Varda's Landing, Peter Thiel, & the Future of El Segundo, Delian Asparouhov, Founders Fund

My understanding of like the aerospace sector, the manufacturing sector, the biotech sector has so vastly improved over the course of the experience of art. And I think that really has reflected in the quality of the investing that I've done over sort of the past several years. And it just made me much more comfortable in diving into some of these areas. I think my ability to diligence things in biotech, in industrials, in robotics, you know, in aerospace is so improved for having such, you know, sort of close to the metal, you know, sort of experience with this. You know, I was talking about this actually with a, you know, sort of friend over lunch. You know, I think if you look at, you know, people that land on the top 10 of the Midas list every year, you'll find that about a decade later, half of that top 10, nobody thinks about it anymore. There are people that have just totally fallen off the face of the planet. But then you look at somebody like our series CEO and original co founder of Founders Fund, Peter Thiel. I would argue while he doesn't necessarily always submit to the Midas list, I would very easily argue he's been one of the top 10 VCs in the Valley for the past several decades combined. Foreign.

Welcome to Sorceries podcast. I'm Molly o', Shea, the founder of Sorcery, a weekly top VC deals newsletter highlighting the top GPS founders and deal announcements leading the next innovation cycle. Today I'm very excited. We have someone who might not even need an introduction. We have Delian from Founders Fund. He was recently promoted to partner and he has been investing there for the past five years. He's also co founder and president of Varda Space Industries, which is building the world's first space factories. Before Founders Fund, he was a principal at Khosla Ventures. Hope you enjoy. Hi Deli. It's great to have you on.

Thanks, Molly. Look forward to hanging in LA soon.

So we have a couple of big congratulations for you that we'll get into today. First, Varda's Landing. This is a big deal. Your promotion to partner at Founders Fund and most importantly, your new title as a father.

Which, by the way, you know, effectively those three were my goals that I set for myself when I was like 24 years old. I basically said by the time I'm 30, I want to be a father. I want to be a partner in a billion dollar plus fund and I want to start a basically successful space company. And so yeah, basically, you know, effectively all three of those landed in like the last years or seven, eight months. You Know, right on time. So now I got to start thinking, you know, do I set up, you know, goals for 35, or do I just say, you know, this is it, Kurt Cobain. It never gets any better than this. You know, got to. Got to go out with style.

Well, if anything, you are just validating that manifestation works. And maybe you belong in la.

Exactly, exactly.

So to kind of just dive right in your launch. Varda's launch was my number one newsletter of 2023. Now the landing will make it full circle. This was a huge accomplishment for the space sector. And it seems like every week there's a new announcement for Varda and your team. Could you share more about Varda, its founding and the launch into space?

Yeah. So the idea behind VARDA was predicated on an idea that I can't necessarily say I came up with. There are actually papers from the 1960s that theorize about the value of doing solid state crystalline, you know, work across a variety of materials in the environment of microgravity that you get in space. And, you know, that work has been expanded on obviously, over the past sort of 60 years in particular, really took off in the space sort of Skylab space shuttle and then ultimately sort of ISS era. I really sort of got fascinated with this sort of, let's say, scientific field and world in the sort of 2011 timeframe, and really thought that it sort of painted a potential path to either humanity having an industrial future in space, rather than just an exploratory future in space. And I felt like that was the way that you really made something truly sustainable. Right. I think a part of why the Apollo era, while it had a lot of success, ultimately didn't turn into sort of permanent capability that humanity had, was because it was ultimately entirely based off of state budgets and entirely exploratory. But ultimately, if you look at everything from the Chinese and Portuguese empire in the 15th century, to Lewis and Clark, to the original American colonies, the only reason that there ever is a sort of more permanent human establishment anytime in human history is ultimately through economic means and through the means of production. And so tracked this idea in space for quite some time. I considered working on it sort of seriously in 2011. 12 ultimately kind of put the idea on the shelf. And then in 2019, for the first time in Q4, a rocket launched and landed for the first time four times in a row, which to me was the first time where I was like, this is no longer a sort of fluke. This is a pattern. And it means that rocket landing is going to be very regular. And so that means access to space, space should be much cheaper. And so as I started to think about this field, sort of my immediate, let's say, assumption was while all this work to date has happened as a part of the Space Shuttle or as a part of the International Space Station, that's a great place to do sort of basic research and sort of push the scientific frontier. But ultimately, if you think about the sort of economics of sustaining a human in orbit, it's just incredibly expensive, incredibly complex. And so if you want to sort of commercialize this type of work in the near term, you need to do it in a, you know, sort of fully automated and much more cost effective user manner. And so in Q4 20, 19, Q1 20, I actually went out to various groups that had been working on this problem of user space manufacturing, utilizing the microgravity environment for materials, and basically pitched them on the what is now the VARDA architecture. And that, you know, rather than basically again doing any of this work inside the International Space Station, instead, how do you make something that looks closer to a Starlink satellite with a small little sort of capsule, you know, reentry pod that ideally costs more like 500k rather than something like the sort of cargo or crew dragon that are $100 million. And that's the way to really prove out this business model. And funnily enough, I kind of got shut down by everyone. The reaction was that's a very difficult problem, nobody's ever done that before. And also in some ways, most importantly, this does not fit within NASA's priorities. And so NASA is not going to fund this because they only want things where humans are on board, because ultimately they're responsible to Congress and they believe that the best marketing for low Earth orbit is having humans there. This is not on that path. And so kind of put the idea on the shelf. Covid hits Peter at Founders Fund, basically tells us, you know, you know, go on a six month vacation, we're not going to be deploying any capital. And so I had a lot more sort of free time and free space. And I kind of had the idea. I was like, man, it's pretty frustrating that it finally feels like this idea's time is, it's finally ripe and nobody's doing it correctly. And so I realized in that moment I was like, you know, I think I just have to do this myself. And so went to a couple of leaders for SpaceX buddies pulled together sort of the founding team and sort of came to them with this like you know, sort of napkin sort of spreadsheet and architecture. I was like, look, I'm not an aerospace engineer, but to me it seems like you could build something like Starlink, you could build a much smaller reentry capsule. Shouldn't that all be doable and shouldn't we be able to do this for a relatively like small amount of capital? It's not like a billion dollar industry type project. And the reaction at first is like, you're crazy. Like reentry capsules cost a billion dollars. That's not going to happen. And then in practice as people started to dig in, they were like, huh, you know, actually there is this like reentry capsule from the 1960s called the Corona capsule. And, and they did actually build it for pretty cheaply and they did fly it like over, you know, 100 and you know, I think like 34 times total. Maybe if they did it in like the you know, mid-50s and 60s, we can probably sort of do it today, you know, as well. And so yeah, lo and behold, you know, sort of, you know, three and a half years basically from you know, opening office doors. About four years almost since I was working on it, you know, we were able to land our first reentry capsule in the middle of the Utah desert. And it is, you know, while that capsule, you know, is the, you know, size of it, you know, sort of tracking a little bit larger and maybe user looks simplistic. I do think it is really profound moment for the space industry where you now have this opportunity to not only launch very cheaply obviously on a SpaceX rocket, but we've actually proven you can land very cheaply in a way that we think is much more sustainable for commercial activity where we landed on US soil. So you don't need tons of helicopters and ships in an inflatable reentry capsule. You can do a very low cost reentry capsule being just pick up with a couple guys in an ATV rather than, you know, some highly complex equipment out in the ocean. And we were able to get you sort of regulators and military range partners on board for it as well, which was, you know, pretty non trivial as you know, as you probably saw, we were up in orbit for a lot longer than we were originally expecting. But you know, now that we got that, you know, sort of all across the line is pretty awesome to see. So yeah, I'm proud to say that, you know, we started the company that basically landed the first ever, first ever commercial reentry capsule, you know, on US soil with also a New regulatory regime use a part 450 with the FAA. So yeah, it was a lot of historic firsts and hopefully we look forward to this year doing it multiple times and making this seem sort of totally routine, just like rockets landing is totally routine.

I definitely think you will be doing that multiple times given your ambition and your willingness to not accept no as an answer. In terms of the cost differentiation, is there a like multiple difference of how much it costs you to put your capital into space and back down versus, let's say, the government?

Like the rough napkin math you can do is, you know, by our, you know, call it, you know, sort of fifth or sixth mission, we expect our permission cost to be sort of three and a half, $4 million. You know, if you look at how much, you know, sort of SpaceX contracts, you know, sort of crew and cargo dragonflights for, at a bare minimum that's sort of $40 million, let alone the idea of like you have to dock the International Space Station, the hardware on board, the manufacturing, the reentry operations, et cetera. And so, you know, I call it, it's like minimum of, you know, 10x. But you know, more realistically, it is probably closer to like 100, if not a thousand x when you take into account the cost of astronaut time, you know, NASA infrastructure, et cetera. And you know, I'm very glad like both of these paths should exist, right. I think it's really great to see a wide set of companies, SpaceX on down, working on this type of human rated infrastructure. Because if Varda really sees its, you know, gets to its ultimate success and continues to scale up our automated factories, at some point we will want a human on board to do some level of maintenance or operation of these larger space factories. And so you want both to proceed in parallel. But it really feels like there's a lot of investments in activity both from NASA and private companies on the human rated portion of, let's say the tech tree. And it feels like it's basically only VARDA on the autonomous tech tree. And so there should probably be a little bit more of an even balance if we're looking for, you know, are looking to, you know, see the fastest path to the establishment of a real economy in low Earth orbit. But yeah, you know, probably, you know, call it a differential being anywhere from minimum 10x to probably more realistic sort of thousand X. In some ways that's actually like the real competition for Varda is not, you know, these human rated platforms, they're so far off in economics, the Real competition is like, can you actually do this in a way that, you know, integrates into people's terrestrial user supply chains and terrestrial alternatives? So we never think about, like the ISS being our competitor. We think about, you know, what are alternatives. To be able to solve this, you need to solve the problems that we solve on Earth, you know, in different, in different ways. And, you know, is, you know, microgravity always the most effective or the only way to solve the problem that a customer is experiencing?

I was actually thinking about this earlier today when I was prepping for our call that when you started Varda, did you even think about having competitors in the market? Like, obviously this is just such a unique problem to solve and it's very mission driven, but how do you even think about competitors?

Yeah, it's funny, I had an investor ask me the same question yesterday, like, you know, what do you think about like, you know, somebody coming in as a second mover once you groom this house? And it's just, you know, my response is like, best of luck, like, please do, you know, like, you know, I would love if other people try to tackle this, the difficulty in getting, you know, sort of aerospace engineers, hypersonic analysts, pharma chemists, people that are seeing the BD into this like, you know, pharma world, you know, sort of, you know, reg affairs team, you know, sort of D.C. hill affairs team, getting that all under one roof, integrated into a cohesive like you sort of team and DNA and culture has been just like such an incredibly difficult problem for my co founder and I, that the idea of like somebody else trying to do this, I'm like, please go right on ahead, you know what I mean? There have been sort of quote unquote competitors that try to tackle very narrow components of what we do, right? There's people that just do the reentry capsule, there's people that just try to do the zero gravity sort of pharma manufacturing, right? But these sort of narrow, let's say competitors or narrow alternative attempts, I think are highly unlikely to succeed in that. Part of why we've had a lot of success at Varda is because we sort of fully control our entire supply chain. And so when we present to a customer we don't have, they don't need to think about, you know, right? Our pharmaceutical customers, they don't need to think about aerospace, they don't need to think about rockets, they don't need to think about microgravity. We just go to them with a, you know, basically tool in their toolkit that can solve very unique challenges. But we handle everything from there. They hand us a drug molecule, we hand them back a like solid formulation. Not like they hand us a drug molecule and then we say okay, but like who do you want to launch on and who's going to bring this back, et cetera. Like top 20 biopharma don't know how to think about hardware or space. Right. And completely abstract, you know, sort of all those details. And then maybe in theory some of these narrow competitors could like partner to together. And I'm like man, I have a hard enough time figuring out how to do this thing when we control all of it, let alone the idea of now multiple companies trying to collaborate and somehow make this thing happen. It's like dear Lord, you know, please do, please go, you know, give it your best shot. We would love for more folks to tackle this.

Well, you know, that's a more supportive approach versus the people who in the beginning told you not to even go after it, that it will be multi billion dollars. So at least you're encouraging of the ecosystem.

Yeah, it was fun. When we landed our capsule, most of the team was focused on celebrating. They were going out and having a good time. Einstead was focused on emailing or 15 earliest haters that said we would never land a reentry capsule on US soil and making sure that email them photos of the capsule being like look us now.

Seems like true Delian fashion.

Just go, I do love myself a sort of self invented grudge. I love to hold them.

Yeah, well Dave Portnoy does something similar except he gets like a champagne bottle and etches all of his enemies names into them and when something bad happens to them, he pops the champagne and drinks it.

Oh, that's good. I should start doing that. I like that. Yeah, I gotta, I gotta take a, you know, slice out of his strategy.

It's surely a spiteful approach, but to go back to the idea maze of founding Varda. So you got into now pharma manufact. So would love to understand how you ended up landing a couple of pharma customers and the testing process from that.

Yeah, you know, when we started the company it was admittedly a little bit of a wider user aperture in terms of, you know, let's say business models, materials that we wanted to tackle. If you look at our very first, you know, sort of seed round pitch deck, we do talk about look, there's you know, gravity has a wide variety of effects. We're going to need to spend some time to actually like, you know, Go through and understand these, you know, sort of, let's say, you know, sort of fields materials results ourselves. And, you know, it's just not really sort of possible to do this literally working on it full time, because ultimately, like, while there have been a lot of research papers and NASA publications about this, you can't really figure this out until you really start to dig in, talk to the end customers, and start to try to replicate some of this work for yourself. So, yeah, like I mentioned, we started off with a really wide aperture. And within about a year and a quarter or so of starting the company, it was just incredibly clear that there was really only one path forward, which is around the basically formulation of small molecule pharmaceuticals. And so we pretty rapidly discarded basically everything else on the commercial side of things. So commercially, Varda fundamentally is a biotech company focused on the formulation of small molecules. Our business model looks very similar to other formulation technology companies like Halozyme, Electrify being two of my favorite recent examples. And then we have a DoD business that is obviously focused on the architecture of our spacecraft and totally unrelated to the commercial EO business. Part of why we landed there, it was a couple of different things. First, if you look at it, the active ingredients in pharmaceuticals are fundamentally the highest value sort of objects by unit mass on the planet via Earth. And the limitation of this business model is really mass to orbit. And so if you look at it from the mass equation, fundamentally small molecules wins there. The second is if you look at just the processing complexity, basically the step that needs to actually happen in microgravity in terms of processing, you know, small molecule, you know, you know, solid state crystallization is actually just like a much simpler process than some of the other materials that have been theorized. You know, fiber optic semiconductors, human organs, all those are very highly complex, you know, sort of processes that you felt like it was, you know, sort of too much to you, sort of bite off. And then, you know, in some ways, you know, sort of third is, you know, if you look at a lot of the other, you know, sort of models, the EU or a lot of the other materials, the only real business models that you could do in them was, you know, what I call, like lemonade stand style economics, where you produce the material, you sell the material, it's for a fixed price, versus in the world of pharmaceuticals, there are some more, let's say, you know, aligned incentives that you can have with your end customer, where, you know, in all the Varda contracts we have to date, we not only, you know, do some Amount of payment for the actual user flight discovery of the new user pharmaceutical product. But then we also get to participate, you know, in a risk sharing model where we also get to participate in the upside of the compound versus that's not the case in you know, some of these like you know, sort of in semiconductor world a little bit more so, but definitely not in user fiber optic world. And so yeah, across all three, let's say, you know, sort of, you know, dimensions that we analyze, you know, price per unit mass, complexity of processing and you know, sort of value, you know, capture potential. It was just very obvious that user pharmaceuticals and in particular small molecules were by far, you know, the winning contender there. So in some ways it's been interesting to see since Varda started there have been a couple of, you know, sort of very early stage. I know these people have tons of funding or anything, but there have been a couple companies come up starting to try to tackle non pharmaceutical product areas in, you know, microag manufacturing. And to me I just find it quite confusing because they always phrase it as like, well Varda is going to go to this, we're tackling these other things. I'm like man, we looked at those other things like every single one of those other things we like talked to customers, almost had signed contracts with them. Like you know, we went very, very deep. But it's like those, those areas were very difficult to make everything you sort of pencil out. And so I'm kind of skeptical honestly at this point of you know, anything in some ways other than the particular use case that we landed on. It's not like we were like oh this one's number one, but there's a close number two that we would have done if not for the number one. It was like this is number one and it's like a like very, very long gap to the number 2.

3, 4 is a function of that being A, the need for the science research in this field and maybe B they actually have the budget to go after it versus other industries like is does pharma have more research dollars to work towards these things? Because they are more critical a bit.

I would say, you know, pharma is more willing to make long term bets because that is fundamentally what pharma does. They make you know, sort of long term, you know, R and D bets. But you know, at the end of day it still has to translate to you know, commercial, commercializable, you know, sort of value. So it's not like you get this like indefinite, you do sort of R and D$, it eventually has to be translated into sort of commercial dollars. So I wouldn't say that like, you know, pharma needs microgravity. It's not something that was like sort of top of mind for people. But in the world of small molecules where we play, which is, you know, sort of a category of compounds that is, you know, actually the majority of, you know, you know, pharmaceutical products on the market today, and the vast majority there hasn't been actually a real innovation in the world of the formulation and development of these types of compounds in almost 20 years at this point. And so I think a part of the attraction is that while there are a lot of new areas like MRNA biologics, et cetera, and there are a lot of formulation, new technologies occurring in those areas, formulation of solid state small molecule work basically has been stagnant for 20 years. And so I think a part of the interest in Varda has been this is the first new tool in the tool set for a process that affects, you know, 90% of the drugs on the market. And also this is a sort of industry that is very willing to obviously, you know, sort of bet on R and D that they think gives them a real competitive advantage. And so I think that's what's a lot of, you know, led to our ability to assign these first, first handful of user pharma customers that, you know, we look forward to announcing over the next quarter or so.

On Twitter today, I did read that Varda is a part of enabling a new field of research in gravity for science and manufacturing. So how do you determine what materials will work on and the effects in gravity?

Yeah, so what we found very surprising when we first started the company is if you looked at like the past, you know, sort of 40 years of research, you know, I would argue that it is, you know, sort of closer to monkeys throwing darts at a dartboard versus like a true scientific process where people are basically taking, however, their pharmaceutical process work down here on Earth and just running that exact same process in space and then just seeing if the result was different effectively. And that was effectively, that was where the scientific field basically ended our sort of thesis, you know, at this point, almost a year and a half, two years ago, was, well, if the whole point of going up to microgravity is that you're studying how the material is sensitive to gravity, is that not something that you could do down here on Earth? Because, yes, we all experience, you know, sort of one G at the surface, you know, of the planet, and you can't decrease, you know, gravity here on the surface of the planet. But you can simulate an increase in gravity. Right. You can basically spin up a large scale centrifuge and use that to experience effectively 2G, 3G, 4G. It's sort of the opposite of going to orbit. Right? The reason you experience zero gravity in orbit is because the centrifugal force basically perfectly cancels out the gravitational force. Well, what if instead we actually just have this centrifugal force, rather than canceling out, add on to the gravity force that we experience down here on Earth and use that to actually study basically what is the effect of various material systems and, and how are they sensitive to increasing levels of gravity. So we can use that to basically extrapolate downwards to what actually will happen in zero gravity. So that way you can do a lot of this type of, let's say pre screening and you know, sort of faster learning here on the ground. Like the, the very, you know, sort of, you know, you know, five year old version, let's say, of the paper that we published today is if, like if at 1g your drug is medium, and at 2g and 3g and 4g your drug becomes very bad, well then one could theorize that if you wanted your drug to be very good, shouldn't you go to zero G? Basically? And that is not something that even though there's been probably over a billion dollars at this point sort of spent on this type of microgravity pharmaceutical research, not a single person has ever looked at this type of gravity sensitivity ahead of doing microgravity studies up in orbit. But it felt very counterintuitive to us. So yeah, today we published this first paper where we basically showed this small molecule, L histidine, had basically the sensitivity to gravity in its particle size distribution. Think of this as like when you basically crystallize this particular molecule, what size are the crystals? And we basically showed that as you increase gravity, there's variations in the size of those crystals. And so one would expect that there would also be, you know, this extrapolated variation downwards when you go, you know, down to, you know, sort of zero D. And we hope that this basically ushers in a sort of new field around basically gravity sensitivity sort of studies, both in pharmaceuticals, but probably across a wide variety of products. So you can use that to screen for, you know, what could be some effects in microgravity.

That's incredible. By the way, you're probably inspiring a lot of scientists out there, people that, and researchers that just didn't think that new fields could pop up or like there are new possibilities and dimensions to evaluate these parts of science.

And it's a very like, you know, sort of fundamental, you know, sort of effect on science in that, you know, if you look at the four fundamental forces of the universe, right, it's a strong and weak nuclear force, it's electromagnetism and gravity. And in some ways all of science is predicated on, you know, interactions that those four forces have. The idea that you can actually sort of manipulate one of those and actually remove it entirely can be a pretty radical effect across a wide set of fields. We've obviously, you know, really focused in on pharmaceuticals, but I think over the course of sort of Varda's sort of life, I do hope that we can eventually, you know, probably not necessarily tackle ours ourselves. You know, sort of tell investors, look, we are going to be a pharma company. And then over time as we build up our platform, I'm happy to be a contract manufacturer. I don't expect in the future that we are also going to want to be a semiconductor company and a fiber optic company, et cetera. I think more likely, ideally in the success case in 2032 and Varda's pharma factory is very large, TSMC finally realizes that they want to create a semiconductor fab up in orbit. And they come to us basically as the sort of Foxconn kind of equivalent where REACT is their contract manufacturer. Because we've built up such expertise in things, the logistics, the infrastructure of sort of running this type of industrial sort of park in orbit. But yeah, I do think there are sort of wide ranging and sort of large ramifications of the work that we do. And in some ways, starting with this initial paper that we published today.

Dang, you took all of my questions out of what I was already going to ask. I was going to ask, so when are you going to do Varda times TSMC partnership? You're gonna start spinning up semis. But you've already, you've already answered it. Okay, well that's one step at a time.

Gotta make our, you know, gotta make our, you know, station be a multi billion dollar company. First the TSMC takes us seriously.

Yeah. And then you can become a trillion dollar company, as you should.

That's, that's the only goal in life. Gotta, you gotta shift the goals, Right? Yeah. You know, billion dollar companies aren't interesting anymore. You know, we gotta update Aileen's, you know, unicorn term to, you know, I don't know, Trinacorn or something like that.

You just Mark that for your 35th birthday goal.

That'll be more of like a 40th or 45th birthday goal. Compounding takes time.

Yeah, yeah, you're right. Well, in terms of Varden, did you have any idea when you started it that you were going to become not only a deep tech kind of master of the world, but now you're also a biotech expert. You're now covering like all of these different grounds of deep tech. It's space, it's bio. Given that and how constrained this category is in general, it's very cost intensive. Not many investors invest into it. You have to be very specialized. What are your biggest learnings after taking the plunge and going into that?

Yeah, you know, I can't claim that. When I started Varda, I thought I was going to be going so deep in like the, you know, say, you know, sort of pharmaceutical industry. It was funny. I was like meeting with a like, you know, sort of svp, top tier executive from a, you know, very large publicly traded biopharma company. And at one point, like in the midst of the conversation, she asked me, you know, do you have like a chemistry background or like, you know, what's your background? I was like, no, I'm like a computer science dropout. Like technically, like when I check the box on like what level of education, it's like high school is like, you know, technically, how much I have to check. So it was sort of nice in some ways to feel like one of those moments where I was like, I'm holding my own. Like I was like reminding her of some of her like, you know, grad school chemistry, you know, concepts that she hadn't thought about, you know, in a little while to like explain to her, you know, what we were, what we were up to. And so, yeah, yeah, just it's fun to see that I can kind of hold my own there. And I think if there's a sort of lesson that I've learned from it is I'd always had interest in the world of biotech. I remember When I was 20, 21 years old, I dropped out of MIT, was out in San Francisco talking to a friend that had had a decent amount of success building some biotech companies. And I remember telling him was like, this is a field I'm interested in. How do I get going? And he was like, here's some textbooks, here's this. And it's like you order them, you kind of read through them. But it's just hard because I was so good at computer science and software et Cetera, why would I go do this? It's hard to have the motivation for it. And if there's a lesson that I've learned is like, when you, like when your company's life is on the line, you have way more motivation. And when you have way more motivation, you're actually going to sort of learn some real depth of these concepts. And so, yeah, yeah, I definitely feel much more comfortable in this world now, but only because it was like, well, this is the only way to make Barda successful. So time to spend, like years of three, four months just nonstop immersing myself, you know, sort of in this world. And then beyond that, it's like, you know, I just have our chief scientist officer and people that I really respect. It's like anytime a new paper comes out, anything that's related to Varda, it's like, walk me through it at a very, you know, sort of first principles level. And I build my way up to eventually being able to, like, use it, hold my own.

You started your career out as an operator. You founded a company, you worked at Teespring, and then you found yourself at Khosla Ventures, and now you're at Founders Fund. So having that operator experience and founding Varda, would you say that every. I feel like this is like a big debate. Like, in the VC world, you're. You're getting investor experience, but there's always like, oh, you should get some operating experience. It'll like, tremendously increase the quality of your deal flow. The way you evaluate companies.

I think it has a huge effect on, like, the, my, you know, sort of investing, you know, world. My understanding of, like, the aerospace sector, the manufacturing sector, the biotech sector has so vastly improved over the course of the experience of Art. And I think that really has sort of reflected in the quality of the investing that I've done over sort of the past several years and has just made me much more comfortable in diving into some of these new areas. I think my ability to diligence things in biotech, in industrials, in robotics, in aerospace is so improved for having such sort of close to the metal sort of experience with this. I was talking about this actually with a sort of friend over lunch. You know, I think if you look at, you know, people that land on, like, the top 10 of the Midas list, you know, every year, you'll find that about a decade later, like, half of that top 10, nobody thinks about anymore. Like, there are people that have just like, totally sort of fallen off the face of the planet. But then you look at somebody like, you know, sort of our series CEO and you know, original co founder of Founders Fund, you know, Peter Thiel, I would argue, you know, while, you know, he doesn't necessarily always submit to the Midas list, I would very easily argue he's been one of the top 10 VCs in the Valley for the past several decades combined. Right. He's probably coming up on almost 30 years at this point of being one of the top VCs and investors in the Valley. And I think a part of actually what keeps him so fresh is it's probably underappreciated how regularly he still goes close to the bare metal where he actually takes a chairman co founder position in companies and gets pretty deeply involved and really understands the problem sets that they're going through in a way that I think most investors don't. And so, you know, I do think I love our style, you know, that we do like do at FF where it's not to say we encourage incubations or anything. If anything we like actively discourage them because typically you should just stick to investing. But the fact that we do have a decent amount of partnership that is very actively close to the bare metal, I do think makes us much better investors, especially some of the fields that our companies operate in.

Are you saying like that has like maybe 10x or maybe move the mark a little bit further on what you thought you would achieve as an investor or what you thought like quality investments would look like?

Yeah, I mean I think objectively if you look at, you know, again I use the Midas list as, you know, the marker because it is, you know, sort of the best, you know, sort of, you know, ranking that we have on performance. And it's not just like run by Forbes, right? It's run by highly qualified and competent LP that happens to sort of publish it in conjunction with Forum. But it's not like journalists are doing this ranking. It's like financially sophisticated sort of insiders. And if you look at sort of top 100 on the Midas list for VC that started their career sort of pre2012 versus post 2012, pre2012, there was definitely a large number of investors that were pure sort of financial analysts early on their career. Bill Gurley is an example. Mary Meeker, Michael Moritz, CEO from the Eastern journalism world. Tons of investors that you can point to that very much so did not have this operational background. As you start to look at, you know, sort of as it becomes 2012 and onwards when people start their venture career, it becomes Much, much heavier. In that sort of top stratus of, you know, best venture investors, a much higher percentage of them end up having significant, you know, sort of operating experience. And so I think in some ways, you know, we can argue about the philosophy of this, but in some ways Darwinistically, the Midas list is somewhat proving that, you know, it appears to be quite necessary if you want to be in the upper stratus of investors to have some level of serious use of operating experience on a very personal level. Yeah, I did find it to be both valuable before even becoming an investor having that experience and that in the early days of Coastal Lifers I felt like I just had a level of moral authority with advising and even reaching out to founders that people that you sort of jumped straight into investing didn't have. And then now especially so in the sort of post Varda world there are just so many investments and things that I can point to where I either wouldn't have gotten into the deal, I wouldn't have been able to diligence it, it wouldn't have kind of crossed my desk, you know, sort of if not for it. I find that my quality of investing is significantly sort of improved post Varda, despite the fact that in some ways I'm obviously spending much less time on it because of, because of the sort of time constraints that Varda provides me. And so yeah, I do tend to tell people I'm not sure obviously maybe you'll be a counterpoint to go here. But I mostly tell people the idea of going straight from college into venture I don't think is necessarily the best idea. I think it's one where maybe you should do it for a couple years but then maybe go join a super promising portfolio company, then come back to it. You know, it's a career that you has measured its success, has measured over the course of years or decades. And so make sure to think in the order of decades. And that may mean at certain points of it, you know, not necessarily, you know, being a full time investor, you.

Went from Khoslo to Founders Fund. And Founders Fund is recognizes being varied like focused on investing in self reliant founders, people that might not need your help. What are the biggest differences between the two firms that you've worked at given those are your experiences and what do you think is beneficial with that?

Yeah, I think in the grand scheme of like, you know, let's say the bell curve of types of cultures and firms and investing styles in Silicon Valley, KV and FF are like, you know, about as close in some ways as it gets. They're both relatively small investment teams. They both have sort of prolific founder CEOs that sometimes are vilified in the media. They both like to invest in true technical moonshots, right? Founders on being the largest sort of investor, you know, in Space X Coastal Ventures being the largest investor in Rocket Lab and then in some ways more recently, you know, the only equity owner in OpenAI other than Microsoft. And so, you know, clearly both firms that are, you know, very successful, you know, sort of backing true technical moonshots. After that there tend to be, I would say, a lot of differences. I think one of the most obvious ones is just the way that the firms structure their time. Coastal Ventures is known for their, call it four to six to eight hour long Monday partner meetings where the entire team gets together, partner presentations are done where companies get invited in to present to the entire team. And that's where a lot of the investment decision making effectively happens is on that Monday meeting. Founders Fund is like sort of in some ways truly the opposite, completely sort of unstructured in terms of sort of time and decision making in that we don't proactively get together sort of once a week, everything sort of bubbles up from within. One of my former colleagues quips or ways that he would describe it as founder fund sometimes feels like the blockchain of VCs where it's sort of fully decentralized and then sort of use technology as a way to form a sort of internal consensus. I think they both have their pros and cons at Coastal Ventures. I do think one of the maybe one last difference that I'll articulate is I think sometimes you can also tell a firm's culture by what is the first question that they ask when considering an investment at kv? Generally the first question was what is the technological differentiation that this company has versus a founder's fund? Typically the very first question we ask is why are we going to appreciate this company and others won't? And it's filtering for let's say technical moat and barrier and the KV side of things versus let's say level of contrarian on the FF side of things. I think they both come with pros and cons. I think KV is a really great place to learn venture in that you just get so much exposure to the team because of those eight hour long partner meetings. There's very rigorous discussions, a memo writing culture. Usually they're inundated with information in a way that really allows you to learn via osmosis on the flip side, I find Founders Fund a really great place to. If you already kind of know what you want to do and have your sort of strategy laid out, it's a great place to execute with very minimal friction, given that it is sort of decentralized. And so, yeah, I think both you should come with pros and cons. In some ways, I'm very happy the way my career has been structured to date, where it's like, I felt like I got to really go learn a lot of how to practice venture at kv, and it was given the opportunity to practice it the exact way that I wanted, basically.

Fff, you moved from San Francisco to go to this beautiful island, like, resort world of Miami. What have you learned from getting out of that bubble to coming to Miami? Obviously, you're a huge advocate, and you've also built a company in Los Angeles, another beautiful place that I love. But what was your biggest, like, learning getting that reflection, getting out of the bubble and into, like, a broad new world?

Yeah. I think I can talk about why I advocate so much for Miami and why I feel like I'm far more productive here than any other city in the United States and feel like it's a model city of the future more so than anywhere else. But when I think about what did I learn from leaving, I think it's that independent thinking is extremely difficult to accomplish, and you kind of need to take every possible advantage that you can get in order to even having a chance to have a sort of unique thought. And I think I probably underappreciated how much even just being sort of physically near this sort of, you know, intellectual bubble of San Francisco led me to, you know, succumbing, you know, sort of to it. Like, I, when I lived there, thought of myself as a very independent thinker versus the types of ideas that I'm much more willing to play around with in Miami are far more radical. And I think a part of it comes from this, like, very unique. Like, you know, I was recently chatting with a professional colleague, not, you know, an FF colleague, but somebody that we have some professional overlap with that lives in San Francisco. And, you know, they were, you know, claiming to be a true sort of advocate of free speech. And it was so clear that, you know, the bar for what they considered acceptable versus unacceptable speech was very different than what is the average bar in Miami. And so they believed to be themselves very genuinely an advocate for free speech. And yet, if they were somebody that was in Miami and having a casual sort of dinner conversation, they would be considered quite censorious. And so I think when you're embedded in that culture, it can be very easy to succumb to that just sort of morally corrupt, censorious, hypocritical culture. Right. My somewhat sort of quippy one liner that I will sometimes use about San Francisco that I think reflects both the values there, but then also how it affects you intellectually is that, you know, sort of progressive SF liberals are actually some of the most racist people that I've ever met, you know, on the planet. They claim to be very open to new ideas, they claim to be very open to sort of new cultures. But ultimately, if you look at it, it is a extremely, you know, sort of homogeneous and mono, you know, sort of culture that is, you know, extremely intolerant of any sort of radical ideas. And so, you know, they claim to have, you know, diversity, yet they lack even the basics of diversity of skin color and diversity of thought. You walk around, you know, sort of Chestnut street in San Francisco and it is going to be like 99% white people. Why walk outside of, you know, sort of my office here, you're basically going to see either sort of every color on the rainbow, but nobody's going to even be shouting it from the rooftops because in San Francisco it's proclaimed to have diversity versus Miami just has it. And so there's no need to proclaim.

It to shift back to la. So we alluded to this a little bit in the beginning, but El Segundo, some call it Gundo, some call it Gundo, I don't know, but they have kind of taken up a storm on Twitter in the last couple of months. I'm curious, from your perspective, is this a net positive? Is this good for the ecosystem? Some of it might not be the most tasteful kind of representations of building companies. But what is your perspective? Having built a company in El Segundo, funded companies in the area have been a deeper part of the deep tech, aerospace industry. What do you think of all this that's going on?

A couple different angles that one could take here, I think first, on the sort of positive spin of it, I do think that we would hope to have a society that inspires people to be working in deeply technical fields and really pushing the field of engineering forward. More so than having people grow up wanting to be YouTubers or TikTokers. And so any type of marketing that influences that I see to be highly positive. But I think some of my, let's say, underlying, let's say, critiques of some of the current movement are sort of twofold. The first is I do think you have to be sort of cautious about how one brands oneself. And in particular I find some of the, you know, Gundo Bros or Gundo Boys, you know, culture, you know, a bit off putting to, you know, people that are not of the male gender. And it's something that I've, you know, heard validated you sort of across the board. And I think that is an okay thing to do on the weekends with your boys in a like personal setting and like lift your weights, you know, drink your protein shake, smoke your cigarettes, et cetera. But I think in a professional setting you are just actually like, you know, sort of limiting your talent pool quite significantly. And so I'm not sure it's appropriate in your sort of professional world. As somebody who by the way, I very much tried to push the boundaries on what's acceptable in the professional world. So it's like if it's triggering even mind things, I think that is always something to reflect upon. So that's probably sort of the first critique. The second critique is I do think that there are moments in time where there are real opportunities around certain fields and moments in time there aren't. Let's take aerospace as a particular example and maybe founders funds pattern of investing in aerospace over the past few 25 years, years. In the 07 through, or let's say when founders first started from 04 to 07 we didn't know aerospace investing. From 07 through 2011 we did a decent amount investing in a lot into SpaceX, a very small amount into Planet Labs and ultimately didn't really invest then for about a decade straight. Partially because you really needed to see that first generation of company succeed before there really was an opportunity for other models beyond just launch and earth observation and satellite Internet to really make sense. And in some ways we really picked up investing in 2020 through 2023. And I think it was a really opportune sort of window to be starting an aerospace company because there was now a second generation of model business models that were sort of viable companies like Hadrian, like Senra, like Varda, you know, like Impulse Space, things that we really sort of believed in. But there's a world now where we don't necessarily invest in aerospace for another sort of 10 years. And so sometimes some of these movements I think can sometimes be a bit mistimed where I think the sort of window of opportunity may have somewhat closed for the next five, six, seven years while you wait for the second generation companies to really succeed. And then there will be. I'm not saying the window is permanently closed. I'm just saying that there are just certain times industries. And so I sometimes find some of this marketing to be a bit sort of mistimed, where you're sort of coming into this field when it's already sort of past its zenith. And if anything we should be focusing on other aspects of rare earth minerals production, industrial automation, robotics, much more so than I would say actually, aerospace, defense. There's probably not that many more interesting companies to be built in today's sort of time. But there very well maybe another window of opportunity in four or seven, 10 years. And so I think that's where quip that originally started off as a sort of internal sort of slack and FF and obviously turned into a tweet, was sort of a El Segundo bull, Gundo bear, where companies like, you know, Hadrian, Senra, Varda, etc, that have been in El Segundo now for many years on end. And you know, this type of marketing is not necessarily something that I would, you know, want, you know, my office culture to be particularly, you know, affiliated with. Right. I think, you know, there are some very important leaders at Varda that probably are not that interested in the Gundo bro culture. And I say this as somebody that was like in her fraternity and has been accused of being sometimes too bro, you know, myself many a time, and I'd be proud to be a bro. I like my deadlifting. I like my like, you know, you know, squatting. I like my, you know, sort of benching. I'm not sure that that's, you know, something that I'd be doing inside of an office environment though, given that that's, you know, not necessarily a culture that everybody feels comfortable with.

Well, I definitely agree with that. Being of the opposite gender, it's not very fun to see more of like not the most positive narratives being circulated. But then you also think from responsible standpoint, how is this going to attract more talent if you're setting yourself up in this view? And it's, it's like curious and it's interesting the difference between online personalities and actual professional personalities. I'm sure you've, you've experienced this, right? Like being active on Twitter and having all this stuff like, no, like at the end of the day you're still a professional investor. You work for one of the top tier funds. Like, you still have to come to the table prepared and like. And I think that's just a learning curve that might Progress. But let's hope that this professionalizes maybe and becomes a little bit more buttoned up. But it's certainly been a movement, and.

It already exists, though. It's the El Cendo movement. You know what I mean? Like, there is this sort of professional equivalent. Like, you know, I think, you know, myself and Chris Powers and Jordan Black, et cetera, have done a, you know, pretty great job of marketing over the past few sort of couple of years. And so, yeah, it's funny, there's somebody that, like, you know, sort of tweeted and replied of my thing being, like, you know, dying jealous because he's been in El Scooter for a while, but, like, the Gundo Bros are getting the, like, you know, main stage. And my reply to that was like, what size of stage are we talking about here? Like, are we talking about, like, Twitter followings is. Those don't compare. Are we talking about, like, who is accomplishing use of real hardware? You know, we have, like, a react capsule video that got, you know, you know, whatever. 1.4 million views. It's like, that is definitely not the reason why I'm critiquing. It is for this movement. It's that I think we want to make sure that we make this particular city acceptable to a wide set of talent.

Yeah, it's interesting. It's an interesting one. But to close out. Okay, so maybe we get a little bit more personal here. You've been very vocal about being a new father on Twitter. It seems you might have even gotten wiser. So is that even possible?

I'm so wise already.

I mean, after seeing your birthday tweet with all the wisdom, I was like, oh, my gosh. I. I really didn't know that the Lego is. Was this, like, introspective.

How dare you, Molly.

Sorry, sorry.

Are you trying to say that I come off as shallow?

Okay, you're a very wise person. You've been wise the entire time.

There we go. There we go.

That's what I, like, changed at all.

There we go. There we go. Thank you. Thank you. There we go. That's the framing that I like to hear.

Anyways, getting back to. But with your newborn, right? Like, you probably have an entirely new perspective on the world. I would love to learn, like, how has that changed your outlook on life and building and creating an ambitious future?

Having a child. Yeah. I mean, you know, I feel like the Eastern European Slavic culture is, you know, sort of very, you know, sort of pro family, pro children, you know, sort of pro future pro building part of Why? I actually think like, you know, sort of Western Europe is, you know, headed into probably a multi decade decline and it's going to regulate itself to death while Eastern Europe probably, you know, steadily starts to exit from the EU and is pro mathematics and pro building. And so I go to like, you know, sort of the capital of, you know, Bulgaria, Sofia, and I feel like I just see like way more interesting startups than I do in like London at this point. And so, you know, you sort of extrapolate that out. You can just see it in like, you know, GDP growth in London has effectively been flat now for almost like 15 years, whereas like in Bulgaria the last 15 years it's been like, you know, a 10. Or again, they're starting off in different bases, but still you continue to extrapolate that Trend for another 10 years and like Western Europe's kind of look like a second world country while Eastern Europe actually sort of rises to the top. So, you know, I think, you know, having having a kid, you know, is something that I felt like I was, you know, sort of always, you know, very excited to, you know, experience and something that I thought about a lot even before having him. So in some ways it didn't feel like, you know, sort of that massive a shift, but it has been a real reminder of just, yeah, I really do think your sort of duty in life and purpose of life is to ultimately, you know, expand life and extend it. And you know, to date, you know, the only way to really do that is to have children, given that it's the only way to extend life beyond your death. And you know, I just, you know, love the, love the experience of being a father, you know, sort of philosophically at a very, you know, sort of, you know, cerebral, you know, sort of level in terms of, you know, I feel like I can see how, you know, my son is hopefully going to be wealthier, wiser and live longer than I am and get to experience it, you know, so more bright future. And so I love it on a cerebral, cerebral level, but I also love it on a like, very practical level of just like, you know, every day I get to like, you know, pick up, you know, my son and smile at him and like feed him in the morning and hang out with him. And it's just like, like by far, you know, the most fulfilling and, you know, phenomenal way to start off every single day. And so, yeah, I hope that being vocal about fatherhood encourages many other men that maybe are feeling on the fence or aren't sure whether to commit or aren't sure whether or not they're ready for kids to hopefully realize that this is really just the most fulfilling experience one can have in life. And I think I feel very fortunate and glad and happy that we've both had a very, so far, knock on wood, and everything very healthy for his kids, but also that I've gotten to have it, I think relatively not as early as typical in Eastern European thought to culture where most people are having their kids 21 to 25 years old. But I still feel very happy that I was able to have my kid, you know, basically at 30 years old and get to experience so many more years of my, you know, sort of life with him relative to having him, you know, if I was, you know, 50 or 60, where just by default, obviously less of your, you know, years that you're alive, you get to have, you know, sort of with your kids and in some ways with your grand grandkids and hopefully, obviously, knock on wood with, you know, ultimately my great grandkids. I feel also, you know, very lucky that, you know, my. My son today currently has a great great grandmother that is still, you know, alive. She's 94 years old. And, you know, I hope that they, you know, sort of get to meet this summer, you know, in Bulgaria. I think that'll be a really special moment to see, you know, all. What does it be? Five generations, Son, father, grandpa, great grandma, great, great grandma. Yeah, all five generations, you know, sitting side by side.

Wow, that's beautiful. And I think that does set a really good example for others out there that that might be on the fence or might be stuck in the dating apps and don't know how to pick up a phone and call someone. But. But between, you know, all of the congratulations to you. You've, like, really accomplished a lot so far in your career. It's amazing. I remember meeting you, like, you were one of the first people I met in Venture. I called my friend, I was like, hey, I'm coming to sf. Is there anybody I should meet? And she was like, oh, you got to meet my friend Owen. And then Owen was like, oh, you got to meet my friend Delian. He's like, you have to, like, compliment him on his Twitter, but you should meet him. And I was like, okay, yeah, sure. So I met you, and it's been awesome to kind of like, even see that journey, like, early in my career and see your progression. So thank you for taking the time on the call and congratulations again on promotion to partner Varda's landing and your newborn beat.

Thanks, Molly. I appreciate you having me on. And see you soon.

All right, See ya.