David Rosenthal: belief

Transcript context

…The interesting thing about why no venture firms were doing it about themselves was the commonly accepted wisdom that opacity plays to our advantage. I think most people didn't actually think it through. They just thought, what have successful venture capitalists done in the past and that was to be opaque, don't make too much PR noise other than to claim your win when you have it, but you don't need to take these big positions, be brash, and counter-position publicly. Andreessen Horowitz not only saw that as a thing they could exploit, but I can't remember if it was Marc or Ben—I was listening out to a podcast that we'll link to in the show notes, along with a lot of other sources we did for research for this one—brought up the fact that if you trace back the origins of institutional firms like venture capital firms, it comes from the investment banks of the 40s and 50s, who were opaque because they were financing wars. There were lots of reasons why they wouldn't talk about where their returns were coming from or their excitement about the projects they were financing. Whereas Marc and Ben are unabashedly optimistic about the future, Marc in particular, of just standing on the largest soapbox possible and preaching about how cool the future will be, and how much better off everyone will be both on average and in every spot in the distribution in the long run. Let's bring that closer as fast as possible and be really loud about the future that we see, and about the companies that we're investing in to build it, how much we believe in that, and how unapologetic we are about that. That was just totally different from the commonly accepted wisdom of how venture capitalists should go to market. Two things. One, I think the version of hiding the war financing of investment bankers that VCs were doing here was, they're hiding the management fees. Come on, you got a 10-person organization, half of which are assistants, and you're making $20 million across your funds in management fees a year. I don't want to shout that from the rooftops if I have a VC firm. Or brag about how I'm putting $2 million into work to own 30%–40% of a company.…

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