How I Invest with David Weisburd
00:23:30 · David Weisburd
[00:23:30] S1: One thing I've learned from talking to hundreds of investors is that great investment firms aren't built on investment returns alone. The firms under are great at the things most people don't see, their operations, their relationship with LPs, and the quality of information they use to make decisions. And here's what AI has changed. Every firm now has access to the very same models, so the intelligence isn't the edge anymore. The edge is what you could feed it. A firm with its fund operations and data in one connected record can actually put AI to work. A firm running on disconnected systems simply can't. That's why thousands of GPs run their funds on Juniper Square. Juniper Square puts your fund operations, data, and administration together in one connected record. That means less time managing disconnected systems and more time investing, working with LPs, and building your firm. This episode is brought to you by Juniper Square, the operations partner for private market GPs. Learn more at junipersquare.com/howiinvest. That's junipersquare.com/howiinvest. Everyone I talked on the show is chasing the same thing, an edge. And more and more of the edge comes down to your information, not just having it, but being able to trust it when the stakes are highest. AI is doing more of that information gathering for you every day and most tools are very good at sounding right. The summary reads clean, but can you trace it back to filing the transcript, the specific passage that drove the answer, or are you just trusting the confidence of the output? For investors, that's not a minor concern. A miss filing, miss weighted source, context that got lost somewhere in the retrieval chain, those aren't edge cases, they're how decisions go wrong. AlphaSense is the AI market intelligence platform built specifically for this. They own the content over 500,000,000 curated documents from broker research and expert transcripts to filings and earnings calls, and they own the retrieval layer on top of that. So every answer links back to an exact verifiable source because the answer is only as good as what's underneath it. And with AlphaSense, you know exactly what that is. The edge goes to whoever can trust their information and prove it. See it for yourself. Start your free trial at alpha-sense.com/howiinvest. That's alpha-sense.com/howiinvest.
00:25:40 · David Weisburd, Gavin Ezekowitz
Send other ways, SpaceX is a company, not a day care. [00:25:43] S0: Absolutely. [00:25:44] S1: Yeah. And we're not here to entertain [00:25:45] S0: you. That's... Yeah. We're not a fan. [00:25:46] S1: I have to I have to disclose as well. Also, investor in SpaceX. I think I have something like 90% still in my position. [00:25:52] S0: Good for you. [00:25:53] S1: And I have a crazy thesis on SpaceX and in terms of data centers, but also asteroid mining, all this. I'll I'll spare spare the audience. [00:26:03] S0: I love it. I love it. [00:26:04] S1: But I I do think there's still this asymmetry that's embedded in the stock. I'm not telling people to buy the stock, but it is interesting how today you have these trillion dollar plus companies that seem like they're still early. [00:26:17] S0: I would agree with you. I mean, I I often say, again, this is not investment advice to to our investors, many of whom are are taking the SpaceX shares that they've owned a long time. We distribute cash or shares depending on what people wish to. And I've said the three to five year view here is fantastic. The ten year view is even better. So why... You know, what other asset are you going to replace that is going to potentially give you that kind of incredible return? Like, I don't know what else you would buy instead of that. [00:26:52] S1: And also, what does it correlate? It seems like a great asset to have you your portfolio. What is core... What is SpaceX correlated to? Is it correlated to goal [00:27:00] S0: Something different every day. Something...
00:27:00 · Gavin Ezekowitz, David Weisburd
[00:27:00] S0: Something different every day. Something... [00:27:03] S1: I I guess now it's correlated to AI. So if you have some AI concentration, you might be
00:27:06 · Gavin Ezekowitz
[00:27:06] S0: able But I think, you know, let's observe some really incredible dynamics. And it's not like I came at this as an adherent of the AI Elan approach or that was my thinking. In fact, I passed on XAI in that $25,000,000,000 early round. I just couldn't understand it. But what I would observe in that business, and I would observe that we can take away from many others, is that there is an incredible capability of great technology entrepreneurs, great entrepreneurs in other sectors, but great technology entrepreneurs to just figure out that there's a moment and they can swoop in. And I look at what Elon did in building out all of those data centers incredibly quickly, at an incredible scale, at a time where nobody was building 100,000 GPUs, and no one was doing anything like that. And then he arrives at this moment where we're just massively short compute, and he's able to charge a super premium to all these other companies to go and utilize that incredible asset. I see this, you can look at it with the leadership of a number of technology companies. There is an incredible ability to understand where the world might be going and how to make some really intelligent bets on that future state. These folks are not It's not everybody, but it's also what I look for in venture managers, frankly, is that that ability to say, you know, it's great. You can tell me about, you know, what might happen in the next year or whatever. What's happening now? Kind of where do you see when you look at your portfolio? Where do you see the things that are going to work in three to five years? Five to ten years when the world arrives in the with your vision or how does that company play in? What are the factors here? Because to me, that's super interesting when when folks have that kind of mindset. That's most often where I get really excited.
00:29:32 · David Weisburd
[00:29:32] S1: When people ask me about what venture funds should I invest in, what startups should I invest in, I always first make sure that they have the right framework. And the way that I do my venture investing is you have to really understand the role of venture capital in your portfolio. Venture capital is not treasuries. It is not the S and P 500. It is not real estate. It is not private equity. It has a singular role, and that is to deliver outsized asymmetric returns once in a while. It is the most bipolar asset classes, the most bipolar underlying portfolio companies. So the the way that I look at venture is you have to be both paradoxically bold and have the right portfolio construction. What does that mean? You wanna be bold. Every company should be this 100 or a thousand x or zero. Of course, depending on what stage you're on. But even today, I think the reason Benchmark is raised or is is raising a growth fund is because they believe that's... There's there's their power laws at the growth stage. Yep. I don't think Benchmark woke up and suddenly became greedy. They've been one of the most disciplined investors in the world. But regardless of stage, you wanna take these highly asymmetric bets. A 100 x or zero. Just think about it from from an oversimplified... Companies like Anthropic, companies like Instinct, which was Mhmm. This this personal AI app, which, you know, I don't know. Some probability, it'll go up to $500,000,000,000, and some probability, it'll go to zero. Right. And probably nothing in between. And then... And this is the thing that people get wrong. A lot of people get excited by that. A lot of people have this gambling compulsion. They're like, okay. Great. This is great. I wanna put all my all my money on, you know, the number 31 on the roulette table. The next and most important thing is you need to have the right portfolio constructions. You need to be diversified. In our fund, we have roughly 20 positions. So you wanna take these very aggressive bets, and you wanna be diversified across different verticals. If you're an LP, you wanna be across multiple funds. So now you have, let's say, five funds of twenty twenty companies per vintage. So now you have a 100 companies, and then, you know, you you have one Anthropic, and one of your 100 portfolio companies across your five managers who are doing well.
00:31:47 · David Weisburd
What do you think about that, and how would you improve upon that model?