The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 23 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 2 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Palihapitiya: Long feedback loops make it easy for VCs to lack integrity
“To be a partner in a venture capital firm, it's very easy, frankly, to lack integrity because there are no points of demarcation, and you only learn about your fellow partners In very sporadic bursts over very, very long periods of time, largely when it comes …”
Palihapitiya: Traditional IPOs are corrupted by investment banks underpricing shares
“Traditional IPOs are very fraught with principal agent problems by the banks who try to feed cheap stock and, you know, poor price performance to other customers of theirs. Namely, the prime brokerage customers of their trading business.”
Palihapitiya predicts venture capital returns will decay to single-digit IRRs globally
“The thing that I think people need to realize is as that happens, returns will decay. And it happens in every market when you expand. So real estate used to generate 30% IRRs. Now they generate high single digit IRRs. But the asset class and the category is a …”
Palihapitiya: Investing is an infinite game where survival is the only success metric
“I think if you think about investing more broadly speaking, it's an infinite game. The only real competitor is yourself because the only thing you're really fighting is not really market gyrations, but it's your own psychology. And if you can manage your own p…”
Palihapitiya predicts Facebook will acquire politically segmented platforms
“So I suspect what happens at Facebook specifically is you'll have certain properties that are much more right-leaning or libertarian, if you will, and other properties that are much more left-leaning. And I think that that's probably how for them to maintain m…”
Palihapitiya: Human integrity compounds infinitely over time, whereas capability decays
“Integrity really does compound infinitely. And capability always decays”
Palihapitiya: When deploying $100M+, investors should be predisposed to inaction
“When I'm talking about investing philosophy, Hundreds of millions to a billion dollars plus. I tell myself that I have to be completely predisposed to inaction. And so I forced myself to do nothing, Harry. And the bigger the check, the longer I need to wait, a…”
Palihapitiya: Early-stage VCs should deploy 75% of funds evenly across 18 months
“I take my fund, allocate 25% to reserves, And the other 75% and divided by the number of months I want to go before I raise a new fund, typically 18 months, and that's how much money I'm writing every month, and I would just keep doing it ad infinitum as long …”
Palihapitiya: D&O insurance in direct listings is nearly impossible to get
“On top of that, the ability for directors to get D&O insurance via direct listing is next to impossible, and I went through this at Slack, so I can tell you firsthand.”
Palihapitiya operated Social Capital on a budget-based fee model
“I ran my fund as budget based. I never ran it as a flat fee. Now, I ended up using the two percent because I had many, many tens of people. I had data scientists, we had HR, we had PR, we had all these outsourced resources, all those things consumed capital. B…”
Palihapitiya: Business growth forecasts are worthless regardless of data volume
“The first is that forecasts are pretty worthless because everybody gets them wrong no matter how much data you have.”
Palihapitiya calls early-stage startup growth forecasting fake work
“I think the high quality investors also understand the fragility of these kinds of things. And so as a result, don't demand this kind of fake work.”
Palihapitiya predicts social networks will fragment by political stance
“I think what you're going to see is a distribution of outcomes where you will have more left-leaning sites, more right-leaning sites, and more centrist organizations, and they will reflect their moral and ethical view into the product and the business decision…”
Palihapitiya designed Social Capital to combine Berkshire, Koch, and Red Cross
“I wanted to build a kind of organization that, you know, in some ways was a mixture between Berkshire with respect to its Capital and capitalism philosophy. The developments that are like Koch Industries with respect to its view on amalgamation and building co…”
Palihapitiya: Accurately assessing a partner's integrity requires five to six months
“The only way that you can find people with high integrity is to spend enormous amounts of time with them over a longitudinal period of time. So it's not about two weeks of 10 hours a day. It turns out to be five or six months of many, many, many hours every we…”
Palihapitiya: Faking products and embezzling is much harder in tech today
“It's much harder in 2020 to start a company and fundamentally cheat and lie. You can't steal money or embezzle as easily as you could have in the past. You can't fake a product. You can't fake customers as easily as you could in the past.”
Palihapitiya: SPACs allow forward financial forecasts while traditional IPOs ban them
“Did you know that you cannot create a forecast when you go public through a traditional IPO? No, I cannot show a multi-year projection of what you think the business can do. So there's all these arcane rules that you can work around that a SPAC solves.”
Palihapitiya: Investing is an infinite game where survival is the only success
“If you think about investing more broadly speaking, it's an infinite game. And the only real competitor is yourself because the only thing you're really fighting is not really market gyrations, but it's your own psychology. And if you can manage your own psych…”
Palihapitiya: Strong network effects protect products despite poor execution and strategy
“At AIM, it was a similar kind of idea where you had these tens of millions of users, and because of those users, we were able to keep the product afloat even during times when the product quality was quite poor, The product strategy wasn't very crisp. Our exec…”
Palihapitiya: Facebook's early growth team underestimated ultimate scale by 10x
“When we were trying to project the impact of some of the things that we did, we were frankly off by an order of magnitude. We thought success would be getting the product to a hundred million users plus. And lo and behold, the product now touches three billion…”
Palihapitiya purchased a 10% stake in the Golden State Warriors at 33
“So when I was 33 years old, I joined the ownership group of the warriors. I bought 10% of the business. I was one of six major holders of the business.”
Palihapitiya: Winamp reached 100M users with a team of eight or nine
“Winamp had a hundred million users, and we were able to use those users to create two ecosystems. One was for skins, which was sort of the UI layer that sat on top of the media player. And one was for plugins, which was all this incremental Third-party technol…”