The Exchanges

Q I absolutely love that kind of LP patient money. I'm intrigued, though. Does that mean that you potentially think fund cycles are too small in or too short in other perspectives where there's maybe not such patient capital with other private investors? Do you think maybe that?

A Yeah, I think absolutely. And even though funds are ten-year funds, which sounds like a long time, you know, the average investment period for most Funds is probably, you know, three to five years, and so what that means is that every three to four to five years, you've got funds out raising capital, and when funds are raising capital, they want to show results, and so on average for a company that, even a company that enters at the very beginning of a fund has that kind of a clock on them over a four to five-year period, and so, and then, and then if you enter, you know, on average, of course, you enter midlife into fund, so you end up Having that conversation three years into your ownership by private equity firm, and again, I'm generalizing, of course, and this isn't always the case, but sort of, there's a pressure there from a timing perspective that has nothing to do with the business fundamentals, and then it has everything to do with the fundamentals of the firm that's invested, and that's a poor reason to make decisions about how to try to get liquidity on investments, and what's much smarter is to be able to wait and access the public markets Think about selling the company, examine liquidity when it's appropriate for the business in light of its development, not when it's convenient or desirable for the investor in the company.

AI assessment note: “Yeah, I think absolutely. And even though funds are ten-year funds”

Q I absolutely love that kind of LP patient money. I'm intrigued, though. Does that mean that you potentially think fund cycles are too small in or too short in other perspectives where there's maybe not such patient capital with other private investors? Do you think maybe that?

A Yeah, I think absolutely. And even though funds are ten-year funds, which sounds like a long time, you know, the average investment period for most Funds is probably, you know, three to five years, and so what that means is that every three to four to five years, you've got funds out raising capital, and when funds are raising capital, they want to show results, and so on average for a company that, even a company that enters at the very beginning of a fund has that kind of a clock on them over a four to five-year period, and so, and then, and then if you enter, you know, on average, of course, you enter midlife into fund, so you end up Having that conversation three years into your ownership by private equity firm, and again, I'm generalizing, of course, and this isn't always the case, but sort of, there's a pressure there from a timing perspective that has nothing to do with the business fundamentals, and then it has everything to do with the fundamentals of the firm that's invested, and that's a poor reason to make decisions about how to try to get liquidity on investments, and what's much smarter is to be able to wait and access the public markets Think about selling the company, examine liquidity when it's appropriate for the business in light of its development, not when it's convenient or desirable for the investor in the company.

AI assessment note: “Yeah, I think absolutely. And even though funds are ten-year funds”

Q firms look to be distinctive? Often, it's the tag that it's kind of Merely money without being disrespectful or rude to you in any way, because I know that's not capital G at all, but often that's the label given to later stage funding where a business is so formed that there's not much one can do in terms of formation. So how can one be distinctive, do you think?

A I think it's really hard, which, you know, again, for me personally is a big part of why I came here to capital G was the view that you needed to bring something to the party beyond just smarts, money, and hard work. And so the prospect here is To be able to build a business that could leverage Alphabet and Google to bring to startups what historically they've never had, which is access to Google's expertise, knowledge, and know-how was really distinctive. And that that was something that the world didn't already have and could use. And in fact, if you look at our strategy, that model is totally core to what we do. And so we spend immense amounts of effort to ensure that we're bringing to companies that we invest in distinctive help And value add in the form of Google coaching, knowledge access, that sort of thing. And so that's something that's a big, big part of what we do. And to that point, the reason we do it is that we're trying to differentiate relative to other capital out there. And the reason we want to differentiate relative to the capital is that A, it'll enhance our returns and B, it'll make us more of a go-to partner for other firms when they're raising money and make us more desirable than other sources of capital they may have access to.

AI assessment note: “leverage Alphabet and Google to bring to startups what historically they've never had”

Q Can I ask, does that delay concern you, potentially, as Capital G obviously investing for financial return and liquidity often happening at IPO, does that concern you with the extension of the private IPO?

A It doesn't, in the sense that, you know, we, and this is somewhat a virtue of our structure, is we have in our LP here at Google, Alphabet, the ultimate and very patient capital. And so, if we can find companies to invest in that we can be in for a very long period of time, That are growing and doing the things that they want to be doing and building value. Having a longer time period before one goes public is totally fine from our perspective. And in fact, we're eager, we're much more interested in a company developing long-term sustained value than we are in the particular timing of an IPO in light of sort of Google has is as patient a company as there is. And so from an LP perspective, we have a very, very patient capital base and therefore Much more in the long-term value creation story.

AI assessment note: “It doesn't, in the sense that, you know, we... have in our LP”

Q firms look to be distinctive? Often, it's the tag that it's kind of Merely money without being disrespectful or rude to you in any way, because I know that's not capital G at all, but often that's the label given to later stage funding where a business is so formed that there's not much one can do in terms of formation. So how can one be distinctive, do you think?

A I think it's really hard, which, you know, again, for me personally is a big part of why I came here to capital G was the view that you needed to bring something to the party beyond just smarts, money, and hard work. And so the prospect here is To be able to build a business that could leverage Alphabet and Google to bring to startups what historically they've never had, which is access to Google's expertise, knowledge, and know-how was really distinctive. And that that was something that the world didn't already have and could use. And in fact, if you look at our strategy, that model is totally core to what we do. And so we spend immense amounts of effort to ensure that we're bringing to companies that we invest in distinctive help And value add in the form of Google coaching, knowledge access, that sort of thing. And so that's something that's a big, big part of what we do. And to that point, the reason we do it is that we're trying to differentiate relative to other capital out there. And the reason we want to differentiate relative to the capital is that A, it'll enhance our returns and B, it'll make us more of a go-to partner for other firms when they're raising money and make us more desirable than other sources of capital they may have access to.

AI assessment note: “build a business that could leverage Alphabet and Google to bring to startups”

Q of the raising of funds there, and we've seen many later stage funds raised, and so I'd love to hear your thoughts on the competitive landscape of late stage funding, and how maybe it's altered your approach with Capital G. Is there much more emphasis on value add with, with now your role with like the growth team, and is that necessary with such a proliferated market, do you think?

A So I would say that investing writ large across growth equity, private equity, has commoditized To a very high degree over the last decade in a way that would not have been the case in the prior 10 years to that. And in particular, it used to be a group of really smart professionals with, with money was differentiated and could go do things that were interesting and different. And the proliferation of that formula has meant that there's, for any given situation, you got a huge number of people that are very smart, that have a lot of experience, that understand Sufficiently enough about operations of a business to be really effective with management, where strategies that work are quickly replicated, and so it's very hard to differentiate, and I would argue that within the investing world, whether it's growth equity or private equity, there's a very limited number of firms out there that are truly distinctive in terms of just, we're smart, and we've got money and experience, and we work harder than everybody else.

AI assessment note: “investing writ large across growth equity, private equity, has commoditized To a very high degree”

Q Can I ask, does that delay concern you, potentially, as Capital G obviously investing for financial return and liquidity often happening at IPO, does that concern you with the extension of the private IPO?

A It doesn't, in the sense that, you know, we, and this is somewhat a virtue of our structure, is we have in our LP here at Google, Alphabet, the ultimate and very patient capital. And so, if we can find companies to invest in that we can be in for a very long period of time, That are growing and doing the things that they want to be doing and building value. Having a longer time period before one goes public is totally fine from our perspective. And in fact, we're eager, we're much more interested in a company developing long-term sustained value than we are in the particular timing of an IPO in light of sort of Google has is as patient a company as there is. And so from an LP perspective, we have a very, very patient capital base and therefore Much more in the long-term value creation story.

AI assessment note: “It doesn't, in the sense that, you know, we, and this is”

Q You said there about kind of company selection. I'm super intrigued, as we said, speaking now on the kind of slightly later stage element, what does a company need to show to get a larger check or go public today, do you think? And have these requirements fundamentally changed?

A Yeah, well, I think to go public, I would say, you know, it seems like companies need to be a bit larger and a bit more developed than would have been the case 20 years ago. But I think a great deal of the consideration whether they go public Is driven by management teams who may or may not be as enamored of going public as they would have been in years past and a recognition that there is liquidity in the late stage market in a way that there hasn't been. And so as a result of that, you know, companies electively will wait longer to go public and stay private and be a little bit more cautious about the decision to go public, even if they can go public.

AI assessment note: “companies need to be a bit larger and a bit more developed”

Q of the raising of funds there, and we've seen many later stage funds raised, and so I'd love to hear your thoughts on the competitive landscape of late stage funding, and how maybe it's altered your approach with Capital G. Is there much more emphasis on value add with, with now your role with like the growth team, and is that necessary with such a proliferated market, do you think?

A So I would say that investing writ large across growth equity, private equity, has commoditized To a very high degree over the last decade in a way that would not have been the case in the prior 10 years to that. And in particular, it used to be a group of really smart professionals with, with money was differentiated and could go do things that were interesting and different. And the proliferation of that formula has meant that there's, for any given situation, you got a huge number of people that are very smart, that have a lot of experience, that understand Sufficiently enough about operations of a business to be really effective with management, where strategies that work are quickly replicated, and so it's very hard to differentiate, and I would argue that within the investing world, whether it's growth equity or private equity, there's a very limited number of firms out there that are truly distinctive in terms of just, we're smart, and we've got money and experience, and we work harder than everybody else.

AI assessment note: “investing writ large across growth equity, private equity, has commoditized To a very high degree”

Q I do want to touch on one really interesting element for me then, having with you seen so many market cycles and in those 17 or 18 years since TPG, how seeing the market ups and downs, the cyclicality of the markets affected how you view investments today and kind of company trajectory?

A Well, I think cycles are a business reality and always will be, and there's no way around that. And I think we, for our part, um, and this would be true, of course, for anyone in the investment business, Have as our mandate the responsibility to invest wisely through cycles. And so there's, if times are hard or it's a cyclical peaky kind of time, it's still our job to figure out appropriate places to invest capital. And so the need to invest, you know, you could certainly modulate your pace of activity, but sort of not investing in something that we're in the business of doing. Google expects to invest capital and do that Do that wisely. And so, um, I would say that sort of getting creative and finding ways to make money and invest wisely, even if, if times are frothy is something that, that we certainly think a lot about, you know, beyond that, I think just trying to keep as long a term of view as you can and having a strong set of convictions on what long-term is, uh, appropriate for thinking about ultimately how one exits an investment, sort of what valuation should be Considered at that point in time is an important part of the overall thinking that goes into that.

AI assessment note: “trying to keep as long a term of view as you can and having a strong set of convictions”

Q I do want to touch on one really interesting element for me then, having with you seen so many market cycles and in those 17 or 18 years since TPG, how seeing the market ups and downs, the cyclicality of the markets affected how you view investments today and kind of company trajectory?

A Well, I think cycles are a business reality and always will be, and there's no way around that. And I think we, for our part, um, and this would be true, of course, for anyone in the investment business, Have as our mandate the responsibility to invest wisely through cycles. And so there's, if times are hard or it's a cyclical peaky kind of time, it's still our job to figure out appropriate places to invest capital. And so the need to invest, you know, you could certainly modulate your pace of activity, but sort of not investing in something that we're in the business of doing. Google expects to invest capital and do that Do that wisely. And so, um, I would say that sort of getting creative and finding ways to make money and invest wisely, even if, if times are frothy is something that, that we certainly think a lot about, you know, beyond that, I think just trying to keep as long a term of view as you can and having a strong set of convictions on what long-term is, uh, appropriate for thinking about ultimately how one exits an investment, sort of what valuation should be Considered at that point in time is an important part of the overall thinking that goes into that.

AI assessment note: “responsibility to invest wisely through cycles”

Q You said there about kind of company selection. I'm super intrigued, as we said, speaking now on the kind of slightly later stage element, what does a company need to show to get a larger check or go public today, do you think? And have these requirements fundamentally changed?

A Yeah, well, I think to go public, I would say, you know, it seems like companies need to be a bit larger and a bit more developed than would have been the case 20 years ago. But I think a great deal of the consideration whether they go public Is driven by management teams who may or may not be as enamored of going public as they would have been in years past and a recognition that there is liquidity in the late stage market in a way that there hasn't been. And so as a result of that, you know, companies electively will wait longer to go public and stay private and be a little bit more cautious about the decision to go public, even if they can go public.

AI assessment note: “companies need to be a bit larger and a bit more developed”