20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

I mean, we made ridiculous sums of money for LPs in that period. We were the largest shareholder of Coursera. $800 million back to LPs on Coursera. We made a ton of money on Lyft and we lost money on Uber. 40% of my third fund went into Spotify. I went back to our LPs and said, Listen, we fucked up. We need to pivot. We need another 300 million bucks because I need to protect this thing. The next three years were some of the worst of my Life.

This is 20 VC with me, Harry Stebbings now. Today we feature one of the most nuts stories in vent. I went for a walk with this guest before the show and it was just mind blowing the different elements of their journey. So we dive into it today and I'm thrilled to welcome Larry Asherbrook, founder and Managing partner of G Squared in what is, as I said, one of the wildest stories in venture. Larry started G Squared with nothing, dialing for dollars, having personally invested in like Twitter and Uber. And then in his first fund, he made sizable bets into SpaceX, Power, Palantir, Alibaba and Twitter. He also had mega losses along the way, which we discuss in the show. In Get Here 23andMe, he had a lawsuit with Theranos to get out of an investment there and today he manages over $5 billion and he's invested in everyone from Wiz to Spotify to Revolut and Anthropic. This is one of the best shows I've ever done because Larry's so honest, he's so real, and he's very candid with the numbers. This was an incredible show, but. But before we dive into the show today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens of platforms, products and tools. That's why we use Coda, the all in one collaborative workspace that's helped 50,000 teams all over the world get on the same page. Offering the flexibility of docs with the structure of spreadsheets, CODA facilitates deeper teamwork and quicker creativity. And their turnkey AI solution. The intelligence of Coda Brain, a game changer powered by Grammarly, Coda is entering a new phase of innovation and expansion, aiming to redefine productivity for the AI era. Whether you're a startup looking to organize the chaos while staying nimble, or an enterprise organization looking for better alignment, Coda matches your working style, its Seamless workspace connects to hundreds of your favorite tools including Salesforce, Jira, Asana and Figma. Helping your teams transform their rituals and do more faster. Head over to Coda iO20VC right now and get six months off the team plan for startups for free. That's Coda C o D A IO 20 VC and get six months off the team plan for free. Coda IO 20 VC and while Coda keeps the engine running smoothly, Shopify puts the pedal to the metal when it's time to sell. When I was 18, I dreamed about being an investor with zero contacts in the industry. And through persistence, I'm now living that dream. Maybe you're dreaming of your own business and that's where Shopify steps in. I spend my time exploring successful businesses online. Often there's a business behind the business driving success for millions. That's Shopify. Powering 10% of US commerce, Shopify offers beautiful templates AI tools for product images and descriptions, easy marketing campaigns and 247 support their number one checkout boosts conversions by 50%. Fewer abandoned carts, more sales Winner turn dreams into success with Shopify go to shopify.com sh for your $1 per month trial today. That's shopify.com 20VC and while Shopify helps you drive sales, don't forget what really keeps those customers coming back. Trust is the ultimate currency in business and today customers expect it faster than ever. And that's why over 10,000 global companies trust Vanta. Vanta automates up to 90% of the work for in demand compliance standards like SOP2, ISO 27001 and more. Using smart AI to centralize workflo, manage risk and get you audit ready in weeks, not months so you can stop chasing paperwork and start closing deals. And a new IDC report found that Vanta customers achieve $535,000 per year in benefits. That's insane. And the platform pays for itself in three months. I had no idea about these. Whether you're growing fast or just getting started, Vanta connects you with trusted auditors and experts support to help you build trust with customers. Get $1,000 off your at vanta.com forward/20VC that's vanta.com forward/20vc. You have now arrived at your destination.

Larry did we walked around the park and I heard your incredible story. And to be fully transparent, I didn't know the incredible story before. Which is why at the end I was like dude, we have to do a show together. So thank you so much for doing.

This with me, I think that's. That's humbling. You know, it's sometimes difficult to open up and tell the story. But I enjoyed our walk.

Listen, it's the short shorts and the great legs that make you feel comfortable to open up. I completely understand. But I want to start on the entry. Dialing for dollars is kind of how I was thinking about this. How did you start your way into venture and what was that entry point?

Yeah, for me, it wasn't really, hey, I want to be a venture capitalist and manage, you know, billions of dollars. You know, I come from Nothing was a fundraiser for academic institutions for their endowments. I was good at that. And everybody I raised money from, most of people, not everyone. Most people made it investing in private companies. It would be a PE funds or venture funds or running their own operating businesses. It didn't matter what it was. From, you know, Windows to financial management to pe, they created real wealth for their families. And I was like, they're not that much different than me. I work hard. I'm smart enough. Maybe I can do it. So I went back to business school late in life, and our business today was my thesis, and I started buying. You know, the smartphone became something that was running our lives in 2010. And I just started saying, this is super interesting. Why don't I buy shares? And I follow Twitter. I like Twitter, you know, what about early Uber? What about early Spotify? And I just started buying shares from my classmates with my own money.

That sounds great, but these companies are not public at the time.

No.

So how does one do that then? How did you approach it?

Well, I guess it's not knowing what you don't know. And ignorance is bliss is kind of the same thing. I didn't realize that it was something you shouldn't or couldn't do. I just ask people, you have shares? Can I buy some of your shares? Well, I never really thought about selling them because I really can't sell them. How would you buy them? And still to this day, 15 years later, there's a form that I created at Carey School of Business at Arizona State. One page form that then we sent to the company to buy stock. And it still floats around. I got it back from a broker not that long ago. And it's like literally the form I created in 2010, one page. And it's binding, though. That's scary. It's binding, which has bitten me in the ass a few times.

So we're at business school and we're like, you know what? I see the Mobile revolution. I'm buying Uber, I'm buying Twitter, I'm buying Spotify. What happens then? And also, how much are you buying?

Yeah, so small, you know, I wanted to make a change. I was working in college athletics. That was changing as it's become today. You know, this whole thing, players should get paid and coaches salaries and pretty soon the inmates were running the asylum, so to speak. And I was like, this isn't my passion. It's not where I came from. I want to make a change as a former athlete. Like maybe I can use my brain, not my brawn. I cashed in my retirement, I went through a divorce, got remarried, had nothing, had no money, and I just had paid the tax on my retirement, started buying these shares and I this is.

Literally your last money.

Yeah, well, half of nothing's nothing. My wife came to our marriage with $50,000. I had went through a pretty tough financial situation, rightfully so. My former wife kind of took what I had raising my three young kids at the time. And my wife and I today, we started a journey together. And she backed me with the 50 grand in my small amount of retirement. I just started buying Twitter shares and Alibaba stock from Jack Ma's family office. And then, holy shit, it worked.

When you review those today, which was the single best investment on a multiple basis?

I mean, Twitter and Alibaba were pretty good. Those are when I realized there's something here. Making a little bit of money in your whole life, working 10 years in a profession thinking you've kind of made it, coming from. I grew up in an orange trailer in my Utah, you know, having like 100 grand in your bank account. One random Tuesday felt pretty good. And I said, this is something interesting. And I got some advice. You should raise some third party capital. And that's when I really understood the power of opm. Other people's money. I went around to all those alums who basically, I think, gave me some money because they were tired of me asking that. I worked at five different large academic institutions.

And so just so I get it right, what was the thesis?

For me, it was very simple. If there's fewer institutions to help companies go public. Coming off the financial crisis, funds started deploying large sums of money. So then the byproduct would be companies would stay private longer. The average age from inception to IPO was like three years leading up to 2010. From 2010 to 2018, it got to seven or eight years. Today our average portfolio company is 15 years old. So there was to me Something that was clear there, which was there's an opportunity to buy shares from these people have no liquidity, and you should be able to make more of a return. And also, companies wouldn't return my phone call, frankly, because I had no money and hey, Twitter. Hey, Dorsey. My name is Larry Ashbrook. I'm a retreader athlete that wants to become a venture capitalist. Can I invest in Twitter? And by the way, my fund size is. I don't have a fund. I just have, like, 200 grand in my name. I'd like to buy $10,000 worth of Twitter stock. That conversation obviously wouldn't go anywhere. So.

And so you have this moment in time when you're like, hey, we're seeing this extension of private markets. We're seeing a lot more capital flow in. And so you go out and fundraise for the first vehicle. How big was the vehicle?

Three years. $35 million deployed along the way.

Well, wait, pause. It was three years to fundraise.

Yeah, three years, 2010 to 2013. 34 million or 35 million. And deployed the money as I raised it.

So you did multiple closes?

Oh, yeah, Multiple.

What was the first close?

I don't even know how many. A couple million bucks.

What do you advise founders on closings? And it sounds strange, but, like, you get different advice. Close as soon as possible. 51 close.

Founders for companies or founders for new managers?

New managers.

Well, first of all, if I knew then what I know today, I'm not sure I would start the journey because I didn't know how hard it would be. I just want to do something different with my life, try to create value for my family and try to set my children up for a different future than I had. I was lucky. I grew up, my siblings grew up in the same house as me. We don't have the same life. Today I got out of the squalor because I could run and throw and catch. My siblings didn't have that benefit. I didn't want my children. Who knows what their outcome would be? So the whole genesis of it for me was to try to create something and seeing opportunity and capitalize on it. So with my mentality still to this day, raising billion $2 billion funds is. The money's there, you close, start deploying it, build a portfolio, show some improvement in nav. It is inertia that makes it easier. I don't have the benefit. Even today, with the returns that we've had and the DPI we've had to say, hey, I'm raising A new and have 2 billion show up in two months. We don't have the benefit of that. I'm okay with that because I think the way we are forced to raise money makes us better. Now 2021, it was very different. I was sat at my farm. You sat in your underwear probably. And raised in three months. I don't know what you raised.

150 million.

150 million bucks. We raised a billion four. And then turned down another 700 million in very short period of time. And companies, by the way, also raised a ton of money. Insane numbers we're going to get there.

But I want to tell the story before we move into that. It's just such an amazing story. And so when we look back at that, okay, so three years, 35 million.

Awesome.

What was the first big mover in that portfolio? When was the real momentum?

The real momentum happened in 2014. And that's when I really felt the power of what I was trying to do. When Alibaba goes public.

And you had that in the fund.

Yes. Bought shares from Jack Ma's family office and wow, what a creator of shareholder value.

Jack Ma's right, dude. How do you get in touch with Jack Ma's family office to buy shares from them?

I mean, that's the story of my life. It's like, you know, it's a bit of luck. You meet alum that I knew, knew somebody that knew somebody, and kind of introduced me to a gentleman's name was Barry Purcell, who is running Jack Ma's money in Virginia, of all places, I believe. And he said, hey, we have some shares to sell. I'm like, okay. Hired a group in India to do some DD because I had like two people and wrote me an investment committee. Oh, yeah. My early investment committee memos in the early vintages were outsourced to a group of really smart analysts in India that you could pay a fraction of what you could pay talent in the US And I didn't have any money to invest in talent.

And that today is what Sam Altman does for deep research. Okay.

So, yeah, Alibaba was the. For me was there's a business here. It was grinding, grinding, grinding. That was the first one that was material for me is 2014 Alibaba.

And are you putting size into these?

Yeah. So from the beginning, again, you don't know what you don't know. I didn't like the idea in my personality is kind of, you go big or go home. I didn't like the idea of trying to manage a lot of these positions because I didn't really know how. So my idea was I wanted to put a little bit of money in, understand the businesses, and then pick a few and put all my money in. Today we call it land and expand. We have all this bullshit that we say that our marketing, our marketing team, our team is second to none.

Reserves heavy model, but we're diversified on entry.

See, it sounds like that, but really for me it was all fewer companies. Because ultimately, how do I get liquidity if I have 50 companies? I don't. It's my money. I don't have much. I've got a few people who trusted me. I want to get their money in and out as quick as I can. Because as you're trying to raise that fund and you know what it's like, people want track record, they want pedigree. You know, what's your TVPI going to be? What's your MOIC going to be? I had people who were running their own businesses give me a little bit of money and say, I want the money back quick. I want optionality to it. So from the early days, it was, how can I build a strategy that I can actually make a good living at to have velocity of the capital come back in optionality. And today our business has become that. And the early generation of it was start off with little checks because I didn't have much money. As I raised more money, the challenge of raising the first vintages, the benefit of that was you didn't have a lot to deploy. So I'm deploying it as I have it. So inherently I'm doing this land and expand without even knowing it. Then you look back at the returns and you say, holy shit, it works. Start off with a couple small checks. All of a sudden you keep getting the data and I'm sending it. Yes. To my awesome group in India to give me the data back. I'm sending it over there. Hey, it's amazing. You work 24, seven time zones. But anyway, what comes back is, hey, these five companies are better. And so then what I did is I put a lot of concentration in and still to this day, which some people are not comfortable with, hopefully 90% of our risk are in 10 companies.

So when we get back to that first 35, that's how many companies sort of give or take like 7. 7 companies.

But most of it is Alibaba. This is funny. This is just dumb luck. Come on, I'm not that smart. Alibaba, Spotify, Palantir and Twitter.

You're not that smart. You're either the best fucking picker ever or you.

But actually you can't get that lucky.

And so you have to actually be. Because if you just did one I would.

But what do all those have in common? Right? And now you look back and say, well, how do you do that? Right? And there were some dogs in there, some clean tech shit that Kleiner Perkins sold me that was just a flaming bag of turds on your front porch. Like, look at this guy, he's energetic. Let's give him some garbage, you know. And that's what the old line Silicon Valley firms did in the beginning. Oh yeah, we'll let you in the syndicate. Sure. How much are you putting? Oh, we're putting in very little. But our LPs are co investing a lot. That's an alarm bell. Now that you know it's ringing as loud as like a four alarm fire.

When douglion calls you and goes, I've got something just for you.

Just for you. You're going to love it. You're going to love. It's really going to help your first time manager. I really want you to succeed.

So what do those four have in common then to you when you look.

Back on them and reflect the timing of that period? No liquidity. Large private valuations, really differentiated unchallenged business models. No one was doing anything like them. The liquidity window was still early from the financial crisis because you look at the number of IPOs from 2010-14, there wasn't many.

Was the pricing premium applied to them? And what I mean by that is if you think about that applied TO Today, your SpaceX of the world or your.

Yeah. Which we had in our third vintage.

We can get to that. But there's a pricing premium on it where you're paying an exorbitant price for that defensibility and for that moat.

Yeah. Today then there's no options for liquidity. It wasn't that. It was. You actually could get really good value. And I think one of the interesting things about the cycle we've been in the last 15 years is now we look back at the funds and dissect them and say what kind of value did you get as being a secondary direct buyer in early vintages we got like 35 cents on the dollar by being a secondary direct buyer over primary buyers. Because there was no other secondary buyers. Because a lot of reasons. Sure. Give myself a little credit. Hard work drive run through a wall, regardless of how thick it is and just keep hitting it until it falls that's my mentality, which is good and bad.

You're really leaving the brawn, not brain department.

Yeah, right. I'm trying, I'm trying.

I'm just running through, running through a wall.

It's there. I think that early vintages, up until 2020, all of those vintages, you were getting a lot of value by being a secondary direct buyer. Now that's a key differentiator. What I wanted was, and still to this day what I want is I want to touch and feel the founders, the companies, the data. I was amazed by what I started. The paradigm that opened for me mentally was something that I'd never tapped into my entire life. This was really interesting what these companies are doing.

Do you think your business model still applies today when you are so detached from the data and the founder at the level that you're going in now to a lot of these secondary businesses?

That's the misconception of what we do. I love it because it actually is when a good lp, the light bulb goes off, they realize that it's the opposite of that. We get primary level data, we touch and feel the founders, because the value of the discount is back and they value the work that you do today because there's still a massive needle for liquidity. But they want a trusted partner and that's, that's part of the journey to how we got here today is by doing something different.

But sorry, the value of the discount is back. Are you kidding me?

No, it's amazing.

No, no. But for the premium assets, you're coming in at cost.

Not always. No. The market on direct secondary buying is really fragmented. So first of all, in the US you have to be regulated a bit of a different way than most fund managers to do it in quantity, which is ria. Yeah, a fully registered, kind of like a hedge fund. So you're seeing a lot of people opt into that. Why? Because they want to pair primaries and secondaries together and they want to do some one off secondaries, big checks. One of the things from the early vintages that teased out that we still do today, it was the frequency of transactions and touch points of really micro transactions. Sub Microsoft $2 million, let's say today on a $2 billion fund, give you a lot of interim data that you would not normally get in that touch point as a primary investor. It starts to provide you that Trojan horse moment to know when to triple down on a whiz, which we did in our 2022 vintage fund, and have the outcome that we're going to have those founders are amazing. But to make 3x in 18 months is because of what they created. But the opportunity to do that is because you offer something different than others. And that's to the people. You asked me a question earlier. If you're going to start raising a fund, you do. Yeah, raising money. Don't take no for an answer. Open every door, all those things deploy as you go. But also create a firm that's different. The world doesn't need just another early stage seed manager, growth manager, crossover fund. There's so many, dude, I agree completely.

That's why we have media companies.

You differentiate your business by sitting here and doing this and in the know. And how many awesome people do you get to talk to to find and get their references to the next great thing? You have figured out a niche. Most don't. Most say, oh, you know, I worked at XYZ old logo firm for 10 years and I know how to operate. I'm going to start a VC firm. I'm going to go to 10 LPs that were in that old one that I got to know and give me some money.

And they fund them.

And they fund them.

I mean they really do.

They really.

Right before this night. We love the spin outs. Yeah, you spin out of Excel or you name your big firm and we fund you.

Great. And that also provides the ecosystem for us to operate in.

I want to go back to the four names you mentioned. You mentioned how do you get Spotify? What's the story there? I love Daniel. He's one of my oldest friends. Shaq as well. They are special. How did you get a Spotify in 2014?

So one of the first employees I hired, young guy out of Berkeley. He's now my co PM Spencer McLeod. He's a living caricature of what Silicon Valley is. He was working as an analyst with me. This is like 2014. I think he's like 22 years old. @ the time I was telling him this story about how my, my mind exploded when I was in college and I could download Metallica on Napster. And he's like, you know you've heard of Spotify, right? And I'm like, yeah. He's like, well, maybe we should buy some shares in Spotify. And it literally, that's kind of how it started. And we started searching around and we found a celebrity that was going through a unfortunate change of life scenario and a divorce. And he had like $4 million of stock and we had a $300 million fund. At this point, I'M like, yeah, let's buy it. Well, Spotify had this interesting process of how they approved shareholders. It was kind of onerous and difficult and my mentality was they're not responding, so let's go see them. So literally, Spencer and I flew without an appointment to Stockholm. My wife came, we spent a week there in the terrible north, like November. We had a new baby. We were staying in an Airbnb that we rented, which became a great investment for us later on. But anyway, we started going to get a meeting and finally this young lawyer, Peter Grandelius, took pity on us in the waiting room and took a meeting and we pitched to, I look back and all the pitches I ever gave a company on how we could add value with a small fund and a lot of co investment. Spotify is what it's become. But they're like, yeah, we could use the help. Very humble, very nice people. They introduced us to a gentleman named Johan Berkhust who was at the end, I think the treasurer and then went on to Bolt where we also became an investor in the EU ride hailing business. And before we left the meeting they were like, do you think you could buy $150 million worth of stock? And I said sure. And I didn't have the money because we were in the process of raising the fund and I think we had like close $125.

Million. Have you done the diligence? Have you done the.

Diligence? Yeah, by this time we did. We did due diligence, we'd written a memo and.

Diligence. There's diligence, there's diligence. Like a $20.

Million. This was mosaic theory. So most of the early stuff had to be Mosaic theory because companies until really Spotify. So the early wins are gathering data, trying through public sources, but it's not really available. You're gather through contacts and putting as many feelers out and then sending all this information to what became our own research team to develop a thesis around it. And then the Trojan horse became the check to get the info. So in that land and expand strategy that we run as it's developed, often that first check is kind of that Trojan horse. You like it, you've done some Mosaic theory work, you think it works, but you don't really know. You go in. So we go in. They give us a whole deep dive on the business. And it's amazing. It's like nothing I ever could imagine. It's nothing I've seen before. Why so, why so what was it.

About? It that was made it so.

20. At that time, the penetration of the usership in Sweden was like 25% of the population used it. That's amazing. 25% of the population used the product. It's already cool because you're using it. And of course Apple Music and I think that Beats and, and Tidal and all these, you know, SoundCloud, all these competitors. But what they divulged to us in that one on one personal meeting after saying no to us for six straight days was the fact that the record labels were also investors. That to me was like, this is like Napster on steroids. And it worked. And obviously they went on to create amazing shareholder value. It's one of the best businesses we ever invested in. And we had $150 million to go.

Find. So what do you do then? They're like, hey, you got $150 million? Are you shitting.

Yourself?

Yeah. Because is it 150 million or.

None? Yeah. So the way that the transfer process worked on that business is pretty interesting. It actually gave you time. So you signed the documents today. It took like 60 days to clear. So we had like let's say 25 million ready to go. Awesome. Concentrated position on a $300 million fund. We're going to start. Let's do it. We had 4 million they said yes to. We'll take another 25. So we went out and went on a world tour with our thesis, Spencer and I. Different.

Countries. How long did you.

Have? We had 60.

Days. We had 60 days to raise.

125. And we got to day 59 and we had sent 141 million to one of the earliest investors. Very predominant Norwegian fund. We'll leave their name out of it. Awesome. Founder of that fund, who is an iconic pop star, or, sorry, heavy metal star in music in his own right. Very serious guy. And we have $141 million we've sent him. And the rofer ends. And if we don't send him the $9 million, the deal blows up. And I don't have $9 million to my name, so I borrow it from.

Him. You borrow it from.

Him? I borrowed the nine million bucks from.

Him. You call him up and say.

I'm so sorry, I don't have the 9 million, but if you lend it to me, I'll close and I'll pay you.

Back. And he's like, sure, I'll lend.

You. Well, it wasn't exactly that pleasant, Harry, but it worked. And God bless my wife, she's like, do you Love this business. I'm like, it's the most amazing business I've ever seen. She's like, well, how do you. How do we figure out how to own the 9 million? And we figured it out and that 9 turned into a very different number. And that was the life changing event for me. Spotify buying into our business model. We then went on to become a top 10 global shareholder of Spotify. Went as far as to putting up signs in their break room. We'll buy your shares. Buying all these odd lot transactions along the way and built a huge position. And it ended up being like a billion dollar outcome to our LPs. 40% of my third fund went into.

Spotify. How much was that of the third.

Fund? 380 million. It was a lot of money, very concentrated.

Risk. What price is it going in? Just kind of give or.

Take. Yeah. So in many ways we did it at the time in which it was perfect because you had Adele announced she was leaving the platform. You had Apple Music taking market share and you had Taylor Swift saying, I want my library off. And Daniel Ek came out and I think one of the smartest things he's ever done, and he agreed with the artist. He said, I have your back. I understand why you pulled from our product. You're not the issue. And the record labels had an option to buy more shares and they executed the option to buy more shares. So to me that was like there's this aha moment where we can triple down. Nobody else knows this information. You buy from all the people who are scared to death and you do the counterintuitive thing and you take the bet. And we did, and it worked. And we bought at like a 50% discount to the current financing round. And we just kept buying it there for the next two.

Years. So after the 150, you kept.

Buying. Yeah, we kept buying. So we pooled a bunch of money together. Some of it we were able to put into our fund. Others we had very prominent, very, very prominent logos come into our SPVs to buy the stock because we locked in the access. So you have this journey, you start your hustling, you get to 35 million. The second fund was 36 million. Raised it in a.

Year. And a million.

Increase. Yeah, 1 million increase. Fewer investors, thank God. And then you get to a $380 million pool of capital. And in that you take a lot of concentration in Spotify. But on top of the concentration we had, we did another 700 million in co invest in Spotify. In.

Spotify. 700.

Million. Yeah, I know, but that fund also. But by the way, that fund also had Lyft, Uber, SpaceX, Instacart, Impossible Foods. The list goes on and on of companies because of Spotify's acceptance of our.

Model. It opened up the.

Door. It opened the door. And Johan Berquist and Peter Grandelius, they're the two people that have made probably the most direct impact to my life because they trusted that we could do it and they put their names on the line to Daniel Ek. That we could actually achieve it. And then we went and somehow, you know, Spencer and I spent. Poor guy got shingles. He literally got shingles. He was like 23 years, 4 years old, got.

Shingles. So funny, because Daniel's like the guy who I just send rude memes to most.

Mornings. I mean, it's an amazing business. It's truly.

Amazing. No, he is absolutely incredible. When you go through those names, what about Uber? How does that come.

Often? In our thesis, we'll back two businesses trying to attack the same thing. Lyft and that fund became the value play. We sold it. And did you make money? We made a ton of money on Lyft and we lost money on.

Uber.

What?

Yeah. Well, how does that.

Work? When Uber chose to go public, it was a tough time. Today, Uber's valued off a gross profit, which is, I think, a good. A good metric for them. And I don't think when it went public, it was rewarded properly. In our business model, we don't hold. Rarely do we hold post public. Oftentimes we sell before they're public. And as it went public at the price it did on a converted basis, we were underwater. We lost. We lost like 20 cents on the dollar. And Lyft, we made like a.

3X. So how much did you lose on.

Uber? I don't know, 50 million bucks.

Probably. And you made a 3X on Lyft? Yeah, yeah, because you sold before the.

IPO. We sold most of before the IPO. And, you know, we won't talk about the names that buy, but. But you'd be surprised. I think one of the issues with Silicon Valley, one of the benefits of being in Chicago, is we isolate ourselves a bit from the herd mentality. Sometimes it's like sheep. They just jump one on after another and they buy more stock and things that you see that you should sell. And it just takes one brand name to jump on board and 10 others jump on board. And we just kept selling our lift stock to others. You know, I get why they did it. It was A value play compared to Uber. And it went on to work for them. But we made our multiple and went home and distributed the.

Cash. Do you think it's very clear when rationality leaves the.

Room? Yeah, that's something I've spent a lot of time in the last few years trying to figure out. Because 2021, all rationality left the room. 2020, 2021 and. And us, like everyone else, just kept deploying.

Capital. But it left the room in public markets too. The multiples were off the.

Charts. Yeah, everybody left a room. I think, you know, you want.

To. You're told to play the game on the field, as Bill Gurley.

Says. Yeah, a few things about that period. That is the rationality leaving the room that you want to protect yourself. Guardrails are important. A good friend of mine, and I know you had him on the show. I'm a huge fan of what they've done. Mitchell Green. Best things in life are copied in some ways. You know, he has his lead edge. 8. We have our G squared. 8. Sorry, Mitch, we kind of borrowed it from.

You. Is it the.

Same? It's not the same. We had to really adjust ours after 2021. It had holes in it that were.

Exacerbated. What were the holes and how did you achieve.

It? Too much. Qualitative, Too much my gut, my feel. Too much. Who else is in the room? Too much. The soft stuff that venture capitalists and growth managers like to pride themselves about. And our strategy has to be about the numbers. It has to be cut and dry, cutthroat. Does it work financially or not? Because at our stage, unlike yours, in a lot of ways, I envy your seat. Because if you pay 50 pre or 100 pre, if it's a good business, you're still going to make a 5x10 pre.50 pre. Does it really matter? For you, maybe. For me, is it 3 billion or 2.5 billion? You walk that forward. I can't make my 2 1/2 x net in a five year period. If I miss that now, I get an okay return, but I'm not.

Rehired. Does your mindset change around that when you see the elasticity of outcome sizes that we have today? I completely agree with you. In a normal world, in the last five years. But when you have companies that are hitting a trillion. A trillion, five, two trillion. Dude, who gives a shit if it's 10 or 15.

Billion? Yeah, I think that that's in a shorter thesis. You're able to play that game. And that's one of the benefits to our thesis is, yes, as long as you don't get caught at the end of that cycle, which happened in 2021. So our earlier vintages were selling into it like it was happy days. Did you just offload just massive amounts? I mean, we made ridiculous sums of money for LPs in that period, which set our business up to be able to survive a bad vintage. And we're working our tails off our asses off on our 2020 vintage. But it's hard when you're shipping.

A ton of money back. Yeah. LPs.

Happy? Yeah, I think LPs are happy. It's also their expectation. Looking for a pat on the back because you did your job is something I talk to our team a lot about. Yeah, it's a big win. But hey, we also lost $400 million of their money over here. Yeah, we made them money, but look at these losses. How can we lose that kind of money? I think keeping our team focused on that and reducing the amount of mistakes because in a short fund life, liquidity is already hard. It's really hard as a fund manager, as you know, you're a five.

To seven year fund life, aren't.

You? Yeah. With some levers we can get it a bit longer, but you know, for the first time we've had to pull one of those levers and it really guts.

Me. Is that a mistake on your behalf or is that a changing.

Landscape? You are what you become, so to speak. Yeah. Are there businesses that I would love to take a 10 year horizon on because I think they're amazing companies. Yes, 100%. But that's not what our LPs have hired us to do. They've hired us specifically for this North Star DPI statistic that I've pitched them on and our team have pitched them on and for 15 straight years. So do not sell.

Vintages. They hire you to make the most money for them and you can go back to them and say, listen, the job of a manager is to change to moving markets. And I believe that actually we will make more money for you with a longer hold period because of X, Y and.

Z. Reason. Yeah, I.

Think. And you now have the data. I'm so sorry to interrupt you data to go look at Paler. Look.

At. Oh my God, why? So even if I would have held Palantir for three more years, I mean, who knew they would go.

On? How much more money would you.

Have made if God you Listen, Harry, we would be having this podcast in my bubble in outer.

Space. But is it like 2x.

More? Oh my God, no. It's like I had an lp, long time lp, first vintage. Been back every time. I was talking to him the other day about the difficulties of our 2020 vintages and the lessons learned and how I'm more energized today than ever before and how, you know, we're going to make it up in spades. And he said to me, you know what Larry, you get a free pass on that one you made me because I distributed the shares to some of our early funds. We distributed shares, we no longer do that, we just send cash. And he's like, I held that Palantir stock and I've been investing in every one of your vintages from the proceeds of my first 50 grand I gave you. So it just gives you a perspective. I think we made a 3x on it and sold it at $9 a.

Share. What's it.

Now? Oh, I don't know. I try not to look at it because it's one of those things is you don't want to inflict the self inflicted wound of the pain. But I think it's, I don't know, it's 80, 90 bucks a.

Share. But my question to you is, have your guardrails not now become a constraint? A negative.

Constraint? Yeah, look, I think the answer to that is we're doing what we're hired to do and that is to generate the velocity of the capital for our subset of LPs. That's not for everybody. Our LPs are looking for an ability to play the fastest growing, most dynamic technology companies in the world. And they want to get in and out with optionality of their capital to give more to firms like yours in every a five year period. So if they back to back funds of ours, they make a 4x cash on cash return in 10 years. But they have the optionality of it. And if you have confidence in the mousetrap you've built forex in 10 years. Cash on cash return is pretty hard to.

Beat. Dude, we all tout these big, we all tout these big numbers. Look at the real numbers. I've seen them, you've seen them. They're very different in.

Reality. Yeah, I mean when your north star is a DPI figure, there's no.

Hiding. Listen, let's go to the 2020 you said there about, hey, you get a hall pass. You know I said to you after our walk, it's really special to actually have the conversations that we do. And I really meant it. Yeah, the Candidness is important. When you look back now, what do you think your sins.

Were? And I've talked a lot about this openly to our LPs because I take pride in going around the world. We have 60 countries and six continents of LPs. It was smart, in my opinion, when I started the firm. It's difficult now. The main mistake we made was believing our own bullshit. Because coming up to that point, we had some of the best returns in our industry. We were raising money. We just to put the flag out there. It was hard. We go around, raise money, co investment raise money. Life changed dramatically for my partners, myself. Our team just had shipped back 2018 vintage fund. By 2020, we had the DPI to almost one. Oh, yeah. Airbnb goes public, make a 3x. Coursera goes public, make a 3x. Sell our SpaceX stock privately. Make a big return. Impossible Foods. Make this huge.

Return. Impossible.

Foods. Oh, yeah, we made a.

Killing. How did you make money on.

Impossible? The herd mentality. I mean, I think that it's all product. The time you're operating in, you go back to that period. Impossible Foods was a big deal. People made a ton of money on that Beyond Meat. And what was the other one? That egg.

Company. One of my best friends made like $10 million on a Beyond Meat SPV. See, and I'm like, $10 million is like the market cap.

Today. I look at the big wins that where the market cap goes in a bad way is we were the largest shareholder of Coursera. Through our Strategy, we owned 16% of Coursera when it went.

Public. What did it go public?

Huh? We sold the stock at 36 bucks a share, and it's at $8,800 million back to LPs on Coursera. $800 million back to LPs on coursera. That's part of the strategy where you get to concentration and the law of large numbers actually works. And it's easier to manage a fund on liquidity. But getting to 2020, the mistakes we made. So you had all these exits. Toast was our largest position in that fund. It's trading at 76 bucks a share. Mitchell Green and I did toast together. It's like you're popping champagnes around the office. You're like, this is. We're so smart. We're the fucking smartest people in the room. And then I'm on a ski lift in Montana and I'm looking at. Unfortunately, and I'll admit it out loud, Yahoo.

Finance. It was before.

Perplexity. It was before Perplexity. And I'm like, wait a second. Toast is 76 bucks a share. What the hell? How is it $76 a share? It's a great business, but 76 bucks a share? Whoa. At the time. Now Toast is an amazing company, right? Revolutionized the restaurant space and by the way, saved tens, thousands, hundreds of thousands of jobs in the US because of the way they pivoted during COVID to help restaurateurs. An amazing business, great founders. All that being said, it wasn't worth as a public company that price. So to me, that was kind of the canary in the coal mine. And I started freaking out because we just deployed $900 million between, you know, beginning of COVID and 2021. To your point, jumping on board with all these primaries and secondaries. We're super smart. We can do some primaries.

Too. So what was the realization when you saw.

Toast? So that I have a problem in this vintage. We've overpaid for all of it. All of it. We've overpaid. Go to the team and a lot of them aren't with us anymore because we went through a kind of identity crisis and said, listen, I had went through a period where I wanted to believe that our firm was more than just the CO PMs and Spencer and myself and that we could do a traditional model. Because we don't do that. We deploy the capital between the two of us, we have a research team that support us. It's more like a hedge fund. It's quick decisions. But at that period of time we're like, hey, we've made all this money. We're growing our business. LPs are coming aboard with big checks. They want to chase moic, they want to chase tvpi. Right? We have to have a thesis that's a bit longer. Seven years, not five. So let's divide the capital up amongst a bunch of people. Let's build the traditional fund model because we're so smart. And you know what? We're still conservative. So we're going to pay 12 times last 12 months to enterprise value on SaaS. Public markets are trading at 25. Pat yourself on the back, guys. We're super smart. Oh, the floor can't be lower than 10. That's a historic multiple. Wake up in 2025. The multiple is four. So when that happened, when a really awesome business, which we made a ton of money on by selling it at the right time and harvesting and they in Toast. And they've went on to create a tremendous amount of shareholder value as a Public company, don't get me wrong, but when it's trading at this crazy multiple, I went back to our LPs and said, Listen, we fucked up, we need to pivot, we need another 300 million bucks because I need to protect this thing. And so we went in and we did structured equity deal after structured equity deal. As that market's falling and the house is on fire, we're running in the front door with cash and we're going and doing minimum IRR deals. We're partnering with the super savvy investors and the Lightspeed's and the Dragon ears and the DSTs of the world and we're doing deals that nobody knows about. Third point CO2 and we're putting all kinds of structure in where these founders believed their own bullshit and they said, I'll take the high price top line but I'll embed structure in the equity. And so that vintage of all of our vintages has 70% primary and 40% of that has structure for people that don't.

Know. What does that.

Mean? It means you embed IRR hurdles and multiples in the paper. So regardless if you say the business is worth 8 billion on paper, the company has to generate you a 25% IRR or a 2.5X, whichever is greater. So every day the return's ticking and you walk it out. Now five years, the entire prep stack is totally fucked because we, the last money in has this ratchet that's just eating up all the value. And that pivot and the willingness, I think our team, not just me, the willingness for Spencer and I to get together and say what were we thinking? We have to try to save this thing. Our LPs trusted us with a billion at that point. Billion.

Five. But you're going on the offensive with cash in the door when everyone's running.

Out.

Yeah. In terms of the actual saving, what are you doing with the overly inflated asset prices that you.

Have?

Selling.

Selling. Cutting your losses. Selling. Taking a different perspective on multiples and saying you have to get the price to 10x so you're going back in and assets you overpaid and you're using the secondary market as the market's falling to lower cost basis. So we did a lot of primaries. Yes, because we didn't like the secondary multiple because it traded at a premium during that period. So if you paid 25x in a public company to enterprise value to last 12 months of ARR in a SaaS company privately they traded at.

50. And so you were like shit, the secondary market is overly.

Inflated. The secondary market doesn't work. My business model is.

Broken. And so you go to.

Primary. You go to primary. You go earlier, you do a bottom, small cap, hindsight. The mistake I made was not having, besides thinking we're smarter than we are is structurally in our business, not having the levers to pull. Because leading up to then, whatever we did worked. And you could get in and out in five years and make a 2x net. You're a hero. You just keep raising money and it keeps getting bigger. And your amount, your wealth generation keeps getting bigger. So we're unstoppable. We're Tiger woods in 2001. You start to create this Persona that everything works and pivoting. It was a lot of soul searching. We had a large.

Meeting. Was it difficult for you as a.

Leader? Yes, it was difficult because I couldn't believe that I talked myself into it. Silicon Valley coach, me, a person that grew up in a trailer might in Utah athlete, and I have to have a coach to tell me how great I am. I bought into the whole hook, line and sinker bullshit of the entire problem, in my opinion of Silicon Valley, and so did our.

Firm. What is that.

Problem? Losing focus of what you're hired to do and paying more attention to the lifestyle that comes along with being a money manager and the circles that you roll in and about the deals that you're doing and the money that you're managing versus, at the end of the day, the actual value you're creating for your people who have trusted you with their capital and making a difference for your underlying companies. That's what's important. Not going to a dinner party and saying, I just invested in Wiz or anthropic or OpenAI or Airbnb. That's the culture, in my opinion, in Silicon Valley. And it's people deploying the capital that don't have the responsibility to sit in front of the LPs to explain the problems. It's a herd mentality that rushes in. And LPs follow, by the way. LPs follow at the wrong time. It's very easy to raise money in a crazy market like you and I both did and many other managers did, when it's the wrong time. And it's very hard. Our 2022 vintage, we raised very difficult to.

Raise. How big Was that.

Fund? Billion.

Two. Was that the first billion.

Fund? No, 2020 was a billion.

Four. So you went down in fund.

Size? Well, the 2020 vintage, we topped that up. Remember, as I was saying, we went back and said, hey, we've made all these mistakes. We have to protect, we need more money. And it went from a billion two to a billion.

Five. And the protection there was because pay to play was coming.

In. It was because we saw that we had overpaid on the first tranche of capital. So I wanted more to combat that with secondaries and also.

Structure. So you hadn't lost faith in the underlying.

Assets? No, some of them have went on to monumental failures that have been well written about, but most are really fundamentally good underlying.

Companies. So when you review that period of 2020, what do you wish that you had done? Or if you could replay the tape, go back to the first half or quarter or whatever you Americans like to call your timings in sports games, innings, innings. What would you have done now if you could replay that tape? Like I would say, sit on my hands. You did not need to be part of that ridiculous 700 million priced round for 10 million. ARR.

Saska. Yeah, that's the easy answer is wait, if I could do it all over again, I would keep the control tighter to Spencer and myself on deployment. And that way, as we went forward, the only excuse we could have is that he and I made the decisions. We wouldn't have any excuses. It would be clear that we made the mistakes versus, hey, we tried to do the Silicon Valley mentality and hand out the capital and build teams underneath. And yeah, it's the G Squared logos that we invested in, but the attribution actually goes to X, Y and.

Z. You don't like.

Attribution? No, it causes unintended consequences. People want to pat themselves on the back for the wins and deflate the losses and deflect the losses. Excuse me. If you want to build a firm that stands the test of time, the logo makes the investment. It withstands any transition period in any leadership role in the firm because the logo made it, not the individual. That's what we're trying to build at G Squared is when I look out 20 years from now and say, where do I want it to be? I want some grandkids to think about the logo that was built and say, my grandpop built that and it's still there. And it's The Jim Simmons 40% annualized IRR for 20.

Years. What I always say, I always say that about my grandchildren. I don't have children yet, so it's really quite a step. But we mentioned lessons on a company basis. If you look back at one of yours, that was a big loss. What Was your subsequent lesson from.

That? Well, we've had a lot in that concentrated equity portfolio. You're going to have some monumental misses, hundreds of millions of dollars you're going to light on fire if you have the fortitude to stick to it. So we've got a lot of those lessons to draw.

On. What's the one that.

Most. That's most painful? There's a couple. One is Theranos, and the other is.

23Andme. How did Theranos.

Happen? So Theranos, secondary. The big loss there was for me personally. We signed up to do a secondary at a really good price, met with management. Something didn't feel right. Don't know what it is. Can't say that I was like, oh, it's a great gigantic fraud. I didn't know what it.

Was. Did you meet with.

Elizabeth? No. The kind of C suite. Without her, something just didn't feel right. We went back and we had that form I told you about, binding to.

Transact. Oh.

No. One page. One page. Simple. Companies love it. It's easy. Things that change on it. Name, shares, company dollar amount, binding transaction. So I ripped it up and I got sued to finish the transaction, and I agreed to settle where I would pay a fraction of the transaction cost. But I did it personally so our LPs didn't have to go in. What that taught me was before we sign that paper, we better be certain, because it cost me a few million dollars at a time where I didn't have a lot of money. And I did it so that our LPs didn't take the loss, because that was one of those spider sense moments where it's like to your saying the risks were tangential to the data. And my wife would say, if she were sitting here, she told me that it couldn't work because she's an epidemiologist and they collect blood and saliva and you can't. You can't get that much data from a. Whatever. She was the one saying, I feel the magic. She's like, she was sick. Yeah, she's like that. That doesn't work. Long story short, the spider sense came up, going through negotiations to get out of the contract, and then some of the material started to come out and we just like, hey, we're not doing it. And then actually, I don't think it was formally sued. It was threatened to be sued, and I agreed to settle it out of court and gave him a couple million dollars to go away. And obviously it went on to be, you know, one of the more notable frauds of the time. But that was painful for me. That was bad process, bad outcome. Sometimes you can have bad process and good outcome. Sure. But what that taught me was you just need to have a good process. And if the outcome is bad, okay, that's fine. Which is 23andMe, which we'll get to. This was bad process going in. This was jumping, trying to jump on board, play the elasticity and pricing and follow the.

Herd. Respectfully, the herd there was not.

Professional. No, it.

Wasn'T. Did that not.

Worry? To me, I was chasing the discount that was available and the thought that if it just traded at what the last round was, I made a lot of money on the secondary side. That's what you're chasing. Right. You want to get that disc value of the discount and you could get it in bulk. And I should have seen. I should have seen a lot of warning signs. That was a tough one to do due diligence on. I would say that added a lot of our checkboxes that we now have to make sure that we don't make those mistakes again. And we really averted a massive issue in our business by doing that.

Massive. What was the check size going to.

Be? The agreement was to buy about $50 million of stock over like four months. Because I'm still raising the fund anyway. We got a.

Way. That's one of the biggest wins. I know personally, it sucks. Me personally and personally, it sucks. I agree. But actually, for the damage that it would have done to the.

Brand. Oh, it's catastrophic to.

Us.

Yeah.

Yeah. Mega win. Yeah. Couple of takeaways. One, always listen to your wife if she's.

Around. Hopefully she doesn't listen to this, although I'm sure she will. Don't say that out loud because she'll say, see, Harry's.

Right. She will. Trust me. And the clips go viral. And two is when you feel icky in your gut. My one spider sense, dude, I've had this and I'm not going to name the company because it's still going. We did a five million dollar investment and I called up the lead ambassador. He's a very, very pedigree firm. This is.

Off. Yeah, but you still did.

It. I did. Now I don't fucking do it. Yeah, I'll pull out of everything if I feel the ick. I feel the.

Ick. Yeah. You go through this phase is building a business where you feel like you have some allegiances to some of the people who helped you get there. Right. So you have other and you're too far in and you're too far in to say no and you know you shouldn't do it. And we're humans. First mistake on. On you. Second mistake on me. The one that's probably from a financial perspective, the largest that hurt. There's two really is 23andMe and geter. 23andMe not selling. That was my.

Mistake. When did you come.

In? First investment. 23andMe and I think 2617. Really bought into the business model on the consumer side. Loved it. Enjoyed interaction with Ann. Really bought into what she was trying to build. And she really embraced our model to be helpful. And I was really taken aback by what she was doing and believed in it. And we built a large position in our 2018 vintage fund. I think it was the second largest position in that fund. Co investment. We maybe had 50 million in and LP capital maybe 30 or 40 million in during the SPAC craze. Pair up with Sir Richard Branson. What an iconic pair you got Anne Mojkowski, who's a fantastic founder in my opinion. Not maybe a great public CEO, but awesome founder and visionary of what she wanted to build and the ability to go do it. Amazing. Richard Branson on top of it. Awesome. Let's go put gasoline on it. Trades 10 goes up. We can start selling at 7, which would have been about a 2x. I think I sold the last share at 70 cents. That's me. Chasing multiple. And that's a problem in our strategy. You need guardrails in that to protect from Larry. Chasing.

Multiple. Which is what? A layered approach to.

Selling. Yes. Dollar cost average out. Just like you. Dollar cost average in. And just start getting liquidity when you can privately and continuing it through. When they list liquidity's.

Hard. How big was your position in.

Total? Probably 100 million.

Bucks. 100 million bucks. And you said you can do a.

2X? Yeah. And instead lost $70.

Million. DLP is cool about.

That. No, the pool of the capital is awesome. It's just, you know.

Don'T. What was the number one position in that.

Fund? Toast. Yeah, Toast. Awesome business like 3X Net and started in 2018 during COVID Mitchell and I talking about it. Mitchell Green and I saying this. People don't get it. Let's buy a bunch of secondary. Yeah.

Awesome. I'm on his.

Now. Also Asana too. We teamed up. Mitch and I teamed up on Asana. It was fantastic. It was just like you're conquering the world. You and your buddy buying stock. People running out the front door. Because their house is on fire. During COVID and us running in with capital, it was.

Fun. What about get.

Here? Get tier is one Emotionally, for me, that's really hard when I think about that. Good process, good.

Outcome. You had good.

Process. We had good process on the first money gorillas, the investment in gorillas. We had good process. We had made a lot of money in kind of the food revolution. We were in Instacart. We were in Postmates. We were in.

Meituan. And just to be clear. Sorry. Because people will hear these names. You made money in.

Postmates? Oh, we made a. That's a Founders Fund special, man. We did a lot of work with Founders Fund early. Fantastic group of investors there. I think Peter Thiel's got more money than God now. But, yeah, they were the largest investor in Postmates. Sebastian Lehman, awesome guy. Spoke at our 2018 LP day. Yeah, we made a 3x on Postmates in how long? 18 months. It was amazing. And Spencer McLeod, who was my co PM, he led that deal. And he was like this. You got to meet this founder. He loves what we're doing. He wants to help all his employees. Let's do it. I was like, yeah, the data looks good, man. Let's.

Go. And you made money on.

Instacart? Yeah, we made a lot of money on Instacart. We sold Instacart privately during COVID.

You're one of the guys who sold it, like the.

25. I was like, come.

On. Sequoia and the price. Because Sequoia.

Bought. Yeah, Sequoia make money in the long run that they also bought along the way. I mean, Sequoia's business model is fantastic. We have a lot of investments in common. Their partners are awesome. There's few evergreen structures I'd ever invest in. There's this.

One. Why did you sell at 25 then? You just thought it was.

Okay. Funny story. And personally, you know, you have experiences with companies. Very frustrating experience with Instacart during COVID where it went from Whole Foods only pickers and grocery shoppers, which was an amazing service. Right. To then having your Uber driver shop for your groceries and try to get a ripe avocado and Covid from your Uber driver. It's not a great experience. And I remember a point. I'm hunkered down at my farm. The world's falling apart. I can't get the order. Just can't. It's just not right. And they don't take it back. You just keep getting stuff delivered. And I was like, it's time. I just got to get out. I'm.

Sorry. Wait a minute. So the fact that your Uber driver can't get you a fucking ripe avocado, you're like, you know.

What? I'm not the only.

One. Harry, come.

On. I'm out. You know what? We're gonna sell at 25. And you do like a 3x on.

It. Yeah, but also for us, the decision to sell becomes somewhat easy because we're also solving for something that's different than others. And we're solving for this velocity of capital. It's not part of keeping in the middle of our, to use a sports analogy, fairway. Don't chase the moink. We make a 2x net in a 5 year period. Cash return, not shares. We stop distributing shares because LPs blame you. If they hold it, don't founders.

Just see you as a bit of a tourist? No offense though, if it's like, if you want that short compression, you're not exactly a long holder. You're not a long believer in the.

Company. No, we're, we're a point in time problem solver. We're like the janitor that's cleaning up the mess. They have an employee that leaves, they're out there in the market making noise. They don't want them to take their shares. We get the phone call. You've got a fund that wants to show their LPs that there's value in the extension they're giving them. We get the phone call to buy a little bit of their position. You don't buy 100% of somebody's position typically in a company, unless they're on year 15 of their fund and have no extensions. Because if it's a large position in their holdings in their nav and you buy it all, you kind of scratch your head like, well, why are they selling it to.

Me? Yeah, but dude, I've had this before. I've got a great company and I want to buy some and I chat and then rofas.

Happen.

Yeah. How do you get around a.

Rofa? That's the relationships. And in our business model, the companies and your peers have to see value in what you can bring to the company. Because what we're after is large, concentrated positions. We're not indexing secondaries, buying with no information, playing the arbitrage and pricing and putting 200 secondary positions in a fund. That's not what we do. We're going to have 10 companies make up 90% of our risk and we're going to Become very large shareholders of those companies by doing our business model. And so it requires your peers to say, okay, they do something unique. They are going to provide value to us by consolidating the cap table. They're going to help us with employee structured tenders, shareholder tenders. We have an employee or a former share or a current shareholder that needs to leave. They're going to buy it. And it's. It's really the barbell of the small micro transact that nobody cares about. Some of our companies we've built through 50 transactions to get to $75 million and some we've done four to get to 200. You have to sell that. You're going back to raising money as a new manager. Be different. Be.

Different. Because that's a pain in the ass to do 50 transactions. It.

Is. It's the muscle memory of that is not replicable for others in the back office. You have to have the investment to not just pay yourself and to hire big teams to run it requires the ability for you to know that the actual outcome is the benefit of the carry, not the management.

Fee. Going back to get.

Here. Yeah, that one took years off my life. Good.

Process. How did you come.

To. So we made those investments and made a lot of money for LPs. Get in introduced to get tier but one of our excuse me to guerrillas. We have an office in Zurich. We have a team about 10 in Europe. We've been here since 2017. Say hey, you got to meet this company in Berlin when I'm there. We had a bunch of portfolio companies in Berlin at the time. Met the founders and the business was growing like a.

Weed. This is when it was in Takay.

Only. No, this was Guerrillaz in.

Berlin. Oh, this was.

Great. So we were acquired. Gorillaz was acquired by.

Geter. Yeah, that wasn't a good.

Deal. It was so for a group of shareholders we were a part of helping structure alongside of five others. It actually was a good deal. We actually got good value for our.

Money. You get cash.

Out. We did get a little bit of cash and we got most of the preferred value in the transaction. So four or five shareholders of Gorillas received of all of their shareholders received the majority of the preferred equity that we received from Geter. So in a good place then. Fine. Get Your valued at 10 billion. The next three years were some of the worst of my life. Seeing that we needed to then try to protect that money with more money and then get involved at the board and do the heavy lift of restructuring and battles with the founders and we'll leave a lot of it out because it's still ongoing. But it was really hard. And the mistake I made was the second tranche of the.

Capital. How big was the first? How big was the.

Second? The total first was like 50 million bucks in total between secondary primary, we got that plus sum in value of geter and then the next check was 100 million bucks to restructure that equity to pull it forward. So you got 200 million risk total. A lot of LPs in it with co invest. Of course everybody during that period signed up for you just put it.

Out there and dude, the convest craze.

Was it was nuts in 2021 and. And created a lot of unintended consequences that we can chat about but. And different from our normal co investment model which we went back to from that period. But anyway, the long story short was I think the major mistake I made there was not willing to just walk away after the first check. After the first check. The fight that when you grow up in like severe poverty, you're fighting with your siblings for everything. You're fighting at school, you're fighting.

For food, you're fighting the.

World. You're fighting, you're fighting, you're fighting. And as you grow into business that doesn't leave you. It subsides a little bit. But there's many people in our industry that have backgrounds like mine and you don't stop.

Fighting. Is it a blessing or a.

Curse? It starts to become a curse if you can't manage it. Because in that scenario my thought that I could fight and will the outcome. Little old G squared amongst giants. It was like you were dead man walking without knowing it. You were just. You were already dead. You just kept fighting and making sure that we don't make those mistakes again are important. And that's where guardrails other people with voices in your.

Firm. Was it obvious that it was going wrong? It seemed like just enormous amount of cash going into a business before it was ready and premature scaling and just needed economics that didn't.

Work.

Work. It seemed very obvious to.

Me. Respectfully, yeah. Hindsight, it's easy to say it's obvious. I'm sure to many looking at me and watching from afar it was.

Obvious. You still hold it though.

No? Yeah, we still hold it. It's now business focused in Turkey and you know, lots of great people in the business working and I'm still on the board so I'll be careful of some of the things I.

Say. But because it's a major, major part of.

Turkey. Oh yeah.

It'S. By the way, that was the biggest mistake for me of the business. It should have just continued deeper.

Penetration. Yeah, well, yes, and I think investors would say one thing, founders would say another on how it became a global kind of strategy. I think the mistake the company made there was it left Turkey and didn't focus maybe on other markets that were similar to Turkey. From an employment cost perspective, look, today it's still operating in Turkey. It's a big business. You got a lot of sophisticated people from model in there working with the business. You've got people inside the business that want to win. You got 10,000 plus employees that are working hard every day trying to create values for their family. For me as an investor, I lost a lot of money. Why I'm still involved is because those people that are commuting in some cases three hours a day to work in Turkey, you know, they deserve a good outcome. And that's the piece of our investing. As a secondary investor, you often don't get that granular involved with. And we do it with a handful of companies unfortunately, typically when they have issues that you're trying to save. But yeah, it was a very hard.

Journey. How much money do you think you lost.

Though? Well, there's kind of the numbers you can quantify and then there's the dollars that you lost from a fundraising perspective for your next vintages from.

LPs. Because you lose that co invest. Yeah, because you, when you lose co invest dollars, do you lose them.

As the next round LP depends on how you structure your co investments in that case from that fund. My guess is those decisions we made cost our partnership probably a half a billion dol capital between capital actually lost and investors that you can't bring back. It was a monumental miss on our.

Part. I have lost money before IncomeVest and the only lesson that I've learned actually on that is use it as a chance to build trust and in crisis communicate more than you ever have done.

Before. Yeah. And try to over communicate. A lot of LPs because of that have come back and now.

They'Re. Does it make you question your co invest strategy? Because the thing that I don't like with co Invest is often LPs, they're almost not aware that it's a single shot. And what I mean by that is you have a portfolio in a direct, in a venture fund, fine. You have a get it, fine. We've got a toast as well. Yeah, but it's like they're almost shocked that oh shit, I didn't realize that's.

Done. So kind of going through our co investment process in the early vintages, let's say vintage one through four, in some cases we were four times co investment to fund investment because four times co investment. Yeah, but here's why. Because the type of companies that we were interested in investing in, we weren't large enough to make a difference. So if you want to run our business model, you need capital, a.

Lot of capital just to get in.

The door, just to be able to solve the problems that they have. To your point of being relevant to the Rofer, if all you can do is onesies and twosies and you can't write a hundred million dollar check when they need you to do it on the secondary, they go find somebody else. And when they turn that faucet on a shares, when they buy into your strategy, when Daniel X says, hey, you guys are interesting to us, oh by the way, here's $150 million stock. If I say no and it's at a good price and he picks up the phone and calls somebody else, it's gone. You're not getting that opportunity back. With our strategy, you have to have scale. So is the co investment in the early days was a significant part of our strategy. Over time it's more normalized. Today it's about on a billion five, it'll be 700 million. It's still a lot. The mistake we made in 2021 vintage or 2020 vintage is we didn't just do co investments around our core positions. We had LPs coming to us saying, hey, I built my fortune in, let's say wellness. I like health tech companies. You've got one down here in the land. I want to buy stock directly. And we felt at the time, hindsight being 20 20, it was wrong. We felt at the time that we were enabling our business model to help them achieve what they wanted by being an LP of.

Ours. Okay, but let me just push back on you. We're partners now. I say they have directly requested that asset. I share with them my concerns and how we believe the company is doing. And if I do that transparently and offer them access, am I not providing them a service that they're asking.

For? Yeah, until it doesn't work and then they blame.

You. So you should block them from.

Doing. I wouldn't. So the way we run it today is the way I think people should run their only in conviction when your funds are investing alongside of it. That's when you do the co investment. You don't do it it the way we did it in 2020. You do it the way we did it today. Our 2022 vintage fund, that was a billion two in size. The co investments we ran are our top 10 positions. A couple LLMs, the high flyers, companies like fanatics, Wiz, databricks, Turo, the Airbnb of cars, Monzo, companies like that, where you've already decided those are your core positions and then they make a bespoke portfolio of additional exposure to them in equal weighted.

Size. Why are you in.

Monzo? Value play to Revolut and TS is.

Fantastic. I think Revolut is the.

Generation. We were in revolut in our 2018 vintage fund. I agree with you. Amazing.

Business. Did you hold.

It? Yeah, some of the stuff we can't really talk about holding it or not in the live.

Positions. But I just look at it now and I'm like, fuck me. This is a $500.

Billion. We have it in our 2018 vintage fund. It's made an awesome return for that vintage today for.

Me. How did you get revolut in 2018? Dude, you're like a mid American growth in the.

World. I love the.

Bias. And I'm sitting in fucking London and I don't see it in 2018. I was.

12. Fucking hustle, Harry.

Hustle. I was 12 then. Oh, you know. But seriously, how did you see it then? This was well.

Before. Yeah, well before. I think four megatrends for us, fintech is one. And we had good success coming off of SoFi. The founders of Sofi and now the current management really believed in our strategy. And SoFi was actually also in our 2018 vintage fund. Yeah, that fund, man, it's just crazy what was in it. And off the back of that win, and then we had early N26 before the growth.

Restrictions. Did you.

Sell? No, no, we didn't. We didn't sell. They're working their way through some things and looking fairly okay right now. And they're doing a really good job of managing through the stress they had in the business. And now more of a focused in Germany versus kind of a continental play. And then we had Revolut. What a great little pool of companies.

Right? What a great pool. And so you were like, but it.

Went. Revolut went like a hockey stick, man. So in our strategy you need.

Like. And so you're like, I see Revolut. You're like, oh, I'm going to go into.

Monzo. Well, Monzo is a later vintage. So yeah, Revolut's in our 2018 vintage where sometimes. And we have them in every vintage. You know, in our current vintage we have Chime. Awesome business. Believed in our business model, but it went so fast that you can't build over time, dollar cost averaging in through lots of transactions. You can't build a scalable position if the company goes from 0 to 100 in no time. Wiz was very short for us. Our current vintage, we did it in three years, but it was only because it started with the back of the downturn. We caught it at the right moment. Normalized scenario, we would have never been able to build this position in Wiz because it was a hockey stick from day one. But the availability even to the best assets in the world wasn't great for 18.

Months. What price do you get into.

Monza? Oh, sub 4 billion. Yeah, we're not solving for what you're solving for, so you have.

To. TS is.

Great. I really like it. Yeah, TS is a great operator. So I think what you have to build a portfolio across the four megatrends. For us, the way we look at it is you have to diversify that risk. So you have SaaS, you have FinTech, you have consumer Internet and mobility. And so what we do across those is we try to build conviction positions pretty equally weighted across those megatrends amongst 10 companies. And so for every anthropic you have, you have to balance that with a fantastic business in fanatics, which is more of a traditional last quarter talk about growth. I mean the business is fantastic and it's at scale, massive scale. Billions of dollars of revenue and hundreds of millions of dollars of ebitda. Like a massive company. Michael Rubin owned, pretty much significantly owned sports apparel, merchandising business. You balance that risk because what we've learned over time is you can't just play the momentum because you can get burned. And that's chasing.

Multiple. Totally get that. You can't just play the momentum. How the fuck do you play AI then? Because it.

Is. Go to the leaders. It's easy. Go to the winners. Cap what's holding back the next generation of the LLMs to get to anthropic and OpenAI scale in three years. Who's going to rival.

Them? No.

One. You just answered your own question.

Harry. No, I completely agree with you. No, no, I literally if for what I'm about to say, may my LPs forgive me if I could do.

Anything. Be careful. They're your blood that pumps through Your.

Heart? Oh no, I adore them and I think they probably agree with my next statement. Okay, I would put my whole fund into.

OpenAI. You would? Yeah, it's a. You know, you and Spencer McCloud should start a fund together. He's amazing. He's my co PM. He believes the same thing at.

350. 50. Do I see this being a one and a half trillion dollar company in five years time? Easily I do. That is a 5X with fair confidence for very large confidence in a five year period.

Yeah. It's an amazing.

Business. Yeah, I would do that. 100%. It's reached escape velocity. I speak to Kevin Scott at Microsoft and I'm like yeah but dude, there's no defensibility on the search. And he's like and you can't just switch from Google to Bing. Of course you.

Can. But it's the brand. Poor Bing always gets picked.

On.

Bing. Everybody picks on.

Bing. Everyone even.

Even. You don't need to pick on.

Being it was him, not me. But like point me. I was like wow. Yeah, that's absolutely true. And so I agree. Okay, but I have friends who are in Anthropic and got in at 4 and you don't need to comment. And it's now.

60. Yeah.

61. 61. And they've got like a.

4X.

Yeah. On their money and so there's a question of like okay, value.

Accrual. Have them call me. I'll buy all their shares of anthropic at 61.

Billion. You would buy into.

60? I would buy it all day long today and twice on.

Sunday. Are you.

Serious?

100%. Even though the dilution is so.

Intense. See now you're talking like an early stage investor. Harry. I don't give a shit about the dilution. Why I care about the price I pay in dollars and the price I'm going to sell it at in dollars. I am focused on dpi, not moic. I don't care about the.

Dilution. So are you not just going around now hoovering up.

Anthropomorphism? Oh.

100%. Is there much to hoover.

Up? A lot. And I've got appetite for more. Same with OpenAI. Same with Databricks Wiz. Holy shit. What do they built was amazing. We hosted them at our LP day. Half the things they say I don't even understand what they're talking about. Scares the shit out of me. The world after talking to three of them and what's out there. But man, did they build how they did that by the way, they also sold a business to Microsoft together and made a bunch of money and then said, hey, yeah, we're well healed. They're humble people, they've made a lot of money and some of them live in like a one bedroom apartment in Tel Aviv. I went to see them in Tel Aviv, went to see a bunch of companies. We'll leave the other ones out. A couple of them wouldn't even see me. This is after I managed five plus million dollars. This guy's welcomed me in, gave me a sweatshirt. How you doing? I'm like, oh, by the way, I want to land in your company. You're raising like half a billion dollars. I want to give you like 3 million.

Bucks. 3 million.

Bucks. They're like, you know, that's a little small, Larry, but we like you. Will you settle on nine? Sure, I'll give you nine million bucks. That's how we started. And then we went on to build a $200 million position. It takes that buy in and so you go back to Anthropic and the others. You know, we were fortunate enough during you mentioned FTX earlier to be awarded during the bankruptcy a bunch of stock. We bid on it, we went through the whole process, bid on the stock, bought a big chunk. The company is, in my opinion is unstoppable. That and OpenAI. They're just the beginning. So how do you play the space? You go to the winners because I have a shorter.

Thesis. How many winners are.

There? I think the LLM space is challenging for new entrants and it's because it's time and capital, but I think.

It'S like OpenAI and.

Anthropic. I don't see a ton of room for more. Not because I don't think.

So. Are you going to play the application layer two and are you going to try and do cursor and a bridge in.

Medical? No, I mean, I think for us our view is take a few concentrated bets in the foundation models and the winners and then let's play a bit of the picks and shovels. That's why we have Lambda. We also had Core Weave and then on the business models themselves, let's play a scale AI and software to help them scale on the hyperscaler side and focus the balance of our capital on our other megatrends where AI has been embedded into all businesses. So you have exposure to IT throughout cyber and SaaS. You have exposure to it in fintech, you have exposure to IT in consumer companies today that are created without AI embedded in Their DNA. Like why? Why would you do it if you're not gonna. If you don't put it in there? The challenge you have in our industry is you have vintages of managers who invested basically for the last 20 years, many of them without liquidity. And most of their businesses don't have AI embedded in the DNA of the company. And so they're chasing. Now you have incumbents that are large. There's two types of companies that are big and private that aren't in AI. They're kind of. We talk internally, we call them vampires and zombies because they're massive. Many of them are profitable. They have to now implement AI in their business models. And you have some that are going to get out of it and be okay, and those are the vampires and the zombies are dead. There's hundreds of.

Them. I think there's far more zombies than there are vampires. I think it is a much more difficult transition to implement AI. A lot of product change is actually from bottoms up and you can't just slap AI on.

It. No, it's.

Hard. Here you.

Go. It's hard and it's companies are going.

Through. I really want to do a midlife crisis and name it pfu, which is private. Actually fuck you. And I just want to go down Anaplan, Cooper, you name it and just take out one by one by one where you've got to have a couple of things. Founders not there, engineering team, cut customer service, cut price.

Increases. No. And then by the way, layer some secondary on lower the cost basis and you have you a 5X in three years. Yeah, yeah. No, it's a great idea. I think that there's long in the tooth companies from 2015.

Vintages. So is my generation, the generation of LPs funding as morons. And I mean that in the nicest way. And I'm being deliberately glib, but like in the liquidity profiles that we're doing and it's 15.

Years. Yeah, I think it's hard, Harry. I mean liquidity is hard. The one thing and you asked me this question on our walk is like, what do LPs think they know that they actually don't? And I would say how hard liquidity actually is for us, all of us. It's really hard. And that's why the DPI numbers are so low. It's not because people don't want to make money for people, it's because it's hard. It's just as hard as getting into the best deals. It may be harder to get.

Out. Is that even the case in the high demand assets like we have today with the LLMs. You want to sell your anthropic.

Sam? Yeah, Today I think there's a handful of liquid private companies. Basically they're quasi because this is the hard thing but at scale small positions. Yes. Because I look at but try to go move a billion dollars of.

Anthropic. Agreed, completely. But I look at like my first fund which was tiny admittedly but.

All of my winners it was large compared to.

Mine. But all of, all of my winners. Yeah, I can sell tomorrow. I don't want to sell any of.

Them.

Yeah. But all of my shit I'm desperate to.

Sell. Well then yeah, that's, that's, that's, that's the, that's the classic, that's the classic sell, you know, sell your dogs and keep your winners. And I think it's, it's actually the somewhat of the inverse is you have to be able to willing to sell your winners to have a sustainable business model and to generate the return that will will actually drive your Harry's fund.

Forward. What has been the single best investment for you on a multiples.

Basis? Early Wiz and probably early Spotify. Both of those were in Bolt. The early ride hailing. It's yet to be determined. Marcus Phillig Business we were the first institutional money from the North America in that business. Honest. Those first investments we made in all three of those are probably.

10X. Why did you do.

That? Which.

Bolt? Yeah, I love.

Marcus. He's amazing on the.

Show. He was.

Fantastic. Yeah, he's amazing.

Dude. Respectfully, when you went in this was pre Sequoia. Yeah, pre institutional.

Accredited. I think it was like 20 bucks a share or something. It's equated at 260.

Yeah. So.

Yeah. And this was like not the.

Brand. Oh no. But we had come off, in fairness to us, we just came off a great outcome in Lyft. We didn't know yet what Uber was going to be. I was going through all the challenges around the transition of founder Johan Berquist that was at Spotify called me and said what do you think? Lyft and Uber? And I gave him my opinion on both and he's like, well there's this small business out of Estonia that I'm going to go be the CFO at. And Johan has been our single best investment we've ever made. Spotify early investment that he trusted our business model in. Let's say 8-10x bolt yet to be determined. But let's Just assume It's somewhere between 50% and face value of what Sequoia paid. It's 6.7x and now it's a big business and Marcus has phenomenal young kid building that business. Thesis was well, I'll go where Uber's not and do it profitably because I don't have any.

Money. Being blunt, as I said, you said your humble beginnings earlier. You've done very.

Well. It's all relative. What's well. But yeah, go.

Ahead. Does money make you.

Happy? Money doesn't make me happy. Money makes my life easier. Money makes your life easier. Complex in some.

Ways. What did you think about money that now you have it, you now see.

Differently. When I was growing up, I thought if I could just make $5,000 a month, I would be set if I could just make $5,000 a month, own my own farm and farm it. And that's all I wanted to do. And then I spent 20 years trying to get away from the farm and now all I want to do is go back. But money doesn't make you happy. I think it makes your life complex. How you handle that money is.

Important. What have you learned about handling money when it comes to.

You? Yeah. Me personally, it's like for me.

Don'T increase my spending with my increased.

Wealth. Yeah, I think that's a good goal, Harry, and you should try to maintain that. It's very hard to maintain that for me personally. My journey has been about not having that fear of going back to the powdered eggs and powdered milk and the government cheese and that fear that it could happen again and setting my family up so that my children won't ever have to go through that and generations won't have to go through that. That's been my desire. And now that we're partly there creating that, I would say I'm in the probably middle innings of doing that for where I want my life to be. Reminding yourself of where you came from constantly is important because it's easy to be around people in our profession and just in general in life, as your financial status increases, the people around you change a bit. And I think that pull to be more like everyone is there and maintaining the thought in your mind that this always hasn't been what your life is and being thankful that it's here without losing the edge. The most difficult thing to do as you start to make real money, regardless of how you define that, is keeping that edge that got you there. And I think you see that across sports. I think you see it across business. I think you see it about high performing CEOs when you think about keeping that.

Edge. Is it the running away from the government cheese and poverty or is it the running towards the grandchild memories race of G.

Squared? I think keeping the edge for me isn't about either of those things. Keeping the edge for me is the chase of the next win and that no matter what dollar amount is that the win is what gives me satisfaction and the loss is what hurts. I spent a lot of time talking to you about the losses because I can remember mostly every moment of those. And as an athlete, I remember all the.

Failures. Should you ever build immunity to.

Losses? Yeah, immunity to losses would be nice to say that you should do that because maybe you'll be happier. Plus the money. Maybe you're like high on life. Yeah, I think some people can. For me, it's, I think ingrained in my DNA that I don't want to leave. I don't want to know who that Larry is. I enjoy the fight, I enjoy the journey to win and everything in life. I want to.

Win. Final one. Before we do a quick fire, what does no one see about firm building? Having built a firm you think is so.

Cool. Building something that then you don't realize that people outside of your small sphere recognize as something positive and that is something that you're randomly faced with. Like this conversation for me is, I'm a huge fan. It's like sports radio. Longtime listener, first time caller. You're a young guy, but you're super successful. And you have some of the most, most amazing people in our industry on the planet sit here and talk to you. And to think that I'm sitting here with you telling my story is for me very humbling in the fact that you're even interested. And I think that piece of building a firm and staying focused on the logo and not me individually has led to this moment. And that tells me that we all, for all of our flaws, which we have many, there's something in the water at G squared that works and we're going to keep grinding and doing.

It. I'm gonna do a quick fire with you. Otherwise I could keep you all.

Day.

Yeah. Okay. So tell me, whose life do you secretly admire and.

Why? I look at because of my background in sports, who do I admire? I think the longevity of like a Cal Ripken Jr. In baseball who basically for 16 straight season didn't miss a Major League baseball game. Major league baseball plays 160 games a year for 16 years from the time the guy was 22 to the time he was 38. Didn't miss a start. You know, people talk about records in sports and you know, all of the high flying athletes that people recognize and their accomplishments. Here's a guy who was a grinder, played third base, hard position to play in baseball. You know, I know you're a cricket guy, but study it up 16 years, not miss a game. Of course he's in the Baseball hall of Fame and celebrated in that way. But a good player, not the best, but the grind that that must have taken for him to do that just to get to the major leagues is not being the most talented guy. And then to play and not miss a game for 16 straight years for one team in 38 when he retires, that to me, we talk about our 20 mile march every day at G squared. Like it's a 20 mile march. Rain or shine. We're marching 20 miles and we're going to make progress. That is a different kind of intestinal fortitude in a set of massive steel balls that you just don't get in generations today. What that guy accomplished is unsurmountable. They will not be another baseball player, in my opinion, in the history of the future of baseball that will accomplish what he.

Did. It's very kind of you saying about like listening to the show, being a family, three shows a week for 11 years, there you go. Like no one giving a shit for four or five of those.

Years. Yeah, it's the grind in the willingness to have faith and that you can do it and living and breathing the challenge and making it become your identity. And I don't know, Cal Ripken Jr. I can only imagine what he went through, but I imagine it often. Waking up at 38 years old playing another random baseball game on a shitty team in Baltimore. Like to go out and grind to make that happen. For what reason? He'd made tons of money. Why do it? Why do the early shows where nobody was.

Listening? Because I loved.

It. Because you loved it. Because. And it was your.

Passion. Still.

Is. And that's where people should find their work life. Balance is when your work is your life, your life is balanced.

Balanced. I couldn't do this today if I didn't love.

It. No, of course not. Why? You don't have to go far. You're in your house, you can go swimming next door and walk in the.

Park. I'll tell you, we do a session in the sauna afterwards. Oh yeah, that too. Yeah, That's a little weird, but I'll go We're.

European. Yeah, I.

Know. What would you most like to change about G Squared that you.

Can'T? I think our people would like me to chill out just a little bit bit. And if I could be a little chiller and less grinding, I think people at our firm would probably enjoy being there more than they do. The money's awesome for everyone. People don't leave. We only have forced attrition. That aside, I spent a lot of time thinking about how to change my delivery at this point where we are survivable. We will have the next vintage. We're going to have many more vintages. There's not fighting just to fight. It needs to be altered without losing the edge. And I wish I could change it more quickly than I have. And I think it's led to, unfortunately, some really good people moving on that. Otherwise I would still like to be on the journey with.

Me. What's the most memorable LP meeting here in.

London? Guy committed on the spot and said, I'll sign the forms for 20 million bucks. First meeting said I'll do it. Never happened to me before. And it was here in London. Longtime LP still with us today. Saw the. I probably didn't even care about the strategy. Just I think liked me and said, I'll do it. That was most memorable for me.

Yeah. What worries you today that you don't think many people are thinking.

About? I think fundamentally our industry is the people searching for solutions to the fun life problem. They're searching for a solution to it because it's fundamentally broken and they don't want to say out loud that it's broken. So Evergreen Structures, Interval Funds, Quasi Liquid Strategies and Privates Continuation Funds. The continuation funds, though, I find a bit more interesting today than they were in the early inceptions because now you only want. They will only buy your good assets. So now they've really gotten smart. That's really interesting.

Space. Right now I'm a CIO of a large endowment fund. What advice would you give me.

Today about allocating in this environment where endowments miss the boat? And by the way, I'd love to have many of them. We don't is I think they chase the wrong.

Statistics. What do they chase that they shouldn't and what should they.

Chase? My belief is that TVPI and MOIC are not the stats that people should be focused on. And they are. I think they're fake.

Numbers. They should just chase.

Dpi. It's the only thing you can use to buy.

Food. When you think about yourself as a leader, what could you do to be better.

Today? I think I need to continue to grow and be more open minded in which I have, and I have full trust now in a co PM of mine who I think is one of the smartest people I've ever met and fantastic investor and he has my ear. I think I could do a better job of having more people have my ear. Like I could listen to more people than I do. And that's a challenge for me in the protectionist mode. Just my nature to be productively paranoid and I should listen to more people in their advice that they give me. And that's something I've worked on for the last probably five years, more extensively is gathering more around me, digesting it and then acting versus.

Acting. Final one. When has being paranoid helped you? When does it hurt.

You? Well, I told you about the theranoise that theranos that helped me. That was a productive paranoia and also the productive paranoia of closing an investor. The money's there, close it, invest it. Money's there, close it, invest it. Because you don't know when the next one's coming. And that's a bit of just my DNA as a human being and how I was raised is that productive paranoia that it's great today, but the wheels are going to fall off and you have to make sure every day that you tighten the wheels and you have to be focused on the right things that driving every day, that having that paranoia, no matter how good things are and always worrying that it's going to get worse across all things in life is to a degree, it's.

Healthy. I so appreciate this. I so appreciate the willingness to talk so openly. I loved it on our first walk. I really did. It was very special, which is why I was so keen to make this happen. So thank you so much for doing this with me.

Man. Well, thanks, Harry. Congratulations on what you've built. I'm a huge fan and I think you're only in the beginning of what you're building and I'm going to be cheering for you along the.

Way. Time for the.

Sauna. Yeah, let's do it, sanne, here we come. 9 Badenhosen, as you heard Larry.

Say, there we went for a walk in the park and I just thought it was such an incredible journey. I'm so glad we could make that show happen. I've got a new friend in Larry and I hope you enjoyed it. You can find it on YouTube by searching for 20VC. That's 20VC on YouTube. But before we leave you today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens, dozens of platforms, products and tools. That's why we use Coda, the All In One collaborative workspace that's helped 50,000 teams all over the world get on the same page. Offering the flexibility of docs with the structure of spreadsheets, Coda facilitates deeper teamwork and quicker creativity and their turnkey AI solution the intelligence of Coda Brain is a game changer. Powered by Grammarly, Coda is entering a new phase of innovation and expansion, aiming to redefine productivity for the AI era. Whether you're a startup looking to organize the chaos while staying nimble, or an enterprise organization looking for better alignment, Coda matches your working style. Its seamless workspace connects to hundreds of your favorite tools including Salesforce, Jira, Asana and Figma, helping your teams transform their rituals and do more faster. Head over to Coda iO20VC right now and get six months off the team plan for startups for free. That's Coda C o D A IO 20 VC and get six months off the team plan for free. Coda IO 20 VC and while Coda keeps the engine running smoothly, Shopify puts the pedal to the metal when it's time to sell. When I was 18, I I dreamed about being an investor with zero contacts in the industry. And through persistence I'm now living that dream. Maybe you're dreaming of your own business and that's where Shopify steps in. I spend my time exploring successful businesses online. Often there's a business behind the business driving success for millions. That's Shopify. Powering 10% of US commerce, Shopify offers beautiful templates, AI tools for product images and description options, easy marketing campaigns and 247 support their number one checkout boosts conversions by 50% fewer abandoned carts, more sales Winner turn dreams into success with Shopify go to shopify.com 20vc for your $1 per month trial today that's shopify.com 20vc and while Shopify helps you drive sales, don't forget what really keeps those customers coming coming back. Trust is the ultimate currency in business and today customers expect it faster than ever. And that's why over 10,000 global companies trust Vanta. Vanta automates up to 90% of the work for in demand compliance standards like SoC2, ISO 27001 and more. Using smart AI to centralize workflows, manage risk and get you audit ready in weeks, not months, so you can stop chasing paperwork and start clicking closing deals. And a new IDC report found that Vanta customers achieve $535,000 per year in benefits. That's insane. And the platform pays for itself in three months. I had no idea about these Whether you're growing fast or just getting started, Vanta connects you with trusted auditors and experts support to help you build trust with customers. Get a thousand dollars off your first year@v vanta.com 20vc that's vanta.com 20vc as always, I so appreciate all your support. And stay tuned for an incredible news show coming on Thursday with me, Jason Lemkin and Rory o'.