Disclosure
Morgan: B Capital Has Paused New Investments in China Due to Geopolitics
“A little bit of presence left in China, Hong Kong and Beijing, but not doing new investing in China right now, geopolitics being what it is”
Prediction Not checkable as stated
Morgan: Perplexity will be worth a couple hundred billion if successful
“I mean, we invested in perplexity at nine billion, which was kind of crazy in some ways. On the other hand, if it works, it's going to be worth a couple hundred billion.”
Insight
Morgan: Jim Simons Valued Novel Data Sources Over Superior Trading Algorithms
“And Jim once said to me, if somebody comes to me with a much better algorithm for trading, and another guy comes to me with a new source of data no one else has, I'm much more, I'd much rather pay for the data. You know, we'll figure out the algorithms.”
Opinion
Morgan: Solo GP funds are unnerving due to lack of governance
“Way too many funds, way too many solo GPs, which is on, on, on I don't know what the right word is, an unnerving trend, because as a, as an investor, because on the other side I have a family office, we're investors in ADVC funds, and we worry about solo funds…”
Prediction Not checkable as stated
Morgan: Relying on secondaries will reduce overall VC industry returns
“It's going to cut off the long tail. And if you look at the Ubers and the Roblox's and so on, it's that long tail where you make the giant returns. And so if you keep squashing it down, then the overall industry returns are going to, are, there's no question t…”
Prediction Open · timeframe Sep 2030
Morgan: Agrees With Elon Musk That Earth Will Have Billions of Humanoids
“You know, Elon Musk has said he thinks there'll be billions of humanoids. I agree with him on that. I don't agree with him on a lot of things, but that one I do agree.”
Disclosure
Morgan: BCG Holds No Equity in B Capital but Receives Carried Interest
“BCG does not own any of the firm. They don't make any of the investment decisions, but they do earn a piece of the carry interest in return for providing the various services they provide.”
Opinion
Morgan: Startup valuations are reaching bubbly levels primarily in the Bay Area
“Valuations are starting to get into bubbly territory, particularly in the Bay Area but not necessarily elsewhere, and I think that's critical.”
Insight
Morgan: Market size matters more than founder caliber in venture outcomes
“In fact if you look through history, the most important thing is how big is the market they're going after. But right after that is the founder.”
Assertion Not checkable as stated
Morgan: First Round Capital Fund II Returned 50x
“We raised a hundred thirty two million dollar fund. That fund returned 50 x. So Princeton and Yale each got a billion dollars back, actually moved their needles.”
Assertion Supported
Morgan: Larry Page and Sergey Brin Initially Booed Paid Search
“Bill Gross announced paid search at the TED conference. It was booed. People were like, oh, I, you know, people are going to pay for my time and my attention in search. No, that's horrible. Including Larry and Sergey saying, this is terrible. We'll never do th…”
Prediction Not checkable as stated
Morgan: Electricity generation capacity will be the primary rate limiter for AI
“AI needs power. AI is hungry for power. And the rate limiter for AI is going to be how much electricity generation can we build?”
Assertion Not checkable as stated
Morgan: US is not building power fast enough compared to China
“We are not building power in the US nearly fast enough compared to what China's been doing, and if you want AI, you need power.”
Assertion Not checkable as stated
Morgan: Renaissance Has 50 Years of Tick Data Nobody Else Has
“Whoever has the most data wins and Renaissance even today has 50 years of data. Tick by tick data to do research on. No one else has that. That's why they're still doing so well, even, even today.”
Assertion Supported
Morgan: Silicon Valley share of unicorns dropped to 20-25% by 2020
“Well, first of all, you know, in, in, in 2012, 80% of the unicorns came out of Silicon Valley. By 20 20, that was down almost to like 20, 25%.”
Assertion Not checkable as stated
Morgan: Venture Capital Dominated Returns for Renaissance Technologies' First Five Years
“In the first seven years of Renaissance, which is now known as the premier quant trading fund around the world, but the first seven years, we also had about half the money in venture, and for the first five years, venture dominated the returns.”
Assertion Not checkable as stated
Morgan: First Round's Uber Investment Returned 22x the Entire Fund
“And when it exited, Uber returned 22 times the whole fund.”
Assertion Not checkable as stated
Morgan: First Round's Roblox Investment Returned 23x to 24x the Fund
“So we did Roblox, and you know, that in the end returned even more than Uber. Like, 23, 24 XCI.”
Assertion Supported
Morgan: Jim Simons Refused to Hire Wall Street Talent at Renaissance
“So he never hired a Anyone who knew anything about the markets, because he was hiring mathematicians, statisticians, physicists, astrophysicists, people who understood time series, number series, big data. And he didn't want them to be colored by thinking they…”
Disclosure
Morgan: B Capital Uses an AI Algorithm to Quantitatively Rate Founding Teams
“So we have an AI algorithm to actually rate the founding teams. And it's based on their experience, their education you know, were they successful or not? How close to what they've studied? Are they working?”
Prediction Open · timeframe Sep 2030
Morgan: VC returns will fall as entry valuations outpace exit prices
“The entry prices have gone up Way faster than exit prices, which means that returns are going to come down.”
Disclosure
Morgan: B Capital sells ~20% on secondaries when investments beat base cases
“We have a small team, actually, that looks at when it's appropriate to exit. We don't have any specific marker, but you know, it, first of all, it has to, if it's beating our base case, you know, where, where we thought it would be in that many years by a sign…”
Disclosure
Morgan: B Capital Manages $8B Across $400M Early and $2.1B Growth Funds
“We have about eight billion dollars under management in total. Right now, investing out of two funds, mainly, the early stage fund called Ascent, and that funds about a four hundred million dollar fund, and the growth fund, which is about a two billion dollar,…”
Disclosure
Morgan: B Capital targets 5x for growth and 10x for early stage
“We have to see that there's a five X for us in the growth fund and a 10 X in the early stage fund.”
Howard Morgan