20VC: From $8BN to $19BN: Inside WashU's Endowment Fund | SpaceX Made Up 20% of Our AUM | Why Europe and China Has So Much Opportunity | The Reckoning That is Coming for AI Companies with Scott Wilson

Scott Wilson is the CIO of WashU, one of the best-performing endowment funds in the world. Under his leadership, Scott has grown the endowment from $8BN to $19BN today. At one point, SpaceX was over 20% of the entire value of the endowment. AGENDA: 00:00 – How WashU Built One of the Best-Performing Endowment Portfolios in the World 04:00 – Scott Wilson's Investment Playbook: Concentration, Conviction and Compounding 05:20 – Why Scott Sold Over 75% of WashU's Portfolio When He Joined 07:15 – How Should You Allocate a $20 Billion Endowment Between Publics and Privates? 10:00 – How WashU Finds Direct Investments That Other LPs Miss 12:15 – How WashU Made Billions From SpaceX and Kept Holding 13:25 – Why Concentration Limits Are Killing Venture Returns 16:15 – Scott's Biggest Investing Mistake 17:10 – How Much Diversification Does a $20 Billion Endowment Really Need? 19:40 – Why Mega Funds Don't Work for WashU's Investment Strategy 23:15 – How WashU Gets Into the Best Companies Before Everyone Else 25:35 – Are Private Market Valuations Now Completely Detached From Reality? 28:10 – Why Half of Today's AI Companies Could Disappear in 10 Years 30:10 – When Should LPs Sell Their Biggest Winners After an IPO? 32:00 – Why Scott Wilson Walked Away From Sequoia Capital 34:15 – The Number One Reason WashU Fires Venture Managers 35:45 – Should LPs Forgive VCs for Deploying Their Funds in Just 18 Months? 38:30 – Is the AI Boom Heading for a Massive Shakeout? 45:15 – Why European Companies Are So Much Cheaper Than US Companies 47:30 – Why WashU Still Believes China Is a Great Place to Invest 48:30 – Is Government Overreach Actually Worse in the UK Than China? 50:10 – Quickfire: The Venture Funds Scott Wishes He Had Backed 53:00 – The Best Career Advice From a $20 Billion Endowment CIO

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

• 0:00Speaker 00

  We had thirty six, thirty seven hedge funds in the portfolio. And when we got rid of them all, you know, eighty, ninety percent of our time is just out meeting individual companies. And that's very different than probably how most of your LPs spend their time. You know, at one point, north of twenty percent of the portfolio is in SpaceX. Half of our portfolio is in our top fifty look through positions. Our model doesn't really work with mega funds. They don't need our capital. We hardly ever talk about like fund performance. We only really talk about the underlying exposures in the portfolio. Price is what you pay, value is what you get.

• 0:34Harry Stebbings?

  This is twenty VC with me, Harry Stebbings. Now, how often do you hear one of the biggest allocators in the world reveal how they make incredible investment decisions? Very rare. This CIO today has taken their institution from eight billion dollars to close to twenty billion dollars today. I'm so excited to welcome an OG of the endowment fund space, Scott Wilson at Wash U. Now, the incredible fact about this institution is that at one point SpaceX was over twenty percent of their portfolio. It has done incredibly well for them. And today, we discuss the journey from eight billion to twenty billion in AUM. The biggest lessons, what they did that they wish they hadn't done, and what they didn't do that they wish they had done.

• 1:16Harry Stebbings?

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• 1:59Harry Stebbings?

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• 4:32Speaker 02

  You have now arrived at your destination.

• 4:35Harry Stebbings?

  Scott, I'm so excited for this. One of the most respected in the industry. Thank you so much for joining me today.

• 4:40Speaker 00

  Yeah, well, thanks for having me.

• 4:41Harry Stebbings?

  Not at all, but I'd love to start with a couple of lessons from the past. You obviously had roots with Grinnell, spent several years there building out an incredible book. What are some lessons for you from Grinnell that really stuck with you and you took with you to Wash U and impacted how you think about building out your book with Wash U?

• 4:58Speaker 00

  Yeah, I think we ran a similar strategy at Grinnell. So I was fortunate to work for this guy, David Clay, who hired me at Grinnell. Grinnell had a long history of kind of a mix of direct co-investments and external partners that managed the portfolio. It was a pretty concentrated portfolio. I think it was super concentrated relative to the peer group. And we do a lot of the same things, but David was a great guy to learn from because when I first landed at Grinnell, I really had no idea what an endowment actually did, you know, on a day to day basis. And I think our strategies evolved over time, but we still fundamentally do the exact same things we were doing at Grinnell here at Wash U.

• 5:36Harry Stebbings?

  Which is concentrated managers, concentrated positions in direct as well.

• 5:40Speaker 00

  Yeah, I mean, if you, if you really want to dumb it down, it's, there's nothing particularly clever about it. You know, we try and find really good external partners. When they find something that we think is really unique, we try and double, triple, quadruple down on it. And then hopefully let that compound over long periods of time. That's it.

• 5:57Harry Stebbings?

  If we go forward to Wash U, I heard, and this was, I can't, I can't remember who told me, but they said that the first week in the job, most people have a bit of time, get used to the new environment. Nope, Scott did a fire sale, sold seventy five percent plus of the Wash U portfolio.

• 6:14Speaker 00

  Yeah, I saw that stat. I'm not sure that it was seventy five percent, but we put in redemptions for over half the portfolio in the first week. But I also had the portfolio for a couple of months before I actually landed in the seat. So there was a lot of preliminary work that went into those decisions. It wasn't, uh, it wasn't a complete, like, we're just fire sailing everything.

• 6:34Harry Stebbings?

  Were you worried about doing too much too soon? That is a very large shift.

• 6:38Speaker 00

  Yeah, I mean, it was a mix. There was this kind of obvious tension that performance hadn't been great for, for quite some time. And the board, you know, wanted to see results quickly and, and they had kind of given me and the team three years to really make performance, show some real performance improvements. And to do that, you know, we had to really restructure the portfolio relatively quickly, you know, and then changing around an endowment portfolio is more like turning around an aircraft carrier than a speed bro. So we knew that was going to take a decent amount of time. And then the private side, luckily the private side was in better shape, I think, than the public side of the portfolio. But we, uh, we had thirty six, thirty seven hedge funds in the portfolio and when we got rid of them all.

• 7:21Speaker 00

  So we certainly weren't popular in certain parts of Manhattan. Ultimately, we turned over more than seventy five percent of the portfolio through secondary sales on the private side.

• 7:30Harry Stebbings?

  That is a fire sale. That would constitute, yeah, I'll, I'll take that.

• 7:34Speaker 00

  Fire sale over eighteen months.

• 7:36Harry Stebbings?

  Oh, fine. And just don't go to Manhattan for a while. You won't be the most popular dude on Wall Street. Okay. And the endowment then is eight billion dollars?

• 7:44Speaker 00

  Yeah, it was just under eight billion when I started.

• 7:46Harry Stebbings?

  Okay. And it today is how much?

• 7:48Speaker 00

  The total managed pool is probably just under twenty billion dollars today.

• 7:52Harry Stebbings?

  I hope you have a twenty percent take rate personally.

• 7:57Speaker 00

  No, unfortunately, that's not the way it works.

• 7:59Harry Stebbings?

  Unfortunately not. That would be a two point four billion dollar take. So well done. So you have that restructuring of the portfolio and you then have the freedom to bluntly reallocate and start a little bit more afresh. How did you approach it then going, okay, this is how much I want publics, privates. What did the portfolio construction look like when you had that flexibility?

• 8:20Speaker 00

  I mean, I always say we're pretty much indifferent between publics and privates. And I would tell my board, like, you know, the only difference between those two asset classes is how often they're mark to market. So if you have like a ten, twenty year timeframe, do you, should you really care that something is marked every day or something is marked once a quarter? Within that, we have obvious liquidity constraints. So our big broad target, I would say, is half publics, half privates. We're definitely out over our skis in privates, but that's reversing quickly.

• 8:48Harry Stebbings?

  With the greatest of respects, I get you on the mark to markets. The biggest difference is, as you said, liquidity, no? I mean, the extended period that funds are now in terms of being twelve to fifteen year funds and the time it takes to get cash back, the fundamental difference is available liquid, no?

• 9:04Speaker 00

  Yeah, I mean, we obviously have liquidity constraints and that drives that ratio between public and privates. But it's not like if Stripe goes public tomorrow, it should be in a different asset class.

• 9:14Harry Stebbings?

  In terms of the capital requirements, you have net outflows a year of like five percent?

• 9:19Speaker 00

  Roughly five percent. It's, it's smoothed out over kind of rolling five year average.

• 9:23Harry Stebbings?

  If you didn't have the required net outflows, would you do anything differently in terms of capital allocation?

• 9:30Speaker 00

  Oh, for sure. We would probably have seventy, eighty percent targeted privates.

• 9:34Harry Stebbings?

  Wow. Can you walk me through that thinking and just like, I, I'm the board. Rationalize that for me, Scott.

• 9:39Speaker 00

  Yeah, well, your payout is a function of your liquid assets, right? Because you can't always convert your private portfolio and the payout is not guaranteed, right? In theory, like, you know, some percentage of your private portfolio should become liquid every year, but you can never count on it when you actually need it. So if you have a five percent payout on, and half your portfolio is liquid, that's ten percent of your liquid portfolio that you're paying out every year. If you're paying out zero, well, you really don't have that constraint. And if you look at the relative performance, you know, over the last decade, we've probably compounded our privates by in the low to mid twenties. And we've compounded, you know, our public equities at ten percent.

• 10:18Harry Stebbings?

  Did you always have this belief in privates being the value driver of a portfolio?

• 10:22Speaker 00

  No, I, but I do think like the markets are less efficient.

• 10:26Harry Stebbings?

  What do you mean by that?

• 10:28Speaker 00

  I mean, like you can get access to investments that are less picked over. Like there's always natural buyers and sellers. And I think it's much harder to create alpha in public markets than it is private markets. And I think this is, you know, well documented over the course of time.

• 10:43Harry Stebbings?

  So if we take the 70 to 80% that could be in privates, how do we think about structuring the privates book today? Obviously, privates is a very large allocation in itself. You've got directs, you've got funds, you've got credit, you've got debt. How do you think about how privates should be structured for you?

• 11:00Speaker 00

  The way we do it, so roughly half of our private portfolio is in, maybe more than half right now, is in kind of co-investments and direct investments. So we manage it the same way we manage the public portfolio. So we, you know, find good partners and to the extent we can, when they find something that's really interesting, we try and co-invest or add capital directly to that single name.

• 11:23Harry Stebbings?

  Do you have a separate direct team?

• 11:25Speaker 00

  No, no, everybody in my team is a journalist.

• 11:27Harry Stebbings?

  What would you advise another CIO? I, you know, obviously I'm a manager, I have many LPs and they all say to me, you know, oh, we'd really like to do more directs, but we don't feel like we're equipped to do so. We don't have the time to really do the work. What would you say to them and how would you advise a CIO who doesn't really do directs today, but maybe should and could?

• 11:46Speaker 00

  Yeah, you kind of have to build that muscle. You have to have that internal skillset on the team. So if you look at how my team allocates their time, and we still meet with a lot of external partners, but, but upwards of, you know, 80, 90% of our time is just out meeting individual companies. And, and that's very different than probably how most of your LPs spend their time.

• 12:06Harry Stebbings?

  Very different. Most of them spend 70 to 90% of their time with managers and then 10% of their time with directs, I'd say.

• 12:13Speaker 00

  But if you look at our performance over the last decade, if we didn't have any direct or co-investments, we would have been right at the average of our peer group, you know, as it is, I think for, we're at the top, if not the very top of our peer group over the last decade.

• 12:26Harry Stebbings?

  So were you just better company pickers then? Because what you just told me is that actually you'd be average if it were just funds only. And if that were the case, you must just be better company pickers than everyone else.

• 12:38Speaker 00

  Yeah, it's not us though. Like we're not doing what you're doing, you know? I think you have to be humble. Like I think, you know, we're trying to identify what we think is a really unique thesis or a really unique company. But we're not sourcing that from scratch. And so I think we're starting on second or third base because, you know, we're already invested with Harry and we think Harry's a really smart guy and he really likes this investment. And we'll do our own work to kind of independently verify the thesis. And sometimes we don't agree with the thesis and we have certain partners that we think, you know, is high signal and, and lower signal. But, but that's where we start our process. Hey, somebody we think is really smart already thinks this is a great investment.

• 13:17Harry Stebbings?

  Tell me, how much will you have in one company? We have a mutual friend in Mr. Lee Fixall, who I happen to think is wonderful. And he told me that I had to ask about concentration limits. How do you think about concentration on a per company basis?

• 13:30Speaker 00

  Well, I would separate cost versus, you know, NAB. And Lee in the board and Adam should get a lot of credit for, for the big win in SpaceX. You know, I think that became such a large position for the portfolio, you know? At one point, north of 20% of the portfolio is in SpaceX. And at that point, it'd become like, we had conviction as a team and we had many chances to take lots of liquidity in that name. But we advocated for holding it and letting that compound. And we did several kind of continuation vehicles that allowed us to hold on to that stock up and through, through the IPO. But you can't do that without the right government structure. So at cost, you know, if we were going to put more than two or 3% of the portfolio in, in a single name, we probably, we would need to notify the board. I think it's 4%.

• 14:14Speaker 00

  We need their approval, but we have a lot of leeway to concentrate the portfolio quite a bit.

• 14:19Harry Stebbings?

  You've also worked with some of the best funds and we have capital concentration limits on a per company basis. Do you think those are inhibitors of great venture returns?

• 14:27Speaker 00

  I do. They're mostly artificial, you know? If you think over the course of like, say you're going to do five funds, that's, you know, X amount of capital and, and to have a 10% concentration limit in any individual fund, I don't think it makes sense. I think we have lots of funds actually that where we have a mandate where it's like two or three stocks. And we certainly wouldn't have a problem with, if you think about it, if, if you're 1% of our portfolio or 2% of our portfolio and you have a 50% position, that's only 100 basis points for us.

• 14:56Harry Stebbings?

  Have you had a position with a lot of capital concentration that hasn't worked out?

• 15:01Speaker 00

  Oh yeah, for sure.

• 15:02Harry Stebbings?

  What did you learn from it?

• 15:04Speaker 00

  Well, a lot. There's like a couple that come to mind where we, you know, we had super high conviction going in. One was an automated manufacturing company and another was an additive manufacturing company. Maybe we're just poor at underwriting manufacturing companies where, where, you know, we have substantial investments. I don't think the story's completely been written on either company, but, but certainly it's painful. It's painful when those don't work out.

• 15:27Harry Stebbings?

  Do you think 50% of your private book being in directs is the right allocation?

• 15:32Speaker 00

  I, I would take it to 80%. You know, when we started, it was, it was just a tiny fraction.

• 15:37Harry Stebbings?

  Could you have it as 80% given that you are fed by the managers you back?

• 15:42Speaker 00

  Yeah, there's a natural equilibrium there and that'll ebb and flow over time, you know? As you do get, some of these bigger positions become liquid, there's no kind of artificial limit on it. And it's somewhat of an organic process when you, you know, if you're right on the underlying thesis and it can compound for a decade or more and it massively outperforms the rest of the portfolio, like you get natural high concentration in that portfolio.

• 16:05Harry Stebbings?

  I think investment decision-making processes are the product that we sell our LPs. I'm intrigued by your investment decision-making process on the direct side. What does that look like? How do you decide on directs?

• 16:17Speaker 00

  Yeah, I mean, we have to agree with the thesis and we also have to underwrite it. So there's a ton of stuff that people bring to us that, you know, for whatever reason, the team is not smart enough. We just don't have the right skillset or it's impossible for us to differentiate between this company and five of its competitors. And there we just don't play. So we have to be able to independently verify the thesis, understand the thesis, have the ability to underwrite the company, ability to monitor it going forward. And we have to think it's our best marginal use of capital. So we, we look at a lot of potential investments and I would say we do, it's probably more like 0.1% of those investments than 1%.

• 16:57Harry Stebbings?

  Is it challenging as you've scaled? Because now you're close to $20 billion and just something that moves the needle. I mean, writing a $20 million check into a growth round at 20 to $50 billion, even if it 20x's, it doesn't move the needle in any meaningful way.

• 17:13Speaker 00

  Yeah. And, and I think if I look back, the biggest mistake that I've made since I've been at Wash U is not adding capital to our winners just because, you know, they became a relatively sizable position early on. You know, so we had lots of opportunity to add capital to some of the names you would know that have done extremely well. And we, we didn't do that when we could have, just because they were already north of, you know, 1% or 2% of the portfolio. But I still think our model probably scales better than the traditional fund to funds model because it's hard to scale with managers as well. And what you end up doing is you just have to add more managers and then, you know, each manager means less and less. So we can maintain, I think, better concentration.

• 17:53Speaker 00

  Now, we're still probably over diversified, but we can hopefully maintain this concentration even as we double in size from here.

• 18:00Harry Stebbings?

  You say you're potentially over diversified. What's the right amount of managers to have in a book, do you think?

• 18:06Speaker 00

  Well, if you think about the underlying look-through exposures, right? The quantitative benefits for diversification trail off really quickly when you get more than 20, 30 names in the portfolio. So if you have 20 or 30 investments, you know, Charlie Munger would say if you have three, you're fine. But there's really no quantitative benefits beyond 30 for 30 underlying look-through exposures. And, you know, really the way we think about diversification is we want the top 30 names to have a, be a significant driver of our performance. And the way we targeted, we actually targeted like, I would say, half of our portfolio is in our top 50 look-through positions. And it's taken us a long time to get there.

• 18:47Speaker 00

  And that's probably a good target for us, a realistic target, but it's still very diversified. I mean, if you look at a diversified hedge fund, typically they have the bulk of their capital in their top 15, 20 names.

• 18:59Harry Stebbings?

  So just so I understand, we have 50% of privates in directs. In the venture funds allocation, how much do you allocate towards those 20 to 30 names?

• 19:09Speaker 00

  At cost, you know, I always tell, if we don't have enough conviction to do 1% of the portfolio, then we probably don't have enough conviction to do it at all. But typically we, you know, at this point, that's close to $200 million and we just don't, we don't have capacity. So, you know, we have to continue to back the companies that we have high conviction in over time. So we might start off with a $50 million check in a co-investment and then scale that up over time.

• 19:34Harry Stebbings?

  With a fund investment, will you do a $20 million fund check if it's completely irrelevant from a returns perspective?

• 19:41Speaker 00

  You know, it probably means it's a very small fund. And if it's a very small fund that's doing like really interesting things and we would have an opportunity to write a bigger check into one of the underlying companies, then we would do it. But we don't do many of them because it's just not scalable.

• 19:57Harry Stebbings?

  You have 20 to 30 funds. How many do you add a year?

• 20:01Speaker 00

  I think last year we added one. We have one that we're going to add and we know we're going to add next year. But if we had one or two funds, it's kind of one in, one out. It's not a hard, hard line, but, but we don't add partners very often.

• 20:14Harry Stebbings?

  You said before about mega funds that like maybe instead Of just growing, they should be more judicious about where they invest is I'm kind of paraphrasing you. And it seems like the the world has moved in favor of mega funds. Capitalism moat now for many startups. Compute and capex is a very real cost that maybe wasn't there before. Have you reflected on that and changed your mind or not?

• 20:38Speaker 00

  No, our model doesn't really work with mega funds. They don't need our capital and they certainly don't really need us for co-investment unless it's some massive round. It's a massive company that we can probably go direct on anyway. You know, I think these mega funds, it's going to be very hard. We'll see, but it's going to be very hard to kind of generate the historic multiples of invested capital that they have on those much smaller funds.

• 21:02Harry Stebbings?

  With respect, and I think this show is phenomenally successful because I do push back. So forgive me because you are an OG and I'm a podcaster. But you know, you see thrive, absolutely crush it with open AI and cursor and positions in sizes of outcomes that are just previously never seen before. And we're seeing outcome expansion so real as you've seen with SpaceX. With respect, that would suggest that you could get venture returns on mega funds if in those outcomes.

• 21:31Speaker 00

  Yeah, it's certainly when you, when you get these trillion dollar plus outcomes in private markets, even before they public, it's possible. You know, I think if you just think about the dynamics, when you double your fund size, right? You either have to double your check size in every company at the same valuation. And we know that doesn't happen, right? They end up paying, it's a, it's a much bigger check, but it's a much higher valuation. So the multiple money is probably not going to be as good going forward as it has been historically. Or you have to do twice as many investments and you know, your 50 best investment is not as good as your top 10 investments. So you have to do way more investments, double your check size. And typically when they double the check size, it comes with a valuation that's commensurate.

• 22:13Harry Stebbings?

  I think they would say they double their check size, but the companies need so much more capital. AI is this exhaust of capital that venture needed. Finally, we have an avenue to deploy the billions of dollars that you very kindly give us.

• 22:27Speaker 00

  Yeah, there's certainly massively capex intensive businesses, but it's not clear to me what the long-term returns on that capex is going to be.

• 22:36Harry Stebbings?

  With respect, given the size of checks that you need to write, are you able to not be in the mega funds? Just when you think about concentration on a per fund basis, if you have to write 50 to $100 million and you don't want to be more than a 10% of the fund. I mean, you've got to be in billion dollar plus funds.

• 22:53Speaker 00

  Yeah, we're obviously in lots of funds that are north of a billion dollars. We're not in any that are north of 10 billion. Yeah, and we, we would certainly have a strong bias. I wouldn't say never, but we would have a strong bias that that's probably not the best use of our capital. And we have no problem getting concentrated positions. You know, if you look at our, look through exposures, you know, we have lots of significant capital allocated to a small handful of names that we've built up over time in really great companies. That we don't need trillion dollar outcomes to have, you know, SpaceX like outcomes. Yeah, it's just a completely different strategy. We would rather be at somebody who's small, doing really interesting things in these companies early.

• 23:35Speaker 00

  And we can partner closely enough with it that we know those companies, we can develop conviction early on. And you know, we can essentially lead some of those middle to late stage rounds.

• 23:46Harry Stebbings?

  When is it interesting for you to get involved? Company valuations are soaring so fast, so quickly today. How do you think about like, when's the wash you insertion?

• 23:55Speaker 00

  I mean, we come across at all stages. It's more driven by like our opportunity set at the time than, than any specific like strategy we're targeting this stage of company. But I'd say we're not good, super early stage investors. That's a really tough skill set that I would say we don't have. So if we can't, you know, talk to customers, understand the product, you know, understand what we think unit economics look like. That's, that's something that's going to be hard for us to build conviction in. So it tends not to be a lot of C or series A.

• 24:25Harry Stebbings?

  Does it become difficult as more and more of these funds have IR teams? And so the distance between you and the manager becomes more real and your ability to get information, get deals becomes more buffered.

• 24:37Speaker 00

  Yeah, well, we, I don't think many of our funds that we're real close to, I even have IR teams, but some of them have somebody that functions like our guests. But the way we typically do it is more, much more proactive, like we're not waiting for them to bring us a deal. You know, we're going out and saying, Harry, like, who are the five companies in your portfolio that you're most excited about? And then we'll just go out and meet those five companies. And if, you know, if we find one that we think is really interesting, we'd be like, hey, we would love to get involved with this company. If there's a chance for us to help lead the next round or, you know, we've led employee tender offers. We've gone direct on the cap table.

• 25:14Speaker 00

  We've done lots of things that help us get exposure, but that is more offensive than we're waiting for the, your IR person to call us and say, hey, we have, and we're doing an SPV in this fund. And I actually think like, there's a huge negative selection bias. If you're just waiting for someone to give you a, a call and say, hey, we have, you know, $500 million of open AI that we're syndicating out.

• 25:37Harry Stebbings?

  Can I ask you, when you review the venture book that you've built in terms of managers, what do you know now that you wish you'd known back when you were at $8 billion, when you were doing the fire sale?

• 25:47Speaker 00

  We've definitely learned some hard lessons. I think maybe the biggest takeaway is like, you know, we've done much better on this like offensive strategy than defensive strategy. So we do way fewer of co-investment opportunities than we do outbound. That's probably the biggest takeaway.

• 26:03Harry Stebbings?

  Are you concerned by where we are in the cycle? You're a very realist investor that to me really likes fundamentals. Today, a lot is detached from fundamentals, it would seem, especially from the private world where you've got incredible exuberant pricing, real frothiness juxtaposed by this very real public markets reality. How do you think about that?

• 26:27Speaker 00

  I mean, I think like the markets have short memories, you know? If you look at the lessons from the original tech bubble in the 2000s and the GFC in 2021, like from the crypto bubble, like, you know, we're seeing the same kind of stupidity that we saw in all those other cycles. And it's like every five years, particularly in private markets, you know, where I think the investors tend to be just less sophisticated. But it's clear to me that like, there's a valuation premium in the private markets. You know, I don't know where Anthropic is going to go public, but it's clear to me, they could have raised capital in the private markets if they stayed, stayed in the private markets at north of $2 trillion if they wanted to. I don't, I'm not convinced that the public market is going to give them that same valuation, maybe.

• 27:10Speaker 00

  Same with open AI, you know, Aura tried to go out, Cerebras tried to go, or has traded really poorly since the IPO. SpaceX is basically back to really close to its IPO price. There's just too much capital chasing these kind of late stage champions in the private markets. And the valuations are, I think that's why there's no DPI. It's not because the public markets aren't open, the public markets are pretty close to all time highs. It's just, you can't go out public at the valuation that the private markets will give.

• 27:39Harry Stebbings?

  Why would you go public? Is this a permanent transition in the financing landscape where to your point there, you could raise and stay private? The Colossians have proven that staying private and having a great business is very beneficial. You're still able to do amazing tender offers to your employees. You're able to do M and A and buy OpenRuder for $8 billion. How, Scott, why are we going to go public?

• 28:00Speaker 00

  There's a lot of rationale to stay, to stay private. I think ultimately like the public markets are obviously much deeper capital markets. I think, you know, when SpaceX raised 85 billion or whatever in the IPO, that's pretty tough to do. You know, the sovereign wealth funds and the big pension funds and SoftBank, like they can only write so many of those checks. And, you know, I think most of those capital sources have been exhausted and the public markets are still a multiple the size of the private markets. I think there's 14 trillion or something globally in private markets.

• 28:28Harry Stebbings?

  And do you think we're seeing a massive sell off now to make capacity for Anthropic?

• 28:33Speaker 00

  Could be, it would obviously be a lot of the same potential buyers, but I mean, I think that that's tough to kind of bait at us.

• 28:40Harry Stebbings?

  You said about stupidity within private markets. What did you mean by stupidity? Like, what are you pointing to? Is it valuations? Is it deployment speeds?

• 28:47Speaker 00

  Yeah, it's just valuations. I'm sure that half of these kind of, you know, I guess, super intelligence is the correct term now, but these AI related companies, like probably half of these companies don't exist 10 years from now. And it's not clear how many have like a defensible mode around their business. It's not clear to me what the ultimate profit pools look like for these companies. I think it's a super strange dichotomy. If you take the top five kind of large language models and they all had the same user interface for 99% of problems or tasks, like you probably couldn't tell the difference, right? You wouldn't know which model you're using. Like, I can't describe another industry like that, that has a big kind of deep profit pool.

• 29:27Harry Stebbings?

  Do you have much exposure to open AI or Anthropic, the model providers?

• 29:31Speaker 00

  We have pretty decent exposure to Anthropic through a few of our partners.

• 29:35Harry Stebbings?

  With the greatest of respects, as you said, that the ability and willingness to switch, the commoditization, do you ascribe little value then to that model provider layer?

• 29:45Speaker 00

  The way the business models are currently constructed, yeah. When there's a free alternative, customer willingness to pay drops very, very quickly. And I think everybody starts with the frontier model. And this is definitely true when I talk to our companies and our portfolio. You know, everybody starts with the frontier model because if you're trying to implement AI, I'm like, you know, you're starting at spending at zero and you allocate some budget to it. So I think everybody starts with the most expensive models and they use it, they find it useful, they ramp up spend. And at some point they say like, you know what, for most of Our tasks. And certainly this is true on my team. Like, we don't really need a frontier model. We're not solving millennial prize problems.

• 30:25Harry Stebbings?

  Why have you not sold then? We've had very liquid secondary markets. I completely hear and agree with you on everything. But then why, why hold a position that could be sold?

• 30:34Speaker 00

  Yeah, for us, it's relationship driven. These aren't held in SPVs where we could easily sell. It's one exposure and a fund of 40 other investments. So we wouldn't be selling just one thing in isolation. Those particular partners, like they're, they're great partners for us. So we're happy to hold it in. You know, if it goes public, we have the ability to hedge if we think the price is right.

• 30:54Harry Stebbings?

  How do you think about the stock distribution lens? We've seen several managers say, actually, we think we can manage your position once public. And so we're going to create vehicles to do that. Others say, we're going to distribute straight to you in stock. How do you think about what is the right way? And then what do you do once distributed with the stock?

• 31:15Speaker 00

  Yeah, I mean, it depends on the, the situation. We have stuff that we owned as private company. And it went public five years ago, like New Bank, it's in our 13F. We've owned that since it was a private company. It was distributed and we still own it almost five years later. Other companies that goes public and we have the ability to hedge exposures even pre, pre-distribution. We'll do that if we think the valuation is frothing. So for us, it's, it's kind of valuation. We probably have some independent view on what we think the right value for the, the stock is. And so we'll partially hedge or fully hedge the position.

• 31:50Harry Stebbings?

  So you get stock, you do a like scheduled sell down over an 18 month period. It's totally ad hoc and it depends on a per name basis. I agree. I think New Bank's amazing and David is a rock star. I'm a, I'm a holder too. But how do you do that?

• 32:05Speaker 00

  For something like SpaceX or a really big position that we think still has like a ton of potential upside over the next five, 10 years. Like we'll, you know, try and be as thoughtful as we can. And it's, you know, I always say it's better to be not stupid than clever. So it'd be stupid to not take some chips off the table because we have a fiduciary obligation to the university and the mission of the university. So we'll take some chips, but if it were a much smaller position, we would just hold it for the next 10 years. So we're to some extent, just risk managing that position, but we'll gradually sell out it over, you know, multi-year period.

• 32:38Harry Stebbings?

  Scott, I believe you were one, well, the only allocator to suggest to Sequoia that maybe the eternal and evergreen funds were not optimal. How do you think about and reflect on that? And did you, did you kind of sit back and go, wow, this is a bold move as you were doing it?

• 32:54Speaker 00

  I mean, it was controversial enough that we discussed it with the board. I mean, they're great investors. They're great people. And they've obviously made LPs a ton of money over long periods of time. Like it didn't fit super well into our kind of co-investment model. So they weren't great partners for us at that point in time. And, you know, it was probably detrimental to some LPs when they switched that structure. And we really haven't followed the firm as closely since then. But hey, those guys will do great over long periods of time.

• 33:21Harry Stebbings?

  Scott, I'm so sorry to be so blunt. You don't fricking turn down Sequoia. Like you just, you just don't do it. I really like you because you're blunt, you're honest, you're just a good dude. But like, what are you doing? Even, even if they won X, the point is you're, you're close to the green leaf. And goodness comes from being close. It's like the genie in the lantern, you know, in the cartoons. Maybe don't rub it.

• 33:47Speaker 00

  No, I'm sure it was a mistake if you look at the returns that they've generated, but we've done just fine.

• 33:53Harry Stebbings?

  Did every LP just come to you and be like, wow, that was so bold.

• 33:58Speaker 00

  You know, it was funny. There was a bunch of LPs that called and we expressed, you know, our view. And I think everybody complained about it, but everybody did it at the end of the day.

• 34:08Harry Stebbings?

  I have so many LPs that call us up because we have a lot of data on the managers that we interview. And they will say, I can't believe it. And they name a big mega platform. They make me do the India fund, the China fund, the bio fund, the crypto fund, the games fund. I can't believe it. I can't believe it. And I say, so did you do them? And they go, oh yeah, of course we did it. Oh yeah.

• 34:29Speaker 00

  Yeah. And we just want to do that. We'll just, we'll find some other place to put capital.

• 34:33Harry Stebbings?

  Is it a big decision for you to churn? Like, do you agree with the three fund policy for fund commitments? Which is traditional in venture being LPs will commit to three to give managers enough time and room to prove themselves or not?

• 34:46Speaker 00

  Yeah. I mean, like we don't have a hard commitment. Probably we're committing to more than three funds. But we will, as soon as like there's something for us to go and underwrite, you know, and we, we're fortunate that we don't have that many partners. So we typically know their portfolio companies relatively well. And we'll start making our own judgment calls on what we think the quality of the underlying portfolio is early on. And if we, if we think there's a big disconnect on, you know, between our view of the portfolio and the partner's view of the portfolio, then, you know, we won't stick around. But that's super rare. I mean, typically we have some view before we invest.

• 35:20Harry Stebbings?

  When you review those decisions to not do a fund, what is the dominant reason? What's the number one most frequent reason why you will churn?

• 35:29Speaker 00

  Discipline around valuation.

• 35:31Harry Stebbings?

  Wow, that's bold. But it's bold because you don't know with the greatest of respects. And so the best companies often look expensive at the time, but very cheap in hindsight. And so for you to take a snapshot decision and say that company is overpriced is bold, close to it being done.

• 35:48Speaker 00

  Yeah. I mean, it's typically, it's not just one example. Like we, we had one partner that I'm not sure he found a hundred times revenue deal that he was willing to turn down. Like it just didn't exist. And for something to trade at a hundred times revenue, it has to be, you know, an exciting company. I get that. But for us, like, that's not what we want our capital to be used for. We want discipline around valuation, you know? And you mentioned Lee Fixell, like, you know, I think he's super pragmatic. He'll obviously, you know, pay up and he's participated in some of these great companies that are huge winners. But he's also very pragmatic about, you know, when things get too frothy, stepping away.

• 36:26Harry Stebbings?

  Do you think we should give managers forgiveness, patience for deploying funds much faster than they said they would? Scott, me and you are both old enough to know that every manager says three years and every manager right now is coming back 12 to 18 months later saying, Scott, I'm so sorry. I'm so sorry, but it's the best time ever to be investing. It's the best time ever. New intelligence, intelligence. Should we give them forgiveness?

• 36:48Speaker 00

  You know, if we think that they're deploying capital at really high returns, like we have no problem with really fast deployment. And if we think if they're deploying capital at poor returns or poor expected value, then we don't care how fast it's deployed. That's what I would say. We have a bias for smaller funds. Like we'd much rather have someone who raises, you know, a billion dollar fund when they could raise four billion and, and comes back every 18 months than, than someone who raises 10 billion and comes back every three years. We, we just think like the ability to write like a small check in a venture portfolio and have that be a super meaningful outcome for the whole portfolio. You know, a fund returner is, is much easier on a billion dollar or less fund than it is in a $10 billion fund.

• 37:33Harry Stebbings?

  Do you look at it through the look through perspective being if I have a billion dollar fund and I get 10% in every company that I invest in? And you say, well, we're a hundred million dollar check of your billion dollar fund. Our look through, obviously I'm just explaining it for everyone listening. You've got this already is 1% in every underlying company. Is that how you think about it?

• 37:54Speaker 00

  That's exactly how we think about it. We hardly ever talk about like fund of performance. We, we only really talk about the underlying exposures in the portfolio. So we aggregate everything up and we know that we have X dollars of SpaceX or Cerebras or Anthropic in the portfolio. And that's, that's how we think about it.

• 38:12Harry Stebbings?

  Can I ask you, on your like cerebrus, how do you think about performance being challenged? And I'm not saying to comment on cerebrus at all, but when you have a company that is hit by bad tailwinds in the public markets, how do you think about whether the stick and hold are actually a fiduciary duty to just cash your chips in?

• 38:30Speaker 00

  Yeah. I mean, Cerebras specifically, like for us, that, that was a really big position at the IPO. And so we took some chips off the table and put some hedges on even pre-distribution. But we like Andrew and the team, so we'll continue to hold some of that. And I think, you know, it's, if you look at the current kind of KPIs of the business relative to expectations going out the next four or five years, it's tough to justify the valuation even at 25, 30 billion, wherever it's at today. Based on what they've done the last 12 months, you're, you're betting on the, the come, so to speak. So that, that company has a lot to prove, but it's clearly a great company. And we have lots of confidence in, in Andrew and his team to produce good results over the next decade.

• 39:08Harry Stebbings?

  Scott, if you could do anything without retribution from any stakeholders, students, board, team, what would you do differently?

• 39:16Speaker 00

  You know, I would, I would probably, there's this natural tension between what, like, we're here to support the mission of the university and that's why we exist. But I also think like a 5% payout in certain market environments is, is tough long-term, depending on gift flow. So I've, I've probably smoothed the payout over a longer period of time. But I understand that tension and, and, you know, it's great to grow the endowment and be able to see the impact on the institution. So I think that's a natural tension. I, I don't think there's really much at Wash U that, if it makes sense for, for the stakeholders and for the team, like we've been able to accomplish everything we wanted to accomplish.

• 39:55Harry Stebbings?

  Scott, you've seen many cycles now. You're a pro. Does this have a shakeout? Or do we keep going on the meteoric wave that is super intelligence and AI?

• 40:04Speaker 00

  Yeah, well, I, I think there will be a shakeout. I don't know what the timeline of that is. Like some of these industries that have just had massive runs, like historically they were not great businesses, you know? And that was for like three decades. They were businesses. That probably barely return their cost of capital. And at some point, they'll go back to being not great businesses. But in the short term, you know, if you used to sell a chip or memory for $3 and now you sell it for $30 and all that excess just falls to the bottom line. I mean, I think you see that in the multiples. Like, I think some of these industries, right? You you buy them at very rich multiples and you sell them at low multiples because that's how cycle companies work. But how long the cycle actually lasts, I think that's anybody's guess.

• 40:45Harry Stebbings?

  Can I ask you, given what we said earlier, you mentioned like new bank or say, I'm just choosing like like an Uber or an Nvidia of the world. These are comparatively very cheap companies based on a fundamentals basis, actually, today. And then the privates are exorbitantly priced if one looks at fundamentals. And then I look at your statement earlier of wanting to be 70 to 80% in privates. And I just try and judge.

• 41:08Speaker 00

  Yeah, for us, we are deploying all of this stuff that we're generating liquid back into public markets right now. So like 70 or 80%, like if we didn't have any liquidity constraints, I think over time privates would grow as a percent. I mean, we're at the end of our fiscal year, we were 70% in privates. But a bunch of that has become liquid. So we're redeploying that. And we think the opportunity set in public is particularly like non-AI, AI infrastructure related publics. It's a really good time to be investing in in sectors completely that we think are relatively protected, if not immune from AI.

• 41:45Harry Stebbings?

  It's a bit of a blunt question, but you've had such a meteor, like $11 billion is an incredible capital accrual value appreciation for for Wash U. And it's it's an amazing journey. You could do anything now, Scott. You could have every trillionaire, billionaire in the world pay you an exorbitant amount of money to join you on their super yacht and run their family office. With respect, why?

• 42:09Speaker 00

  It's actually, it's a lot. So in the nine years I've been here, we started roughly, say, eight. We've generated $17 billion of profits on that original eight billion and we've paid out roughly $5 billion to the university.

• 42:21Harry Stebbings?

  I I mean, that's just showing off, Scott. Okay.

• 42:25Harry Stebbings?

  But you but you could. And obviously, Wash U is an incredible institution, amazing, but like, humans are humans.

• 42:31Speaker 00

  Yeah.

• 42:31Harry Stebbings?

  Why do you stay in?

• 42:33Speaker 00

  I'm super happy here. I've got a great board, a great administration, a great team, you know, and I make money. I'm well compensated. So it's a great place to be. And I, yeah, I obviously had opportunities to go elsewhere, but I'm very happy at Wash U. If you if you've spent time with my board and and the chancellor of the university, like, this is a great place to work. And, you know, I think maybe more than half of your your fulfillment and enjoyment coming to work every day is who you get to work with. And, you know, from that standpoint, I'm just super fortunate. And you've spent time with my team like this. It's a really great team.

• 43:10Harry Stebbings?

  I know I have. They're amazing. Listen, I think before we do a quick fire, you learn from sometimes mistakes. We've talked about the amazing successes. When you reflect back on the, you know, $11 billion that we've added, what did you not do in that journey that you wish you had done? Be it renewables, be it more in privates, be it you name it. What did you not do that you wish you had done?

• 43:30Speaker 00

  Yeah, I think our biggest mistake was not adding to our winners, just because whether you like get frame of reference bias. So we invested in this company at $2 billion and now it's $5 billion. So we didn't add to it. And obviously, like, you know, the position was twice the size at that point. But, you know, we had we had times where we could have invested in stuff that I think was still probably our highest conviction investment. And we didn't do it either because, you know, it had grown in the portfolio or the price had just gone up. And and that was that was my mistake. And it's cost us billions of dollars. So that that's probably the biggest learning over that timeframe.

• 44:05Harry Stebbings?

  What did you do that you wish you hadn't done on the flip side?

• 44:08Speaker 00

  Oh, well, I mean, there's a there's a lot. There's a lot of individual funds I wish we hadn't done. Obviously, we made tons of mistakes on the co-investment. You know, it's an 80/20 rule where 20% of your investments have generated 80% plus of the profits. We're not quite that bad. But but yeah, we've made tons of mistakes. You know, we've added capital to companies that, you know, probably we should have let die, but we thought there was still a chance they could recover. We've made every investing mistake you could you can think of.

• 44:36Harry Stebbings?

  Is there one that really stands out?

• 44:38Speaker 00

  Yeah, I mean, our biggest mistake, we had put in like mid 2020, we had put a huge a huge packet of kind of LP interest into the secondary market. And the markets had this huge run at the end of 2020 going into 2021. And we decided to hold off because we knew that all those companies were going to have just massive write-ups in the December quarter. So we were waiting for the first quarter to basically, you know, maximize the value on the secondary sale of those assets. And then, you know, that was a short-term bubble in venture markets. So like, we were just essentially being greedy and we had the chance to sell at really good prices. And we we didn't take it, you know, pretty much by the like, I think it was probably mid 2021.

• 45:20Speaker 00

  And so that 2021 period, we we were up, I think, 65% and and obviously wrote a bunch of that back down all the subsequent years. But we had a chance to get out of a bunch of that stuff at really good prices and we didn't do it.

• 45:33Harry Stebbings?

  And so you wish you'd done it.

• 45:34Speaker 00

  Yeah, for sure. Yeah. I mean, we were probably taking like 80, 90 cents on the dollar, but we we were pretty sure that the bubble wasn't going to last forever. And and so we should take chips off the table.

• 45:44Harry Stebbings?

  One of my dearest friends, who's a very successful investor, told me, you must be fearful when others are greedy and greedy when others are fearful. And it sounds so obvious, actually very difficult in hindsight.

• 45:57Speaker 00

  Yeah, I think we needed another three months or something. And those, it was a big secondary sale.

• 46:03Harry Stebbings?

  Do you care about Europe? I had David Moorhead on from Baylor. He was, I mean, he laughed at me in all honesty, when I said about Europe. Do you care?

• 46:12Speaker 00

  Yeah, it's mostly like idiosyncratic ideas, but we like Europe. And we found lots of interesting stuff to do in Europe. And it's a super interesting market now. We were recently invested in a fintech company in Spain.

• 46:25Harry Stebbings?

  So whoa, whoa, whoa, pause, Scott. Europeans don't invest in fintech companies in Spain. What what the Wash U doing investing in a fintech company in Spain?

• 46:35Speaker 00

  Well, by one of our partners, and we invested, you know, in another, I mean, it's more of a global fintech company, but based in London and Singapore. But we've got out in Europe recently. I mean, the thing is like for the same quality of asset. And there are good companies over there just because like the market as a whole has struggled. We find that there are great companies and certainly non-tech related companies. You know, if they were based in the US and had the same kind of KPIs, growth and unit economics, they would trade at huge revenue multiples. And in Europe, they trade at, you know, small earnings multiples.

• 47:08Harry Stebbings?

  My question to you on like some of these companies, Europe or Asia, is actually, everyone's like, oh, the Europe discount or the Asia discount. Well, if there's always a discount, it's not a discount, it's just the it's just the price.

• 47:23Speaker 00

  Well, there's, there's price and value. I think you got to separate the two, right? If we think companies are like, you can buy it at 100, we think it's worth 300 and we think it's compounding value at a significant clip. Like, we think that's a much better investment than in buying something in the US that trades at five times the multiple that's compounding value at the same rate. Does that make sense?

• 47:43Harry Stebbings?

  It does. So people understand, how do you determine the difference between price and value? Value is what it's worth and price is what someone's willing to pay.

• 47:51Speaker 00

  Price is what you pay, value is what you get. And it's very subjective. And I think you have to be pragmatic about valuation. But for the same quality of assets and you can think same growth rate. And, you know, over a long periods of time, like what the core KPIs of the business will drive returns more than the original entry multiple. So if you get a much cheaper multiple on the entry price and you get the same growth over a decade, you're going to do a lot better.

• 48:15Harry Stebbings?

  Do you have much in China?

• 48:17Speaker 00

  We don't. We don't have a ton in China. We have an office in Shanghai, so we we cover that region really well. We have two guys there permanently. And we certainly look at a lot of stuff in China. We probably have more than our peers in China. And we've been active, you know, since Jamie Dimon said China's uninvestable. We've added a decent amount of capital. And I think China was one of those markets. You know, the geopolitical risk was always there. The fact that it was a little bit more visible, like, if you spend enough time in Asia, you know, you want to do stuff that you think is either under the radar or supported by the broader political parties. So I think you have to be rational there. But when you can find a good company that can actually return capital to shareholders

• 48:58Speaker 00

  and and, you know, has a pragmatic view on the world, we think China is a great place to invest.

• 49:04Harry Stebbings?

  Why does everyone else not then? I I know, again, I so enjoy this show. Why do people? People often ask me like, why do you love doing the show? I'm like, because I have conversations like this. Dude, the world is saying no, run. They kill education overnight. Whole sectors get taken over. Xi Jinping has like unlimited power and control. And everyone's like, get out. Respectfully, you know, you're not. What do you see that others don't?

• 49:31Speaker 00

  Well, you see that, but like, you know, we've seen worse behavior in very developed markets, like in the UK, where there was like offshore, like in the northern part of the UK, where they had the offshore oil and whatever, energy assets. And they took the tax rate from 25% to 75%. I mean, that's basically confiscating half the company. I've never seen that behavior in China. And they more or less did the same thing in Norway with certain types of assets. Like, if they take the tax rate from 25 to 75%, that's the equivalent of confiscating half the company.

• 50:02Harry Stebbings?

  Do you mind that? And I bet you weren't expecting to go here, but my knowledge of investing in Chinese funds is actually surprisingly solid.

• 50:10Speaker 00

  Yeah.

• 50:11Harry Stebbings?

  When you invest in a Chinese fund, there's a dollar denomination and there's like an R B denomination. And now the average is $1 to 9 R B. Do you mind that split? And if you're not allowed to invest in chips and some of the most exciting things with the dollar-denominated fund, does that not take out all the alpha of investing in China?

• 50:31Speaker 00

  Yeah, I mean, I think there's a natural, like, some agency problems, but I think for the most part, the entrepreneurs prefer dollar. And it's a way for them to get assets offshore if they're in the V I E structure. So you still get access to really good companies and that's a good good market. And we don't have a ton of funds in China, but we're certainly not afraid of it. And we we've done more kind of co-investments and one-off stuff in China over the last five years. But yeah, it's a huge market, is what I would say. But you have to navigate it on the ground and be realistic.

• 51:00Harry Stebbings?

  Do you have to have a team on the ground to do China?

• 51:02Speaker 00

  I don't know if you have to have a team on the ground, but you certainly have to invest through local partners.

• 51:08Harry Stebbings?

  Listen, dude, I want to do a quick fire round with you. So I say a short statement, you give me your immediate thoughts. What fund are you not in that you wish you were in?

• 51:17Speaker 00

  Benchmark, probably.

• 51:18Harry Stebbings?

  You're not in benchmark?

• 51:19Speaker 00

  We're not, no. I mean, I wish we had like a bigger allocation to the early-stage founders fund as well.

• 51:26Harry Stebbings?

  How did you get? You got Cerebrus through Foundation?

• 51:29Speaker 00

  We got Cerebrus through a fund called Eclipse.

• 51:32Harry Stebbings?

  Oh, yeah, Leo. You can put all of your money in only one fund. Which one do you choose?

• 51:39Speaker 00

  Private or publics?

• 51:40Harry Stebbings?

  One each.

• 51:41Speaker 00

  I will say addition of our core partners. I think he's the best investor in our portfolio. He's just very pragmatic. He's disciplined around price, but will pay up for super high quality assets. And I think his underwriting process and just the way he dissects companies and business models and management teams is really impressive. And so of the people I've spent a lot of, a lot of time with, I think he's the, he's probably the most talented investor in our portfolio.

• 52:08Harry Stebbings?

  Are you ready for a hard one? You have an amazing board. Who would you most like to have on your board? Who you don't have on your board today?

• 52:15Speaker 00

  Probably it would be somebody with real industry expertise like Elon Musk or Thomas Reardon, somebody who I think has like real deep industry knowledge that we could use and could help us diligence a variety of investments. I mean, as it is, my board is really great at that.

• 52:35Harry Stebbings?

  Which other endowment fund do you most respect? And why them?

• 52:40Speaker 00

  There are several, um, you know, I think what Eric's accomplished in Michigan, what Robert's accomplished at Virginia, Seth at MIT, Jane, now Josh at Brown. Like those, those teams have just done unbelievably well over the last 20 years. And I think that's, uh, you know, ultimately that's what you're judged on is the, you know, multi-decade performance of the portfolio.

• 53:00Harry Stebbings?

  Do you have like a CIO dinner party? Like all get together and shoot the shit?

• 53:05Speaker 00

  I've been involved in like various little groups over time and a couple like one-off chat groups where I keep track with some of my peers. And, you know, my daughter goes to school in Boston, so I'll meet some of the folks in Boston when I go out there. But, but no, there's, there's not like an organized, like regular CIO dinner. I think most of us spend enough time on the road that it's, uh, that'd be tough to organize.

• 53:27Harry Stebbings?

  You've worked with incredible managers. You've met and yeah, worked with incredible founders. Final one, when we think about the best advice that you've been given that sticks with you every day, what would the best advice you've been given be?

• 53:40Speaker 00

  The best advice, I tell this to like kids all the time, but, and I think it's very true. And it, it extends from like, I don't know who first said it, but you should always try and be the best at things that require no talent. So like showing up, being curious, working hard, being presentable, asking good questions, being respectful, being kind, like all those things that require no talent. I think contribute a lot to, to success over time.

• 54:05Harry Stebbings?

  Do you know, and I also think it's appalling when today you are equipped with tools that allow you to be so good at those things so easily. You can go to chat GPT before an interview with Scott for a job and say, give me three things about Scott that will show that I've done my work and really impress him. And it'll tell me about an incredible investment you did at Grinnell, a quote that Adam said about you and something else. And if I say those in that meeting, you'll be like, wow, Harry did his work.

• 54:32Speaker 00

  Yeah, no, it should be easier than ever to do those things.

• 54:35Harry Stebbings?

  Scott, I do the show for shows like this. I can't thank you enough for A agreeing to do it, but B being so open, transparent, fantastic. Really, this has been a joy.

• 54:45Speaker 00

  Yeah, well, thanks for having me. It was a lot of fun.

• 54:49Harry Stebbings?

  But before we leave you today, today I want to tell you about how the first AI law firm, Crosby, helped us close a big sponsor. As you know, some of the biggest companies in the world advertise on 20 VC. My British dulcet tones clearly convert well. I was working to close this big sponsor and they wanted to get through legal review quite quickly to close the deal. Crosby turned red lines around in three hours and caught major issues that would have caused us serious problems in the future. Crosby combines AI, some of the best engineers in the world from companies like Ramp and Stripe, and some of the best attorneys in the world from top 10 law firms. Customers get the best of both worlds. An elite human attorney reviews every contract, but they move incredibly quickly, returning red lines in under four hours.

• 55:34Harry Stebbings?

  They help the fastest growing companies like cognition, Ramp and Clay close deals in hours, not weeks. Learn more at crosby.ai/20vc. If you want to redline NDAs, MSAs, DPAs and any other procurement contracts faster, go to crosby.ai/20vc. It's speed that you can really trust. While Crosby keeps your numbers sharp, One Mind keeps your customer conversation sharper. Our friends over at One Mind have a hot take. The B to B GTM model we've been using for, well, the last 20 years, it's collapsing. Predictable revenue isn't so predictable and buyers are just tired of explaining themselves

• 56:15Harry Stebbings?

  at every handoff between SDRs, AEs, CSMs and support. You feel it in your board reporting, your sellers feel it in their coverage, your buyers feel it as they wait for answers. Well, enter One Mind and their GTM superhumans. HubSpot, Alteryx and ZoomInfo are just three of the tech companies using One Mind's superhumans to qualify buyers, ride along with sales reps and coach customers. Whether you're ahead of target or under pressure to increase bookings ahead of hiring or behind on target even, and need every rep to hit quota, One Mind is the solution. See for yourself at onemind.com. That's one mind, M I N D dot com.

• 56:57Harry Stebbings?

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• 57:38Harry Stebbings?

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