00:42:35 · Molly O'Shea
[00:42:35] S1: We've definitely alluded to this a bunch during the conversation, but I'm really curious to get your perspective. The public markets are seeing the largest IPOs of all time, it's all apparently gonna be happening this year. And so like, how do you think the markets are gonna take that? Will it be absorbed? Will it be kind of like aftershocks? How will that actually then affect this asset class?
00:43:02 · Ev Randle
[00:43:02] S0: Yeah, I think in a few ways. The first is I did this analysis, this very quick analysis, because I was just like, I know that just using a single example with Anthropic, after the $380,000,000,000 round, I was like, man, I know this is so much bigger of a deal than we've ever seen in a growth round ever, and I also, I know it's like, and I also know that we're not talking about it enough currently, just how different it is, and so I did this analysis where I basically charted out, over the last ten years, I took four of the best pre IPO investments ever over the last decade in terms of both just the raw scale, like they were big rounds, and then also the investors did really well in the rounds. And so I think it was Slack, DoorDash, Snowflake, and NewBank. And typically in those rounds, they were like, the total round size for the pre IPO round was like 500,000,000 to 2,000,000,000, and the investors over a four year period made from like a two to 5x, And everyone went home happy with that. That was a great outcome for all involved. So I think the Snowflake pre IPO round over a four year period ended up was like $500,000,000 turned into $2,500,000,000 That's insane. That's amazing. When you think about the Anthropic $380,000,000,000 round, if Anthropic was to go public and get liquid at a $1,500,000,000,000 valuation, which they just raised at about a trillion dollar valuation, don't think people would think that's that ambitious of an estimate, and I think a lot of people would have their estimates higher than that. The gross return of their $380,000,000,000 round, the 30,000,000,000 that they raised at $3.80, it would return 35 times that of the Snowflake pre IPO round. So it's 35 Snowflake pre IPO rounds in a single round, and like I have friends, I know several people that have like 3 to $4,000,000,000 invested into Anthropic, and it's like so hard to even talk about, like these numbers are so big that it's hard to even comprehend because five years ago, a growth fund was like a billion dollars.
00:45:18 · Ev Randle, Molly O'Shea
Like until COVID brought all these growth fund sizes up, a normal growth fund was like a billion dollars, and now there's an individual company that these people have $4,000,000,000 invested in, and they might return five times their money in less than five years on $4,000,000,000 like it's unbelievable, and at least SpaceX took twenty plus years to make everyone rich and put all this money in the ecosystem, but I just don't know if people really understand and are ready for the impact that this much liquidity could have on the ecosystem. I think the one place that people are definitely predicting it and are already seeing it is in the SF housing market. [00:46:03] S1: Oh my god. [00:46:05] S0: Where it's like, you know, everything's going for two x asking price at this point, Or and it's all [00:46:10] S1: in equity. [00:46:11] S0: Or in lab equity, but I think there's so many knock on effects in terms of like, what do those employees do? What do they invest in? What causes or companies do they then invest in? Do they start new companies? Do they stay at these labs? It's going to be a shock that's going to impact every single aspect of life, both practical life in Silicon Valley, but then also the lives of employees, investors, and founders in the ecosystem as well.
00:46:11 · Ev Randle, Molly O'Shea
[00:46:11] S0: Or in lab equity, but I think there's so many knock on effects in terms of like, what do those employees do? What do they invest in? What causes or companies do they then invest in? Do they start new companies? Do they stay at these labs? It's going to be a shock that's going to impact every single aspect of life, both practical life in Silicon Valley, but then also the lives of employees, investors, and founders in the ecosystem as well. [00:46:40] S1: Oh, absolutely, I've done now two episodes with Michel Del Buono, who to your point, Andreessen Horowitz has multi products. He runs their multifamily office of Mark and Ben and the principal's there. So it's the wealth management division for them. And each time I talk to him, I'm asking because there's gonna be huge wealth event, like the most amount of wealth creation probably ever because of all these things happening simultaneously. And so we've gone through a couple of the questions. I'm obviously not gonna reiterate them now, but like one of the biggest questions is what do you do when 90 of your net worth, probably more at this rate, is in one position? [00:47:19] S0: Right. [00:47:20] S1: And so he has some really great answers to that.
00:47:22 · Molly O'Shea
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00:49:08 · Molly O'Shea, Ev Randle
[00:49:08] S1: So as we wrap up, I have like a couple more questions, but one of the things when I was doing research on you all was super interesting was like how diverse your portfolio is, especially in the AI mix. Like you've Star Cloud, Yeah. Data centers in space, named in the SpaceX, S One. Then you have Cerebras, that just went public. Sierra, Langchaine, Legora, Fireworks, which we talked about a bit. [00:49:34] S0: Mercur. [00:49:34] S1: Vanus. [00:49:35] S0: Vanus. [00:49:35] S1: Mercur. Yeah. Mercur. Interesting. I just listened to his podcast with Harry Stebbings and I was really surprised about the positive things that are going on there after the data breach. [00:49:45] S0: He cleared a lot of air. [00:49:46] S1: Good for him, honestly. HeyGen, Gumloop that we talked about and Ekza. So because of this whole mix and like there has been, you know, you guys have a concentrated strategy, like how do you, how do you come up with a portfolio of this type? They're all very mature. They're all doing really well. Like what is, I guess like what is the magic between all of that