01:16:28 · John Coogan
[01:16:28] S0: Yeah. How is the global pool of capital changing and its appetite for venture? I'm just thinking about there was a moment when, you know, Sequoia had a Chinese arm. They obviously separated. There's a conflict in The Middle East. There was a long time when there was a stage, I'm thinking of like the Uber era where it was like, oh, like The Middle East shows up with a big pocketbook but now there's a there's obviously geopolitical conflict there. There's protectionism, tariffs, all sorts of different dynamics. What are you seeing on the global stage of capital allocation towards venture? Because it's certainly not showing up in the headline prices, but I would expect some sort of move here. But how are you puzzling all that together?
01:17:17 · Hunter Somerville
[01:17:17] S3: It's actually still pretty robust, but it's concentrated among a smaller subset of managers. And that's sort of natural because a lot of the international check writers are going to be writing larger checks. And so they're not going to be able to come in and do sub $200,000,000 seed managers Mhmm. Or they're not going to be staffed to be able to do it or the proximity of what's required to do diligence and build relationships and build pattern recognition is just naturally more difficult. I think another way to approach it, I think there are great branded managers that are bigger that are very much worth doing and should be a ballast in any venture portfolio. But you can also supplement that by working with a partner on a separate account basis and build customized exposure in smaller managers on top of that and almost barbell it in both ways where you get the core exposure with the managers that have the halo effect and the ability to get into the best companies early. Then you also get that alpha exposure from the smaller end in a more customized way that fits the needs of a team that's maybe more remote or further away. There are creative solutions to do it, but I would say it's still much more weighted towards the bigger brands that are more proven and derisked when it comes to how people are thinking about allocation decisions.
01:18:43 · Jordi Hays, John Coogan
[01:18:43] S1: What's the what's the what are the upsides and downsides of being in this business from Baltimore versus living, you know, in in SF? I can I can imagine I can imagine a lot of a lot of, honestly, alpha and, you know, you you and being able to actually understanding like diffusion? [01:19:04] S0: Yeah. Like the real world. [01:19:05] S1: But but what what's your view?
01:19:05 · Jordi Hays, Hunter Somerville
[01:19:05] S1: But but what what's your view? [01:19:07] S3: Yeah. We have parts of our team in California, in San Diego, in Palo Alto, in New York, in London. Biggest part is actually still in Baltimore, which does seem counterintuitive. We like it that way. I I think our culture is predicated on grit and grind. Behind me, I have a bunch of Cal Ripken merchandise, the Ironman, and that's sort of how we think. Go to work every day. Work your ass off. Crush it, don't be complacent, and don't get caught in the echo chamber. This is a cyclical asset class. It's a cyclical business. It's easy to get caught up in euphoria all of the time and feel like momentum is never going to stop. I think being in Baltimore where things are tough and not always easy and there's challenges beyond what we do on a day to day basis grounds us. When it comes to difficulties, you know, I'm on a plane four days a week going all over the country or internationally to meet with founders, to meet with funds, to meet with our investor base. And so, it creates sacrifice, but I mean we're blessed to be in this business. There's nothing I would rather be doing to back innovative founders taking risk, embracing the American dream, going hard at things and to be able to do it, you know, still in a small blue collar environment like Baltimore is pretty special.
01:20:28 · John Coogan, Hunter Somerville
[01:20:28] S0: Love it. Have I have two more questions. I'll I'll leave time for you, Jordy. But one, the liquidity wave. There were a ton of breathless articles about the wave of liquidity coming to early stage managers, late stage managers across SpaceX, OpenAI, Anthropic. Some big IPOs coming. How real is that? How significant is that? I mean, SpaceX is a $2,000,000,000,000 company. It's holding. You mentioned the IPO window potentially continuing to be open. But how much does that actually change the calculus of what you do and others in the category do? [01:21:09] S3: Yeah. Awesome question. And we haven't talked about that yet. So The biggest issue, I think, with venture is duration. It takes forever to go from seed to eventual exit. Yeah. The bar to go public is 500,000,000 or whatever people think these days on the banker side, 400,000,000, 500,000,000 of top line. AI businesses are obviously growing faster than anything we've ever seen, but the duration is still long. Yeah. And you need to be able to distribute capital back to investors in order to get them to invest in your next funder. That cycle is not sustainable overall. And so, people have been waiting four or five years for liquidity. DPI has been in short supply. Mhmm. And it does feel like that is changing both with M and A. We saw Hugging Face, obviously. Yeah. Most recently, we saw the SpaceX IPO. [01:21:58] S0: Reversive a
01:21:58 · John Coogan, Hunter Somerville, Jordi Hays
[01:21:58] S0: Reversive a [01:21:59] S3: bunch of other IPOs happening in the fourth quarter and hopefully into the first half of next year, which would be awesome. Yeah. And so hope that continues. But you're you're right. It it's actually an interesting thing to think about on the secondary side because if there's a massive kind of environment around liquidity generation, I would say that is a negative for the secondary side, but not a huge one overall because there's still what we described before where people are going to offer tender offers on an annual basis, start putting that in place ahead of time Mhmm. And creating an environment where that's iterative over time. And for our asset class and the endurance and long term viability of it, I welcome a lot of capital coming back to all of the hardworking pensions and endowments, and that'll give them a lot more flexibility to be able to invest in new funds, new innovation, continue and start to do more on the emerging manager side again, and broaden out holistically what they're considering within venture. I'd say it's a double edged sword, but but we'll we'll root for liquidity anyway. [01:23:04] S0: Yeah. Yeah. Yeah. That makes sense. [01:23:05] S1: You have one more? [01:23:06] S0: I have [01:23:06] S1: I have one more. Yeah. Go for it.