Mar 21, 2025 · 1h 11m · sourcery
SpaceX, Stripe, Ramp, Anduril: Navigating Liquidity in Private Markets · Sourcery with Molly O'Shea
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Host Molly O'Shea speaks with 137 Ventures Partner Christian Garrett about late-stage private market liquidity, the mechanics of employee tender offers, the growth of defense tech ecosystems, and the power-law dynamics of venture capital investing.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Molly holds 11.1% of the talking time here. How this is scored →
Molly as informed peer 4.8 Guest teaching 4.7 Guest disagreement 1.2 Molly pushing back 0.9
speaking balance: gold is Molly, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:40 Defense tech is overrated
Garrett directly rejects the prevailing venture consensus by bluntly asserting that defense tech is overrated due to heavy procurement concentration among a few primes.
Hardest push from Molly ▶ 14:31 Stripe and Plaid public market skepticismO'Shea challenges Garrett's premise that companies must eventually go public by citing the Collison brothers' All-In podcast interview asserting Stripe has zero forcing function to IPO.
Biggest teaching moment ▶ 9:01 Single trigger vs double trigger RSUsGarrett educates O'Shea on the specific structural differences between single-trigger and double-trigger RSUs and how vesting tax bills create recurring tender requirements.
Molly holds their own ▶ 14:00 Plaid repricing vs Stripe capital independenceO'Shea demonstrates her market knowledge by referencing Plaid's down-round repricing in anticipation of an IPO and contrasting it with Stripe's capital sufficiency.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Molly as informed peer | Guest teaching | Guest disagreement | Molly pushing back | Why |
|---|---|---|---|---|---|---|
| Macro Trends in Private Markets and Staying Private Longer | 5 | 6 | 1 | 1 | O'Shea sets up the discussion with recent large tender offers like SpaceX, Figma, and Ramp. Garrett provides an educational overview of the post-2021 macro shifts, the transfer of small cap premiums into private equity, and structural regulatory changes like the JOBS Act and double-trigger RSUs. | |
| Defining Tender Offers and Secondary Market Mechanics | 4 | 4 | 0 | 0 | O'Shea asks Garrett to define tender offers and explain 137 Ventures' core investment thesis. Garrett clearly defines secondary liquidity mechanics and explains how 137 underwrites growth durability and sustainable competitive advantages. | |
| SpaceX Case Study and RSU Tax Mechanics | 4 | 7 | 0 | 0 | O'Shea inquires about SpaceX's valuation and secondary frequency. Garrett breaks down how SpaceX's negative working capital and single-trigger RSUs force regular tender offers to handle employee tax obligations, educating O'Shea on the mechanics. | |
| Strategic Benefits of Staying Private vs. Eventual IPO Realities | 6 | 5 | 2 | 4 | O'Shea challenges Garrett's premise by citing the Collison brothers' argument on the All-In podcast that scaled companies never need to go public, as well as Plaid's repricing. Garrett reframes the dynamic, arguing that SpaceX is an N-of-1 anomaly and most venture-backed winners must eventually seek public liquidity. | |
| Addressing LP Pressure for Liquidity and DPI | 5 | 5 | 3 | 2 | Garrett shares a contrarian take that defense tech is overrated because federal budget spend concentrates among a few massive winners rather than dispersing across hundreds of software startups. O'Shea reacts with genuine surprise given Garrett's active portfolio in defense. | |
| Hard Tech Ecosystems and the Southern California Flywheel | 4 | 3 | 0 | 0 | O'Shea prompts Garrett on the broader role of defense tech and Southern California's hub. Garrett details the compounding flywheel in Los Angeles stemming from traditional aerospace talent feeding modern hard-tech startups. | |
| The Realignment Between Silicon Valley and Washington D.C. | 5 | 6 | 1 | 0 | O'Shea asks whether the tech sector's collaboration with DC is real or hype, sharing her firsthand experience from the presidential inauguration. Garrett delivers an in-depth breakdown of initiatives like Replicator and FedRAMP modernization. | |
| The Hill and Valley Forum and Bipartisan Tech Policy | 5 | 3 | 1 | 0 | O'Shea and Garrett engage in lighthearted banter about a Washington Post profile before detailing the founding of the Hill and Valley Forum. Garrett emphasizes the bipartisan bridge-building that brings tech competitors and opposing political leaders together. | |
| Christian Garrett's Personal Backstory and Rapid Ascent in Venture | 4 | 3 | 0 | 0 | O'Shea asks Garrett about his rapid ascent to partner at 137 Ventures. Garrett recounts the inspiration of his grandfather Bernard Garrett Sr. and godfather Teddy Forstmann, alongside early mentorship from Trey Stevens. | |
| Investor Value Add, Mentorship, and Essays on Government's Role in Tech | 6 | 6 | 1 | 1 | Garrett outlines detailed essay concepts exploring obscure statutory frameworks like Title 10 USC 2377 and the Durbin Amendment that spawned massive tech sectors. O'Shea chimes in with relevant macroeconomic data regarding high-net-worth consumer spending. | |
| Spicy Takes: RTO Scapegoats, Distributed Tech Hubs, and Europe | 5 | 4 | 4 | 2 | Garrett delivers spicy contrarian takes, calling Return to Office mandates a convenient scapegoat for struggling businesses and defending the upside of European venture markets. O'Shea introduces nuances around high-performing engineers. |
Statements from this episode (19)
Garrett: Startups use tender offers to remark business valuations
“The companies have compounded past, cash flow positive, they're not burning any cash, they don't need cash in the balance sheet, ah, and so they've been using tenders and liquidity as not just a tool, From an employee retention or recruiting perspective, but a…”
Garrett: Companies now stay private for an average of 12+ years
“Companies used to go public in, you know, three, three to four years you know, back just in the 2000, and that has progressively trended towards seven, 10, I think now on average companies stay private, you know, 12 plus years.”
Garrett: The number of publicly traded companies has more than halved
“The number of publicly traded companies is more than halved.”
Garrett: SpaceX has only raised $10B over 23 years
“The company has only raised ten billion dollars in its life cycle as a 23 year old business.”
Garrett: SpaceX launch business operated with negative working capital for years
“SpaceX has been cashflow positive most of the life cycle of the business. The core business, the launch business for years had negative working capital”
Garrett: SpaceX employees have single-trigger RSUs, requiring semi-annual tenders
“They run tenors every six months. They're it's interesting. So actually they're the company the company employees actually have single trigger RSUs, not double trigger RSUs.”
Garrett: Databricks and Stripe converted RSUs to single-trigger to delay IPOs
“If you saw recently with Databricks and Stripe, those big massive rounds and tenders were actually to cover the tax bill for the employees after they hit their seven year cliff on the double trigger RSU. So they converted from double trigger to single trigger …”
O'Shea: Plaid repriced its valuation down ahead of a potential IPO
“Plaid just did a big repricing. They repriced down a bunch to hopefully maybe go public.”
Garrett: A wave of tech IPOs will begin in 2025 and continue through 2026
“And I think you'll see a wave companies going out starting this year and continuing through next year.”
Garrett: Lack of secondary market demand forces some private companies to IPO
“Investor needs for liquidity sometimes will be a forcing function for companies to go public. Like I mentioned, not every company has the ability to run a liquid market effectively or a semi liquid market, like some of these companies we mentioned earlier.”
Garrett: Matt Grimm and Gwynne Shotwell are the industry's best operators
“Matt Grimm from Anderle is one of the best COOs. If not, I would say the best COO in our industry. Gwen Shotwell, one of the best operators, if not the best operator in industry, president of SpaceX.”
Garrett: Defense tech is currently overrated in venture capital
“What's, what's overrated? And I would say it was overrated actually is defense tech.”
Garrett: Defense tech value will accrue to a few winner-take-all companies
“It's not like enterprise software where there's going to be hundreds of great companies that go after a multi-trillion dollar TAM in defense tech, multi-trillion dollar TAM, but I think it's gonna be a much smaller number of companies where all the value accru…”
Garrett: US will win second Cold War by partnering with tech
“If you look, you know, backdrop, we're in a second cold war during the first court war, we won because of our technological industrial prowess and government was a huge partner to the tech industry and really was helped fund the beginnings of the tech industry…”
Garrett: Hill and Valley Forum attracts more elected officials than Davos
“We have, you know, more elected reps that go there than attend Davos.”
Garrett: Grandfather Bernard Garrett Sr. was first Black US bank owner
“My grandfather was Bernard Garrett senior, who was one of the, who was the wealthiest black in the country in the fifties and sixties built his wealth through real estate and was the first black man owned banks in the country.”
Garrett: The Durbin Amendment was a core catalyst for modern fintech
“Underappreciated, but like Dodd-Frank post the GFC the Durbin amendment literally was like probably one of the core pieces of legislation that created the FinTech industry, right? Like you actually had interchange based business models that could compete enter…”
Garrett: Return to office has become a scapegoat for struggling tech companies
“Return to office has become like a scapegoat for businesses. Through a down cycle to basically blame everything that's going wrong. Like effectively, like if you're a bad business and things are going wrong, return offices scapegoat. If you're a good business …”
Garrett: European breakout startups face fewer venture-backed clones than US winners
“When you build a winner, you don't have what you have in the U S which is like, once there's a large, massive winner and outcome in the U S there's like 20 startups that get funded to go compete. Right. And Europe, it's not like that. The capital market is not…”