Assertion Not checkable as stated
Friedberg: Late-stage VCs reinvest in existing portfolio to delay write-downs
“A lot of VCs, as you know, have marked up their investments and marked up their books of Private companies significantly over the last couple of years with these later stage rounds and ballooning values, and they don't want to take a write down. So they're mor…”
Opinion
Friedberg: Traditional VC fee structures align incentives around AUM over returns
“I wasn't the biggest fan of when I invested my money in venture capital firms, all the fees that they took. And I thought that it, like, created a significant misalignment of incentives that VCs are incentivized effectively to raise more capital and make more …”
Insight
Friedberg: Market valuations drop first in public, then early-stage, then late-stage
“Valuations come down in public markets first. Ironically, the valuations then come down in early stage second and later stage third.”
Opinion
Friedberg: Andreessen Horowitz pioneered Silicon Valley's over-capitalization strategy
“Andreessen was the first to kind of make the statement where Mark Andreessen said, when I was raising my Series B, Andreessen Horowitz actually gave me a term sheet. So did Founders Fund and Kosla, and I went with Kosla. Andreessen was like, look, we're going …”
What-if
Friedberg: DoorDash succeeded because Travis Kalanick left Uber
“They do not think they would have as successful as they were if Travis was still CEO of Uber.”
Insight
Friedberg: Price Is Not a Valid Reason to Pass on a Startup
“That's really not the reason to pass on a company. If you believe in the team, you believe in the market, you believe in the technology competency, you believe they can move up that business value creation framework, you know, let the market set the price.”
Opinion
Friedberg: Top VC firms like Sequoia and Andreessen Horowitz are post-economic
“This bifurcation in the market that's underway, which is the folks that have made it, they've gotten to the top of Mount Everest. At this point, I would argue those funds are post-economic, and now they can operate more rationally over the long run, like Found…”
Insight
Friedberg: Venture market bifurcation leaves mid-sized funds with diminishing returns
“You end up with the extraordinarily hungry, motivated, high value creating early stage funds, and then you end up with these massive post-economic folks. The middle ones are the ones that maybe have the diminishing returns.”
Insight
Friedberg: Capitalist enterprises scale exponentially while governments operate linearly and non-profits run out
“That's why I love capitalism so much more than nonprofits or governments as ways to solve problems, because if someone's willing to pay you to solve the problem and you can make money doing it means that you've created a tremendous amount of value, and it crea…”
Insight
Friedberg: Startups should raise as much capital as dilution criteria allow
“I would argue every business should raise as much capital as they possibly can, provided it meets their dilution or ownership criteria.”
Disclosure
Friedberg earns no carried interest from portfolio company sales at TPB
“I don't make any carried interest, right? I don't take any money out if we sell a company. That money is just recycled.”
Assertion Supported
Friedberg: Tech adoption expands wealth disparity despite overall living improvements
“The pace of technology adoption increased wealth disparity globally. Wealth disparity, the difference between, call it the top decile and the bottom quartile, has increased, whereas the absolute condition of everyone has moved forward.”
Insight
Friedberg: Global energy, carbon, and health challenges are resolvable with existing science
“We have the opportunity to kind of resolve energy, resolve carbon, resolve human health. I mean, many of these challenges are resolvable based on first principles analysis of science as it sits today.”
Insight
Friedberg: Deploying too much capital too fast destroys business value
“You actually create negative value for the business by putting too much capital in too fast.”
Disclosure
Friedberg: The Production Board uses permanent balance-sheet capital to launch startups
“Unlike a fund, it's not just committed capital. We actually take money. We put in a checking account, and we hold it there, and then we can use it to do whatever we want. We run R&D cycles. We start businesses. Occasionally, we'll make minority investments, bu…”
Disclosure
Friedberg: TPB partners with scientists who do not pitch Sand Hill Road
“We're typically not bringing in people that we start businesses with that are otherwise trying to be entrepreneurs. The scientists, the academics, the engineers, the researchers that we primarily start businesses with are not out there going up and down Sand H…”
Disclosure
Friedberg: TPB takes majority equity at launch, reserving rest for team
“The way we capitalize the business, you know, we'll typically own, you know, majority of the equity when we start, reserve the rest of the equity for the team.”
Disclosure
Friedberg: TPB funds portfolio companies via convertible notes after initial capital
“After we put in our initial tranche of capital, the continuous capital we put in after that is in the form of converts. And then everything gets resolved when we raise outside money.”
Assertion Supported
Friedberg: Google created over 95% of its value post-IPO
“Google has accrued 95% of its value since it went public more than that.”
Assertion Partly supported
Friedberg: Applied Semantics founder Gil Elbaz was top-five Google IPO shareholder
“Applied Semantics, which was acquired by Google in 2003 or 2002, which became AdSense. The founders got equity in Google, and I think still may own a lot of it. And the founder ended up being one of the top five holders of Google stock when Google's IPO happen…”
Insight
Friedberg: Taking action generates data faster than prior analysis
“So many people I know that are super smart are too analytical and not action-oriented enough, in the sense that they kind of want to gather data before acting. More often than not, acting gives you the data you need to answer the question.”
Prediction Not checkable as stated
Friedberg: The Production Board will eventually become a publicly traded company
“You know, I would hope that we would be a public company. I think that that's important because it would give us access to capital markets to raise additional capital to have equity to a currency we could use, a publicly traded currency to do things with.”
Assertion Supported
Friedberg: Dot-com crash forced public tech companies to sell below cash balance
“We ended up during that period of time actually selling multiple public companies for less than their cash balance because their business models were so flawed.”
Assertion Supported
Friedberg: Tiger Global deployed $15 billion in venture capital in 2021
“I think Tiger Global has publicly, I don't know how public it is, but they deployed fifteen billion.”
David Friedberg