Sep 30, 2019 · 32m · capital-allocators
Joe Lonsdale – Entrepreneurship and 8VC (First Meeting, EP.09)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Ted Seides interviews 8VC founding partner Joe Lonsdale to examine his trajectory from co-founding Palantir and Addepar to building an elite venture capital firm. The conversation explores 8VC's thematic incubation model, underwriting discipline, operational value creation, and emerging frontiers across enterprise software and bio-IT.
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 31.4% of the talking time here. How this is scored →
Ted as informed peer 4.3 Guest teaching 4.0 Guest disagreement 1.5 Ted pushing back 1.0
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 30:28 Condemnation of Silicon Valley's celebration of failure
Joe forcefully denounces the casual startup culture attitude toward failure, stating that celebrating quitting due to distraction rather than maximum effort is unacceptable.
Hardest push from Ted ▶ 21:46 Challenging valuation discipline against competitive pricing pressureTed presses Joe directly on where the line is drawn to walk away when competing mega-funds drive valuations up on high-conviction founders.
Biggest teaching moment ▶ 16:00 Explaining why non-founder VC models are obsoleteJoe educates listeners on the structural shift in venture capital, explaining why top founders will only partner with proven company-builders rather than traditional financial investors.
Ted holds their own ▶ 23:46 Probing firm-wide scalability of individual partner networksTed demonstrates sharp institutional allocation expertise by drilling into whether 8VC's bespoke network advantage genuinely scales beyond Joe's personal relationships.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Early Entrepreneurship, PayPal, and Clarium Capital Roots | 4 | 3 | 1 | 1 | Ted guides the conversation smoothly through Joe's early career at Stanford, PayPal, Clarium Capital, and the genesis of Palantir. Joe provides deep historical narrative in an engaging, collegial tone. | |
| Commercializing Palantir and the Founding of Addepar | 4 | 4 | 1 | 1 | Joe details commercializing Palantir with clients like Bridgewater and identifying data infrastructure gaps that led to Addepar. Ted asks targeted questions regarding the transition from operating to angel investing. | |
| The Evolution of Formation 8 and Founding 8VC | 5 | 5 | 2 | 1 | Joe discusses the split at Formation 8 and why modern tier-one venture firms must be run by founders who hold key network advantages. Ted probes on competitive differentiation in an expanded venture landscape. | |
| Ridgeline Sponsor Message: AI-Native Investment Technology | 3 | 4 | 0 | 0 | Following an ad read, Ted asks how 8VC sources and incubates ideas. Joe illustrates their thematic research process using the logistics model behind Deliver. | |
| Underwriting Discipline, Hurdle Rates, and Valuation Inflation | 5 | 4 | 3 | 2 | Joe details strict hurdle rates of 10x multiple and 30%+ IRR, criticizing crossover mega-funds bidding up B-rounds for lower returns. Ted presses on balancing deal valuation discipline versus founder quality. | |
| Network Value Creation and Strategic Senior Advisors | 5 | 4 | 2 | 1 | Joe outlines 8VC's due diligence filters, red-flagging skewed founder equity cap tables and explaining how senior advisors like Andrew Witty add strategic scale. Ted asks how individual partner networks institutionalize across the firm. | |
| Operational Playbook: Talent Mapping and Sector Summits | 4 | 3 | 1 | 1 | Joe describes 8VC's platform playbook spanning campus recruiting, talent mapping, and 180 annual thematic summits. Ted asks how advisory boards with entertainment and enterprise leaders are practically deployed. | |
| Frontier Opportunities: The Biology and IT Renaissance | 4 | 5 | 2 | 1 | Joe explains the intersection of biology and IT/data sciences, highlighting investments in cell engineering and semiconductor cell sorting. Ted asks about portfolio concentration and sector deep dives. |
Statements from this episode (16)
Max Levchin rejected Lonsdale from PayPal before Peter Thiel hired him
“So I actually got turned down the very first time I applied there as a programmer when I was quite young, Max Loachin. Who's now a friend. I mean, do stuff on the whiteboard and we debated things and I never got an offer from that, but then Peter brought me ba…”
Eight early PayPal competitors went bankrupt from Russian and Chinese online fraud
“Well, the idea was from PayPal originally where the Chinese and Russian mafia were stealing all of our money, and there were about eight competitors that went bankrupt to these online money laundering efforts.”
Lonsdale hired the majority of Palantir's first 100 employees
“I ended up hiring most of the first hundred people, and I helped run the product and built it out.”
Lonsdale: Bridgewater used Palantir's platform for over a decade
“We had a few early customers like Bridgewater and others who Ended up using the system for over 10 years as a way that their analysts did their work.”
Formation 8 launched with a $50M anchor check from the LG family
“One of my unfair advantages in starting Formation Eight was that my early partner, his family built LG in Korea. His father gave us fifty million dollars as an anchor. I was able to raise with my network most of the remaining four hundred forty million dollars…”
Lonsdale: Great non-founder VCs are very rare today compared to past decades
“I think you could do that in the eighties or nineties and be a great venture capitalist. It's very rare these days. So first of all, being a founder is a big advantage.”
8VC allocates roughly 10% of its fund capital to in-house incubations
“One thing we do at our firm that's probably different than a lot of other firms is we still use about 10% of the fund towards things we're building ourselves”
Deliverr doubled Walmart merchant sales by providing guaranteed fast shipping
“We put it on Walmart for a bunch of their merchants and rather than three to five day shipping, they distinct guarantee one or two day shipping and those merchants sales doubled once we told consumers that.”
A massive growth fund outbid 8VC by 60% on a Series B
“I was just outbid last month for something I love by like 60% from a firm. I won't mention the name, but it's a firm that writes regularly the 102 hundred million dollar checks. They decided to come down and write a thirty million dollar check.”
Lonsdale's first venture fund achieved an IRR of over 40 percent
“Our first firm's over 40% IRR, you know, it's 50,”
Lonsdale: Venture capital has high autocorrelation where winning firms keep winning
“Venture capital is a very interesting asset class is very high auto correlation for a lot of these different reasons. And so, so it's just a very big unfair advantage. Once you're winning, you kind of can keep winning if you do it right.”
Founders hoarding 90 percent equity are not building investable venture-backed companies
“You can't just take a company and take 90% for yourself. And that actually means it's not really a venture company. It means it's something else that we wouldn't want to invest in.”
Lonsdale warned investors to be highly cautious of late-stage venture in 2019
“Again, it's getting to a point where I'd be very, very careful if I'm doing too much late stage venture right now.”
The most important venture question is what became possible recently
“I think the most important question in venture capital is what's possible now that wasn't possible five years ago, right? Because if you want to invest in ride sharing, we did before the mobile phone. It doesn't make sense. If you did it now, you're like, 1213…”
Lonsdale: 8VC Allocates About 25% of Its Fund to Biology
“So about 25% of what we're doing as a fund, I'd say, is within the Renaissance and biology area right now.”
Lonsdale calls the Silicon Valley culture of celebrating failure 'really disgusting'
“I think the celebration of failure to me is really disgusting. It's okay to fail. If you try really, really hard, you give it your all. It's not okay to feel because you got distracted and you decided not to do it anymore.”