David Rosenthal: uncertainty

Transcript context

…Let's land this plane. Let's talk about power. I think that's a good place to start it before we get into the playbook. I'm not sure there's a more perfect and pure illustration of counter positioning than how Benchmark started. I think it goes deeper than just, oh, if you are a very powerful, very wealthy senior GP at a different firm, you'd have to give up a lot of your economics and no one would do that, therefore, no one's going to do it. Other firms were not set up to exclusively have partners that were truly equal to each other in value. Price is what you pay, value is what you get. Price is what you pay the carry that you have to pay someone out and the salary that you have to pay someone, and value is what you get in terms of them bringing great deals and then contributing something to the partnership. No other firm was set up to have equal value employees. You couldn't make everyone equal because it wouldn't solve the problem. Every other firm couldn't do this. It doesn't mean that this is better, but it is for sure that no other firm will set up to actually do this. A hundred percent. I don't know where this falls on this, but because of everything we talked about this whole episode and because of this all-star team dynamic of for this model to work, everybody has to be an all-star and has to bring it all the time and you have to be committed and capable of being the best on the field, it's also a barrier to entry to other firms starting and copying the model. Sure, you can try and do that, but you got to be the best. Other firms have. Lots of firms out there have equal partnerships and no associates, but none of them have 25X to a $500 million fund. It's almost like every decision you make is very risky because once it falls apart, it's done for good because you're not going to attract the next Bill Gurley if you've been mediocre for a couple of funds.…

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