00:00:00 · Larry Aschebrook, Guillaume Moubeche
[00:00:00] S0: I actually had to personally borrow some of the money to close the transaction, but I didn't have anything to back up the loan. I think that's one of the benefits of coming from nothing is you're not afraid of what that's like. Raising money and raising capital from LPs is difficult. Investing it is easy. Selling it is hard. I enjoy the grind. I enjoy the wins, but the losses haunt me. Don't chase paper gains. Don't follow the herd. [00:00:22] S1: Today on BILLIONS, I'm sitting down with Larry Aschebrook, the guy who invented a market that Wall Street didn't know existed. Larry started personally buying shares in Twitter and Uber on the side, and he realized: there are thousands of employees sitting on life changing paper games with zero liquidity, waiting for companies that might never IPO. So in 2011, he quit his safe university job and launched G Squared, a fund to solve that problem. Nobody took him seriously. The secondary market was taboo. Companies thought selling share meant you were failing. Today, he manages $5,000,000,000. He turned a 150,000,000 Spotify bet into $1,000,000,000, also made $800,000,000,000 on Coursera, and the market he built is now worth $140,000,000,000 a year. Larry, welcome to BILLIONS. [00:01:13] S0: Thank you. Thanks for having me. Excited to be here.
00:01:13 · Larry Aschebrook, Guillaume Moubeche
[00:01:13] S0: Thank you. Thanks for having me. Excited to be here. [00:01:16] S1: Yeah. I'm really excited to understand, you know, how all of this started. So initially, you spent a lot of time in your career, like, raising money for university endowments. And then after, like, you started buying shares on the side, you started to see, like, a a new category. Can you walk us through a little bit more about how you made your first investment and how you made that happen?
00:01:16 · Guillaume Moubeche, Larry Aschebrook
[00:01:16] S1: Yeah. I'm really excited to understand, you know, how all of this started. So initially, you spent a lot of time in your career, like, raising money for university endowments. And then after, like, you started buying shares on the side, you started to see, like, a a new category. Can you walk us through a little bit more about how you made your first investment and how you made that happen? [00:01:42] S0: Yeah. I I wish I could say when I started the business that I had some master plan of how it was gonna all go. And I have to tell you early on, people thought I was crazy and that I had lost my marbles, so to speak, when I walked into a very safe job that I had spent ten years building a career in and was at the pinnacle of and just quit. And I think what I realized early on, which is still the same today, is these companies that we all are really fascinated by, Every year or two, there's a new batch of them. But in the beginning, it was basically the companies that were starting to run our lives via the smart devices we were all so focused on, and I was no different. I was a major consumer of of data just through my spark... My my smartphone and started to change the way I consumed and behaved. And I thought there was an opportunity to share in that value creation. Little did I know how hard it would be to access some of these businesses, but I think just grinding and not taking no for an answer and and really being naive, I think, was a godsend. Because if I if I if I knew then what I knew today, I probably wouldn't start the business start the business.
00:01:42 · Larry Aschebrook, Guillaume Moubeche
[00:01:42] S0: Yeah. I I wish I could say when I started the business that I had some master plan of how it was gonna all go. And I have to tell you early on, people thought I was crazy and that I had lost my marbles, so to speak, when I walked into a very safe job that I had spent ten years building a career in and was at the pinnacle of and just quit. And I think what I realized early on, which is still the same today, is these companies that we all are really fascinated by, Every year or two, there's a new batch of them. But in the beginning, it was basically the companies that were starting to run our lives via the smart devices we were all so focused on, and I was no different. I was a major consumer of of data just through my spark... My my smartphone and started to change the way I consumed and behaved. And I thought there was an opportunity to share in that value creation. Little did I know how hard it would be to access some of these businesses, but I think just grinding and not taking no for an answer and and really being naive, I think, was a godsend. Because if I if I if I knew then what I knew today, I probably wouldn't start the business start the business. [00:03:11] S1: So so when it's, like, 2011, you want to make, like, an investment in Uber or Twitter at the time. Like, how do you do it? Like, do you message the founder directly? Like, do you send emails to employees?
00:03:11 · Guillaume Moubeche, Larry Aschebrook
[00:03:11] S1: So so when it's, like, 2011, you want to make, like, an investment in Uber or Twitter at the time. Like, how do you do it? Like, do you message the founder directly? Like, do you send emails to employees? [00:03:23] S0: There wasn't a robust LinkedIn back then. And, yeah, it was... The universities they worked at all had alumni lists, and and I worked at five different major universities around the country in The US. And I had those lists of alumni, and I just started calling them, folks that worked at Twitter and early Palantir and Spotify and, early Uber and many others, and just just started offering to buy their stock and didn't really know how to actually go about doing it, but just kinda made it happen. [00:04:03] S1: So, like, I own a software company. And, obviously, like, if an employee wants to sell their share, like, the the company always has, like, or in most cases, I would say, like, a roofer. How do you, like, overcome that? Like, so
00:04:03 · Guillaume Moubeche, Larry Aschebrook
[00:04:03] S1: So, like, I own a software company. And, obviously, like, if an employee wants to sell their share, like, the the company always has, like, or in most cases, I would say, like, a roofer. How do you, like, overcome that? Like, so [00:04:18] S0: Well, on, there wasn't... It was so taboo, as you mentioned in the intro, that it wasn't widely done. I mean, secondaries, now I know, were were mostly reserved for fund stake purchasing and also large PE deals. The growth venture ecosystem really didn't have many secondaries. In fact, there was the the new regulation coming out following the financial crisis for managers who spent their capital on the secondary market that most traditional managers wanted to stay away from. They were they were afraid of that. Now you see many of many managers opting in for the registration. And so I think that there was just a broken market, and employees, you know, like the idea of liquidity, and companies just kinda turn their turn turn their back on it and didn't really didn't really care. There... It was so small. It wasn't meaningful in the beginning. Now the industry has really evolved, and we're we're thankful to be one of the first movers to to now be in a position to to get the phone call versus making all the calls. [00:05:32] S1: So so now how exactly does that work, like, versus back then when you want to to get into, like, a a secondary transaction?