E382: Why Venture Capital Has a $3 Trillion Liquidity Problem

What if the biggest opportunity in venture today isn’t finding the next unicorn—but solving the liquidity problem created by companies staying private twice as long as they used to? In this episode, I sit down with Ravi Viswanathan, Founder and Managing Partner of NewView Capital, to discuss how the venture ecosystem is evolving beyond the traditional fund model. Ravi explains why he left NEA to build a firm focused on liquidity solutions, how company-led secondaries are becoming a critical tool for founders and employees, and why the future of venture may depend on balancing long-term ownership with thoughtful liquidity. We also explore the DPI drought, continuation vehicles, cap table management, and why relationships remain the ultimate source of edge in venture capital.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Weisburd?

  Ravi, tell me the story of how you spun out of NEA and launched a $1.3 billion fund in 2018.

• 0:08Speaker 01

  So in 2018, I had been a growth investor for NEA for about 15 years and was noticing some structural changes in the industry. Companies are staying private longer. Another dynamic that was happening is that was really the start of the huge AUM boom. And this wasn't just NEA, this was a cross venture because I was talking to a lot of my friends at other firms. But the venture ecosystem really hadn't evolved and I found that there was a need for real liquidity and flexible solutions. And so that was really the launch of NewView. We launched NewView in 2018, raised 1.35 billion to really buy out a set of 30-odd companies from NEA and use that as a vehicle to spin off, really as a firm, not just a point-in-time transaction,

• 0:52Speaker 01

  but really to build something that I felt was going to be something prevalent for a decade beyond, which is really the need for liquidity across venture capital.

• 1:02David Weisburd?

  Is it consensus who the top companies are? In other words, there's some people that believe that by series being beyond, pretty much it's known which basket of companies is going to succeed. Or is there still these diamonds in the rough that you can find?

• 1:16Speaker 01

  You are seeing right now, at least in the AI boom, a flock to consensus investing. Sometimes that's early, a lot of times it is much later. Our view, we don't have a minimum when we invest in terms of scale. For us, it's really not focusing on consensus rounds, really focusing on product-market fit, the market and the team. And those three have served me well in the 25 years I've been a venture investor. And so that could mean that could happen earlier, could happen a little bit later. But all of them are companies that we've been tracking, we want to partner with, they view us as value-add partners.

• 1:51David Weisburd?

  Roughly 25% of your capital is for primary investments into these companies. Why is that so critical?

• 1:58Speaker 01

  It's really important because it changes the narrative on who we are. We just didn't want to be a secondary solutions provider because that could become much more transactional. And instead of being transactional, we wanted to be strategic. So how do we be a long-term capital partner, a long-term strategic partner to this company? A lot of times, it could start with providing liquidity to employees, to early founders, to institutions on the cap table. But then we can marry that with primary capital and our value adds such that they view us very differently in the cap table. It's pretty unique in that we can do both. We're not pure secondary, we're not pure primary. But that isn't the real important piece. The important piece is figuring out the companies we want to partner with, they see the value that we can provide, and that's how we start the relationship.

• 2:43David Weisburd?

  I have a bit of a contrarian view on the future of secondaries. Today, we have these infamous SPVs in Anthropic and OpenAI and Anduril. The CFOs of these companies, it's unprecedented, are going on Twitter saying, "We're not going to authorize these transactions." Second-order effects of that is there's going to be a flight back to quality. The last thing that the CFO of SpaceX and the CFO of Anthropic wants to do is deal with somebody's grandma. Maybe she's technically a credit investor, maybe even a qualified purchaser, losing grandma's money in some shady deal with some SPV holder that they've never even met. So I think there is going to be this flight to quality, and there's going to be, again, this return to having trusted capital partners.

• 3:27David Weisburd?

  It sounds so trite, it sounds so basic, but it's such a critical part of the private markets.

• 3:33Speaker 01

  We totally agree. And in secondaries, you've heard of GP-led secondaries, you've heard of LP-led secondaries. That's where most of the narrative is. Our view is company-led secondary is one of the most interesting facets of the secondaries market in venture that we're seeing. It's not doing, again, a point-in-time transaction because a GP needs liquidity, or employees need liquidity, or an LP wants out. It's much more where the company takes control of the cap table, and we partner with them to provide liquidity, and it could be an employee tender, and you tack that on with early founders and early institutions. Get liquidity, but it's really important because the founders and the CEOs, and you're hearing about this, this SPV narrative is really front and center to that. They really want control of their cap table.

• 4:17Speaker 01

  Their view is, we don't want traders, we don't want folks that we don't know who they are. Because this is a long journey, companies are staying private longer, and we need partners that we feel good about. That is really important for us, well over 95% of our deals. It's been blessed by the CEO, directly in there with the cap table in the company. So I think that's going to be really important. And you're starting to see elements of it in this top fringe of companies. But I think that's starting to go down into the broader ecosystem.

• 4:47David Weisburd?

  I had another guest talk about the $15 billion that Databricks raised. Much of it went to clean up their RSU problem, their restricted stock units. Talk to me about that, and what are companies actually trying to solve via secondary?

• 5:01Speaker 01

  You have employees that have been in the company for five, six, eight, 10 years, right? And they need liquidity. And it used to be that they would just wait for that event, an IPO, M and A, et cetera. And this is an opportunity for them to actually, I call it releasing the pressure valve in these companies and really allowing the employees to carry forward. And not have this pressure of, okay, I have to have, wait for this event to get this big batch of liquidity. That also holds true for a lot of the early investors. And then, you know, a lot of it is culminating in this DPI desert that we're in, where you have this massive buildup up until 2021. Three trillion.

• 5:39Speaker 01

  And so the LPs are basically saying, this is great, we still believe in this asset class, the power law is building some incredible generational iconic companies. Having said that, we need to get liquidity.

• 5:49David Weisburd?

  And by the way, three trillion in funds with over 10 years. But three trillions past the natural fund life.

• 5:56Speaker 01

  That is a very important point. If you look at a fund life, it's typically 10 to 12 years. And if you look at companies that are now staying private longer, the average has gone from seven, eight years a decade ago to 13, 14 years. So you're already seeing this mismatch, a structural mismatch in terms of. The fund life and the life of a private company. So there needs, something needs to give. What you don't want to do is be in a situation where you're forced to do something. No company really wants to be forced to IPO, forced to sell. You want to have the freedom and flexibility in the hands of the founders that have built so much for so long for them to carry forward.

• 6:33David Weisburd?

  And I want to double click on that because what does it mean to be forced? It's subtle. It's somebody on the board saying some offhanded comment. It's employees, your co-founder that might have been with a company 10 years ago that's trying to have a baby and start a family. It's these subtle things and they build up to release this pressure valve is a very underrated thing for a CEO that you want him or her focused fully on optimizing the outcome for the company, not optimizing around someone's liquidity.

• 7:03Speaker 01

  And the signs are subtle, but you said it. The quality CEOs will pick up on the signs. They'll pick up on the signs in board meetings, the institutional investors, but they'll pick up on signs daily with their employees. And one of my companies, this is 15 years ago, that really I thought was one of the early pioneers of this company called MuleSoft. Greg Shaw, what he did is he started tacking an employee tender or employee secondary to every primary financing. And he found some really interesting trends. He first found that, all right, there's a lot of employees that, that got liquidity. That was one. The second was it really boosted morale. It was a great retention tool. Third, in subsequent tenders, the employees started pulling back on how much they were

• 7:47Speaker 01

  selling because they realized, wow, I'm part of building something and the reason I wanted liquidity was that pressure release valve, I wanted to buy a home, et cetera. Once that's been satisfied, I can now build for value. And I took that listen. Now you're seeing that much more prevalent. That's why the whole founding of NewView was this. It wasn't just this point in time trade or transaction of N E H. Really, we think that this market is, there's a structural shift happening in venture. It's following what's happened in P E. Right? P E has sponsor to sponsor deals. There isn't that way in venture and I think that'll change. So the structural shift is really enabling companies to continue to build. But also satisfying the needs of the other constituents, the GPs, the LPs, the employees.

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• 10:16David Weisburd?

  Just to steel man what you're saying, I believe OpenAI is allowing up to 30 million in secondaries. At some point, that becomes counterproductive. What is that point? And how should companies think about how much in secondary employees should be able to sell?

• 10:31Speaker 01

  That's a great question. It's kind of the Goldilocks problem. If it's too small, you'll get frustration from the employees and the institutions that they weren't able to sell enough. If it's too big, and that's what I worry about in this climate, you could have complete misalignment. You're going to have behavioral changes. So this is where these company-led transactions or secondaries really have to be thoughtful. So how we do it, we partner with the CEOs and we help them think about their dashboard. Is there a certain tenure that the employee needs to be there? What percent of their vested stock can they sell? What is too little? What is too much? What is that right amount where you're not changing that employee behavior too much, but you're still releasing

• 11:13Speaker 01

  the pressure valve and it's a great retention tool. It's actually becoming a great hiring tool. And so what does that number look like? It could be 10 to 30% or 10 to 20% of their vested equity. It varies company by company, but that, there is a sweet spot. And a lot of these companies are doing it more and more. It's not just now the OpenAI's and the anthropics of the world. It's really coming to a much broader part of the market.

• 11:38David Weisburd?

  Do you know the origin of the four-year vesting schedule?

• 11:42Speaker 01

  I don't. I actually don't.

• 11:43David Weisburd?

  So Eric Bond from Hustle Fund told me that the reason employees historically vest over four years was that was the expected timeline to IPO, from Series A to IPO in the 80s and 90s. Just to give you a sense for how things have changed, I think SpaceX is almost in year 20. Palantir was, I believe, in year 17, year 18.

• 12:03Speaker 01

  Really interesting point that we have noticed after starting NewView in that so much of venture is just how it's been done, right? The four-year vest, I think that's a wonderful example of just how it's always been done. Back then, there was an alignment, right? But now people don't even think of it that way. And our approach is just to break that or put it on its side, say, well, It's always been done that you invest and you get liquidity whenever you get liquidity. Our view is it doesn't have to be. What we're trying to do is even disrupt the venture ecosystem in a small way by saying, you know what? Take a lesson from the PE folks that have these sponsor to sponsor deals. It's easier for them because they own their companies. Much harder to do if you're a venture investor. But just figuring out ways such that it doesn't have to be this long linear path.

• 12:48Speaker 01

  It's always been, okay, we can't mess with that long linear path because you don't know, right? You invest in a lot of companies, the power law. And some of these companies just take time. You mentioned some great examples. Having said that, along the way, there are mechanisms for you to increase your chance of retaining great people and continuing to build such that there isn't the stagnation element. It's eight, 10 years. We're starting to get going, but man, there's a lot of folks here that are tired. And so I think there's a lot, when I say folks, it's all, it's up and down the cap table. It could be angels, institutions, employees, founders. So all of that plays.

• 13:22David Weisburd?

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• 14:06David Weisburd?

  One thing that I've learned from talking to hundreds of investors, founders and business leaders is that planning for the future isn't just about growing assets. It's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at statefarm.com. Like a good neighbor, State Farm is there.

• 14:50David Weisburd?

  One thing that I've learned from talking to hundreds of investors, founders and business leaders is that planning for the future isn't just about growing assets. It's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at statefarm.com. Like a good neighbor, State Farm is there.

• 15:38David Weisburd?

  We've been talking about these companies SpaceX, OpenAI, Anthropic. Full disclosure, I'm an investor in Anthropic and SpaceX. But these companies are going to have the three largest IPOs in history. How does that change liquidity and the nature of DPI in Silicon Valley?

• 15:58Speaker 01

  The IPO market is critical for the venture ecosystem. It's really, and this is where I do agree with Bill Gurley, former benchmark partner when he said that. So I think these are going to be generational IPOs. It's going to put a lot more liquidity into the system. It's wonderful for venture because it's going to put a lot more liquidity in the hands of limited partners. And that's really important because that's what really gets the flywheel spinning. They get capital back. Guess what? They're going to reinvest it back in venture. When you have this illiquidity DPI desert for so long, the LPs, and it's fair for them to say, look, I need liquidity from you. By the way, a lot of that, I'm just going to reinvest back into you, you being the venture ecosystem. But your siblings in the Credit world and the buyout world and the middle market world have returned capital

• 16:43Speaker 01

  to me. I understand that the multiples you're going to promise me are a lot higher. But I do think that that's really going to be important to get that flywheel spinning. And if you look at just in my 25-plus years in venture, when you have that IPO market start to open, people realize why companies go public and why public institutional investors love the venture ecosystem for growth. They really can't get growth broadly speaking in the market. So I think that that's going to be a fantastic set of events for the venture ecosystem.

• 17:15David Weisburd?

  I have a bit of a contrarian take on this, and I think DPI in venture is not going to change long term. And before I tell you why, I want to first steel man that. The original Swenson model, just started in the 80s by David Swenson, famous investor at Yale, modeled for 24% DPI in the private markets. I had Alex Ambrose, CEO of Allocator Training Institute, they've tracked this for several decades. 2024 had a 9% DPI, lowest since 2000. 2025, again, roughly 9%. I don't think it's changing. And the reason for that is if you think about venture capital as an asset class, a couple of things are happening.

• 17:56David Weisburd?

  One is you have this extreme concentration in these top quartile funds, the Sequoias, Andreessen, Founders Fund, et cetera, et cetera. And it's important to remember, and people forget when talking about DPI, is venture capital is an access class, not an asset class, meaning the top LPs are trying to get into the top VCs. But on top of that, the top VCs are trying to get into the top startups. So the startups pick the VCs, the VCs pick the LPs, as it relates to over 50, close to 75% of AUM in certain years.

• 18:32David Weisburd?

  Therefore, if the founders are the ones that are ultimately picking whether they want to go public and they have an infinite amount of capital from VCs, I don't think it makes sense for them to go public quickly for many of the reasons that are obvious and many non-obvious. The most obvious being, of course, having to report on a quarterly, a quarterly basis. We talk about incentives. You basically can't take long-term bets. It's extremely difficult, which is why you see in public companies, the main CEOs that are taking big risks are the founders.

• 19:01Speaker 01

  Yep.

• 19:02David Weisburd?

  That either have literal control via founder shares and special bonus shares, like at Google or at Facebook, or figurative control where the public markets trust them, kind of like Elon and Tesla. I don't think that's changing. And yes, I think those three companies will provide a lot of DPI, but fundamentally, the problem is the same, which is significantly easier to grow a company in the private markets. And the more disruptive and the more fast-moving the market, the more of a competitive advantage it becomes to build in the private markets.

• 19:34Speaker 01

  So let's unpack that. We make some good cases. I would say two things to point out. The DPI, it's a fair point to say that 24%, probably that number may be unattainable. But DPI, there's also a denominator, which is the paid-in capital piece, and that has exploded in the last decade. So what you're saying is, if the DPI still remains very low, we'll still give a lot of DPI, but we'll still keep raising massive amounts of capital. I just don't know the institutional LP base that can support that for a very long period of time. So that's one. So maybe it's not 24%, maybe it's not 5% to 10%, and that 9% may be generous in some of the low points in the last decade.

• 20:17Speaker 01

  There's probably some equilibrium where you can provide more DPI, but still bet on your winners. And that 24%, that's basically saying you pay back the fund in four or five years. It's also very tough to stomach. I think in the buyout world, it's very different, right? But in venture, I think these are maybe the rails you're looking at. So I think that there needs to be a normalization, and that's happened. I've witnessed several downturns post the dot-com crash, post the GFC. There was this normalization equilibrium. There's always a run-up. But post that, people start realizing you need to marry that DPI with capital raising. The way I frame it is, for the longest time, VCs would look at the three main metrics. Multiple, IRR, and DPI.

• 21:01Speaker 01

  The way I think about it, just to visualize, multiple was 50-point font. IRR was 24-point font. And DPI is 6-point font. And I think what you're hearing from the LPs are, multiple is great, but you need to start normalizing the three, right? That's one point. The other point about staying private longer, I think that there is going to be some companies, I've talked about this perpetually, private companies. I think it's a fringe set, maybe it's 5%, 2%, 1%. That why did people go public in the past? It was really for two reasons. Capital, access to capital, and liquidity, right? You're right, the way the private markets are evolving, you can do both of those.

• 21:43Speaker 01

  Having said that, we do need public markets for a variety of other reasons. And even some of these folks that want to be private for a long time. If you look at the journey of many of these companies, post-IPO, there's a period of time when inorganic growth starts becoming interesting. Most venture-backed companies really think about organic growth. They have product-market fit. It's this amazing product that they have, they scale that. After a period of time, they really start thinking about buy versus build. And when you have a public currency, it's a lot easier to do that. You could argue OpenAI is buying a lot of companies. But if folks thought that OpenAI would be private forever, there may be a different reaction to folks selling, because how would these institutional investors get liquidity? So I do think there's some real benefits there.

• 22:28Speaker 01

  And also access to a shareholder base that could be longer term. But again, we don't know where that equilibrium point will be, that DPI percentage. I think that is evolving, I agree with that.

• 22:38David Weisburd?

  Such a good point about build versus buy. The other way that I also look at it, because these are markets. People forget these asset classes. My biggest pet peeve is someone will say, "Well, I don't like early-stage venture." Well, what does that mean? At what valuation? At $5 million or at $50 million? Every asset class has some equilibrium, some theoretical equilibrium, which is why you see these waves. But on the point of DPI, the Occam's razor, the way that I look at it, is if companies overall want to stay longer private, let's just say, for longer periods than the 10-year fund life, on average, especially the breakouts, then you're going to see DPI on the second layer. Secondaries, continuation vehicles.

• 23:23David Weisburd?

  LP LETs secondaries, GP LETs secondaries, company liquidity pools. The second layer may be where the liquidity comes from.

• 23:30Speaker 01

  Yeah, I think so. The narrative, as I said at the outset, is just shifting that it's not this weird obtuse thing. It's more mainstream. When we started the firm-

• 23:40David Weisburd?

  It's not a faux pas.

• 23:41Speaker 01

  It's not. And venture and secondaries had a negative connotation. It was distressed venture 25 years ago. It's very different now. So I do think you're right that there's going to be this tier that's going to start. You're going to see more and more secondaries, more and more tenders are flowing to this tier. Having said that, I think all of these generational companies are also gearing up to go public because they're also seeing now that the public markets are appreciating what they're doing. That is overtaking the quarterly earnings call, et cetera. I also think that that is a factor in all of this.

• 24:15David Weisburd?

  One of the topics I'm really fascinated about is continuation vehicles. It's gone to $110 billion in the buyout space. I had Michael Woolhouse, who runs the largest fund in that space, and TPG is a $1.9 billion first fund. And there's so much money going in on the buyout side. I've been talking about this conversation with several large asset managers about continuation vehicles. Are they coming to venture?

• 24:38Speaker 01

  For continuation vehicles, you need to be registered in the US. It's very difficult to do it if you're not registered. You have to totally restructure your documents. So who are registered? In our estimation, less than 10% of venture firms are registered.

• 24:50David Weisburd?

  RIAs.

• 24:51Speaker 01

  RIAs. And so, of course, these are the mega funds, the ones that have 50 to 100 billion AUM. They could do that. So I do think they're coming to venture in one regard. For the other 90, 95% of ventures, it's just tougher to do. I also think you have to think about what you're solving for. A really good CV, how it started, is you had a business in the buyout world that was continuing to chug along, high-quality earnings, high-quality EBITDA.

• 25:20Speaker 01

  Growth profile and it elapsed the fund life. And so you place that asset into a CV and it's a win, win, win for everyone. The GPs want to continue to manage it. LPs say, you know what? This is a great asset. We can take liquidity or not. The flip side of that is sometimes you see CVs where there's some good stuff and they throw a bunch of other stuff in there. And so that I think is where it's going to get problematic. The other issue is in venture, which maybe isn't the case in PE. There's 10,000 companies or how many number of private companies? Bandwidth is becoming a significant issue for VCs. So when you have a CV as a venture capitalist, you're still managing the company.

• 26:02Speaker 01

  So I think you're also going to see another use case where venture firms lighten their load in some of these companies, not only for DPI and liquidity and portfolio management, which is critical, but also for bandwidth management. The thing that we talk a lot about is this massive generational shift that's happening in venture. There's some great spin outs happening, but this huge generational shift, a lot of these folks retiring, what's going to happen to those companies that they manage? They still may manage it or they may hand it over. But this is where a lot of, when we have these conversations with GPs, we talk to them all the time. It's for DPI, but also this bandwidth issue is going to start coming full circle.

• 26:44David Weisburd?

  To clarify what you're talking about, the technicalities on it, a CV is a secondary. It's put into its own vehicle. So if you are an exempt reporting advisor, as 90% of VCs are, it blows that

• 26:57Speaker 01

  Yes.

• 26:57David Weisburd?

  exemption versus if you're a registered investment advisor, RIA, you're able to do that because secondary, you don't have to qualify via secondary. On that note, is there an opportunity for you to partner with GPs? Let's say they have a Databricks or an OpenAI or Anthropic in their portfolio and that position is now $200 million, $300 million. Is there an opportunity for you to partner with those GPs?

• 27:21Speaker 01

  For sure. That's what we do a lot. The other thing you see in venture with the power law in these funds from 10 years ago, you have significant NAV concentration in one or two names. And so for them to get DPI, show their LPs are actively managing the portfolio, balance out that NAV concentration, it's a huge use case that we're seeing. And it's win-win because a lot of these companies, when we get into them, we still see significant upside. So do they. And it's a very healthy back and forth on they want to sell less than what we want them to sell. And that's, for us, that's a great signal, positive signal, right? And so I actually think that that is going to be a significant use case because there's these three that we just talked about going public. And then

• 28:04Speaker 01

  there's probably another 20 to 40 underneath them, still have been around for 10, 15 years. In the lead up to the IPO, maybe they start lightening their load, right? They're not, they don't have a gun to their head from their LPs or to their founders to say, you know what, we got to do something. And so I think that's a significant use case that's emerging.

• 28:24David Weisburd?

  I don't want to age you, but you've been in the venture business now two and a half decades, going back to Goldman in 2000 on their venture team. What has compounded the most in your career?

• 28:33Speaker 01

  I think relationships. Venture is, was, and will be a relationship business. And so the most satisfaction I've gotten, the best deals, everything has just come from relationships. And this company building narrative that I was taught by folks like Dick Kramlich and others decades ago still hold true. And that's been a fundamental ethos of me and also our firm.

• 29:02David Weisburd?

  I had Nico, who was at C practice at General Catalyst for 15 years, just started a firm called Verdict. And he was mentored by Charlie Monger. Charlie Monger gave him this thought experiment, which is everything on your calendar, think about it from the view of the 80 year old self. Am I happy I did that meeting? Am I happy I talked to this person? Basically, I saw it back from that.

• 29:22Speaker 01

  That's actually an interesting narrative. Part of this is like, how do I look back and educate the whatever Ravi 25 years ago? What I would tell that person is, same thing, it's optimizing for volume versus optimizing for quality. That's one. Second is play the long game. Venture, it's not obvious, it is a long-term game. And you have to pace yourself, really play for that. And sometimes that may mean building relationships that last years before you get anything out of it. Maybe you get nothing out of it, right? And the third thing is just

• 30:01Speaker 01

  Telling the younger me that when there are fundamental dislocations in the market, that's when opportunities arise. If you look at post.com, post GFC, and even the last few years, the cast of companies that have emerged from these dislocations are just generational companies. So when you have these dislocations, there's a lot of panic that sets in and the volatility explodes. And I've found that the best founders, the best VCs keep their wits about them and then use that as leverage points to really find the next great founder, entrepreneur, product, what have you.

• 30:39David Weisburd?

  So that's saying there's some years that go slow and then there's some days or weeks that you could get a decade of progress?

• 30:47Speaker 01

  Yeah. And I remember in GFC, you have a lot of these companies having liquidity issues and difficulty fundraising, which is unheard of now with all the capital flowing. And that's when really you have to focus the founder. One of my favorite CEOs told me this, that the 12 to 24 months following a downturn are some of the best moments at a startup.

• 31:11David Weisburd?

  It reminds me during COVID, I had an opportunity to invest with Sequoia and Robinhood in the Sequoia round. And family offices have been asking me probably for a decade for Sequoia to invest. I'm like, sure, I'll give you a call when I have a company investing with Sequoia. And of course, I had that. And my thesis on Robinhood, it looked like a good company, but no one knew how bad COVID was going to be. And my thesis was pretty simple, which is if the world ends, it doesn't matter. If the world doesn't end, it'll be a good company.

• 31:41Speaker 01

  Yeah.

• 31:42David Weisburd?

  Almost literally, my thesis at a high level on how to deal with COVID. There's no way to price it, just like AI. If you're fundamentally honest, there's some percentage chance that in five to 10 years, no one will have a job. No one could really deny this fact, but you have to keep on investing as if that's not going to happen. But there's this weird thing that human beings, when there's panic and when there's blood on the streets, they turn off their brain and they go into panic mode. They're not able to execute. I think that I was able to get some exposure there, but.

• 32:12David Weisburd?

  If it was a regular market, which of course the opportunity would have been there at that time, I could have done 10, 100 times more probably.

• 32:18Speaker 01

  So when all that capital floods the market, you just had a lot of bad habits. So we're talking to founders and after a 30 minute meeting, they would ask for allocation. There's no diligence. So I think that in those times, it's almost harder to invest because you just see capital flooding. And what happened in 2021, which is pretty dangerous, is a capital masked product market fit. And now you're seeing the flip side of that. And that's why we've talked about this as tale of three cities, where you have this AI boom and you're probably at the steeper part of that curve. But some generational companies are getting created, a few that are going to go public shortly. And the other extreme, you have this long tail, the trillions of dollars that ran up

• 33:02Speaker 01

  in 2021, capital mass product market fit, capital retreated, and a lot of these companies are stuck and they're going to become zombie companies. There's also really high quality companies that were founded actually before 2023, but they're well run, kept their wits about them, focused on product market fit, scaled, great management teams, now have figured out, how do I use AI as a tailwind versus a headwind? So I do think making sense of all that in this current ecosystem is going to be critical. As many cycles as I've seen, this is an extraordinary time to be an investor, to be in the startup world for all of these reasons.

• 33:39David Weisburd?

  Going back to what you said, you said relationships compound over 25 years. A lot of people say this. It almost sounds straight. But inherent in that is that there's a trade off in the short term. If you're building relationships for the long term, there must be trade offs in the short term.

• 33:56Speaker 01

  The way we look at it is, this again, moving away from transactions to something longer term and strategic. And I've found that when, and it could be that maybe I missed an investment, right? But I built a relationship and I got in later versus jumping in because you fell in love very quickly with a product or marketer or technology. Maybe that will work maybe that long. But inherently, anytime you play the long Anytime you need patience, you're trading off, especially when you have this ecosystem that's so focused on FOMO and speed and volatility and please don't let me miss out. I mean, that started a couple of decades ago with Facebook, right? Google and Facebook and then and now you're seeing that obviously with some of these, some of these AI names.

• 34:41Speaker 01

  And so that's where this business is beautiful, but also gut wrenching. And in one fell swoop is you've just got to really focus on the long game, but there's also a price to be paid for patience. So where do you have that equilibrium point, right?

• 34:58David Weisburd?

  Did that lead to cynicism earlier in your career that you were playing the long game and a lot of people were not?

• 35:03Speaker 01

  I didn't necessarily think I was playing the long game. It actually, early in my career, there's moments when I wish I played the long game. So that's what I would tell the younger Ravi. And when I started thinking about playing long game, it really is when I started meeting just founders that were just so exceptional that reset what I thought world class was. And that's when I realized, oh, wow, it takes longer to find these folks. But then if you find them, then this weird thing happens, then you build credibility, then that cycle time can actually increase.

• 35:34David Weisburd?

  Well, Ravi, I first heard about you when you did this epic $1.35 billion deal in 2018. I believe it was TechCrunch or one of those headlines. And it's been a pleasure getting to know you and thanks so much for stopping by.

• 35:46Speaker 01

  Thank you, David. Enjoyed the conversation.