How Jack Altman Hit 100x Growth With Uncapped: AI, VC, Founders

0:00There are companies now that look like they could become so large. OpenAI, SpaceX, Stripe, Databricks, Andrel. That could be the answer that solves this venture arrogance score riddle. The temperature on the whole market has definitely risen. If you're meta and you think another trillion dollars can be unlocked by a particular team, your willingness to pay is very, very high for that. I think the model companies will be ridiculously big. It's also what I think is the best place for venture in 2025 to be investing, because you're basically investing behind the fundamental belief that AI is going to start to do jobs.

0:31You recently had Sam Altman on your pod. Were you nervous? No. Definitely not. Why? Why would I be nervous? I don't know. It's my brother. He's your brother? Stop. Really? You're joking. Would this have changed the line of questioning if this had been connected before? You know, I was going to ask about like open AI and like, what do you think is going to happen? When is AGI going to happen? It's going to happen. They're doing great. It's going to happen? Jack Altman, welcome to Sorcery. What's up? How's it going? It's nice to be on this side for once. I know. I couldn't think of any more perfect way to bring someone else on than another podcaster.

1:09It's easier. No prep. It's great. No prep at all. I love being here. Well, hopefully we can make some sort of cross-collab with Uncapped because now you're crushing it. Well, I don't know. I'm doing something. You're doing something. It's fun, though. I want to get into this, though. So what is the strategy behind it? I didn't have a strategy. I don't know that I have one. I think on some level, I was just like, it's a fun thing to do. I had done a bunch of podcasts in the past, like during Lattice and stuff, but I was sort of just like, this seems fun. And it's like a good excuse to meet interesting people.

1:42And I'm a year and a half into venture. And I was like, this is like a good excuse to get to learn from people who do venture. And I'll be able to ask them a bunch of questions that would be super awkward for me to ask them if I was like seeing them for coffee. But now because the cameras are on, I get to just like grill them. So I didn't really have, and I don't think I really do have a strategy per se. I'm sort of just following my interest. So you're newer to venture. Max mentioned that he's also newer to venture. Shout out to Max. Thanks for some great questions. The cooler Altman brother.

2:12So you just kind of started back into this world of VC. How are you thinking about the transition between like founder to VC? Talking about the podcast, one of the things that has struck me talking to all these awesome people is that there's a lot of ways to do it. And for every great person who tells you that the right strategy is X, there's somebody who will tell you that the right strategy is the opposite of X. And so to me, that's actually pretty liberating to realize that you can be really good or probably really bad at this job in any way that you want to do it. And so my sort of guiding principle on most professional things is to sort of go towards what interests me and what I like.

2:58And I think that like, that'll end up making me become more likely to get good at it. So, you know, it's evolved even over the last 18 months. But like, that's sort of my conclusion is there's like no right or wrong way to do it. And as long as you, you know, find your path and hone something and there ought to be a way to do well. And you're learning from some of the greatest VCs. So far, you've had headliners. Like, if we had a Coachella lineup, these would all be headliners. You've had Marc Andreessen most recently. That was great. Keith Reboyd, Josh Koppelman. Loved the hot take in Josh Koppelman's.

3:34Elad Gill, Sean McGuire, Gary Tan. What was it like with each of them? Like, what's your main takeaway? Sort of like what I was mentioning, like, they're all so different. and even among those names, you know, like what the hot take that you're referencing, I'm guessing from Josh at first round was basically around like the venture arrogance score and that like big fun math, just like dozen math. But then you hear perspectives from people with much larger funds who, you know, have a totally different take on things. And there's people in the middle and we can talk about that too, where, you know, Mark Andreessen mentioned that there's basically this barbell where you can either be really small, you can be really big.

4:13The middle is not there. But I had a guest recently that I haven't posted yet who, you know, we didn't talk numbers, but I would say is in the middle of the barbell and is like a really good investor. So one of my sort of just takes from meeting all these people is basically that there's just so many ways to build companies to do venture. But each of them had their own like really interesting thoughts on everything. So there's no distinctive strategy. It's just you have to have. I think you have to have a strategy, but there's many strategies that can work. But I do think you have to have a strategy.

4:45Yeah. How do you go from such strong opinions to applying that to your own fund? Two things. One, the way I think about learning from people, and this is how I thought when I was founder Building Lattice, it's how I'm thinking now that I'm very fresh-eyed into venture and consider myself fully in learning phase. but even still, I'm not looking for advice from people in order to actually dictate what I'm going to do. I'm just looking to be as informed as I possibly can, but then I'm going to follow my own goals and principles about things. I'd also say that in general, I think in some ways, all of this strategy stuff is a little bit overdetermined.

5:28And on some level, you either invested in a great company with a meaningful size or you didn't. And I think that, you know, it's easy to get lost in all this other stuff, but what it really comes down to is like, did you back special companies, you know, and if you did, it kind of will work out. And if you didn't, it kind of won't work out. I want to get into more specifics from the pod with Mark later on, but first I want to bring up some of the founders you've had on as well. You've had great founders. I'm sure some of them are portfolio companies. You've had Aaron Levy of Box, Adam Gild of Owner.

6:02And then you've also had someone named Sam Altman. Yeah. So what have you learned from the founders? Yeah. And there was, and Castro at Applied was amazing too. To me, talking to the founders is actually where I learn the most, most of the time. I really love talking to venture investors too, but it's sort of like, you know, there's this really great quote about like, you know, when artists get together, they talk about turpentine when art critics get together to talk about form and function and whatever. I think that's very true. I think there's a lot to learn from both altitudes, but to me, the founders who are running companies are the ones who are close to the metal and who really understand the market in the much more nuanced ways.

6:47They also go so much deeper in a particular area. Like Jordan from Antares talking about nuclear and unbelievable depth or adamant owner who is just like unbelievably obsessed with this one particular, you know, vertical and he knows his customers at restaurants inside and out or Casarit Applied, who is just, you know, a total student of company building. Obviously, Sam knows about, you know, AI and, you know, he kind of is operating at both a high level and, you know, very close to the company, just given the shape of OpenAI. But for me, those conversations, I just learned so much because you're talking like a true expert.

7:26Yeah, it makes a huge difference. I feel like when I have VCs on, I don't need to prepare as much. I feel like I know the language kind of well, but when you get on with a founder, there's such extreme expertise behind it. You have to do real research. You have to be able to follow up with questions. It's kind of hard. It's also a big part of what informs my view that it's very unlikely for VCs to help in ways that have to do with the actual company or like the product. I think like what, like there are things you can do, but VCs by nature are like, you know, a mile wide, an inch deep and founders are like, you know, the inverse of that.

8:01And so I think it's really hard to, you know, there are certain situations where a specialist investor knows a ton. It's really hard to know more than great founders about what they're doing. Conceptually speaking, I feel like VC is always related to sports, But what you're building is kind of like a highlight reel of your conversations and whether it's like with the investors or like with the founders and like grasping a point in time. Do you do you think back of like how each of these conversations draws out to a greater narrative? Because having a podcast now is like is a really unique thing.

8:36And it's also kind of a special experience to like capture these moments. Totally. It's really lucky. and it's coming together in a funny way because now as time has gone on, and I've done, I guess, like 12 or 13 of these, I'm seeing a lot of common threads between people and similar ideas keep coming up, but with different takes. And so I am getting to build a little bit of a through line. I'm not trying to connect the dots too early here and I want to talk to way more people. But yeah, I do think there's something there. I think one of the things that I've enjoyed the most is that, you know, I haven't published it yet, but like I talked to Vinod recently and the history that he has in Silicon Valley and just the depth of knowledge he has just earned over decades.

9:26I really enjoy that. And so, you know, like I'm relatively speaking early to all of this in my career. And I think getting to hear from people who have lived through many of these cycles and changes and that they can still be so optimistic about the future after all of that time. It's like really, it's really inspiring. So, yeah. What's the most critical thing you've learned from founders? For me, when I think about what I've learned from the founder podcasts, assuming that's what you mean. it's less about the things they've said and more about observing what they're like when they talk about their companies and um these great founders are just so um they're so uh they're so obsessed they're so like inspired about what they themselves are doing and they have such um there's like a clarity and confidence in what they're building that i find like gives me a lot of energy and so I think it's less learning about like specifically what they've said and just kind of like the, you know, gestalt, gestalt, however you, what is that word?

10:31I don't know. I'm gonna start that over. And more just about the bigger picture of like the way that they talk and think. That's what really gets me inspired. Drawing out the broader podcast landscape, we are, we might be in bubble territory. There's a lot of podcasts, yeah. I kind of. Yeah, I'm part of the problem. You're part of the problem. I'm part of the problem. We're all the problem. It's fun, though. It is so fun. The macro kind of like theme of podcast right now is everybody has a podcast. OpenAI just started one. Stripe just started one. You have one. I think Sam started one. Mark has one.

11:10Turpentine, A16Z, everyone. Everyone has one. What's your perception on this? Is this bubble going to last? Where does this go? well there's two possible answers one would be like there are too many and everybody needs to chill and like people are not there's only so many hours in the day and people don't want to watch more podcasts um which is what like you know i had a lot of people tell me that when i was starting i was like yeah i don't care it's fine like if people don't watch it it's okay so there's that and i guess on some level like for all those podcasts it's a little bit you know it's kind of low stakes on some level like so there's that but um the other side would be like you know there's also a lot of restaurants but there's a lot of people who like need to eat food and there's a lot of days that are going to eat food and so like it's possible that podcasts are similar where it's just like people enjoy them and there's actually not enough yet there should be 10 times more so I don't really know I don't know either but what stood out to me about yours is like it seems like you genuinely enjoy it like it seems like there's an authentic love and like excitement around the conversations you're having the quality of it like you started out and you you put out really high quality product like the set's really good the conversations the questions the guests like it's all great and then recently you had mark on and it seems like from that you've you've hit your escape velocity and you're you're really growing well anytime he talks there's just so much to pull from it it's like when i was talking to him i was like this is unbelievable because i'm like talking to like an informed tech positive encyclopedia you know it was amazing so So it makes sense that anytime he talks, like a lot of people want to hear it.

12:50Were you nervous? No, I wasn't nervous. It was fun. I loved it. I could have gone for two more hours. Really? Yeah, it was great. How do you prepare for that? I didn't. I don't. So I actually don't prepare that much for these. By the time I'm inviting people, I mostly already am so interested in so many things about them that I don't need to do that much. And what I found in general also is that like, I don't stick with my questions anyway. way. So I make them, you know, but I kind of get lost during the conversation. And, you know, to me, following what the person's talking about, and then going deeper with them is, that's what I want to do.

13:25And so my North Star for this whole thing is just like, I'm gonna have the conversation I want to have. I'm not like trying to take it in a certain place. And for me, most of the time, what I the conversation I want to have evolves halfway through it. So, so I've ended up not preparing that much. I think also similarly, though, So there's some people who, when they do public speaking, they need to prepare every word and practice 10 times. There's some people who don't prepare at all. I actually think the worst is the middle ground. So I've kind of always been on the far unprepped side. Going back to the barbell.

13:55Back to the barbell. It's all about barbells. It's all about barbells. It really is. It's like a two-by-two matrix. You've got to have some picture people can think about whether it's true or not. Sorcery is brought to you by Brex, the financial stack trusted by more than 30 ,000 companies. including one in three venture-backed startups in the U.S. Nearly 40 % of startups fail because they run out of cash. Brex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, chipping away at it with fees, Brex is designed to help you spend smarter and move faster.

14:29Their all-in-one solution combines checking, treasury, and FDIC protection into one powerful account. You can send and receive money globally at lightning speeds, Get 20 times the standard FDIC coverage through their partner banks and even high yield from day one. With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMSS, Anthropic, Flexport, Robinhood, and Plaid trust and use Brex. Start today at brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. I want to go now into Mark's pod with you. It was super dense. You're entirely correct.

15:14It was super dense. I think I've listened to it twice now because I'm like, what is happening? We can talk about multiple of the topics, but I guess let's start with the barbell one. What were your biggest takeaways with that? I really like the positioning that he puts around it. It puts shape to this concept, and it's a good framing around Josh Koppelman's that like, you know, there's this venture math thing that was kind of posited first that like the funds kind of seem too big. And, you know, if you're a$10 billion fund and you want to get a 3X, like where are you going to find it? Like you got to own 10 % of SpaceX, like good luck.

15:51And that, that makes sense. But I do think that there's, there's another narrative, uh, on the, on the other side that I think I actually believe in as well. So when I think about firms like, You know, Andreessen's amazing. I think about Founders Fund. I think about Thrive. I think about Green Oaks. I think about these firms that are able to get huge positions in companies that are big. And the sort of the contrarian bet, let's say, for them is not that they believe this company is good and the rest of the market believes that it's bad. It's that they believe harder that it's good. And so if you're investing a lot of money in Andrel, 30 billion, everybody believes Andrel's a great company now.

16:33But how hard do you believe that? Do you believe it's going to be a$300 billion company and so on? And so I do think that there is this sense in which there are companies now that look like they could become so large. OpenAI, SpaceX, Stripe, Databricks, Andrel, many more. That could be the answer that sort of like solves this venture arrogance score riddle. And if the strategy includes just placing huge bets on those companies later, the math could all work. And so to me, I like that framing. The part I'm least sure about with the framing is that the middle shouldn't exist. That I don't know if I have clarity on that yet.

17:09The reason is I still think that a series A or B or C founder, for the most part, is going to pick a partner that they really like, a brand that they trust and respect, a team that they think can help them, and like a price that works. And I don't know if the founder cares whether that fund is 200 million, 1 billion, 3 billion, 7 billion. Like, I just don't think that the middle can't exist necessarily. But, you know, it's a provoking thought. Could you explain more on the middle? Like, what is this middle ground that he's talking about? Well, I think basically what he's saying is there's specialists, which either means that your specialty is a sector or a stage or a way that you help companies.

17:50And so you're like a boutique, you know, like this is like the Gucci and the way he described it or your hyperscale. You are resources and your power and your, you know, access to, you know, the world, your access to the government, et cetera, because you have all this institutional strength, which I buy that too. And I think what he's talking about is that in the middle, you're trading off both the ability to be a specialist and you're not big enough to be, you know, institutionally powerful like that. which is a believable description of the world. What do you think it takes to win one of these hyper-competitive rounds now?

18:28I think it's different in each case. There's not a single threaded answer. There's a few answers that I think the best founders that have all the choices in the world can have. For some Some of them, they pick based on round dynamics and price and valuation and low dilution and all the rest of it. And I think that that's actually like, there's nothing wrong with that. Particularly if you're an experienced founder and you're like, my VCs aren't going to help me that much anyway. And my company's brand is already bigger than most of these VC brands. And so I don't need to even have theirs help me get forward.

19:05It's pretty rational. So long as you think the money's not reputationally damaging or the investor is going to be a paying in the ass for you or whatever. So that's one bucket. Another is people picking based on brand, which I think is super logical as well. You need to hire people, you need to win customers, you need to get downstream capital, you need to basically just take the action out of the room and have an aura that your company is the leader in the space. And so having Sequoia do your round implies that very smart investors who themselves have lots of options picked you. So I think that's one.

19:40Then sometimes people pick based on who they like, Like, you know, who do they connect with? Who do they want to go through the journey with? Who do they want to be the person that they're going to call on the phone every other day as a board member? Who do they think can be useful to them? And I think all those reasons can happen. I think different founders have just, like, different tastes and sensibilities on this stuff, and there's not a right answer. Vibes. Yeah. Vibes. Well, you're also a successful founder. You raised hundreds of millions of dollars. This was, you know, a couple years ago.

20:11Now, fast forward, like the environment's totally different. If you were in the founder seat today, do you think you'd be pulled by one way or another? I think I now would be, I would be mostly focused on people I liked and terms that I liked, to be honest. I would still want to have, you know, good firm brands and everything like that. But one of my learnings with Lattice was that like you're in particularly your board, all your investors, but mostly your board members. That's where you're really picking somebody who's going to be with you as a through line through the company. And it's hard to see it when it happens because you're just in a frenzied round and you're just like there's like, you know, competing term sheets.

20:54And you're, you know, when you're on the when you're on the good side of that as a founder, it's like, you know, it's a bit of a rush. It's also a bit stressful. And it turns out, though, that what you're picking is somebody who's going to be there with you longer than most of your employees are going to be with you. And you're going to talk to them about stuff that you're not going to talk to your employees about because you can't. So I think that would matter a lot to me if I did it again. Most founders, early stage founders, don't have that kind of foresight. What advice would you give to them for picking board members?

21:26My advice on it would basically be like, it doesn't matter so much at your scene, to be honest, because those investors are with you, you know, tightly for a couple of years. But in the fullness of time over the course of the company, it's less. But I think once you get to your board, I would just make sure it's somebody that you want to spend time with because you spend over the years, you end up talking to them about a lot of high stakes stuff a lot of times. Yeah. Yeah. You also mentioned terms. Terms right now are crazy and valuations are crazy. Yeah. What is your sweet spot for packaging up a deal?

22:05You mean like where am I investing? Yeah. I'm doing seed in Series A. I've been doing more Series A's lately for whatever reasons, but I'm going roughly early stage because my fund's not that big. I do think terms are crazy. And, um, however, I'm not sure that I'm not sure that this vintage isn't really good. Um, you know, and maybe I'm drinking the cool, I'm trying to like only cautiously be super optimistic, but I, my instinct is that I want to be really optimistic right now. Cause I do believe that we're in a super cycle and I do believe that this is like, you know, Sam called it a scientific discovery.

22:40And I do believe that, and that this, like a real thing happened, that's unlocking a huge amount of innovation and value. And like, you know, millions of jobs are going to be done by AI, which I don't see that as being replaced by. I mean, I think they're going to be done by. And then that means people are going to unlock more economic value on top of that. So I'm really bullish, but at the same time, I'm like these valuations are high. Private markets and public markets are kind of disjointed. And so like there's a sober part of me too, but I'm pretty optimistic still. Yeah. How do you price that?

23:13I don't know. You tell me. I have no idea. Okay. I thought, you know, on some level, the market's the market. And we, for better or for worse, we exist in a very competitive market where there's a lot of options for founders. And what that means is that, you know, you might be able to get some discount if you've got value of the founder once a slightly sober, you know, valuation on some level. but it's not rational for a founder to take a 50 % discount, even if the 50 % discount is itself too high. So I think you kind of just on some level have to play the game. At Alt Capital, what kind of check sizes are you writing?

23:51The biggest we've done is like 12 million. Smallest is like one. So that kind of range. How many deals do you do a year? We'll do probably 25 in the fund. So 12-ish. Okay.

24:10It's exciting. Yeah, it's great. I love it. How do you think about the broader AI landscape? I know you went into this with Mark pretty deeply. Yeah. Well, I think the model companies will be ridiculously big, but from an alt perspective, we're not investing in them. I know less about infrastructure, I have less perspective on it, so we haven't really done a lot there. and then applications are just like the obvious place for me both because of my background but it's also what i think is like the best place for venture in 2025 to be investing because you're basically investing behind the fundamental belief that like ai is going to start to do jobs and if that turns out to be true it's going to be huge that's a good segue okay so we have a calci market on a number of jobs do you think like are going to get taken out i'll i'll blend this in out or done by AI.

25:05Okay. Well, there's two approaches to this. So do you think there's going to be more tech layoffs this year than in 2024?

25:17No. I guess not. No? Not necessarily. I think a lot of what's happening right now is people are buying AI and then just hiring less. mm-hmm okay what does cal she say let's see cal she says there's going to be a 64 chance all right i know yeah the other fun one with this is what do you think the unemployment rate will be in 2030 with all this ai um i think it will be somewhat higher but not ridiculously higher i also think unemployment numbers are like really hard because the reporting will change. And so what I don't know is what things will count as jobs, who will be considered, you know, wanting to be in the workforce and is not versus who will be just, you know, deciding to, will fewer people decide to be in the workforce.