The Ledger, every show

“We've done a lot of work over the course of this year, a lot of which was catalyzed by Elon and the Doge team. As a result, we expect probably that we'll end up with somewhere around 2.1 million employees at the end of the year, so roughly about a 300,000 redu…”

“So one of the things that we're doing, we just put out guidance on this, at least with respect to what are called the SES, which are the most senior level people in government, is we are effectively doing a modicum of a forced distribution. And so we put out g…”

“In the government, if you look across, you know, government for long periods of time, about, like, you know, 70, 80% of people get ranked a four or five, meaning, like, 70, 80% of the people are well above, like, average, basically, and Literally, like, 0.2% o…”

“And literally that consent decree existed until about three months ago when we kind of went back to the original plaintiff in that case, actually, who was still alive. And we were able to actually get to a resolution where we got ourselves out of that consent …”

“Literally for like 42 years basically the government did away with any form of test, not just like that pace test, which was kind of a, an aptitude test and a leadership test, but also any kind of like Functional tests... We literally relied on self-attestatio…”

“Technology continues to advance rapidly and, you know, just to be blunt, the government is nowhere near prepared for it. We just don't have the right talent here.”

“So fours and fives, so the very, very top, is roughly 65 to 70% of people get a four or five. 90, when you add threes, fours, and five, that's 99.7%, ok? So 99.7% are a three or higher. 0.3%, therefore, is a one or a two.”

“Nobody's certainly done it at the scale that we're doing it at, so a big change in the industry over the last 10 years has been that there are more firms that are adding to their post-investment teams, which for a long time was really never part of the makeup …”

“The vast majority of things we do don't involve sovereignty or national security, or does somebody actually get a social security check?”

“Seven percent of government employees are under the age of 30. That compares with close to a quarter of the normal workforce outside of government.”

“A significant portion of people in technical organizations are not actually technical, and they're managing people who are technical, and therefore they're just not, quite frankly, able to provide career, career development, other things that happen.”

“Today, like, everybody's power in government is measured by how big their budget is and how many people they have. And so, again, we get the exact behavior we incent, which is everybody wants to, like, grow their budget and grow their people.”

“Probably half of what we do is euphemistically what we call impaired capital, which basically means you lost all your money, right?”

“Here at Injuries and Horowitz, we do things differently, which is as long as people follow the process, you know, consistently, you know, any single general partner has the ability to ultimately make a decision to invest and go on the board of a company.”

“When Square went public, they went public at eight dollars a share. Their last round of financing was at 16 dollars a share. And those 16 dollar investors had this full ratchet that we were talking about. So those 16 dollar shareholders basically got issued tw…”

“There are always signs Nobody could foresee the crash, but there were precursors to problems.”

“We found in, in a hundred percent of the cases that having done it, they all kind of now say, gee, like, had I done that six or 12 months earlier, it would have been better.”

“I think it's like, 95, 96% of people in the U.S., The only access they have to capital appreciation is through the public markets”

“Coupled with four and a half year time to IPO for a company, so you've got kind of massive risk both on the public markets and the private markets, whereas now at least we have kind of much better distribution of funding, as you talked about, kind of only 20% …”

“Certainly, you know, the ones we've seen, particularly where you start to get to either, you know, the hedge fund community, or in some cases, you know, buyout firms who are now kind of doing these later stage private rounds, you definitely see more structured…”

“We've got about seven percent of the workforce in the federal government that is early career. And so I'm not supposed to say, you know, ages, but let's call it under the age of 30 is the way to think about it. And that compares with about, like, 22% in the no…”

“We're gonna, like, retire out a ton, ton of people over the next 10 years, and we're doing nothing to actually replace them with people who are modern, Understand new technology.”

“I'm super grateful that we've had the sponsorship of Susie Wiles on this, who, you know, kind of has really helped us kind of navigate kind of through all the various, you know, things you have to do to get these policies through on the other end”

“Joe literally took a team of two killer engineers and like two great design people, and it's completely redesigned our retirement application, but it worked partly because we had killer people like Joe and team, but also because it was set up organizationally …”

“My primary goals for our organization is, number one is, I want operational efficiency to actually be a real first class metric in the government, right?”

“For the last 15 years, it's basically been 10 to 12 years, so we've almost doubled the time to stay private”

“Now, participating is slightly different, and it's actually much more advantageous to the venture capitalist, and quite frankly, deleterious for the entrepreneur. We generally do not see it very often, particularly in Silicon Valley, but it's good for you to u…”

“Often the boards are not controlled by the venture capitalists, but controlled by the CEO and, you know, kind of, you know, other common shareholders, in which case the board really can't, you know, the venture capitalists can't unilaterally do anything. They …”

“Venture's probably almost 18, 20% of his assets. And then if you layer on other private assets, he probably has, you know, kind of 40 plus percent, maybe even 50% of his assets in the private markets.”

“I think the other phenomenon we've seen, which I think is going to continue, is this idea of companies staying private much longer. And so it used to be that companies would go public six, six and a half years after they were started. Now it's 1012 years. I do…”

“And I think the third big thing that we're going to see over the next 10 years is more of a blending of private and public markets. So today you have this interesting dichotomy, which is you're private, and then we flip a switch and all of a sudden, you know, …”

“Ben Horowitz and I spent a bunch of time raising this very large round. We raised a hundred and twenty million dollars at an eight hundred and twenty million dollar post money valuation, right?”

“Yeah, the most entrepreneur-friendly, and the one that I think generally predominates, quite frankly, particularly in Silicon Valley, is what you would call a one X non-participating liquidation preference.”

“Over the last 10 years, that's really shifted, and more of our boards have more common shareholders, more founder and, you know, employee-led board members then do, then they have preferred shareholders.”

“The short answer is I'm not sure there's yet a real change in convention. I think most people are still doing the pretty straight four years.”

“We did 700 IPOs in 1999 and 2000. And in the decade from kind of 2009 to 18, we did about 450.”

“The average revenue for those companies was about seventeen million dollars on an annual basis when they went public. Today, those numbers are roughly about a 170, so almost 10 X scale from a you know, size perspective.”

“At the time, Lyft and Uber were raising kind of their first couple rounds of financing. I think the taxi market in the, in San Francisco was about a hundred million dollars annually. And I think today, the combined, the two of them do north of a billion and a …”

“If you look at the numbers kind of over the last 20 years, the number of companies in the public markets is closer to 3500 to 4000 today versus 7500 to 8000 about 20 years ago.”

“When companies are public, they generate jobs at a much faster pace than when they stay private.”

“Eric is working with a lot of folks in DC to think about this concept of, he calls it the long-term stock exchange, but again, similar idea, which is how do we incent both management teams and employees, as well as incent shareholders to kind of think longer t…”

“The other thing that the early employees typically have available to them is what's called 83 B, which allows them to essentially early exercise their options when the strike price is still very low and therefore the cash out of pocket required to do so is rel…”

“And one of the things that Tesla does is, instead of the typical practice, which is most people get a very significant grant, you know, the day they join the company, and then over time, they might get some refresher grants, but those refresher grants are ofte…”

“You have an IPO that prices at a price that's below where the last private round. It also happened to have this, you know, feature that we've all talked about before, which is this concept of a ratchet, meaning, you know, in basic terms that the kind of invest…”

“By the way, I think Fenwick and West came out with a report yesterday that it's only about 30% of the deals actually that have this ratchet in it.”

“I would have expected at this stage of the cycle to have a more robust M&A environment, which, you know, we've talked about in prior posts and others about, you know, whether it's activist shareholders or other things that potentially are making it more diffic…”

“I think the other thing that, you know, is potentially likely to happen over the next several years is potentially the establishment of a more, you know, fundamental secondary trading market for not just employees, which we see today, but potentially also earl…”

“We're partnering with about 25 of, you know, the best technology companies, obviously companies that you know well, like Palantir and Anvil and others.”