The Exchanges

Q flew to London on a Friday. He won the deal on a Saturday. He beat out everyone in London. Um, the guys at IVP fly to bumfuck nowhere, Romania to do UI path. Sorry if anyone's in Romania. Um, they, they fly to, you know, bumfuck nowhere Germany. See, I equated both, so everywhere's bumfuck. Uh, bumfuck nowhere Germany, so to do DPAL, do the best not get on planes?

A They do, but again, there's, you know, some level of turnaround of, like, you know, Keith's schedule, as an example, is booked, like, a full, like, three, four weeks in advance. The idea that, like, it's gonna be a week-long turnaround is impossible, and for his, like, activation energy, it has to be the junior investors have gone and done some level of diligence, built conviction, and for sure, it's to say he will do it at some point, but I was just willing to do it faster, quicker turnaround, and, like, you know, dive much, much deeper than what they would be capable of doing, but that was the value that I provided to the table, where I came back within two weeks and said, hey, I've gone and visited the management team in person, I've run through the list of a hundred questions that Vinod basically wanted me to make sure that I did while I was in Portugal. And I feel high conviction that we should invite these founders, the United States, pay for their flights to basically, you know, sort of come, you know, sort of pitch that, you know, sort of partnership. So it's not to say that the like elite GPs don't go and do it, but again, it's just a different turnaround time, et cetera. The analogy that I like to, or like the, the, the, the one line mantra is just, I think, um, extraordinary careers, uh, when you're a junior in venture, do not get built sitting behind a desk in an of…

AI assessment note: “So it's not to say that the like elite GPs don't go and do it”

Q What is your most radical thought that you have not tweeted yet that you would like to?

A You know, I've sort of, you know, hinted at this some amount, you know, in, in, in various tweets, but maybe, you know, sort of not said it super explicitly, but I, I do think the sort of, uh, biggest geopolitical and moral crisis that humanity will have over the course of the next minimum a hundred, but, you know, sort of maybe it is closer to a 150 to 200 years is, you know, sort of fundamentally that, you know, humanity is almost certainly going to be, you know, sort of speciating where both with artificial selection pressures from things like You know, uh, polygenic risk scoring of embryos to eventual, you know, sort of crispering of, you know, sort of embryos where you're changing DNA to natural selection pressures of, you know, people being on, you know, sort of moon, Mars, and, you know, low earth orbit stations will fundamentally, you know, sort of create a new dynamic that we have not had, you know, in the last effectively, you know, sort of 15, sort of 20,000 years where people don't appreciate that we all happen to be sort of homo sapiens, like the only, you know, sort of intelligent conscious beings on the planet happen to be, you know, sort of homo sapiens. Almost certainly, you know, we will have Homo Luna, Homo Marsha, you know, Homo, you know, Cosma, um, and, you know, uh, Homo Neanderthal and Erectus, you know, sort of may come back as people decide to, you kno…

AI assessment note: “humanity is almost certainly going to be, you know, sort of speciating”

Q Have you ever been pulled aside in Founders Fun for your Twitter?

A Oh, a multitude of times. I mean, I, I probably had at least, you know, sort of six, you know, uh, you know, uh, Singerman, you know, sort of one-on-ones where he has to be like telling what the fuck. Um, but, uh, uh, yeah, thankfully those have generally decreased in frequency. Um, I, you know, I think, you know, especially in the early days, it was like, sorry, I'm such an idiot. I'll try to do better in the future. And then I think thankfully I did generally do better in the future. So thankfully I think, uh, you know, Brian has not had to do one of those, uh, now sit down one-on-ones. And I think, Two years and a month. So of my five years at Founders Fund, I think we're at least getting to the point where now I'll be past, uh, you know, 50% of the time, Brian having to sit me down versus not.

AI assessment note: “Oh, a multitude of times. I mean, I, I probably had at least”

Q flew to London on a Friday. He won the deal on a Saturday. He beat out everyone in London. Um, the guys at IVP fly to bumfuck nowhere, Romania to do UI path. Sorry if anyone's in Romania. Um, they, they fly to, you know, bumfuck nowhere Germany. See, I equated both, so everywhere's bumfuck. Uh, bumfuck nowhere Germany, so to do DPAL, do the best not get on planes?

A They do, but again, there's, you know, some level of turnaround of, like, you know, Keith's schedule, as an example, is booked, like, a full, like, three, four weeks in advance. The idea that, like, it's gonna be a week-long turnaround is impossible, and for his, like, activation energy, it has to be the junior investors have gone and done some level of diligence, built conviction, and for sure, it's to say he will do it at some point, but I was just willing to do it faster, quicker turnaround, and, like, you know, dive much, much deeper than what they would be capable of doing, but that was the value that I provided to the table, where I came back within two weeks and said, hey, I've gone and visited the management team in person, I've run through the list of a hundred questions that Vinod basically wanted me to make sure that I did while I was in Portugal. And I feel high conviction that we should invite these founders, the United States, pay for their flights to basically, you know, sort of come, you know, sort of pitch that, you know, sort of partnership. So it's not to say that the like elite GPs don't go and do it, but again, it's just a different turnaround time, et cetera. The analogy that I like to, or like the, the, the, the one line mantra is just, I think, um, extraordinary careers, uh, when you're a junior in venture, do not get built sitting behind a desk in an of…

AI assessment note: “They do, but again, there's, you know, some level of turnaround”

Q You mentioned getting deals across the line internally there. Can I ask you, has there been a deal? What have you had a deal where you wanted desperately to get it over the line and it didn't go over the line?

A Yeah. My biggest, you know, sort of miss, um, Um, you know, uh, uh, investment and, you know, one that I, you know, sort of think about a lot was in December, 2019. Uh, maybe it was like November. Um, I had the opportunity to double down on sword, um, and invest in the company basically, you know, sort of 10 on a hundred million post. And we had previously actually done a, you know, sort of smaller check into sword basically as soon as I joined, um, founders fund, uh, from KV. Um, you know, I, I really wanted to, you know, I really believed in the company and wanted to double down. I was still pretty new to FF. And I don't think I just set up the argument for why we should do it correctly or built enough basically internal consensus in some ways, uh, before, you know, sort of going to Peter at FF, you know, I think counterintuitively, um, I think your, your sort of best way to get a deal across the line at FF is actually to probably go to the most junior person at FF and have them start to build, you know, sort of consensus amongst a, you know, sort of wider group. Like if you look at FF, I feel like a lot of the deals sort of percolate from below. And as, you know, sort of their set of people doesn't have to be the entire firm, but let's say a subset of like two or three people that are really high conviction. And then even if it's a later stage check that requires basically P…

AI assessment note: “My biggest, you know, sort of miss... was in December, 2019... double down on sword”

Q Speaking of that kind of operational now, so obviously you run Varda today, there's pros and cons. How does running Varda make you a better investor?

A You know, a multitude, if we go back to that sort of five point, you know, sort of framework, there's a multitude that have been significantly positively impacted due to Varda. The first just top of funnel, there's just a set of, you know, founders that did not know me, uh, when I was just the founder, son, investor versus now because the company is, you know, an intriguing company have heard of me sort of through that. Second, uh, my ability to decide on what I would like to invest in significantly improved. In particular, I'd like to, you know, go back to this example of, uh, there's this company that I led the, you know, sort of seed round in, uh, Senra systems, where, uh, the founder proactively chose to come meet me in Miami, even though he was based in Los Angeles because of, you know, sort of the Varda connection. And then I was able to run an extremely extensive diligence over the following basically, 36 hours after my initial meeting with him. Because I was able to call people at Varta that had been his former manager, direct reports, had worked with him as a peer. And so the level of sort of depth of network that I have into this field allowed me to do even for other really top tier aerospace investors, that type of diligence would have taken them probably weeks, you know, sort of to do to mine into that network versus being so practically so close bear to the metal. …

AI assessment note: “The first just top of funnel... Second, my ability to decide on what I would like to invest in”

Q How does the investor mind need to change with the transition to this very different world of investing that we now face? Like many investors are high margin SaaS investors or consumer investors. This is a fundamentally entirely different asset class. It's not even comparable. How does the investor mind need to change to embrace this? And is the current generation of investors equipped?

A What's funny is like, this is actually what historical Silicon Valley was known for, right? Obviously we, you know, became what we are because of the word silicon. We were a chips industry where you had to do extremely deep technical diligence. Things required quite a bit of capex to basically scale up. The fact that we had this sort of like low marginal cost, free distribution, very simple business model is sort of like a freak, you know, sort of outcome of the like mid 2000 to the like, you know, sort of late 2010. And I think in some ways we're sort of reverting to the mean where, you know, if you look at the most successful investors from the eighties, nineties, et cetera, They look closer to, you know, sort of a Vinod Khosla than a, you know, sort of pure SaaS investor, you know, sort of Jason, you know, sort of Lemkin. And so, um, I think what you will see is the, you know, sort of profile of investors start to change. You need these very sort of broad polymaths that can, you know, sort of get up to speed across biotech, material science, aerospace, et cetera, more so than people whose, you know, sort of skill set purely sits in the world of like financial analysis, um, and, uh, you know, uh, software, you know, engineering and product. And so, Um, there does need to be adaptation. I think what you'll realistically see is just the, like, you know, sort of ranks of VCs wil…

AI assessment note: “I'm not sure that everyone is going to be capable of sort of reinventing themselves”

Q Now, listen, I always like to start with like a really soft, easy one. I think we're shaped by our past. When you reflect back on yours, what was the most maybe challenging element of your past and growing up that shaped you and how you think today? Most do you think?

A I never felt like a true American when I was in the United States because of the Bulgarian heritage. And when I would go to Bulgaria, I would never feel truly Bulgarian because of the, you know, sort of time I spent in America. I remember one of the moments that I felt like I really realized, you know, sort of that this was in some ways the fundamental cause of some of the challenges I had in both countries was I went back to Bulgaria. I, I used to go basically every summer as a kid until I was about like 13 or so. And then for, uh, the next couple of years as a teenager, I had like internships or, you know, math camps, et cetera, just like things that kept me in the States. And then I went back, uh, when I was, I want to say, like, 19 years old, uh, for, you know, maybe a month, month and a half, and I remember, uh, interacting with my cousin, who's, uh, basically, like, you know, sort of my same age. Um, our dads are basically the same age. We, like, you know, grew up around each other all the time, and, and they have, like, very similar personalities, backgrounds, like, so many, we both like computer science, et cetera. In some ways, if you, like, squint, it's just kind of, like, what I would have looked like if I grew up, basically, you know, sort of in Bulgaria. And I had this realization after, like, spending, you know, a couple weeks with him, where I was, like, Oh, all …

AI assessment note: “I never felt like a true American when I was in the United States”

Q Speaking of that kind of operational now, so obviously you run Varda today, there's pros and cons. How does running Varda make you a better investor?

A You know, a multitude, if we go back to that sort of five point, you know, sort of framework, there's a multitude that have been significantly positively impacted due to Varda. The first just top of funnel, there's just a set of, you know, founders that did not know me, uh, when I was just the founder, son, investor versus now because the company is, you know, an intriguing company have heard of me sort of through that. Second, uh, my ability to decide on what I would like to invest in significantly improved. In particular, I'd like to, you know, go back to this example of, uh, there's this company that I led the, you know, sort of seed round in, uh, Senra systems, where, uh, the founder proactively chose to come meet me in Miami, even though he was based in Los Angeles because of, you know, sort of the Varda connection. And then I was able to run an extremely extensive diligence over the following basically, 36 hours after my initial meeting with him. Because I was able to call people at Varta that had been his former manager, direct reports, had worked with him as a peer. And so the level of sort of depth of network that I have into this field allowed me to do even for other really top tier aerospace investors, that type of diligence would have taken them probably weeks, you know, sort of to do to mine into that network versus being so practically so close bear to the metal. …

AI assessment note: “there's a multitude that have been significantly positively impacted due to Varda.”

Q to, uh, to get harder and see someone's capabilities. I do have to ask you, speaking of kind of lessons from Keith there, kind of a quick fire on Keith, but so many people had so many questions. When you think about three different components operating, uh, what, To look for in founders and what to look for in companies. First, what did Keith teach you about operating most significantly?

A A ton of lessons there, but when I think about the one that has been sort of the most strategic, you know, sort of impact, let's say on my life in particular, in terms of how basically, you know, sort of Varda came together was sort of what I, uh, what he calls is like sort of Hollywood, you know, sort of analogy of, you know, sort of building companies where, you know, if you look at the best studios, they don't, you know, sort of AB test their way into, you know, sort of building a film. The script writers write a script and they have a story that they really strongly believe in. And once they've written that story, they think through, you know, sort of who should be the, you know, sort of major, you know, cast for each one. And so when they're making the Mission Impossible films, they don't go and interview 30 people on the debate. Should they have Tom Hanks or Tom Cruise? It's like, no, it's, it's an action movie. It's going to be Tom Cruise and he's going to do these basically crazy stunts. And then they might put out a sort of short preview, but they go and spend a 100,000,200 million and go fully produce the film and then put it out, you know, in the public sort of fully, you know, uh, produced. Versus in some ways the 2010, you know, sort of false or, you know, uh, antithesis of this mentality, uh, was the whole sort of lean startup approach of like a B test your way to…

AI assessment note: “what he calls is like sort of Hollywood, you know, sort of analogy”

Q Larry Summers said on the show that Japan is a nursing home, China is a jail, and Europe is a museum. Would you agree with him?

A Yes, other than the caveat of, I think, Eastern Europe is maybe, you know, sort of the only hope, where, you know, if you look at, you know, Bulgaria in particular, um, one of the now largest, uh, nano-satellite integrators, Endurosat, um, is this company that basically builds, like, I think, like, sub-thirty kilogram-type satellites, is based in Sofia. They have now built out this, like, fifteen-story skyscraper that has as nice of facilities as we have here, and you can just feel the energy when you walk in, and by the way, the people that are working there, It's like a fourth or maybe a half of the team is like Italian, French, German, English that have escaped the, like, you know, sort of socialist, like, you know, communist regimes of Western Europe to try and basically, you know, work in a country that still believes in, you know, sort of capitalism. And so I very much feel like I'm in the, like, you know, sort of like Ayn Rand, you know, where is John Galt, you know, sort of version of the world when I walk there, where it's like, these are the brightest and best people and they're clearly, you know, sort of escaping the museums of Western Europe. Um, now, Will they want to stay in the EU? How is that going to work over the next years or decade? I think what will probably happen is like, you see some of these countries actually start to leave the EU as Western Europe bec…

AI assessment note: “Yes, other than the caveat of, I think, Eastern Europe is maybe”

Q You mentioned getting deals across the line internally there. Can I ask you, has there been a deal? What have you had a deal where you wanted desperately to get it over the line and it didn't go over the line?

A Yeah. My biggest, you know, sort of miss, um, Um, you know, uh, uh, investment and, you know, one that I, you know, sort of think about a lot was in December, 2019. Uh, maybe it was like November. Um, I had the opportunity to double down on sword, um, and invest in the company basically, you know, sort of 10 on a hundred million post. And we had previously actually done a, you know, sort of smaller check into sword basically as soon as I joined, um, founders fund, uh, from KV. Um, you know, I, I really wanted to, you know, I really believed in the company and wanted to double down. I was still pretty new to FF. And I don't think I just set up the argument for why we should do it correctly or built enough basically internal consensus in some ways, uh, before, you know, sort of going to Peter at FF, you know, I think counterintuitively, um, I think your, your sort of best way to get a deal across the line at FF is actually to probably go to the most junior person at FF and have them start to build, you know, sort of consensus amongst a, you know, sort of wider group. Like if you look at FF, I feel like a lot of the deals sort of percolate from below. And as, you know, sort of their set of people doesn't have to be the entire firm, but let's say a subset of like two or three people that are really high conviction. And then even if it's a later stage check that requires basically P…

AI assessment note: “Yeah. My biggest, you know, sort of miss”

Q I love Brian. Had him on the show a couple of times. Wonderful dude. Spoke to him beforehand. He said, you have to ask him, what makes Founders Fund so special with the addendum that very few people do not know or consider? So not the like contrarian mind. Yeah. We like big plans and big ideas. Everyone knows that. What that not many people see makes them so special.

A I think the thing that is probably most underappreciated, the fact that the team is very small allows for there to be very strong sort of personal relationships where obviously in any network, the number of, you know, certain network connections grows by N squared. And so the fact that, you know, I probably, I won't do the, you know, sort of counting perfectly, but I think there's, you know, call it 11, 12 of us on the investment team today. Um, and so, you know, on the order of, you know, n squared, a 130 basically permutations of, you know, sort of connections, that's actually, you know, sort of relatively, you know, sort of possible to maintain quite strongly. Once you actually go to even, you know, so 20, at that point you're talking about 400, which then basically becomes impossible to maintain. And what that allows us to do, and the way that we sort of do our economics, which is, you know, sort of not on a, There's no sort of deal by deal, you know, sort of basis, um, mixes that the, the firm is far more collaborative than I think people expect in terms of many of the, even like intro calls that we take. We'll have multiple people on the firm and there's not jockeying around sort of who was the most point person and who gets to claim the most basic, you know, sort of credit for an individual investment. That type of politicking sort of doesn't really exist because I think…

AI assessment note: “I think the thing that is probably most underappreciated, the fact that the team is very small”

Q which are just devastating. I see gun crime that's out of control, where people don't want to send their kids to school, and going to a mall is dangerous. Um, I see an infrastructure which is just ripe for civil unrest with this election and with, you know, some of the latest political things that we've seen. I'm kind of going, respectfully, who the fuck are you to judge us?

A You know, at the same time, in the first six months of 2024, Europe did not launch a single orbital rocket. You guys did not send a single kilogram of matter from the surface of the earth into space. The United States probably, you know, roughly estimate 180 days. We've been launching roughly every day and a half on average. We've probably done 130 launches in the first six months of 2024. Um, and I think the American system, what it enables is both ends of the risk curve. We both have the downside sort of part of the risk curve where you have the homeless, the gun violence, et cetera, but we will also enable the opposite end of the risk curve, the Musks, the Vanderbilts, the Rockefellers, and in some ways you can't get one without the other. If you want an Elon Musk type figure, uh, they can do sort of crazy things. You also have to be somewhat allowing of the other side of the crazy, which is, you know, sort of the drug addicts on the, you know, sort of streets of San Francisco and Perhaps we should get a bit better at that and not only clean it up when Xi Jinping comes and visits, um, but, you know, in some ways, maybe you don't have the Elon Musks without the drug addicts.

AI assessment note: “in some ways you can't get one without the other.”

Q I can't remember the exact number, so if Vinod's listening, don't kill me or sue me if I get it wrong. Uh, 80 to 90%, I'm just giving a range of VCs actually detract value. Do you agree with that? People chat shit about venture investors like detracting value. How? How do they?

A I think there's a couple of different causes. One of the, you know, sort of, um, worst outcomes is when a venture investor feels pressure from the firm Whether it's in the like, you know, Uber case of we need liquidity, or one of the most, you know, worst cases that I've seen is when it's your first sort of like, quote unquote, big deal, big investments. It's like the thing you feel like is defining your next three, four or five years at the firm. And that anxiety then creeps in where you're trying to force the founder into like, hey, I need a quick markup or XYZ sort of short term progress. It's like not quite to the like public markets quarterly, you know, sort of, um, you know, hamster wheel, But it starts to approximate to that where you like, you start to be really, really sort of short term, um, you know, sort of thinking focused and impose that anxiety upon, um, the founder. Yeah. It just, it ends up being this very dangerous piece of advice. And then, um, probably the second is people that are just so decayed on operational skill sets, but still feel like they have really strong opinions on here's how you should do X, Y, Z marketing, this candidate, et cetera. I just think that unless you have been, you know, in a true operational day to day role, In the last, like, you know, sort of three to five years in some ways, your ability to significantly, you know, sort of, uh,…

AI assessment note: “people that are just so decayed on operational skill sets, but still feel like”

Q money. Uh, I know I pay the tax. I pay the highest tax bracket. Um, some countries do take more, but sadly, uh, no. Um, anyway, uh, I, I do have to ask dude, I was chatting to Sean McGuire before this, and he was like, you gotta talk to him about marrying up I did it. What is your biggest advice on marrying up and finding your life partner?

A The biggest mistake that I see people go into sort of, uh, the stage of life where they're prioritizing finding their lifelong partner is they come into that process with a pre-prescribed notion of what they think their ideal partner looks like, whether that be a set of attributes, a list, particular, you know, um, family archetype, et cetera. They come in with these very sort of strong predisposed notions. I came into that process sort of with that similar sort of list myself and arbitrarily one of the things on that list in some ways was I really believe that my wife needed to be a really good skier. Skiing was an incredibly important, or it still is an incredibly important sport in my life. It's how my family hangs out, you know, together all on Christmas day. And so I felt that how would somebody possibly integrate into my familial life basically without that? And then it turns out my wife, who I very much so married up for, um, it was a sort of God awful skier and, you know, bless her heart, at least allowed me to, you know, sort of teach her some of that, uh, to, you know, get her to mediocrity rather than being God awful. But I think it's recognizing that you probably don't even realize, you know, sort of what that ideal person looks like. Use the instincts of what you've built, you know, and what worked well in sort of, you know, sort of prior relationships, and try to …

AI assessment note: “try to find the person where you can most be yourself”

Q You mentioned some of those incredible kind of category-defining founders. What did Keith teach you about the founders that you want to get behind and invest in?

A Probably this sort of singular, you know, sort of lesson is just what he calls sort of the spark where, you know, there is no one archetype of great founder, right? If you look at Zuckerberg, if you look at Steve Jobs, if you look at Elon Musk, if you look at Jensen Huang, Completely different personalities, personal stories, the way they like to run their companies, right? But I think what they all have is this just unique. Attribute thing that they, you know, sort of Excel in the 99th, you know, sort of percentile on that may not always necessarily have to be, you know, specifically, you know, related to the company that they're working on. Like the way this sometimes shows up practically is a lot of times we'll end up getting really excited at founders fund to, you know, sort of back a particular founder because they happen to be like world-class in some super esoteric, you know, sort of field, whether that's like the, Cognition, you know, sort of AI founders that, you know, crushed it at IOI to, you know, people that, you know, did really well in, you know, sort of college athletics, um, to, you know, Ryan Peterson, you know, sort of running his, you know, sort of freight forwarding, you know, sort of, you know, company from whenever he was like, you know, whatever, 18 years old. And I think it's, you know, sort of looking for and identifying that spark and seeing how does …

AI assessment note: “lesson is just what he calls sort of the spark”

Q I can't remember the exact number, so if Vinod's listening, don't kill me or sue me if I get it wrong. Uh, 80 to 90%, I'm just giving a range of VCs actually detract value. Do you agree with that? People chat shit about venture investors like detracting value. How? How do they?

A I think there's a couple of different causes. One of the, you know, sort of, um, worst outcomes is when a venture investor feels pressure from the firm Whether it's in the like, you know, Uber case of we need liquidity, or one of the most, you know, worst cases that I've seen is when it's your first sort of like, quote unquote, big deal, big investments. It's like the thing you feel like is defining your next three, four or five years at the firm. And that anxiety then creeps in where you're trying to force the founder into like, hey, I need a quick markup or XYZ sort of short term progress. It's like not quite to the like public markets quarterly, you know, sort of, um, you know, hamster wheel, But it starts to approximate to that where you like, you start to be really, really sort of short term, um, you know, sort of thinking focused and impose that anxiety upon, um, the founder. Yeah. It just, it ends up being this very dangerous piece of advice. And then, um, probably the second is people that are just so decayed on operational skill sets, but still feel like they have really strong opinions on here's how you should do X, Y, Z marketing, this candidate, et cetera. I just think that unless you have been, you know, in a true operational day to day role, In the last, like, you know, sort of three to five years in some ways, your ability to significantly, you know, sort of, uh,…

AI assessment note: “I think there's a couple of different causes. One of the, you know, sort of, um, worst outcomes”

Q Who will be the biggest losers in the next 10 years of venture?

A I think the sort of, um, sector specific specialized funds are going to, you know, sort of have a very tough time where, um, you know, if you were a financial services or SaaS focused fund, you for sure, you know, sort of had a wave that you could ride for a certain period of time. And it's not obvious that there will be that same wave again. Like founders fund is not a, Aerospace defense focused investor. It happens to be that, you know, we picked up on that trend and saw that there was going to be upcoming tailwinds far ahead of anybody else, but we also invested in Airbnb, Affirm, et cetera. And so I think in some ways the firms that will struggle the most over the next 10 years are the ones that, you know, sort of have these artificial constraints on the types of investments that they're going to make that don't allow them to optimize for the reality of where is being disrupted and where are there going to be, you know, sort of generational returns to You know, maybe again, go back to, you know, sort of one of Brian's, you know, classic isms internally is, you know, the only rule of founders fund is that there are no rules. If we establish any type of arbitrary rule, it almost certainly will basically decrease our user IRR. And so a lot of these like sort of specialist firms, I think are going to have a really tough time when their sector sort of falls out of favor.

AI assessment note: “I think the sort of, um, sector specific specialized funds are going to”

Q which are just devastating. I see gun crime that's out of control, where people don't want to send their kids to school, and going to a mall is dangerous. Um, I see an infrastructure which is just ripe for civil unrest with this election and with, you know, some of the latest political things that we've seen. I'm kind of going, respectfully, who the fuck are you to judge us?

A You know, at the same time, in the first six months of 2024, Europe did not launch a single orbital rocket. You guys did not send a single kilogram of matter from the surface of the earth into space. The United States probably, you know, roughly estimate 180 days. We've been launching roughly every day and a half on average. We've probably done 130 launches in the first six months of 2024. Um, and I think the American system, what it enables is both ends of the risk curve. We both have the downside sort of part of the risk curve where you have the homeless, the gun violence, et cetera, but we will also enable the opposite end of the risk curve, the Musks, the Vanderbilts, the Rockefellers, and in some ways you can't get one without the other. If you want an Elon Musk type figure, uh, they can do sort of crazy things. You also have to be somewhat allowing of the other side of the crazy, which is, you know, sort of the drug addicts on the, you know, sort of streets of San Francisco and Perhaps we should get a bit better at that and not only clean it up when Xi Jinping comes and visits, um, but, you know, in some ways, maybe you don't have the Elon Musks without the drug addicts.

AI assessment note: “the American system, what it enables is both ends of the risk curve”

Q to, uh, to get harder and see someone's capabilities. I do have to ask you, speaking of kind of lessons from Keith there, kind of a quick fire on Keith, but so many people had so many questions. When you think about three different components operating, uh, what, To look for in founders and what to look for in companies. First, what did Keith teach you about operating most significantly?

A A ton of lessons there, but when I think about the one that has been sort of the most strategic, you know, sort of impact, let's say on my life in particular, in terms of how basically, you know, sort of Varda came together was sort of what I, uh, what he calls is like sort of Hollywood, you know, sort of analogy of, you know, sort of building companies where, you know, if you look at the best studios, they don't, you know, sort of AB test their way into, you know, sort of building a film. The script writers write a script and they have a story that they really strongly believe in. And once they've written that story, they think through, you know, sort of who should be the, you know, sort of major, you know, cast for each one. And so when they're making the Mission Impossible films, they don't go and interview 30 people on the debate. Should they have Tom Hanks or Tom Cruise? It's like, no, it's, it's an action movie. It's going to be Tom Cruise and he's going to do these basically crazy stunts. And then they might put out a sort of short preview, but they go and spend a 100,000,200 million and go fully produce the film and then put it out, you know, in the public sort of fully, you know, uh, produced. Versus in some ways the 2010, you know, sort of false or, you know, uh, antithesis of this mentality, uh, was the whole sort of lean startup approach of like a B test your way to…

AI assessment note: “what he calls is like sort of Hollywood, you know, sort of analogy”

Q I love Brian. Had him on the show a couple of times. Wonderful dude. Spoke to him beforehand. He said, you have to ask him, what makes Founders Fund so special with the addendum that very few people do not know or consider? So not the like contrarian mind. Yeah. We like big plans and big ideas. Everyone knows that. What that not many people see makes them so special.

A I think the thing that is probably most underappreciated, the fact that the team is very small allows for there to be very strong sort of personal relationships where obviously in any network, the number of, you know, certain network connections grows by N squared. And so the fact that, you know, I probably, I won't do the, you know, sort of counting perfectly, but I think there's, you know, call it 11, 12 of us on the investment team today. Um, and so, you know, on the order of, you know, n squared, a 130 basically permutations of, you know, sort of connections, that's actually, you know, sort of relatively, you know, sort of possible to maintain quite strongly. Once you actually go to even, you know, so 20, at that point you're talking about 400, which then basically becomes impossible to maintain. And what that allows us to do, and the way that we sort of do our economics, which is, you know, sort of not on a, There's no sort of deal by deal, you know, sort of basis, um, mixes that the, the firm is far more collaborative than I think people expect in terms of many of the, even like intro calls that we take. We'll have multiple people on the firm and there's not jockeying around sort of who was the most point person and who gets to claim the most basic, you know, sort of credit for an individual investment. That type of politicking sort of doesn't really exist because I think…

AI assessment note: “I think the thing that is probably most underappreciated, the fact that the team is very small”

Q I'm like, honesty one, like, does it matter if I don't like your mother? Really? Like, honestly? No. But I, I get you. So you'd have honesty one.

A Uh, honesty one, and then maybe the controversial one is, you know, I'd actually, you know, maybe put, you know, sex second, where I do think, Um, you know, sort of that, you know, type of physical connection is, you know, uh, you know, I think Zuckerberg actually had an interesting, you know, sort of quote, um, yesterday in his like Emily Chang interview, where he talked about how much he just does not believe in the idea of like, you know, plug yourself into a computer and upload your consciousness. We're so much more than just our brains. We are the bodies, the sensations, et cetera. So in some ways, you know, sort of sex in a relationship is the sort of epitome of that and needs to be, um, you know, sort of second. And then it's probably, you know, sort of laughter in that I think, you know, life is a, Difficult thing. The fact that it's so short is a difficult thing. Um, you know, you have to deal with many hardships, and if you don't have laughter, you know, you may not be able to get through that. And then, you know, probably fourth is respect where, um, I do think it's important, but when I think about it in the, you know, sort of ranking of all of those, it is probably, you know, sort of fourth most important. If you've got, you know, sort of honesty, laughter, honesty, sex, and laughter, um, you know, in some ways, respect probably falls out of that.

AI assessment note: “Uh, honesty one, and then maybe the controversial one is... put sex second”

Q Final one for you. What question are you never asked that you should be asked, do you think?

A Uh, you know, funny when I saw this, you know, on the agenda, one of the, you know, sort of things that I was going to say, uh, is, you know, people sometimes, you know, uh, don't ask enough, why did you decide to, you know, sort of not be sort of founder CEO of Varda? And it does basically come down to, you know, sort of this, where I actually, you know, sort of I think that, and this may, you know, sort of trend over time, maybe over the course of the next decade or two, as I continue to gain experience, you know, become hopefully more emotionally and mentally, you know, sort of mature. Um, I'm able to do that CEO job, but I do think that, um, you know, the question I'm not asking enough is, you know, why do you, why didn't you do the CEO job? And it's because I'm not a hundred percent convinced that I could be in the, you know, sort of top, you know, sort of .1% of CEOs versus I am very convinced that my co-founder is able to. And so I need to focus on the thing that I can, I think, be .1% in, and that is a bit more of the sort of president chairman role.

AI assessment note: “people sometimes don't ask enough, why did you decide to not be sort of founder CEO”

Q You mentioned some of those incredible kind of category-defining founders. What did Keith teach you about the founders that you want to get behind and invest in?

A Probably this sort of singular, you know, sort of lesson is just what he calls sort of the spark where, you know, there is no one archetype of great founder, right? If you look at Zuckerberg, if you look at Steve Jobs, if you look at Elon Musk, if you look at Jensen Huang, Completely different personalities, personal stories, the way they like to run their companies, right? But I think what they all have is this just unique. Attribute thing that they, you know, sort of Excel in the 99th, you know, sort of percentile on that may not always necessarily have to be, you know, specifically, you know, related to the company that they're working on. Like the way this sometimes shows up practically is a lot of times we'll end up getting really excited at founders fund to, you know, sort of back a particular founder because they happen to be like world-class in some super esoteric, you know, sort of field, whether that's like the, Cognition, you know, sort of AI founders that, you know, crushed it at IOI to, you know, people that, you know, did really well in, you know, sort of college athletics, um, to, you know, Ryan Peterson, you know, sort of running his, you know, sort of freight forwarding, you know, sort of, you know, company from whenever he was like, you know, whatever, 18 years old. And I think it's, you know, sort of looking for and identifying that spark and seeing how does …

AI assessment note: “singular, you know, sort of lesson is just what he calls sort of the spark”

Q Can I ask, before we dive into what you believe that founders fund disagree with you on, like Peter is such a, Large presence, important person, influential figure. When he's in a room, how do you prevent the weight of his words being the only words that matter?

A I actually think it goes back again to that sort of familial nature at Founders Fund. I think, um, because, uh, he maintained such closeness to everyone on the team, and obviously it's, you know, when you're, you're in your first year there, it's probably more difficult, but, you know, once you're, you know, sort of five years in, at that point, you've spent sort of so much time with him that the sort of, um, Star power or, you know, sort of weight of words, et cetera, you know, sort of goes away when you get to know that you sort of individual behind the sort of star. And so, you know, if anything, um, uh, he values sort of people that are willing to actually sort of disagree and stand up to him so much so that I think it's incentivizes behavior internally where people proactively want to disagree with him more than others. And so actually, if anything that like reverse effect, you know, sort of happens, I remember I just like, there was this particular You know, sort of moment right after the Keith departure, and I was obviously, you know, sort of feeling in some ways very emotionally raw. We were having a team meeting where there was this like discussion about, you know, sort of candidates and who we wanted to bring onto the team. And there's this person that, you know, sort of Peter was particularly excited by. And I remember I just like practically jumped in and I, I don't…

AI assessment note: “he values sort of people that are willing to actually sort of disagree”

Q Have you found a correlation between deal heat and success of company when you look back at your portfolio?

A No, it's not to say that deal heat means it will not be successful. But if you look at the sort of returns, some were hot deals and some were not. And so, you know, it's sort of like a wash and I shouldn't really focus on it, right? Sword Health was like the epitome of not hot deal, random Portuguese company. There was nobody on the other side of the table. We either sort of set terms that ramp seed round had, you know, five or six other offers and obviously was sort of super hot. Those are basically the two biggest outcomes and on opposite sides of that, you know, sort of spectrum. And so I think it's actually just like uncorrelated Um, you know, I think obviously at Founders Fund, we definitely have a bias towards, um, seeing it as a negative, you know, sort of factor, partially because it does typically end up affecting pricing. But I do think there's a set of like, you know, sort of hyper competent founders. I think in some ways, you know, at Varda, we take this strategy, which is even in a competitive situation, we don't necessarily, you know, sort of take the highest priced offer that we have. And every Varda round, we've actually not taken the highest priced, you know, sort of offer. We've, you know, done what we thought was in the, you know, sort of appropriate reasonable range that sets The company up for, you know, sort of long-term success. And so there are hot round…

AI assessment note: “And so I think it's actually just like uncorrelated”

Q Do you think people are too soft today?

A Born and, you know, bred, you know, sort of Americans that grow up within, you know, sort of this, you know, economy, culture, climate, et cetera, don't, um, they take for granted how special the United States is, our economic system, our political system, and don't recognize, you know, how existential it can be if we sort of lose the current System and how bad the rest of the world is. And so I do think that obviously makes people extraordinarily soft. You know, I'll maybe use this sort of Netanyahu quote from the congressional, you know, speech that he gave yesterday, which is, you know, there are protesters outside of Capitol Hill that had signs that, you know, said, you know, sort of gays for Gaza. And he was like, you might as well be saying that, you know, we're chickens for, you know, sort of KFC, you know, they would eat you alive there. And I think that's like a perfect example of just like the softness of the, you know, sort of next generation, because they don't, they take for granted that you can even be gay. In this country.

AI assessment note: “And so I do think that obviously makes people extraordinarily soft.”

Q In 10 years, who will the top three VC firms be?

A The sort of top three VCs a decade ago kind of looked like the top three VCs today, and those will almost certainly basically be the top three VCs, you know, a decade from now. You are starting to see, obviously, people shift in fundamentally different directions, like Sequoia and C and Z becoming RIAs, maybe points towards a world where they're going to be scaling headcount, asset classes, et cetera, to the point where they start to resemble something more like BlackRock versus, you know, sort of the, uh, you know, homegrown, you know, sort of VCs of, you know, the historical Silicon Valley arc. And I do generally believe that at least within the world of like Seed, Series A, technology companies, those are going to look more like the, you know, the most successful ones are gonna look more like the Founders Fund model of small teams focused specifically on that asset class. Versus just being a subset within a larger black rock looking like behemoth.

AI assessment note: “those will almost certainly basically be the top three VCs, you know, a decade from now.”

Q Okay, one of your tweets got me in particular. It was, and I think you know where I'm going with this. It was where you said you can't take people seriously who are over 35 and straight and who don't have children and are married. It's a bold thing to put out there, Delian. Can you just talk to me about the thinking behind that tweet?

A I just think in the technology industry, great, you know, sort of companies, movements, you know, technologies only get implemented with people that have extreme, you know, sort of long-term thinking. And to me, the epitome of long-term thinking is recognizing that your time on this planet is sort of very short, and what you're here ultimately to do is, you know, sort of set it up Well, for the next generation, and in some ways, the epitome of that is recognizing that there needs to be a next generation, and we have to be the ones to make them. Babies don't, you know, come from storks. Um, they come from people, you know, sort of ideally, you know, being married and having children. Obviously, unfortunately, there's a lot more being born out of wedlock today than not. And so, I, I just see it as a sort of fundamental, you know, sort of flaw. And to be clear, there is obviously exceptions to the rule. Um, there are many successful sort of founder that are, you know, sort of solo, you know, sort of bachelors. Um, obviously Alex Karp from, you know, Sir Pound here is doing pretty damn well, you know, being at the helm of a fifty five billion dollar, you know, sort of company.

AI assessment note: “the epitome of long-term thinking is recognizing that your time on this planet”