20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Larry Aschebrook is the Founder and Managing Partner of G Squared in what is one of the wildest stories of venture capital. Larry started G Squared with nothing, dialling for dollars having personally invested in Twitter and Uber. In his first fund, Larry made sizable bets into SpaceX, Palantir, Alibaba and Twitter. Larry has also had mega losses along the way (discussed in the show) in Getir, 23andme and more. Today, Larry manages over $5BN and has invested in all the best from Wiz to Spotify to Revolut and Anthropic. Agenda: 00:00 – From Broke to Billion-Dollar Bets 03:40 – The $800M Coursera Windfall 06:10 – Lyft Made Millions, Uber Lost $50M 09:05 – “We Fcked Up”: The Billion-Dollar Vintage 11:50 – How a $150M Spotify Bet Made a Billion 15:10 – The Gut Call That Dodged Theranos 18:00 – Vampires vs Zombies: The Coming Startup Purge 20:30 – When Success Almost Killed the Firm 24:20 – DPI Is King, MOIC Is Bullsht 27:40 – Why I’d Buy Anthropic at $61BN Today 30:05 – Losing $70M on 23andMe 32:10 – The Janitor of Venture Capital 34:00 – The Getir Deal That Nearly Broke Me 36:25 – Does Money Actually Make You Happy? 39:00 – What Cal Ripken Jr. Taught Me About Venture

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

• 0:00Speaker 00

  I mean, we made ridiculous sums of money for LPs in that period. We were the largest shareholder of Coursera. Eight hundred million dollars back to LPs on Coursera. We made a ton of money on Lyft and we lost money on Uber. Forty percent of my third fund went into Spotify. I went back to our LPs and said, listen, we fucked up. We need to pivot. We need another three hundred million bucks because I need to protect this thing. The next three years were some of the worst of my life.

• 0:25Harry Stebbings?

  This is 20 VC with me, Harry Stebbings. Now today, we feature one of the most nuts stories in venture capital. I went for a walk with this guest before the show and it was just mind blowing the different elements of their journey. So we dive into it today and I'm thrilled to welcome Larry Asherbrook, founder and managing partner of G Squared. In what is, as I said, one of the wildest stories in venture, Larry started G Squared with nothing, dialing for dollars, having personally invested in like Twitter and Uber. And then in his first fund, he made sizable bets into SpaceX, Palantir, Alibaba and Twitter. He also had mega losses along the way, which we discuss in the show in Get Here, 23andMe.

• 1:08Harry Stebbings?

  He had a lawsuit with Theranos to get out of an investment there. And today he manages over five billion dollars and he's invested in everyone from Wiz to Spotify to Revolut and Anthropic. This is one of the best shows I've ever done because Larry's so honest, he's so real and he's very candid with the numbers. This was an incredible show. But before we dive into the show today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens of platforms, products and tools. That's why we use Coda, the all-in-one collaborative workspace that's helped 50,000 teams all over the world get on the same page.

• 1:50Harry Stebbings?

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• 2:33Harry Stebbings?

  and get six months off the team plan for startups for free. That's coda, C-O-D-A dot I O slash two zero V C and get six months off the team plan for free. Coda dot I O slash two zero V C. And while Coda keeps the engine running smoothly, Shopify puts the pedal to the metal when it's time to sell. When I was 18, I dreamed about being an investor with zero contacts in the industry and through persistence, I'm now living that dream. Maybe you're dreaming of your own business and that's where Shopify steps in. I spend my time exploring successful businesses online. Often, there's a business behind the business driving success. For millions, that's Shopify, powering 10% of US commerce.

• 3:18Harry Stebbings?

  Shopify offers beautiful templates, AI tools for product images and descriptions, easy marketing campaigns and 24/7 support. Their number one checkout boosts conversions by 50%. Fewer abandoned carts, more sales. Winner, turn dreams into success with Shopify. Go to Shopify.com/20vc for your $1 per month trial today. That's Shopify.com/20vc. And while Shopify helps you drive sales, don't forget what really keeps those customers coming back. Trust is the ultimate currency in business and today, customers expect it faster than ever. And that's why over 10,000 global companies trust Vanta. Vanta automates up to 90% of the work

• 4:00Harry Stebbings?

  for in-demand compliance standards like SOC 2, ISO 27001 and more, using smart AI to centralise workflows, manage risk and get you audit ready in weeks, not months. So you can stop chasing paperwork and start closing deals. And a new IDC report found that Vanta customers achieved

• 4:20Harry Stebbings?

  Five hundred and thirty five thousand dollars per year in benefits. That's insane. And the platform pays for itself in three months. I had no idea about these. Whether you're growing fast or just getting started, Vanta connects you with trusted auditors and experts. Support to help you build trust with customers. Get a thousand dollars off your first year at vanta.com/20vc. That's vanta.com/20vc.

• 4:47Harry Stebbings?

  You have now arrived at your destination.

• 4:50Harry Stebbings?

  Larry, dude, we walked around the park and I heard your incredible story. And to be fully transparent, I didn't know the incredible story before, which is why at the end I was like, dude, we have to do a show together. So thank you so much for doing this with me.

• 5:05Speaker 00

  I think that's that's humbling, you know? It's sometimes difficult to open up and tell the story, but I enjoyed our walk.

• 5:11Harry Stebbings?

  Listen, it's the short shorts and the great legs that make you feel comfortable to open up. I completely understand, but I want to start on the entry. Dialing for dollars is kind of how I was thinking about this. How did you start your way into venture? And what was that entry point?

• 5:26Speaker 00

  Yeah, for me, it wasn't really, hey, I want to be a venture capitalist and manage billions of dollars. You know, I come from nothing, was a fundraiser for academic institutions for their endowments. I was good at that and everybody I raised money from, most of people, not everyone, most people made it investing in private companies. It would be at PE funds or venture funds or running their own operating businesses. It didn't matter what it was from, you know, Windows to financial management to PE. They created real wealth for their families and I was like, they're not that much different than me. I work hard, I'm smart enough, maybe I can do it. So I went back to business school late in life and our business today was my thesis. And I started buying, you know, the smartphone became something that was running our lives in 2010. And I just started saying, this is super interesting.

• 6:11Speaker 00

  Why don't I buy shares and I follow Twitter, I like Twitter, you know? What about early Uber? What about early Spotify? And I just started buying shares from my classmates with my own money.

• 6:22Harry Stebbings?

  That that sounds great, but these companies are not public at the time.

• 6:25Speaker 00

  No.

• 6:25Harry Stebbings?

  So how does one do that then? How did you approach it?

• 6:28Speaker 00

  Well, I guess it's. Not knowing what you don't know is ignorance is bliss is kind of the same thing. I didn't realize it was something you shouldn't or couldn't do. I just asked people, you have shares, can I buy some of your shares? Well, I never really thought about selling them because I really can't sell them. How would you buy them? And still to this day, 15 years later, there's a form that I created at Carey School of Business at Arizona State. One page form that then we sent to the company to buy stock. And it still floats around. I got it back from a broker not that long ago. And it's like literally the form I created in 2010. One page and it's binding though. That's scary. It's binding. Which has bitten me in the ass a few times.

• 7:08Harry Stebbings?

  So we're at business school and we're like, you know what? I see the mobile revolution. I'm buying Uber, I'm buying Twitter, I'm buying Spotify. What happens then? And also, how much are you buying?

• 7:18Speaker 00

  Yeah, so small. You know, I wanted to make a change. I was working in college athletics. That was changing as it's become today. You know, this whole thing, players should get paid and coaches salaries. And pretty soon the inmates were running the asylum, so to speak. And I was like, this isn't my passion. It's not where I came from. I want to make a change as a former athlete. Like maybe I can use my brain, not my brawn. I cashed in my retirement. I went through a divorce, got remarried, had nothing, had no money. And I just had paid the tax on my retirement, started buying these shares.

• 7:49Harry Stebbings?

  This is literally your last money?

• 7:51Speaker 00

  Yeah, well, half of nothing's nothing. My wife came to our marriage with $50,000. I had went through a pretty tough financial situation. Rightfully so. My former wife kind of took what I had, raising my three young kids at the time. And my wife and I today, we started a journey together and she backed me with the 50 grand and my small amount of retirement. I just started buying Twitter shares and Alibaba stock from Jack Ma's family office. And then holy shit, it worked.

• 8:18Harry Stebbings?

  And you review those today. Which was the single best investment on a multiple basis?

• 8:23Speaker 00

  I mean, Twitter and Alibaba were pretty good. Those are when I realized there's something here. Making a little bit of money in your whole life, working 10 years in a profession, thinking you've kind of made it coming from. I grew up in an orange trailer in Mighton, Utah. You know, having like a hundred grand in your bank account one random Tuesday felt pretty good. And I said, this is something interesting. And I got some advice. You should raise some third-party capital. And that's when I really understood the power of OPM, other people's money. I went around to all of those alums who basically, I think, gave me some money because they were tired of me asking that I worked at five different large academic institutions.

• 9:02Harry Stebbings?

  And so just so I get it right, what was the thesis?

• 9:04Speaker 00

  For me, it was very simple. If there's fewer institutions to help companies go public, coming off the financial crisis, funds started deploying large sums of money. So then the byproduct would be companies would stay private longer. The average age from inception IPO was like three years leading up to 2010. From 2010 to 2018, it got to like seven or eight years. Today, our average portfolio company is 15 years old. So there was, to me, something that was clear there, which was there's an opportunity to buy shares from these people who have no liquidity and you should be able to make more of a return than, and also companies wouldn't return my phone call, frankly, because I had like no money. And hey, Twitter, hey, Dorsey, my name's Larry Aschebrook. I'm a retread athlete that wants to become a venture capitalist. Can I invest in Twitter?

• 9:51Speaker 00

  And by the way, my fund size is, I don't have a fund. I just have like 200 grand in my name. I'd like to buy $10,000 worth of Twitter stock. That conversation obviously wouldn't go anywhere. So.

• 10:01Harry Stebbings?

  And so you have this moment in time when you're like, hey, we're seeing this expansion of private markets. We're seeing a lot more capital flow in. And so you go out and fundraise for the first vehicle. How big was the vehicle?

• 10:12Speaker 00

  Three years, $35 million deployed along the way.

• 10:16Harry Stebbings?

  Whoa, wait, pause. It was three years to fundraise?

• 10:18Speaker 00

  Yeah, three years, 2010 to 2013, 34 million or 35 million and deployed the money as I raised it.

• 10:26Harry Stebbings?

  So you did multiple closes?

• 10:27Speaker 00

  Oh, yeah, multiple.

• 10:28Harry Stebbings?

  What was the first close?

• 10:29Speaker 00

  I don't even know how many, a couple million bucks.

• 10:32Harry Stebbings?

  What do you advise founders on closings? And it sounds strange, but like you got different advice. Close as soon as possible, 50% one close.

• 10:40Speaker 00

  Founders for companies or founders for new managers?

• 10:43Harry Stebbings?

  New managers.

• 10:44Speaker 00

  Well, first of all, if I knew then what I know today, I'm not sure I would start the journey. Cause I didn't know how hard it would be. I just want to do. Something different with my life, try to create value for my family and try to set my children up for a different future than I had. I was lucky. I grew up, my siblings grew up in the same house as me. We don't have the same life today. I got out of the squalor because I could run and throw and catch. My siblings didn't have that benefit. I didn't want my children, who knows what their outcome would be. So the whole genesis of it for me was to try to create something and seeing opportunity and capitalize on it. So with my mentality, still to this day, raising billion, two billion dollar funds is

• 11:26Speaker 00

  the money's there, you close. Start deploying it, build a portfolio, show some improvement in NAV. It is inertia that makes it easier. I don't have the benefit even today with the returns that we've had and the DPI we've had to say, hey, I'm raising a new fund and have two billion show up in two months. We don't have the benefit of that. I'm okay with that because I think the way we're forced to raise money makes us better. Now, 2021 was very different. I was sat at my farm, you sat in your underwear probably and raised in three months, you, I don't know what you raised.

• 11:59Harry Stebbings?

  Hundred and fifty million.

• 12:00Speaker 00

  Hundred and fifty million bucks. We raised a billion four and then turned down another 700 million in very short period of time. And companies, by the way, also raised a ton of money, insane numbers.

• 12:10Harry Stebbings?

  We're gonna get there, but I want to tell the story before we move into slaying that. It's just such an amazing story. And so when we look back at that, okay, so three years, thirty five million, awesome. What was the first big mover in that portfolio? What was the real momentum?

• 12:23Speaker 00

  The real momentum happened in 2014 and that's when I really felt the power of what I was trying to do and Alibaba goes public.

• 12:32Harry Stebbings?

  And you had that in the fund?

• 12:33Speaker 00

  Yes, bought, bought shares from Jack Ma's family office and wow, what a creator of shareholder value, Jack Ma.

• 12:39Harry Stebbings?

  Dude, how do you get in touch with Jack Ma's family office to buy shares from them?

• 12:45Speaker 00

  That I mean, that's the story of my life. It's like, you know, it's a bit of luck. You meet an alum that I knew, knew somebody that knew somebody and kind of introduced me to a gentleman's name was Barry Purcell, who was running Jack Ma's money in Virginia, of all places, I believe. And he said, hey, we have some shares to sell. I'm like, okay. Hired a group in India to do some DD, because I had like two people. And wrote me an investment committee. Oh yeah, my early investment committee memos and the early vintages were outsourced to a group of really smart analysts in India that you could pay a fraction of what you could pay talent in the US. And I didn't have any money to invest in talent.

• 13:23Harry Stebbings?

  And that today is what Sam Altman does with Deep Research.

• 13:27Harry Stebbings?

  Okay.

• 13:28Speaker 00

  So yeah, Alibaba was the, for me, was there's a business here. It was grinding, grinding, grinding. That was the first one that was material for me is 2014 Alibaba.

• 13:38Harry Stebbings?

  And are you putting size into these?

• 13:40Speaker 00

  Yeah. So from the beginning, again, you don't know what you don't know. I didn't like the idea in my personality is kind of you go big or go home. I didn't like the idea of trying to manage a lot of these positions because I didn't really know how. So my idea was I wanted to put a little bit of money in, understand the businesses and then pick a few and put all my money in. Today, we call it land and expand. We have all this bullshit that we say that our marketing, you know, our marketing team, our, our team is second to none.

• 14:08Harry Stebbings?

  We're very reserves heavy modeled, but we're diversified on entry.

• 14:11Speaker 00

  See, it sounds like that, but really for me it was all fewer companies because ultimately how do I get liquidity if I have 50 companies? I don't, it's my money. I don't have much. I've got a few people who trusted me. I want to get their money in and out as quick as I can. Because as you're trying to raise that fund and you know what it's like, people want track record, they want pedigree. You know, what's your TVPI going to be? What's your MOIC going to be? I had people who were running their own businesses, give me a little bit of money and say, I want the money back quick. I want optionality to it. So from the early days, it was how can I build a, a strategy that I can actually make a good living at? To have velocity of the capital come back and optionality. And today our business has become that. And the early generation of it was start off with little checks. I didn't have much money.

• 14:55Speaker 00

  As I raised more money, the challenge of raising the first vintages, the benefit of that was you didn't have a lot to deploy. So I'm deploying it as I have it. So inherently, I'm doing this land and expand without even knowing it. Then you look back at the returns and you say, holy shit, it works. Started off with a couple of small checks. All of a sudden you keep getting the data and I'm sending it to us to my awesome group in India to give me the data back. Yeah, I'm sending it over there. Hey, it's amazing. You work 24/7 time zones. But anyway, what comes back is, hey, these five companies are better. And so then what I did is I put a lot of concentration in and still to this day, which some people are not comfortable with, hopefully 90% of our risk are in 10 companies.

• 15:35Harry Stebbings?

  So when we go back to that first 35, that's how many companies sort of give or take?

• 15:40Speaker 00

  Like seven.

• 15:41Harry Stebbings?

  Seven companies?

• 15:42Speaker 00

  But most of it is Alibaba. This is funny. This is just dumb block. Come on. I'm not that smart. Alibaba, Spotify, Palantir and Twitter.

• 15:53Harry Stebbings?

  No, you're not that smart.

• 15:54Speaker 00

  I'm not that smart. I'm not that smart.

• 15:57Harry Stebbings?

  You're either the best fucking picker ever or you... But actually, you can't get that lucky. And so you have to actually be. Cause if you just did one, I would have...

• 16:04Speaker 00

  But what do all those have in common, right? And now you look back and say, well, how do you do that? Right? And there were some dogs in there. Some clean tech shit that Kleiner Perkins sold me that was just a flaming bag of turds on your front porch. Like, look at this guy. He's energetic. Let's give him some garbage. You know, and that's what the old line Silicon Valley firms did in the beginning. Oh yeah, we'll let you in the syndicate. Sure. How much are you putting? Oh, we're putting in very little, but our LPs are co-investing a lot. That's an alarm bell. Now that you know, it's ringing as loud as like a four alarm fire.

• 16:36Harry Stebbings?

  When Doug Leoni calls you and goes, I've got something just for you.

• 16:39Speaker 00

  Just for you. Yes. You're gonna love it. You're gonna love it. It's really gonna help. You're a first time manager. I really want you to succeed.

• 16:45Harry Stebbings?

  So what do those four have in common then to you when you look back on them and reflect?

• 16:49Speaker 00

  The timing of that period, no liquidity, large private valuations, really differentiated, unchallenged business models. No one was doing anything like them. The liquidity window was just, was still early from the financial crisis. Cause you look at the number of IPOs from 2010 to 14, there wasn't many.

• 17:09Harry Stebbings?

  Was the pricing premium applied to them? And what I mean by that is if you think about that applied to today, your SpaceX's of the world or your...

• 17:15Speaker 00

  Yeah, which we had in our third vintage.

• 17:18Harry Stebbings?

  We can get to that.

• 17:19Speaker 00

  Yeah.

• 17:19Harry Stebbings?

  But like, there's a pricing premium on it where you're paying an exorbitant price.

• 17:23Speaker 00

  Yeah.

• 17:23Harry Stebbings?

  For that defensibility and for that moat.

• 17:26Speaker 00

  Yeah, today, then there's no options for liquidity. It wasn't that, it was you actually could get really good value. And I think one of the interesting things about the cycle we've been in the last 15 years is, you know, now we look back at the funds and dissect them and say, what kind of value did you get as being a secondary direct buyer? In early vintages, we got like 35 cents on the dollar by being a secondary direct buyer over primary buyers, because there was no other secondary buyers. Because, a lot of reasons. Sure, give myself a little credit, hard work, drive, run through a wall regardless of how thick it is, and just keep hitting it until it falls, that's my mentality, which is good and bad.

• 18:00Harry Stebbings?

  You're really leaving the brawn, not brain department.

• 18:02Speaker 00

  Yeah, right? I'm trying, I'm trying.

• 18:04Harry Stebbings?

  I'm just running through some man.

• 18:06Speaker 00

  Running through a wall, it's there. I think that early vintages, up until 2020, all of those vintages, you were getting a lot of value by being a secondary direct buyer. Now, that's a key differentiator. What I wanted was, and still to this day, what I want is I want to touch and feel the founders, the companies, the data. I was amazed by what I started. The paradigm that opened for me mentally was something that I'd never tapped into my entire life. This is really interesting, what these companies are doing.

• 18:36Harry Stebbings?

  Do you think your business model still applies today when you are so detached from the data and the founder at the level that you're going in now to a lot of these secondary businesses?

• 18:45Speaker 00

  That's the misconception of what we do. I love it because it actually is when a good LP, the light bulb goes off, they realize that it's the opposite of that. We get primary level data, we touch and feel the founders because the value of the discount is back and they value the work that you do today because there's still a massive need of liquidity, but they want a trusted partner. And that's, that's part of the journey to how we got here today is by doing something different.

• 19:14Harry Stebbings?

  But sorry, the value of the discount is back. Are you kidding me?

• 19:17Speaker 00

  No, it's amazing.

• 19:18Harry Stebbings?

  No, no, but for the premium assets, you're coming in at cost.

• 19:21Speaker 00

  Not always, no. The market on direct secondary buying is really fragmented. So first of all, in the US, you have to be regulated a bit of a different way than most fund managers to do it in quantity.

• 19:32Harry Stebbings?

  Which is RIA.

• 19:33Speaker 00

  Yeah, a fully registered, kind of like a hedge fund. So you're seeing a lot of people opt into that. Why? Because they want to pair primaries and secondaries together, and they want to do some one-off secondaries, big checks. One of the things from the early vintages that teased out that we still do today, it was the frequency of transactions and touchpoints of really microtransactions, sub $2 million, let's say today on a $2 billion fund, give you a lot of interim data that you would not normally get in that touchpoint as a primary investor. It starts to provide you that Trojan horse moment to know when to triple down on a whiz, which we did in our 2022 vintage fund, and have the outcome that we're going to have. Those founders are amazing, but to make 3X in 18 months is because of what they created.

• 20:18Speaker 00

  But the opportunity to do that is because you offer something different than others. And that's to the people, you asked me a question earlier. If you're going to start raising a fund today, what would you do? Yeah, raising money, don't take no for an answer, open every door, all those things, deploy as you go, but also create a firm that's different. The world doesn't need just another early-stage seed manager, growth manager, crossover fund. There's so many.

• 20:39Harry Stebbings?

  Dude, I agree completely. That's why we have media companies attached and it's very, very different.

• 20:43Speaker 00

  And you differentiate your business by sitting here and doing this and in the know. And how many awesome people do you get to talk to to find and to get their references to the next great thing? You have figured out a niche. Most don't. Most say, oh, you know, I worked at XYZ old logo firm for 10 years and I know how to operate. I'm going to start a VC firm. I'm going to go to 10 LPs that were in that old one that I got to know and give me some money.

• 21:09Harry Stebbings?

  And they fund them.

• 21:10Speaker 00

  And they fund them.

• 21:11Harry Stebbings?

  I mean, they really do. I was with an LP like right before this night. We love the spinouts.

• 21:15Speaker 00

  Yeah.

• 21:15Harry Stebbings?

  You spin out of Excel or you name your big firm and we fund you.

• 21:18Speaker 00

  Great. And that also provides the ecosystem for us to operate in.

• 21:21Harry Stebbings?

  I want to go back to the four names you mentioned. How do you get Spotify? What's the story there? I love Daniel. He's one of my oldest brands, Shaq as well. They are special. How do you get Spotify in 2014?

• 21:34Speaker 00

  So one of the first employees I hired, young guy out of Berkeley, he's now my co-PM, Spencer McLeod. He's a living caricature of what Silicon Valley is. He was working as an analyst with me. This is like 2014. I think he's like 22 years old at the time. I was telling him this story about how my, my mind exploded when I was in college and I could download Metallica on Napster. And he's like, you know, you've heard of Spotify, right? And I'm like, yeah. He's like, well, maybe we should buy some shares in Spotify. And it literally, that's kind of how it started. And we started searching around and we found a celebrity that was going through a unfortunate change of life scenario in a divorce. And he had like $4 million of stock. And we had a $300 million fund at this point. I'm like, yeah, let's buy it. Well, Spotify had this interesting process

• 22:17Speaker 00

  of how they approve shareholders. It was kind of onerous and difficult. And my mentality was they're not responding, so let's go see them. So literally Spencer and I flew without an appointment to Stockholm. My wife came, we spent a week there and the terrible November, we had a new baby. We were staying in an Airbnb that we rented, which became a great investment for us later on. But anyway, we started going to get a meeting and finally, this young lawyer, Peter Grandilious, took pity on us in the waiting room and took a meeting. And we pitched to, I look back and all the pitches I ever gave a company on how we could add value with a small fund and a lot of co-investment. Spotify's what it's become. But they're like, yeah, we could use the help. Very humble, very nice people.

• 23:00Speaker 00

  They introduced us to a gentleman named Johan Bergst, who was at the end, I think, the treasurer, and then went on to Bolt, where we also became an investor in the EU ride-hailing business. And before we left the meeting, they were like, do you think you could buy $150 million worth of stock? And I said, sure. And I didn't have the money because we were in the process of raising the, the fund. And I think we had like closed on $125 million.

• 23:21Harry Stebbings?

  Have you, have you done the diligence?

• 23:25Harry Stebbings?

  Have you done the diligence?

• 23:26Speaker 00

  Yeah, by this time, we did. We did do diligence. We'd written a memo and you know.

• 23:30Harry Stebbings?

  But there's diligence, there's diligence. There's diligence for like the $20 million.

• 23:32Speaker 00

  This was Mosaic theory. So, most of the early stuff had to be Mosaic theory because companies, until really Spotify, so the early wins are gathering data, trying through public sources, but it's not really available. You're trying to gather through contacts and putting as many feelers out and then sending all this information to what became our own research team to have developed a thesis around it. And then the Trojan horse became the check to get the info. So in that land and expand strategy that we run, as it's developed often, that first check is kind of that Trojan horse. You like it, you've done some Mosaic theory work, you think it works, but you don't really know. You go in. So we go in, they give us a whole deep dive on the business,

• 24:14Speaker 00

  and it's amazing. It's like nothing I ever could imagine. It's nothing I've seen before.

• 24:18Harry Stebbings?

  Why so?

• 24:21Speaker 00

  Why so?

• 24:22Harry Stebbings?

  What was it about it that was made it so?

• 24:23Speaker 00

  Twenty, at that time, the penetration of the usership in Sweden was like 25% of the population used it. That's amazing. 25% of the population used the product. It's already cool because you're using it and of course, Apple Music and I think the Beats and Tidal and all these, you know, SoundCloud, all these competitors. But what they divulged to us in that one-on-one personal meeting, after saying no to us for six straight days, was the fact that the record labels were also investors. That to me was like, this is like Napster on steroids. And it worked. And obviously, they went on to create amazing shareholder value. It's one of the best businesses we ever invested in. We had $150 million to go find.

• 25:04Harry Stebbings?

  So what do you do then? They're like, hey, you got $150 million. Are you shitting yourself internally?

• 25:10Speaker 00

  Yeah, yeah.

• 25:10Harry Stebbings?

  Because is it 150 million or none?

• 25:13Speaker 00

  Yeah. So the way that the transfer process worked on that business is pretty interesting. It actually gave you time. So you sign the documents today. It took like 60 days to clear. So we had like, let's say 25 million ready to go. Awesome. Concentrated position on a $300 million fund. We're going to start. Let's do it. We had 4 million they said yes to. We'll take another 25. So we went out and went on a world tour with our thesis. Spencer and I, different countries.

• 25:37Harry Stebbings?

  How long did you have?

• 25:38Speaker 00

  We had 60 days.

• 25:39Harry Stebbings?

  You had 60 days to raise 125.

• 25:41Speaker 00

  And we got to day 59 and we had sent 141 million to one of the earliest investors, very predominant Norwegian fund. We'll leave their name out of it. Awesome founder of that fund, who is an iconic pop star or sorry, metal, heavy metal star in music in his own right. Very serious guy and we have 141 million dollars we've sent him and the rofer ends. And if we don't send him the $9 million, the deal blows up and I don't have $9 million to my name. So I borrow it from him.

• 26:12Harry Stebbings?

  You borrow it from him?

• 26:13Speaker 00

  The $9 million bucks from him.

• 26:15Harry Stebbings?

  You call him up and say, I'm so sorry.

• 26:17Speaker 00

  I don't have the $9 million, but if you lend it to me, I'll close and I'll pay you back.

• 26:21Harry Stebbings?

  And he's like, sure, I'll lend you the $9 million.

• 26:24Speaker 00

  That wasn't exactly that pleasant, Harry, but it worked and God bless my wife. She's like, you love this business? I'm like, it's the most amazing business I've ever seen. She's like, well, how do you, how do we figure out how to own the $9 million? And we figured it out and that nine turned into a very different number. And that was the life-changing event for me. Spotify buying into our business model. We then went on to become a top 10 global shareholder of Spotify, went as far as to putting up signs in their break room. We'll buy your shares, buying all these odd lot transactions along the way and built a huge position. And it ended up being like a billion dollar outcome to our LPs. 40% of my third fund went into Spotify.

• 27:01Harry Stebbings?

  How much was that of the third fund?

• 27:03Speaker 00

  380 million. It was a lot of money, very concentrated risk.

• 27:07Harry Stebbings?

  What price is it going in? Just kind of give or take?

• 27:10Speaker 00

  Yeah. So in many ways, we did it at the time in which it was perfect because you had Adele announce she was leaving the platform. You had Apple Music taking market share and you, you had Taylor Swift saying, I want my library off. And Daniel Ek came out and I think one of the smartest things he's ever done and he agreed with the artist. He said, I have your back. I understand why you pulled from our product. You're not the issue. And the record labels had an option to buy more shares and they executed the option to buy more shares. So to me that was like, there's this aha moment where we can trip. Down. Nobody else knows this information. You buy from all the people who are scared to death. And you do the counterintuitive thing and you take the bet.

• 27:52Speaker 00

  And we did, and it worked. And we bought at like a 50% discount to the current financing round. And we just kept buying it there for the next two years.

• 28:00Harry Stebbings?

  So after the 150, you kept buying?

• 28:02Speaker 00

  We, yeah, we kept buying. So we pooled a bunch of money together. Some of it, we were able to put into our fund. Others, we had very prominent, very, very prominent logos come into our SPVs to buy the stock because we had, we locked in the access. So you have this journey. You start, you're just hustling. You get to 35 million. The second fund was 36 million, raised it in a year.

• 28:21Harry Stebbings?

  And a million increase.

• 28:22Speaker 00

  Yeah, 1 million increase.

• 28:23Harry Stebbings?

  Came viral.

• 28:24Speaker 00

  Yes, fewer investors, thank God. And then you get to a $380 million pool of capital. And in that, you take a lot of concentration in Spotify. But on top of the concentration we had, we did another 700 million in Co- Invest.

• 28:36Harry Stebbings?

  In Spotify?

• 28:37Speaker 00

  In Spotify.

• 28:38Harry Stebbings?

  700 million?

• 28:40Speaker 00

  Yeah, I know. But that fund also, but by the way, that fund also had Lyft, Uber, SpaceX, Instacart, Impossible Foods. The list goes on and on of companies because of Spotify's acceptance of our model.

• 28:55Harry Stebbings?

  It opened up the door.

• 28:56Speaker 00

  It opened the door. And Johann Berquist and Peter Grandilious, they're the two people that have made probably the most direct impact to my life. Because they trusted that we could do it. And they put their names on the line to Daniel Ek that we could actually achieve it. And then we went and somehow, you know, Spencer and I, Spencer, poor guy, got shingles. He literally got shingles. He was like 23 years, four years old, got shingles.

• 29:22Harry Stebbings?

  I just find it so funny because Daniel is like the guy who I just send rude memes to most mornings.

• 29:29Speaker 00

  I mean, it's, it's an amazing business. It's truly amazing.

• 29:33Harry Stebbings?

  He is absolutely incredible. When you go through those names, what about Uber? How does that come?

• 29:38Speaker 00

  Often in our thesis, we'll back two businesses trying to attack the same thing. Lyft and that fund became the value play. We sold it and

• 29:46Harry Stebbings?

  Did you make money?

• 29:47Speaker 00

  We made a ton of money on Lyft and we lost money on Uber.

• 29:49Harry Stebbings?

  What?

• 29:50Speaker 00

  Yeah.

• 29:50Harry Stebbings?

  Well, how does that work?

• 29:52Speaker 00

  When Uber chose to go public, it was a tough time. Today Uber's valued off a gross profit, which is, I think, a good, a good metric for them. And I don't think when it went public, it was rewarded properly. In our business model, we don't hold, rarely do we hold post-public. Oftentimes, we sell before they're public. And as it went public at the price it did, on a converted basis, we were underwater. We lost, we lost like 20 cents on the dollar. And Lyft, we made like a 3X.

• 30:19Harry Stebbings?

  So how much did you lose on Uber?

• 30:20Speaker 00

  I don't know, 50 million bucks, probably.

• 30:22Harry Stebbings?

  And you made a 3X on Lyft?

• 30:24Speaker 00

  Yeah. Yeah.

• 30:26Harry Stebbings?

  Because you sold before the IPO?

• 30:27Speaker 00

  We sold most of before the IPO. And, you know, we won't talk about the names that buy, but you'd be surprised. I think one of the issues with Silicon Valley, one of the benefits of being in Chicago is we isolate ourselves a bit from the herd mentality. Sometimes it's like sheep, they just jump one on after the another and they buy more stock and things that you see that you should sell. And it just takes one brand name to jump on board and 10 others jump on board. And we just kept selling our Lyft stock to others. You know, I get why they did it. It was a value play compared to Uber and it went on to work for them. But we made our multiple and went home and distributed the cash.

• 31:03Harry Stebbings?

  Do you think it's very clear when rationality leaves the room?

• 31:07Speaker 00

  Yeah, that's something I've spent a lot of time in the last few years trying to figure out because 2021, all rationality left the room. 2020, 2021, and, and us, like everyone else, just kept deploying capital.

• 31:18Harry Stebbings?

  But it left the room in public markets, too. The multiples were off the charts.

• 31:22Speaker 00

  Yeah, no, everybody left the room. I think, you know, you want to-

• 31:25Harry Stebbings?

  And you're told to play the game on the field, as Bill Gurley says.

• 31:28Speaker 00

  Yeah, a few things about that period that is the rationality leaving the room that you want to protect yourself. Guardrails are important. A good friend of mine, and I know you had him on the show, I'm a huge fan of what they've done, Mitchell Green. Best things in life are copied in some ways. You know, he has his lead edge eight, we have our G squared eight. Sorry, Mitch, we kind of borrowed it from you.

• 31:48Harry Stebbings?

  Is it the same?

• 31:49Speaker 00

  It's not the same. We had to really adjust ours after 2021. It had holes in it that were exacerbated.

• 31:55Harry Stebbings?

  What were the holes and how did you adjust?

• 31:57Speaker 00

  Too much qualitative, too much my gut, my feel, too much who else is in the room? Too much the soft stuff that venture capitalists and growth managers like to pride themselves about. And our strategy has to be about the numbers. It has to be cut and- Dry, cutthroat. Does it work financially or not? Because at our stage, unlike yours, in a lot of ways, I envy your seat because if you pay 50 pre or 100 pre, if it's a good business, you're still going to make a 5X. A 10 pre, 50 pre, does it really matter for you? Maybe. For me, is it 3 billion or 2.5 billion? You walk that forward, I can't make my 2.5X net in a five-year period if I miss that. Now, I get an okay return, but I'm not rehired.

• 32:42Harry Stebbings?

  Does your mindset change around that when you see the elasticity of outcome sizes that we have today? I completely agree with you in a normal world in the last five years. But when you have companies that are hitting a trillion, a trillion, five, 2 trillion, dude, who caves a shit if it's 10 or 15 billion?

• 32:55Speaker 00

  Yeah, I think that that's in a shorter thesis, you're able to play that game. And that's one of the benefits to our thesis is yes, as long as you don't get caught at the end of that cycle, which happened in 2021. So our earlier vintages were selling into it, like it was happy days.

• 33:11Harry Stebbings?

  Did you just offload?

• 33:12Speaker 00

  Oh, just massive amounts. I mean, we made ridiculous sums of money for LPs in that period, which set our business up to be able to survive a bad vintage. And we're working our tails off, our asses off on our 2020 vintage, but it's hard.

• 33:24Harry Stebbings?

  When you're shipping a ton of money back, are LPs happy?

• 33:29Speaker 00

  Yeah, I think LPs are happy. It's also their expectation. Looking for a pat on the back because you did your job is something I talk to our team a lot about. Yeah, it's a big win, but hey, we also lost $400 million of their money over here. Yeah, we made them money, but look at these losses. How can we lose that kind of money? I think keeping our team focused on that and reducing the amount of mistakes, because in a short fund life, liquidity is already hard. It's really hard as a fund manager, as you know.

• 34:00Harry Stebbings?

  You're a five to seven-year fund life, aren't you?

• 34:02Speaker 00

  Yeah, with some levers, we can get it a bit longer. But, you know, for the first time, we've had to pull one of those levers and it really guts me.

• 34:10Harry Stebbings?

  Is that a mistake on your behalf or is that a changing landscape?

• 34:13Speaker 00

  You are what you become, so to speak. Yeah, are there businesses that I would love to take a 10-year horizon on? Because I think they're amazing companies. Yes, 100%. But that's not What our LPs have hired us to do. They have hired us specifically for this North Star DPI statistic that I've pitched them on and our team have pitched them on it for 15 straight years across seven vintages.

• 34:36Harry Stebbings?

  They hire you to make the most money for them and you can go back to them and say, listen, the job of a manager is to change to moving markets. And I believe that actually we will make more money for you with a longer hold period because of X, Y, and Z reason.

• 34:49Speaker 00

  Yeah, I think.

• 34:50Harry Stebbings?

  And you now have the data. I'm so sorry to interrupt you.

• 34:52Speaker 00

  No, go for it.

• 34:52Harry Stebbings?

  You have the data to go look at Palantir, look at Spotify.

• 34:55Speaker 00

  Oh, my God. Well, I saw Larry. I just, I, I, even if I would have held Palantir for three more years. I mean, who knew they would go on to build this juggernaut?

• 35:04Harry Stebbings?

  How much more money would you have made if you held it?

• 35:05Speaker 00

  God, you listen, Harry, we would be having this podcast in my bubble in outer space.

• 35:10Harry Stebbings?

  But is it like 2X more?

• 35:12Speaker 00

  Oh, my God. No, it's like, I had an LP, long time LP, first vintage, been back every time. I was talking to him the other day about the difficulties of our 2020 vintages and the lessons learned and how I'm more energized today than ever before and how, you know, we're going to make it up in spades. And he said to me, you know what, Larry, you get a free pass on that one. You made me, because I distributed the shares to some of our early funds. We distributed shares. We no longer do that. We just send cash. And he's like, I held that Palantir stock and I've been investing in every one of your vintages from the proceeds of my first 50 grand I gave you. So it just gives you a perspective. I think we made a 3X on it and sold it at $9 a share.

• 35:53Harry Stebbings?

  What's it now?

• 35:54Speaker 00

  Oh, I don't know. I tried not to look at it because it's one of those things is you don't want to inflict the self inflicted wound of the pain, but I think it's, I don't know, it's 80, 90 bucks a share or something like that.

• 36:04Harry Stebbings?

  My question to you is have your guardrails not now become a constraint, a negative constraint?

• 36:09Speaker 00

  Yeah, look, I think the answer to that is we're doing what we're hired to do. And that is to generate the velocity of the capital for our subset of LPs. It's not for everybody. Our LPs are looking for an ability to play the fastest growing, most dynamic technology companies in the world. And they want to get in and out with optionality of their capital to give more to firms like yours in every, a five year period. So if they back to back funds of ours, they make a 4X. Cash on cash return in 10 years, but they have the optionality of it. And if you have confidence in the mousetrap you've built Forex in 10 years, cash on cash return is pretty hard to beat.

• 36:45Harry Stebbings?

  Dude, we all tell these big, we all tell these big numbers.

• 36:47Speaker 00

  Yeah.

• 36:48Harry Stebbings?

  Look at the real numbers. I've seen them. You've seen them. They're very different in reality.

• 36:51Speaker 00

  Yeah. I mean, when your North Star is a DPI figure, there's no hiding.

• 36:55Harry Stebbings?

  Listen, let's go to the 2020. You said there about, hey, you get a hall pass. I, you know, I said to you after a war, it's really special to actually have the conversations that we do. And I really meant it.

• 37:05Speaker 00

  Yeah.

• 37:06Harry Stebbings?

  The candidness is important. When you look back now, what do you think your sins were?

• 37:11Speaker 00

  And I've talked a lot about this openly to our LPs because I take pride in going around the world. And we have 60 countries and six continents of LPs. It was smart, in my opinion, when I started the firm. It's difficult now. The main mistake we made was believing our own bullshit. Cause coming up to that point, we had some of the best returns in our industry. We were raising money. It didn't, we just to put the flag out there, it was hard. We go around, raise money, co-investment, raise money. Life changed dramatically for my partners, myself, our team. Just to ship back 2018 vintage fund, by 2020, we had the DPI to almost one. Oh yeah. Airbnb goes public, make a three X. Coursera goes public, make a three X.

• 37:52Speaker 00

  Sell our SpaceX stock privately, make a big return. Impossible Foods make this huge return.

• 37:57Harry Stebbings?

  Impossible Foods?

• 37:58Speaker 00

  Oh yeah, we've made a killing.

• 37:59Harry Stebbings?

  How did you make money on Impossible?

• 38:01Speaker 00

  The herd mentality. I mean, I think that it's all a product of the time you're operating in. You go back to that period, Impossible Foods was a big deal. People made a ton of money on that Beyond Meat. And what was the other one? That egg company in the?

• 38:13Harry Stebbings?

  One of my best friends made like $10 million on a Beyond Meat SPV.

• 38:16Speaker 00

  See?

• 38:16Harry Stebbings?

  And I'm like, $10 million, it's like the market cap of the company today.

• 38:20Speaker 00

  I look at the big ones that the, where the market cap goes in a bad way is we were the largest shareholder of Coursera through our strategy. We owned 16% of Coursera when it went public.

• 38:30Harry Stebbings?

  What did it go public at?

• 38:31Speaker 00

  We sold the stock at 36 bucks a share and it's at $8. $800 million back to LPs on Coursera. $800 million back to LPs on Coursera. That's part of the strategy where you get the concentration and the law of large numbers actually works. And it's easier to manage a fund on liquidity, but getting you to 2020, the mistakes we made, so you had all these exits. Toast was our largest position in that fund. It's trading at 76 bucks a share. Mitchell Green and I did toast together. It's like you're popping champagnes around the office. You're like, this is, we're so smart. We're the fucking smartest people in the room. And then I'm on a ski lift in Montana and I'm looking at, unfortunately, and I'll admit it out loud, Yahoo Finance.

• 39:10Harry Stebbings?

  It was before perplexity.

• 39:11Speaker 00

  It was before perplexity. And I'm like, wait a second, Toast is 76 bucks a share? What the hell? How is it 76 dollars a share? It's a great business, but 76 bucks a share? Whoa. At the time, now Toast is an amazing company, right? Revolutionized in the restaurant space. And by the way, saved 10,000s, hundreds of thousands of jobs in the US because of the way they pivoted during COVID to help restaurateurs. An amazing business, great founders. All that being said, it wasn't worth, as a public company, that price. So to me, that was kind of the canary in the coal mine. And I started freaking out because we just deployed $900 million between, you know, beginning of COVID and 2021.

• 39:54Speaker 00

  To your point, jumping on board with all these primaries and secondaries. Ah, we're super smart. We can do some primaries too.

• 40:02Harry Stebbings?

  So what was the realization when you saw Toast?

• 40:04Speaker 00

  That I have a problem in this vintage. We've overpaid for all of it. All of it we've overpaid. Go to the team and a lot of them aren't with us anymore because we went through a kind of identity crisis and said, listen, I had went through a period where I wanted to believe that our firm was more than just the co PMs and Spencer and myself and that we could do a traditional model. Because we don't do that. We deploy the capital between the two of us. We have a research team that supports us. It's more like a hedge fund. It's quick decisions. But at that period of time, we're like, hey, we've made all this money. We're growing our business. LPs are coming aboard with big checks. They want to chase MOIC. They want to chase TVPI, right? We have to have a thesis that's a bit longer, seven years, not five.

• 40:47Speaker 00

  So let's divide the capital up amongst a bunch of people. Let's build the traditional fund model because we're so smart. And you know what? We're still conservative. So we're going to pay 12 times last 12 months to enterprise value on SaaS. Public markets are trading at 25. Pat yourself on the back, guys. We're super smart. Oh, the floor can't be lower than 10. That's a historic multiple. Wake up in 2025, the multiple's four. So when that happened, when a really awesome business, which we made a ton of money on by selling it at the right time and harvesting and

• 41:22Harry Stebbings?

  And toast.

• 41:23Speaker 00

  And toast. And they, they went on to create a tremendous amount of shareholder values, a public company, don't get me wrong. But when it's trading at this crazy multiple, I went back to our LPs and said, listen, we fucked up. We need to pivot. We need another 300 million bucks because I need to protect this thing. And so we went in and we did structured equity deal after structured equity deal. As that market's falling and the house is on fire, we're running in the front door with cash. And we're going and doing minimum IRR deals. We're partnering with the super savvy investors and the light speeds and the dragon ears and the DSTs of the world. And we're doing deals that nobody knows about, third point, co two, and we're putting all kinds of structure in. Where these founders believed their own bullshit and they said, I'll take the high price top line, but I'll embed structure in the equity.

• 42:08Speaker 00

  And so that vintage of all of our vintages has 70% primary and 40% of that has structure.

• 42:15Harry Stebbings?

  For people that don't know, what does that mean?

• 42:17Speaker 00

  It means you embed IRR hurdles and multiples in the paper. So regardless if you say the business is worth eight billion on paper, the company has to generate you a 25% IRR or a two and a half X, whichever is greater. So every day the return's ticking and you walk it out now, five years, the entire pref stack is totally fucked. Because we, the last money in has this ratchet that's just eating up all the value. And that pivot and the willingness, I think our team, not just me, the willingness for, for Spencer and I to get together and say, what were we thinking? We have to try to save this thing. Our LPs trusted us with a billion at that point, billion five.

• 42:54Harry Stebbings?

  But you, but you're going like on the offensive with cash in the door when everyone's running out.

• 42:58Speaker 00

  Yeah.

• 42:58Harry Stebbings?

  In terms of the actual saving, what are you doing with the overly inflated asset prices that you have?

• 43:03Speaker 00

  Selling.

• 43:04Harry Stebbings?

  Selling at a loss?

• 43:05Speaker 00

  Your losses, selling, taking a different perspective on multiples and saying, you have to get the price to 10x. So you're going back in and assets. You overpaid and you're using the secondary market as the market's falling to lower cost basis. So we did a lot of primaries. Yes, because we didn't like the secondary multiple because it traded at a premium during that period. So if you paid 25X in a public company to enterprise value the last 12 months of VRR in a SaaS company, privately they traded at 50.

• 43:32Harry Stebbings?

  And so you're like, shit, the secondary market is overly inflated.

• 43:35Speaker 00

  Secondary market doesn't work. My business model is broken.

• 43:37Harry Stebbings?

  And so you go to primary.

• 43:38Speaker 00

  You go to primary, you go earlier, you do a bunch of small cap. Hindsight, the mistake I made was not having, besides thinking we're smarter than we are, is structurally in our business, not having the levers to pull. Cause leading up to then, whatever we did worked and you could get in and out in five years and make a 2X net. You're a hero. You just keep raising money and it keeps getting bigger. And your amount, your wealth generation keeps getting bigger. So we're unstoppable. We're Tiger Woods in 2001. You, you start to create this persona that everything works. And pivoting, it was a lot of soul searching. We had a, a, a large meeting.

• 44:14Harry Stebbings?

  Was it difficult for you as a leader?

• 44:16Speaker 00

  Yes, it was difficult because I couldn't believe that I talked myself into it. Silicon Valley coach, me, a person that grew up in a trailer in Martin, Utah, athlete. And I have to have a coach to tell me how great I am. I bought into the whole hook, line and sinker bullshit of the entire problem, in my opinion, of Silicon Valley and started our firm.

• 44:35Harry Stebbings?

  What is that problem?

• 44:36Speaker 00

  Losing focus of what you're hired to do and paying more attention to the lifestyle that comes along with being a money manager and the circles that you roll in and about the deals that you're doing and the money that you're managing. Versus at the end of the day, the actual value you're creating for your people who have trusted you with their capital and making a difference for your underlying companies. That's what's important. Not going to a dinner party and saying, I just invested in Wiz or Anthropic or OpenAI or Airbnb. That's the culture, in my opinion, that in Silicon Valley. And it's people deploying the capital that don't have the responsibility to sit in front of the LPs to explain the problems. It's a herd mentality that rushes in and LPs follow, by the way.

• 45:21Speaker 00

  LPs follow at the wrong time. It's very easy to raise money in a crazy market like you and I both did and many other managers did. And it's the wrong time and it's very hard. Our 2022 vintage we raised, very difficult to raise.

• 45:32Harry Stebbings?

  How big was that fund?

• 45:34Speaker 00

  Billion two.

• 45:35Harry Stebbings?

  Was that the first billion fund?

• 45:36Speaker 00

  No, 2020 was a billion four.

• 45:38Harry Stebbings?

  So you went down in fund size?

• 45:40Speaker 00

  Well, the 2020 vintage, we topped that up. Remember what I was saying, we went back and said, hey, we've made all these mistakes. We have to protect, we need more money. And it went from a billion two to a billion five.

• 45:50Harry Stebbings?

  And the protection there was because pay to play was coming in?

• 45:53Speaker 00

  It was because we saw that we had overpaid on the first tranche of capital. So I wanted more to combat that with secondaries and also structure.

• 46:01Harry Stebbings?

  So you hadn't lost faith in the underlying assets?

• 46:03Speaker 00

  No, some of them have went on to monumental failures that have been well written about. But most are really fundamentally good underlying companies.

• 46:12Harry Stebbings?

  So when you review that period of 2020, what do you wish that you had done? Or if you could replay the tape, go back to the first half or quarter or whatever you Americans like to call your timings in sports games.

• 46:23Speaker 00

  Innings.

• 46:24Harry Stebbings?

  Innings. What would you have done now if you could replay that tape? Like I would say, sit on my hands. You did not need to be part of that ridiculous 700 million price round for a 10 million arrow or something.

• 46:34Speaker 00

  Yeah, that's the easy answer is wait. If I could do it all over again, I would keep the control tighter to Spencer and myself on deployment. And that way, as we went forward, the only excuse we could have is that he and I made the decisions. We wouldn't have any excuses. It would be clear that we made the mistakes versus, hey, we tried to do the Silicon Valley mentality and hand out the capital and build teams underneath. And yeah, it's the G squared logos that we invested in, but the attribution actually goes to X, Y and Z.

• 47:07Harry Stebbings?

  You don't like attribution?

• 47:08Speaker 00

  No, it causes unintended consequences. People want to pat themselves on the back for the wins and deflate the losses or deflect the losses, excuse me. If you want to build a firm that stands the test of time, the logo makes the investment. It withstands any transition period in any leadership role in the firm because the logo made it, not the individual. That's what we're trying to build at G squared is when I look out 20 years from now and say, where do I want it to be? I want. Some grandkids to think about the logo that was built and say, my grandpop built that and it's still there and it's the Jim Simmons 40% annualized IRR for 20 years.

• 47:49Harry Stebbings?

  That's what I always say. I always say that about my grandchildren. I didn't have children yet, so it's really quite a step. But we mentioned lessons on a company basis. If you look back at one of yours that was a big loss, what was your subsequent lesson from that?

• 48:02Speaker 00

  Well, we've had a lot. In that concentrated equity portfolio, you're going to have some monumental misses, hundreds of millions of dollars you're going to light on fire if you have the fortitude to stick to it. So we've got a lot of those lessons to draw upon.

• 48:15Harry Stebbings?

  What's the one that most stands?

• 48:17Speaker 00

  The most painful? There's a couple. One is Theranos and the other is 23andMe.

• 48:23Harry Stebbings?

  How did Theranos happen?

• 48:24Speaker 00

  So Theranos secondary, the big loss there was for me personally. We signed up to do a secondary at a really good price, met with management, something didn't feel right. Don't know what it is. Can't say that I was like, oh, it's a great gigantic fraud. I didn't know what it was.

• 48:39Harry Stebbings?

  Did you mean with the lesbians?

• 48:40Speaker 00

  No, the kind of C suite without her. Something just didn't feel right. We went back and we had that form I told you about, binding to transact.

• 48:50Harry Stebbings?

  Oh, no.

• 48:51Speaker 00

  One page, one page, simple. Companies love it. It's easy. Things that change on it, name, shares, company, dollar amount, binding transaction. So I ripped it up and I got sued to finish the transaction and I agreed to settle where I would pay a fraction of the transaction cost, but I did it personally. So our LPs didn't have to go in. What that taught me was before we sign that paper, we better be certain because it cost me a few million dollars at a time where I didn't have a lot of money. And I did it so that our LPs didn't take the loss because that was one of those spider sense moments where it's like to yours, you're saying the risks were tangential to the data. And my wife would say, if she were sitting here, she told me that it couldn't work because she's

• 49:34Speaker 00

  an epidemiologist and they collect blood and saliva and you can't, you can't get that much data from a whatever. She was the one saying.

• 49:40Harry Stebbings?

  I feel the magic.

• 49:42Speaker 00

  She's like.

• 49:43Harry Stebbings?

  You're sick.

• 49:44Speaker 00

  Yeah. She's like, that, that doesn't work. Long story short, the spider sense came up, going through negotiations to get out of the contract. And then some of the material started to come out and we just like, hey, we're not doing it. And then actually, I don't think it was formally sued. It was threatened to be sued. And I agreed to settle it out of court and gave him a couple of million dollars to go away. And obviously it went on to be, you know, one of the more notable frauds of the time. But that was painful for me. That was bad process, bad outcome. Sometimes you can have bad process and good outcome. Sure. But what that taught me was you just need to have a good process. And if the outcome is bad, okay, that's fine, which is 23 and me, which we'll get to.

• 50:23Speaker 00

  This was bad process going in. This was jumping, trying to jump on board, play the elasticity in pricing and follow the herd.

• 50:30Harry Stebbings?

  Respectfully, the herd there was not professional.

• 50:33Speaker 00

  No, it wasn't.

• 50:34Harry Stebbings?

  Did that not worry you?

• 50:35Speaker 00

  To me, I was chasing the discount that was available. And the thought that if it just traded at what the last round was, I made a lot of money. On the secondary side, that's what you're chasing, right? You want to get that disc value of the discount and that you could get it in bulk. And I should have seen, I should have seen a lot of warning signs. That was a tough one to do due diligence on. I would say that added a lot of our checkboxes that we now have to make sure that we don't make those mistakes again. And we really averted a massive issue in our business by doing that. Massive.

• 51:06Harry Stebbings?

  What was the check size going to be?

• 51:08Speaker 00

  The agreement was to buy about $50 million of stock over like four months. Cause I, cause I'm still raising the fund. Anyway, we got out of there.

• 51:16Harry Stebbings?

  In a way, that's one of the biggest wins. I know, I know personally, it sucks.

• 51:20Speaker 00

  I'm happy personally.

• 51:21Harry Stebbings?

  Personally, it sucks. I agree.

• 51:22Speaker 00

  Yeah.

• 51:22Harry Stebbings?

  But actually for the damage that it would have done to the brand.

• 51:25Speaker 00

  Oh, it was catastrophic to our, to us.

• 51:27Harry Stebbings?

  Yeah.

• 51:27Speaker 00

  Yeah. If it would have happened.

• 51:28Harry Stebbings?

  Mega win.

• 51:29Speaker 00

  Yeah.

• 51:29Harry Stebbings?

  Couple of takeaways though. One, always listen to your wife if she's around.

• 51:35Speaker 00

  Hopefully she doesn't listen to this, although I'm sure she will. But don't, don't say that out loud because she'll say, see, Harry's right.

• 51:40Harry Stebbings?

  She will, trust me. And the clips go viral. And two is when you feel icky in your gut.

• 51:45Speaker 00

  You have the spider sense.

• 51:46Harry Stebbings?

  Dude, I've had this and I'm not going to name the company that's still going. We did a $5 million investment and I called up the lead investor. He's a very, very pedigree firm. This is off.

• 51:55Speaker 00

  Yeah, but you still did it.

• 51:57Harry Stebbings?

  I did. Now I don't fucking do it.

• 51:59Speaker 00

  Yeah.

• 51:59Harry Stebbings?

  I'll pull out of everything. If I feel the ick, I feel the ick.

• 52:03Speaker 00

  Yeah, you go through this phase as building a business where you feel like you have some allegiances to some of the people that helped you get there, right? So you have other investors.

• 52:09Harry Stebbings?

  And you're too far in.

• 52:10Speaker 00

  And you're too far in to say no, and you know you shouldn't do it. And we're humans. First mistake on on you, second mistake on me. The one that's probably from a financial perspective, the largest that hurt, there's two really, is 23andMe and Gatiere. 23andMe not selling, that was my mistake.

• 52:28Harry Stebbings?

  When did you go in?

• 52:30Speaker 00

  First investment 23andMe in, I think, 2026, 17. Really bought into the business model on the consumer side. Loved it, enjoyed interaction with Anne, really bought into what she was trying to build. And she really embraced our model to be helpful. And I was really taken aback by it, by what she was doing and believed in it. And we built a large position in our 2018 vintage fund. I think it was the second largest position in that fund. Co-investment, we had maybe had 50 million in and LP capital, maybe 30 or 40 million in during this back craze, you know, pair up with Sir Richard Branson. Like, what an iconic pair, right? You got Anne Wojcicki, who's a fantastic founder, in my opinion.

• 53:14Speaker 00

  Not maybe a great public CEO, but awesome founder and visionary of what she wanted to build. And the ability to go do it, amazing. Richard Branson on top of it, awesome, let's go. Put gasoline on it, trades 10, goes up, we can start selling at 7, which would have meant I'm about a 2X. I think I sold the last share at 70 cents. That's me chasing multiple, and that's a problem in our strategy. You need guardrails in that to protect from Larry chasing multiple.

• 53:40Harry Stebbings?

  Which is what a layered approach to selling.

• 53:42Speaker 00

  Yes, dollar cost average out, just like your dollar cost average in. And just start getting liquidity when you can privately and continuing it through when they list. Liquidity's hard.

• 53:52Harry Stebbings?

  How big was your position?

• 53:53Speaker 00

  In total, probably 100 million bucks.

• 53:55Harry Stebbings?

  100 million bucks, and you said you can do a 2X?

• 53:58Speaker 00

  Yeah, and instead, lost 70 million dollars.

• 54:01Harry Stebbings?

  The LP's cool about that.

• 54:02Speaker 00

  No, the pool of the capital's awesome. It's just, you know, don't.

• 54:05Harry Stebbings?

  What was the number one position in that fund?

• 54:07Speaker 00

  Toast. Yeah, toast, awesome business. It's like 3X net and started in 2018 during COVID. Mitchell and I talking about it, Mitchell Green and I saying this, people don't get it. Let's buy a bunch of secondary. Yeah, awesome.

• 54:19Harry Stebbings?

  Aman is an LP.

• 54:20Speaker 00

  Also Asana too. We teamed up, Mitch and I teamed up on Asana. It was fantastic. It was just like you're conquering the world, you and your buddy buying stock, people running out the front door because their house is on fire during COVID and us running in with capital. It was fun.

• 54:34Harry Stebbings?

  What about Getir?

• 54:36Speaker 00

  Getir is one emotionally for me that's really hard. When I think about that good process, good outcome.

• 54:42Harry Stebbings?

  You had good process?

• 54:43Speaker 00

  We had good process on the first money gorillas, the investment in gorillas. We had good process. We had made a lot of money in kind of the food revolution. We were in Instacart, we were in Postmates, we were in Meituan.

• 54:53Harry Stebbings?

  And just to be clear, sorry, because people will hear these names, you made money in Postmates?

• 54:57Speaker 00

  Oh, we made a, that's a Founder's Fund special, man. We did a lot of work with Founder's Fund early. Fantastic group of investors there. I think Peter Thiel's got more money than God now, but yeah, they were the largest investor in, in Postmates. Sebastian Lehman, awesome guy, spoke at our 2018 LP day. Yeah, we made a three X on Postmates.

• 55:15Harry Stebbings?

  In how long?

• 55:16Speaker 00

  18 months. It was amazing. And Spencer McLeod, he was my co PM, he led that deal. And he was like this, you gotta meet this founder. He loves what we're doing. He wants to help all his employees. Let's do it. I was like, yeah, the data looks good, man. Let's go.

• 55:30Harry Stebbings?

  And you made money on Instacart?

• 55:32Speaker 00

  Yeah, we made a lot of money in Instacart. We sold this cart privately during COVID.

• 55:36Harry Stebbings?

  You're one of the guys who sold it like the 25.

• 55:39Speaker 00

  I was like, come on, Sequoia.

• 55:41Harry Stebbings?

  And the price, because Sequoia bought?

• 55:43Speaker 00

  Yeah, Sequoia make money in the long run on that. They also bought along the way. I mean, Sequoia's business model is fantastic. We have a lot of investments in common. Their partners are awesome. There's few evergreen structures I'd ever invest in, theirs is one.

• 55:54Harry Stebbings?

  Why did you sell at 25 and you just thought it was?

• 55:56Speaker 00

  Okay, funny story.

• 56:00Speaker 00

  And personally, you know, you have experiences with companies, very frustrating experience with Instacart during COVID, where it went from Whole Foods only pickers and grocery shoppers, which was an amazing service, right? To then having your Uber driver shop for your groceries and try to get a ripe avocado in COVID from your Uber driver. It's not a great experience.

• 56:22Speaker 00

  And I remember a point, I'm hunkered down at my farm, the world's falling apart. I can't get, the order just can't, it's just not right. And they don't take it back. You just keep getting stuff delivered. And I was like, it's time. I just gotta get out.

• 56:35Harry Stebbings?

  I'm sorry, wait a minute. So the fact that you're Uber driver can't get you a fucking Rife avocado.

• 56:40Speaker 00

  I mean, I'm not the only one, Harry, come on.

• 56:42Harry Stebbings?

  I'm out. You know what? We're gonna sell at 25. And you do like a 3X on it?

• 56:47Speaker 00

  Yeah, but also for us, the decision to sell becomes somewhat easy because we're also solving for something that's different than others. And we're solving for this velocity of capital. It's not part of keeping in the middle of our, to use a sports analogy, fairway, don't chase the moik. We make a 2X net in a five-year period, cash return, not shares. We stop distributing shares because LPs blame you if they hold it.

• 57:12Harry Stebbings?

  Don't founders just see you as a bit of a tourist, no offense to? If it's like, if you want that short compression, you're not exactly a long-holding, you're not a long believer in the company.

• 57:20Speaker 00

  No, we're a point in time problem solver. We're like the janitor that's cleaning up the mess. They have an employee that leaves, that they're out there in the market making noise. They don't want them to take their shares. We get the phone call. You've got a fund that wants to show their LPs that there's value in the extension they're giving them. We get the phone call to buy a little bit of their position. You don't buy 100% of somebody's position typically in a company unless they're on year 15 of their fund and have no extensions. Because if it's a large position in their holdings, in their NAV, and you buy it all, you kind of scratch your head like, well, why are they selling it to me?

• 57:52Harry Stebbings?

  Yeah, but dude, I've had this before. I've got a great company and I want to buy some and I get charged. And then ROFA's happened.

• 57:58Speaker 00

  Yeah.

• 57:59Harry Stebbings?

  How do you get around a ROFA?

• 58:00Speaker 00

  That's the relationships. And in our business model, the companies and your peers have to see value in what you can bring to the company. Because what we're after is large concentrated positions. We're not indexing secondaries, buying with no information.

• 58:16Speaker 00

  Playing the arbitrage and pricing and putting 200 secondary positions in a fund. That's not what we do. We're going to have 10 companies make up 90% of our risk and we're going to become very large shareholders of those companies by doing our business model. And so it requires your peers to say, okay, they do something unique. They are going to provide value to us by consolidating the cap table. They're going to help us with employee structured tenders, shareholder tenders. We have an employee or a former share or a current shareholder that that needs to leave. They're going to buy it and it's it's really the barbell of the small micro transactions that nobody cares about. Some of our companies, we've built through 50 transactions to get to $75 million and some we've done four to get to 200.

• 58:59Speaker 00

  You have to sell that you're going back to raising money as a new manager. Be different, be different because.

• 59:05Harry Stebbings?

  It's a pain in the ass to do 50 transactions.

• 59:07Speaker 00

  It is. It's the muscle memory of that is not replicable for others. In the back office, you have to have the investment to not just pay yourself and to hire big teams to run it requires the ability for you to know that the actual outcome is the benefit of the carry, not the management fee.

• 59:24Harry Stebbings?

  Going back to Getier.

• 59:25Speaker 00

  Yeah, that one took years off my life. Good process.

• 59:28Harry Stebbings?

  How did you come to it?

• 59:29Speaker 00

  So we made those investments and made a lot of money for LPs. Get introduced to Getier, but one of our, excuse me, to Gorillas, we have an office in Zurich. We have a team of about 10 in Europe. We've been here since 2017. Say, hey, you got to meet this company in Berlin. When I'm there, this and we had a bunch of portfolio companies in Berlin at the time. Met the founders and the business was growing like a weed.

• 59:50Harry Stebbings?

  This was when it was in Turkey only?

• 59:52Speaker 00

  No, this was Gorillas in Berlin.

• 59:53Harry Stebbings?

  Oh, this was.

• 59:54Speaker 00

  So we were acquired. Gorillas was acquired by Getier.

• 59:58Harry Stebbings?

  That wasn't a good deal, was it?

• 59:59Speaker 00

  So for a group of shareholders, we were a part of helping structure alongside of five others. It actually was a good deal. We actually got good value for our money.

• 1:00:08Harry Stebbings?

  You get cash out there?

• 1:00:09Speaker 00

  We did get a little bit of cash and we got most of the preferred value in the transaction. So four or five shareholders of Gorillas received of all of their shareholders received the majority of the preferred equity that we received from Getier. So in a good place then? Fine. Getier valued at 10 billion. The next three years were some of the worst of my life. Why? Seeing that we needed to then try to protect that money with more money and then get involved at the board and do the heavy lift of restructuring and battles with the founders and we'll leave a lot of it out because it's still ongoing, but it was really hard and my, the mistake I made was the second tranche of the capital. How big was the first? How big was the second?

• 1:00:52Speaker 00

  The total first was, was like 50 million bucks in total between secondary, primary. We got that plus sum and value of Gater and then the next check was a hundred million bucks to restructure that equity to pull it forward. So you get 200 million risk total, a lot of LPs in it with Co Invest. Of course, everybody during that period signed up for, you just put it out there and. Dude, the Co Invest craze was fucking. It was nuts in 2021 and, and, and created a lot of unintended consequences that we can chat about, but, and different from our normal Co Invest model, which we went back to from that period. But anyway, the long story short was, I think the major mistake I made there was not willing to just walk away. After the first check? After the first check.

• 1:01:34Speaker 00

  The fight that when you grow up in like severe poverty, you're fighting with your siblings for everything. You're fighting at school. You're fighting for food.

• 1:01:41Speaker 00

  Fighting the world. You're fighting, you're fighting, you're fighting. And, and as you grow into business, that doesn't leave you. It subsides a little bit, but the people, there's many people in our industry that have backgrounds like mine and you don't stop fighting. Is it a blessing or a curse? It starts to become a curse if you can't manage it because in that scenario, my thought that I could fight and will the outcome, little old G squared amongst giants. It was like you were, you were a dead man walking without knowing it. You were just, you were already dead. You just kept fighting and making sure that we don't make those mistakes again are important. And that's where guardrails, other people with voices in your firm. Was it obvious that it was going wrong?

• 1:02:24Harry Stebbings?

  It seemed like just enormous amount of cash going into a business before it was ready and premature scaling and unit economics that didn't work. It seemed very obvious to me, respectfully.

• 1:02:33Speaker 00

  Yeah, hindsight, it's easy to say it's obvious. I'm sure to many looking at me and watching from afar, it was obvious.

• 1:02:41Harry Stebbings?

  You still hold it though, no?

• 1:02:43Speaker 00

  Yeah, we still, we still hold it. It's now a business focused in Turkey and, you know, lots of great people in the business working. And I'm still on the board, so I'll be careful of some of the things I say, but.

• 1:02:53Harry Stebbings?

  Cause it's a major, major part of Turkey.

• 1:02:56Speaker 00

  Oh yeah, it's, by the way.

• 1:02:57Harry Stebbings?

  That was the biggest mistake for me of the business. It should have just continued deeper penetration.

• 1:03:01Speaker 00

  Well, yes, and I think investors would say one thing, founders would say another on how it became a global kind of strategy. I think the mistake the company made there was it left Turkey and didn't focus maybe on other markets that were similar to Turkey from a employment cost perspective. Look, today it's still operating in Turkey. It's a big business. You got a lot of sophisticated people from Bubotl in there, working with the business. You've got people inside the business that want to win. You got 10,000 plus employees that are working hard every day, trying to create values for their family. For me as an investor, I lost a lot of money. Why I'm still involved is because those people that are commuting in some cases, three hours a day to work in Turkey, you know, they deserve a good outcome.

• 1:03:43Speaker 00

  And that's the piece of our investing as a secondary investor, you often, often don't get that granular involved with. And we do it with a handful of companies. Unfortunately, typically when they have issues that you're trying to save. But yeah, it was a very hard journey.

• 1:03:56Harry Stebbings?

  How much money do you think you lost there?

• 1:03:58Speaker 00

  Well, there's kind of the, the numbers you can quantify. And then there's the dollars that you lost from a fundraising perspective for your next vintages from LPs.

• 1:04:06Harry Stebbings?

  Because you lose that co-invest.

• 1:04:08Speaker 00

  Yeah, because you.

• 1:04:09Harry Stebbings?

  When you lose co-invest dollars, do you lose them as a natural LP?

• 1:04:12Speaker 00

  Depends on how you structure your co-investments. In that case, from that fund, my guess is those decisions we made cost our partnership probably a half a billion dollars of capital. Between capital actually lost and investors that you can't bring back. It was a monumental miss on our part.

• 1:04:30Harry Stebbings?

  I have lost money before in co-invest. And the only lesson that I've learned actually on that is use it as a chance to build trust. And in crisis, communicate more than you ever have done before.

• 1:04:40Speaker 00

  Yeah, and try to over communicate. A lot of LPs because of that have come back and now they're.

• 1:04:46Harry Stebbings?

  Does it make you question your co-invest strategy? Because the thing that I don't like with co-invest is often LPs. They're almost not aware that it's a single shot. And what I mean by that is, you have a portfolio in a direct, in a venture fund. Fine, you have a get it. Fine, we've got a toast as well.

• 1:05:02Speaker 00

  Yeah.

• 1:05:03Harry Stebbings?

  But it's like, they're almost shocked that, oh shit, I didn't realize that's done.

• 1:05:07Speaker 00

  So kind of going through our co-investment process in the early vintages, let's say vintage one through four. In some cases, we were four times co-investment to fund investment because.

• 1:05:16Harry Stebbings?

  Four times.

• 1:05:16Speaker 00

  Yeah, but here's why. Because the type of companies that we were interested in investing in, we weren't large enough to make a difference. So if you want to run our business model, you need capital, a lot of capital.

• 1:05:26Harry Stebbings?

  Just to get in the door.

• 1:05:27Speaker 00

  Just to be able to solve the problems that they have. To your point of being relevant to the rofer. If all you can do is onesies and twosies, and you can't write a hundred million dollar check when they need you to do it on the secondary. They go find somebody else. And when they turn that faucet on of shares, when they buy into your strategy, when Daniel Lux says, hey, you guys are interesting to us. Oh, by the way, here's a hundred fifty million dollars for the stock. If I say no, and it's at a good price, and he picks up the phone and calls somebody else, it's gone. You're not getting that opportunity back. With our strategy, you have to have scale. So is the co-investment in the early days was a significant part of our strategy. Over time, it's more normalized. Today, it's about on a billion five, it'll be seven hundred million. It's still a lot.

• 1:06:07Speaker 00

  The mistake we made in twenty twenty one vintage, or twenty twenty vintage, is we didn't just do co-investments around our core positions. We had LPs coming to us saying, hey, I built my fortune in, let's say, wellness. I like health tech companies. You've got one down here in the land. I want to buy stock directly. And we felt at the time, hindsight being twenty twenty, it was wrong. We felt at the time that we were enabling our business model to help them achieve what they wanted by being an LP of ours.

• 1:06:35Harry Stebbings?

  Okay, but let me just push back on you. We're partners now.

• 1:06:38Speaker 00

  Yeah.

• 1:06:38Harry Stebbings?

  Okay, I say they have directly requested that asset. I share with them my concerns.

• 1:06:44Speaker 00

  Yeah.

• 1:06:44Harry Stebbings?

  And how we believe the company is doing. And if I do that transparently and offer them access, am I not providing them a service that they're asking for?

• 1:06:51Speaker 00

  Yeah, until it doesn't work and then they blame you.

• 1:06:54Harry Stebbings?

  So you should block them from doing?

• 1:06:56Speaker 00

  I wouldn't. So the way we run it today is the way I think people should run their, only in conviction. When your funds are investing alongside of it, that's when you do the co-investment. You don't do it the way we did it in 2020. You do it the way we did it today. Our 2022 vintage fund, there was a billion two in size. The co-investments we ran are our top 10 positions. A couple L L Ms, the high flyers, companies like Fanatics, Wiz, Databricks, Turo, the Airbnb of cars, Monzo, companies like that, where there's, you've already decided those are your core positions. And then they make a bespoke portfolio of additional exposure to them in equal weighted size.

• 1:07:32Harry Stebbings?

  Why are you in Monzo?

• 1:07:34Speaker 00

  Value play to Revolut and TS is fantastic.

• 1:07:37Harry Stebbings?

  I think Revolut is the generation.

• 1:07:39Speaker 00

  We were in Revolut in our 2018 vintage fund. I agree with you. Amazing business.

• 1:07:42Harry Stebbings?

  Did you hold it?

• 1:07:43Speaker 00

  Yeah, some of the stuff we can't really talk about holding it or not in the live positions, but.

• 1:07:48Harry Stebbings?

  I just look at it now and I'm like, fuck me, this is a 500 billion.

• 1:07:51Speaker 00

  We have it in our 2018 vintage fund. It's made an awesome return for that vintage today for me.

• 1:07:57Harry Stebbings?

  How did you get to Revolut in 2018, dude? You're like a mid-American fucking growth master.

• 1:08:03Speaker 00

  There it is. I love it. The bias.

• 1:08:04Harry Stebbings?

  And I'm sitting in fucking London and I don't see it in 2018.

• 1:08:07Speaker 00

  You fucking hustle, Harry. Hustle.

• 1:08:09Harry Stebbings?

  I was 12 then. Fuck you.

• 1:08:14Speaker 00

  Oh, you know.

• 1:08:15Harry Stebbings?

  But seriously, how did you see it then? This was, this was well before.

• 1:08:18Speaker 00

  Yeah, well before. I think four mega trends for us, fintech is one. And we had good success coming off of SoFi, the founders of SoFi. And now the current management really believed in our strategy. And SoFi was actually also in our 2018 vintage fund. Yeah, that fund, man, it's, it's just crazy what was in it. And off the back of that win, and then we had early N26 before the growth restrictions.

• 1:08:44Harry Stebbings?

  Did you sell?

• 1:08:45Speaker 00

  Uh, no, no, we didn't. We didn't sell. They're working their way through some things and, and looking fairly okay right now. And they're doing a really good job of managing through the, the stress they had in the business. And now more of a focused in Germany versus kind of a continental play. And then we had Revolut. What a, what a great little pool of companies, right?

• 1:09:02Harry Stebbings?

  What a great pool. And so you're like.

• 1:09:05Speaker 00

  But Revolut went like a hockey stick, man. So in our strategy, you need like.

• 1:09:09Harry Stebbings?

  And so you're like, I see Revolut, you're like, I'm gonna go into Monzo?

• 1:09:11Speaker 00

  Well, Monzo is a later vintage. So yeah, Revolut's in our 2018 vintage where sometimes, and we have them in every vintage, you know, in our current vintage, we have Chime, awesome business, believed in our, our business model. But it went so fast that you can't build, over time, dollar cost averaging in through lots of transactions, you can't build a scalable position if the company goes from zero to a hundred in no time. You know, Wiz was very short for us, 20, our current vintage, we did it in three years. But it was only because it started with the back of the downturn. We caught it at the right moment. Normalized scenario, we would have never been able to build this position in Wiz because it was a hockey stick from day one,

• 1:09:53Speaker 00

  but the capital availability, even to the best assets in the world, wasn't great for 18 months.

• 1:09:58Harry Stebbings?

  What price do you get into Monzo?

• 1:10:00Speaker 00

  Oh, sub four billion. Yeah. We're not solving for what you're solving for. So you have to.

• 1:10:05Harry Stebbings?

  TS is great. I really like that.

• 1:10:06Speaker 00

  Yeah, TS is a great operator. So, so I think what you have to build a portfolio in across the four mega trends for us, the way we look at it, is you have to diversify that risk. So you have SaaS, you have fintech, you have consumer internet in mobility. And so what we do across those is we try to build conviction positions pretty equally weighted across those mega trends amongst 10 companies. And so for every Anthropic you have, you have to balance that with a fantastic business in Fanatics, which is more of a traditional, like last quarter, talk about growth. I mean, the business is fantastic and it's at scale, massive scale, billions of dollars of, of revenue and hundreds of millions of dollars of EBITDA, like a massive company.

• 1:10:49Speaker 00

  Michael Rubin owned, pretty much significantly owned, sports apparel merchandising business. You balance that risk. Cause what we've learned over time is you can't just play the momentum because you can get burned. And that's chasing multiple.

• 1:11:02Harry Stebbings?

  Totally get that. You can't just play the momentum. How the fuck do you play AI then? Because it is.

• 1:11:08Speaker 00

  Go to the leaders. It's easy. Go to the winners. Cap, what's, what's, what's holding back the next generation of the LLMs to get to Anthropic and OpenAI scale? In three years, who's gonna rival them?

• 1:11:19Harry Stebbings?

  No one.

• 1:11:20Speaker 00

  You just answered your own question, Harry.

• 1:11:21Harry Stebbings?

  No, I completely agree with you. No, no, I literally. Now, if, for what I'm about to say, may my LPs forgive me, if I could do anything.

• 1:11:30Speaker 00

  Be careful, they're your blood that pumps through your heart.

• 1:11:32Harry Stebbings?

  Oh, no, I adore them, and I think they'd probably agree with my next statement.

• 1:11:35Speaker 00

  Okay, we'll see.

• 1:11:35Harry Stebbings?

  I would put my whole fund into OpenAI.

• 1:11:38Speaker 00

  You would?

• 1:11:38Harry Stebbings?

  At 350, yeah.

• 1:11:39Speaker 00

  Yeah, it's if, you know, you and Spencer McLoud should start a fund together. He's amazing. He's my co-PM. He believes the same thing.

• 1:11:45Harry Stebbings?

  At 350, do I see this being a one and a half trillion dollar company in five years' time? Easily, I do. That is a five-ax with fair confidence, but very large confidence in a five-year period.

• 1:11:57Speaker 00

  Yeah, it's an amazing business.

• 1:11:59Harry Stebbings?

  Yeah, I would do that 100%. It's reach, escape, velocity. I speak to Kevin Scott at Microsoft, and I'm like,

• 1:12:05Speaker 00

  Yeah.

• 1:12:05Harry Stebbings?

  "But dude, there's no defensibility on the search." And he's like, "And you can't just switch from Google to Bing?" "Of course you can, but it's the brand."

• 1:12:12Speaker 00

  Poor Bing always gets picked on. Everybody picks on Bing.

• 1:12:16Harry Stebbings?

  Everyone, even he does.

• 1:12:18Speaker 00

  You don't need to pick on Bing.

• 1:12:20Harry Stebbings?

  It was him, not me. But like, point me, I was like, "Wow, yeah, that's absolutely true." And so I agree. Okay, but I have friends who are in Anthropic and got in at four, and you don't need to comment, and it's now 60.

• 1:12:33Speaker 00

  Yeah, 61.

• 1:12:34Harry Stebbings?

  61. And they've got like a four-ax

• 1:12:36Speaker 00

  Yeah.

• 1:12:37Harry Stebbings?

  on their money. And so there's a question of like, okay, value accrual.

• 1:12:40Speaker 00

  Have them call me. I'll buy all their shares of Anthropic at 61 billion.

• 1:12:45Harry Stebbings?

  You would buy Anthropic at 61 billion?

• 1:12:46Speaker 00

  I would buy all day long today and twice on Sunday.

• 1:12:49Harry Stebbings?

  Are you serious?

• 1:12:50Speaker 00

  100%.

• 1:12:51Harry Stebbings?

  Even though the dilution is so intense?

• 1:12:54Speaker 00

  See, now you're talking like an early-stage investor, Harry. I don't give a shit about the dilution.

• 1:12:59Harry Stebbings?

  Why?

• 1:13:00Speaker 00

  I give a sh- I care about the price I pay in dollars and the price I'm gonna sell it at in dollars. I am focused on DPI, not MOIC. I don't care about the dilution.

• 1:13:13Harry Stebbings?

  So are you not just going around now hoovering up Anthropic?

• 1:13:15Speaker 00

  Oh, 100%.

• 1:13:17Harry Stebbings?

  Is there much to hoover up?

• 1:13:18Speaker 00

  A lot. And I've got appetite for more. Same with OpenAI, same with Databricks, Wiz. Holy shit, what they built was amazing. We hosted them at our LP day. Half the things they say, I don't even understand what they're talking about. Scares the shit out of me, the world, after talking to three of them.

• 1:13:35Speaker 00

  What's out there? But man, did they build how they did that? By the way, they also sold a business to Microsoft together and made a bunch of money. And then said, Hey, yeah, we're well healed. They're they're humble people. They've made a lot of money. And some of them live in like a one bedroom apartment in Tel Aviv. I went to see him in Tel Aviv, went to see a bunch of companies, we'll leave the other ones out. Couple of them wouldn't even see me. This is after I managed five plus million dollars. It was guys welcomed me in, gave me a sweatshirt. How you doing? I'm like, oh, by the way, I want to land in your company. You're raising like half a billion dollars. I want to give you like three million bucks.

• 1:14:08Harry Stebbings?

  Three million bucks.

• 1:14:09Speaker 00

  They're like, you know, that's a little small area, but we like you. Uh, will you settle on nine? Sure, I'll give you nine million bucks. That's how we started and we then we want to build a $200 million position. It's it takes that buy in. And so you go back to Anthropic and the others. You know, we were fortunate enough during you mentioned FTX earlier to be awarded during the bankruptcy, a bunch of stock. We bid on it. We went through the whole process, bid on the stock, bought a big chunk. The company is, in my opinion, is unstoppable. That and then OpenAI, they're just the beginning. So how do you play the space? You go to the winners because I have a shorter thesis.

• 1:14:43Harry Stebbings?

  How many winners are there?

• 1:14:45Speaker 00

  I think I think the LLM space is challenging for new entrants and it's because it's time and capital.

• 1:14:50Harry Stebbings?

  But I think it's like OpenAI and Anthropic.

• 1:14:52Speaker 00

  Yeah, I don't I don't see a ton of room for more, not because I don't think.

• 1:14:55Harry Stebbings?

  So are you going to play the application layer two? And are you going to try and do cursor and a bridge in medical?

• 1:15:02Speaker 00

  No, I mean, I think for us, our view is take a few concentrated bets in the foundation models and the winners. And then let's play a bit of the picks and shovels. That's why we have Lambda. We also had CoreWeave. And then on the business models themselves, let's play a a scale AI and software to help them scale on the hyperscaler side and focus the balance of our capital on our other mega trends where AI has been embedded into all businesses. So you have exposure to it throughout cyber and SaaS. You have exposure to it in fintech. You have exposure to it in consumer. Companies today that are are created without AI embedded in their DNA, like, why? Why would you do it if you're not going to?

• 1:15:44Speaker 00

  If you don't put it in there, the challenge you have in our industry is you have vintages of managers who invested basically for the last 20 years, many of them without liquidity, and most of their businesses don't have AI embedded in the DNA of the company. And so they're chasing now, you have incumbents that are large. There's two types of companies that were, that are big and private that aren't in AI. They're kind of, we talk internally, we call them vampires and zombies because they're massive, many of them are profitable. They have to now implement AI in their business models and you have some that are gonna get out of it and be okay. And those are the vampires and the zombies are dead. There's hundreds of them.

• 1:16:22Harry Stebbings?

  I think there's far more zombies than there are vampires. I think it is a much more difficult transition to implement AI. And I think a lot of product change is actually from bottoms up and you can't just slap AI on it and be like, here you go.

• 1:16:35Speaker 00

  It's hard and it's, companies are going through

• 1:16:38Harry Stebbings?

  I really wanna do a fund

• 1:16:39Speaker 00

  Midlife crisis.

• 1:16:40Harry Stebbings?

  And name it P F U, which is Private Actually Fuck You. And I just wanna go down Anaplan, Cooper, you name it, and just take out one by one by one where you've got to have a couple of things. Founders, not there. Engineering team cut, customer service cut, price increases.

• 1:16:56Speaker 00

  No, and then by the way, layer some secondary on lower the cost basis and you have, you can make a five X in three years.

• 1:17:01Harry Stebbings?

  Yeah.

• 1:17:02Speaker 00

  Yeah, no, it's a great idea. I think that there's long in the tooth companies from 2015 vintages.

• 1:17:08Harry Stebbings?

  So is my generation, the generation of LPs funding us more. And I mean that in the nicest way and I'm being deliberately glib, but like in the liquidity profiles that we're doing, and it's 15 years.

• 1:17:18Speaker 00

  Yeah, I think it's hard, Harry. I mean, liquidity is hard. The one thing, and you asked me this question on our walk, is like, what do LPs think they know that they actually don't? And I would say how hard liquidity actually is for us, all of us. It's really hard and that's why the DPI numbers are so low. It's not because people don't wanna make money for people, it's because it's, it's hard. It's just as hard as getting into the best deals. It may be harder to get out.

• 1:17:45Harry Stebbings?

  Is that even the case in the high demand assets like we have today with the L L Ms? You wanna say you're anthropic, Sam?

• 1:17:51Speaker 00

  Yeah, today, I think there's a handful of liquid, private companies, basically. They're quasi liquid.

• 1:17:56Harry Stebbings?

  Cause this is the hard thing for me.

• 1:17:57Speaker 00

  But at scale, small positions, yes.

• 1:17:59Harry Stebbings?

  Cause I look at my

• 1:17:59Speaker 00

  But try to go move a billion dollars of anthropic.

• 1:18:03Harry Stebbings?

  Agreed completely. But I look at like my first fund, which was tiny admittedly, but all of my winners

• 1:18:07Speaker 00

  It was large compared to mine.

• 1:18:10Harry Stebbings?

  But all of my winners.

• 1:18:13Speaker 00

  Yeah.

• 1:18:13Harry Stebbings?

  I can sell tomorrow. I don't want to fucking sell any of them.

• 1:18:15Speaker 00

  Yeah, but all of my shit, I'm desperate to sell. Well, that's, yeah, that's, that's, that's the, that's the thing. That's the classic sell, you know, sell your dogs and keep your winners. And I think it's, it's actually the, somewhat of the inverse is you have to be able to, willing to sell your winners to have a sustainable business model and to generate the return that will, will actually drive your Harry's fund forward.

• 1:18:36Harry Stebbings?

  What has been the single best investment fee on a multiple basis?

• 1:18:40Speaker 00

  Early Wiz and probably early Spotify. Both of those were, and Bolt, the early ride handling, it's yet to be determined. Marcus Philig business. We were the first institutional money from the North America in that business. Those first investments we made in all three of those are probably 10x.

• 1:18:54Harry Stebbings?

  Why did you do that?

• 1:18:56Speaker 00

  Which Bolt?

• 1:18:56Harry Stebbings?

  Yeah, I love Marcus.

• 1:18:58Speaker 00

  He's amazing.

• 1:18:58Harry Stebbings?

  On the show, he was fantastic.

• 1:19:00Speaker 00

  Yeah, he's amazing.

• 1:19:01Harry Stebbings?

  But dude, respectfully, when you went in, this was pre Sequoia.

• 1:19:04Speaker 00

  Yeah.

• 1:19:05Harry Stebbings?

  Pre institutional credibility.

• 1:19:07Speaker 00

  I think it was like 20 bucks a share or something. It's quoted at 260.

• 1:19:11Harry Stebbings?

  Yeah. So, yeah. And this was like not the brand that it is.

• 1:19:15Speaker 00

  But we had come off, in fairness to us, we just came off a great outcome in Lyft. We didn't know yet what Uber was going to be. I was going through all the challenges around the transition of founder. Johan Berquist, that was at Spotify, called me and said, what do you think of Lyft and Uber?

• 1:19:32Speaker 00

  And I gave him my, my opinion on both. And, and he's like, well, there's this small business out of Estonia that I'm going to go be the CFO at. And Johan has been our single best investment we've ever made. Spotify, early investment that he trusted our business model in, let's say eight to 10x. Bolt, yet to be determined, but let's just assume it's somewhere between 50% and face value of what Sequoia paid, it's six, seven x. And now it's a big business. And Marcus is phenomenal. Young kid, building that business, thesis was, well, I'll go where Uber's not and do it profitably because I don't have any money.

• 1:20:07Harry Stebbings?

  Being blunt.

• 1:20:08Speaker 00

  Yeah.

• 1:20:08Harry Stebbings?

  As I said, you, you said your humble beginnings earlier. You've done very well.

• 1:20:13Speaker 00

  It's all relative, what's well. But yeah, go ahead.

• 1:20:16Harry Stebbings?

  Does money make you happy?

• 1:20:17Speaker 00

  Money doesn't make me happy. Money makes my life easier. Money makes your life easier. Complex in some ways.

• 1:20:23Harry Stebbings?

  What did you think about money that now you have it, you now see differently?

• 1:20:28Speaker 00

  When I was growing up, I thought if I could just make $5,000 a month. I would be set if I could just make $5,000 a month, own my own farm and farm it. And that's all I wanted to do. And then I spent 20 years trying to get away from the farm. And now all I want to do is go back, but money doesn't make you happy. I think it makes your life complex. How you handle that money is important.

• 1:20:50Harry Stebbings?

  What have you learned about handling money when it comes to you?

• 1:20:54Speaker 00

  Yeah, me personally.

• 1:20:55Harry Stebbings?

  So it's like for me, don't increase my spending with my increased wealth.

• 1:20:59Speaker 00

  Yeah, I think that's a good goal, Harry, and you should try to maintain that. It's very hard to maintain that. For me personally, my journey has been about not having that fear of going back to the powdered eggs and powdered milk and the government cheese and that fear that it could happen again. And setting my family up so that my children won't ever have to go through that. And generations won't have to go through that. That's been my desire. And now that we're partly there creating that, I would say I'm in the probably middle innings of doing that for where I want my life to be. Reminding yourself of where you came from constantly is important because it's easy to be around people in our profession and just in general in life.

• 1:21:43Speaker 00

  As your financial status increases, the people around you change a bit. And I think that pull to be more like everyone is there. And maintaining the thought in your mind that this always hasn't been what your life is and being thankful that it's here without losing the edge. The most difficult thing to do as you start to make real money, regardless of how you define that, is keeping that edge that got you there. And I think you see that across sports, that you see it across business. I think you see it about high performing CEOs.

• 1:22:17Harry Stebbings?

  When you think about keeping that edge?

• 1:22:18Speaker 00

  Yeah.

• 1:22:19Harry Stebbings?

  Is it the running away from the government cheese and poverty? Or is it the running towards the grandchild memories of G squared?

• 1:22:27Speaker 00

  I think keeping the edge for me isn't about either of those things. Keeping the edge for me is the chase of the next win. And that no matter what dollar amount is, that the win is what gives me satisfaction. And the loss is what hurts. Like I spent a lot of time talking to you about the losses because that's what I can remember mostly every moment of those. And as an athlete, I remember all the failures.

• 1:22:52Harry Stebbings?

  Should you ever build immunity to losses?

• 1:22:55Speaker 00

  Yeah, immunity to losses would be nice to say that you should do that because maybe you'd be happier. Plus the money, maybe you're like high on life. Yeah, I think some people can. For me, it's, I think ingrained in my DNA that I don't want to leave. I don't want to know who that Larry is. I enjoy the fight. I enjoy the journey to win and everything in life. I want to win.

• 1:23:18Harry Stebbings?

  Final one before we do a quick fire. What does no one see about firm building? Having built a firm, you think is so cool.

• 1:23:26Speaker 00

  Building something that then you don't realize that people outside of your small sphere recognizes is something positive and that is something that you're randomly faced with. Like this conversation for me is, I'm a huge fan. It's like sports radio, long time listener, first time caller.

• 1:23:46Speaker 00

  You're a young guy, but you're super successful and you have some of the most amazing people in our industry on the planet. Sit here and talk to you and to think that I'm sitting here with you telling my story is for me very humbling in the fact that you're even interested. And I think that piece of building a firm and staying focused on the logo and not me individually has led to this moment. And that tells me that we all, for all of our flaws, which we have many, there's something in the water at G squared that works. And we're going to keep grinding and doing it.

• 1:24:16Harry Stebbings?

  I'm going to do a quick fire with you, otherwise I could keep you all day.

• 1:24:18Speaker 00

  Yeah.

• 1:24:19Harry Stebbings?

  Okay. So tell me, whose life do you secretly admire and why?

• 1:24:24Speaker 00

  I look at, because of my background in sports, who I admire, I think the longevity of like a Cal Ripken Jr. in baseball, who basically for 16 straight seasons, didn't miss a major league baseball game. Major league baseball plays 160 games a year. For 16 years, from the time the guy was 22 to the time he was 38, didn't miss a start. You know, people talk about records in sports and, you know, all of the high flying athletes that people recognize in their accomplishments. Here's a guy who was a grinder, played third base, hard position to play in baseball. You know, I know you're a cricket guy, but study it up. 16 years, not miss a game. Of course, he's in the baseball hall of fame and celebrated in that way, but a good player, not the best.

• 1:25:03Speaker 00

  But the grind that that must have taken for him to do that, just to get to the major leagues is not being the most talented guy. And then to play and not miss a game for 16 straight years for one team in 38 when he retires. That to me, we talk about our 20 mile march every day, G squared, like it's a 20 mile march, rain or shine, we're marching 20 miles and we're going to make progress. That is a different kind of intestinal fortitude and a set of massive steel balls that you just don't get in generations today. What that guy accomplished is unsurmountable. They will not be another baseball player, in my opinion, in the history of the future of baseball that will accomplish what he did.

• 1:25:41Harry Stebbings?

  It's very kind of you saying about like, listening to the show and being a family, three shows a week for 11 years.

• 1:25:46Speaker 00

  There you go.

• 1:25:46Harry Stebbings?

  Like, no one giving a shit for four or five of those years.

• 1:25:50Speaker 00

  Yeah, it's, it's the grind and the willingness to have faith and that you can do it and living and breathing the challenge and making it become your identity. And I'm, I don't know, Cal Ripken Jr., I can only imagine what he went through, but I imagine it often, waking up at 38 years old, playing another random baseball game on a shitty team in Baltimore. Like to go out and grind to make that happen. For what reason? He'd made tons of money. Why do it? Why do the early shows where nobody was listening?

• 1:26:19Harry Stebbings?

  Cause I loved it.

• 1:26:20Speaker 00

  Because you loved it. Because it was, and it was your passion.

• 1:26:24Harry Stebbings?

  Still is.

• 1:26:25Speaker 00

  And that's where people should find their work-life balance, is when your work is your life, your life is balanced.

• 1:26:32Harry Stebbings?

  I couldn't do this today if I didn't love it.

• 1:26:34Speaker 00

  No, of course not. Why? You don't have to go far, you're in your house.

• 1:26:40Speaker 00

  You can go swimming next door and walk in the park.

• 1:26:43Harry Stebbings?

  I'll tell you, we do a session in the sauna afterwards. We record that too.

• 1:26:46Speaker 00

  Yeah, that's a little weird, but I'll go.

• 1:26:49Harry Stebbings?

  We're European, it's fine.

• 1:26:51Speaker 00

  Yeah, I know.

• 1:26:51Harry Stebbings?

  What would you most like to change about G squared that you can't?

• 1:26:55Speaker 00

  I think our people would like me to chill out just a little bit. And if I could be a little chiller and less grinding, I think people at our firm would probably enjoy being there more than they do. The money's awesome for everyone. People don't leave. We only have forced attrition. That aside, I spent a lot of time thinking about how to change my delivery at this point where we are survivable. We will have the next vintage. We're going to have many more vintages. There's not fighting just to fight. It's, it's needs to be altered without losing the edge. And I wish I could change it more quickly than I have. And I think it's, it's led to unfortunately, some really good people moving on that otherwise I would still like to be on the journey with me.

• 1:27:36Harry Stebbings?

  What's most memorable LP meeting?

• 1:27:38Speaker 00

  Here in London, guy committed on the spot and, you know, said, I'll sign the forms for 20 million bucks.

• 1:27:44Harry Stebbings?

  Wow.

• 1:27:44Speaker 00

  First meeting said, I'll do it. Never happened to me before. And it was here in London, longtime LP, still with us today. Saw the, I probably didn't even care about the strategy, just, I think, like me and said, I'll do it. That was the most memorable for me. Yeah.

• 1:27:58Harry Stebbings?

  What worries you today that you don't think many people are thinking about?

• 1:28:02Speaker 00

  I think fundamentally, our industry is the, the people searching for solutions to the fund life problem. They're searching for a solution to it because it's fundamentally broken and they don't want to say out loud that it's broken. So evergreen structures, interval funds, quasi liquid strategies and privates.

• 1:28:21Harry Stebbings?

  Continuation funds.

• 1:28:23Speaker 00

  The continuation funds, though, I find a bit more interesting today than they were in the early inception because now you only want, they will only buy your good assets. So now they're, they've really gotten smart. That's really interesting space right now.

• 1:28:36Harry Stebbings?

  I'm a CIO of a large endowment fund. What advice would you give me today about allocating in this environment?

• 1:28:43Speaker 00

  Where endowments miss the boat, and by the way, I'd love to have many of them, we don't, is I think they chase the wrong statistics.

• 1:28:49Harry Stebbings?

  What do they chase that they shouldn't and what should they chase?

• 1:28:52Speaker 00

  My belief is that TVPI and MOIC are not the stats that people should be focused on, and they are. I don't, I think they're fake numbers.

• 1:29:00Harry Stebbings?

  They should just chase DPI.

• 1:29:01Speaker 00

  It's the only thing you can use to buy food.

• 1:29:03Harry Stebbings?

  When you think about yourself as a leader, what could you do to be better today?

• 1:29:07Speaker 00

  I think I need to continue to grow and be more open minded, in which I have, and I have full trust now, in a co PM of mine, who I think is, is one of the smartest people I've ever met and, and fantastic investor. And he has my ear. I think I could do a better job of having more people have my ear. Like I could listen to more people than I do. And that's a challenge for me in the protectionist mode. Just my nature to be productively paranoid and I, I should listen to more people in their advice that they give me. And that's just something I've worked on for the last probably five years more extensively, is gathering more around me, digesting it and then acting versus acting.

• 1:29:50Harry Stebbings?

  Final one, when has being paranoid helped you? When does it hurt you?

• 1:29:53Speaker 00

  Well, I told you about the Theranos that Theranos that that helped me. That was a productive paranoia. And also the productive paranoia of closing and investing. The money's there, close it, invest it. Money's there, close it, invest it. Because you don't know when the next one's coming. And that's a bit of just my DNA as a human being and how I was raised. It's that productive paranoia that it's great today, but the wheels are going to fall off. And you have to make sure every day that you tighten the wheels and you have to be focused on the right things. That driving every day, that having that paranoia, no matter how good things are and always worrying that it's going to get worse. Across all things in life is to a degree, it's healthy.

• 1:30:31Harry Stebbings?

  I so appreciate this. I so appreciate the willingness to talk so openly. I loved it on our first walk. I really did. It was very special, which is why I was so keen to make this happen. So thank you so much for doing this with me, man.

• 1:30:43Speaker 00

  Well, thanks, Harry. Congratulations on what you've built. I'm a huge fan and I think you're only only in the beginning of what you're building. And I'm going to be cheering for you along the way.

• 1:30:53Harry Stebbings?

  Time for the sauna?

• 1:30:53Speaker 00

  Yeah, let's do it. The sauna, here we come. Nine Baden-Hosen.

• 1:30:58Harry Stebbings?

  As you heard Larry say there, we went for a walk in the park and I just thought it was such an incredible journey. I'm so glad we could make that show happen. I've got a new friend in Larry and I hope you enjoyed it. You can find it on YouTube by searching for 20VC. That's 2-0-V-C on YouTube. But before we leave you today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens of platforms, products and tools. That's why we use Coda, the all-in-one collaborative workspace that's helped 50,000 teams all over the world get on the same page. Offering the flexibility of docs with the structure of spreadsheets. Coda facilitates deeper teamwork and quicker creativity.

• 1:31:41Harry Stebbings?

  And their turnkey AI solution, the intelligence of Coda Brain, is a game changer. Powered by Grammarly, Coda is entering a new phase of innovation and expansion, aiming to redefine productivity for the AI era. Whether you're a startup looking to organize the chaos while staying nimble, or an enterprise organization looking for better alignment. Coda matches your working style. It's seamless. Space connects to hundreds of your favorite tools, including Salesforce, Jira, Asana and Figma, helping your teams transform their rituals and do more faster. Head over to coda.io/20vc right now and get six months off the team plan for startups for free.

• 1:32:21Harry Stebbings?

  That's coda, C O D A dot I O slash two zero V C and get six months off the team plan for free. Coda.io slash two zero V C. And while Coda keeps the engine running smoothly, Shopify puts the pedal to the metal when it's time to sell. When I was 18, I dreamed about being an investor with zero contacts in the industry. And through persistence, I'm now living that dream. Maybe you're dreaming of your own business and that's where Shopify steps in. I spend my time exploring successful businesses online. Often, there's a business behind the business driving success. For millions, that's Shopify. Powering 10% of US commerce, Shopify offers beautiful templates, AI tools for product images and descriptions,

• 1:33:06Harry Stebbings?

  easy marketing campaigns and 24/7 support. Their number one checkout boosts conversions by 50%. Fewer abandoned carts, more sales. Winner, turn dreams into success with Shopify. Go to Shopify.com/20vc for your $1 per month trial today. That's Shopify.com/20vc. And while Shopify helps you drive sales, don't forget what really keeps those customers coming back. Trust is the ultimate currency in business and today customers expect it faster than ever. And that's why over 10,000 global companies trust Vanta. Vanta automates up to 90% of the work for in-demand compliance standards like SOC 2,

• 1:33:47Harry Stebbings?

  ISO 27001 and more, using smart AI to centralize workflows, manage risk and get you audit ready in weeks, not months. So you can stop chasing paperwork and start closing deals. And a new IDC report found that Vanta customers achieved $535,000 per year in benefits. That's insane and the platform pays for itself in three months. I had no idea about these. Whether you're growing fast or just getting started, Vanta connects you with trusted auditors and experts, support to help you build trust with customers. Get $1,000 off your first year at vanta.com/20vc. That's vanta.com/20vc.

• 1:34:31Harry Stebbings?

  As always, I so appreciate all your support and stay tuned for an incredible news show coming on Thursday with me, Jason Lemkin and Rory O'Driscoll.