00:36:35 · Eric Newcomer
[00:36:35] S1: the dogmas that drives me forward. The mood in the venture business right now is for the multi stage funds, right? It's like the big are getting bigger, raising huge amounts of money. It's sort of a two part question. Like, do you feel the pressure, I guess, to get bigger and bigger to match this sense that the light speed general catalyst of the world, multi strategy, huge, or you don't want to do that? And then on the other end, what do you feel for the emerging managers, the people who are much earlier than you that feel like totally squeezed out of the business even by 4,000,000,000 funds? And so I guess the first part of the question is like, what's your approach to the situation where mega funds get bigger and bigger? And then what advice and thought do you have for the emerging
00:37:21 · Aydin Senkut
[00:37:21] S0: I mean, look, in every situation people only see one side of things and you need to look at it from multiple sides. Like you can say, well, these four largest firms are doing something very interesting but you also have to realize that comes at a cost. Do you want to manage like 600 people? Do you want to manage like dozens of funds? Like how many LPs do you want to manage? Will the capital raising continue? Now you're so giant that giant entity basically drives what you do and it's no longer about the pureness of I just want to back founders like Eric or I want to back founders like Walter at Fractal or a couple at Supabase. It's basically what the machine dictates. You just look at the numbers and like, well, the way these numbers are, I need to basically write even $100,000,000 checks is not going to move it. I need to write billion dollar checks. And how many companies in the world can absorb billion dollar checks and produce businesses that are worth trillion dollars? Now, it's exciting but there are no like 100 or 1,000 of them yet. I ran the numbers like in 2006 there were no trillion dollar companies. Now we have fifteen trillion dollar companies but I'm not sure if 15 is going to be 1,500. So look, the way that I think about it is the most important thing that everybody has to ask whether they're giant or they're micro is that you got to be authentic to yourself. I think in Silicon Valley there is one thing that I observed that a lot of people, even managers, they want to be something what people tell them to be. You know what? You're this. You should do this. Or this is your background. This is what you should be doing. And to me the thing that I've done all my life is to never ever go into a box people tell me. Always make my own box. Transcend what people tell you. And so look, I don't know what the right answer is yet. I think it's really important to have enough capital because especially in this world the three areas we talked about biology, physical world and robotics and AI infrastructure unlike twenty years ago when I started where software companies didn't need a lot of capital, we're in a new world where there was a lot of capital spend and CapEx spend because you're building something durable and deep moats. The dark side of it is it requires a lot of CapEx.
00:39:26 · Aydin Senkut, Eric Newcomer
And if you cannot write a minimum check, it's going to be very difficult to be part of those companies. And I never want to be at the table and say, well, we can only do this small little portion here in terms of companies we back. I always want to have full purview of all the great companies we can invest but then it's also a fine balance of once you become too large I also don't want to be happy with like whatever like 11% IRR or like the size is so much that even when everything goes into the right you just look at it as like well physically like where this is going to go like because physics and math is physics and math. So I think it's just finding the right balance is really important and we're just going to keep blazing our own paths. And the most important thing for us is also to stay true to our founders. Like can we do enough to support them? And we were also talking about that even in this world when everybody is seemingly founder friendly, what people don't talk about is the founder's trust. Like what do you do actually to earn that trust? Like the fact that we vote our shares with the founders and all the things we do. [00:40:29] S1: Even if they defraud you or what do you have limits to
00:40:31 · Aydin Senkut
[00:40:31] S0: that? It's so funny. I mean, this is something that people ask. I think in the history of Felicis, nobody has defrauded us. But let's say out of the 500 plus bets, let's say that there were only two situations where things have gone sideways and unexpected and negative ways. But the reality is like you can only lose 1x your money but if you don't get into the very best companies, you're just never going to be great. So I think one of the biggest misconceptions about this business is, Oh, we're like risk managers or I'm avoiding failure. I'm awaiting failure. Actually, biggest failure for me was not to be brave enough. You know, like I can go on and on about like Brian Chesky from Airbnb emailing me before YC, I didn't really like you. Sure you don't want to write an angel check at $2,500,000 valuation? That became a $60,000,000,000 plus company. Same thing happened with Pinterest. Like my founder, Sandeep, was in the wedding of the founder. We're like, God, like if they build a mobile app, it would be so great. We pass and six months later, guess what they do? They launch a mobile app. And all we had to do is have faith and invest in the company. So every time we got... Or like Airbnb, I got afraid of legal risk. Every time we thought about the risk versus if the world can go wildly... If the things can go wildly right, that was like the much bigger failure than actually we manage the risk. So that's all I'm going to say. And honestly the other thing that's inspiring to me is this whole idea of voting our shares with the founders was something that came from the founders. Kind of like what you did with the emergence list. You're like, you know what? If we're going to pick the best founders why don't we ask the founders themselves? What I realized is a lot of VCs do things that they think are the right thing to do for the founders. I'm like, how about I do something really radical? Let me ask the founders what they want. And they said, look, we want to know that you're never going to vote against us so we can trust you. Not like you're on the board, but we can actually trust you so we can talk about the hard things. And the second thing is like, look, being a founder is really tough. Like it breaks people's marriages, it breaks people and we're like, how can we make you unbreakable? So let us spend our own money.
00:42:36 · Aydin Senkut, Eric Newcomer
Like whether it's coaching, mentorship, we had 100 plus founders take advantage of this great founder pledge we have that we put 1% of every check we write they can use for self development or anything that can help them. So what I love about that is just like something that no other VC does. What the founders want to see is like, don't tell me something that every other VC offers or puts on the table. Tell me something that only you people do. Is your, I don't know, put your finger in [00:43:01] S1: the air read on the bubble moment? Or how much do you feel like this is a... We used to have to talk about .com, but 2021 was such a crazy period. Now I think we just look back at 2021. Does 2026 feel like 2021 to you?
00:43:01 · Eric Newcomer, Aydin Senkut
[00:43:01] S1: the air read on the bubble moment? Or how much do you feel like this is a... We used to have to talk about .com, but 2021 was such a crazy period. Now I think we just look back at 2021. Does 2026 feel like 2021 to you? [00:43:17] S0: I spent like not even a second thinking about bubbles. Like all I care about is the underlying business value. Like a great example is we've invested Supabase. It was right after the COVID bubble, valuations crashed. For three years nothing happened to that company. And people are like, you guys are idiots. You pay too high of a price. What's going to happen to that company? And I think what happens is if you basically let the market affect your decisions, you're never going to have the bravery to find the right things. Underlying, Supabase had insane growth. They grew revenues 1000x since we invested. What really mattered to me is that the underlying business performance was growing 1000x. And more importantly, we had a thesis that that was going to follow hyper demand for a backend platform that takes advantage of like crypto needed backend and all the AI apps needed backend. And people look around and there was no like friendly backend and Supabase became that. [00:44:17] S1: It's become key to a lot of these like vibe coded