succeed in angel investing, one must treat it as “unicorn hunting” (or “decacorn hunting” now) and make 20-30 bets minimum to achieve the necessary diversification and portfolio effect for outsized returns.
• Timing the Exit: The success of his best angel investment, Credit Karma, highlighted the importance of founder timing (selling near the market peak in late 2021).

Context and Significance:

This conversation is highly relevant as it provides a seasoned entrepreneur’s perspective on navigating capital markets across different cycles (the 2021 boom vs. current environment). Imad’s defense of chasing high valuations, provided the capital is managed responsibly, offers a counterpoint to conventional wisdom often preached by investors who didn’t experience that era firsthand. Furthermore, his insights into the psychology of successful founders and the practical realities of angel investing offer actionable guidance for both founders raising capital and emerging investors.

Mentioned Entities & Frameworks:

• Companies: Mercury, Rappi, Rippling, AirTable, Credit Karma, Scale AI.
• Investors/Partners: Harry Stemings (Host), Imad (Guest), Yash Toshi (Imad’s new fund partner), Sequoia, Andreessen Horowitz (a16z), Keith Rabois, Elad Gil (a16z partner).
• Frameworks: The concept of “value-add” from VCs, the necessity of portfolio diversification in angel investing, and the debate over chasing high valuations.

🏢 Companies Mentioned

Carry ✅ tech

Chime ✅ finance/tech

Founders Fund ✅ finance

Grammily ✅ tech

Substact ✅ tech/media

Rappy ✅ tech

Dresen Co2C RV ✅ finance

Koehya ✅ Organization/Company (Unspecified)

Like Mercury ✅ unknown

ASIC Gavin ✅ unknown

AI SaaS ✅ unknown

Stoke Space ✅ unknown

Like SpaceX ✅ unknown

How I ✅ unknown

Agent Sync ✅ unknown

💬 Key Insights

"I think seed is very, very hard stage because the multi-stage fund product is so efficient. They are so good, fast, and their cost of capital is so different to a pure-play seed fund, which is like many, much smaller funds."

Impact Score: 10

"Why bother raising external money? No offense. Like if you took a look at Carry, like 20% on $26 is $5.2 million of your own money. I know $5.2 million is a lot of money; I'm not belittling it, but you could easily sell $5.2 million in secondary. Why bother?"

Impact Score: 10

"I would say part of Mercury's success has been my connection with early-stage founders. You know, actually, like from the first 30 kind of alpha customers in Mercury, I think 100% of them were like companies I'd invested in."

Impact Score: 10

"I have a problem with founders that raise money from VCs, and that's your responsibility to build a company. And then you raise money from other LPs where you have another responsibility to optimize the value of a portfolio. I view them at odds."

Impact Score: 10

"Time is about energy, not time. There are things that like drain your energy, and those are hard to do... And then there are things that are fun. Like I love talking to entrepreneurs and helping them out."

Impact Score: 10

"There's like basically three existing markets in space tech. There's rockets... There's taking pictures from space... And then there's communication."

Impact Score: 10

📊 Topics

#artificialintelligence 111 #startup 78 #investment 35

🧠 Key Takeaways

💡 charge a third of that

💡 do this because like someone else did it, I'm like, I don't care