YouSaid · the spoken record

Trae Stephens

lines on the record
82
first
2024-04-03
most recent
2024-04-03
sittings or episodes
1
sources
podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

  1. “Deal flow is always the biggest thing for venture capital. It's like you have to have access to the deals that are going to move the needle. And for large funds, the economics only really work if you have a $10 plus billion dollar winner in every fund, or more than one in most cases. You have to evaluate yourself on whether or not you got hits on those monopoly style winners. That's just about maintaining access to the network and being super easy to work with. And I think Founders Fund has the ladder in spades. Like, you know, we were the first fund that was talking about being founder friendly. You know, we don't generally want to take board seats. We are incredibly hands off and operationally helpful when asked, but only reactively. And the former is the harder part though. It's like you have to make sure that you are seeing all of these companies. That has to be the focus for the entire investment team.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I definitely think there's truth to that statement. I think the industry has certainly become significantly more competitive and commoditized. At the same time, the returns end up being pretty highly concentrated towards the winners. You don't see really high IRRs across every new fund that pops up. There's definitely still great potential for the asset class as an asset class, but certainly like as Peter points out in his book zero to one, competition is for losers and it will always be for losers. I don't care if it's venture capital or startups or any its competition is for losers. And so we need to figure out ways to differentiate and stand out”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Are just they just get caught up in the moment. They get caught up in this idea that the only thing that matters is up and to the right minimizing dilution. And we'll see what happens. We'll see if that lesson persists.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “I don't think we did. I think there are some people in the industry that I have a tremendous amount of respect for that have looked at this and said, we're just not going to play this game. Guys, it was literally like two years ago. This isn't like a 10-year information gap. It was like two years ago. And then there were other people that are saying like, YOO, like I have to win. I have to get in. I'm going to plow it in. You know, there was this incredible scene in Silicon Valley that I've been sending some people this video, the main character is sitting at the bar with another founder and the guy is like, you know, his company was taken away from him. He's no longer the CEO. And he says, you know, you could have just taken less at a lower price. And he was like, no, no, I was offered this price in this mountain. He was like, yeah, but you didn't have to take it. You could have taken less at a lower price. And he's like, why didn't anyone tell me I could have taken less at a lower price? And I feel like sometimes founders.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Get out of hand. And now we have to do a recap. We have to do a down round. We have to do all this crazy structure. But we're doing the same stupid stuff all over again. And it's like people don't realize, guys, you have to calm down. Think about the future of your business. Don't think about what makes you feel good when people are, you know, patting you on the back and giving you exploding term sheets and taking you out to steak dinners. This is not good for your company. It might be good for your ego, but it's not good for the company. And that's what we should be maximizing is the long-term value and sustainability of these businesses.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “You mean like the ZERP phenomenon of 2020 2021? Yes. I think that the primary lesson for me is that I really don't have fun in that environment. It was super stressful. And I think for some people, it was like the deal velocity was super energizing. For me, it was awful and draining. I was on the verge of just leaving venture capital because this idea that, you know, a founder goes out and basically holds their capital source hostage by creating this hyper competitive overpriced environment was just gross. Like it just didn't feel right. And I say that as a founder as well. Like we ran a process at Androil during that time and we didn't do that because we agreed this is really gross. We're not just going to let the highest bidder come in and sweep us off our feet. We have to think about the future of our business. And I think now in 2024, looking back on what happened, it's very easy in retrospect to say, wow, we really let that.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “I actually think that's super responsible. I think communicating expectations and aligning people is really important. The thing that I actually like a lot less is the false sense of scarcity and urgency. And that was like what was happening in 2021 where the founder was saying like, you have 24 hours. I have an exploding term sheet. I'm going to pull the trigger on this. That is basically saying I'm using the leverage that I have perceived or real to push people to do things with limited information. And those sorts of behaviors are like they're manipulative and they usually lead to bad outcomes. And so I think someone's saying, I'm going to give this a week. This is when I'm like hoping to move through the wickets. And if they really want Founders Fund involved, they're going to be respectful to us kind of walking through those wickets alongside them.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Leads to bad investment decisions. When a founder says, I'm going to let this run like auction style, they're actually saying secretly inside their head, subconsciously or consciously, I'm like an athlete model. All I care about is competition. And I'm just going to let it run and I'm going to take the best price at the lowest dilution that I can accomplish. I don't care if that impacts the long-term responsible growth of my business.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “There's something deeply troubling about prices getting out of control that have nothing to do with the price itself. So usually what an inflated price means is that the deal is being competed. And so the founder believes that they have leverage. The worst deals are the most competitive deals because they're the ones that are super consensus. Everyone agrees on the thesis. Everyone agrees on the founding team. There's no edge on the investment. Everything is going to be expensive at every round, so your expected value is going to decrease. And it usually indicates that there's some mimetic contagion that's happening in the marketplace. And this, for example, is why Founders Fund, why Peter put us in San Francisco when everyone else was on Sandhill? Because he wanted us to avoid getting caught up in this are they going and meeting all the way down the street with all the other people? It's because memetic contagion”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “No, it didn't, actually. I think like we were wise to hold the line on the price in that specific case. That might not always be the case. There might be examples where it would have been better to pay the price, but I don't think that's generally true. This is going back to that earlier point I was making about heuristics, is that you can't constantly convince yourself that every exception is actually an exception. Usually it's just wrong. Usually you should just follow your instincts around the heuristic.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, I mean, there's at least one that I can think of that I lost on a massive price disparity, not on fund decision making.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Honestly, the answer is yes. Of course, we'll work together as a partnership to win deals. Our platform is very strong. And so I wouldn't say that we're often in situations where people are not keen to take our term sheet over someone else's, which is a great advantage. And it's a great advantage of having a longstanding brand and very opinionated partnership that is very publicly opinionated.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, I mean, naturally, we're going to pull in the person that we feel like knows the most about the industry in the process to have those conversations. You know, I'm not going to invest in like a rocket launch company without talking to Dellian and Scott. We're always going to pull in the other people that are necessary to get to the best decision possible. It's just not done in a process-oriented way. We really just want to back people in their conviction. So when I wanted to make the Flexboard investment, I had to kind of go through the gauntlet and answer a bunch of questions from the team and pound the table. But at the end of the day, they were like, we made a bet on Trey. Trey has high conviction in this. And if he wants to put his reputation and his career on the line to go and write a big check into this company, we need to support him to do that. That's like kind of on you to figure out whether or not you have that level of conviction.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Our approach to this is like it's going to be really hard to get anything through because there's no structure set up to get it through. It's just like personal willpower to go and convince people and get them to take the meetings outside of this process cycle. And in order to get anything through, you literally have to just be pounding the table. It is on you to have the level of conviction that's required to get people on board.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “This is absolutely true of Founders Fund. We all run our own strategy. We don't have Monday partner meetings. Everything is super difficult to get through the investment team. And this is on purpose. The rough thesis is that the more process you have, the easier that it is to game the process to get to some mediocre outcome. And I'll give you an example. If like the most junior person on your team meets with a company and they're like, yeah, this company is pretty good. Like I like the founder. I kind of like the idea. I'm going to have them talk to a principal or a partner. And then that meeting happens. And they're like, it's interesting. I don't have like super high conviction, but like, we'll bring it up into the partner meeting on Monday. And then, you know, the GP or whatever is like, yeah, let's do a meeting with him. By the time that it gets to that point, it's like, okay, maybe we don't have conviction to write a big lead check, but like maybe we put something in because it made it all the way through the process. So like, you know, this is probably worth a participant.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Capital intensive, but if you can actually be a next generation rebooted version of Lockheed Martin or North Grumman, that company could be worth hundreds of billions of dollars. And so I think that's the sort of stuff that I'm looking for.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, I really want a big category defining opportunity in industries that haven't been touched by modern technology in decades. And I want a founder that understands how to play inside baseball in that sector. Two great examples. You know, the first big check that I wrote at Founders Fund was Flexport. And no one was thinking about supply chain logistics in 2014. Ryan shows up and he's kind of this kooky guy that lived in China and like made a bunch of money on like pricing arbitrage and bath fittings and four wheelers shipping them from China to the United States. And he was kind of this crazy outlier that it was like he was either crazy or on drugs or going to be one of the greatest founders of all time. I think that like as an industry was super interesting to me. And then the second example of this is Anderol, where basically going to be super hard, it'll be really.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Totally. Yeah. No, I do think it takes a lot of that. And there's all sorts of things that I think the human brain is super interesting. Like we have the ability to convince ourselves of all of these things that are just not true. Like we look at something and we say, this category is way too competitive. The founder isn't like perfectly aligned. There's like this weird economic incentive structure. But this, ah, this is the exception to all of the heuristics I've learned in my time. And we do this stuff all the time. You know, it's a constant battle to like remind yourself of all the reasons why these things don't work. Part of that is just maturity and getting to the point where you feel accountable, truly accountable for not allowing yourself to be sucked into these cognitive biases.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “With a business, and it does take about that long. It takes about 500 pitch meetings before you really know what you're doing.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “It took time. Brian Singerman gave me the best advice I got in my first month when he said, the only thing that you should be doing for the next year is meeting with every single company you can. Have no standards, just like take meetings. And eventually you'll start perceiving what's good, what's not good, like where you can kind of do a founder check to make sure that this is someone that the team would be able to get really excited about. And you can only do that with volume. There's no way that you could say, I'm going to be super discerning. I'm only going to take like top tier meetings. It's like, just do as many as you can. So my first year, I think I did like just over 500 pitch meetings, which for anyone that has done VC, I think you know that that is an absurd amount of pitch meetings in a year. And by the end of the year, I think I was pretty well tuned to what it means to be a top tier founder, what it means to have like great alignment with.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “You know, like you should entertain it. Like, I want you to meet other people on the team. And so I got together with a bunch of folks that are still at Founders Fund today, Lauren Gross, who's our COO, Brian Singerman, who you just had on your podcast a couple of weeks ago. They were like, okay, so why are we talking to? I'm like, you know, Peter wanted me to talk to you. They're like, why are you interested in venture capital? I'm like, I'm not actually interested in venture capital. What deals that we've done are you most excited about? Like, I don't know what deals you've done. So I wouldn't even know what to be excited about. And not surprisingly, coming out of these very, very bad interviews, the process dragged for nine months and then eventually I just get an email from Peter where he's like, all right, here's your offer. There's always this kind of like funny joke at Founders Fund that like horrible, horrible interview experience with me. And then that obviously meant that I ended up working at Founder's Fund.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “I'm not sure it was an opportunity as much as it was an order. It's kind of unclear. So I was heading up what Palinger called the leverage team, which is essentially the sales organization and have been doing that for a while. In that role, I interact with Peter pretty frequently because, you know, he would want to know like, what does our pipeline look like? Where are we running into problems? Where can we leverage leadership to drive these opportunities to close? And so Ian and I became friends really bonding around philosophy and theology primarily. In March of 2013, which I had been at Palatira for about six years at that time, Peter just called me out of the blue and said, hey, we're raising this first billion dollar fund at Founders Fund. I would love for you to come join us at FF. You know, I kind of scratched my head. I'm like, Peter, I have no interest in finance. I don't know anything about venture capital. Also, I'm like, I literally work for you at Palantir. Like, what exactly is going on? And he's like, yeah.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Things are cultural problems more than anything else, and my partner here at Founders Fund, Peter Thiel, who I also worked for when I was at Valentier, he's been talking about this for decades, like probably longer than anyone else. He started a program called the Teal Fellowship to convince kids to drop out of college based on this idea that the elite universities are distorting our culture and our values. I think that there's some distortion that's happened that requires correction. That correction is, we've seen this on display actively over the last six months with some of these presidents being fired for kind of feeding into this hysteria in the cultural moment. We need to get back to a point where we have some way to generate meritocratic outcomes that are good for everyone, not just for like subsets of the population.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Not sure that it is, and I'm willing to go out on a limb and say that spending your life working for a consultant firm is probably not the path to having the most enlightened experience.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Like, man, we are just like being completely ignored. You know, you see these communities of blue collar industrial workers that have historically been Democrats that have shifted over to being populist Republicans. And it's because they're just ignored. And I feel like I kind of figured out a way through that, genuinely because of my mom's persistence. Yeah, I would have ended up going to a state school and probably working at Deloitte or something. You know, it's a pretty big shift.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Oh, it certainly would have been. I think, like, again, this is like something we don't really talk about as a society, but lower middle class, rural, primarily Caucasian communities have just been obliterated by globalization. You know, JD Vance talks about this in his book, Hillbillyology. You see these stats from the elite universities about how many validatorians they reject. It's like kind of a symbol of pride. It's just this community that they're rejecting because they have no connections, they have no money. There's no legacy omissions. They get no demographic boost from accepting these people. So it's just like I was a stat. I was like one of these people that's like, look, we get nothing from admitting this kid with good grades and test scores. Doesn't benefit us in any way. And so I was just that stat to all the places that I applied to college. This is a lot of what has led to populism, the rise of populism in America is all of these people saying.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Said, you know, I can't help you with financial aid, but I can give you a job in the president's office. And so I ended up working for the university president all four years that I was in college. It was kind of like a crazy, it went from a”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “She did not write a recommendation letter for sure. But they basically just said, this is crazy that you flew out here with no plan other than to like demand to speak to me. And we're going to put you on the top of the waiting list. And as soon as we get the final decisions back from everyone about whether they're going to attend or not, you'll be the first person off the list. And so to my surprise, a couple weeks later, got a call from Georgetown and they were like, all right. you're in. That was a crazy stunt that you pulled. The funniest part about this whole story though is that in my first week at Georgetown, I got invited to the president's office, have a meeting. And I thought like, wow, the President of the University is crazy. Like he meets with every incoming freshman. And so I go and meet with him and he's like, no, I don't meet with every incoming freshman. I just heard your story from the Dean of Admissions. And he was like, I needed to meet you. Obviously, you came from like a middle class, lower middle class background. What's the financial situation here given your story? And I said, I'm taking a ton of debt.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Just laid on the couch with my face down, and my mom came over and she's like, what do you want to do? Where do you actually really want to go? And I said, I want to go to the school foreign service at Georgetown. And she said, well, then you're going to go to the school foreign service at Georgetown. And she put me on a flight and sent me to Washington, D.C. and said, go convince the admissions office in person that they should let you in. And so I sat on the doorstep of the admissions office demanding to see the dean. And eventually the dean came out and he's like, who is this crazy person that's loitering on my doorstep? And I had a backpack full of recommendation letters admittedly from people that I know now. It's like they're probably not even reading these recommendation letters. It's like my high school cross country coach and things like that.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “I had great grades, great test scores. Like for all intents and purposes, it seemed like I was going to be able to kind of write my story for what I was going to do. But the problem was I went to a rural public school in the middle of the country. We don't really talk about this very much as a country we're focused on other social demographic problems, but it turns out that it's basically impossible to get into good schools if your guidance counselor doesn't know all of the admissions officers at the Ivy League schools or whatever. And so I sent out a bunch of applications. I think I applied to nine schools and I got a lot of skinny envelopes back. I remember on the day that I got the skinny envelope back from five of the nine schools that I applied to, I went over to my high school girlfriend's house and I was like, well, you know, at least the school that I did get into is next to where you're going to go to school. And she was like, yeah, about that. And broke up with me the same day that I had gotten rejected all these schools. So I like went home and”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “Oh man, yeah, I mean, I grew up in the country. Like I lived in the woods in a log cabin that my dad literally built with his bare hands. And I was kind of always this misfit, I would say. I love where I came from. I love Ohio. It's a wonderful place to be from. You know, there was always this like tension that was like pulling me to escape. And I have an older brother. He's 18 months older than me. And my mom used to say that she had one son that's 18 going on twelve being my older brother. And I was like 16 going on forty, had this kind of old soul from the very beginning. And I was the British version of an American teenager, was like a 60 year old in a 16-year-old skin. I just loved hanging out with adults. I loved sitting around and reading books. I loved like thinking about philosophy. I would not say that I was like a super cool teenager.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “We don't have Monday partner meetings. Everything is super difficult to get through the investment team. And this is on purpose. The more process you have, the easier that it is to game the process to get to some mediocre outcome. The worse deals are the most competitive deals. They're the ones that are super consensus. It's very easy in retrospect to say, wow, we really let that get out of hand, but we're doing the same stupid stuff all over again for large funds, the economics only really work if you have a 10 plus billion dollar winner in every fund.”

    2024-04-03 · The Twenty Minute VC · 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything · IDENTIFIED FROM THE TRANSCRIPT · source