The Ledger
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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.”
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.”
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.”
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.”
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…”
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…”
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.”
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.”
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…”