The Exchanges

Q Final one before we do a great fire. What does no one see about firm building, that having built a firm you think is so cool?

A Building something that then you don't realize that people outside of your small sphere recognize is, is something positive. And when, and that is something that you're randomly faced with, like, this conversation for me is, is, is, I'm a huge fan, it's like sports radio, long time listener, first time caller. To, to, you know, you're a young guy, but you're super successful, and you have some of the most amazing people in our industry, on the planet, sit here and talk to you, and to think that I'm sitting here with you telling my story, Um, is, is for me very humbling in the fact that you're even interested. And I think that piece of building a firm and staying focused on the logo and not me individually has led to this moment. And then, and that tells me that we all, for all of our flaws, which we have many, there's something in the water at G squared that works and we're going to keep grinding and doing it.

AI assessment note: “Building something that then you don't realize that people outside of your small sphere recognize”

Q What price is it going in, just kind of give or take?

A Yeah, so, um, in many ways, uh, we, we did it at the time in which it was perfect because you had Adele announced she was leaving the platform. You had Apple Music really taking market share. Um, and you, you had Taylor Swift saying, I want my library off. And, and Daniel Ek came out, and I think one of the smartest things he's ever done, and he agreed with the artists. He said, I have your back. I understand why you pulled from our product. You're not the issue. And the record labels had an option to buy more shares. And they executed the option to buy more shares. So to me, that was like, there's this aha moment where we can triple down. Nobody else knows this information. You buy from all the people who are scared to death and you do the counterintuitive thing and you, you, you take the bet and we did and it worked and we bought it like a 50% discount to the current financing round. And we just kept buying it there for the next two years.

AI assessment note: “we bought it like a 50% discount to the current financing round”

Q Can I ask, when you review those today, which was the single best investment on a multiple basis?

A Oh, the early ones. I mean, Twitter and Alibaba were pretty good. Um, those were, those were when I realized there's something here. Like, making a little bit of money in your whole life, working 10 years in a profession, thinking you've kind of made it coming from, I grew up in an orange trailer in Mighton, Utah. You know? Having like a hundred grand in your bank account one random Tuesday felt pretty good. And I said, this is something interesting. And, um, I remember the first, you know, I tried then I was like, I got some advice. Um, you should raise some third party capital. And that's when I really understood the power of OPM, other people's money. And, um, I went around to all of those alums who basically I think gave me some money because they were tired of me asking that I worked at five different large academic institutions.

AI assessment note: “I mean, Twitter and Alibaba were pretty good.”

Q The candidness is important. When you look back now, what do you think your sins were?

A And I've talked a lot about this openly to our LPs, because, um, I take pride in going around the world, and we have 60 countries and six continents of LPs. It was smart. In my opinion, when I started the firm, it was fun. Uh, it's, it's difficult now. The main mistake we made was believing our own bullshit. Was believing that we were, cause coming up to that point, we had some of the best returns in our industry. Like we were raising money. It didn't, we just, to put the flag out there, it was hard. We go around, raise money. Co-investment, raise money. Life changed dramatically for my partners, myself, our team. Just to ship back, you know, uh, 20 18 vintage fund. By 2020, we had the DPI to almost one. Oh yeah, Airbnb goes public, make a three X. Coursera goes public, make a three X. Sell our SpaceX stock privately, you know, make a, make a big return. Impossible Foods make this huge return.

AI assessment note: “The main mistake we made was believing our own bullshit.”

Q Final one. When has being paranoid helped you? When does it hurt you?

A Well, I told you about the Theranos, that Theranos, that, that helped me. That was the productive paranoia. And also the productive paranoia of, um, closing and investing. The money's there, close it, invest it. Money's there, close it, invest it. Because you don't know when the next one's coming. And that's a bit of just my DNA as a human being and how I was raised is, is, is that productive paranoia that it's great today, but the wheels are going to fall off. And you have to make sure every day that you tighten the wheels and you have to be focused on the right things. And I think that that driving every day that having that paranoia, no matter how good things are, and always worrying that it's going to get worse across all things in life is, is to a degree it's healthy.

AI assessment note: “Well, I told you about the Theranos, that Theranos, that, that helped me.”

Q So we're at business school, and we're like, you know what, I see the mobile revolution, I'm buying Uber, I'm buying Twitter, I'm buying Spotify. What happens then? And also, how much are you buying?

A Yeah, so small, you know, I, I, I wanted to make a change. I was working in college athletics. That was changing as it's become today. You know, this whole thing, pay, players should get paid, and coaches' salaries, and pretty soon the inmates were running the asylum, so to speak, and I was like, this isn't my passion. That's not where I came from. I, I wanna make a change as a former athlete. Like, hey, maybe I can use my brain, not my brawn, and I just, I cashed in my retirement, I went through a divorce, got remarried, had nothing, had no money, and I just had paid the tax on my retirement, started buying these shares, and I think-

AI assessment note: “Yeah, so small... I cashed in my retirement... started buying these shares”

Q Can I ask, when you review those today, which was the single best investment on a multiple basis?

A Oh, the early ones. I mean, Twitter and Alibaba were pretty good. Um, those were, those were when I realized there's something here. Like, making a little bit of money in your whole life, working 10 years in a profession, thinking you've kind of made it coming from, I grew up in an orange trailer in Mighton, Utah. You know? Having like a hundred grand in your bank account one random Tuesday felt pretty good. And I said, this is something interesting. And, um, I remember the first, you know, I tried then I was like, I got some advice. Um, you should raise some third party capital. And that's when I really understood the power of OPM, other people's money. And, um, I went around to all of those alums who basically I think gave me some money because they were tired of me asking that I worked at five different large academic institutions.

AI assessment note: “I mean, Twitter and Alibaba were pretty good.”

Q Final one before we do a great fire. What does no one see about firm building, that having built a firm you think is so cool?

A Building something that then you don't realize that people outside of your small sphere recognize is, is something positive. And when, and that is something that you're randomly faced with, like, this conversation for me is, is, is, I'm a huge fan, it's like sports radio, long time listener, first time caller. To, to, you know, you're a young guy, but you're super successful, and you have some of the most amazing people in our industry, on the planet, sit here and talk to you, and to think that I'm sitting here with you telling my story, Um, is, is for me very humbling in the fact that you're even interested. And I think that piece of building a firm and staying focused on the logo and not me individually has led to this moment. And then, and that tells me that we all, for all of our flaws, which we have many, there's something in the water at G squared that works and we're going to keep grinding and doing it.

AI assessment note: “Building something that then you don't realize that people outside of your small sphere recognize”

Q So we're at business school, and we're like, you know what, I see the mobile revolution, I'm buying Uber, I'm buying Twitter, I'm buying Spotify. What happens then? And also, how much are you buying?

A Yeah, so small, you know, I, I, I wanted to make a change. I was working in college athletics. That was changing as it's become today. You know, this whole thing, pay, players should get paid, and coaches' salaries, and pretty soon the inmates were running the asylum, so to speak, and I was like, this isn't my passion. That's not where I came from. I, I wanna make a change as a former athlete. Like, hey, maybe I can use my brain, not my brawn, and I just, I cashed in my retirement, I went through a divorce, got remarried, had nothing, had no money, and I just had paid the tax on my retirement, started buying these shares, and I think-

AI assessment note: “I cashed in my retirement, I went through a divorce, got remarried, had nothing”