The Exchanges

Q Pause pause. What's great power conflict? Just so we're aware this is like global war instead of just traditional counter-terrorism, correct?

A No, it's specifically like we're no longer competing with like rogue agents and non-state actors. Like our competition are huge nation states with, you know, a lot of power resting behind them. Places like China, You know, Iran, Russia. Um, and we had for a, you know, over a decade, really like a decade and a half, we have just been entirely focused on counterinsurgency. Uh, and you're quite, the problems that you're dealing with, with things like, uh, airspace superiority in Iraq or Afghanistan, totally different than determining airspace superiority in Ukraine or in, you know, a potential Taiwan conflict. And so we really needed to like shift To a mentality of how do we compete with great powers? Uh, and how has that changed since the last time we did this during the Cold War? And the answer is significantly. Like, the capabilities, the huge expensive platforms that we built for competing with the Soviet Union are not particularly relevant in a future conflict with, you know, a China or an Iran.

AI assessment note: “No, it's specifically like we're no longer competing with like rogue agents and non-state actors.”

Q Did you instantly like it? It's a weird job and it's very unstructured. Did you like it straight off or did it take time to assimilate?

A It took, it took time. You know, Brian Singerman gave me the best advice I got in my first month at Founders Fund when he said, the only thing that you should be doing for the next year is meeting with every single company you can. Have no standards, just like take meetings and eventually you'll start Um, perceiving like what's good, what's not good, like where you can kind of do a founder check to make sure that, um, this is someone that the team would be able to get really excited about. And you can only do that with volume. Like there's no way that you could say, I'm gonna be super discerning. I'm only going to take like top tier meetings. It's like, just do as many as you can. So my first year, I think I did like just over 500 pitch meetings, which for anyone That has done VC. I think you know that that is an absurd amount of pitch meetings in a year. Um, and, uh, by the end of the year, I, I think I was like pretty well tuned to, you know, what it means to be a top tier founder, what it means to have like great alignment with a, with a business. Um, and, uh, I, I think It does take about that long. It takes about 500 pitch meetings before you really know what you're doing.

AI assessment note: “It took, it took time.”

Q Oh, thank God. I don't have to do it then. Uh, Chris Dixon actually said on the show yesterday to me, I, uh, I like to predict the future. Uh, and then kind of find companies that align to that prediction. Would you very much disagree with that in terms of a style? It's not disagree, but you have a very different style. I take it.

A Yeah. I, I, I think as, as a founder, I think, yeah, like and role in my, in some way was me predicting where I thought the defense market was going to go. Um, and so as a founder, I, I think that is what their job is as a VC. I think like your investment thesis is only as good as the strength of the companies that come and pitch to you. And so Did I have like some super crazy interest in supply chain and logistics or a thesis in supply chain and logistics before I invested in flex work? No, of course not. Like I needed Ryan to like convince me of the, the timing to the market. And so I think that like, anytime you're, you're looking at a thesis about the future, you are saying there is a category and I have like some belief in that category. And that means you're probably too late. Like if you're, if you're like, I have a thesis on space tech, but you're not a space investor, you're probably losing money. If you're like, I have a thesis in crypto, but you're not in Bitcoin and Coinbase, you're probably losing money. If you have a thesis in, uh, cyber, but you're not in Palo Alto networks or CrowdStrike, you're probably losing money. It turns out that the core monopoly investment that won is the only one that mattered in the rest of the category matters a lot less. So if you have some vision for what the future looks like and you're looking for a company to invest in that's doi…

AI assessment note: “if you're looking for a company to invest in that's doing it... you're probably already too late.”

Q I totally get it. Dude, what was the most non-obvious reason for the success of Andrel? Like, amazing team, complementary skills, yes. Timing, yes. What's like the, no one thought of that, but it was really cool to the success.

A I think you kind of hinted at this around, like, having a, a, a kind of holistic view on skills, but I really want to beat the drum and say, you have to be Good at selling to the government to make companies in this sector work. You just, you can't, you either have enough money to survive being bad at it for a long time, or you know what you're doing from the beginning. And I think there are way too many companies in this hype moment that are approaching this and saying like, I'm just going to build something really cool that warfighters love and expect that that's going to be sufficient. And it's not. And that's what we knew from the beginning at Andrel. And that's probably the most prescient thing we did is to say, We're going to hire a lobbyist literally in the first week of the company's existence, and we're going to build the relationships that we know are going to be important for authorization and appropriation of funds to the product programs that we're working on. And most startups just, they don't have the background to understand that. They don't have the, the finance, the capital to do it, even if they, if they did understand. And so I think that is, that's a big differentiator.

AI assessment note: “We're going to hire a lobbyist literally in the first week of the company's existence”

Q I mean, that has to be my favorite, like, phrase to enter, which is, uh, the American teenager in a British body. Um, I, I do have to ask, I heard that your entry to Georgetown in particular is a rather unique story of persistence. So how did you get into Georgetown, Trey?

A You know, I was, uh, I had, you know, great grades, great test scores, like, you know, for all intents and purposes, it seemed like I was going to be able to kind of write my story for what I was going to do. The problem was, is I went to a rural public school in the middle of the country. And so it, it's like, we don't really talk about this very much as a country. We're focused on other kind of social demographic problems. Um, but it turns out that like, you just, it's basically impossible to get into good schools if your guidance counselor doesn't know all of the admissions officers at the Ivy league schools or whatever. Um, and so I sent out a bunch of applications. I think I applied to nine schools and I got a lot of skinny envelopes back. And, uh, I remember on the day that I got the skinny envelope back from five of the nine schools that I applied to, uh, I went over to my high school girlfriend's house and I was like, well, you know, at least the school that I got, I did get into is next to where you're going to go to school. And she was like, yeah, about that. And broke up with me the same day that, uh, that I had gotten rejected all these schools. So I like went home and just laid on the couch with my face down and my mom Uh, came over and she's like, what do you want to do? Where, where do you actually really want to go? And I said, I want to go to the school foreign…

AI assessment note: “she put me on a flight and sent me to Washington DC and said”

Q Wait, is it the billionaire element that makes them successful, or is it the structure of their teams and the knowledge and skill sets of their teams? Because brilliant people can raise billions of dollars. It's not the billions. It's the team composition of Palmer, of you, that make it special, no?

A Kind of. I, I do think that, like, the, there is a capital advantage to having a billionaire as a co-founder. Um, at Palantir and SpaceX, certainly, it took a really, really long time To get momentum on the business side of things. And so you needed to be able to raise money through a drought. While you were figuring that out at Andrew, it's, it's a little different now because we have the benefit of standing on the shoulders of giants. Like we have done this before we saw the way it worked with them. There are hundreds of people who have executed this sales motion successfully. Um, and so it's not quite as hard, but there's still a huge capital advantage to going in and saying, this is capital intensive. It's going to be really hard. And we want to raise A war chest to, to finance getting through to program of record wins. And this isn't something that's going to take six months. It's something that's probably going to take closer to three years. Um, it, it's like, it is important to have the ability to go out and raise that sort of capital.

AI assessment note: “I do think that, like, the, there is a capital advantage to having a billionaire”

Q You mentioned Peter there. I do want to, before we move into the investing world, just discuss the entry. How did Peter convince you to leave Palantir and where you were doing very well to then move into the investing side and join Founders Fund? What's that story?

A You know, I, I, I'm not sure it was an opportunity as much as it was an order. It's kind of unclear. So I was, um, I was heading up what Palantir called the leverage team, which is essentially the sales organization, um, and had been doing that for a while. In that role, I interacted with Peter pretty frequently. Because, you know, he would want to know, like, what does our pipeline looks like? Where are we running into problems? Where can we leverage leadership, uh, to, to drive these opportunities to close? Um, and so he and I became friends really like bonding around philosophy and theology primarily. And in March of 2013, um, which I had been at Palantir for about six years at that time, um, Peter just called me out of the blue and said, Hey, we're Raising this first billion dollar fund at Founders Fund. Uh, I would love for you to come join us at, at FF. And, uh, you know, I kind of scratched my head. I'm like, Peter, I have no interest in finance. I don't know anything about venture capital. Also, I'm like, I literally work for you at Palantir. Like what, what exactly is going on? And he's like, you know, like you should entertain it. Like I want you to meet other people on the team. And so, uh, I got together with a bunch of Folks that are still at, at Founders Fund today, Lauren Gross, who's our COO, Brian Singerman, who you just had on your podcast a couple of weeks ag…

AI assessment note: “Peter just called me out of the blue and said, Hey, we're Raising”

Q a straight down the fairway deal for you? For me, it's like a non-competitive industry. I never want to compete against fucking Sam Altman doing foundation models and Dario from Anthropic and Satya at Microsoft. I want, like, legacy architecture. I want, like, high pricing power. I want really, really large old industries. That's a straight down the fairway deal for Harry, ok? Do you know what is a trade?

A Yeah, I, I really want a big category defining opportunity in industries that haven't been touched by modern technology in decades. And I want a founder that understands how to play inside baseball in that sector. And so like two great examples, um, you know, the first big check that I wrote at Founders Fund was Flexport. And no one was thinking about Supply chain logistics in 2014. Uh, Ryan shows up and he's kind of this like kooky guy that lived in China and like made a bunch of money on arbitrage in pro like pricing or arbitrage and bath fittings and for like four wheelers, uh, shipping them from China to the United States. Um, and he was kind of this crazy outlier that it was like, he was either crazy or on drugs or Like, going to be one of the greatest founders of all time. And I, I think that, like, as an industry was super interesting to me. And then the second example of this is Anderil, where, you know, basically gonna be super hard. It'll be really capital intensive. Uh, but if you can actually be a next generation rebooted version of Lockheed Martin or Northrop Grumman, that company could be worth hundreds of billions of dollars. Um, and so I, I think that's the sort of stuff that I'm looking for.

AI assessment note: “I really want a big category defining opportunity in industries that haven't been touched”

Q Pause pause. What's great power conflict? Just so we're aware this is like global war instead of just traditional counter-terrorism, correct?

A No, it's specifically like we're no longer competing with like rogue agents and non-state actors. Like our competition are huge nation states with, you know, a lot of power resting behind them. Places like China, You know, Iran, Russia. Um, and we had for a, you know, over a decade, really like a decade and a half, we have just been entirely focused on counterinsurgency. Uh, and you're quite, the problems that you're dealing with, with things like, uh, airspace superiority in Iraq or Afghanistan, totally different than determining airspace superiority in Ukraine or in, you know, a potential Taiwan conflict. And so we really needed to like shift To a mentality of how do we compete with great powers? Uh, and how has that changed since the last time we did this during the Cold War? And the answer is significantly. Like, the capabilities, the huge expensive platforms that we built for competing with the Soviet Union are not particularly relevant in a future conflict with, you know, a China or an Iran.

AI assessment note: “No, it's specifically like we're no longer competing with like rogue agents and non-state actors.”

Q But I, I do want to ask, I listen to you talk now, and I'm like, wait a minute, you run deals, you're a GP at Founders Fund, you're running, like, parts of Anduril, also there's Sol, which, sorry Trey, respectfully, I didn't even know you did Sol as well. Um, like, how the fuck do you spend your time?

A I set boundaries. I mean, I have, as I said, a love lovely wife and two awesome kids. They're 10 and eight. Um, I make sure that I'm, you know, I make them breakfast, driving the to school every morning, and I'm with them for dinner every night that I'm not traveling. Um, it's really important to me to like be present for my family as well. Um, but I have, I have an awesome support team around me. I think that's like the only way that this is possible. I have an EA who's been with me the whole time. I've been a founder's fund that is truly world-class. Um, my chief of staff, Ellie Untermeyer, is, uh, she's been with me for the last nine months now, and she's makes sure that I, like, know what I'm doing and staying on task and, uh, keeping my priorities in line. Um, at Anderil, we have an incredibly talented executive team, um, and I manage a portion of the business, uh, not the entire business, and we have a high trust relationship across the entire exec team.

AI assessment note: “I set boundaries... I have an awesome support team around me.”

Q What do you think is your biggest challenge today as founders fund? I remember, um, when I had Keith on the show, Keith said about just finding the next generation of great talent and it being a young person's game. Which I thought was an interesting answer. What do you think is your greatest challenge as founders fund today?

A Deal flow is always the biggest thing for venture capital. It's like you have to have access to the, the deals that are going to move the needle. And for large funds, by the way, this is very different than people that are operating seed funds or whatever, but for large funds, the economics only really work if you have a 10 plus billion dollar winner in every fund. Um, or more than one in, in most cases. I think, like, you, you have to evaluate yourself on whether or not you got hits On those, those kind of like monopoly style winners. Um, and that's just about maintaining access to the network, um, and being super easy to work with. And I think founders fund has the ladder in spades. Like, you know, we, we were the first fund that was talking about being founder friendly, um, and have, you know, we don't generally want to take board seats. We are incredibly hands-off and operationally, uh, helpful when asked, but only reactively. Um, and I think the, the former is the harder part though. It's like, you have to make sure that you are seeing all of these companies. Um, and, uh, and that has to be the focus for the entire investment team.

AI assessment note: “Deal flow is always the biggest thing for venture capital.”

Q venture firm thinking. You guys push back on two really interesting notions in venture. A traditional notion of, like, weekly ICs and partnership decision making and the benefits of it. Listen, I speak to LPs the whole time. This, they love to hear. They love to hear that. You guys don't do that. How do you make decisions? And why do you encourage every investor to run their own book?

A This is absolutely true of Founders Fund. We, we all run our own strategy. We don't have Monday partner meetings. Um, everything is super difficult to get through the investment team, and this is on purpose. The, the rough thesis is that the more process you have, the easier that it is to game the process to get to some mediocre outcome. And I'll give you an example. If like the most junior person on your team meets with a company and they're like, yeah, this company is pretty good. Like I like the founder. I kind of like the idea. Um, I'm going to have them talk to, you know, a principal or a partner. And then that meeting happens and they're like, it's interesting. I don't have like super high conviction, but like, we'll bring it up into the partner meeting on Monday. And then the part of the, you know, the GP or whatever is like, Yeah. You know, let's, let's do a meeting with them. By the time that it gets to that point, it's like, okay, maybe we don't have conviction to write a big lead check, but like, maybe we put something in because like it made it all the way through the process. So like, you know, this is probably worth a participation check. Our approach to this is like, it's, it's gonna be really hard to get anything through because there's no structure set up to get it through. It's just like personal willpower to go and convince people Um, and get them to take the…

AI assessment note: “in order to get anything through, you literally have to just be pounding the table”

Q You know, you hate memos, but in memos that you always write a kind of post-mortem, a reason why, or a pre-mortem, a reason why it won't work. If there was one for Andrew, what would it be?

A I'll, I'll give you two and I'll do it quickly. The first is like, if we build something and we ship it and it doesn't work, um, we deserve To be crushed by the market. Uh, unfortunately, I don't think that actually happens. I think that the, the big defense companies are constantly delivering things that don't work like they're supposed to, and they're never punished for it. Uh, you can see this with like the way that the seven 37 max has been going for Boeing for a long time. Um, so that's, that's one way that I think it could in theory go south. The other way is that government cultural risk. It's like, we're coming to them with a very different business model. Um, and the only way that we win at a scale That we're working towards winning is if we win major multi decade long programs like core military platforms. Um, and there will have to be people with courage inside the government to make a decision to go with a new player to, you know, build a next generation fighter plane or a next generation counter air missile or whatever.

AI assessment note: “The other way is that government cultural risk.”

Q of capital accumulators, Andreessen and Sequoia and Cotu and NEA. Where is Founders Fund? Because you guys, like, reduced your fund size. The fund sizes themselves, I don't believe, are actually that big. I mean, I think it's about a billion dollars each, which is big, but it's by no means the large, large funds that we see at other funds. Where do you sit in, capital accumulator or boutique?

A It's a good question. I think probably somewhere in the middle. Um, you know, we have, we have a lot of, Money under management. Uh, so we're not like a, a small fund by any stretch. Um, but we also are very intentional about playing our, our core venture strategy. And so we're not trying to be cute with weird structures and debt instruments and like big category specific funds, nothing like that. Our core vision is we just want to invest in the best founders, building the best companies that are going to be category, category defining. And I think you can do that through a very traditional venture model of, can we get a check into the series A and can we follow on to the ones that are working? Uh, and that's what we do. And I think that's what we're always going to do.

AI assessment note: “I think probably somewhere in the middle.”

Q You're like, Harry, none of this is on schedule. And I'm like, I know I told you beforehand, but how quickly do you know if a company's good or not? I think, you know, in the first month,

A Wow. That's really fast. I don't know if I would say the first month, but definitely in the first six months, um, I think you can get a sense for momentum. There's almost nothing as important as momentum in startups. Like, you know, there, there's this, I think idea, especially in deep tech that like, if you just hold out long enough, like eventually they'll cross enough tech milestones that like things will seem like they're, you know, starting to move. And even in deep tech momentum turns out to be the most important thing. Um, and you can see that, you can feel it, it's visceral. And I think that it's definitely not five to 10 years like people often talk about as, as venture capital windows. And if you go back and you look at the best companies in any portfolio, they were kind of the best companies at every stage. Like they were incredibly awesome at A, they were incredibly awesome at B, they were incredibly awesome at C. Very rarely do you see a company that like struggled for a long time and then like suddenly hit an unlock. That doesn't really happen that often.

AI assessment note: “I don't know if I would say the first month, but definitely in the first six months”

Q Wait, is it the billionaire element that makes them successful, or is it the structure of their teams and the knowledge and skill sets of their teams? Because brilliant people can raise billions of dollars. It's not the billions. It's the team composition of Palmer, of you, that make it special, no?

A Kind of. I, I do think that, like, the, there is a capital advantage to having a billionaire as a co-founder. Um, at Palantir and SpaceX, certainly, it took a really, really long time To get momentum on the business side of things. And so you needed to be able to raise money through a drought. While you were figuring that out at Andrew, it's, it's a little different now because we have the benefit of standing on the shoulders of giants. Like we have done this before we saw the way it worked with them. There are hundreds of people who have executed this sales motion successfully. Um, and so it's not quite as hard, but there's still a huge capital advantage to going in and saying, this is capital intensive. It's going to be really hard. And we want to raise A war chest to, to finance getting through to program of record wins. And this isn't something that's going to take six months. It's something that's probably going to take closer to three years. Um, it, it's like, it is important to have the ability to go out and raise that sort of capital.

AI assessment note: “there is a capital advantage to having a billionaire as a co-founder”

Q 17, ok. So did you just have a crystal ball and predict the explosion of global conflict? Because we could have continued, we could have continued in this period of detente for another 10 years, and the need for Andrew would have been lesser than it is now, for sure. Was it just lucky on timing, dude? Well, that sounds awful, not lucky.

A No, no, yeah. Like, like I said, I'm not, I'm, I'm gonna do the opposite of what Chris Dixon did, and I'm gonna say, I, I don't have a crystal ball. I'm not predicting the future. I'm gonna try, and I'm, like, I think all of us in the, on the founding team of Anderil, like, we perceived that we were going to care a lot more about these things post, post-insurge, counter-insurgency, counter-terrorism, but obviously, like, I would not have guessed That all these global conflicts would have necessarily happened. Um, but I think like the writing has been on the wall for a while that globalization didn't really work and that traditional strategic deterrence with nuclear weapons was not going to be the, the only thing that drove, uh, reduction in conflict globally. And so, um, I, I think there was, there were some smart decisions that were made and I think we had a lot of conversations about those Uh, those elements, but I certainly wasn't like standing at a whiteboard, you know, with lines and pieces of yarn and pieces of paper being like, and you see China is going to invade. I, I, I don't think I had that level of insight.

AI assessment note: “I don't have a crystal ball. I'm not predicting the future.”

Q Are you a better investor now that you're founding companies as well?

A 100%. The entropy on, like, knowledge of operationally being engaged with the startup is so fast. All the things that I did at Palantir for six years, like, I feel like were relevant for, like, my first three years at Founders Fund. And then, like, the software that we were using to do things is different. The tech, the cutting edge on the technology side is different. Like, we, you're just constantly going through these shifts. And so I think being in a place where I'm operationally engaged at Andrel, like, I actually, I'm up to date. Like I know what people are using. I know what like is impacting our business in a meaningful way. I know what stuff that we're, we started using that ended up kind of being not that useful that we turned off of. Like I'm, I'm keeping up on a day to day basis. And I think that that's, that's a super valuable asset to my, my other job as a partner at Founders Fund.

AI assessment note: “100%. The entropy on, like, knowledge of operationally being engaged with the startup”

Q venture firm thinking. You guys push back on two really interesting notions in venture. A traditional notion of, like, weekly ICs and partnership decision making and the benefits of it. Listen, I speak to LPs the whole time. This, they love to hear. They love to hear that. You guys don't do that. How do you make decisions? And why do you encourage every investor to run their own book?

A This is absolutely true of Founders Fund. We, we all run our own strategy. We don't have Monday partner meetings. Um, everything is super difficult to get through the investment team, and this is on purpose. The, the rough thesis is that the more process you have, the easier that it is to game the process to get to some mediocre outcome. And I'll give you an example. If like the most junior person on your team meets with a company and they're like, yeah, this company is pretty good. Like I like the founder. I kind of like the idea. Um, I'm going to have them talk to, you know, a principal or a partner. And then that meeting happens and they're like, it's interesting. I don't have like super high conviction, but like, we'll bring it up into the partner meeting on Monday. And then the part of the, you know, the GP or whatever is like, Yeah. You know, let's, let's do a meeting with them. By the time that it gets to that point, it's like, okay, maybe we don't have conviction to write a big lead check, but like, maybe we put something in because like it made it all the way through the process. So like, you know, this is probably worth a participation check. Our approach to this is like, it's, it's gonna be really hard to get anything through because there's no structure set up to get it through. It's just like personal willpower to go and convince people Um, and get them to take the…

AI assessment note: “It's just like personal willpower to go and convince people”

Q What do you think is your biggest challenge today as founders fund? I remember, um, when I had Keith on the show, Keith said about just finding the next generation of great talent and it being a young person's game. Which I thought was an interesting answer. What do you think is your greatest challenge as founders fund today?

A Deal flow is always the biggest thing for venture capital. It's like you have to have access to the, the deals that are going to move the needle. And for large funds, by the way, this is very different than people that are operating seed funds or whatever, but for large funds, the economics only really work if you have a 10 plus billion dollar winner in every fund. Um, or more than one in, in most cases. I think, like, you, you have to evaluate yourself on whether or not you got hits On those, those kind of like monopoly style winners. Um, and that's just about maintaining access to the network, um, and being super easy to work with. And I think founders fund has the ladder in spades. Like, you know, we, we were the first fund that was talking about being founder friendly, um, and have, you know, we don't generally want to take board seats. We are incredibly hands-off and operationally, uh, helpful when asked, but only reactively. Um, and I think the, the former is the harder part though. It's like, you have to make sure that you are seeing all of these companies. Um, and, uh, and that has to be the focus for the entire investment team.

AI assessment note: “Deal flow is always the biggest thing for venture capital.”

Q You're like, Harry, none of this is on schedule. And I'm like, I know I told you beforehand, but how quickly do you know if a company's good or not? I think, you know, in the first month,

A Wow. That's really fast. I don't know if I would say the first month, but definitely in the first six months, um, I think you can get a sense for momentum. There's almost nothing as important as momentum in startups. Like, you know, there, there's this, I think idea, especially in deep tech that like, if you just hold out long enough, like eventually they'll cross enough tech milestones that like things will seem like they're, you know, starting to move. And even in deep tech momentum turns out to be the most important thing. Um, and you can see that, you can feel it, it's visceral. And I think that it's definitely not five to 10 years like people often talk about as, as venture capital windows. And if you go back and you look at the best companies in any portfolio, they were kind of the best companies at every stage. Like they were incredibly awesome at A, they were incredibly awesome at B, they were incredibly awesome at C. Very rarely do you see a company that like struggled for a long time and then like suddenly hit an unlock. That doesn't really happen that often.

AI assessment note: “I don't know if I would say the first month, but definitely in the first six months”

Q Has your spiritual faith impacted your investing mindset?

A A lot of people, and this goes primarily for, like, my upbringing even as well, there were a lot of people that they viewed their job as a way to pay their bills, right? It's like, I'm gonna go to work nine to five, I'm gonna make money, and then my life Will be what I do when I'm not at work because the work is just like a mechanism to generate cash to survive. Um, I think this is like a deeply un like theological way of viewing the world. I think like we are, we have a, a, a responsibility to our vocation and it doesn't matter what you're doing, whether you're a barista at Starbucks or, you know, starting a defense company. Um, yeah, that is your vocation and you are living in service to humanity. And so I think as an investor, As a person of faith, I look at, I look at the world and say, I want, I don't want the world to be a science fiction dystopia. Like, I don't want to live in, you know, all these Hollywood pictures. I want the world to be, uh, approaching the kingdom of God. Like, I, I think we have a role in, in building that. And so as an investor, when I look at something and I'm like, yeah, this is a vice investment. Maybe it's probably going to make a lot of money because it leads to addiction or loneliness or You know, whatever. Um, I don't want to be involved in that. I don't want to be involved in stuff that might be a good economic outcome, but is going to lead…

AI assessment note: “as an investor, As a person of faith, I look at, I look at the world”

Q of capital accumulators, Andreessen and Sequoia and Cotu and NEA. Where is Founders Fund? Because you guys, like, reduced your fund size. The fund sizes themselves, I don't believe, are actually that big. I mean, I think it's about a billion dollars each, which is big, but it's by no means the large, large funds that we see at other funds. Where do you sit in, capital accumulator or boutique?

A It's a good question. I think probably somewhere in the middle. Um, you know, we have, we have a lot of, Money under management. Uh, so we're not like a, a small fund by any stretch. Um, but we also are very intentional about playing our, our core venture strategy. And so we're not trying to be cute with weird structures and debt instruments and like big category specific funds, nothing like that. Our core vision is we just want to invest in the best founders, building the best companies that are going to be category, category defining. And I think you can do that through a very traditional venture model of, can we get a check into the series A and can we follow on to the ones that are working? Uh, and that's what we do. And I think that's what we're always going to do.

AI assessment note: “I think probably somewhere in the middle.”

Q And I agree with you. You look at your Andrews of the world. You look at your open AIs of the world. So is your perspective as an investor and as a founder then, fuck it. Don't try and do defense tech. Just do Andrew. And instead of trying to do AI, fuck it, just do open AI. Is that generally the right strategic play, do you think, for investors?

A I mean, there will be other companies that might be worth taking a bet on, for sure. Like, you know, if you were a social media investor, you missed Facebook, but you got conviction and invested in Snap, you actually did pretty well. On the back of that investment. So there, there are exceptions. There are places where you should stay open to the idea that there's a brilliant founder and a team that has the ability to go and to make something in a market. But I think that this idea that investing broadly across an entire category where you're doing relative rather than absolute assessments is just bad strategy. It doesn't make any sense. Like there's not gonna be a hundred space X's. There's probably not going to be two space X's, but if there are, that's just, you should just be making that one investment in like a really high conviction thing that you would have done regardless of whether or not you were looking at that category. And so, yes, that might be a violation of the rule of look at me. I'm so smart. I don't think I'm so smart. I think like the founders are the ones that are really smart that are changing the world. And I'm just lucky to be on the ride with them as an investor.

AI assessment note: “there will be other companies that might be worth taking a bet on, for sure.”

Q of these kind of bluntly averagely paid middle management government bureaucrats in a lot of international governments, why would I bother buying Andrew now? It's obviously very well-known brand, but in the early days when I've got established brands where I'm not going to get a CA same old LP argument in venture, just invest in X, Well-known firm. How do you fix the incentive problem of buying from innovators?

A As I mentioned before with a different set of problems, I think this is primarily a culture problem. All of the authorities that need to exist to buy products from non-traditional, um, companies, they all exist. You can do it. If the government wanted to do it, it could do it. The problem is, is that they don't because they don't feel Uh, they don't feel as comfortable with it. They claim that it's a much riskier path. I, I happen to disagree with that particular fact, but I think, I think the, um, the reason why in the early stages people were willing to take a chance on us is that we were working very focused on problems that were clearly software problems. And I think they had had like long running bad experiences with the traditional players in the space coming to them, delivering capabilities that relied on That, you know, the technology delivering the against the problem set depended on software execution. And so when we come in and we have a demo and we say, we can actually do the thing that we know you're trying to do, and we can demonstrate that to you in real time. And we've taken the risk of funding the development of those capabilities. We're not asking you to like, believe us in like a response to an RFP. We're just gonna show you that we can do it. Um, and that shifting that risk to us rather than putting it on the government was really important to those early wi…

AI assessment note: “shifting that risk to us rather than putting it on the government”

Q give me some credit. My question to you is, you mentioned there about, kind of, timing of, of deep tech startups in particular. I'm always just, like, very focused on market timing. I never, like, take market timing risk. You clearly do, which I love. I mean, that's some real kahunas. How do you think about market timing risk as an investor today and as a founder? I mean, both.

A You know, I, I think that It's not on me as a venture capitalist to evaluate markets and then pick companies to time some arbitrary thesis I have for any particular market. You know, that's asking too much. Like VCs are not generally like super talented specialists in any one space. Like the best VCs are kind of generalists. Um, and that means that they might have like a shallow understanding of a wide set of things, uh, but they probably don't have like some massive Kind of polymath death of understanding of every type of company they're going to look at. And so I think it's really on the founders to communicate why the market timing thing is, is relevant to their business. And the best founders are able to do that in a way that's super compelling. Um, and so again, I think this comes down to like, do you have conviction?

AI assessment note: “It's not on me as a venture capitalist to evaluate markets and then pick companies”

Q of these kind of bluntly averagely paid middle management government bureaucrats in a lot of international governments, why would I bother buying Andrew now? It's obviously very well-known brand, but in the early days when I've got established brands where I'm not going to get a CA same old LP argument in venture, just invest in X, Well-known firm. How do you fix the incentive problem of buying from innovators?

A As I mentioned before with a different set of problems, I think this is primarily a culture problem. All of the authorities that need to exist to buy products from non-traditional, um, companies, they all exist. You can do it. If the government wanted to do it, it could do it. The problem is, is that they don't because they don't feel Uh, they don't feel as comfortable with it. They claim that it's a much riskier path. I, I happen to disagree with that particular fact, but I think, I think the, um, the reason why in the early stages people were willing to take a chance on us is that we were working very focused on problems that were clearly software problems. And I think they had had like long running bad experiences with the traditional players in the space coming to them, delivering capabilities that relied on That, you know, the technology delivering the against the problem set depended on software execution. And so when we come in and we have a demo and we say, we can actually do the thing that we know you're trying to do, and we can demonstrate that to you in real time. And we've taken the risk of funding the development of those capabilities. We're not asking you to like, believe us in like a response to an RFP. We're just gonna show you that we can do it. Um, and that shifting that risk to us rather than putting it on the government was really important to those early wi…

AI assessment note: “shifting that risk to us rather than putting it on the government”

Q I mean, that has to be my favorite, like, phrase to enter, which is, uh, the American teenager in a British body. Um, I, I do have to ask, I heard that your entry to Georgetown in particular is a rather unique story of persistence. So how did you get into Georgetown, Trey?

A You know, I was, uh, I had, you know, great grades, great test scores, like, you know, for all intents and purposes, it seemed like I was going to be able to kind of write my story for what I was going to do. The problem was, is I went to a rural public school in the middle of the country. And so it, it's like, we don't really talk about this very much as a country. We're focused on other kind of social demographic problems. Um, but it turns out that like, you just, it's basically impossible to get into good schools if your guidance counselor doesn't know all of the admissions officers at the Ivy league schools or whatever. Um, and so I sent out a bunch of applications. I think I applied to nine schools and I got a lot of skinny envelopes back. And, uh, I remember on the day that I got the skinny envelope back from five of the nine schools that I applied to, uh, I went over to my high school girlfriend's house and I was like, well, you know, at least the school that I got, I did get into is next to where you're going to go to school. And she was like, yeah, about that. And broke up with me the same day that, uh, that I had gotten rejected all these schools. So I like went home and just laid on the couch with my face down and my mom Uh, came over and she's like, what do you want to do? Where, where do you actually really want to go? And I said, I want to go to the school foreign…

AI assessment note: “she put me on a flight and sent me to Washington DC and said”

Q This was my point with some of the crazy, crazy rounds that we're seeing now, especially in AI. Do you think we actually did learn our lesson?

A I don't think we did. I think there are, there are some people in the industry, uh, that I have a tremendous amount of respect for that have looked at this and said, we're just not going to play this game. Like it was guys. It was literally like two years ago. This isn't like a 10 year information gap. It was like two years ago. And then there are other people that are saying like, you know, Yolo, like I have to win. I have to get in. Um, and I'm gonna plow it in. You know, there was this, this incredible scene in Silicon Valley that I've been sending some people this video where, uh, the main character is, uh, sitting at the bar with another founder. And the guy is like, you know, his company was taking away, taken away from him. He's no longer the founder. He was no, he's no longer the CEO. And, uh, he says, you know, you could have just like taken less at a lower price. And he was like, no, no, no. Like I was offered this price in this mountain. He was like, yeah, but you didn't have to take it. You could have taken less at a lower price. And he's like, why didn't anyone tell me I could have taken less at a lower price. And I feel like sometimes founders are just, they just get caught up in the moment. They get caught up in this idea that like the only thing that matters Is up and to the right minimizing dilution and like, I don't know. We'll see what happens. We'll see if, …

AI assessment note: “I don't think we did. I think there are, there are some people in the industry”

Q What's been your biggest loss and what did you learn?

A Well, I've only been in the industry for 10 years. And so the reality is, is that startups survive for longer than anyone thinks they will. And so there are certainly investments that I've made that are still, you know, puttering along, um, and haven't figured out a way to hit the, the inflection, but I wouldn't call them a loss. Um, I think, I think the, the biggest thing The biggest lesson that I've learned from these is that there are times where I've gone in and I've said, this has 10 X potential from where it is right now, and therefore it's probably worth making a bet. And I look back on some of those investments that I've made and I've said, Even if it 10 X from a, you know, a small series a, it's not going to return the fund. It's not going to really move the needle. And it really, I should be focusing on finding massive upside because the opportunity costs of deploying these checks, uh, is, is actually quite high.

AI assessment note: “haven't figured out a way to hit the, the inflection, but I wouldn't call them a loss.”