The Exchanges

Q But could you just give a high level overview of Anduril and maybe their evolution over the years?

A Yeah, so they're building a modern, Anduril's building a modern defense prime, um, you know, kind of leveraging, uh, software, AI, mass manufacturing, uh, designed for mass manufacturing. And, you know, it started out with, I think initially it was like a border, uh, security company, Uh, and I, I believe their first product was like a, a century tower. So kind of like a surveillance tower. You know, they now have, you know, many product lines across air, land, sea, and space. And so, you know, they made a re recent acquisition that got announced as company Klaus, which is a ruggedized, you know, edge compute, uh, and networking sort of, you know, product and platform. You know, they've got a whole suite of products, you know, underwater with, Dive and, and Copperhead and, and, you know, sensor networks. They've got all types of, like, counter UAS. Um, uh, they've got drones. They've got Fury, which is their, um, group five, uh, autonomous, you know, drone for, for the CCA program. So they've got.

AI assessment note: “Anduril's building a modern defense prime... started out with... now have... many product lines”

Q Let's talk about that. So dig into the strategy there, because you, you mentioned you're concentrated, you do few investments, but you're writing large checks. So could you break that down?

A Yeah. Diversification is the enemy of outlier returns. And so few things matter less, but better. We want to earn the right to partner with a couple of companies, the couple of teams that have the opportunities to build like truly special companies. And so we're investing out of our seventh venture fund right now. I, you know, don't quote me on this, but I think like less than 70 total investments on, on the private side across those seven funds. Right. And so. You know, Brad's really great as a partner to all of us of like, hey guys, like, wait for your pitch. Um, you know, spend the time, you know, one or two investments per partner per year. Not that that's like a hard rule, but we do really, um, You know, we're not a high volume shop. We're not making toehold investments. Like we spend a lot of time really intentionally to identify and build the relationships with the teams that we're most excited about to, you know, make an initial investment and then constant earn the right to concentrate a significant amount of capital in each, you know, round going forward. Um, and we are very comfortable writing a large check to start because of all that work that we've done and because of the conviction and belief that we have In the team, in the market opportunity, in the company of itself, and then, you know, like, We're happy to put, um, a significant percentage of, of a fund into …

AI assessment note: “Diversification is the enemy of outlier returns. And so few things matter less, but better.”

Q You're writing over a hundred million dollar checks now. You go from human capital straight to a hundred million dollar checks. That's truly incredible. And you're doing it for Altimeter, who is traditionally very well known as a software investor. How did you convince Altimeter, Brad, the team to get into this space?

A You know, it's helpful when the entrepreneurs that you are building conviction in and you put in front of the team are, are, you know, great. And so, uh, the team is good at recognizing greatness. Um, but, but it, it stems with, you know, a lot of data and a lot of market work pointing to, like, what is changing in the world? Like, what is the super cycle or why is now the right time to kind of go after some of these opportunities? You know, obviously our investment, you know, in SpaceX helped inform our investment in K-II. Um, and with Andrel, like, it was pretty clear how exceptional the team was, what they were doing, why they had a fundamentally, like, better, like, cost structure and business model, and how they were being innovative to, you know, capture, uh, you know, a very large sort of, like, market, um, uh, opportunity within defense, and so, you know, convincing the team is doing a bunch of work and, you know, explaining the size of, of the opportunity, Uh, why this team is uniquely well-suited to go after this opportunity? What's their insight? What's it's informed by? Why have they earned the rights? Why have they earned the right to go after it? And then, you know, stemming back to my human capital days, it's like, yeah, you can identify the, like, difficult or hairy things that aren't perfect yet, but you also can see, like, okay, well, I know how to help on tha…

AI assessment note: “convincing the team is doing a bunch of work and, you know, explaining the size”

Q Are you as bullish on drones as everyone else?

A You know, we're talking like drones in the, cause you're, you know, you have drones on water, drones under, underwater, drones in the sky. I, I don't think there are going to be a hundred massive drone companies. I think there will be a couple. I do think that drones are going to play a major role in, you know, uh, you know, future conflicts and defense. Absolutely. There's going to be different classes of drones, right? Like large ones, small ones, medium ones, ones that, you know, are on the surface of the water, same thing. So there's going to be whole fleets of these. Um, but We haven't made a standalone investment in the category yet. Um, and, and so, but I do think there, there are some, some companies, some large companies that can be built there. I think there's other use cases that are really interesting for drones, like drones for, for public safety. You're seeing kind of what, uh, Flock Safety, their acquisition of Aerodome. Like, I think that we will see a lot of police departments, um, using these for, you know, um, public safety and, and policing communities in a way that they can more quickly respond to nine one one calls Or, um, keep the community safe. So I think you'll see really interesting use cases for drones there. I think you'll see drones for deliveries. So I do think you will see a lot more drones, um, in, in general, in the future. Uh, other things we'…

AI assessment note: “I don't think there are going to be a hundred massive drone companies.”

Q And so you have developed a superpower throughout all of this, like, of the details that you mentioned, authenticity, trust, between all these relationships, what do you think are the key components of developing relationships with different people and talent?

A I think you have, like, curiosity, right? Like, you have to take an interest in other people and actually care to get to know them. What's important to them? What do they care about? Um, I don't know. Maybe it goes, like, I'm an only child, and so I, growing up, like, had to make friends. You gotta take an interest in, in other people. Um, and so I think it starts with that, and then there's just, like, a simple thing of, it's not what everybody can do for you. It's about what can you do for everybody else to earn the right to have a relationship or a friendship with these people, to be a part of, like, their career journey or their life journey. Um, and, like, I say that from a position of privilege of, like, hey, if you're working at a COSA or an index or an altimeter, like, You're in the ecosystem. You're gonna benefit from being a good actor in the ecosystem, and whether that's a short term, you earn the right to invest in this company, or it comes back around because, you know, you did the right thing for somebody else, um, you know, careers are long, uh, venture cycles are long, and so it was a couple of those things of just being curious, genuinely wanting to get to know people, being useful to them, being helpful, and then, I don't know, like, In venture, in this ecosystem, like, these are incredible people doing inspiring things, important missions, um, so if you, if y…

AI assessment note: “being curious, genuinely wanting to get to know people, being useful to them”

Q Tying in your superpower and your background to your companies, how do you support them in ways in which you've seen other investors not? I guess to reframe that, what do you think the biggest difference is in your approach to supporting founders versus traditional VCs?

A I mean, I can't speak about to all the traditional VCs. I, you know, I, I know what, what I do and, and, um, how I like to partner with my founders. And again, I, it comes back to talent is the leading indicator of the success of any organization. Like. The team you build is the company, the company you build, like best team wins. And so, you know, I spent a lot of time with the companies identifying like, okay, what do we need to be great at? Do we have the, the people, the team, the person that is great at that thing, um, that we need to accomplish? If not, like, okay, we need to identify that person and get them into the business. Um, and it's like a constant sort of, you know, that, that, that's, As soon as you solve one, you're kind of on to the next. And so I spent a lot of time with, with the founders thinking through, um, the team, the org structure. What are the, what are the things that are important for us? What do we uniquely, we need to be uniquely great at? What are the biggest risks? What are the biggest opportunities? How are we identifying and getting after those opportunities? And how are we, you know, getting the people that are the best at the world at those functions into our company properly incentivized and motivated? Um, because everything that shows up in a spreadsheet or shows up on a, on a hype video or, you know, shows up in a customer's hand is just…

AI assessment note: “I spend a lot of time with with the founders thinking through, um, the team”