20VC: SpaceX, Tesla, Neuralink: Elon’s Empire After the Firestorm | Are Circle and Coreweave Meme Stocks: IPO Analysis | Anduril Raises $2.6BN & Becomes Founders Fund's 1st and 2nd Largest Check Ever | Cursor Now 20% of SaaS Spend and the SaaS Slowdown
🎯 Summary
20VC Podcast Summary: SpaceX, Tesla, IPO Frenzy, and the Unicorn Cull
This episode of 20VC features Jason Lemkin and Rory O’Driscoll providing a news breakdown focused heavily on recent IPO performance, the strength of the US capital markets, and the future viability of the current crop of private unicorns.
1. Focus Area
The discussion centers on General Tech and Capital Markets, specifically analyzing recent high-profile IPOs (Circle, Coreweave), the strategic implications for Elon Musk’s companies (SpaceX, Tesla, Neuralink) following recent political events, the future of private “zombie unicorns,” and the competitive advantage of the US stock exchange system.
2. Key Technical Insights
- IPO Underpricing Dynamics: The massive pops seen in Circle (trading up 2X+) and Coreweave highlight a significant informational asymmetry in the IPO process, where anchor investors and bankers may intentionally underprice shares, resulting in billions of dollars transferring from sellers to initial buyers.
- Valuation Volatility for High-Growth Tech: The extreme divergence between CoreWeave’s initial filing range reduction and its subsequent 2.5X pop in four months underscores the difficulty in valuing high-growth companies where sentiment and market timing play an outsized role.
- De-Risking via Public Markets: CoreWeave successfully leveraged its strong IPO performance to raise additional debt, instantly de-risking existential threats related to prior debt repayment obligations, demonstrating the immediate financial utility of a successful public debut.
3. Market/Investment Angle
- US Market Dominance: The US capital markets are overwhelmingly superior, commanding roughly 67% of the world’s stock market capitalization despite having only 4% of the global population, making it the preferred listing location for international companies like Wise.
- Meme Stocks vs. Fundamentals: Circle and Coreweave are characterized as “meme stocks” because they combine strong underlying businesses with high retail/hype demand, making pricing exceptionally difficult compared to “solid, boring companies” that saw modest, predictable pops.
- The Unicorn Cull: Based on Rich Wong’s prediction that 20% of unicorns will fail, the hosts estimate a distribution where only about 20% will successfully IPO, 20-25% will fail outright, and the remaining 50% will likely be acquired or absorbed by Private Equity rather than achieving independent public liquidity.
4. Notable Companies/People
- Circle & Coreweave: Highlighted for their massive IPO pops, positioning them at the edge of “meme stock” territory.
- Wise (formerly TransferWise): Mentioned for choosing a US listing over London, reinforcing the US market’s liquidity advantage.
- Databricks & Stripe: Cited as juggernauts that choose to stay private despite the window being open for them, contrasting with companies like Figma, which is expected to IPO soon.
- Rich Wong (Excel): Quoted for his bearish prediction regarding the failure rate of current unicorns.
- Elon Musk/Trump: Briefly discussed in the context of political events potentially impacting the valuations and operations of his companies (SpaceX, Tesla, Neuralink).
5. Regulatory/Policy Discussion
The discussion touched upon the inherent flaws in the traditional IPO structure, particularly the informational asymmetry between founders/VCs and investment bankers regarding allocation and flipping behavior. While direct listings and Dutch auctions (like Google’s) were mentioned as alternatives, the consensus is that for median companies needing primary capital, the current flawed book-building process remains the default because alternatives carry too much execution risk.
6. Future Implications
The strong IPO environment suggests the window is wide open for high-quality, large-cap companies (like Databricks and Stripe) to go public if they choose, and it encourages mid-sized, high-growth companies (like Figma) that recently missed liquidity events to push forward with their debuts. The conversation implies a coming shakeout among the 1,500 existing unicorns as capital access tightens for those not meeting high growth or profitability thresholds.
7. Target Audience
This episode is highly valuable for Venture Capitalists, Private Equity professionals, Investment Bankers, and Founders/Executives focused on late-stage financing, public market strategy, and understanding current capital market sentiment.
🏢 Companies Mentioned
💬 Key Insights
"It's the definition of a great, I mean, definition of a great business is when your customers can hate you and still do business with you."
"I think the wonderful thing about SpaceX is, you kind of go through the, oh my God, I hate, I mean, I can see the government sitting in a room going, we love you, Elon, God, we'll give you a lot of business. Then, oh my God, we hate you, Elon, but there's nothing we can do because we don't have any other rockets."
"when an S-tier AI is included for free in an SMB product, and when it's charged to a $20,000 a year to replace one human in the enterprise, we'll see how that works out over the coming years."
"My mental model is there's a two-step process. Step one is, does the AI work and allow automation? You clear that hurdle. And you write the second question is, can you get paid for that enough?"
"I don't just don't know that we're going to be able to, that all these price points that we hope are sustainable in venture and startups. I'm not sure when the underlying COGS approaches zero of it's going to be as sustainable as we hope this one for two."
"I'm a huge proponent of AI replacing sales reps, right? Everyone out there in the market selling these products is basically trying to sell a $30 to $50 to $60K price point up. When we get really good at it, it might be $20 a month, it might be $20 a month."