How I Invest with David Weisburd
00:29:12 · David Weisburd
[00:29:12] S1: The best example of the hacker house is Josh Browder, Browder Capital. And he has a one person accelerator. He only accelerates one person at a time. The reason for that is they live in his house. And part part of his secret sauce is he wakes them up at 3AM, middle of the night, and asks for more allocation, which I think is about the joke and actually serious. But the... This is, like, the ultimate thing that can't scale is these highly high value models. It's interesting that you keep on answering my questions at the early stage and the late stage. I just had Eric from, AngelList, and they have data from, I think, this point, 25,000 companies. And they figured out that they couldn't actually generalize or make any useful mathematical calculations or anything from the entire dataset. They had to actually divide it into what they call two asset classes, the early stage and late stage. It's not just some convenient way to divide the world. It's actually like two idiosyncratic, almost mathematically different parts of the market that to generalize, doesn't even compute mathematically.
00:30:17 · Brijesh Jeevarathnam
[00:30:17] S0: That's very true. And the funding round alphabet doesn't necessarily correlate with that, right? It's more company metrics and even the revenues because some spaces, let's take AI now, the revenue ramps are so steep in a very short time, right? And some of those companies keep just growing at that rate and some just plateau, I. E. There's false positives. But I agree with your point 100%. And one could argue that you could actually kind of micro segment and data is the challenge in doing this, maybe into not just two, but three or four kind of sub areas based on kind of the product market fit and early customers and reaching positive unit economics and so on and so forth. But it definitely is, and this is where I started, venture is not a homogenous asset class anymore. It is, once again, not huge in the scheme of financial assets in the world, but it's become much more
00:31:24 · David Weisburd
[00:31:24] S1: micro segmented. Support for today's episode comes from Square, the all in one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Checkout is fast, receipts are instant, and sometimes they even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. The experience is smoother for them, and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop ups, and everything stays synced in real time. You could track sales, manage inventory, book appointments, and see reports instantly whether you're in your shop or on the go. And when you make a sale, you don't have to wait days to get paid. Square gives you fast access to your earnings through Square checking. They also have built in tools like loyalty and marketing so your best customers keep coming back. And right now, you could get up to $200 off Square hardware when you sign up at square.com/go/howoinvest. That's square.com/go/howoinvest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today. Support for today's episode comes from Square, the all in one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Checkout is fast, receipts are instant, and sometimes they even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. The experience is smoother for them, and it's smoother for me as a customer.
00:33:19 · David Weisburd
Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop ups, and everything stays synced in real real time. You could track sales, manage inventory, book appointments, and see reports instantly whether you're in your shop or on the go. And when you make a sale, you don't have to wait days to get paid. Square gives you fast access to your earnings through Square checking. They also have built in tools like loyalty and marketing so your customers keep coming back. And right now, you could get up to $200 off Square hardware when you sign up at square.com/go/howiinvest. That's square.com/go/howiinvest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today. Support for today's episode comes from Square, the all in one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Checkout is fast, receipts are instant, and sometimes they even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. The experience is smoother for them, and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are in store, online, on your phone, or even at pop ups, and everything stays synced in real time. You could track sales, manage inventory, book appointments, and see reports instantly whether you're in your shop or on the go. And when you make a sale, you don't have to wait days to get paid. Square gives you fast access to your earnings through Square checking. They also have built in tools like loyalty and marketing so your best customers keep coming back. And right now, you could get up to $200 off Square hardware when you sign up at square.com/go/howiinvest. That's square.com/go/howiinvest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today.
00:35:17 · Brijesh Jeevarathnam
[00:35:17] S0: What's interesting is if you look at financial assets around the world, and depending on which source you look at, let's call it roughly 300,000,000,000,000. And I'm going round up these numbers because the point is not the actual number, but the proportions. If the global financial assets are about $300,000,000,000,000 including bonds and equities and so on and so forth, between 90% to 95%, depending on the source you look at, are some combination of bonds, listed bonds, public equities, and maybe some commodities. The remaining 5% to 10% is private markets. And within the private markets, you've got buyout, venture, real estate, etcetera. On a look through basis, venture is very small. And so are buyers, by the way, in the scheme of these financial assets, obviously sub 10%, as I said, combined. But they're growing at a rapid clip. And the point I want to make is that venture capital specifically and private markets broadly are eating the public markets. And if I tie that back to a famous quote by Marc Andreessen, I believe in the twenty ten, twenty eleven timeframe, software is eating the world. And then I think Jensen Huang said maybe five years after that, AI will eat software. We think at this point in time in 2026, both those things are true, very much true, have come true. What people talk about, but in my opinion, not as much as one should, is private capital markets, especially venture capital, is eating the public markets. And let me kind of expound on that for a second. If I go back to say twenty five, thirty years ago, long time obviously in the scheme of things, but in the scheme of financial markets, that long, there were 8,000 plus public companies in The US. And as you know, that number is now about half. Let's call it 4,000 companies now roughly in The US. Public equity, publicly listed companies. So that number has gone down by 50%. At the same time, the combined market capitalization of these companies today, running it up roughly $80,000,000,000,000 has grown about nine to 10x over that time period. And while public market investors still have a lot of choice in where to put their capital, that are fewer choices than twenty, thirty years ago.
00:37:57 · Brijesh Jeevarathnam
At the same time, venture capital has taken market share in the sense that financing rounds or investment entry points that were available previously to public investors are available only to venture investors. That company raising at a 5,000,000,000 valuation and raising $200,000,000 for example, that is only available to private market, I. E. Venture capital investors. And if you look at some of the exits, whether it's Wiz at $32,000,000,000 got acquired, as you know, of course, or canonically SpaceX at a 1.8 whatever trillion it was at the end, In theory, the first entry point for public investors was at that tens of billions or now crazy to say trillion plus mark. And all the value creation from zero, that first seed fund, $2,030,000,000, whatever it was, to tens of billions, let's say Khorsra 60,000,000,000, for example, to trillions happens away from the public markets. And my point in saying that is we think, and I know I'm talking in my book and saying this, we think venture is not a luxury now for institutional investors. It is a necessary complement, a necessary addition to the public books or the public equity exposure so that these investors with a long timeframe especially have balanced exposure across the value creation spectrum. They're not just getting in in the fourth, fifth, or sixth inning of value creation.