Katherine Boyle: belief

Transcript context

…The J Curve (of course) being an initial investment in venture capital. It's going to look bad. Your IRR is going to go negative as your investing period before the returns come. But yeah, so I love that deeper on the J Curve. Yeah. I mean, you look at SpaceX. SpaceX is one of the most important companies, one of the largest private venture-backed companies. And yet, for the first 10 years of SpaceX, there was a lot of fear and a lot of worry that investors wouldn't necessarily see a return. It was often talked about. It's like you destroy three rockets before the fourth actually works. There were a ton of questions even until very recently around the business model of SpaceX. I think for a lot of these companies, they take extraordinary founders. Sometimes they have some technical risks. Sometimes they require more capital upfront. Sometimes they have longer periods of how they'll have to stay private or how they'll be venture-backed. But ultimately, they are such broad swaths of the American economy, as you've said. Also they become holding companies earlier, like this is something we can get into about why these companies are a little unique. A lot of times, if you're looking at companies and consumer enterprise, you'll see three or four different competitors going after similar markets, and they're all competing. Oftentimes, you see one or two companies that look alike that are able to go public, and that's fine. These companies usually become holding companies pretty quickly, and attract all of the talent. There's finite talent around things like aerospace. There's finite talent around things like defense. So you don't see as many competitors. As I said, they are harder to build in the beginning, but towards the middle part of these companies’ trajectory, they're really just competing against themselves, and really trying to compete against legacy incumbents. Well, this is good. Maybe before we dive into some example companies, specifics of the thesis itself, I'm curious, what was the intellectual process? Maybe for you personally, but also, I'm curious. Within a16z, you have these as a firm, these vertical practices now, which has been done in venture before, but not nearly to the degree that you all are doing it now. How did this vertical originate? Did it start with Marc’s It’s Time to Build blog posts at the beginning of COVID? What does it look like within the firm of hey, I think we should create a vertical.…

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