The Exchanges

Q So you talked a little bit in the beginning about the overall structure of WonderCo. I'm curious if we could put some numbers behind that. So how much are you investing at the seed round, the growth and these build strategies?

A So we have, uh, our core fund that will do both builds and invest in venture companies. Uh, builds will do about one a year and we'll put 50, seventy-five million dollars in those builds. We take quite a bit of ownership in the early days because frankly, it's our sweat equity. It's what we roll up our sleeves. Um, and we all pitch in. This is not sort of a every partner does one. Um, it's, that's why we sort of say we feel more like a company in, in a day-to-day of how we operate. Uh, and it's, but it's fun. It's much more collegial. Uh, on the venture side, we'll invest five, 10, fifteen million dollars. Uh, we don't have a strong view on, uh, you know, things like we must have X ownership, we must be in this round. We found, again, going back to it, be the people business. Of course, the best returns are coming from as early as you invest, but, uh, if you just invest in generational founders, it tends to work out, uh, if you look back at the last 1015 years for us and for, for others. Anthony and I also have a lot of fun with the time that we spend on our seed fund. It's a fifty million dollar fund. We're typically investing 500,000 dollars, which means we're not leading. We are participating alongside other great seed investors, many of whom we've known and worked with for 1015 years, 20 years. Many, Dropbox has been a great fountain of producing VCs over the last 1015 year…

AI assessment note: “builds and we'll put 50, seventy-five million... venture side, we'll invest five, 10, fifteen”

Q tasks that require real expertise and real world judgment. That's why companies like Nvidia, Anthropic, Salesforce, and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces. The kind of infrastructure Frontier Labs need to train superintelligence. Visit Turing.com slash S-O-U-R-C-E-R-Y. So what was it like going through all those chapters, all those years, evolving the practice and the firm and strategy?

A Yeah, what probably is less known is that WonderCo started as an investment holding company, and when we got together in 2016, Sujay and I, after leaving Dropbox, uh, we, uh, read about, uh, John Malone, who comes from Jeffrey's World Cable Cowboy, um, we read about The Outsiders and some of the, over the last 50 to a hundred years. Companies that have, uh, been good stewards of capital and, uh, built great generational businesses. I, and that informed a lot of how we thought about starting something new in 2016. Also, when we looked at our skill sets, we had just, I mean, Jeffrey spent his entire career founding and building scaling companies. Sujay and I Join Dropbox when it was about a 20, 25% startup. Um, when we left, it was 2000 plus people. Uh, we had deep conviction that there was something to be done with all the talented folks that we had hired and, uh, seen them grow and scale, uh, and that we could do it again in different contexts, in different situations. Uh, that's led to us building companies in consumer security, uh, in other areas that we can talk about. Um, and it was really that operating Sent built operating building centric mentality. That was probably the guiding light to this day of, of how we operate. Now we have different strategies, different ways of how we work with companies and founders, but.

AI assessment note: “WonderCo started as an investment holding company, and when we got together in 2016”

Q another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com slash sorcery paid for by public investing full disclosures in the description. Founders ship faster on deal. That's D-E-E-L dot com slash sourcery. That's D-E-E-L dot com slash S-O-U-R-C-E-R-Y. Finally, what do you look for in product leaders and in products? Are there, like, how do you sniff out the BS from the opportunity?

A This is what I could do it in person. I think passion is infectious and you can't hide behind a PowerPoint deck, you know? Um, and, uh, I I've done, uh, recently there was one company back where we did like a live demo where I actually installed their product. I was screen sharing. They installed the product and were basically walking me through it. And I was asking questions both about how to use it, but also about, Hey, how did you do this? Uh, and I, when you get to that level of depth, I mean, I, I love it. I geek out on this day in and day out. Uh, that, that's just, um, it, it, I, I don't know how you can not be genuine about that.

AI assessment note: “you can't hide behind a PowerPoint deck... we did like a live demo”

Q Are there any companies that you're particularly excited about? I know you guys have backed Bridge, Harvey, a handful of others.

A So in the, we've been fortunate working with some great founders in, uh, that the curves are in a bridge, uh, Harvey's, uh, and those are just great examples of, uh, who would have thought, uh, multiplying matrices of numbers and predicting, predicting the next token can unlock, if you just zigzag across two years, uh, things that are transforming how doctors do their work every day, how lawyers do their work, how lawyers and their clients do their work, uh, I, I, I love going to, uh, startups offices and getting the vibe and culture of the place. And one of the things I do is just kind of look around and see how many screens have that right tab. And it's like, wow, cruises everywhere. So, um, yeah, it's like in a year, you know, if you were just, if I just did like a walk around in an office in 12 months, it, it just went from zero to a hundred. Practically. Uh, and that, that, that, that's what makes this place special is your, your, uh, and this is not just, you know, startups here. It's, I can go to startups, uh, all around the world in New York and London, um, in Stockholm, and yeah, it's that right tab is right there. Uh, and then by the way, you've seen, uh, the other thing is in the upper right bar on, on Macs, you can see what are the icons. Uh, you know, I used to work at Dropbox, so I'm still like hunting for, thank God you still have Dropbox. Uh, but we're, um, fort…

AI assessment note: “we've, uh, became investors in Granola, and that's effectively become ubiquitous in startups”

Q around. Well, I want to talk about so many things today. Definitely. We need to go into the origin story of wonder co the state of the VC world. We're coming off of a really hot year of 20, 25 and going into 20, 26. And we'll also get some of your predictions and more on the fun strategy. So this is the hot question. What happened in 20, 25?

A All right. So I think one thing we observed is new technology just takes time to get molded and shaped into products and into experiences that actually make an impact in people's lives. I mean, this is really the year where we saw some really cool, oh yeah, this is different. We can def, AI is gonna transform how we do X and Y, and it's not just people playing around with like, hey, look how this is like a show your friend over their shoulders type of moment, but really, uh, this is a new way of doing business. It's still gonna take a decade, I think, from here to fully iron out all the kinks of how companies work, how people collaborate. But this is, it's almost a relief that, given all the excitement and hype, that this is going to be a, a wave that we can build around for a decade to come. I mean, I, I subscribed, others said, uh, also subscribed to this view that even if you just froze model development at this moment in time, I, there's still so much more That we need to figure out and do and productize to actually make delightful products and experiences for consumers, for businesses that, uh, we're excited about what the research and everything is going, but even if that froze, there's so much to do. That's what's exciting.

AI assessment note: “this is really the year where we saw some really cool, oh yeah, this is different.”

Q So I want to talk about some of the breakthroughs and some of the leading companies that you have been fortunate to invest into. So Chen Li, how many unicorns have you invested into and can you name all of them?

A I've lost count. Uh, I think that the special stories are the companies that we got to know the founders early, built a relationship, had that shared. You could see the vision. You could also sort of say, yeah, a lot of things need to go right. And there's a little bit of a murky mind maze to go through. And, and then there's setbacks and there's challenges along the way. And then when they finally do Breakthrough. That's when they get all the celebrations, but we're like, remember those tough, dark moments, um, that, you know, we were texting late at night about, it's like, nah, you'll, you'll get through this. Like, that's actually what's more rewarding for, for me is, uh, because that, you know, you can only control the, the inputs and the grit, and we all recognize how much macro and luck and just circumstance factor into what ultimately happens. Uh, and yeah, that, that, that's what I think about day to day.

AI assessment note: “I've lost count. Uh, I think that the special stories are the companies”