The Ledger, every show

“You're close to, you know, eight hundred billion of market cap needed to return a Forex net for those multi-stage funds. Now, for reference, twenty-twenty-one, the best exit year of all time, there was 850 billion-ish of market cap exit value from that year. O…”

“So, so my guess is that a hundred billion dollar IPO over the next 10 years is still going to be a generational outcome. And so the question I throw back is, you know, do you think there's going to be 10, 20 A hundred billion dollar plus IPOs. I do not think s…”

“You know, we really try to understand has the magic bond been broken between GPs and LPs, which, you know, leads us to, you know, like we think the fee structures need to change to accommodate for that.”

“You are essentially acting as a long only public equity investor, right? You're not, you know, actively, you know, managing the company. They've got their own HR team. They're doing all their own hiring. You know, they've got a 20 person product team. They've …”

“But those growth funds that are really for scaled businesses that are mature assets, like, you should be charging long-only public equity fees, which are one in 10, and if you really love your LPs, it'd be zero in 10, but, or budget-based, right? Based on the …”

“Because at that point, top decile, you are achieving returns above the PME consistently. But below that, even top quartile, you're not.”

“The median IRR is about eight percent net for that asset class, and the top quartile is a bit higher, 15%, but the MOIC is about two and a half x, right?”

“Top quartile DPI from 1998 15 year vintage funds per vintage year up until 2015 is 1.8 X top quartile.”

“I would say if you are a multi-stage firm that is, you know, deploying large checks at scale. 70% access. 30% picking. If you are a small and nimble early stage fund that is trying to break into the mold, I'm gonna say it's, you know, 80%, 70% picking. I'll fl…”

“Usually the multi-stage firms think your perennial, like Excels, Or Sequoia. They're taking very aggressive discounts on, on basically all of their securities. Even if it's a great company that is maybe achieving even a higher price on the secondary market, th…”

“It's a, it is a massive red flag for us, and I would say most institutional LPs.”

“If you're a GC, their last fundraiser, seven billion, say you own 10% of a Figma, which is a generational company, two billion, you know, they're going to take 20% of that. I mean, you've returned what? Point zero point two X. You need 15 Figma's.”

“If you had fifteen billion in AUM, which, you know, God bless, I hope you do someday you're gonna become a billionaire off that fund. Off those funds, right? And that's the difference, right? Is, is you need that capital as a true early-stage venture capital f…”

“If you're raising you know, that early stage fund, the core five hundred million dollar Series A fund, charge us your, you know, two and a half and 20, and if you're good enough, two and a half and 30. We're okay with that, right?”

“And so that is, that's the risk Of selling secondaries as a long-term venture investor is that you're going to have these crazy right-tail outcomes in the fund that could come to fruition at years eight, nine, 10, 1112, 13, that you're traditionally, even if I…”

“The public markets are now pricing risk very differently than they have over the three, the last three years. You look at circle, you look at, you know, Nebius, you look at core weave, you look at Palantir, you look at cloud flare. Like these are all businesse…”

“They're burning Five to ten billion dollars a year, right?”

“This would be the ultimate anomaly if a bubble did not pop in AI, right? You look at past historic, incredible technological moments, right? You think of the railroad, you think of cars, you think of electricity, you think of steamboats, you think of the inter…”

“Yeah, I mean, we do not, when we're sourcing and we're doing reference work, that is not something we try to dig out. Like we want the most founder friendly GPs. That's not something we source for.”

“I would say Miles, this is the perfect fund size for us. We want to be a union square. We want to be a benchmark. 300 to four hundred million, this is the perfect size. We're never going to raise a bigger fund. I hear that. I kid you not. At least every other …”

“The bad one, I mean, this one forever stands out, was we underwrote a manager in in twenty-twenty-three that was holding OpenSea at thirteen billion, which, like, I, that one was like.”

“From a liquidity perspective, we've been fortunate compared to most endowments where that private equity book has been self-funding the past three years, so our distributions Have paid for our capital calls over the past three years. Now, the sub asset classes…”

“I think there is no systematic sourcing strategy. It's the partners and the brands are so strong and they're so networked in the, you know, S tier founder community that they're just in, they're just gonna be a first call for a lot of these firms.”

“I mean, we're, the way we think about referencing, you know, when we do a new fund, we're looking for at least 20 references calls, right?”

“The amount of change you've seen at partnerships over the past two years is the most I've seen combined in my, you know, eight year histories in LP.”

“And when we back a new manager, we want to back them for at least three funds. So call it, you know, 25 years of an illiquid relationship.”

“It'll still be the idiosyncratic headwinds of there's just no capital coming back from venture, right? That's the headwind to the asset class for LPs re-upping today.”

“And so for us, when we do a venture fund, our target is a forex net. That's our goal.”

“There's been 11 fifty billion dollar IPOs ever. Venture backed. 11. Ok? The two largest venture backed IPOs ever, Or Facebook in 2012 and Alibaba in 2014.”

“Largest shareholder in Figma, largest shareholder in Dream Games, largest shareholder in Wiz you know, second largest shareholder in Scale.ai, Revolut.”

“I absolutely think they will continue to survive and thrive at that range.”

“These business models, these GPs are creating are some of the best high margin businesses Ever created, right?”

“I think certain LPs choose to just not even think about it, frankly.”

“I'll never blame you for doing that, and I'll never blame a GP for, I'll never bash a GP saying, oh, how dare you, right? It's the market, like, and you're, you've obviously done something well enough that's allowing you to raise that capital. It's our choice …”

“Mark Suster, I give him all the credit in the world. He's been in the game for a long time and upfront. He saw 20, 21 as an insane period. And he strip sailed like majority of his portfolios and his funds. For a very good price. DPI in the pocket. Like I, all …”

“We'll see what, you know, Q three and Q four look like, but in the U S this is going to be the lowest year since 17 in Europe. Same. So it goes back a bit further, maybe to 20 16.”

“2002 to 2004. You had more dollars raised in the public markets from IPOs than you did from 2022 to 20 24. And with an asset class, 10 times the size.”

“And I am not a believer ever that the IPO markets are closed. It's purely a function of price, right?”

“We ask for trending revenue, trending gross profit, and trending free cash flow for the top 10 nabs of every, every fund of we underwrite.”

“For the longest period of time, private market capital was cheaper than public market capital, which is the most mind boggling statement as like a fundamental investor ever. Like it's hard to fathom that, right? But that was the case. And so that is why the be…”

“You look at the Wiz deal, There's a 10% breakup fee there. Largest breakup fee ever for an M&A transaction.”

“When you look at the hyperscalers, just take them, for example, you look at, you know, 20, 24 to 20, 27 estimates, it's a trillion dollars of capex they're putting into the ground.”

“Frankly, like we have two quantitative data points outside of fund size and pass returns that are the best forward looking indicator for future returns of our funds. And one of them is is GP commitment.”

“I'd say we're overweight venture, but I call it anywhere from five to 10 points versus most other endowments of our size. We're underweight hedge funds and real assets, which would be real estate and natural resources”

“For us and our commitment size, which at the low end, call it ten million bucks anything from at the low end, we'll do an eighty million dollar fund at the high end, you know, anywhere from 400 to a billion, right?”

“Union Square broadly, and we're not an investor there, we wish we were, but I think they've perennially been the best at selling, and they've got a very strict protocol that they run through, you know, from years eight to 12 on those funds, and with those foun…”

“We like them to distribute cash versus stock. Reason being, if they distribute stock to us, there is sometimes a time lag between when we sell that and when others sell that, and so there could be a one to two percent pricing discrepancy on that versus them di…”

“20, 21 caused us to create new muscles in regards to underwriting as a group as well. And so for any re-up or any new manager, we diligence, we'll look at the top 10 company navs. Within that general partnership, we'll underwrite those companies ourselves. And…”