00:34:05 · Shardul Shah
[00:34:05] S0: I think about our firm performance, again, as a function of being the largest, most impactful investor to category defining companies. If we make a small investment and we do not deliver on being the most impactful investor, long term, we're eroding our performance. So, it's not a function of the dollar size of the investment, it's a function of how we follow through on an investment. In other words, for us, we will not play a statistical game of creating a thousand, $2,000,000 checks in order to risk mitigate against and have diversity in the portfolio. We won't have the skill or will to follow through on each of those tiny checks with real advice, impact, activity, engagement with founders to influence their businesses. The inversion of your question is super interesting, which is like, how large of an investment can we possibly make? And I think it's like an in vogue question today because certain investors have done so well with concentration. I think concentration can kind of cut both ways. It can feel great when the market is up and to the right, but if the market changes, and eventually it will, concentration can really hurt. And so, I think when we look at the statistics of our business, we still have 30 to 35 investments in a venture portfolio, so there's reasonable diversification and we're not taking risk on a single position. Because we invest out of multiple funds over time, like with Wiz, we invested over $250,000,000 over time, so there isn't a constraint on dollar size into a company.
00:35:43 · Molly O'Shea, Shardul Shah
[00:35:43] S1: Has the fundraising size or cycle increased in this environment? How has that changed? I ask this because you brought up a really good point. Had a conversation with Brian Singerman, who was a long time GP at Founders Fund, and they focused a lot on concentration to the point where they would bet all the money on, you know, a handful of companies. It worked out really well, and they're like, alright. If we run out of the fund, we'll just raise another one. And they just kept on doing that, and it worked out phenomenally for them. But I'm curious for your stance, how do you think about that, and then how do you think about the cycles and fundraising in this market? [00:36:22] S0: I mean, our LPs, our limited partners, are such an important stakeholder in our business. We never take them for granted, And our belief is they're purely rational individuals that will invest in great fund performance. And so, we try to take that responsibility very seriously. Over the last twelve months, the number of investments, the dollars per investments across the industry have grown. And so, pacing for everyone has accelerated. And I think what used to be a 2.5 cycle, just in the last twelve months, has probably compressed a bit. Will it return to the normal fund cycle? Probably. But we don't think about optimizing on, time duration. We like diversity of exposure to different vintages.
00:36:22 · Shardul Shah, Molly O'Shea
[00:36:22] S0: I mean, our LPs, our limited partners, are such an important stakeholder in our business. We never take them for granted, And our belief is they're purely rational individuals that will invest in great fund performance. And so, we try to take that responsibility very seriously. Over the last twelve months, the number of investments, the dollars per investments across the industry have grown. And so, pacing for everyone has accelerated. And I think what used to be a 2.5 cycle, just in the last twelve months, has probably compressed a bit. Will it return to the normal fund cycle? Probably. But we don't think about optimizing on, time duration. We like diversity of exposure to different vintages. [00:37:13] S1: So as we talk about fund cycles and the evolution of venture capital in this market, how has the exit environment changed? I know we're in kind of an interesting period for IPOs. We're waiting on some very large ones. This year was supposed to be the year of mega returns, and some of them are getting delayed a bit, but also M and A has changed. The floodgates of M and A have opened up, and more people are becoming acquisitive. Even smaller companies are being acquisitive. So, how has the exit environment changed? [00:37:42] S0: We think really carefully about DPI. We also talk about not getting high on your own supply, so making sure we deliver returns to our limited partners is really important. The two drivers of that are IPOs and M and A. IPOs, exactly as you said, are waiting for the window to open or close in a given period of time.
00:37:42 · Shardul Shah, Molly O'Shea
[00:37:42] S0: We think really carefully about DPI. We also talk about not getting high on your own supply, so making sure we deliver returns to our limited partners is really important. The two drivers of that are IPOs and M and A. IPOs, exactly as you said, are waiting for the window to open or close in a given period of time. [00:38:05] S1: Which I've learned from the New York Stock Exchange, their media partner, you can never time. [00:38:09] S0: You cannot time it. But when you're in the right place at the right time, you have to have the courage to take advantage. So, the IPO window is out of our control. M and A has really accelerated. Again, we saw Wiz, we saw Cursor, we saw World Labs. Catalyst is really active, in supporting transactions. So, not only are public companies incumbents buying privates, but we're also seeing private to private mergers and transactions of a variety of different scale and magnitudes. So, the M and A environment is really healthy. The hardest part is when an entrepreneur has belief in themselves, and they've got a really interesting offer in front of them. What do they do? Do they stay independent, or do they sell? And the interesting thing is, most entrepreneurs, when you first meet them, will tell you, I'm on a mission, I'm never going to sell. It's deeper, and it's much more nuanced. And that's where, if you are the most influential investor, you can make an enormous impact on shareholder value in a judgment call where there is no truth.
00:38:09 · Shardul Shah, Molly O'Shea
[00:38:09] S0: You cannot time it. But when you're in the right place at the right time, you have to have the courage to take advantage. So, the IPO window is out of our control. M and A has really accelerated. Again, we saw Wiz, we saw Cursor, we saw World Labs. Catalyst is really active, in supporting transactions. So, not only are public companies incumbents buying privates, but we're also seeing private to private mergers and transactions of a variety of different scale and magnitudes. So, the M and A environment is really healthy. The hardest part is when an entrepreneur has belief in themselves, and they've got a really interesting offer in front of them. What do they do? Do they stay independent, or do they sell? And the interesting thing is, most entrepreneurs, when you first meet them, will tell you, I'm on a mission, I'm never going to sell. It's deeper, and it's much more nuanced. And that's where, if you are the most influential investor, you can make an enormous impact on shareholder value in a judgment call where there is no truth. [00:39:15] S1: I heard you on a podcast before talk about you sold at the IPO price, and then it skyrocketed, and your investors were calling you up, your LPs, and then it plummeted, and then no [00:39:27] S0: one called you. It was not my LPs, they were my partners. [00:39:30] S1: Oh, okay. [00:39:31] S0: My partners called when it looked like we left money on the table. They didn't thank me when the stock price plummeted.
00:39:31 · Shardul Shah, Molly O'Shea
[00:39:31] S0: My partners called when it looked like we left money on the table. They didn't thank me when the stock price plummeted. [00:39:39] S1: Oh, God. I only imagine. I know I asked you, What do you guys look for in a fund? And then then brought up DPI in this answer, but Bloomberg had reported your fund performance. I don't know what is or not like the most current, but as of January 2026, you had an 11X DPI on Index's twenty twelve fund compared with an industry average of 1.5X, so that's pretty crazy. And then a 5.1X DPI on Index's $780,000,000 growth fund that was raised in 2015, also reported in January. What other numbers can you tell