Peter Thiel on the biggest lesson he learned in 10+ years of venture capital

Now there's sort of a lot of, a lot of different, different lessons. One that's, one that's a little bit of a, you know, it's not quite a precise start lesson, but is that, is that people, once something works, people often underestimated. And when things aren't working, they underestimate how much trouble they're in. So there's a way in which, in most areas of investing, momentum is not that good, a good a way to invest. You know, stock's gone up, you don't necessarily want to chase it. When I've done the back testing on our portfolio, I found that every time a company had a big up round led by a smart investor, it was always a good idea to do your pro rata. Flat rounds, down rounds, it was almost always a bad idea. The steeper the up round, the cheaper it was. The biggest mess of the last decade was not doing our pro rata or for that matter, the full Series B at Facebook. It was a 12x up round in eight months. It was the steepest up round in that amount of time in any company we've been involved in. And in retrospect, that was perhaps also the cheapest cost a rebellion. This is Series B round of Facebook. And I think one of the reasons it was so underpriced was that investors don't want to step up that much. But then even the people on the inside often underestimate how much things change. So once things start working, once, once you have that sort of momentum, you know, it was still eight or nine people at the company. They had this office with this horrible graffiti art on the wall. And so. And so even though you had these abstract charts that were, you know, going exponential on the inside, it didn't feel things were changing that much. And that's why people underestimated. And so you have these, these subtle but very important points where somehow the leverage shifts, where somehow the dynamics shift very powerfully and they tend to get very underestimated.