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Jun 5, 2017 · 24m · 20vc

20VC: Founders Fund's Brian Singerman on Why VC Is About Upside Maximisation Not Downside Minimisation, Why There Is No Right Way To Do Venture and Why They Do Not Have Monday Morning Partner Meetings At Founders Fund

Brian Singerman · 13m spoken Harry Stebbings · 9m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Twenty Minute VC, Harry Stebbings interviews Brian Singerman, Partner at Founders Fund, who discusses his transition from Google engineer to top venture capitalist. Singerman shares key insights into Founders Fund's generalist investment philosophy, upside-maximizing strategy, and unconventional operational structure.

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 39.2% of the talking time here. How this is scored →

Harry as informed peer 3.2 Guest teaching 4.8 Guest disagreement 4.0 Harry pushing back 2.4
05100:0010:0020:002:36–7:58 · Harry as informed peer 2/10 Brian Singerman's Background and Entry into Venture Harry guides Brian through his career transition from Google engineer to angel investor and Founders Fund partner. Brian explains how his mindset evolved away from rigid investment dogmas toward complete sector agnosticism.7:58–10:03 · Harry as informed peer 3/10 Evaluating Founder Execution and Business Moats Harry asks how generalists scale knowledge into complex technical domains like oncology. Brian reframes the premise, arguing that domain expertise is unnecessary when evaluating founder execution, strategy, and business moats.10:03–13:03 · Harry as informed peer 3/10 Upside Maximization and Founders Fund's Decision Process Harry asks about balancing upside maximization with downside minimization. Brian presents a strong contrarian stance, arguing that downside protection terms are completely irrelevant in venture capital due to power law returns.13:07–16:22 · Harry as informed peer 4/10 Seed-Stage Bets and Managing Signaling Risks Harry raises industry concerns about seed-stage checks for large funds and the associated signaling risks. Brian defends early bets for building founder trust and explains how upfront communication mitigates signaling hazards.16:22–19:03 · Harry as informed peer 4/10 Non-Domain Investing and Complex Coordination Companies Harry presents guest criticisms regarding generalist software VCs entering complex non-traditional sectors like biotech. Brian forcefully rejects the critique and details how complex coordination companies build unclonable moats.2:36–7:58 · Guest teaching 3/10 Brian Singerman's Background and Entry into Venture Harry guides Brian through his career transition from Google engineer to angel investor and Founders Fund partner. Brian explains how his mindset evolved away from rigid investment dogmas toward complete sector agnosticism.7:58–10:03 · Guest teaching 6/10 Evaluating Founder Execution and Business Moats Harry asks how generalists scale knowledge into complex technical domains like oncology. Brian reframes the premise, arguing that domain expertise is unnecessary when evaluating founder execution, strategy, and business moats.10:03–13:03 · Guest teaching 5/10 Upside Maximization and Founders Fund's Decision Process Harry asks about balancing upside maximization with downside minimization. Brian presents a strong contrarian stance, arguing that downside protection terms are completely irrelevant in venture capital due to power law returns.13:07–16:22 · Guest teaching 4/10 Seed-Stage Bets and Managing Signaling Risks Harry raises industry concerns about seed-stage checks for large funds and the associated signaling risks. Brian defends early bets for building founder trust and explains how upfront communication mitigates signaling hazards.16:22–19:03 · Guest teaching 6/10 Non-Domain Investing and Complex Coordination Companies Harry presents guest criticisms regarding generalist software VCs entering complex non-traditional sectors like biotech. Brian forcefully rejects the critique and details how complex coordination companies build unclonable moats.2:36–7:58 · Guest disagreement 2/10 Brian Singerman's Background and Entry into Venture Harry guides Brian through his career transition from Google engineer to angel investor and Founders Fund partner. Brian explains how his mindset evolved away from rigid investment dogmas toward complete sector agnosticism.7:58–10:03 · Guest disagreement 4/10 Evaluating Founder Execution and Business Moats Harry asks how generalists scale knowledge into complex technical domains like oncology. Brian reframes the premise, arguing that domain expertise is unnecessary when evaluating founder execution, strategy, and business moats.10:03–13:03 · Guest disagreement 5/10 Upside Maximization and Founders Fund's Decision Process Harry asks about balancing upside maximization with downside minimization. Brian presents a strong contrarian stance, arguing that downside protection terms are completely irrelevant in venture capital due to power law returns.13:07–16:22 · Guest disagreement 3/10 Seed-Stage Bets and Managing Signaling Risks Harry raises industry concerns about seed-stage checks for large funds and the associated signaling risks. Brian defends early bets for building founder trust and explains how upfront communication mitigates signaling hazards.16:22–19:03 · Guest disagreement 6/10 Non-Domain Investing and Complex Coordination Companies Harry presents guest criticisms regarding generalist software VCs entering complex non-traditional sectors like biotech. Brian forcefully rejects the critique and details how complex coordination companies build unclonable moats.2:36–7:58 · Harry pushing back 1/10 Brian Singerman's Background and Entry into Venture Harry guides Brian through his career transition from Google engineer to angel investor and Founders Fund partner. Brian explains how his mindset evolved away from rigid investment dogmas toward complete sector agnosticism.7:58–10:03 · Harry pushing back 3/10 Evaluating Founder Execution and Business Moats Harry asks how generalists scale knowledge into complex technical domains like oncology. Brian reframes the premise, arguing that domain expertise is unnecessary when evaluating founder execution, strategy, and business moats.10:03–13:03 · Harry pushing back 2/10 Upside Maximization and Founders Fund's Decision Process Harry asks about balancing upside maximization with downside minimization. Brian presents a strong contrarian stance, arguing that downside protection terms are completely irrelevant in venture capital due to power law returns.13:07–16:22 · Harry pushing back 3/10 Seed-Stage Bets and Managing Signaling Risks Harry raises industry concerns about seed-stage checks for large funds and the associated signaling risks. Brian defends early bets for building founder trust and explains how upfront communication mitigates signaling hazards.16:22–19:03 · Harry pushing back 3/10 Non-Domain Investing and Complex Coordination Companies Harry presents guest criticisms regarding generalist software VCs entering complex non-traditional sectors like biotech. Brian forcefully rejects the critique and details how complex coordination companies build unclonable moats.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 90.1% · guest 9.9%0:00 · Harry 90.1% · guest 9.9%3:00 · Harry 20% · guest 80%3:00 · Harry 20% · guest 80%6:00 · Harry 32.9% · guest 67.1%6:00 · Harry 32.9% · guest 67.1%9:00 · Harry 28% · guest 72%9:00 · Harry 28% · guest 72%12:00 · Harry 17.1% · guest 82.9%12:00 · Harry 17.1% · guest 82.9%15:00 · Harry 31.8% · guest 68.2%15:00 · Harry 31.8% · guest 68.2%18:00 · Harry 23.9% · guest 76.1%18:00 · Harry 23.9% · guest 76.1%21:00 · Harry 68.3% · guest 31.7%21:00 · Harry 68.3% · guest 31.7%24:00 · Harry 100% · guest 0%24:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 16:46 Rejection of domain-specialization criticism

Brian forcefully dismisses the host's cited critique that software VCs shouldn't invest in complex non-traditional spaces, stating he doesn't understand the criticism at all.

 Hardest push from Harry ▶ 16:22 Challenging software VCs in specialized domains

Harry explicitly presents counter-arguments from other industry guests regarding software VCs entering complex fields like genomics without domain knowledge.

 Biggest teaching moment ▶ 10:10 Re-framing venture capital returns economics

Brian educates the host on fund economics, demonstrating why downside minimization terms on deals are completely unimportant compared to upside maximization on winning investments.

 Harry holds his own ▶ 14:00 Highlighting seed-stage signaling hazards

Harry demonstrates strong industry understanding by pressing Brian on the exact operational hazard of signaling risk when follow-on capital is not provided.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Brian Singerman's Background and Entry into Venture 2321 Harry guides Brian through his career transition from Google engineer to angel investor and Founders Fund partner. Brian explains how his mindset evolved away from rigid investment dogmas toward complete sector agnosticism.
Evaluating Founder Execution and Business Moats 3643 Harry asks how generalists scale knowledge into complex technical domains like oncology. Brian reframes the premise, arguing that domain expertise is unnecessary when evaluating founder execution, strategy, and business moats.
Upside Maximization and Founders Fund's Decision Process 3552 Harry asks about balancing upside maximization with downside minimization. Brian presents a strong contrarian stance, arguing that downside protection terms are completely irrelevant in venture capital due to power law returns.
Seed-Stage Bets and Managing Signaling Risks 4433 Harry raises industry concerns about seed-stage checks for large funds and the associated signaling risks. Brian defends early bets for building founder trust and explains how upfront communication mitigates signaling hazards.
Non-Domain Investing and Complex Coordination Companies 4663 Harry presents guest criticisms regarding generalist software VCs entering complex non-traditional sectors like biotech. Brian forcefully rejects the critique and details how complex coordination companies build unclonable moats.

Statements from this episode (12)

Assertion Partly supported
Y Combinator Demo Days Had Only 20 to 30 Attendees in 2007
“This is about when maybe 20 people would be at a Y Combinator demo day, maybe 30.”
Brian Singerman Jun 5, 2017 ▶ 3:14
Disclosure
Singerman's Early Fund Charged Zero Management Fees and 10% Carry
“We raised a fund called XGYC, no management fees, 10% carry, and invested in a bunch of fantastic Y Combinator companies in, in 20 oh seven, 20 oh eight.”
Brian Singerman Jun 5, 2017 ▶ 3:38
Insight
Generating Massive VC Returns Requires Non-Sector-Constrained Investing
“For my job at this fund is to generate massive returns. And for our funds, you simply have to invest in the world's most important companies in order to generate those returns. It doesn't need to be quick. It doesn't need to be overnight. But long-term, they n…”
Brian Singerman Jun 5, 2017 ▶ 6:28
Opinion
Maximizing VC Returns Requires Horizons Longer Than Standard 10-Year Funds
“I think if we're going to maximize returns, it would be over an even longer period of time.”
Brian Singerman Jun 5, 2017 ▶ 7:30
Disclosure
Singerman Bases His Venture Investing on Gut Feel and Reaction
“I am a reaction, a reactive VC, a gut feel based VC”
Brian Singerman Jun 5, 2017 ▶ 9:45
Insight
Venture Capital Is Purely About Upside Maximization, Not Downside Minimization
“Venture capital to me is a Purely a game of upside maximization. And while this may be in trouble, you know, this may get me in trouble. I actually don't. Downside minimization is completely unimportant to me.”
Brian Singerman Jun 5, 2017 ▶ 10:10
Prediction Not checkable as stated
Founders Fund Has Never Had and Will Never Have Monday Partner Meetings
“Now, Founders Fund doesn't have any Monday morning partner meeting. We never have, and we never will.”
Brian Singerman Jun 5, 2017 ▶ 12:19
Disclosure
Many of Founders Fund's Best Deals Started as Small Seed Checks
“A lot of our best investments have been smaller checks That then we've been tracking the closely company closely enough that have grown into larger checks.”
Brian Singerman Jun 5, 2017 ▶ 13:42
Disclosure
Founders Fund Explicitly Warns Seed Founders About Potential Signaling Risk
“And so we always, when we're making a small investment, always tell the entrepreneur upfront, like, Hey, this is a potential signaling risk.”
Brian Singerman Jun 5, 2017 ▶ 14:17
Insight
Eliminating Monday Partner Meetings Accelerates Founders Fund's Investment Decisions
“One thing that that gives us an advantage of is let's say somebody meets a company on a Wednesday. They don't have to wait till the next Monday morning partner meeting that has time to schedule for that team to come meet. We can do it much quicker than that.”
Brian Singerman Jun 5, 2017 ▶ 15:35
Insight
Vertically Integrated Complex Coordination Companies Build Unclonable Moats
“These are the types of what we mean by complex coordination companies that once they've developed that the ability to operate in that complex way, it may, it's a huge moat. So that's a huge moat for us that other companies cannot simply clone. You can't just h…”
Brian Singerman Jun 5, 2017 ▶ 18:21
Opinion
Singerman Considers Affirm's Max Levchin One of History's Best Founders
“Affirm, because it's a ridiculously hard one run by one of the best founders in history with Max Levchin.”
Brian Singerman Jun 5, 2017 ▶ 21:40
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