The Exchanges

Q I, I always, like, think you, you learn a lot from mistakes that have been made, and it's easy to look back and, like, from the outside, bluntly, it just looks like hit after hit. When you think about mistakes that you've made in building Felicis, and, like, mentoring me, building a firm many chapters before you, what mistakes did you make, and what were some big lessons from them?

A I mean, to be honest with you, Let me maybe start with this. Honestly, I am really proud of where we are today. And it's easy to look at only the successes and the highlights to say that was it, but nobody really likes to talk about it, but the mistakes and the side turns we took were just as much part of it, right? Like, so for instance, my personal biggest exit was Adyen. And I remember like, I found Adyen because I was just so frustrated of like, Having missed Airbnb and Uber. I mean, I still have an email from 2008 from Brian Chesky. I didn't. We really like you. You sure you don't want to invest at like 2.5 million dollar cap, right? Like I, I just overthought the risk. Um, and look, every investor has these. I don't want to spend too much time on it, but then what's really curious is what you do after. Like, I would say at least half the investments of Felice's either came back from the dead or we lost the deal in one round, did the next round. And like, It's always came from difficulty, from nothing. We had, like, one percent odds. Like, people are like, no way you can invest in Rovio. No way you can invest in Shopify. It's in Ottawa. I flew to Ottawa. I flew to Helsinki in the middle of winter, you know, like, convinced founders. They're like, how big is your fund size? Like, what investments have you made? Like, I'm like, oh my god, they're totally gonna shoot us down.…

AI assessment note: “I found Adyen because I was just so frustrated of like, Having missed Airbnb”

Q Absolutely. And then the career highlight for you and why I'm sure there's many, many more, but for you so far, what's the pinnacle been?

A You know, you know what I really like is the career highlight. Every time we get into a company that we have no business of like winning or have a chance of getting in, but we do anyway, Shopify, like every fund that was in Shopify was 10 to a hundred times our size. Rovio, same thing. Uh, we made the same thing with Adyen. I mean, they have raised, like, fifty, hundred million dollars, and we're, again, like, a fraction of those funds, and the thing that I'm very proud is, like, I see sometimes, like, my role is a modern-day Marco Polo. Each one of these companies is, like, a new discovery, and it has nothing to do with the money you have. You can't buy this experience. It has to be earned, so that's why it's always a highlight for me, because it is so much Hustle, and creativity, and perseverance, and at the end, it has to be earned, and it cannot be purchased, and there is nothing greater than having that feeling of going against all odds and coming through the finish line at the end.

AI assessment note: “Every time we get into a company that we have no business of like winning”

Q And talking about, kind of, traditional VC and the moving venture landscape, I'd love to hear now what you think of the evolution of Felicis itself, and, and how, with the incredible growth that you've seen, Felicis has, approaches changed and have developed overall. What do you make of that?

A Yeah, I mean, look, in some ways, our strategy has not changed at all, right? I mean, we're very thematic investors. We're, we give ourselves a broad mandate, and every six to 12 months, we, uh, cherry-pick The best areas that we think are poised for future growth, but also, uh, in terms of the overall heat map of risk reward represent, uh, the best opportunities. That's the reason why we don't want to narrow ourselves down to a specific stage or specific, uh, uh, vertical segment. Um, so that part of our strategy has not changed, but what ended up happening is we tend to be very, very good pickers of companies But as we kept doing that, we also realized that founders' expectations of working with us have gotten higher, so we basically take everything we have, all the new team members, all the additional capital, and we basically invested in being better, stronger partners to our companies, and we keep innovating. For instance, you know, ah, two years back, we were the first venture firm to officially, you know, vote, always with their founders, Uh, and then again, uh, last year we brought on Wesley Chan, uh, whom, whom I knew from Google, you know, our founder said, look, you know, you guys are good at picking companies, but we need to see more operational, more founder experience in your team, and it was an awesome, awesome timing because, you know, Wesley was the starter of,…

AI assessment note: “in some ways, our strategy has not changed at all... what ended up happening”

Q If you were to have a guiding principle like that about Felicis, what would, what would you say it is?

A I mean, our guiding principle is success with empathy. Now, empathy doesn't mean that it's all Kumbaya, but I think, like, I had this theory when I wanted to start Felicis is that when I looked around, Basically, it was an environment where everything else was sacrificed to performance. And I'm like, listen, can't there be a world where you have great performance, but you can do it with empathy? Like maybe you, you don't have the largest fun in the world. Maybe you don't have the largest team in the world. Maybe you don't do every deal in the world, but you can still be successful, right? Like, um, and I think that experiment is still running today. Luckily we are doing well in performance. LPs continue supporting us. That's the real answer, right? So I can be telling you anything, but unless LPs come and say, listen, you're doing something great. We're going to give you money. It doesn't matter as zero meaning whatsoever. So, um, and I think that was really important for me because I feel like in every strategy, there is something you sacrifice. And what I saw in the performance at all costs strategy is that Sometimes like things are lost in internal dynamics. People fight each other and energy is dissipated, right? And I want all the energy to go into finding great companies for better or worse in our strategy. Maybe it's closer to a family, but you know, I'm seeing that you …

AI assessment note: “our guiding principle is success with empathy”

Q You mentioned earlier being a mentor to many. You've been a fantastic advisor to me in many ways. Uh, who's your mentor, Aiden, and what have you taken from them?

A You know, I didn't have a mentor, as I mentioned, but we did benefit a lot from our first LP board that taught us a lot about like, hey, how should we think about reserves, you know, recycling, um, vintage diversification, you know, what we talked about. Um, I think one of the things that we did that was really different because I didn't have any mentors, um, we didn't construct a board with all the LPs that were just like in our favor and just kept telling us we're doing a good job. We put the most skeptical ones on our board, the toughest ones, you know, like imagine you're at the uni and you're saying, hey, I'm going to take the classes with only like the toughest professors, because I'm like, listen, the whole point of this is we want to learn. We want to grow and we want to be the best. Um, and that was really helpful. I think there was a lot of our, our aspect and operations. They helped us. Improve and gave us kind of their perspective of having seen firms being built over decades.

AI assessment note: “I didn't have a mentor, as I mentioned, but we did benefit a lot”

Q have, like KOTU, fuck, I mean, they're in London companies before me. I mean, I joke with Maz about it, but it's impressive. And so I, I guess my question is just like, I don't know how it impacts us on the early, but I think suddenly we're going to see a lot more price inflation early because of their entry. Do you agree or do you think I'm negative?

A I mean, I think, look, I know where you're coming from. We're all in the same market. We're all seeing the same things. I think for each one of these things, you can also make a counterpoint. You can also say, listen, all these people have been 99% focused on enterprise software. So any other vertical, you don't have as much impact because they're not investing in everything. They're primarily investing in enterprise software, and it might grow from there. I think they're also going to only invest in things where they have data. So I think the earlier you go, again, it's very hard to find that data. I mean, how do you track when it's just two founders, like starting a stealth company, right? I'm sure there's like ways to find it, but what I'm going to come back down to like, listen, all these people are friends and everybody has some strengths and everybody has some weakness. And I think original thinking and knowing where the market's going to go and what markets are really important, it's still an art. And I don't think data is necessarily going to tell you that there is some like, Creative liberty that you need to take or where the world is gonna go, and I think that's just priceless, number one. Number two, um, you can always throw high valuation at founders and win deals, but the founders are now also realizing that it's kind of a double-edged sword because you take that v…

AI assessment note: “I think for each one of these things, you can also make a counterpoint.”

Q And then the founder you most respect or admire?

A So the founder, I have to be honest, the founder that influenced me the most is Larry Page. Um, I had a chance to work with him directly when I was first at a product role at Google, and the biggest influence that he, he had on me is to always question, uh, the status quo and never, ever, uh, settle for what's, you know, in, in, what's out there, and always think differently, and think out of the box, but I also have to give a lot of credit to some of our founders, like, You know, James Park at Fitbit, who's, I think, one of the most resilient CEOs that I know, and then Toby Lutke at Shopify, and Peter Van Der Doze at Adyen. Um, what I love about them is they have this insane ability to see around the corner, uh, all the way into five, 10 years, and make, take steps that other people don't even realize where it's gonna go, and later on it becomes, becomes really obvious how they set everything up. They just have this insane ability to see into the future.

AI assessment note: “the founder that influenced me the most is Larry Page”

Q parallels between, between potentially you and I at the start being slightly unconventional and unsure of our routes to get into the industry. So what would you advise me looking to get into the industry? I've got an unconventional past, um, huge network, but an unconventional past. I don't tick the management consultant investment banker box. Do tick the startup box. So what would you suggest to someone like me?

A You're already giving me a good signal. So let me tell you the two things I think that really, really helped me, uh, be a good investor that I didn't actually realize. I kind of like see this as a little bit like finding your true calling. And I think that's what the traditional VCs didn't get. I think there are only two things that truly matter, uh, to be a great investor in venture capital. One is having judgment and an opinion to really know in this crazy world, Uh, where to focus? What matters? What's going to be important in the future? Because if you don't have that opinion and that judgment, there are so many companies and so much going on that it's very, very difficult to make sense of it. And I think this conventional wisdom of like, you need to be a banker or a consultant to make sense using a lot of processes and analysis and all of that. I feel like if you don't have the right ideas, you know, all of that stuff does not give you an insight. The second part that is, I think, the most underestimated part, I spent most of my life at Google. I started in product management, but then I did sales, and I thought, what has sales anything to do with venture capital? Then I realized is that, hey, I, I represented Google, and I sold Google in 40 different countries, so what that really taught me is I can be in front of anyone, from a street beggar to a Fortune 50 CEO in any co…

AI assessment note: “let me tell you the two things I think that really, really helped me”

Q And I'm intrigued there. Covering such a variety of stages, how much of a role does valuation play in the kind of determining whether you make an investment or not?

A From a mathematical point of view, it, it, it feels like it should play a big role, but there is also another thing that people forget. So, you know, we've done this analysis, so we're very lucky that not only have we invested in quite a number of companies, but we had 60 M&A exits, six zero, and three IPOs. So we have a very, very good data set, and what we found is that at least half of these companies, we were borderline, ah, about coming in because they were very expensive deals. But that had nothing to do with the eventual outcome. So I think what people sometimes forget is that you can get a cheap deal or you can own a very large percentage of the company, but there is another side of the equation, which is probability of success. And in this industry, you know, like if you were to compare it to like banking and mortgage, in a mortgage, the house is the asset. In a company, the founders and the human talent is the asset. So if you optimize only for that and not for things like valuation, I think it has a huge impact. Like, people forget this is a cash-on-cash business. You know, like, valuations or absolute stage has no impact on the eventual outcome if the companies are chosen well. So that's where we basically, you know, try to spend our, our time. And the, the way we make it work also is that we kind of have this really interesting, flexible approach, right? I mean, mo…

AI assessment note: “valuations or absolute stage has no impact on the eventual outcome”

Q Solving a personal problem there on my professional time. That's, that's brilliant news. Um, and, and I do want to delve into one transition of, of your career, and that's kind of, you were the, one of the first micro VCs and seed funds around, uh, very, very early on, uh, and you made the move from angel investing to being a micro VC. So what caused that pivotal shift?

A Yeah, I mean, I'll tell you. Yeah, I mean, look, again, I had some really New radical ideas. And, you know, just to sum it up, honestly, all it was is I basically immediately realized that venture capital is a derivative business. It's like an art gallery. Um, we are not building these companies, but we're creating these companies and we're supporting them. So the only way you can be a brand and you can rise to the top if you curate the best companies, what ends up happening with a lot of other venture capitalists is that they try to optimize for a ton of other things. So I said, you know, I'm just starting out in this, so I'm only going to try to find the world's best companies however I can, but I'm going to be, ah, ownership agnostic, I'm going to be stage agnostic, and I'm going to be geography agnostic, and we just, I, I basically just kind of perfected this strategy as an angel investor, um, and then it kind of became obvious to me that, you know, what started as a handful of angel investors, then maybe, you know, less than a handful of seed funds, the writing was on the wall that, that, That part is just going to explode. There's going to be a ton more seed investors, even, even seed funds, and there's probably going to be programmatic stuff like AngelList and all of those things. And so what I wanted to do is once I started like seeing that the formula works and I had a…

AI assessment note: “once I started like seeing that the formula works and I had about a dozen exits”

Q And I'm intrigued now to hear about one of your investments, which if you, we crowdsource questions from friends of yours and fellow investors, and one of your, uh, quite a few actually referenced the Rovio investment. And so I'm, I'm very intrigued to hear about the Rovio investment and how that came about. So can you tell us a little about that?

A Yeah, I mean, it is one of the investments that I'm most proud of, because it predicated many other wins we had, like Shopify, Adyen, where we literally had no business of joining a round of such a company, but somehow we hustled and got creative and did everything it took to, to get involved. Just to kind of give you perspective, um, when Rovio closed their first Series A round, it was forty-two million dollars, and that was larger than our whole fund. Um, we tracked them for 10 months. We met them on three continents. We met them in three countries. We met them in US and UK and Finland. We just kept, like, meeting them, calling them, and hounding them. We knew that they had something really special. What other firms saw as a crazy, uh, uh, insane team, we saw some great assets. Like, they had 50, uh, failures, but then they really understood what makes it great. Uh, great game, and their, their, their idea was not gaming, their idea was entertainment, and even when we first met them, not only did they have a lot of users, but they basically made, you know, the Angry Birds run on six different mobile platforms, and this is when people could barely figure out how to make things run on iOS or Android alone. So, there were so many interesting things about this team, and one of the things that really helps us break the ice, and, and this also comes back to one of the other things …

AI assessment note: “We tracked them for 10 months. We met them on three continents.”

Q If you were to have a guiding principle like that about Felicis, what would, what would you say it is?

A I mean, our guiding principle is success with empathy. Now, empathy doesn't mean that it's all Kumbaya, but I think, like, I had this theory when I wanted to start Felicis is that when I looked around, Basically, it was an environment where everything else was sacrificed to performance. And I'm like, listen, can't there be a world where you have great performance, but you can do it with empathy? Like maybe you, you don't have the largest fun in the world. Maybe you don't have the largest team in the world. Maybe you don't do every deal in the world, but you can still be successful, right? Like, um, and I think that experiment is still running today. Luckily we are doing well in performance. LPs continue supporting us. That's the real answer, right? So I can be telling you anything, but unless LPs come and say, listen, you're doing something great. We're going to give you money. It doesn't matter as zero meaning whatsoever. So, um, and I think that was really important for me because I feel like in every strategy, there is something you sacrifice. And what I saw in the performance at all costs strategy is that Sometimes like things are lost in internal dynamics. People fight each other and energy is dissipated, right? And I want all the energy to go into finding great companies for better or worse in our strategy. Maybe it's closer to a family, but you know, I'm seeing that you …

AI assessment note: “our guiding principle is success with empathy.”

Q investing, and the world got a lot, lot better. I'm trying to figure out why and what happened in that change. But my question to you is, you know, Josh at First Round said before on the show that he became more conservative when he moved to being a VC. How did you change your mindset when you moved from angel to investor with other people's capital with Felicis? Yeah.

A I mean, I think it was a different journey for me. Um, I made a switch from angel investing to VC for two main reasons. Number one, I wanted to do it with a team and I truly wanted to build a team and a firm, uh, a real franchise. I think the second thing is I always had a broad strategy in mind, maybe because, you know, I mean, I worked in four different continents in the world. I speak five languages. I worked in probably like tens of different countries. You know, I've done every single discipline known to man. Um, and so I always had a broad purview. It wasn't like, oh, we're only going to do like seed deals, like an enterprise only in Silicon Valley or something like that. I always thought there was one universe of great companies and I want to have the highest share of those companies as possible. And I realized that it was very difficult to do that as an angel investor, because you're limited by capital, you're limited by time, you're limited by resources. So for me, actually, Going from angel to VC was like, kind of, you know, opening the gates, you know, unleashing this like, hey, listen, now we gotta know if the strategy is really gonna work or not. Um, so it's a really interesting journey. I don't know if you know, but the very first fund we had was only forty one million, and we invested in Rovio in Finland from that. The whole round was bigger than our whole firm. …

AI assessment note: “Going from angel to VC was like, kind of, you know, opening the gates”

Q investing, and the world got a lot, lot better. I'm trying to figure out why and what happened in that change. But my question to you is, you know, Josh at First Round said before on the show that he became more conservative when he moved to being a VC. How did you change your mindset when you moved from angel to investor with other people's capital with Felicis? Yeah.

A I mean, I think it was a different journey for me. Um, I made a switch from angel investing to VC for two main reasons. Number one, I wanted to do it with a team and I truly wanted to build a team and a firm, uh, a real franchise. I think the second thing is I always had a broad strategy in mind, maybe because, you know, I mean, I worked in four different continents in the world. I speak five languages. I worked in probably like tens of different countries. You know, I've done every single discipline known to man. Um, and so I always had a broad purview. It wasn't like, oh, we're only going to do like seed deals, like an enterprise only in Silicon Valley or something like that. I always thought there was one universe of great companies and I want to have the highest share of those companies as possible. And I realized that it was very difficult to do that as an angel investor, because you're limited by capital, you're limited by time, you're limited by resources. So for me, actually, Going from angel to VC was like, kind of, you know, opening the gates, you know, unleashing this like, hey, listen, now we gotta know if the strategy is really gonna work or not. Um, so it's a really interesting journey. I don't know if you know, but the very first fund we had was only forty one million, and we invested in Rovio in Finland from that. The whole round was bigger than our whole firm. …

AI assessment note: “Going from angel to VC was like, kind of, you know, opening the gates”

Q Oh no, I totally agree with you. Um, I absolutely still have confidence in what we do, don't worry. I, I, I do want to ask that, you know, when you look at, um, I mean, bluntly, you know, the incredible time that you've had now building Felicis over the last 1314 years, what do you know now that you wish you'd known at the beginning? Yeah.

A I mean, I think, uh, if you ask me, I actually, I hope this is applicable to all founders. So I feel like there are three main stages in the history or, or, you know, in the life cycle of a venture firm or probably like any company, like you go from basically a solo operator. So I feel like first is just you, right? Like, I think one of the things that helped me as an angel investor is actually I had 12 exits. So I knew that my strategy wasn't just, you know, pipe smoke, like, When you see the money return that you know that it's real. And I think that's one thing that that validation is something that's lacking. Luckily in my time, it was happening really fast. Um, so then you go from solo operator to a team, uh, not obvious. And then you go from team to a team of teams. That's literally the most important stages I think. And, um, when you're creating a team, there are some things that are not obvious to me. I think, listen, that was probably where most of my learning has happened is that You look at people and like, wow, these people are really smart. They're incredibly talented, incredible experience for sure. It's going to work out great. And now, like I realized that, you know, culture and cultural fit is equally important. Mindset is very important. I mean, my religion is growth mindset, and I realized that I can only really work with people that have an extreme growth mi…

AI assessment note: “I realized that, you know, culture and cultural fit is equally important.”

Q Man, did that make fundraising hard for that first fund? Because you're not in the early bucket. You're not in the west coast bucket. You're in no bucket for Albin.

A I didn't know bucket at all. I mean, I just tell people like, it's a little bit like a Jamaican bobsled. I don't know, Turkish VCs. There aren't a lot of Turkish VCs or people that have not had certain check marks. I mean, in some ways I'm really grateful for that because listen, I have a huge appreciation empathy for our founders because I've been in their shoes. Similar to you getting no's, like, not only did I get a lot of no's in, like, the job offers in VC, I also got a lot of no's in first LP conversations, for good reason. I mean, I don't blame them. Um, I did have a really ambitious strategy, but it was unorthodox, and I didn't have any experience to prove that it was gonna work, other than a lot of hustle. Um, but some people did take a chance on me, and, you know, and we, we, we were able to close that first fund with some incredible LPs. Those LPs have done really well. Um, so all I can say is, um, it was a really great learning and growth experience, and I think, you know, for people that get into VC and that never seen that side of it, like, some people never see the VC fundraising, and I feel it's a very necessary part of it, like, it's a very necessary part of franchise and firm building.

AI assessment note: “I also got a lot of no's in first LP conversations, for good reason.”

Q I, I always, like, think you, you learn a lot from mistakes that have been made, and it's easy to look back and, like, from the outside, bluntly, it just looks like hit after hit. When you think about mistakes that you've made in building Felicis, and, like, mentoring me, building a firm many chapters before you, what mistakes did you make, and what were some big lessons from them?

A I mean, to be honest with you, Let me maybe start with this. Honestly, I am really proud of where we are today. And it's easy to look at only the successes and the highlights to say that was it, but nobody really likes to talk about it, but the mistakes and the side turns we took were just as much part of it, right? Like, so for instance, my personal biggest exit was Adyen. And I remember like, I found Adyen because I was just so frustrated of like, Having missed Airbnb and Uber. I mean, I still have an email from 2008 from Brian Chesky. I didn't. We really like you. You sure you don't want to invest at like 2.5 million dollar cap, right? Like I, I just overthought the risk. Um, and look, every investor has these. I don't want to spend too much time on it, but then what's really curious is what you do after. Like, I would say at least half the investments of Felice's either came back from the dead or we lost the deal in one round, did the next round. And like, It's always came from difficulty, from nothing. We had, like, one percent odds. Like, people are like, no way you can invest in Rovio. No way you can invest in Shopify. It's in Ottawa. I flew to Ottawa. I flew to Helsinki in the middle of winter, you know, like, convinced founders. They're like, how big is your fund size? Like, what investments have you made? Like, I'm like, oh my god, they're totally gonna shoot us down.…

AI assessment note: “I found Adyen because I was just so frustrated of like, Having missed Airbnb”

Q Man, did that make fundraising hard for that first fund? Because you're not in the early bucket. You're not in the west coast bucket. You're in no bucket for Albin.

A I didn't know bucket at all. I mean, I just tell people like, it's a little bit like a Jamaican bobsled. I don't know, Turkish VCs. There aren't a lot of Turkish VCs or people that have not had certain check marks. I mean, in some ways I'm really grateful for that because listen, I have a huge appreciation empathy for our founders because I've been in their shoes. Similar to you getting no's, like, not only did I get a lot of no's in, like, the job offers in VC, I also got a lot of no's in first LP conversations, for good reason. I mean, I don't blame them. Um, I did have a really ambitious strategy, but it was unorthodox, and I didn't have any experience to prove that it was gonna work, other than a lot of hustle. Um, but some people did take a chance on me, and, you know, and we, we, we were able to close that first fund with some incredible LPs. Those LPs have done really well. Um, so all I can say is, um, it was a really great learning and growth experience, and I think, you know, for people that get into VC and that never seen that side of it, like, some people never see the VC fundraising, and I feel it's a very necessary part of it, like, it's a very necessary part of franchise and firm building.

AI assessment note: “I also got a lot of no's in first LP conversations, for good reason.”

Q Okay, so what's your favorite book and why?

A I think my favorite book, all-time favorite book was Anti-Fragile, and maybe that book is worth rereading again now, um, because it was all about the black swans and how there are all these things we're not thinking about, and I think all the things that are happening in the world right now, I don't know if people were thinking US is gonna go back to a high inflation country, we're gonna have war in Europe as unfortunate and awful it is to watch, um, you know, like a lot of the things that is happening in the world today, A lot of people thought some of the climate change things is just like hockey, and, you know, we are seeing that some of the stuff is real.

AI assessment note: “my favorite book, all-time favorite book was Anti-Fragile, and maybe that book is”

Q Oh no, I totally agree with you. Um, I absolutely still have confidence in what we do, don't worry. I, I, I do want to ask that, you know, when you look at, um, I mean, bluntly, you know, the incredible time that you've had now building Felicis over the last 1314 years, what do you know now that you wish you'd known at the beginning? Yeah.

A I mean, I think, uh, if you ask me, I actually, I hope this is applicable to all founders. So I feel like there are three main stages in the history or, or, you know, in the life cycle of a venture firm or probably like any company, like you go from basically a solo operator. So I feel like first is just you, right? Like, I think one of the things that helped me as an angel investor is actually I had 12 exits. So I knew that my strategy wasn't just, you know, pipe smoke, like, When you see the money return that you know that it's real. And I think that's one thing that that validation is something that's lacking. Luckily in my time, it was happening really fast. Um, so then you go from solo operator to a team, uh, not obvious. And then you go from team to a team of teams. That's literally the most important stages I think. And, um, when you're creating a team, there are some things that are not obvious to me. I think, listen, that was probably where most of my learning has happened is that You look at people and like, wow, these people are really smart. They're incredibly talented, incredible experience for sure. It's going to work out great. And now, like I realized that, you know, culture and cultural fit is equally important. Mindset is very important. I mean, my religion is growth mindset, and I realized that I can only really work with people that have an extreme growth mi…

AI assessment note: “now, like I realized that, you know, culture and cultural fit is equally important.”

Q decisions with concentrated pools of capital, and on the other end of that spectrum, we've had the crossover funds make their entry. With the market crashing in the way that it has done, you know, SoftBank, I think, or sorry, Tiger posted 34% down publicly. Um, like, what should we expect from them in this kind of market crash, potential correction? Where will they move to, do you think? Yeah.

A I mean, I think, listen, um, in some ways, uh, this is very Darwinian for them because you're seeing like how difficult it is to be successful in the public markets. Um, let me, let me attempt at simplifying the last 10 years. There was one alpha strategy and that is long tech, right? Like when Shopify went, like same thing happened to me when Google went public, all my Wall Street friends are like, don't be like too optimistic. And Google grew like beyond like, 40, 50 X, even from the point it went public. You know, you look at Shopify, it went public at 20, went all the way up to 200, maybe now is like in the sixties, seventies. It's still a multiples of where, where it was as a public company. So, um, I think like we forget sometimes that, hey, listen, um, the most important thing is to understand and like catch that growth. Um, but so when you look at The crossover funds and the hedge funds, what they're realizing is, listen, um, in public markets I'm limited. If I want to be in the world's best companies, and some of them are in private, I, by necessity, have to move into privates. And they're gonna have to keep doing that until they feel like they have the right portfolio size or they have the right balance within the portfolio. Um, what I think is really hard is when you're coming from that angle and unlike our angle, which is like, hey, we, we are operators and we're co…

AI assessment note: “I, by necessity, have to move into privates. And they're gonna have to keep doing that”

Q have, like KOTU, fuck, I mean, they're in London companies before me. I mean, I joke with Maz about it, but it's impressive. And so I, I guess my question is just like, I don't know how it impacts us on the early, but I think suddenly we're going to see a lot more price inflation early because of their entry. Do you agree or do you think I'm negative?

A I mean, I think, look, I know where you're coming from. We're all in the same market. We're all seeing the same things. I think for each one of these things, you can also make a counterpoint. You can also say, listen, all these people have been 99% focused on enterprise software. So any other vertical, you don't have as much impact because they're not investing in everything. They're primarily investing in enterprise software, and it might grow from there. I think they're also going to only invest in things where they have data. So I think the earlier you go, again, it's very hard to find that data. I mean, how do you track when it's just two founders, like starting a stealth company, right? I'm sure there's like ways to find it, but what I'm going to come back down to like, listen, all these people are friends and everybody has some strengths and everybody has some weakness. And I think original thinking and knowing where the market's going to go and what markets are really important, it's still an art. And I don't think data is necessarily going to tell you that there is some like, Creative liberty that you need to take or where the world is gonna go, and I think that's just priceless, number one. Number two, um, you can always throw high valuation at founders and win deals, but the founders are now also realizing that it's kind of a double-edged sword because you take that v…

AI assessment note: “you can always throw high valuation at founders and win deals, but the founders”

Q when, you know, Felicis was started, well, Felicis was in 2008, so a little bit longer. But, you know, when you think about the deployment pace then, it was three years, four years even, and that's kind of what I was always brought up on. Now it's 12 months, sometimes even less. How do you think about deployment pace, and what do you make of the compression that we've seen?

A Yeah, I mean, I think this is why, um, Looking forward a little bit, but one of the most formative books that I read was, you know, anti-fragile. Um, I think you need to be ready for anything in the world. I mean, we're kind of in our comfort zone, and we think things are not going to change, and lo and behold, they do. Um, I think in that, the best feedback we got was actually from our LP board. Like, one of the things that I will say that I really benefited from, probably the only people that really helped me in my career was our board of LP, the LPs who are on our board, and They're like, listen, no matter what happens, obviously stay in the market, stay active, but, you know, don't forget about vintage diversification. So, you know, getting beyond the 12 months, right? I mean, there is like, you can always say, like, there's so many great companies, our bar is really high. But I think, like, being able to exceed that 12 month threshold, and you can manage it, like, especially when you're at our size and scale, like, you essentially change the stage mix, and all of a sudden, you know, you can, you can still not give up on speed, um, but changing the stage mix, because of check sizes, you can make the fun last a little bit longer. And I think what they're, what they're basically saying is, listen, I think in success, One of the most important things is to have multiple lines …

AI assessment note: “don't forget about vintage diversification. So, you know, getting beyond the 12 months”

Q What's the most overlooked quality for success in venture?

A Um, I think, listen, um, It's kind of related to what I said before. I think everybody thinks, hey, like making a great investment is really important in venture, but listen, if there are like a hundred other investors and, you know, tens of rounds, your returns get diluted. So not only do you have to be right, but you have to be right in like the absolute minority. Um, it's very, it's very difficult and people still think, um, that it's a, it's a math game. It's a numbers game. They don't understand that it's as much of an EQ game. I think one of the biggest Things that I learned is that, hey, being able to relate people, having very strong EQs, as much of a strong factor as IQ. So I would say that's often overlooked, and maybe that's why people looked at me and like, they didn't really figure out that I could be a great investor.

AI assessment note: “having very strong EQs, as much of a strong factor as IQ... that's often overlooked”

Q And I'm intrigued there. Covering such a variety of stages, how much of a role does valuation play in the kind of determining whether you make an investment or not?

A From a mathematical point of view, it, it, it feels like it should play a big role, but there is also another thing that people forget. So, you know, we've done this analysis, so we're very lucky that not only have we invested in quite a number of companies, but we had 60 M&A exits, six zero, and three IPOs. So we have a very, very good data set, and what we found is that at least half of these companies, we were borderline, ah, about coming in because they were very expensive deals. But that had nothing to do with the eventual outcome. So I think what people sometimes forget is that you can get a cheap deal or you can own a very large percentage of the company, but there is another side of the equation, which is probability of success. And in this industry, you know, like if you were to compare it to like banking and mortgage, in a mortgage, the house is the asset. In a company, the founders and the human talent is the asset. So if you optimize only for that and not for things like valuation, I think it has a huge impact. Like, people forget this is a cash-on-cash business. You know, like, valuations or absolute stage has no impact on the eventual outcome if the companies are chosen well. So that's where we basically, you know, try to spend our, our time. And the, the way we make it work also is that we kind of have this really interesting, flexible approach, right? I mean, mo…

AI assessment note: “valuations or absolute stage has no impact on the eventual outcome”

Q to concentrate capital. For your seed funds, it's not the same. They have to get their ownership on first. So how important is ownership on first check for you, and at what point does it not make sense? This is something I'm struggling with, because even a fifty-k check Could make sense as a customer acquisition cost for me to put five million in at the A or the B.

A Yeah. I mean, listen, I think it's very strongly correlated to fund size. Again, you know, we need to go back to math and math, you know, the one beautiful thing about math is it's always the truth. So I think what is really important is how you manage it. I think we manage it to arrange because at every fund size, we have a model that comes with it where we're like, listen, we need to have a deployment model. That's also how we address pace. Other things. Um, so the most important thing is I feel like, um, actually ownership in the first check is important. Um, you know, as much as we can, but sometimes the only way to get into a company is a small check. And then we need to like double down, triple down after we show more value, after we convince the founders it's worth it. So similar to what I said, I think having a flexible strategy allows us To really focus on getting into the best deals. And we have multiple scenarios, obviously ideal scenarios to get in at high ownership, but we also have scenarios where what we call strategic and we can get in lower ownership, but then, you know, gradually build up our stake. And that has served us extremely well, um, over our, over our tenure, over our history and some of our best companies, like we came in and, you know, build up our ownership over time after we demonstrated value for the founders. It's also been extremely helpful for…

AI assessment note: “actually ownership in the first check is important. Um, you know, as much as we can”

Q think a lot about your product expansion because you've expanded kind of the product suite that you have, so to speak. I wanted to know, like, how do you think about new products? What are the considerations? And, you know, when you're sitting at the table with, you know, Sandeep and the team that you have, What does that discussion look like on new products and whether to do them?

A Yeah, I mean, I think, Harry, I understand where you're coming. I think for me, because our strategy has always been global, like, it's never been limited by stage, it's never been limited by geo, and it's just access to great companies. I don't really see it as product expansion, as product scaling, right? Like, when you look at it, when I was an angel investor, I had such limited funds, I could only really do seed deals, maybe a lucky A if, you know, if it worked. And then I realized that, listen, it essentially limited shots on goal I could take. Like, let's say that we're like, ah, in Liverpool Stadium or Arsenal or something, and there is a soccer game, and somebody tells you where, like, this is the only place in the stadium you can take a shot from. Even if you're talented, it's gonna suck. And you're like, listen, I want to take the shot wherever I care to take it from, right? Like, how different is that? So that's exactly how I'm thinking, is that, listen, with fun size and team, ah, what we gain is essentially to be able to take the shot From wherever we want on the playing field, and honestly, like to take more shots. Um, that's basically what it comes down to, and then I think the one area of the, uh, firm expansion that was really great for us was kind of the fund of funds effort, and what I realized, two things. Number one, if we want to get into more companies, w…

AI assessment note: “I don't really see it as product expansion, as product scaling, right?”

Q to concentrate capital. For your seed funds, it's not the same. They have to get their ownership on first. So how important is ownership on first check for you, and at what point does it not make sense? This is something I'm struggling with, because even a fifty-k check Could make sense as a customer acquisition cost for me to put five million in at the A or the B.

A Yeah. I mean, listen, I think it's very strongly correlated to fund size. Again, you know, we need to go back to math and math, you know, the one beautiful thing about math is it's always the truth. So I think what is really important is how you manage it. I think we manage it to arrange because at every fund size, we have a model that comes with it where we're like, listen, we need to have a deployment model. That's also how we address pace. Other things. Um, so the most important thing is I feel like, um, actually ownership in the first check is important. Um, you know, as much as we can, but sometimes the only way to get into a company is a small check. And then we need to like double down, triple down after we show more value, after we convince the founders it's worth it. So similar to what I said, I think having a flexible strategy allows us To really focus on getting into the best deals. And we have multiple scenarios, obviously ideal scenarios to get in at high ownership, but we also have scenarios where what we call strategic and we can get in lower ownership, but then, you know, gradually build up our stake. And that has served us extremely well, um, over our, over our tenure, over our history and some of our best companies, like we came in and, you know, build up our ownership over time after we demonstrated value for the founders. It's also been extremely helpful for…

AI assessment note: “ownership in the first check is important... but sometimes the only way to get in”

Q think a lot about your product expansion because you've expanded kind of the product suite that you have, so to speak. I wanted to know, like, how do you think about new products? What are the considerations? And, you know, when you're sitting at the table with, you know, Sandeep and the team that you have, What does that discussion look like on new products and whether to do them?

A Yeah, I mean, I think, Harry, I understand where you're coming. I think for me, because our strategy has always been global, like, it's never been limited by stage, it's never been limited by geo, and it's just access to great companies. I don't really see it as product expansion, as product scaling, right? Like, when you look at it, when I was an angel investor, I had such limited funds, I could only really do seed deals, maybe a lucky A if, you know, if it worked. And then I realized that, listen, it essentially limited shots on goal I could take. Like, let's say that we're like, ah, in Liverpool Stadium or Arsenal or something, and there is a soccer game, and somebody tells you where, like, this is the only place in the stadium you can take a shot from. Even if you're talented, it's gonna suck. And you're like, listen, I want to take the shot wherever I care to take it from, right? Like, how different is that? So that's exactly how I'm thinking, is that, listen, with fun size and team, ah, what we gain is essentially to be able to take the shot From wherever we want on the playing field, and honestly, like to take more shots. Um, that's basically what it comes down to, and then I think the one area of the, uh, firm expansion that was really great for us was kind of the fund of funds effort, and what I realized, two things. Number one, if we want to get into more companies, w…

AI assessment note: “I don't really see it as product expansion, as product scaling”

Q decisions with concentrated pools of capital, and on the other end of that spectrum, we've had the crossover funds make their entry. With the market crashing in the way that it has done, you know, SoftBank, I think, or sorry, Tiger posted 34% down publicly. Um, like, what should we expect from them in this kind of market crash, potential correction? Where will they move to, do you think? Yeah.

A I mean, I think, listen, um, in some ways, uh, this is very Darwinian for them because you're seeing like how difficult it is to be successful in the public markets. Um, let me, let me attempt at simplifying the last 10 years. There was one alpha strategy and that is long tech, right? Like when Shopify went, like same thing happened to me when Google went public, all my Wall Street friends are like, don't be like too optimistic. And Google grew like beyond like, 40, 50 X, even from the point it went public. You know, you look at Shopify, it went public at 20, went all the way up to 200, maybe now is like in the sixties, seventies. It's still a multiples of where, where it was as a public company. So, um, I think like we forget sometimes that, hey, listen, um, the most important thing is to understand and like catch that growth. Um, but so when you look at The crossover funds and the hedge funds, what they're realizing is, listen, um, in public markets I'm limited. If I want to be in the world's best companies, and some of them are in private, I, by necessity, have to move into privates. And they're gonna have to keep doing that until they feel like they have the right portfolio size or they have the right balance within the portfolio. Um, what I think is really hard is when you're coming from that angle and unlike our angle, which is like, hey, we, we are operators and we're co…

AI assessment note: “by necessity, have to move into privates. And they're gonna have to keep doing that”