Podbit · The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
SBC is the right mechanism to align employees with company outcomes — Avishai wishes fashion companies did it too. But it must be balanced with buybacks to prevent dilution. The current tech-industry normalization of Snapchat-level SBC is a real problem for investors.
Where this was said
At 26:56 · chapter starts 24:15
Harry flags a growing concern among investors: SBC levels in tech have become so normalized that they're eating investor returns. Avishai doesn't dismiss this. He believes giving employees equity is fundamentally the right alignment mechanism — people who build a company should be invested in its outcome — and he'd extend the practice far beyond tech if he could, arguing it would produce better outcomes even in government. But the excess is real. His framework for companies with cash is: acquisitions (hard, mostly fail), buybacks (underused, effectively dividends), or hiring more engineers (which destroys EBITDA and makes markets hate you). The right answer is balance, not ideology.
Wix had $1.5B in cash, no major acquisition planned, and bought back stock when it looked cheap. Then the market crashed. Avishai calls the timing terrible but still believes buybacks are underutilized tools — effectively a dividend for shareholders.
Wix executed a $1.5B buyback but the stock crashed afterwards, making the timing disastrous.
Base44 has grown to around 400 employees since being acquired as a one-person company.
Wix employs approximately 3,500 people, with customer support being the single largest department.
PropGPT launched with 20 downloads a day and strong influencer marketing but hit a ceiling at $1,000–$2,000 MRR. High download numbers masked a critical flaw: almost nobody stuck around after the free trial ended.
Eyal and Yali made a bold bet: stop all marketing, go back into the cave, and rebuild PropGPT from scratch. Four months of pure engineering and design work with zero revenue growth — and it paid off massively.
After rebuilding, PropGPT relaunched at $1,700 MRR. Within 2.5 months, it peaked at $40K MRR and 2,000 downloads in a single day. The product hadn't changed its audience — it had changed how well it served them.
Users didn't want a sports betting analytics tool — they wanted to be told the answer. Eyal realized their app was making users do the work when they just wanted the result, and that single insight drove the entire rebuild.
Step 1: know exactly who you're building for. Step 2: worship your data. Step 3: obsess over in-app analytics to find drop-off points. Step 4: scale with influencer marketing only after the product converts. In that order.
A 45% download-to-trial rate sounds great — until you see 13% trial-to-paid. That gap isn't a marketing problem. It's a product problem. Eyal breaks down how to read these signals before they kill your business.
Their 70th influencer video hit 600,000 views and single-handedly pushed PropGPT's ARR from $8,000 to $38,000 in three days. Influencer marketing has a lottery-like upside — but only if the product can hold the users it acquires.
Most founders struggle with distribution. Eyal and Yali had it nailed from day one — and still failed. Their story proves the rarer, less-discussed truth: a great go-to-market strategy is worthless if the product can't retain users.
Get a co-founder who has your back. Be scientifically honest about whether your idea has real demand. Once you convince yourself, it becomes an order of magnitude easier to convince investors and team members to join you.
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