The Ledger
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Placing illiquid private assets in daily liquidity mutual funds is unsustainable
“That, that model of taking illiquid securities and putting them in daily liquidity vehicles maybe was not the best model for the longer term because it's just uncertain.”
95% of late-stage growth outcomes hinge on idiosyncratic execution, not macro
“When I look at all of the mistakes that we've made in the last eight, nine years, and all the successes that we've had in that same period of time, 95% of the time, if not more, it's idiosyncratic, is did we get the fundamentals right on the companies that we …”
It is extremely difficult to be a value investor in technology
“One of the things I think I learned was that it's really, really hard to be a value investor in technology”
Wellington sold nearly 90% of its eligible late-stage holdings in 2021
“We ended up selling in 21 close to 90% of everything that came up, and that included selling some secondary stock in companies that weren't even public, and that's all from my experience from the tech bubble.”
High-growth companies compounding at 50% benefit from delaying their IPO
“So my view is that as long as our companies are compounding at 3040, 50%, if it takes a year or two years or even three years, those companies are going to be two, three times larger, and unless valuations have just gone through the floor, we're probably going…”
Average software valuations retraced to six times sales by mid-2023
“What you saw since November of 21 to now is you've now retraced that entire move, and now the average software company is selling for six times sales, which is at the lower end of the range, and so now you're at a point that you can, again, underwrite to much …”
Wellington's private growth team made only one software investment in 2021
“We,
Only did one software investment in 2021, invested in these other areas of the market that we're involved with.”
40 years of data show IPO markets rarely close over two years
“When I look back over 40 years of data, the market generally doesn't close for more than a year, and when it does close for more than a year, maybe it closes for two or so years.”
Wellington reviews 1,000+ companies to make 10 to 12 private investments annually
“We're now looking at north of a thousand companies every year, and we're probably signing NDAs with about a 150 to 200 that lead to, call it, 10 to 12 investments on average per year,”
Wellington's late-stage fund filters for $50M+ revenue and institutional backers
“We're looking for companies that are north of fifty million dollars of revenues. We're looking for companies that have other institutional investors in the cap table at the time of our investment.”
DraftKings went public because it exhausted all available private capital
“I remember saying to Jason Robbins that I think we've tapped into all we can tap into on the private side. And I think this is going to be a really interesting company on the public side. We have an incredibly large industry of Las Vegas casinos and Macau casi…”
Wellington walked away from 2021 deals demanding term sheets within days
“It's amazing the number of deals that we had to pass on in 20, 21, because we get into the data room, and the company would say, like, hey, listen, we want term sheets by Thursday, and it was Monday. Well, we don't work that way. And so we're just going to hav…”