The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:39:55 · Harry Stebbings, Scott Wilson
[00:39:55] S1: Scott, you've seen many cycles now. You're a pro. Does this have a shakeout, or do we keep going on the meteoric wave that is superintelligence and AI? [00:40:04] S0: Yeah. Well, I I think there will be a shakeout. I don't know what the timeline of that is. Like some of these industries that have just had massive runs, historically, they were not great businesses, you know, and that was for like three decades. They were businesses that probably barely returned their cost of capital. And at some point they'll go back to being not great businesses, but in the short term, you know, if you used to sell a chip or memory for $3 and now you sell it for $30 and all that excess just falls to the bottom line. I mean, think you see that in the multiples. Like, I think some of these industries, right, you you buy them at very rich multiples and you sell them at low multiples because that's how cyclical companies work. But how long the cycle actually lasts, I think that's anybody's guess. [00:40:45] S1: Can I ask you, given what we said earlier, you mentioned, like, Nubank or, say, I'm just choosing, like like, an Uber or an NVIDIA of the world? These are comparatively very cheap companies based on a fundamentals basis actually, today. And then the privates are exorbitantly priced if one looks at fundamentals. And then I look at your statement earlier of wanting to be 70 to 80% in privates, and I just try and juxtapose.
00:40:45 · Harry Stebbings, Scott Wilson
[00:40:45] S1: Can I ask you, given what we said earlier, you mentioned, like, Nubank or, say, I'm just choosing, like like, an Uber or an NVIDIA of the world? These are comparatively very cheap companies based on a fundamentals basis actually, today. And then the privates are exorbitantly priced if one looks at fundamentals. And then I look at your statement earlier of wanting to be 70 to 80% in privates, and I just try and juxtapose. [00:41:09] S0: We are deploying all of this stuff that we're generating liquid back into public markets right now. So, like 70 or 80%, I, like, if we didn't have any liquidity constraints, think over time privates would grow as a percent. I mean, we're at the end of our fiscal year, we were 70 in privates, but a bunch of that has become liquid. So we're redeploying that. And we think the opportunity set in publics, particularly like non AI AI infrastructure related publics, it's a really good time to be investing in in sectors completely that we think are relatively protected, if not immune from AI. [00:41:45] S1: It's a bit of a blunt question, but you've had such a meteor... Like, $11,000,000,000 is an incredible capital accrual value appreciation for for WashU, and it's it's an amazing journey. You could do anything now, Scott. You could have every trillionaire, billionaire in the world pay you an exorbitant amount of money to join you on their superyacht and run their family office. Yeah. With respect, why
00:41:45 · Harry Stebbings, Scott Wilson
[00:41:45] S1: It's a bit of a blunt question, but you've had such a meteor... Like, $11,000,000,000 is an incredible capital accrual value appreciation for for WashU, and it's it's an amazing journey. You could do anything now, Scott. You could have every trillionaire, billionaire in the world pay you an exorbitant amount of money to join you on their superyacht and run their family office. Yeah. With respect, why [00:42:09] S0: why do It actually lies a lot. So in the nine years I've been here, we started roughly say eight... We've generated $17,000,000,000 profits on that original 8,000,000,000, and we've paid out roughly 5,000,000,000 to the university. [00:42:21] S1: I I mean, that's just showing off, Scott. Okay? But you but you could. And, obviously, WashU is an incredible institution, amazing, but, like, humans are humans. Yep. Why do you stay in? [00:42:33] S0: I'm super happy here. I've got a great board, a great administration, a great team, you know, and, I make plenty. I'm well compensated. So it's a great place to be. And I, yeah, I obviously had opportunities to go elsewhere, but I'm I'm very happy at WashU. If you if you spent time with my board and and the chancellor of the university, like, this is a great place to work. And, you know, I think, maybe more than half of your your fulfillment and enjoyment coming to work every day is who you get to work with. And, you know, from that standpoint, I'm just super fortunate. And you've spent time with my team. Like, that's... It's a really great team.
00:42:33 · Scott Wilson, Harry Stebbings
[00:42:33] S0: I'm super happy here. I've got a great board, a great administration, a great team, you know, and, I make plenty. I'm well compensated. So it's a great place to be. And I, yeah, I obviously had opportunities to go elsewhere, but I'm I'm very happy at WashU. If you if you spent time with my board and and the chancellor of the university, like, this is a great place to work. And, you know, I think, maybe more than half of your your fulfillment and enjoyment coming to work every day is who you get to work with. And, you know, from that standpoint, I'm just super fortunate. And you've spent time with my team. Like, that's... It's a really great team. [00:43:10] S1: I know I have. They're amazing. Listen. I think before we do a quick fire, you learn from sometimes mistakes. We've talked about the amazing successes. When you reflect back on the $11,000,000,000 that we've added, what did you not do in that journey that you wish you had done? Be it renewables, be it more in privates, you name it. What did you not do that you wish you had done?
00:43:10 · Harry Stebbings, Scott Wilson
[00:43:10] S1: I know I have. They're amazing. Listen. I think before we do a quick fire, you learn from sometimes mistakes. We've talked about the amazing successes. When you reflect back on the $11,000,000,000 that we've added, what did you not do in that journey that you wish you had done? Be it renewables, be it more in privates, you name it. What did you not do that you wish you had done? [00:43:30] S0: Yeah. I I think our biggest mistake was not adding to our winners just because whether you, like, get frame of reference bias, oh, we invested in this company at 2,000,000,000, and now it's 5,000,000,000, so we didn't add to it. And, obviously, like, you know, the position was twice the size at that point. But, you know, we we had times where we could have invested in stuff that I think was still probably our highest conviction investment and we didn't do it either because, you know, it had grown in the portfolio or the price had just gone up and and that was a that was my mistake, and it's cost us billions of dollars. So that... That's probably the biggest learning over that time frame. [00:44:05] S1: What did you do that you wish you hadn't done on the flip side?
00:44:05 · Harry Stebbings, Scott Wilson
[00:44:05] S1: What did you do that you wish you hadn't done on the flip side? [00:44:08] S0: Oh, well, I mean, there's a there's a lot. There's a lot of individual funds I wish we hadn't done. Obviously we've made tons of mistakes on the co investment. You know, it's an eighty twenty rule where 20% of your investments have generated 80% plus of the profits. We're not quite that bad, but, but yeah, we've made tons of mistakes. You know, we've added capital to companies that, you know, probably we should have let die, but we thought there was still a chance they could recover. We've made every investing mistake you could you could think of. [00:44:36] S1: Is there one that really stands out?