Why Does Alphabet Invest in Startups? With Laela Sturdy (Head of CapitalG)
Ep 74 of The Logan Bartlett Show: Untold stories from tech's inner circle
Laela Sturdy is the Managing Partner at CapitalG where she effectively acts as the CEO of Alphabet’s $4B independent growth fund. She has somehow invested in a number of iconic companies across both consumer and enterprise, including Duolingo, Stripe, Gusto, UiPath, Whatnot and more.
In this episode, Laela and I dive into why Alphabet invests in startups, the frameworks CapitalG uses to make decisions, her advice for young investors (or would be investors), her experience operating and her predictions for the VC and IPO landscape.
✉️ Episode Memo
Some of my favorite takeaways from Laela:
Advice for Investors
Find creative ways to get yourself in rooms that you weren't invited to upfront. You have to be scrappier and a lot more of a hustler than most people realize.
The best companies have choices on who they bring on as a partner. Think about how you can be a relevant to entrepreneurs and add unique value.
A Contrarian Take About How To Get the Best Operating Experience
For smart, eager, capable people looking to gain operating experience, you’d be better off joining a growth-stage startup (post product-market fit) than an early stage company (pre product-market fit) .
The reason is that companies that have found lightning in a bottle often have really fun, gnarly, and challenging growth opportunities ahead of them still and there's no time to get experienced people in the door. So, they have to give smart, capable, eager people the chance to try it themselves.
By contrast, early-stage companies are by definition searching for PMF - which lends itself to a very different set of activities that can be ambiguous and may never prove out.
To Find the Best Investments, Look for These Things
Early data that shows high engagement among core customers.
A product or service that genuinely changes habits and lives (and customers that realize it)
The best companies will grow for far longer and compound far more than most people expect.
Where the VC industry is Headed
Currently, the state of the VC industry is slower and there's still a disconnect between public market valuations and private market valuations. However, the IPO window may be opening back up soon.
Fundraising volume is trending upward and is likely to heat up in a major way going into 2024.
⭐ Highlight: The Best Place to Build Your Career
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