E445: AngelList: Why Picking Winners Is the Wrong Way to Invest in Startups

What if the biggest advantage in venture capital isn't picking winners, but getting access to them? Erik Syvertsen is GM of Asset Management and Chief Legal Officer at AngelList and Chairman of USVC. Drawing on AngelList's extensive venture investment data, Erik explains why seed and growth investing operate like two different asset classes, why the best startups often command higher valuations from the beginning, and how access drives venture returns. We explore the power law, why doubling down on winners matters, the two strategies for building successful venture portfolios, and the challenges of selling investments in breakout companies. Erik also discusses how USVC aims to expand access to private markets as companies like OpenAI, Anthropic, and SpaceX create enormous value before going public.

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

• 0:00Speaker 00

  I'm a big proponent of the efficient capital market hypothesis. I was not expecting to see that in venture, where you would think it's super inefficient, it's idiosyncratic. And what our data shows is like, pretty clearly, the top decile priced companies probability of generating a 10x return is kind of in the 50th decile.

• 0:20David Weisburd?

  So in other words, if you assume that the best companies are known, there's no information alpha, the alpha goes to the access alpha. So if everyone knows the best companies, it's all about how do you access those companies, not who are the best companies?

• 0:33Speaker 00

  And that kind of strongly suggests there's actually efficiency in the market getting priced in there. I take inspiration from, I think it was Eric Raymond in his book on open source software, he talked about the cathedral and the bazaar. And I think there's a lot of analogy there that one way you can solve that problem is build a cathedral. And that's what Sequoia and Thrive and Founders Fund are doing, where they build an amazing firm that brings the best founders into them. And so they get coverage, some of the best returning small funds are, people are CEOs of current, very successful companies that do investing on the side.

• 1:07David Weisburd?

  So Eric, you've spent over eight years at AngelList. What have you come to believe about venture capital that few other people believe?

• 1:15Speaker 00

  Yeah. When I started at AngelList, I thought that venture capital was entirely and necessarily a boutique industry of kind of carefully crafted picking, like you were going through a dim sum cart, picking out from the menu, like using your superior skill and vision of the future to kind of pick out the best deals. After spending time here, I think that one, venture capital is not an asset class. I think it's actually two asset classes. And that breaks at seed and the way you approach seed in early stage is just totally different. And then growth and later stage.

• 1:54Speaker 00

  And all of this is kind of developing and compressing and evolving as the markets grow. But that's really the biggest thing that I've changed my view on is that it's all about access, not about, you know, having the best kind of foresight and wisdom on picking. And then all about as companies work, having the capital and conviction to be able to kind of size down on your winners.

• 2:20David Weisburd?

  Two different asset classes, early stage and late stage. Maybe let's start with early stage or seed investing. What is a game that you should be playing as a seed investor in startups?

• 2:31Speaker 00

  As a seed investor, it really comes down to how do you get coverage? And so I'll think about this from both the manager and then from LP's perspective. Cause where we sit at AngelList, we get to kind of see both sides of the table. From the manager's perspective, it's all about how do I win my right in the round? Cause this is really the key thing to understand about venture is it's the only asset class where you have to sell your money to the company. The best companies are, the rounds are oversubscribed. The signals are pretty, pretty clear typically. The founder, either off founder strength or revenue momentum or early, early traction. If it's pre-revenue, even at the earlier stages, when it's just a kind of a vision, you can look at connecting the dots.

• 3:16Speaker 00

  And, and the data that we have is super clear on that. The, you know, rounds that end up having higher outcomes are higher priced upfront on average, right? And so it's not about being able to kind of pull the needle from the haystack at the early stage. It's about being able to be at the right table and then win your seat at that table.

• 3:40David Weisburd?

  One of the reasons I wanted to have you on the podcast is AngelList has access to tens of thousands of startups. So when you make these statements, they're empirically backed. You said something there that the biggest outcomes tend to be the most expensive valuations early on. Do you have empirical evidence for that?

• 3:56Speaker 00

  Yeah, it was a really surprising outcome for me, actually. And it's one of the things that changed my, my view of the world. I actually used to think that venture, you know, I'm a big, big proponent of the efficient capital market hypothesis. And, you know, the idea that unless you're pricing new information in like hedge funds 10 years ago, 20 years ago, whenever they first started buying satellite data, look at parking lots, right? You actually have an edge and you can win. Other than that, you know, it's a, it's an efficient kind of random walk. I was not expecting to see that in venture, where you would think it's super inefficient, it's idiosyncratic. And what our data shows is like, pretty, pretty clearly,

• 4:35Speaker 00

  the top decile priced companies probability of generating a 10x return is kind of in the 50th decile. So what that means is you prepaid for the growth. And so when you see the best priced rounds, what that suggests is they are actually efficiently priced, that you pay more higher valuations for the companies that are more likely to work. And that kind of strongly suggests, you know, there's, there's actually efficiency in the market getting priced in there. And we, we see that, we're able to see that in our data.

• 5:09David Weisburd?

  What do you make with that insight? How do you go about incorporating that into your investing strategy at the seed stage?

• 5:15Speaker 00

  So that goes into the idea of saying, all right, if it's not about superior selection at the earlier stage and the skill in being able to pick out idiosyncratic winners, then it's all about, do you have the right to be at the table in, in the companies that matter? And so there, it's not that you are getting a better pricing necessarily at the early stage. It's not that you're, you know, kind of picking out these companies necessarily at a higher, a higher rate out of like a random basket of companies. It's the self-selection of like, are you around the hoop on the companies that matter? So that you or your LPs through Co Invest or whatever that strategy might look like, can double down on those companies as they go.

• 5:58Speaker 00

  Cause on that individual seed check, it's, the idea of just kind of like indexing it is something, yeah, that like, when I first started at AngelList, I was expecting that to be the answer of, hey, it's just, you know, a random market and you throw a dollar into everything. But the reality is you can't actually throw a dollar into everything. So the way that plays through to what is your strategy? What is a strategy as an investor is how do you evaluate managers based on, are they kind of in the small pool of companies that matter more consistently than the average manager?

• 6:29David Weisburd?

  So in other words, if you assume that the best companies are known, so it's not really, there's no information alpha, the alpha goes to the access alpha. So if everyone knows the best companies, it's all about how do you access those companies? Not who are the best companies?

• 6:44Speaker 00

  Yeah, exactly. And of course there's, there's exceptions to the rule. Cause a lot of, a lot of companies start out, you know, the stories are just so many of like cursor to Slack that start out, you know, kind of go through the woods for a while and then pivot and find the thing that works for them. You know, like Slack was a gaming company that built an internal messaging tool to, you know, work more efficiently. And then that ended up being the thing for them. And so, you know, there are exceptions where, you know, a manager can be particularly good at kind of finding, you know, that kind of outlier talent. But if you're building a portfolio, you can't build it around the like planning for exceptions. And so it's, it's all about, yeah, exactly.

• 7:25Speaker 00

  Who's going to be able to show they consistently have a right to win in getting into those crowded tables?

• 7:32David Weisburd?

  This episode is presented by Juniper Square, the operations partner for private markets.

• 7:39David Weisburd?

  I think one of the reasons that this is counterintuitive to even the smartest investors in the world is because the opposite story and narrative is the one that's being memed. I got into Uber at a $4 million valuation, now it's $4 billion or Airbnb. But that's the exception proving the rule. And that's the reason why people hear about these stories. Cause these are the stories that go viral. I just had another story debunked for me. I used to think Airbnb was this late bloomer. Lo and behold, I learned that Airbnb was one of the hottest companies in their batch. That Sequoia was very interested from them early on. Even though there's this mythology how they were, you know, nobody really believed in them. People thought it was a dumb company.

• 8:24David Weisburd?

  That's true. That was just at the extreme early stage. This was like before they even had anything. But even by the seed round, they became consensus. Mark Andreessen has this meme that there are no more diamonds in the rough, only diamonds. And that consensus is coming earlier and earlier in the startups evolution.

• 8:43Speaker 00

  Yeah. And I think that's a permanent trend because you have, with agentic coding and the distribution rails that are in place today.

• 8:54Speaker 00

  The signal arrives so much faster that you can have outcomes like instinct where company doesn't exist and then is at hundreds of millions of revenue overnight and valuations hit 10 billion, kind of 18 months into a company's journey. And so the slow burn companies where you have kind of a gifted, misunderstood founder is really the exception to the rule today. And yeah, maybe 20 years ago, when venture was less efficient, that was a consistent way to develop a strategy. But today, it's the growth just happened so fast in these companies when they work that it's kind of clear to everyone who has visibility.

• 9:37David Weisburd?

  Instinct was probably the craziest example of this. We got access to the $2.5 billion round. Everyone knows evaluations, I could talk about this. And then we were doing, I think we wanted like three, four days of diligence. Not only did the round close, which is not that unusual, it happens often, but I think a week later, they were raising out a $10 billion valuation.

• 9:59Speaker 00

  Had the round closed, another round had opened at 4X evaluation. I don't think I've ever seen that for any startup. Yeah, it's kind of funny. I think 10 years ago, I think it was Paul Graham who had the idea of the kind of serial, the high fidelity fundraising of doing like safe notes that were stacked on top of each other at different valuations. And the idea was like each incremental dollar in de-risk the company. And so the next incremental dollar should pay a higher price. And it's almost like things are moving so fast, we've accidentally backed our way in there. You know, Higgs field is another great example where I think a year ago, not that many investors outside of kind of the core swim lanes had really even tracked the company.

• 10:39Speaker 00

  And then its valuation is, their last round was 5.4 billion. And now there's like, they're in talks to do something, double a super, you know, before you can even kind of brush the dust off their prior rounds. So you just see this left and right with companies as they're, as they're growth, you just see unprecedented growth underneath.

• 10:57David Weisburd?

  I just heard about Travis Kalanick's famous fundraising process. Do you know about how he raised money in four different rooms?

• 11:04Speaker 00

  No, I didn't hear this. Is this for Adam?

• 11:07David Weisburd?

  So he ran, he's gone public on this. This is in the Uber times, the heyday of Uber where they were the hottest private company.

• 11:14Speaker 00

  Yes.

• 11:15David Weisburd?

  And a couple of things have come to light, which is fascinating. One is that he would have four different rooms fundraising for the round at one time. And it was based on check size. So he would be in the biggest room, call it $100 million plus checks. There'd be a 50 to $100 million round room. There'd be a 10 to 50 million and lower. I don't know the exact thresholds, but there's these four different thresholds.

• 11:43David Weisburd?

  And what he figured out is momentum begets itself, kind of going back to this YC and escalating investment evaluation. And what he would do is he would come in and he would actually try to get a bid at a lower floor. Let's say that the true value of the company was 20 billion and he would get a bid at 7 billion. Somebody would be very interested, they're really excited, they're getting this big deal, you know, their agreed factor starts to kick in. And then he would go to somebody else and they would get 9 billion. You would start to play all these, all these parties against each other. And that's how he was paradoxically able to raise money at these very high valuations because he had so many people pot committed to be investing in Uber that everybody had this FOMO.

• 12:26Speaker 00

  Yeah. And you see that playing through in one of the modern kind of round dynamics. Actually, our data shows it's not as common as I think the narrative suggests, but the idea of the lead check coming in, paying a lower valuation and then kind of top ticking a small slug at a new tranche at a higher valuation. So you have like a, you know, series A, A1, series A2, and they're priced differently or more series C, D, whatever. And yeah, we see that. I think it's less common, but you definitely see that play out in some round dynamics today where it's a, it's kind of like a micro version of that, where there's the price that's actually paid to kind of lead the round. And then there's the price that clears the round with everyone else following on in the same named round, but at a, you know, a totally different valuation. And that's often what gets kind of the print.

• 13:12Speaker 00

  I think it's not, that's certainly not the normal that we're seeing, but that definitely is a version of this that that's a fundraising tactic today.

• 13:19David Weisburd?

  Not my term, but I think this is called the cuck round.

• 13:22Speaker 00

  Yeah.

• 13:23David Weisburd?

  I think that's the official XX term for it. How common are these types of rounds?

• 13:28Speaker 00

  It's the exception to the rule, definitely. Cause we, you know, one of the, one of the amazing things about we're being at AngelList is across our portfolio, we see the cap tables coming through for kind of our valuation services and part of the fund administration. And we're, you know, very careful about keeping the data private to the managers whose funds it is. But we are able to kind of draw the general insights on kind of what are the patterns and trends we see. And so, you know, it's a, it's a minority of rounds, but it is also when you see it, it's kind of some of the, some of the higher profile stuff, but I can't get into particular companies on that.

• 14:04David Weisburd?

  So when you started digging into the numbers, you realized even early stage venture was this access game and this consensus game. Did you also, were you also surprised by venture capital and power laws?

• 14:21David Weisburd?

  Or were the findings pretty consistent with what you would have thought they were?

• 14:26Speaker 00

  Not surprised. Power law is the story of venture. It's access and power law. And the two actually kind of go together causally, right? But yeah, the power, our data just very strongly supports that power law is real and extreme. There's public, public research that shows kind of 6% of startups end up accounting for 60% of returns. I haven't looked at the most refreshed data, but I would strongly suspect with the size of outcomes today, that's got, you know, even more extreme than that. And so that part was not surprising, but confirming that really the only thing that matters in a given batch of companies in a given cohort is there's going to be maybe

• 15:11Speaker 00

  25 companies that matter in a given, even in a given year's vintage. And maybe five of those will return the entire vintage. And, you know, those numbers will change from year to year and where you are in the cycle. But it is kind of the only question in the game is are you in those handful of companies able to size into them? Cause the thing that was surprising to me and where I started out saying, kind of like, I thought the game for venture would be more about just blind indexing. And blind indexing, the math is beautiful to it. Gets asset class where the mean is significantly higher than the median. And it's the idea is if you could just get a dollar into every company, you'd end up

• 15:53Speaker 00

  printing around a 20% IRR, you know, varies across cycles, but for the past 15 years, that's kind of what our data shows. The reality is that's a mathematical fiction though. You can't actually put a dollar into every company. And it's only the ability to have gotten exposure to those handful of companies that actually generate the DPI that returns the industry and then being able to size into it. And we see portfolios across the platform that are the same general shape where, you know, maybe it's 25, 30 companies in a, in a seed fund and their checks are too small and the ones that, that matter, and they don't have a follow-on strategy. Those can be great, great funds, but the, the ones that really generate the kind of

• 16:37Speaker 00

  generational returns for a firm are the ones that then have kind of the ability to concentrate in, whether it's kind of in the same fund or in follow-on vehicles, the, the companies that are winning as they break out. That's kind of been to me, the most surprising part is just the importance of then being able to size up and concentrate in the things that are working.

• 16:56David Weisburd?

  Maybe double click on that because my intuition would be if it's all about power laws, you want as many shots on goal in order to hit one of these power laws. And the follow-on should be, should be secondary to just getting access into these companies.

• 17:11Speaker 00

  It all comes down to that last word of getting access. So in, in a vacuum, theoretically, this is where, you know, that, that intuition makes a lot of sense. So if you, let's say you put a million on 20 post into a seed stage company and it gets kind of five rounds of financing after that at 20% dilution, you know, and something like, you know, one, one and a quarter, one and a half percent of that company by the time it exits. And so if you, if you exit, if that's a trillion dollar company, that's a, you know, 15,000 X returns. You can basically just buy every company in industry and, you know, every company in the vintage. And the index math is very, this is where I said, the index math is very clear that that's clearly the dominant strategy.

• 17:56Speaker 00

  You know, the problem is the way that portfolio would actually look in reality is you would go to every company raising in the valley or every manager in the valley to make this actually scalable. You would give them an equal amount of money and the ones who actually get into the next anthropics or the next, you know, name your breakout generational companies, you won't get into those, right? And so that's, that's where the rubber meets the road of access of the theoretical index just doesn't exist. And it's all about how do you build a basket that gives you coverage of the companies that have a real potential to be those breakouts.

• 18:38Speaker 00

  And then when you get into them, the amount of capital it takes to kind of build that strategy are able to then double down so that the returns really compound.

• 18:47David Weisburd?

  Is the practical way to solve that problem of getting enough broad exposure to, to capture the winners?

• 18:54Speaker 00

  So I, I have a personal worldview on this. I call it, I take inspiration from, I think it was.

• 19:01Speaker 00

  Eric Raymond, the creator of Pearl, he, in his book on open source software, he talked about the cathedral and the bizarre. When you're building software, you can build a, build a monolith, or you can build an open source community. And I think there's a lot of analogy there that one, one way you can solve that problem is build a cathedral. And that's what Sequoia and Thrive and Founders Fund are doing, where they build an amazing firm that it brings the best founders into them. And so they get coverage. And now it's not, you know, it's, these are still competitive rounds, fighting to lead these rounds is, you know, takes a lot of conviction and a lot of hustle. And, you know, that nothing is kind of given to those firms, even at the top echelon. But at the end of the day, their right to win is the brand that they've built and the

• 19:44Speaker 00

  halo that they can provide around the companies they back and the idea of kind of king making from being able to write large checks with the conviction, you know, with the fund sizes to know, you know, you're going to be able to follow those as well. So that's one way that you can get this coverage is by just building an incredible brand in venture. And the other way is what I call the bizarre, and this is the kind of long tail of highly value add managers. And these can be former operators who are, or current operators, as some of, you know, in the data on the angels platform, some of the best returning small funds are people are CEOs of current, you know, very successful companies that do investing on the side,

• 20:26Speaker 00

  where they're invited into rounds because they can be helpful with talent, they can be helpful with customer introduction, they can be helpful with advice, having gone through it. So, you know, that's, that's one side. And then you have managers who spin out of the big firms. So you have, you know, like a good paradigm of this would be like Mike Folpe, you know, incredible investing career at Index, and then, you know, spins out and creates an Abi, and, you know, he has a right to win from kind of the network he's built and the advice he's able to give and the help he brings. And so you have these non-rival risk managers who are able to participate in the same companies alongside the cathedral model. Those two strategies of kind of backing the managers who have great access or building

• 21:11Speaker 00

  a cathedral, I think are the two ways that you can win venture today. It's kind of the whole middle market that I think is challenged in this model, where you have a, you know, $500 million fund, your brand is not something that attracts, you know, founders. I think that's a challenging place to be.

• 21:28David Weisburd?

  I want to get into the bizarre for a bit, because I think that's a really interesting strategy. Let's talk about the cathedral. One of the perceived dangers of the cathedral, let's say you invest in Sequoia, it's that Sequoia may miss the OpenAI or Anthropic investment, as they did in both companies for quite a while. How do you solve around that?

• 21:48Speaker 00

  That is the challenge with the cathedral. The answer that the industry is kind of arriving at is these are becoming more like large asset management firms, where they can, in the later stage, they can participate in kind of multiple companies in the same, in the same industry, if they're not taking board seats, you don't have the same kind of competitive dynamics. And the, the key thing that's changed to de-risk that, I think, is the returns you can get on Growth Plus are, you know, risk adjusted, very compelling today. You know, this is the insight that, you know, you have about 75 companies that have made it to $100 billion.

• 22:31Speaker 00

  And, you know, if you're investing in things that are only $10 billion plus, that's kind of, there's maybe called 300 of those companies, and you have to pick the 75 from amongst the 300 and get into one of those, right? And then that's kind of a lot easier to do than the, the thousands at seed. And so in this, you know, I think the way firms can recover if they've missed early is there, because the outcomes have compounded to be so big, there's still opportunity to get 10x returns if you're entering later. And so I think that's, you know, I mean, no firm ever wants to miss a generational company, but the opportunity to get in while there's still venture scale returns at later

• 23:12Speaker 00

  checks, because returns are compounding to be so large in private markets, is still a viable strategy.

• 23:18David Weisburd?

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• 24:03David Weisburd?

  with LPs, and building your firm. This episode is brought to you by Juniper Square, the operations partner for private market GPs. Learn more at junipersquare.com/HowIInvest. That's junipersquare.com/HowIInvest. Everyone I talked to on the show is chasing the same thing, an edge, and more and more the edge comes down to your information, not just having it, but being able to trust it when the stakes are highest. AI is doing more of that information gathering for you every day, and most tools are very good at sounding right. The summary reads clean, but can you trace it back to filing the transcript, the specific passage that drove the answer? Or are you just trusting the confidence of the output? For investors, that's not a minor concern.

• 24:45David Weisburd?

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• 25:29David Weisburd?

  There are Sequoia, if they miss the Series A, they have a bad at Series B and Series C, is because they've built this cathedral of this brand, the companies want them involved, even if they miss them early. And then I guess the second mitigating factor would be, you don't just invest in Sequoia, you invest in Sequoia and threesome Thrive, and then the odds of all three of them missing this generational company continue to go down, the more managers you back.

• 25:53Speaker 00

  Yeah, yeah, that's absolutely right. And I think that strategy from an LP perspective, it makes a lot of sense if you can execute it on it, right? Because power law goes all the way up the stack, you know, as does access, you know, if you're, not everyone can just write a check into Sequoia, you know? And so the LP's ability to go execute that strategy is, you know, also one that not, not every LP can go do. But yeah, that is how you, as an LP, then get, kind of get the diversification across the, you know, across the mega firms, across the cathedrals, to make sure that you're getting kind of the exposure.

• 26:27David Weisburd?

  And again, points into the access class aspect of venture capital versus the good ideas or the brilliant investor asset class.

• 26:36Speaker 00

  Yeah, exactly. And that's where it's, you know, it applies. It's, it's really interesting. I mean, what we see in the data, this same power law distribution applies across managers as well. And this is where, you know, we talked earlier about the idea that the mean and the median returns are quite, quite different in venture, and that applies to managers. And so when you're going back to the bizarre model, you can't just blindly index that because the average manager, the typical manager, underperforms in, in venture because they're not getting into the generational companies. And so, you know, there it becomes more about being able to evaluate a portfolio of managers who are kind of able to consistently show up in these great companies. And so this is where, you know, the research on persistence in venture comes in, and it's

• 27:20Speaker 00

  the, you know, the firms that have a positive correlation bias, the cathedrals, and then the managers who have individual brands that give them that, that positive selection bias.

• 27:28David Weisburd?

  So Steve Kaplan, previous guest, is famous for this persistent research. 52% of the top quartile funds continue to be top quartile. So if it was completely random, 25% of them would continue to be top quartile, and perhaps even more impressively, 75% roughly of top quartile funds stayed the top 50%. So if you're trying to beat that mean, you're going to be able to hit it three out of four times, which is pretty good, especially when it comes to venture capital.

• 27:57Speaker 00

  Yep, yeah, exactly. And so for folks who are outside of venture capital looking to invest, I think these are just the non-intuitive things that are key to understand. And it is just mechanical. It's not a, it's not like a hedge fund manager who has a model that's working or a particular skill. Here it is, it is, there's an auto correlation to it.

• 28:16David Weisburd?

  That firms are generating their access that are, you know, it's the brands they've built are truly, are truly emotes. When I go. If you run a business, you probably start your morning with way too many tabs open. You're checking revenue, ad performance, email, inventory, spreadsheets. And before you've made a single decision, you've already spent your morning just figuring out what happened yesterday. That's what I like about perplexity computer. Instead of jumping between every dashboard yourself, perplexity computer could connect to the tools you already use and build a command center for your business. It could pull together things like revenue, ad spend, margins, inventory and email performance. Then show you what changed, where you might be losing money and what you should look at next. But what makes perplexity computer really interesting is that could actually work on projects.

• 28:59David Weisburd?

  You could help rewrite an email flow, build an ad campaign or draft outbound outreach. And unlike most AI tools, you're not locked in into one model. Perplexity computer orchestrates leading AI models behind the scenes and automatically chooses the right one for each step. For a limited time only, you could try perplexity computer for free. Head to pplx.ai/invest. That's pplx.ai/invest to try perplexity computer today. Most AI tools are still answering questions while perplexity computer is completing full projects. If you run a business, you probably start your morning with way too many tabs open. You're checking revenue, ad performance, email, inventory, spreadsheets. And before you've made a single decision, you've already spent your morning just figuring out what happened yesterday.

• 29:43David Weisburd?

  That's what I like about perplexity computer. Instead of jumping between every dashboard yourself, perplexity computer could connect to the tools you already use and build a command center for your business. It could pull together things like revenue, ad spend, margins, inventory and email performance. Then show you what changed, where you might be losing money and what you should look at next. But what makes perplexity computer really interesting is that could actually work on projects. You could help rewrite an email flow, build an ad campaign or draft outbound outreach. And unlike most AI tools, you're not locked in into one model. Perplexity computer orchestrates leading AI models behind the scenes and automatically chooses the right one for each step. For a limited time only, you could try perplexity computer for free. Head to pplx.ai/invest.

• 30:28David Weisburd?

  That's pplx.ai/invest to try perplexity computer today. Most AI tools are still answering questions while perplexity computer is completing full projects.

• 30:38Speaker 00

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• 31:21Speaker 00

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• 31:57David Weisburd?

  To the bizarre model. So the cathedral model is you build this beautiful cathedral, you get this reputation, you're Mark Andreessen, you're Peter Thiel. People will show up at your doorstep, even if you originally said no, you'll get multiple chances to invest in most cases. Now there's the bizarre part of the model, which seems much more rife with mistakes. What's the right way to execute the bizarre model?

• 32:23Speaker 00

  Yeah, so the bizarre model is where you have to be very careful in your manager selection. You know, this is the, you have to, you have to understand why this particular manager has a right to win. And that can be, you know, and this is where that, you know, to me, it's where I put my career. And I think it's the most exciting and just dynamic part of, I frankly, capital markets, right? This is where all innovation is happening. And it happens with manager strategies. You have people experimenting with new incubator models, new, you know, maybe, you know, having a hacker house and, um, you know, doing inception work. You have people who are just like, they have a great, maybe like great distribution.

• 33:07Speaker 00

  You have people who have a talent network. You know, we, one of my, one of my former peers went over to human capital that's, you know, helps source engineers for SpaceX since they loaded up a ton of SpaceX by being helpful on recruiting. And, you know, these are strategies that are very bespoke to the particular skillset of the manager and their partners. The way to think about that is you, you know, if you're going to play in that space, you need to believe as an LP, you have an ability to understand, you know, what those managers are. And I think for a lot of LPs, then the right answer is a fund of funds because that is, is very hard to do. It's very hard to figure out who's good and you have to build a portfolio because even if you are right from a vintage to vintage, not every fund is going to have those hits in it.

• 33:52Speaker 00

  And so either you have the skill and access to be able to, you know, get into great managers in the bizarre, or you need kind of, I think of it as chaperoned access of a person who this is like, this is their profession to have those relationships and be able to kind of assess, assess those managers.

• 34:11David Weisburd?

  That's exactly where my head went when you were talking about hacker house. I was thinking about previous guest, Dave Opnot from HF Zero. Probably the, the most unique accelerator model is my friend Josh Browder, previous guest, who literally has one entrepreneur at a time live at his place in San Francisco. It's a very unscalable model, but he's, he's become legendary as, as investor. The problem with these models, which I think are great, and I think very highly of these managers is that even if they're the best investor in the world, if they have a portfolio of 15 companies at the early stage, what are the odds that they invest in the next Anthropic or OpenAI? And they hit this thousand or 10,000 X return, they're still relatively low.

• 34:56David Weisburd?

  So how do you make those numbers work? Whether you're investing into GPs or a fund of funds, how many shots on goal do you need to succeed in the bizarre model?

• 35:06Speaker 00

  If you look at just the raw math and, and assume that maybe 0.5% of companies end up being breakouts. If you get something like 200 companies, you'll get, this is just basic probabilities math, right? You'll get something like 65% probability that one of those companies will be a breakout.

• 35:28Speaker 00

  If you size it up to about 500, then you know, your, your probability goes up to about, about 90%. This is where the portfolio construction is, is very important. We were kind of talking earlier about the index strategy and kind of limitations of like, um, the, the return profile. So if you have a 500 portfolio, company portfolio and you're doing that every year, right? It all, your, your fund size or your allocation size, you know, paying where you sit dictates your strategy. And so do you have enough dry powder to do that year after year?

• 36:03Speaker 00

  And then be able to, you know, and that's where the math of like getting into one company that has a 13,000 X return will pay for that strategy.

• 36:14Speaker 00

  But if you can't consistently do that, then you're going to be stuck in kind of vintage math problems where a lot of the returns are batched and kind of entry prices matter. And there are cycles where it just turns out 2021, right? Very challenging year, even today. The, the top quartile TVPI is kind of 1.4 ish in that neighborhood. And a lot of skepticism, will DPI ever even materialize out of those vintages? Like there's a handful of companies.

• 36:43David Weisburd?

  A lot of old marks.

• 36:45Speaker 00

  Yeah, totally. And so in good faith, right? There's another interesting thing with venture is the returns are very smoothed out over time because it's not easy for a manager to know what is this company worth today when it raised at a billion? I mean, there's, there's just so many companies like this that, you know, raised at a billion in 2021 and they are still, still cooking, they're chugging along, but they have not figured out an AI story that's reigniting growth. And, you know, they have a viable business, but you know, I don't know, is bending spoons going to buy them? You know, what, what does that exit path look like? And what would, what kind of multiple would you put on it today? It's certainly not 2021, but it's also not zero. And it's, um, you know, I think it's challenging to, to mark those, you know, those kinds of companies correctly.

• 37:28Speaker 00

  And so if you take kind of put error bands around the TVPI, the bottom line is, you know, that was a tough vintage to be investing in. Even just, you know, one to two years later, as the ZIRP era kind of, um, interest rate environment worked its way through and valuations rationalized a bit. You saw amazing gems getting created in the, you know, in the next cohort. And so I think that's when we think about the strategy of how do you invest across the bizarre.

• 38:00Speaker 00

  It has to be something that's like a consistent program where you're able to invest across vintages. Or you're genius and you know exactly when you're, you know, at that peak moment in the bubble and you're able to stop. But I think that the, you know, not many people would have conviction to do that. And so you're, you're kind of aware of where you are in the cycle, but needing to invest kind of across cycles.

• 38:19David Weisburd?

  Would go even a step further, which a hot take, I don't think you could know when the bubble will burst. Cause it's largely driven, A, it's largely driven by human behavior, memetic behavior. It's not driven by markets or fundamentals. And B, it's oftentimes, it needs a catalyst. So would the market have gone up so much if there wasn't COVID? Would it then go down if there wasn't a supply shock? Would the bank, would the market, would the startup market been hurt in 2008 if there was no banking crisis? So I think you could generally sense, and I think some people are better than others in sensing whether we're in the fourth inning of a bubble, sixth inning or ninth inning.

• 39:03David Weisburd?

  But timing it, I don't even think it's humanly possible. And even if you were quote unquote, the smartest person in the world. Understood the fundamental value, still may misunderstand the catalyst.

• 39:13Speaker 00

  Yeah, I can tell you a personal story. I got a small allocation in the Anthropic Series C, which, you know, in hindsight, at that time, it was like, okay, I know this, I know AI is going to change the world. I know the leading foundation model companies are incredible. Everyone was scrambling, everyone in the industry was scrambling to get, you know, get allocation. But Anthropic was like very, very not clear that it was going to be a winner. It was like, okay, I can't get OpenAI right now, or so, you know, Anthropic will have to do. Not quite, but it was, you know, it was not, it was not the clear winner that it is today.

• 39:47Speaker 00

  In terms of the momentum in actual kind of where they are in revenue in the market. I invested through a manager and they sold it, thinking that we were kind of like scaling laws were slowing down, et cetera. And OpenAI had won the market and, you know, with the benefit of hindsight, that was obviously a terrible decision. But at the time, it wasn't obviously terrible. It was, you know, you, you know, now there, there are a number of, you know, frontier model labs today that have very high valuations and would you be wise to sell them? Like it's, to your point, it's a fool's errand, you only know in hindsight. So I think there are sensible ways to do this systematically. Some of the great investors that I've studied, both data we see on AngelList and just being in the ecosystem, are systematic about it.

• 40:30Speaker 00

  So as valuations rise, looking at kind of objective things, like the, the number of turns on revenue you're paying for in your multiples, they'll start trimming their positions in a disciplined way over time. So they're not just unloading the whole portfolio, but they'll take opportunistic secondaries. They'll sell into tender offers, et cetera, when they can. And so, you know, I think there is a way to manage that risk. But you certainly, you can't eliminate it and you can't eliminate the risk that you just sold Anthropic, you know, Series C.

• 40:59David Weisburd?

  I think oftentimes it's another cognitive bias where we fall into binary thinking, should I hold all of it and go long? And double and triple and quadruple and pentuple, pentuple down? Or should I, should I sell all of it? And we have this, these human biases where sometimes the rational thing is sell 10% or sell the basis or sell a 2X or whatever that multiple might be and, and over time.

• 41:26Speaker 00

  It's very challenging to be disciplined and just, you know, take some chips off the table because, you know, it's human nature. You know, we, we all have FOMO, you all have, we all have endowment biases where the thing we have feels more valuable than the new thing we might buy with that investment, with that freed up capital. And so, you know, I think that's, you know, that's the difference, I think, between more kind of endowment style, disciplined investing is you're really running a program and you might, you know, you just set rules and follow those rules. And then the challenge is the outlier will always prove, you know, the exception will always prove the rule. Where you'll find people that didn't. And, you know, one of our advisors, Sam Bannister, just like very irrationally, just like doubled down into SpaceX and like, like obviously amazing decision.

• 42:10Speaker 00

  And so those are the stories we tell and celebrate. No one tells and celebrates the story of the person who, you know, year in and year out

• 42:19Speaker 00

  is able to generate 80% of those returns.

• 42:21David Weisburd?

  Damn guilty of that. I, I put up an X post about how Antonio Gracias, I think he, I thought at the time that he had doubled down 32 times on space and then Gavin Baker chimed in and said it was like 80 times. And it's hard not to think that that's so heroic because it is heroic. But at the same time, it's not 80 times or nothing. And you certainly couldn't blame him if he was an early investor to take some chips off the table. I don't think Elon would take it personally. One of the, one of the rules in investing in general across all asset classes, you have to, rule number one is you have to stay in the game. Rule number two is don't break rule number one. So even if you're giving up a little bit of your turn, staying in the game is good for you.

• 43:03David Weisburd?

  It's good for your investors. It's good for your brand, which compounds in all these second order effects of just staying in the game. It's highly underrated.

• 43:10Speaker 00

  Yeah. You just hit on something though, that's very interesting in this asset class in venture that makes it unlike public markets or private equity, where there is huge signaling risk in selling. And so we see it all the time where, you know, amazing managers who have gotten in and backed companies repeatedly across the rounds will play very rationally, they're playing multi-round games. And they don't want to piss off founders and will just keep holding, even if they would prefer to maybe take some chips off the table. So depending on the relationship, sometimes that's okay. But we see very often, it's kind of over, over my cold dead body, that I'll sell any of these shares because it's a signal to the founder

• 43:53Speaker 00

  which matters for their next investments of like, I am with you all the way. And if this ends up being, being all the way up to the moon and then back to the ground, I'm with you for that full ride. And that's, that's the kind of conviction that actually gets these, you know, the top investors access to the next company like that. And so individually, on an individual company basis, it's rational. But when you look at it across the strategy, it's often, it's actually not irrational if you're playing multi-round games to, you know, to just keep holding and doubling down on your winners without taking any chips off the table.

• 44:25David Weisburd?

  And oftentimes, these founders, the breakout founders are the ones that are the references for the next fund. So you have a fund manager, fund two, they return 10X on SpaceX, just on that one investment. In that case, I guess it wouldn't be Elon Musk, it would be somebody like Gwen Shotwell or maybe their CFO Brett Johnson that would come on and do, do that reference, reference call for the next, the next round of LP. So it's, it has extremely valuable in terms of an asset, not just for other startups in terms of getting people to come to your cathedral, but also in terms of investors funding your cathedral.

• 45:02Speaker 00

  Yeah, exactly. I think it, it plays all the way through.

• 45:05David Weisburd?

  We've talked about these two strategies, the cathedral and bizarre strategy. And one of the big issues in the US today is wealth inequality. And the second order effect of companies staying private longer and longer is that venture capital is becoming bigger and bigger. In some ways, the rich will get richer. I think that's not necessarily the worst thing in the world. But I do worry about retail investors and everyday people not having access to some of this wealth that's being created in the Anthropics, the SpaceXs, the OpenAIs in the world that are not going public now until they're, they're over trillion in value.

• 45:48David Weisburd?

  So I want to get into what you're building in a bit, but before then, just paint a picture for me. Five to 10 years from now, retail investors are investing in startups. We all hear about this trillions of dollars going in from retail into venture capital. How does that look? What does a future like that look like?

• 46:06Speaker 00

  Starting with the level set of where we are today, I think still most, most retail investors don't have access to the, to the private markets, to, to private startups. It gets a lot of discussion, but in reality, you know, I, I don't think that many people have actually built, you know, positions that, that matter today. Where you're coming from is, you know, an industry where you, an investor used to be able to build, you know, 60, 40 diversified portfolio in the public market. The number of companies in the public market, you know, has collapsed. The returns have concentrated along with that, where you have, you know, depending on your measurement period,

• 46:46Speaker 00

  you know, 40 to 50% of the returns, the S and P coming from the Mag 7 alone. And so diversification in the, in the kind of public markets is no longer a strategy to manage risk as effectively as it was, you know, 10, 15, 20 years ago. At the same time, the growth that drives, you know, so you have a less diversified portfolio, which means you're more sensitive to the individual company performance. And a lot of that performance is happening outside of those markets.

• 47:20Speaker 00

  You know, you look at where companies like even, you know, Google was when it IPOed. You know, there's, Ratner had a chart out a couple of weeks ago, is making rounds on Twitter, showing that just in the current round of IPO, you have kind of 5.2 trillion in value coming from OpenAI Anthropic and SpaceX alone. And the last, I think it was 20 years, you had kind of four, four, a little over four trillion in total value. So we're having more than two decades of private market value, kind of in three companies today in the private markets. And, you know, in that world, investors to have a diversified portfolio need to be able to access those companies that are driving significant portions of value creation in their portfolios.

• 48:04Speaker 00

  So that's to me, why it matters so much to be able to expand access. And where, you know, I very much applaud a host of new vehicles have been coming to market to allow this across the spectrum from products that are in the wealth channel that are, you know, raising kind of phenomenal amounts of inflows, providing access to some of these top companies to listed companies like Robinhood's fund that are traded on exchanges and allow people to kind of trade in and out of exposure to these kind of companies. So it is that the market is very rapidly evolving there. I think the, you know, I haven't seen the latest data, but I, you know, my, my expectation is that still as a percentage of

• 48:46Speaker 00

  people, you know, the average retail investor's portfolio, most have little to no direct venture exposure today.

• 48:52David Weisburd?

  There's something like eight million plus, I think, a credit investors in the US, probably 10, 10 million at this point.

• 49:00Speaker 00

  Last I saw, I think it was 13 million in SEC's latest research.

• 49:03David Weisburd?

  13 million, how many of them have ever invested in a startup if you take away crowdfunding?

• 49:11David Weisburd?

  I would be surprised if more than 100,000. What is your research show?

• 49:16Speaker 00

  Well, it's more than 100,000 because we have our data on how many investors are on Angel List. So, but yeah, I think this is tying the themes together. Structurally, the market, the vehicles, the correct wrappers to allow for individual investors to, to build portfolios just hasn't existed. To your point, kind of crowdfunding is, it's a very cool mechanism for companies that want to bundle together marketing and community along with their capital raising. And for certain, you know, kind of consumer brands, et cetera, it can make, it can make a lot of sense. But in general, very strong adverse selection from companies that raise their hand and need to raise in market, especially if they're doing kind of like pure, pure tech where the capital in Silicon Valley, you know,

• 50:00Speaker 00

  proverbially is, is ready, readily available. If you want to say, hey, I'm going to credit investor and I'm going to go on Angel List or I'm going to go on, you know, Hive or Forge or wherever in the second, for secondaries and build a portfolio of individual kind of company by company. Walking through the math we talked about before, uh, it's, it's very unlikely that an individual investor is going to have the time, the expertise and the access to build a portfolio of companies that gives them the coverage at the early stage. And then kind of the, the conviction to, you know, um, put bigger checks into the, the winners. And so I think even for the subset of accredited investors who have invested in kind of venture capital

• 50:43Speaker 00

  through kind of the, the access of say, the last decade, through the opening up of a credit investor, uh, kind of investing online or through wealth channel, um, it's still been very, very difficult to build a, you know, uh, institutional grade portfolio through the strategies that have been available.

• 51:01David Weisburd?

  You corrected me, you said not 100,000. How many have invested in Angel List? How many do you suspect have invested in startups today?

• 51:07Speaker 00

  Well, we have, uh, about 90,000, I believe, uh, credit investors is the total on Angel List. I call it, let's, you know, I haven't looked at the latest data, but like kind of rounded out to maybe 100,000. And so, um, uh, and then I know there are a lot of platforms that, you know, there's overlap with these investors, obviously. But there are a lot of platforms that we're pretty selective about, you know, the, the LP community on Angel List. And so, um, you know, let's, let's say it's 10x that, that's still only about a million accredited investors participating in venture through, through access points like Angel List. And so, yeah, I think to say 10% of accredited investors, um, have meaningful access in this asset class today

• 51:51Speaker 00

  is, is probably about right for a back of the envelope.

• 51:55David Weisburd?

  It's just among accredited investors, people with over a million liquid net worth or over 200,000 for several years. I'm trying to size the opportunity. I had the founder and CEO of iCapital, Lawrence Calcano.

• 52:11Speaker 00

  Yep.

• 52:12David Weisburd?

  Who, who talked about this 100 trillion plus that's coming from retail into the private markets. How much of this, some people call it 50 trillion, 100 trillion.

• 52:22Speaker 00

  Yep.

• 52:23David Weisburd?

  Do you think we'll go to startups in the venture capital ecosystem of retail? And how much should?

• 52:33Speaker 00

  It's a really good question. In terms of how much will, I do think there will be a sea change over the next, you know, call it five years. Where it becomes a necessary part of people's portfolios to have, um, private startup exposure. And the reason for that is structural. It's that companies, you know, as, I don't know, not to be a trope here, but like AI is really changing the world. As agentic coding makes the, the development process so much faster and the ability to iterate, the ability to pivot so much faster. And then the existing distribution channels are, are, um, so well understood today.

• 53:15Speaker 00

  If you combine growth with speed of execution, um, companies are, uh, hitting, you know, it used to be, there used to be a chart. I have a chart I follow that's timed to 100 million in revenue. And, you know, the average time has compressed from, you know, kind of six to seven years, uh, 15 years ago to, you know, now 18 months, that's like not even, you know, that, no, no one would blink an eye at that. And so the fact that the outcomes are coming faster and larger, that you have multiple trillion dollar private companies, even after they IPO, you have then dozens of kind of hundreds of billions, uh, companies in the pipe behind that. The

• 53:56Speaker 00

  underwriting that venture capital does to be able to, um, kind of provide the access to these companies is a, is a necessary component. And, you know, you won't, as long as these markets, for all the reasons we discussed, are access bound, you're going to need kind of the venture capital asset class and, and then have a responsible way for the average investor to include that in their portfolio, or they're just going to be missing a huge part of the, of the kind of returns.

• 54:23David Weisburd?

  There's this wild capital IQ number. You mentioned 100 million revenue, 87%, so nearly 90% of companies with over 100 million in revenue, which is quite a threshold, are still private.

• 54:36Speaker 00

  Yeah.

• 54:37David Weisburd?

  Then, and if, if a decade or two decades ago, Amazon, Google were going public at $400 million or $700 million valuations today, that's, that's a trillion dollar plus valuations that we're seeing from these, these three latest startups.

• 54:52Speaker 00

  Yeah, exactly. And so you have kind of two things. You have the accredited investors who could access this today, but the right vehicles and wrappers that are actually accessible on the shelves, you know, through the channels in which they actually manage their portfolios. You know, I think that's realistically where a lot of the new assets into the ecosystem will come. Because if you look at the overlap of actually who owns public stocks, it's the same households. If you break it down to household data, the most Americans, uh, unfortunately don't even own public stocks. And so a lot of like, when we talk about retail, the overlap with accredited is significant. And so, um, the way I think about this is actually twofold. There's, um, providing better quality products to be able to access venture through different structures

• 55:36Speaker 00

  that meet different investment goals into the different channels where the, kind of, I'll call it mass affluent to take out whether, you know, where, whether they hit the accredited definition or not. That's where the majority of that retail wall of money is, is coming from that folks are looking at. But then there's the social aspect, uh, to your point earlier, um, you see stories of, you know, people throwing, you know, Sam Altman, someone threw a Molotov cocktail at his house, right? That it is when you have a technology as disruptive, um, as AI is to reshaping economies, reshaping whole classes of jobs, right? Everyone sitting in customer service today is wondering if Sierra is going to come for their job.

• 56:19Speaker 00

  And then having no ability to participate in the upside of that. I think it makes, uh, it turns, um, you know, a meaningful part of society against technology and against progress and creates kind of fear and, and kind of P doom loops. So from a social perspective, whether or not there's a wall of money in the, in the aspect of retail, the, the, um, part of retail that's not accredited, um, it's, I think, a, a strong net positive for, you know, for the economy, for the country, um, and just globally to have the ability to participate in the upside of technologies that are, you know, frankly, whether, whether it's AI or biotech, um, or kind of name your industry, you know,

• 57:01Speaker 00

  reshaping the world, what's different today is the other knock on effect is, you know, um, 20 years ago, the average teacher could have some Amazon in their, in their retirement account. And today they, you know, people don't feel the ability to participate in the same way.

• 57:16David Weisburd?

  Best bluff is no bluff. I think a lot of times these public policy problems are solved through this narrative spinning. And from both sides, you have the Bernie Sanders spinning that AI is just bad and we should just freeze AI. And then you have whoever the anti Bernie Sanders, like trying to spin a narrative around mass abundance for everybody, even though it's not evenly distributed in terms of the outsider.

• 57:41Speaker 00

  I have a simple, uh, way I can press it all down is just more investor freedom, right? That's what it comes down to. And that's, I think, what American capital markets historically provided. And that's what's changed as, you know, more of this value creation happens in private markets is that well intentioned regulations to protect investors from risks they may not understand have, have ultimately, uh, ended up in a place where we've reduced investor freedom.

• 58:04David Weisburd?

  I think also the vector in some ways is both archaic and also insulting. My brother in law is a physics PhD to say, and he may be a credit investor, but to say that he's somehow less intelligent than some Nepo baby, third generation that has never read, has finished a single book is just an absurd test, this accreditation test is just an absurd paradigm of whether or not you can invest in startups.

• 58:36Speaker 00

  So I'm a securities lawyer by trade and, um, to, to steel man the, the thinking behind the accredited investor limit. You know, it's less about, the sophistication is part of it, um, and it kind of always has been. But the part that intuitively makes sense to me is, is really almost more mechanistic of can you afford the losses? And that's really the, the safeguard that makes sense to me. You know, as a, from a policy perspective, our kind of rules of thumb to make sure that the average investor doesn't come into these markets and treat it like a casino and invest more than they should. And so that's kind of the thinking is if you have, if you meet these income standards or these wealth standards,

• 59:16Speaker 00

  you can afford to make these investments, lose your money and, uh, live to see the next day. Whereas, you know, it's hard to be disciplined, um, the more you're stretching for hope, uh, and acting out of FOMO, the more people, you know, the concern with, that these rules are meant that, you know, that makes sense for them to apply to is, you know, making sure you don't literally, you know, bet the house to pick up the next anthropic only to find out, you know, Q3's numbers didn't come out where they are. And all of a sudden it's, you know, losses, you know, losses are more than people can swallow.

• 59:48David Weisburd?

  The Nepo baby could afford it. I, I think that's intuitive, that's fair. One of the reasons I wanted to get you on the podcast is you are at the intersection of this retail and access to private markets with, with your fund that you launched, USVC. Tell me about it and what's the latest on the fund?

• 1:00:04Speaker 00

  Yeah. So USVC is a project that we've worked on at Angel List. For years on the policy front, it is a 40 Act registered fund that provides evergreen access to venture capital in a tender offer wrapper. And so that's a lot of words. What does that mean? It is a pool of capital that's always raising. You can always buy in at NAV and then we redeem out on a quarterly basis in tender offers that are not guaranteed. And this is the kind of key piece to make it work is that we're able to build a long-term portfolio, investing across stages where we see value in the managers or alongside the managers

• 1:00:48Speaker 00

  that we have access to through the AngelList network. We build the portfolio that's designed to maximize long-term shareholder returns and then, subject to liquidity, which we manage carefully,

• 1:01:03Speaker 00

  providing more flexibility potentially in having that liquidity through the tender offer mechanism. So, traditional venture fund is you put in the capital into the fund. It's a drawdown fund and then you wait maybe five to seven years. You start getting some distributions out and maybe 15 years in, maybe the fund has returned your capital and some upside. And so the idea for structures like this is how do you create a kind of curated basket of companies that provides a broad-based way to access the ecosystem in a low-fee wrapper that has kind of some more reasonable, more flexible liquidity mechanisms than a traditional venture fund and then be able

• 1:01:46Speaker 00

  to make that broadly available without the accredited investor limitations and without the constraints that are applied to traditional venture funds.

• 1:01:54David Weisburd?

  We've talked in the beginning of the podcast, everything is about access. How do you guys access the best opportunities?

• 1:02:01Speaker 00

  AngelList has 25,000 funds and SPVs on the platform. We've had over 6,000 managers on the platform and I think brand matters a lot. We've spent over a decade really trying to support the venture ecosystem from founders to managers. And so, we're able to see the performance of managers who are showing the kind of persistent returns that we talked about before, have the kind of access and partner with them, whether it's through new LP checks or LP secondary or direct secondary, or helping us get introductions to companies to go direct.

• 1:02:42Speaker 00

  The fund kind of invests across all those strategies. And by working with managers who we are able to build relationships through the platform and through our network of just being in the center of venture for a decade plus.

• 1:02:58David Weisburd?

  If you could go back 20 years before, you're coming about 20 years of experience in the professional realm, you could give yourself one timeless piece of advice. What would that be?

• 1:03:08Speaker 00

  It's funny, I have a personal mantra that's steer into the pain. And I think early on, the more, some of the steps that I took that I learned the most from, where I went and got my MBA nights and weekends when I was an associate at a law firm. I actually pivoted careers. I was a teacher before being an attorney. And I think every single hard decision I've made to go do, take on a new challenge, the biggest advice I would give myself is not shy away and just do it sooner. You're never ready. And all kind of great things require resilience and challenge.

• 1:03:48Speaker 00

  And so, steering into the pain and looking for those opportunities to dig a little deeper and find things that are uniquely, you can go uniquely chase down, is a thing that consistently across my career, always wish I'd moved sooner whenever I see those kind of opportunities.

• 1:04:05David Weisburd?

  It's a bit of a paradox, but some of the most difficult times of our life also leads to most growth. A lot of people realize this or they've heard this trope, but what is important to make a distinction is when you're in those periods, they are truly painful and they are truly transformational and truly beneficial in terms of making you more anti-fragile. So both things are true. You kind of want to avoid them, but when you're in them and maybe you can't avoid them, just know that those are really building your resilience and building your character in ways that almost you can't do any other way.

• 1:04:42Speaker 00

  Jensen Wang, he has his toast that he gives folks that is, anyone aspiring to greatness, I wish them ample doses of pain and suffering. I think there's a deep truism here.

• 1:04:52David Weisburd?

  On that note, Eric, thanks so much for jumping on.

• 1:04:55Speaker 00

  Yeah, thank you, David.