Prediction Open · timeframe Mar 2029
Gerstner (in 2022): Snowflake can reach a $500B valuation by 2029
“I think this company can be worth over five hundred billion dollars over the course of the next five to seven years.”
Insight
Gerstner: Venture capital over-earned, but competition will reduce founder dilution
“I might argue the venture market has over-earned for many years, right? And so the market's gonna become more efficient, it's gonna be more competition, with more competition, that means founders are gonna have better access to capital, they're gonna have more…”
Insight
Gerstner: Early-stage venture requires hands-on craftsmanship on startup boards
“Early stage venture, those first two to three years is craft building, and we like to partner with founders who are wise enough To put around that early board table, people who have been through the trenches, and so that increases our probability of success an…”
Prediction Not checkable as stated
Gerstner: Competition in venture capital will compress average returns while concentrating elite gains
“Like, what do I expect that, you know, will happen over the full arc of time in venture, right? We're going to compete away returns. We've already witnessed it over the course of the last couple years, right? But that just means the returns that go to the prem…”
Assertion Supported
Gerstner: Seeding investment accounts for every newborn would cost under $20B/year
“It doesn't cost a lot of money, right? In the scheme of things like this is less than twenty billion dollars a year for the federal government.”
Insight
Gerstner: VCs, not founders, bear the downside risk in startups
“In venture capital, if you fail, the risk is largely on the venture capitalist. I mean, in Silicon Valley, failure is on the part of the founder, so long as you conduct yourself in a way that's honorable, it's a badge of courage that you gave it a go. And we h…”
Insight
Gerstner: High-burn, negative-unit-economic companies cease to exist when risk premiums shift
“If you are a high burn business with negative unit economics, and you fly into a world where risk premiums change, it doesn't matter how good you are, you cease to exist.”
Insight
Barton via Gerstner: Entrepreneurs focus on possibility, investors on probability
“Being an entrepreneur is the art of the possible. Right? You have to will things into existence. And he said, you know, you constantly think about what can go wrong. When you're an entrepreneur, oftentimes you have to suspend disbelief and just think about wha…”
Insight
Gerstner: The belief that companies cannot innovate in public markets is nonsense
“This idea that you can't innovate in the public markets is nonsense, right? Jeff Bezos innovated plenty in the public markets, Facebook in the public markets. You know, look at what Marc Benioff has done in the public markets. And so I think that that the publ…”
Disclosure
Gerstner: Altimeter deliberately avoids competing to lead Series A rounds
“First, I don't want to compete in that first round of institutional capital.”
Assertion Not checkable as stated
Gerstner: Retail aggregators drive a growing share of crossover fund raises
“And if you look at the retail channel, The accredited investor retail channel, through Goldman, through Morgan Stanley, through these other aggregators, as a percentage of the fundraise for Tiger, for Kotu, for Altimeter, it's going up dramatically relative to…”
Assertion Not checkable as stated
Gerstner: HBS students shunned McKinsey and Goldman interviews in 1999
“And, you know, McKinsey and Goldman couldn't get anybody to show up at their interviews at HBS in 1999.”
Assertion Supported
Gerstner: Value legends did crossover investing long before the term existed
“Paul Reeder, who started Park Capital, was doing private investments before Brad Gerstner showed up. Seth Klarman at Bellpost was doing private investments, you know, before we coined the term crossover, right? David Abrams in Boston. So I had a lot of legenda…”
Opinion
Gerstner: TCV's crossover vision was ahead of its time
“TCV Had evolved into almost more of a later stage, you know, venture firm. Yeah. Right. That, that held some public positions, but didn't have a hedge fund per se. So I think I had a slightly different view, but credit where credit is due. Their vision for whe…”
Disclosure
Gerstner: Altimeter's first trade in 2008 was buying Priceline at $42
“We launched on November first, 2008. The first trade I made was into Priceline at 42 dollars a share.”
Disclosure
Gerstner: Altimeter held its initial $42 Priceline position to $2,000
“I still owned it when it hit 2000 dollars a share.”
Insight
Gerstner: Tech companies will stay private longer and scale faster
“The private markets are becoming way deeper, way more liquid. Companies are gonna scale faster because the internet provides a network upon which they can scale, and they're gonna stay private longer because they're deeper pools of private capital. And we've m…”
Assertion Supported
Gerstner: Altimeter operates with 30 employees compared to a16z's 350
“30 versus 350.”
Assertion Supported
Gerstner: Altimeter led Snowflake's round at a ~$175M enterprise value
“I don't remember what the exact share price was. I think the enterprise value at the time was somewhere around a hundred and seventy five million dollars.”
Disclosure
Gerstner: Facebook became Altimeter's largest position when it hit $7 in 2012
“I remember Facebook became our largest investment in 2012 when it went on the cover of Barron's at seven,”
Assertion Not checkable as stated
Gerstner: MongoDB struggled to raise its final private round at $1B
“When David Charia took over, you know, Mongo, I mean, it was famously hard for him to get that last private round of financing done at a billion dollars.”
Disclosure
Gerstner: Altimeter tested beta Snowflake on its own data before investing
“Over Christmas I'll replace our data warehouse with this, you know, with Snowflake, which was non-GA at the time, right? It was in beta with a couple companies. Wow. And so we did that, and he's like, this is gonna win. Like, this is the winning arc.”
Disclosure
Gerstner: Altimeter invested in ByteDance at a $10B valuation
“ByteDance we invested in at ten billion dollars, ok? Today it's marked, you know, somewhere between 350,000,000,500 billion, depending on which crossover fund, you know, you look at.”
Assertion Supported
Gerstner: Tiger Global did 70 to 80 early-stage rounds in H2 2021
“Tiger did, I don't know, 70 or 80 series A's, and You know, seeds in series A in the back half of last year.”
Brad Gerstner