All-In E80: Recession deep dive: VC psychology, macro risks, Tiger Global, predictions and more

Key Discussion Points:

Market Context & Causes

• Chamath explains there's been a 0.92 correlation between Fed money printing and S&P 500 growth from 2018 until Q4 2021
• About $35 trillion in global market value destroyed in 5 months, representing 14% of global wealth
• Unlike 2008 which primarily affected financial institutions, this downturn is impacting all asset classes

Tiger Global & Crossover Funds

• Tiger Global's new $12.7B fund is already nearly depleted
• Many crossover funds like D1/CO2 are sitting on sidelines until market stabilizes
• Discussion of Tiger Global's struggles with hedge fund down 45% through April

Advice for Founders

• Sacks outlines key metrics founders need to focus on:
  • Growth needs to be doubling year over year
  • Gross margins should be minimum 50%
  • CAC payback within 1 year
  • Burn multiple ideally 1x or less
• Companies need 2-3 years runway vs previous 12-month cycles
• Founders need to seriously consider repricing options and addressing employee compensation

Market Bottom Predictions

• Michael Burry analysis suggests only halfway through typical volume turnover needed to find bottom
• Fed in difficult position with inflation at 8% but fed funds rate only at 1%
• Real fed funds rate at negative 7% due to delayed Fed response
• Friedberg warns of potential consumer credit bubble forming as spending habits haven't adjusted

Notable Quotes:

Chamath on fund performance: "Out of 1,276 funds over $1B since 1994, only 22 have managed to return more than 2.3x"

Sacks on company building: "Great companies are built during downturns. PayPal was built during the dot com crash. My company, Yammer was built during the Great Recession."