openpolitics.com

13:43

By the way, talking about somebody being able to operate in India, the single best drone

pilot in the world today– any idea?

MICHAEL GREEN: Well, I’m guessing India.

JOSH WOLFE: 12-year-old girl in Thailand.

MICHAEL GREEN: Really?

JOSH WOLFE: 12-year-old girl.

And she started playing when she was 8.

And she is better on every metric.

In speed, accuracy, she beats everybody.

Her name is Milk.

And that’s, you know, her call sign.

But a 12-year-old girl in Thailand is the best drone pilot in the world.

MICHAEL GREEN: So it truly is actually Ender’s Game, which is the book by Orson Scott Card

where we rely on children to fight the intergalactic battle.

Fascinating.

That’s absolutely amazing.

Let’s think about the nonlinearity for a second.

And one of the topics you wanted to bring up was this idea of liquidity as a nonlinearity.

JOSH WOLFE: Yes.

MICHAEL GREEN: And so one of the things that we see within venture capitals is that there’s

been this explosion of liquidity, particularly exceptionally well-funded growth equity.

So not the true VC stage one, Series A-type round, although that obviously has benefited

from this dynamic, but the Series E pre-public here’s $1 billion, here’s a $20 billion valuation,

here’s a $100 billion valuation.

Talk to me about how you think about this liquidity switch and the impact that that

has on your industry and the impact that has on innovation?

JOSH WOLFE: Well, it ultimately is going to define all the returns.

And if you go back a little bit and say, well, why are we in this situation, where we’ve

called this in the past, the minnows and the megas?

You have lots of these small firms that are starting up that are doing the seed checks,

and then you have these large players that are writing these $100 million plus checks.

Going back 7 years or so, Andreessen— who I think is a brilliant investor, a brilliant

technologist– basically said, there’s only 10 companies that matter in a given year.

And statically, that’s probably true.

Now knowing which 10 is very hard, but he said, you just basically want to be in those

companies.

And I that was a meme that really went very wide.

And people said, OK, well, it doesn’t matter if you invest in Facebook at $1 billion, or

$5 billion, or $10 billion because we’re going to be hundreds of billions.

And so does it really matter if we’re negotiating here and quibbling over $1 billion or $2 billion.

Well, of course, it does, but that I think induced a lot of growth investors to

15:53

let’s just try to speculate on some of these big unicorns.

And you’ve got this phenomenon of companies that were pining to signal that they were

going to be that next Facebook by attaining a billion-dollar valuation.

And then you got a positive feedback effect where people were funding these things, and

to get access, would write an $100 million check at a $900 million pre.

And they would own 10% in a billion-dollar valuation.

And the problem for the early-stage investors and their limited partners is they were getting

these huge markups.