Ben Gilbert: belief

Transcript context

…We think about whether the company has brighter prospects in the future than they do today. If that’s the case, then we continue to hold. We don’t actively think about distributions from an IRR money-on-money perspective. Yes, obviously, we are a fund and we get measured that way. But we’re very proud of the fact that our as held multiples are higher than our net multiples of the stock we distributed. It’s a deliberate strategy that that’s the case. The reason that that is is because we both pick the right founders who want to build long-lasting companies and we help them focus on what’s enduring about their business. You’re just a lot better off focusing on the long run than any short run swings up or down in the market. When we distribute, yes, it’s because it’s maybe the end of the life of the fund, but it’s more about even when we distribute we hope that the company has much longer prospects than the day we send the shares to our LPs. We distribute shares and let our LPs decide whether they want to sell or not. We generally don’t sell the stock. It’s funny. It’s a nice thing to say we’re long-run–focused over short-term–focused. But in the business that we’re in, it’s quite literally and mathematically just a much, much better strategy given how much of the area under the curve of a compounding returns business shows up in those later years. I think I heard a stat recently that Amazon made as or more money in its 21st year after IPO than the entirety of the 20 since IPO. It’s just funny to think about these businesses that we’re in. The opportunity to invest where you’re investing does come early, but the real returns do come much, much, much later. It’s a testament to compounding, the thing that people don’t get right and it’s hard for us to understand compounding because we’re human and we like linear projections as opposed to exponential projections.…

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