Dec 23, 2021 · 45m · capital-allocators
Justin Fishner- Wolfson - 137 Ventures (Manager Meetings, EP.25)
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In this episode of Manager Meetings, Agility's Nat Frazier interviews 137 Ventures co-founder Justin Fishner-Wolfson to explore the firm's bespoke collateralized lending model, late-stage venture dynamics, and founder-aligned liquidity solutions.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 14.7% of the talking time here. How this is scored →
Ted as informed peer 4.1 Guest teaching 4.6 Guest disagreement 0.6 Ted pushing back 1.0
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 34:08 Countering the macro interest rate narrative
Justin directly challenges the conventional market anxiety around Fed interest rate hikes, arguing that for companies compounding at 200% annually, multiple compression and interest rates are practically irrelevant.
Hardest push from Ted ▶ 27:06 Pushing on personal founder relationships versus underwriting disciplineNat challenges Justin on how 137 Ventures maintains disciplined underwriting when close personal founder contacts face personal liquidity needs but possess sub-par business metrics like low net retention.
Biggest teaching moment ▶ 18:11 The emergence of the extended private market liquidity gapJustin explains how tech companies staying private for over a decade created an entirely new market need for structured non-recourse liquidity that incumbent banks and venture debt firms completely failed to address.
Ted holds their own ▶ 7:00 Allocator deep dive into Uber loan collateral mechanicsNat Frazier showcases deep diligence expertise by explaining how 137's collateralized loan in Uber preserved capital during its severe post-IPO equity selloff while preferred venture equity converted and took major losses.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Allocator Diligence on 137 Ventures with Nat Frazier | 5 | 5 | 0 | 1 | Ted Seides conducts an introductory diligence debrief with allocator Nat Frazier. Nat outlines Agility's longitudinal diligence on 137 Ventures and explains how their loan collateral structure protected them in investments like Uber when common equity crashed post-IPO. | |
| Justin Fishner-Wolfson's Background, Stanford, and Founders Fund | 4 | 4 | 1 | 0 | Nat questions Justin on his early background, Stanford education, and joining Founders Fund. Justin provides color on meeting Ken Howery in Jordan during the dot-com era and gently clarifies that Founders Fund was not yet an established premier firm in 2007. | |
| SpaceX Investment and Genesis of 137 Ventures | 4 | 5 | 0 | 0 | Nat asks Justin about leading the SpaceX investment and the genesis of 137 Ventures. Justin explains the failure of traditional banks and venture debt firms to solve early liquidity problems for Facebook employees holding valuable illiquid stock. | |
| Ridgeline Sponsor Message | 5 | 5 | 0 | 3 | Following the sponsor break, Nat asks how the non-recourse loan product works and presses Justin on how he balances personal founder relationships with strict underwriting standards. Justin explains his philosophy of direct transparency regarding LP return requirements. | |
| Business Model Criteria, Growth Underwriting, and Market Dynamics | 5 | 6 | 2 | 3 | Nat raises macroeconomic concerns around Fed interest rate hikes compressing growth valuations and high IPO volume reducing demand for bespoke liquidity. Justin counters that 200% top-line growth overwhelms discount rate adjustments and private durations remain long. | |
| Private Market Dynamics, Hiring Challenges, and Firm Growth | 4 | 5 | 1 | 0 | Nat asks about emerging secondary marketplaces like Carta X and firm scaling. Justin explains why secondary marketplaces often fail due to misaligned founder incentives and details how easy capital environments create severe talent recruitment challenges. | |
| Rapid-Fire Questions and Episode Conclusion | 2 | 2 | 0 | 0 | Nat leads a series of rapid-fire questions covering personal habits, poker, mentors like Peter Thiel and John Powers, and the planning fallacy in venture operations. |
Statements from this episode (11)
Frazier: Outright secondary share sales create severe tax, control, and signaling drawbacks
“The secondary market has picked up, and there are several groups, some of them with decent, good reputations, who will buy shares outright, and that's a simple transaction to get your head around. However, the tax implications can be pretty significant. The co…”
Fishner-Wolfson: Ken Howery raised Middle East capital for PayPal in 2001
“I actually met Ken Howery because at that point in time, it was close to the dot com bust and PayPal was still burning. I believe the technical term is a ton of money, and he was in the Middle East raising money because there was money to be raised in the Midd…”
Fishner-Wolfson: Founders Fund was not a premier VC firm in 2007
“In all fairness, Founders Fund wasn't one of the premier venture funds on the planet back in 2007, right? There really had been no new venture funds It was not like a trivial thing to raise that fund. People were a lot less famous. Facebook was a much smaller …”
Fishner-Wolfson: Cost-plus incumbents had zero incentive to develop reusable rockets
“There are a lot of big players. They built their business on a cost plus strategy, and they had no interest in turning rockets into airplanes. And that's fundamentally what needed to happen in order to increase access to space.”
Fishner-Wolfson: 137 Ventures structures liquidity as loans to preserve 409A valuations
“We structure these things as loans, so we can avoid repricing the foreign day of the business. We can make it more tax efficient for folks. We can allow people to maintain voting control.”
Fishner-Wolfson: 137 Ventures offers non-recourse convertible loans against founder equity
“Most of what we do
Which are the loans that you're alluding to is basically a non-recourse loan. The person we're doing business with is going to put up some shares as collateral for that loan. The loan's non-recourse. And so they're not taking risk beyond the…”
Fishner-Wolfson: SpaceX, Gusto, Flexport, WorkRise, and Curology are 137's top holdings
“The biggest position obviously goes back to the time I was a founder's fund with SpaceX. You know, we're large investors in Gusto and Flexport and WorkRise. I think Curology rounds out probably the top five portfolio companies for us today.”
Fishner-Wolfson: Rate normalization won't hurt companies growing 200% annually
“I still come back to the growth answer, which is that if you have companies that are growing 200% a year, that you can overcome changes in interest rates... A normalization of interest rates to being positive, I think won't matter for very high growth companie…”
Fishner-Wolfson: Record IPOs do not reduce private tech liquidity demand
“I'm not sure that the fact that there's all these IPOs really changes people's need for liquidity or is dramatically changing the duration that companies are staying private for... So the IPO market isn't fundamentally changing the need or desire for liquidity…”
Staying private allows cap table control and shields employees from volatility
“The benefit of being a private company is getting to choose who your investors are and who do you want to work with and who do you think is going to be a good long-term partner. And That's not always about price. It's not necessarily the number one considerati…”
Fishner-Wolfson: Easy capital markets make hiring harder and create talent-driven dilution
“People forget that in times where capital is easier, hiring is harder. And so people have traded one problem for the other, which is that it's much easier to raise money today at quite good prices, but then you're turning around and trying to hire people. And …”