Oct 31, 2022 · 49m · news
Brian Singerman: How I Became a Partner at Founders Fund, Why We Put $400M into Anduril | 20VC #943 · 20VC with Harry Stebbings
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In this episode of the 20VC podcast, Founders Fund General Partner Brian Singerman shares his blunt, contrarian insights on venture capital mechanics, navigating market downturns, and the firm's unique "anti-clone" hiring and high-conviction investment strategies.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 17.5% of the talking time here. How this is scored →
Harry as informed peer 3.6 Guest teaching 4.0 Guest disagreement 3.4 Harry pushing back 3.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:48 Blunt dismissal of LP cross-fund concerns
Brian forcefully rejects Harry's question about LP resistance to cross-fund investing by bluntly stating that LPs who dislike the practice simply do not have to invest in Founders Fund.
Hardest push from Harry ▶ 6:48 Direct pushback on 2021 deployment speedHarry directly challenges Brian on whether Founders Fund made mistakes by deploying capital too fast during the 2020-2021 tech boom.
Biggest teaching moment ▶ 32:00 Fund sizing math for emerging managersBrian breaks down counter-intuitive fund economics, educating Harry and emerging managers on why fund size dictates minimum check size targets.
Harry holds his own ▶ 7:55 Harry's post-boom VC lessonsHarry demonstrates concrete industry understanding by articulating his own two distinct lessons on taking cash off the table and ignoring next-round investor preferences.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| From Google Engineer to Founders Fund Partner | 1 | 1 | 1 | 0 | Harry welcomes Brian and asks for a brief overview of his journey from Google engineer to GP at Founders Fund. Brian casually outlines his path from angel investing in early YC batches to joining Founders Fund during the SpaceX deal. | |
| Macroeconomics and Pricing Lags in Private Markets | 3 | 4 | 3 | 3 | Harry asks if early-stage VCs can ignore macroeconomics given 10-year horizon cycles and proposes a 3-stage market breakdown. Brian reframes the concept, explaining that private market prices lag public markets significantly and creating price mismatches. | |
| Disciplined Capital Deployment During Market Uncertainty | 4 | 3 | 3 | 5 | Harry challenges Brian on whether Founders Fund should be buying low during downturns and explicitly asks if they deployed capital too fast in 2021. Brian admits they went too fast in 2021 but points out it was their most successful distribution year. | |
| Post-Boom Lessons for the Next Generation of VCs | 5 | 5 | 5 | 4 | Harry shares two personal post-boom lessons regarding taking cash off the table and ignoring next-round preferences, then pushes Brian to list specific target companies he failed to back. Brian firmly refuses to name companies and reiterates his total focus on upside maximization. | |
| Evaluating Market Size versus Founder Quality | 4 | 3 | 2 | 3 | Harry shares his experience losing money in bad markets despite great founders to question Brian's founder-heavy thesis. Brian acknowledges market size is critical for multi-billion dollar funds while maintaining founder quality is 80-90% of the decision. | |
| The Predictability of Winners at the Seed Stage | 4 | 5 | 6 | 4 | Harry asks about reserve allocation and LP resistance to cross-fund investing. Brian forcefully dismisses LP objections, arguing that LPs care about making money and can choose not to invest if they dislike cross-fund strategies. | |
| How Brand and Success Impact Sourcing and Getting into Deals | 4 | 4 | 3 | 3 | Harry cites conversations with Sequoia leadership about sourcing challenges to ask how Founders Fund views deal access. Brian breaks venture down into seeing, picking, and getting in, emphasizing that sourcing gets harder with age and requires continuous network adaptation. | |
| Adapt or Die: Founders Fund's Unique Anti-Dogmatic Hiring Strategy | 3 | 4 | 3 | 2 | Harry asks if Founders Fund experienced internal struggles similar to Benchmark's historic tough periods. Brian explains their resilience comes from avoiding firm dogmas and hiring partners with non-overlapping, anti-clone strengths. | |
| Unstructured Mentorship and Exploiting Strengths | 3 | 4 | 5 | 3 | Harry asks how Founders Fund mentors new partners without traditional structure. Brian rejects traditional board involvement and formal mentorship, stating he prefers strategy dinners and leveraging unique individual strengths. | |
| Evaluating Moats and the Zoom-Era Sourcing Deficit | 4 | 5 | 4 | 3 | Harry asks about misjudging moats and downside structural protection. Brian argues downside protection is irrelevant in venture capital because minor returns resemble zero returns when managing multi-billion dollar funds. | |
| Fund Size Realities: Advice for New Managers | 4 | 5 | 3 | 3 | Harry questions the feasibility and pressure of writing massive check sizes. Brian advises emerging managers to keep funds small enough to write checks equal to 25-30% of total fund size. | |
| The Anti-Clone Partnership Model | 3 | 4 | 3 | 3 | Harry asks about loss ratios and Brian's style evolution. Brian rejects the importance of loss ratios in venture and explains that Founders Fund deliberate partnership model pairs complementary specialists across macro, finance, and company creation. | |
| Embracing Sector Agnosticism and Identifying Talent Holes | 5 | 5 | 5 | 4 | Harry probes pre-seed trust, backchannel tactics, and advising shell-shocked junior team members post-crash. Brian offers blunt takes, asserting that VCs relying on business plan analysis should leave and that he aims to maximize his dollars-to-fame ratio. | |
| The Role of Outside Board Members | 3 | 4 | 2 | 2 | Harry runs a quick-fire segment covering effective board members and the thesis behind Founders Fund's $400M total investment in Anduril. Brian details the defense sector's lack of innovation and the unique combination of Palmer Luckey's product genius with strong government relations. |
Statements from this episode (37)
Singerman: Joined Founders Fund after Sean Parker introduction during SpaceX deal evaluation
“And that's when I met Sean Parker and we became friends and he. Said, Hey, why don't you check out what we're doing at Founders Fund? And I came in and that's when we were considering a little investment in a company called SpaceX and, you know, said, this is …”
Singerman: Applying 'buy low, sell high' to venture capital makes no sense
“So this concept of buy low, sell high, like using regular stock market phrases in venture to me just doesn't make any sense.”
Singerman: Private startup valuations lag public market corrections
“There's such a huge price mismatch between, let's say a company's last round of financing and what the macro Is that it's really difficult to invest right now simply because private companies lag public markets in terms of pricing by quite a bit.”
Singerman: Even Peter Thiel cannot accurately predict macroeconomic trends
“My partner, Peter Thiel is. Brilliant macroeconomist and probably the best in the business at this, and he can't even predict this, right? Like predicting macro is extremely hard.”
Singerman: Venture capital is about backing top companies, not cheap deals
“With venture being about upside maximization, Are you really just looking for, like, a good deal, or do you just want to invest in the best companies? And I would argue it's all the latter.”
Founders Fund refuses to pay peak 2021 valuations for top startups
“If even the best companies want You know, end of 2021, beginning of 2022 prices where other comps in their market have gone down by 80%, then we're just, we're also just not going to play that game. Like, we don't have any pressure to invest capital.”
Singerman: 2021 Was Founders Fund's Best Year Ever
“In 21, that said, like, You know, we had great, we had our best year ever in 20, 21, right?”
Founders Fund distributes shares immediately because they lack public market expertise
“Our strategy has always been to distribute shares slash capital right when we can in companies simply because we don't think we know the public markets better than anybody else.”
Singerman admits Founders Fund deployed capital too quickly in 2020 and 2021
“We've had so many discussions about this and about what the last couple of years means, and did we go too fast in 20, 21? And of course we did”
Singerman slows investment pace due to inflated startup valuations
“And right now, I've personally slowed down investing a ton simply because you cannot get a good price on the best companies.”
Singerman: I never buy public stocks
“This is why I don't do public. I don't buy any public stocks ever.”
Harry Stebbings: Lost money on an investment for the first time in 2022
“So I lost money for the first time earlier this year, and my takeaway was actually that no matter how world class the founder, no matter how brilliant the team is, if they're in a market which is just inherently fucked, challenging, vulnerable, no team can get…”
Singerman: Founder quality accounts for 80% to 90% of investment thesis
“Founder quality is still 80 to 90% of my investment thesis, right?”
Singerman: Founders Fund clearly saw Airbnb's huge network effect early on
“We definitely saw at the time that the network effect on Airbnb was, at the time, was huge, and yeah, the market was it was clear that they could penetrate into the travel market, or even the lodging market, which I guarantee you, Harry, is huge.”
Singerman: No one can predict $100B companies at seed stage
“I don't think anybody can see that something is going to be, or they can say they've got their thesis and I, you know, whatever, but like, I don't think you can predict a hundred billion dollar companies at the seed stage. That's silly, but you can predict, He…”
Singerman: Founders Fund never plans or calculates capital reserves for follow-ons
“I don't think about reserves ever. Period. Like, I literally never think, I never think a second about reserves.”
Singerman: Top venture funds back breakout companies across successive fund vehicles
“If we are good investors, we raise another fund, which we've done, and there's no reason the best companies can't go across multiple funds.”
Singerman: VC fund returns earn complete freedom from LP interference
“When we've made money for people, you have a lot of more latitude on how you can invest money. So you've got. The freedom to do whatever you want without people breathing down your neck.”
Singerman: A strong VC brand creates noise and hinders deal sourcing
“Brand can be noise and detrimental for the seeing part for the diligence, you know, for the you know, seeing companies part, but the for the sourcing”
Singerman: Deal sourcing grows harder as venture capitalists age and networks decay
“The part that's just harder and harder over the years as you do this longer and quite frankly get older is the seeing. You've got to keep your networks fresh. You've got to like make sure that you're somehow still connected, right? Cause your networks get stal…”
Singerman: Founders Fund partners each execute distinct individual strategies
“The way that we do things at Founders Fund is everybody runs their own strategy based on what they are the best at.”
Singerman: Founders Fund Refuses to Hire 'Clones' or Generic VC Talent
“If it's a unique strategy that is differentiated from the current partners that are here, we are interested in hiring that person, and that's really paid off. Like our focus on not hiring clones, our focus on not hiring just people who are generically good, ou…”
Brian Singerman Dislikes Startup Board Meetings and Prefers Strategy Dinners
“I can't stand boards. Private company boards, like, I would much rather do strategy dinners with founders, and they know that.”
Singerman: Venture capitalists should optimize for upside, not downside protection structures
“You're trying to maximize your upside. You're not trying to minimize your downside. This is why I've never understood these like, oh, we're going to do a round with three X participating preferred and around with a whole bunch of structure. I mean, like I get …”
Singerman: I am terrible at venture capital without in-person founder meetings
“Meeting a founder in person is just critical. I was terrible at this job during COVID, right? Like when you couldn't meet founders in person. I'm just terrible at this job without being able to meet founders in person.”
Singerman: 3x returns on $10M checks are meaningless for multi-billion dollar funds
“Our funds are multi-billion dollars, right? Like if we have a. Ten million dollar check, there's no real difference between that going to zero or that going to. Thirty million. I mean, there's just no difference between those numbers.”
Singerman: Fund size should be 3-4x your maximum comfortable single check
“Raise whatever fund size you can in order to like be comfortable writing a 25 to 30% of fund size check, right? Like if you're not comfortable writing a more than a five million dollar check, do not raise more than a twenty-five million dollar fund.”
Singerman: I am comfortable writing single venture checks up to $500 million
“Where I'm best is at writing these two, three, four hundred million dollar checks. And so, you know, if I'm using my own, practicing what I preach, it's like, if I'm comfortable writing a, let's say the most, the biggest check I'm comfortable writing is a five…”
Singerman regrets not putting $500M into Airbnb's $1.5 billion valuation round
“I wish I had written 500, I wish we had written a five hundred million dollar check into Airbnb at the, you know, one and a half billion dollar round instead of a, whatever, a hundred and fifty million dollar check.”
Singerman: Loss ratios do not matter for multi-billion dollar venture funds
“Loss ratios don't matter. Losing, I can't, you know, you don't want to lose a five hundred million dollar check, right? Because it's going to be then ridiculously hard for you to return that, to return multiples on that fund. Whereas, like, if you lose, in a f…”
Singerman predicts Founders Fund's $200M Anduril check will turn into $2B
“Enduro is going to be an extremely valuable company. I am, there's, yes, quite sure of that. We are not going to lose that two hundred million dollar check. That two hundred million dollars will turn into, you know, two billion.”
Singerman: Investors Who Demand Perfect Information Will Fail in Venture Capital
“If you are the type of person that is going to do work, work, work, work, work, work, work, work, work, and make sure it's perfect before you invest or make sure it's perfect before you hire, you are just not going to do well in this business. Period.”
Founders Fund Distributed Holdings to LPs at Late 2021 Peak
“We don't have hubris about knowing the public markets better than anybody else with the fact that we were able to distribute. You know, end of 2021, when a lot of people kind of held was worked out in our favor this time.”
Singerman: Personal Goal Is Maximizing Return-to-Fame Ratio
“I mean, I try and my life strategy is to maximize my dollars to fame ratio. Like I want to make a lot of returns for myself and LPs and have the minimal amount of fame possible, right?”
Singerman: Best board members are sector door-openers, not strategists
“Usually the best board members, not, not necessarily investors, right, but the best board members are ones who, Really know the sector that the company is, and know people in that sector really well, such that they can easily connect said company with other pe…”