Brad Gerstner explains why Altimeter prefers partnering with companies backed by traditional early-stage craft VC firms like Benchmark and Sutter Hill.
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…”
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.”