How I Invest with David Weisburd
00:00:00 · Gavin Ezekowitz, David Weisburd
[00:00:00] S0: When you're very early in a long cycle, people try to predict who the eventual winner will be. And most often, it's not that company. It's not Yahoo. There are multiple winners or they could be different leaders. And so it has turned out with Anthropic, our view was quite simple. They look like they've got tremendous shot at being the other company or one of the other major companies. [00:00:21] S1: You're recently sitting down with top 10 fund with... You said that they look for companies that are capital magnets. Mhmm. Do you agree with this strategy? [00:00:29] S0: I would observe over my entire thirty year career in the investment world, there are really special people that can accumulate capital, that can generate investor confidence. They are not always honest people. They're not always good people. Occasionally, they're exceptional at all of these things, and they're wonderful entrepreneurs. But this is certainly... There's a pattern that we can observe over time, but it is not a terrible strategy. [00:00:56] S1: So, Gavin, you're one of a small group of investors that are in OpenAI, SpaceX, and Anthropic. How did you become an investor in all three companies?
00:00:56 · David Weisburd, Gavin Ezekowitz
[00:00:56] S1: So, Gavin, you're one of a small group of investors that are in OpenAI, SpaceX, and Anthropic. How did you become an investor in all three companies? [00:01:04] S0: Oh, it started out with Anthropic, and then we built some momentum largely with our LPs of saying that these are generational companies and subsequent investments in, first of all, in SpaceX, XAI, SpaceX, OpenAI. And, you know, I think along the way, what we began to recognize was that not only were these likely to be generational companies, we didn't expect the kinds of returns that we've had, obviously, But then investors want to own these in their portfolio. Right? That they didn't... And they had very few ways of accessing those companies. And it was really an out... It was an output of relationships that we had with GPs that gave us the confidence because, you know, obviously, we're not on the cap table in any of those three names. They're all GP relationships. [00:02:04] S1: I'm curious because you mentioned iAnthropic. You invested originally at a $17,000,000,000 valuation. What was your thesis there, and how's how's that evolved?
00:02:04 · David Weisburd, Gavin Ezekowitz
[00:02:04] S1: I'm curious because you mentioned iAnthropic. You invested originally at a $17,000,000,000 valuation. What was your thesis there, and how's how's that evolved? [00:02:13] S0: Well, my my thesis there was very, very simple. I'd observed Anthropics appreciation up to... It was valued at 30,000,000,000 in the in the the round that had just occurred. But, of course, the the FTX had this bankruptcy, and the bankruptcy had to sell their shares of Anthropic. And to me, it just seemed obvious that this was an amazing opportunity. We fortunately formed a relationship with a guy who we've done a lot with. They were bidding for, I think at that time, dollars 10,000,000 or $15,000,000 worth. We were there in size. We had to really convince people because it was not... The company didn't look anything like it does today. It was really pre Claude. And it looked like OpenAI was just going to win everything, if you think about that period. And I think that there were a couple of views that we held at the time. One was, and it's a view I hold today, was that when you're very early in a long cycle, people try to predict who the eventual winner will be. And most often, it's not that company. It's not Yahoo or whatever it is. There are multiple winners, or they could be different leaders. And so it has turned out with Anthropic, And our view is quite simple. They look like they've got, you know, a tremendous shot at being the other company or one of the other major companies. This feels like a really great price. Let's give it a go.
00:03:53 · David Weisburd
[00:03:53] S1: Yeah. This first mover advantage, I've thought a lot about it in technology because very few of the companies were first movers. Google, I believe, was the eleventh search engine. Facebook was maybe even further along in the twelfth or thirteenth search engine. But yet, this first mover advantage persists. And I think the reason for that is, first of all, the first mover advantage is quite persistent in other asset classes. So outside of venture capital, the first mover advantage tends to tends to hold much more strongly. And secondly, of course, people invest for two reasons, fear and greed. And I think fear more than greed. And people just get afraid of losing that that number one player. And even if they passed on OpenAI for one round and two round, three round, some some people... At some point, those investors capitulate, and they they wanna go and go into these momentum investments.
00:04:48 · Gavin Ezekowitz
[00:04:48] S0: I think that's that's true. I think I don't know that it's different in in AI, but one of the observations that I would make is that it is very evident from the early days of the the AI phenomenon that this was there there was gonna be multiple disruptive events, whether you can recall even recently the deep sea. You know, suddenly, we had these Chinese open source models, and you have all of these events that were gonna take place. And I think my thinking from the earliest days was this is neat, but it's very structure suggests lots of disruption and even lots of disruption of the disruptors. And, you know, you can observe a company I I missed. I had lots of opportunity at 10,000,000,000 on Cursor. It was like going once, going twice. And they all like, Oh, no, I don't think so. And what I missed, it's so clear in that company now, is that that was a company that iterated multiple times on their journey. And in fact, even now, I was with the leadership team some time ago. They're iterating again within their current xAI environment. And I miss the fact that some of those really special companies are able to innovate, disrupt themselves, watch the new new thing, catch on. They've got the quality of the team. They're not married to a singular thesis, that this is the only way, and we're just going to plunge ahead. They've got a very flexible mindset. And I think that if you look at that approach, you can see that, yeah, we may see vast differences in the kinds of companies that emerge out of businesses that start very differently.
00:06:43 · David Weisburd, Gavin Ezekowitz
[00:06:43] S1: This episode is presented by Juniper Square, the operations partner for private markets. It's fascinating that you said team and this evolution of products. I invested Anthropic as well, $4,100,000,000 valuation. And I had a relatively simple thesis. One was that AI was gonna be transformative. I had the benefit of actually having a few friends at OpenAI, and they were like, this is it. Because people have been talking about AI, I think, going back to fifties. I can't confirm that firsthand, but they've been talking about AI for so long. And so many really smart people have been talking about AI for for so long. It felt like it was actually gonna come. Nobody could predict how quickly or or to to what degree. The second part of the thesis, I knew that a lot of the top OpenAI investors were... I knew that a lot of the top OpenAI employees were actually going over to Anthrop. [00:07:38] S0: Mhmm. Mhmm. Yep.