E382: Why Venture Capital Has a $3 Trillion Liquidity Problem

Summary

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Podcast Summary: How I Invest with David Weisburd

Episode: E382 – "Why Venture Capital Has a $3 Trillion Liquidity Problem"

Date: June 3, 2026
Guest: Ravi (Founder of NewView, ex-NEA)
Host: David Weisburd

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Overview

This episode addresses venture capital's growing liquidity crunch, focusing on the structural shifts affecting private markets—especially as companies stay private longer and the traditional 10-year fund model starts to break down. Ravi shares in-depth insights from spinning out of NEA to launch NewView, and discusses how secondaries and continuation vehicles are reshaping VC, the impact of generational IPOs, and how LPs and GPs alike are navigating the changing landscape.

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Key Discussion Points & Insights

1. The Launch of NewView and Early Recognition of Liquidity Challenges

[00:00–01:02]

• Ravi recounts leaving NEA after 15 years to address venture’s lack of liquidity solutions, launching NewView in 2018 with a $1.35B fund.
• Saw companies staying private longer; traditional VC structures weren’t evolving fast enough.
• “The venture ecosystem really hadn’t evolved and I found that there was a need for real liquidity and flexible solutions.” – Ravi [00:35]

2. Rethinking Secondary and Primary Investments

[01:51–02:43]

• Around 25% of NewView’s capital goes to primary investments, intentionally avoiding a purely transactional “secondary-only” approach.
• Combining secondary and primary investments positions NewView as a long-term, strategic partner rather than just liquidity providers.

3. The Changing Secondary Market: Company-Controlled Transactions

[02:43–04:47]

• David questions the proliferation of secondary deals and SPVs in high-profile private companies.
• CFOs at top firms (e.g., SpaceX, Anthropic) now push for trusted repeat players rather than arbitrary outsiders in their cap tables.
• Ravi: Most NewView deals are company-led, with CEO explicit approval; a trend moving from top companies into the broader market.
• “We don’t want traders, we don’t want folks that we don’t know. Because this is a long journey. Companies are staying private longer. We need partners that we feel good about.” – Ravi [03:33]

4. Liquidity: Employee, Founder, and LP Needs

[04:47–07:03]

• Liquidity events (“pressure release valves”) are crucial to employee morale and retention—employees shouldn't have to wait for rare IPO events.
• The mismatch: Companies stay private 13–14 years, but funds are still 10–12 years.
• Early liquidity options boost morale and are now seen as best practice, per historical example of MuleSoft.

5. Market Data: The $3 Trillion Liquidity Problem

[05:48–06:33]

• $3T in funds are now locked up beyond their natural fund life.
• This “DPI desert” puts pressure on VCs from LPs, even though LPs still support the asset class.

6. Rethinking Vesting, Retention, and Structural Norms

[10:16–13:23]

• Historic four-year vesting schedules reflected a time when IPOs came faster; now, with decades as the new normal, those structures are obsolete.
• Modern liquidity programs (allowing perhaps 10–30% of vested equity to be sold) help avoid misalignment and boost retention/hiring.
• “Our approach is just to break that or put it on its side... figuring out ways such that it doesn’t have to be this long linear path.” – Ravi [12:03]

7. Generational IPOs and Their Impact

[16:58–18:35]

• Companies like SpaceX, OpenAI, and Anthropic could have the largest IPOs ever, re-starting liquidity and DPI (distributions to paid-in capital) for LPs and VCs.
• Ravi and David debate whether this event flow will fundamentally restore DPI or remain a one-off.

8. Fundamental Nature of Venture: Access, Not Just Returns

[18:35–20:55]

• Venture is an “access class”; the top startups pick their VCs, not vice versa.
• Concentration in top funds challenges liquidity cycles—there’s little incentive to IPO quickly if abundant VC capital is available.

9. The DPI (Distributions to Paid-In) Conundrum

[20:55–23:58]

• Ravi: Historic DPI benchmarks (e.g., Swensen’s 24%) may not be realistic—today’s private capital denominator is much larger.
• LPs can’t continually support low-DPI funds without capital returns.

10. Secondaries, Continuation Vehicles & Bandwidth

[23:58–29:43]

• Secondaries and continuation vehicles no longer carry the stigma of “distress” and are now mainstream solutions.
• Most VCs aren’t structured as Registered Investment Advisors (RIAs), which limits their ability to run continuation vehicles—more common in buyout/PE.
• Bandwidth is becoming an issue, especially for GPs dealing with generational transition.

11. Relationship-Driven Investing and Long-Term Perspective

[29:43–36:23]

• Ravi reflects: The biggest compounding force in decades of investing has been relationships; venture is, and will continue to be, a relationship business.
• “The best founders, the best VCs, keep their wits about them and then use [market dislocations] as leverage points to really find the next great founder, entrepreneur, product, what have you.” – Ravi [31:36]

12. Playing the Long Game & Navigating Dislocations

[36:23–end]

• During booms, capital can mask product-market fit; in downturns, real discipline and opportunity emerge.
• Patience and a long-term lens matter, even if that means short-term FOMO or lost quick wins.

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Notable Quotes & Memorable Moments

• On why secondary transactions need to be trusted:
  “The last thing that the CFO of SpaceX and the CFO of Anthropic wants to do is deal with somebody’s grandma...losing grandma’s money and some shady deal with some SPV holder that they’ve never even met.”
  — David Weisburd [02:43]
• On the pressure valve of secondary transactions:
  “Once [liquidity] has been satisfied, I can now build for value. And I took that lesson and now you’re seeing that much more prevalent. That’s why the whole founding of NewView was this.”
  — Ravi [07:42]
• On what “playing the long game” really means:
  “Sometimes that may mean building relationships that last years before you get anything out of it. Maybe you get nothing out of it.”
  — Ravi [30:42]
• On cycles of panic and discipline:
  “There’s this weird thing that human beings...when there’s panic and when there’s blood on the streets, they turn off their brain and they go into panic mode. They’re not able to execute.”
  — David [32:31]

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Timestamps for Key Segments

• [00:00–01:02] Spinning out from NEA, launch of NewView
• [01:51–02:43] Primary vs. secondary investing strategy
• [02:43–04:47] The evolution of secondaries, SPVs, and company-led deals
• [04:47–07:03] The case for employee and LP liquidity; DPI desert
• [10:16–13:23] Employee secondary sales, vesting changes, and retention
• [16:58–18:35] The promise (& limits) of generational IPOs
• [18:35–20:55] Venture as an access-driven asset class
• [20:55–23:58] The DPI challenge and shifting metrics
• [23:58–29:43] Mainstreaming of secondaries and continuation vehicles
• [29:43–31:59] What’s compounded most: relationships and long-term games
• [32:06–34:59] The perils of excess capital and cycles of mispricing risk
• [36:23–end] Playing the long game amid FOMO and short-term pressures

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Tone and Takeaways

The conversation is candid, reflective, and occasionally contrarian. Both host and guest highlight not just numbers, but the deeply human side of venture—relationships, patience, navigating panic, and focusing on the evolving needs of all cap table participants. The $3 trillion liquidity problem isn’t just about math; it’s about people, structures, incentives, and the slow but steady evolution of VC.

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Transcript

[A]

Ravi, tell me the story of how you spun out of NEA and launched a $1.3 billion fund in 2018.

[B]

So in 2018 I had been a growth investor for nea for about 15 years and was noticing some structural changes in the industry. Companies are staying private longer. Another dynamic that was happening is that was really the start of the huge AUM boom. And this wasn't just nea, this was a cross venture because I was talking to a lot of my friends at other firms but. But the venture ecosystem really hadn't evolved and I found that there was a need for real liquidity and flexible solutions. And so that was really the launch of NuView. We launched NewView in 2018, raised 1.35 billion to really buy out a set of 30 odd companies from NEA and use that as a vehicle to spin off really as a firm, not just a point in time transaction, but really to build something that I felt was going to be something prevalent for a decade. Beyond which is really the need for liquidity across venture capital.

[A]

Is it consensus who the top companies are? In other words? There's some people that believe that by Series B and beyond, pretty much it's known which basket of companies is going to succeed or is there still these diamonds in the Roth that you could

[B]

find, you are seeing right now, at least in the AI boom, a flock to consensus investing. Sometimes that's early, a lot of times it is much later. Our viewing we don't have a minimum when we invest in terms of scale. For us, it's really not focusing on consensus or not. It's really focusing on product, market, fit the market and the team. And those three have served me well in the 25 years I've been a venture investor. And so that could mean that could happen earlier, could happen a little bit later. But all of them are companies that we've been tracking we want to partner with. They view us as value add partners.

[A]

Roughly 25% of your capital is for primary investments into these companies. Why is that so critical?

[B]

It's really important because it changes the narrative on who we are. We just didn't want to be a secondary solutions provider because that could become much more transactional. And instead of being transactional, we wanted to be strategic. So how do we be a long term capital partner, long term strategic partner to this company? A lot of times it could start with providing liquidity to employees, to early founders, to institutions on the cap table. But then we can marry that with primary capital and our value adds such that they view us Very differently in the cap table. It's pretty unique in that that we can do both. We're not pure secondary, we're not pure primary. But that isn't the real important piece. The important piece is figuring out the companies we want to partner with. They see the value that we can provide and that's how we start the relationship.

[A]

I have a bit of a contrarian view on the future of secondaries. Today we have these infamous SPVs and Anthropic and OpenAI and Anduril. The CFOs of these companies, it's unprecedented, are going on Twitter saying we're not going to authorize these transactions. Second order effects of that is there's going to be a flight back to quality. The last thing that the CFO of SpaceX and the CFO of Anthropic wants to do is deal with somebody's grandma. Maybe she's technically a credit investor, maybe even a qualified purchaser losing grandma's money and some shady deal with some SPV holder that they've never even met. So I think there is going to be this flight to quality and there's going to be again this return to having trusted capital partners. It sounds so trite, it sounds so basic, but it's such a critical part of the private markets.

[B]

We totally agree. And in secondaries, you've heard of GP LED secondaries, you've heard of LP LED secondaries. That's where most of the narrative is. Our view is company led secondaries is one of the most interesting facets of the of the secondaries market in venture that we're seeing. It's not doing again a point in time transaction because a GP needs liquidity or employees need liquidity or an LP wants out. It's much more where the company takes control of the cap table and we partner with them to provide liquidity. And it could be an employee tender. And you tack that on with early founders and early institutions that get liquidity. But it's really important because the founders and the CEOs and you're hearing about this, this SPV narrative is really front and center to that. They really want control of their cap table. Their view is we don't want traders, we don't want folks that we don't know who they are. Because this is a long journey. Companies are staying private longer. We need partners that we feel good about. That is really for us, well over 95% of our deals, it's been blessed by the CEO directly in there with the cap table in the company. So I Think that's going to be really important. And you're starting to see elements of it in this top fringe of companies. But I think that's starting to go down into the broader ecosystem.

[A]

I had another guest talk about the $15 billion that Databricks raised. Much of it went to clean up their RSU problem, their restricted stock units.

[C]

Talk to me about that.

[A]

And what are companies actually trying to solve via secondary.

[B]

You have employees that have been in the company for five, six, eight, ten years, right? And they need liquidity. And it used to be that they would just wait for that event, an IPO, M&A, et cetera. And this is an opportunity for them to actually, I call it releasing the pressure valve in these companies and really allowing the employees to carry forward and not have this pressure of okay, I have to have wait for this event to get this big batch of liquidity that also holds true for a lot of the early investors. And then, you know, a lot of it is culminating in this DPI desert that we're in where you have this massive buildup up until 23 trillion. And so the LPs are basically saying this is great, we still believe in this asset class. The power law is building some incredible generational iconic companies. Having said that, we need to get

[A]

liquidity and by the way, 3 trillion in funds with over 10 years, but 3 trillions past the natural fund life.

[B]

That is a very important point. If you look at a fund Life, it's typically 10 to 12 years. And if you look at companies that are now staying private longer, the average has gone from seven, eight years a decade ago to 13, 14 years. So you're already seeing this mismatch, this structural mismatch in terms of the fund life and the life of a private company. So something needs to give. What you don't want to do is be in a situation where you're forced to do something. No company really wants to be forced to ipo, forced to sell. You want to have the freedom and flexibility in the hands of the founders that have built so much for so long for them to carry forward.

[A]

And I want to double click on that because what does it mean to be forced? It's subtle. It's somebody on the board saying some off offhanded comment. It's employees, your co founder that might have been with a company 10 years ago that's trying to have a baby and start a family. It's these subtle things and, and they build up to release this pressure valve is a very underrated thing for a CEO that you want him or her focused fully on optimizing the outcome for the company, not optimizing around someone's liquidity.

[B]

And the signs are subtle, but you said it, the quality CEOs will pick up on the signs. They'll pick up on the signs in board meetings, the institutional investors, but they'll pick up on signs daily with their employees. And one of my companies is 15 years ago that really I thought was one of the early pioneers of this company called Mulesoft, Greg Schott. What he did is he started attacking an employee tender or employee secondary to every primary financing. And he found some really interesting trends. He first found that there's a lot of employees that got liquidity. That was one. The second was it really boosted morale. It was a great retention tool. Third, in subsequent tenders the employees started pulling back on how much they were selling because I realized wow, I'm part of building something. And the reason I wanted liquidity was that pressure release valve. I wanted to buy a home, et cetera. Once that's been satisfied, I can now build for value. And I took that list and now you're seeing that much more prevalent. That's why the whole founding of NewView was this. It wasn't just this point in time trade or transaction with nea. It's really we think that this market is. There's a structural shift happening in venture. It's following what's happened in peace, right? PE has sponsor to sponsor deals or isn't that way in venture and I think that'll change. So the structural shift is really enabling companies to continue to build but also satisfying the needs of the other constituents, the GPs, the LPs, the employees.

[C]

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[A]

to steal me on what you're saying, I believe OpenAI is allowing up to 30 million in secondaries. some point that becomes counterproductive. What is that point? And how should companies think about how much and secondary employees should be able to sell?

[B]

That's a great question. It's kind of the Goldilocks problem. If it's too small, you'll get frustration from the employees and the institutions that they weren't able to sell enough. If it's too big. And that's what I worry about in this climate you could have complete misalignment. You can have behavioral changes. So this is where these company led transactions or secondaries really have to be thoughtful. So how we do it, we partner with the CEOs and we help them think about their dashboard. Is there a certain tenure that the employee needs to be there? What percent of their vested stock can they sell? What is too little? What is too much? What is that right amount where you're not changing that employee behavior too much, but you're still releasing the pressure valve. And it's a great retention tool. It's actually becoming a great hiring tool. And so what does that number look like? It could be 10 to 30% or 10 to 20% of their vested equity. It varies company by company, but there is a sweet spot and a lot of these companies are doing it more and more. It's not just now the open AIs and the anthropics of the world. It's really coming to a much broader part of the market.

[A]

Do you know the origin of the four year vesting schedule?

[B]

I don't actually.

[A]

So Eric Bond from Hustle Fund told me that the reason employees historically vest over four years was that was the expected timeline to IPO from Series A to IPO in the 80s and 90s. Just to give you a sense for how things have changed. I think SpaceX is almost in year 20. Palantir was, I believe in year 17, year 18.

[B]

Really interesting point that we have noticed after starting Newview in that so much of venture is just how it's been done, right? The four year vest. I think that's a wonderful example of just how it's always been done. Back then there was an alignment, right? But now people don't even think of it that way. And our approach is just to break that or put it on its side, say, well, it's always been done that you invest and you get liquidity whenever you get liquidity. Our view is it doesn't have to be. What we're trying to do is even disrupt the venture ecosystem in a small way by saying, you know what, take a lesson from the PE folks that have these sponsor to sponsor deals. It's easier for them because they own their company. It's much harder to do if you're a venture investor. But just figuring out ways such that it doesn't have to be this long linear path. It's always been okay, we can't mess with that long linear path because you don't know, right? You invest in a lot of companies, the power law and some of these companies just take time. You mentioned some great examples. Having said that, along the way there are mechanisms for you to increase your chance of retaining great people and continuing to build such that there isn't the stagnation element. It's 8, 10 years starting to get going. But man, there's a lot of folks here that are, that are tired. And so I think there's a lot those. When I say folks, it's all, it's up and down the cap table. It could be angels, institutions, employees, founders. So all of that plays in.

[C]

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[A]

We've been talking about these companies. SpaceX, OpenAI, Anthropic, full disclosure, I'm an investor in Anthropic and SpaceX. But these companies are going to have the three largest IPOs in history. How does that change liquidity and the nature of DPI in Silicon Valley?

[B]

The IPO market is critical for the venture ecosystem. It's really, and this is where I do agree with Bill Gurley, former benchmark partner, when he said that. So I think these are going to be generational IPOs. It's going to put a lot more liquidity into the system. It's wonderful for venture because it's going to put a lot more liquidity in the hands of limited partners. That's really important because that's what really gets the flywheel spinning. They get capital back, guess what, they're going to reinvest it back in venture. When you have this illiquidity DPI desert for so long, the LPs, and it's fair for them to say, look, I need liquidity from you, by the way, a lot of that I'm just going to reinvest back into you, you being the venture ecosystem. But your siblings in the credit world and the buyout world and the middle market world have returned capital to me. I understand that the multiples you're going to promise me are a lot higher, but I do think that that's really going to be important to get that flywheel spinning. And if you look at just in my 25 plus years in venture, when you have that IPO market start to open, people realize why companies go public and why institute public. Institutional investors love the venture ecosystem for growth. They really can't get growth, broadly speaking in the market. So I think that that's going to be a Fantastic set of events for the venture ecosystem.

[A]

I have a bit of a contrarian take on this and I think DPI and venture is not going to change long term. And before I tell you why, I want to First Steel man that the original Swensen model just started in the 80s by David Swensen, famous investor at Yale, modeled for 24% DPI in the private markets. At Alex Ambrose, CEO of Allocator Training Institute, they've tracked this for several decades. 2024 had a 9% DPI, lowest since 2000. 2025, again roughly 9%. I don't think it's changing. And the reason for that is if you think about venture capital as an asset class, a couple things are happening. One is you have this extreme concentration in these top quartile funds, the Sequoias, Andreessen Founders Fund, et cetera, et cetera. And it's important to remember and people forget when talking about DBI is venture capital is an access class, not an asset class. Meaning the top LPs are trying to get into the top VCs, but on top of that the top VCs are trying to get into top startups. So the startups pick the VCs, the VCs pick the LPs as it relates to over 50, close to 75% of AUM in certain years.

[B]

Yep.

[A]

Therefore, if the founders are the ones that are ultimately picking whether they want to go public and they have an infinite amount of capital from VCs, I don't think it makes sense for them to go public quickly. For many of the reasons that are obvious and many non obvious. The most obvious being of course, having to report on a quarterly by quarterly basis we talk about incentives. You basically can't take long term bets. It's extremely difficult. Which is why you see in public companies, the main CEOs are taking big risks are the founders that either have literal control via founder shares and special bonus shares like at Google or Facebook, or figurative control where the public markets trust them. Kind of like Elon and Tesla. I don't think that's changing. And yes, I think those three companies will provide a lot of dpi. But fundamentally the problem is the same, which is it's significantly easier to grow a company in the private markets. And the more disruptive and the more fast moving the market, the more of a competitive advantage it becomes to build in the private markets.

[B]

So let's unpack that we make some good cases. I would say two things to point out. The DPI, it's a fair point to say that 24%, probably that number may be unattainable. But DPI, there's also a denominator which is the paid in capital piece and that has exploded in the last decade. So what you're saying is if the DPI still remains very low, we'll still give a lot of dpi, but we'll still keep raising massive amounts of capital. I just don't know the institutional LP base that can support that for a very long period of time. So that's one. So maybe it's not 24%, maybe it's not 5 to 10% and that 9% may be generous in some of the low points in the last decade. There's probably some equilibrium where you can provide more DPI but still bet on your winners. And that 24%, that basically saying you pay back the fund in four or five years, that's also very tough to stomach. I think in the buyout world it's very different. Right? But in venture, I think these are maybe the rails you're looking at. So I think that there needs to be a normalization and that's happened. I've witnessed several downturns. Post the.com crash, post the GFC there was this normalization equilibrium. There's always a run up. But post that people start realizing you need to marry that DPI with capital raising. The way I frame it is for the longest time VCs would look at the three main metrics, multiple, IRR and DPI. The way I think about it, just to visualize, multiple was 50 point font, IRR was 24 point font and DPI is 6 point font. And I think what you're hearing from the LPs are multiple is great, but you need to start normalizing the three. Right? That's one point. The other point about staying private longer, I think that there is going to be some companies, I've talked about this perpetually private companies. I think it's a fringe set. Maybe it's 5%, 2%, 1% that why did people go public in the past? It was really for two reasons. Capital access to capital and liquidity. You're right. The way the private markets are evolving, you can do both of those. Having said that, we do need public markets for a variety of other reasons. And even some of these folks that want to be private for a long time. If you look at the journey of many of these companies post ipo, there's a period of time when inorganic growth starts becoming interesting. Most venture backed companies really think about Organic growth. They have product market fit. It's this amazing product that they have. They scale that. After a period of time they really start thinking about buy versus build. And when you have a public currency, it's a lot easier to do that. You could argue OpenAI is buying a lot of companies. But if folks thought that OpenAI would be private forever, there may be a different reaction to folks selling because how would these institutional investors get liquidity? So I do think there's some real benefits there and also access to a shareholder base that could be longer term. But again, we don't know where that equilibrium point will be. That DPI percentage. I think that is evolving. I agree with you.

[A]

Such a good point about build versus buy. The other way that I also look at it because these are markets, people forget these asset classes. My biggest pet peeve is someone will say, well, I don't like early stage adventure. Well, what does that mean? At what valuation? At 5 million or at $50 million? Every asset class has some equilibrium, some theoretical equilibrium, which is why you see, you see these waves. But on the point of dpi, my Occam, the Occam's razor, the way I look at it is if companies overall want to stay longer private, let's just say for longer periods than, than the ten year fund, life on average, especially the breakouts, then you're going to see dpi. On the second layer, secondaries, continuation vehicles, LP LED secondaries, GP LED secondaries, company liquidity pools. The second layer may be where the liquidity comes for investors.

[B]

Yeah, I think so. The narrative, as I said at the outset, is just shifting that. It's not this weird obtuse thing, it's more mainstream when we started the firm.

[A]

It's not a faux pas.

[B]

It's not. And venture and secondaries had a negative connotation. It was distressed venture 25 years ago. It's very different now. So I do think you're right that there's going to be this tier that's going to start. You're going to see more and more secondaries, more and more tenders are flowing to this tier. Having said that, I think all of these generational companies are also gearing up to go public because they're also seeing now that the public markets are appreciating what they're doing, that is overtaking the quarterly earnings call, et cetera. I also think that that is a factor in all of this.

[A]

One of the topics I'm really fascinated about is continuation vehicles. It's grown to $110 billion in the buyout space. I had Michael Woolhouse who runs the largest fund in that space and TPG has a $1.9 billion first fund. And there's so much money going in on the buyout side. I've been talking about this conversation with several large asset managers about continuation vehicles. Are they coming to venture?

[B]

For continuation vehicles, you need to be registered in the US it's very difficult to do it if you're not registered. You have to totally restructure your documents. So who are registered? In our estimation, less than 10% of venture firms are registered RIAs. RIAs. And so of course these are the mega funds, the ones that have 50 to 100 billion AUM, they could do that. So I do think they're coming to venture in one regard. For the other 90, 95% of venture, it's just tougher to do. I also think you have to think about what you're solving for a really good cv. How it started is you had a business in the buyout world that was continued to chug along high quality earnings, high quality EBITDA growth profile. And it elapsed the fund life. And so you place that asset into a CV and it's a win, win, win for everyone. The GPS want to continue to manage it. LPs say, you know what, this is a great asset. We can take liquidity or not. The flip side of that is sometimes you see cvs where there's some good stuff and they throw a bunch of other stuff in there, right? And so that I think is where it's going to get problematic. The other issue is in venture, which maybe isn't the case in PE, there's 10,000 companies or how many number of private companies. Bandwidth is becoming a significant issue for VCs. So when you have a CV as a venture capitalist, you're still managing the company. So I think you're also going to see another use case where venture firms lighten their load in some of these companies, not only for DPI and liquidity and portfolio management, which is critical, but also for bandwidth management. The thing that we talk a lot about is this massive generational shift that's happening in venture, right? There's some great spin outs happening, but this huge generational shift, a lot of these folks retiring. What's going to happen to those companies that they manage, right? They still may manage it or they may hand it over. But this is where a lot of when we have these conversations with gps, we talk to them all the time. It's for DPI but also this bandwidth issue is going to start coming full circle.

[A]

To clarify what you're talking about, the technicalities on it, a CV is a secondary. It's put into its own vehicle. So if you are an exempt reporting advisor, as 90% of VCs are, it blows that exemption versus if you're a registered investment advisor. And Ria, you're able to do that because secondary, you don't have to qualify via secondary. On that note, is there an opportunity for you to partner with GPS? Let's say they have a Databricks or an OpenAI or anthropic in their portfolio and that position is now 2,300 million dollars. Is there an opportunity for you to partner with those gps?

[B]

For sure, that's what we do. The other thing you see in venture with the power law and these funds from 10 years ago, you have significant NAV concentration and one or two names. And so for them to get DPI show their LPs are actively managing the portfolio, balance out that NAV concentration. It's a huge use case that we're seeing and it's a win win. Because a lot of these companies, when we get into them, we still see significant upside. So do they. And it's a very healthy back and forth on. They want to sell less than what we want them to sell and that's that for us. That's a great signal, positive signal. Right. And so I actually think that that is going to be a significant use case because there's these three that we just talked about going public and then there's probably another 20 to 40 underneath them still have been around for 10, 15 years in the lead up to the IPO. Maybe they start lightening their load, right? They're not, they don't have a gun to their head from their LPs or to their founders to say, you know what, we got to do something. And so I think that's a significant use case that's emerging.

[A]

I don't want to age you, but you've been in the venture business now two and a half decades, going back to Goldman 2000 on their venture team. What has compounded the most in your career?

[B]

I think relationships venture is, was and will be a relationship business. And so the most satisfaction I've gotten, the best deals, everything has just come from relationships. And this company building narrative that I was taught by folks like Dick Kramlich and others decades ago still hold true. And that's been a fundamental ethos of me and also our firm.

[A]

I had Nico, who was At C practice at General Catalyst for 15 years. Just started a firm called Verdict and he was mentored by Charlie Munger. Charlie Munger gave him this thought experiment which is everything on your calendar. Think about it from the view of the 80 year old self. Am I happy I did that meeting? Am I happy I talked to this person? Basically solve back from that.

[B]

That's actually an interesting narrative. Part of this is like how do I look back and educate the whatever Ravi, 25 years ago, what I would tell that person is same thing. It's optimizing for volume versus optimizing for quality. That's one second is play the long game venture. It's not obvious, it is a long term game and you have to pace yourself, really play for that. And sometimes that may mean building relationships that last years before you get anything out of it. Maybe you get nothing out of it. Right. And the third thing is just telling the younger me that when there are fundamental dislocations in the market, that's when opportunities arise. If you [e-mail], post GFC and even the last few years, the cast of companies that have emerged from these dislocations are just generational companies. So when you have these dislocations, there's a lot of panic that sets in and the volatility explodes. And I found that the best founders, the best VCs, keep their wits about them and then use that as leverage points to really find the next great founder entrepreneur, product, what have you.

[A]

So that's saying there's some years that go slow and then there's some days or weeks that you could get a decade of progress.

[B]

Yeah. And I remember in GFC you have a lot of these companies having liquidity issues and difficulty fundraising, which is unheard of now with all the capital flowing. And that's when really you have to focus the founder. One of my favorite CEOs told me this, that the 12 to 24 months following a downturn are some of the best moments at a startup.

[A]

It reminds me during COVID I had an opportunity to invest with Sequoia in Robinhood in the Sequoia round. And family offices have been asking me probably for a decade for Sequoia Co Invest. I'm like, sure, I'll give you a call when I have a company investing with Sequoia. And of course I had that and my thesis on Robinhood. It looked like good company, but no one knew how bad Covid was going to be. And my thesis was pretty simple, which is if the world ends it doesn't matter if the world doesn't end, it'll be a good company. Yeah, almost literally. My thesis at a high level on how to deal with COVID There was no way to price it. Just like AI, if you're fundamentally honest, there's some percentage chance that in five to 10 years no one will have a job. No, no one could really deny this fact, but you have to keep on investing as if that's not going to happen. But there's this weird thing that human beings, when there's panic and when there's blood on the streets, they turn off their brain and they go into panic mode. They're not able to execute. Thankfully, I was able to get some exposure there. But if it was a regular market, which of course the opportunity would have been there at that time, I could have done 10, 100 times more, probably.

[B]

So when all that capital floods the market, you just had a lot of bad habits. So we're talking to founders and after a 30 minute meeting they would ask for allocation. There's no diligence. So I think that in those times it's almost harder to invest because you just see capital flooding. And what happened in 2021, which is pretty dangerous, is that capital masked product market fit. And now you're seeing the flip side of that. And that's why we talked about this as Tale of Three Cities where you have this AI boom and you're probably at the steeper part of that, of that curve. But some generational companies are getting created, a few that are going to go public shortly. And the other extreme, you have this long tail, the trillions of dollars that ran up in 2021, capital mass, product market fit, capital retreated and a lot of these companies are stuck. They're going to become zombie companies. There's also really high quality companies that were founded actually before 2023, but they're well run, kept their wits about them, focused on product market fit, scaled great management teams, now have figured out how do I use AI as a tailwind versus a headwind. So I do think making sense of all that in this current ecosystem is going to be critical. As many cycles as I've seen, this is an extraordinary time to be an investor, to be in the startup world for all of these reasons.

[A]

Going back to what you said, you said relationships compound over 25 years. A lot of people say this, it almost sounds straight. But inherent in that is that there's a trade off in the short term. If you're building relationships for the long term, there must be trade offs in the short term.

[B]

The way we look at it is this, again, moving away from transactions to something longer term and strategic. And I found that when. And it could be that maybe I missed an investment, right? But I built a relationship and I got in later. Versus jumping in because you fell in love very quickly with a product or market or technology, maybe that will work, maybe that won't. But inherently, anytime you play the long game, anytime you need patience, you're trading off. Especially when you have this ecosystem that's so focused on FOMO and speed and volatility. And please don't let me miss out. I mean, that started a couple of decades ago with Facebook, right? Google and Facebook. And then. And now you're seeing that obviously with some of these. Some of these AI names. And so that's where this business is beautiful, but also gut wrenching in one fell swoop is you just got to really focus on the long game. But there's also a price to be paid for patience. So where do you have that equilibrium point? Right.

[A]

Did that lead to cynicism earlier in your career that you were playing the long game and a lot of people were not?

[B]

I didn't necessarily think I was playing the long game. It actually early in my career, there's moments when I wish I played the long game. So that's what I would tell the younger Ravi. And when I started thinking about playing the long game, it really is when I started meeting just founders that were just so exceptional that reset what I thought world class was. And that's when I realized, oh, wow, it takes longer to find these folks. But then if you find them, then this weird thing happens, then you build credibility, then that cycle time can actually increase.

[A]

Ravi, I first heard about you when you did this epic $1.35 billion deal in 2018. I believe it was TechCrunch or one of those headlines. It's been a pleasure getting to know you and thanks so much for stopping by.

[B]

Thank you, David. Enjoyed the conversation.