SpaceX, Stripe, X, Ramp, Anduril: Navigating Liquidity in Private Markets

25:41And then they go off and start a business from the learnings that they had while operating at that previous business. And that cycle, that flywheel is really great for the venture industry, because that's where folks want to invest in and be a part of. And so I think, you know, LA and Southern California has really benefited from the growth of the aerospace and defense ecosystem and all these startups. And you'll just see that continue to compound. This particular category is super close to Washington, D.C. I know you go there a lot. These founders go there a lot. How do you think about the collaboration between this category?

26:13They're very close to Washington, D.C. and policymakers. Is it real? Is it hype? We've seen so much over the course of the last couple of years, especially with the new administration. How much of it should we be watching out for? Yeah, it's a great question. It's definitely real. You know, like all things, you know, government is like any big organization. It's in even even with Doge, it'll still it'll still take time for them to move. But you see the desire and the realization that it's somewhat existential for them to move faster. And, you know, I would say you can look at the growing relationships between the tech industry and and and.

26:59DC and policymakers has been really incredible to see, you know, what was somewhat contrarian for folks who wanted to either do business full time or, you know, as a second business line, as a dual use company. It was very contrarian to focus on that, right? Like SpaceX, Anderle, Palantir, these companies were not obvious or consensus. And, you know, now that that has changed, you've seen the investor community and the entrepreneurs, these founders, really, really going after opportunity sets to sell hardware and software to the government, specifically in the aerospace and defense industry. And so that's been great.

27:38I think the relationships have also deepened and grown. And to your point, if you look at trend over the last couple of years, the number of firms, the number of founders spending time in DC has grown exponentially. and that's only going to lead to not just deeper partnerships between these two ecosystems, but most importantly, lead to helping policymakers draft really important policy. And I think it's one of the most important things right now, because if you look, backdrop, we're in a second Cold War. During the First Cold War, we won because of our technological industrial prowess, and government was a huge partner to the tech industry and really helped fund the beginnings of the tech industry.

28:20And really like going back to that original partnership, I think is how we'll win the second Cold War. And so I think it's critically important. I think the other side is if you look, the next set of policy is either going to have to do directly with or be implemented by technology. And so, you know, a lot of the economic opportunities ahead of us and a lot of the policy that's gonna drive that, you're going to need tech very close. And that's just the nature of kind of what's different in the world today. And on that, like even more so, it's not just aerospace and defense companies that are spending time there.

29:01Back on that last point, you have fintech companies, you have cybersecurity companies, you have healthcare companies, you have energy companies, manufacturing companies, semiconductor companies. I mean, it's going down the list, right? It's not just kind of what we would think is just, you know, purely kind of defense companies doing this. And so that's what's also exciting is like the entire ecosystem is embracing this reality, which is like policy really matters. We should spend time educating policymakers who've given their life to public service, but there's no way that they can be experts on thousands of topics and try to draft policy and bills around that.

29:36And also government's a real partner. And I think, you know, that that has definitely been very, very real. And you just see it. every company, you know, that I spent a lot of time with on this category, you know, they're going after kind of what we're talking about. It's a broad range of them. And I enjoy that personally, being a part of kind of, you know, companies of different categories, not just defense, who are trying to build relationships in DC and try to, you know, focus on selling their products to the government or focus on, you know, helping government, you know, draft kind of good policy.

30:07On the flip side, you know, government's response, like I said, will be slow, but it's definitely, it's definitely like trended towards a really great direction. You've seen early signs of that. Two examples, you know, during the last administration, there were two, during the Biden administration, you know, there was a replicator initiative, which was a really incredible sign. Can you explain that? Yeah, the replicator initiative was really led by Kathleen Hicks, who was undersecretary of defense at the time, and was really initiative to basically push hard on faster procurement and procuring a ton of mass.

30:44And basically, let's get a ton of autonomous attributable unmanned systems. Let's procure them super fast based on various needs across the military forces. and uh that initiative was an early sign of you see like from the top down the defense department's desire to modernize and speed up its procurement process and particularly go after procuring technology from the tech sector um in order to solve some of the critical problems that they have the other thing that i think is also just interesting trend is like you look at you look at things like fed ramp which has a lot of problems but the biden administration expanded it in 2022 um and modernize a little bit um there's actually be some more work done on fed ramp during this administration which would be great but ferrum's a good example where it's like it's actually been great for the tech industry um it's uh created a forcing function for um contractors uh who want to sell their products to the government um to make sure that they all have standardized compliance and security frameworks in order to sell cloud services to the government.

31:56And so it's actually created opportunity for a ton of startups to make sure that, you know, vendors to the government all have, you know, secure cloud infrastructures. And these are like the beginnings, I think, of where, you know, government can actually draft good policy that creates opportunity for the tech industry and is showing like a willingness to try to modernize their thinking. And that's just going to continue to trend during this administration. Yeah, that was, I think like one of my biggest realizations going to the inauguration and being in the room with everything, it like really felt like an authentic, real embrace of technology.

32:36Like it felt like a tech conference. Yeah, no, totally. I mean, that, that it's funny. I remember having a great conversation. Actually, Keith Raboy had a great tweet about this um based this conversation was like sean keith a bunch of us and and um we were just discussing this very thing which was like it was strange you basically had like two centers of gravity um and you had uh the inauguration you had davos going at the same time yeah and you had the tech community which traditionally has not gone really to either um a lot of the folks i mean i mentioned in that circle and a lot of folks there like none of us have ever gone to davos um Never was a priority for us.

33:16Didn't make sense for the industry, for a lot of, you know, especially the venture investors, a lot of the operators. But you had all these people in DC at the inauguration. And I think it showed this like shifting in the world and this like realignment, which is very interesting. And you sort of have like, you know, the sort of the old world and the new world in some sense, which is kind of fascinating. And like I said, I think that's just really positive for the country overall. And it's, you know, this trend has continued, right? It's been going on through previous administration. It's been going on this administration, accelerated during this administration, and it'll just continue.

33:52And I think it's very important for the country, given the backdrop, like I mentioned, of where we are and kind of the role that tech's going to play. You know, tech doesn't have a trade association. So these relationships really need to be built out across, you know, all parts of government from policymakers to program officers to to other folks, you know, directly between kind of the ecosystem. And that's that's going to be an exciting opportunity. As you know, you've spent a lot of time on this with with the Hill and Valley Forum. Oh, I'm going to get into that. Let me lead into this. So you you've been embracing this for a while now.

34:25Now you've created the Hill and Valley Forum. There was recently an entire profile in the Washington Post that I had to pay for. So thank you for that. Well, I, you know, I would say you should have called me. I would happily send you a PDF. But, you know, I think Bezos has been struggling financially lately. And so I think getting more subscribers to the Washington Post is probably a good thing. So yeah, it's hard to keep up with that lifestyle. And then, you know, opening it up, I think they lost like 75K subscribers once they announced that they weren't going to be communists anymore. That's another reason why I think you should have signed up.

34:59Exactly. So let's get into the Hill and Valley Forum. Could you just explain more about that and how it started? Yeah. So the Hill and Valley Forum was started by Jacob Helberg from Palantir, who's going in as the Undersecretary of State for Economic Growth. um delian um from founders fund and varda uh and myself um we started it uh about four years ago um and uh initially and and uh it was you know the the desire uh was really just to create a kind of small dinner um to gather kind of you know leaders from tech and leaders from government to discuss policy on the very point we were talking about earlier.

35:45And it's grown to be much larger than that. And now it's, you know, one of the largest gatherings of the tech industry and government in the country. We have, you know, more elected reps that go there than attend Davos. and so it's become a pretty fun thing to work on with two friends and it's been cool to see kind of the impact and the ability for us to kind of set the stage for broad conversation that hopefully can lead to some really cool things. What's come out of it so far? Yeah, so what's come out of it, we run it every year. We do a daytime form and dinner after. and he live streamed the last one he live streamed the last one and i think it's one of the only places where you'll have you know uh uh donald trump speak uh through a live stream and also have chuck schumer you know give a keynote address um i mean it's extremely bipartisan yeah and i think it's funny you're asking the impact like what what i love about it is first off it's one of the only places where you really see true unity from somewhat disparate or at least competitive ecosystems, right?

36:58Like within obviously DC, things are very polar and things are very polarized. And you see, like I mentioned, right? Leaders from Democrats to Republicans all coming together in a bipartisan way. In the venture ecosystem, right? There are actually folks there like whose companies really compete against each other pretty aggressively. You have venture firms that all compete with each other, all coming together in a bipartisan effort because this matter much, much more. Right. And so, um, it's been cool to create kind of an event every single year, uh, that gathers these leaders and tries to foster discussion.

37:34Um, and, uh, it's cool to see that, you know, this topic really like keep making sure that America has technological supremacy, um, trying to draft good policy, uh, to implement that, um, and, you know, build bridges between, um, the tech industry and, uh, and government, um, you know, that trumps any sort of a polar or competitive dynamics that exist, you know, in our ecosystems. And it's very cool to find subjects that, you know, really unify people. It's also incredible you're doing this with your friends. Like you've really accomplished friends. Yeah. Yeah. Yeah. I think we've just all been fortunate to be in really great positions to have some of these relationships and be able to be a bridge between these worlds.

38:17And, you know, something I particularly really enjoy. And, you know, we're not the only ones doing this work. Like we have a ton of partners in the only value firm that are all other companies and great venture firms that are also doing this work. And it's like I mentioned, you know, tech doesn't have a trade association. So we're all kind of one part of the puzzle. And it's fun to kind of get together and all work on this together. And it is a very collaborative work among the investors and the companies. And so I think, you know, that's what makes it really exciting. So I would say like, yeah, it's awesome.

38:46We can do it from friends and we're in a good position. But quite frankly, it's really the whole industry behind it. and everyone really supports the work. So it's been great. Yeah, it's amazing. Like really incredible, very impressive. I want to shift more towards the personal angle. Christian, you've had a very fast track to partner at 137 Ventures. I know you didn't start in an investing seat either. So could you just like explain how you got into venture, how you carved your path up to partner and being on the investment team? Yeah. So, you know, I was one of the rare few. I always knew I wanted to be an investor.

39:27And so when I kind of started my career, you know, I looked and kind of saw which asset class I wanted to invest in. And it became very clear I wanted to invest in venture and tech. Kind of threefold reason for that. You know, my desire to be an investor was driven by two family members of mine that are big inspirations in my life. My grandfather was Bernard Garrett Sr., who was one of the, who was the wealthiest black in the country in the 50s and 60s, built his wealth through real estate and was the first black man to own banks in the country. This was during the height of Jim Crow era. And I saw, you know, some of the impact that he had as a real estate investor.

40:04And a godfather of mine was a guy named Teddy Forsman, who started one of the first private equity firms, Forsman Little, and also a larger than life figure like my grandfather. and growing up and seeing kind of the impact in the world that they had and learning a lot of their lessons that they had as investors always stuck with me. It was kind of a big inspiration for me for a long time. But I knew also, once again, like it wasn't just, I want to be an investor. It's like, which asset class? And tech was a very obvious asset class. I grew up a gamer. I built computers as a kid. I fell in love with technology actually because of an old MMORPG game called RuneScape, which was sort of my foray into tech.

40:42so uh um you know this was uh i was born in 92 so i got to grow up at kind of the right time and and uh be a part of the the the pc era um internet era and uh you know kind of the growth of gaming um i think all those you know began my love of technology i read every kevin kelly ray crosewell book as a kid and so it was always a futurist so it's very obvious i wanted to invest in in in tech and build in the future and then um i read peter's book as well zero to one Oh, what's that? Should we have to college? Yes, it's a very under the radar book. Most people haven't read. But and so I think all those things were like this confluence of like made it very obvious for me that this is kind of the career path I wanted.

41:25And so ended up, long story short, you know, doing a quick stint in startups, worked on the investing side at a firm, was going to go to business school, ended up joining 137 Ventures instead of going to business school. Um, and, uh, met the team, uh, um, back in 2019 and kind of built a relationship that summer. And yeah, I ended up convinced me to join a business school and been a homegrown product. Um, on my end, I think, uh, you know, being able to move fast, uh, it's really been a confluence of a couple of things, but you know, there's a, there's a great, uh, uh, quote, right. Which is what luck is when preparation meets opportunity.

41:59And so, you know, I think I just happened to be at the right place, right time. Um, you know, One, a mentor of mine is Trey Stevens, and he happened to start a company called Andrel, which now apparently is the most popular company in the world. It was not that way back years and years ago. And being able to have that be my first investment was an incredible opportunity. And I think through that relationship has compounded and been able to partner with a ton of other really incredible businesses. That was your first investment? Yeah. Yeah. And I think and I would say another another thing that's been really beneficial for me moving fast has also been the firm that they gave me way too much autonomy and responsibility, way too young in my career in order to develop.

42:50And, and, you know, it's a testament to the place. Very few places, you know, I think have the ability like 1.27 Ventures has. And a lot of it really stems from the same kind of playbook and training and, and, and kind of how to develop talent that, you know, Peter Thiel has. And that, you know, you find smart people, you give them a ton of responsibility and you let them prove themselves and you give them more. And so I think, you know, 1.27 Ventures is very unique in that. It's an incredible job for that. I've been a beneficiary. And if you look at the investment team outside of the founding partners, from partners all the way down, all homegrown products, all products of promotion.

43:33And, you know, I think it just speaks to the ability for one of these inventors to develop talent from within. And so I think I've also been a beneficiary of that alongside, obviously, you know, being at the right place, right time with some incredible companies. On that point, many of your founders credit you for being one of their most helpful investors. So could you explain more on that? Yeah. You know, Keith Verboe has a great quote when he talks about evaluating talent, which I think is applicable to, you know, if you're trying to look at yourself, which is you want to find places where, you know, you spike.

44:03And, you know, for me, I think one of the things that I've found most impactful for founders is being able to fundamentally just help them and give them kind of strategic introductions or relationships that they would not otherwise have. And, you know, I think giving founders advice is really helpful and giving them information is really helpful. But, you know, one of the most helpful things you can do is open a door for a founder that he wouldn't have business otherwise having gone through. And so, you know, for me, I very much enjoy that, whether that's, you know, playing a role in companies, you know, building out their relationships in government or their strategy in government, whether that's, you know, making company introductions, whether that's trying to help unlock, you know, new opportunities or new markets or new strategic initiatives.

44:53For the most part, I think, you know, as a venture investor, you want to find areas where you can be more helpful outside of capital, which is a commodity. And, you know, being able to leverage your relationships to kind of help your company scale and being able to be very good at that and have a vast network, I think is something that's, you know, strategic tool as an investor, especially when you're trying to help differentiate your capital. To this a little bit earlier, but Trey Stevens has been a mentor of yours. What have you learned from him and how has it impacted your investing strategy?

45:23I've been very, very fortunate to have Trey as a mentor in my life. And you're pretty open about that. Some people, for some strange reason, get competitive things with their mentors or they don't talk about that. I'm very open with all these people that I would not be where I am if it wasn't for them. So I find that kind of interesting how some people struggle with that. Like, um, so I, I, uh, I, I don't take all the credit for things that have, you know, worked out so far in my, in my career, in my life. Um, but, uh, you know, I think Trey's been incredible because, you know, look, he's, he's obviously open to, uh, once again, I mentioned earlier, like being able to invest in and role, you know, early in your career, it really set, set things up, uh, um, and, you know, or, and was just an incredible opportunity.

46:04And, and, um, but the thing that's interesting is like Trey also has been an incredible source of real wisdom for me because, you know, I'm, I've always been, uh, you know, younger, more optimistic, more energetic, and Trey is default skeptical and pessimistic of many things. I think it's been really great to have a sounding board and kind of have wisdom from someone that's, you know, experienced a lot and, uh, has pioneered a lot, um, uh, in our industry. And, uh, also, you know, we'll, we'll default always bring a different view, which I think has just been super helpful to have as you're kind of growing up in your career.

46:37Um, so yeah. Also incredible writing. Has he inspired you to write? Cause I know you write as well. Yeah. Um, I think, you know, yeah, Trey's an incredible writer. Um, he writes on topics other people don't really write about or think about, which I think really stands out. Um, you know, his piece like choose good quest was incredible. Um, and, uh, for me, like the writing thing I think has been, um, you know, personally, like I just memorialize what I've been thinking about a lot better when I actually am forced to write it and tweak it and, uh, and put it out. And so I've generally just have enjoyed that perspective, which is like, it's a way for me to moralize that that's really top of mind.

47:13Um, I wish I had more time to write more. There's like a couple of topics that, uh, I really want to like dive into. I mean, the, the, the two that have really been, been like irking me that I really want to spend time on. Um, one is the impact of government on the tech ecosystem. And I think it's very underappreciated, like how important government has actually been to unlocking and shifting and guiding the tech industry. An example, so we talked about the companies staying private longer. In 2012, the Jobs Act was passed, and the Jobs Act actually changed the shareholder count from 500 shareholders to 2 ,000 shareholders before you're forced to go public.

47:53Technically, 2 ,000 shareholders and 10 million in assets, but for a venture startup, it's really the shareholder count that matters. And that was also another further supporter of Accelerant to like why companies could stay private longer. Like the whole purpose of that policy was to encourage more capital to flood the mid-market businesses, right? It was literally built to keep more capital growing the private markets and, you know, kind of foster that ecosystem. Underappreciated, but like Dodd-Frank posted GFC. The Durbin Amendment literally was like probably one of the core pieces of legislation that created the fintech industry, right?

48:24Like you actually had interchange-based business models that could compete and enter the market. Not really appreciated or talked about as much. I think that our industry, another one that's very esoteric, but like Title 10, U.S. Code 23777, which encouraged people to go look this up. But also a piece of legislation that was litigated by Palantir that is like directly a triple-order and roll existing, which basically forced the government to have to act on the fact that they have to look at a cheaper and better commercial alternative in the market if there is one versus just basically not bidding out contracts, right?

49:05Once they have a prime in there. So like open the floodgates for competition, basically. I'm generalizing. There's like massive industries or massive businesses that are literally the direct result of like major policy decisions. SpaceX benefited a ton from the fact that the government just basically shut down NASA and Russia also invaded Crimea at the time. Excuse me, not Crimea, Russia invaded Georgia at the time. And so it's like, where else was the US government going to go in order to launch things um and so basically i kind of want to write a piece about just historically how and you can go back further and further and further but like how the u.s government has played a role i mean all the way back to the railroad industry or the telegram industry but like you can go back to basically and seeing how government has played a massive role in unlocking private industry and and specifically technology and so i think uh it is not as appreciated that like the winds of capital tend to shift based on decisions made in D.C.

49:57in bigger ways than we appreciate. The other piece I really want to write is actually going to involve a ton of research, but I'm kind of obsessed with this dynamic where there's basically like two economies. This is kind of what I want to talk about. And in two facets. One, there's like two economies that's like the percentage of GDP that's driven by directly and indirectly by the public sector. It's like government spending. How much of our economy is actually attributable to government spending and directly and indirectly? So like directly, there's, there's numbers, like it's probably much larger.

50:30The other piece is like on the two economies is like, there's an economy for, you know, call it the 1 % and there's economy for the 99%. And like, they're very disconnected. And our overall economy, like GDP, how much of that is driven by one or the other? And like, how do they interplay and work with each other? And so that's been another thing that's like been interesting to, for me personally, like I want to go a lot deeper in and read. if anyone has any papers on either of these I actually have a chart I will send you because it has to do with high net worth spending and how most of consumers spend like almost 50 % of it is driven by I forget the exact percentage but it's like the top 10 % of earners or something like that and then you can see by category which it is there's a ton of data points that are really interesting on this but like I actually want to do a deeper dive you should do it, you should write these just carve out some time Yeah, it's easy to carve out time, 100%, especially in this environment.

51:27Every company is fundraising every single day, it feels like. Well, I support it. You should do it. Get a little research team going. That's true. I mean, you know, ChatGPT5 is coming soon. I've heard great things about deep research. Yeah, exactly. So maybe I just need to pay more. You might be closer than you think. I might be too cheap. I probably should be paying OpenAI. You actually might just be able to prompt this and have it spit out. Yeah, sure. I probably should pay$200 a month and solve this. if Kevin Whale is listening, he'll probably, he'll probably tell me that that's all I need to do.

51:55So maybe I'm just not using the tools in front of me. No, you should. I'll help you. Okay. So just driving off of that a little bit, I want to get into your spicy takes. You have like a couple like really awesome spicy takes. One of them is on return to office. Can we start off with that one? Can you explain more on your spicy take for return to office? Yeah. All right. So let me caveat and then I'll probably have like Delian and Keith tell me how wrong I am, which is fine. You can't be a contrarian if you only agree with your friends. Exactly. I got to find something that I disagree with. So I generally think, like, one, I have a strong view.

52:30Like, I think in-office culture is great. I think certain companies, they need to do it. I think, you know, if you look, if you're an early small startup of, you know, three people just finished YC, it's like that time in person is very, very valuable. if you're a hardware startup like obviously like you need to be in person like uh that's not debatable um what i've seen though has been like basically like return to office has become like a scapegoat yeah for businesses uh through a down cycle to basically blame everything that's going wrong like effectively like if you're a bad business and things are going wrong return office is a scapegoat if you're a good business and you're just growing slower return office is a scapegoat.

53:09And, and then also if you're a, yeah. And so, so like that to me has been somewhat like, okay, like it's just a scapegoat basically. It's like, oh, the business is struggling. It's like, because people aren't in the office. And that to me is like, kind of felt like, okay, a little off. The other piece is like, I think people tend to, you know, not remember that like tech has not been like investment banking finance culture. Like it was always a much more flexible dynamic pre-COVID yes people were in the office a lot more in San Francisco but like I don't think VCs have ever been in their offices but that's a tiny part of that I mean yeah like it was I think there's a bit of like somewhat you know I don't know revisionist history on this of like you know it was this golden age where I was in the office non-stop like not fully typically engineers need to be in dark rooms I mean I think like like people it was definitely a lot more than COVID so I don't want to like caveat but like it was a much more flexible environment right um and the tech industry has always been much more like forward thinking on this stuff like that so I I think, you know, I'm not sure if that's like fully the case.

54:07And then the other piece is like the success rate of RTO. So all these people will talk about like, we're going back to the office. And, you know, we had a company, I won't name who, and I'll skip one of their headquarters. So it's not obvious, but they have headquarters in X city, I won't name, San Francisco and New York. And they did an RTO. And in their RTO in New York, it was like 90 % success rate, which makes sense. people generally uh the office is probably nicer than their apartments uh in new york yeah it's close commute it's blah blah um in san francisco in this other city it was like 50 to 60 percent um and they're trying everything they can to get the remaining and a lot of that remaining are like top top talent so this isn't like you know we're just gonna fire all these people because like we don't want to get rid of these people so it's like what do you do um and i think a lot of companies are in this mode where it's like it's good but like realistically they're not like 100 percent back and the only point i'm making is like i think there's nothing wrong with having that like i think it's like i said i'm very positive on office culture um but uh i think the reality is is like everyone de facto is just becoming a hybrid company so like we're just you know not saying it because it's like a dirty word but like everyone de facto is becoming a hybrid company in certain industries so like once again this is just like certain types of industries and i think that's fine um so i guess what really irked me is like rto became like a scapegoat basically um and uh and i don't think that was like fully honest um in regards kind of what we're seeing but so yeah i guess my contrarian take is that like uh you know work from home is not the bastion of all evil um for certain kind of companies um because de facto everyone is hybrid right now no one is 100 uh back in the office so especially also if you're like a high contributor like if you're high quality yeah exactly and i mean this is like a debate it's like you know You can find a hundred different examples that are completely different.

55:58Like there's no flavor fits all, which is actually my point, which is like, yeah, you're right. Like some people got rid of all their high contributors because they didn't want to go back. Or some people made exceptions for them. Like every company is different. That's what makes a company so hard to build. No, totally. It does. And but I think the answer is like, yeah, like I think flexibility gives optionality. and now companies have a bunch of flavor of options they can do based on their various needs and where the company operates, what type of product they're building, the talent pool they need to access.

56:31For example, there's operating expense optimizations you can make based on this decision. Do I hire a bunch of teams that are cheaper labor in certain states or other countries? Do I not? You just have a menu of options now. And I think that's a good thing. um so i guess i mainly just got irked at like the scapegoat of our uh of like work from home um and then rto was like the sort of panacea but um so i don't think i'm not making a view that like you know office culture is bad like i'm very pro it um and i think all the arguments for it are true it's just also like all the arguments for working home are like also true so like the answer is like the answer is everything is everything the answer is your opinion everything is everything okay so there's two other spicy takes that we have um one is san francisco yeah so is san francisco back or is it dead where are we at i mean i guess a derivative of the earlier point like you know during covid san francisco was dead and then it become detroit um which was like obviously not fully true um for all of its problems and you know then post covid san francisco is back and it's the greatest city on earth and you have to move here your career is over just like you know in the 2010s it's like also not true um so i think the answer is like san francisco will always have the largest density of talent uh it's clearly like the ai hub um uh which is you know very big opportunity um but it's no longer the only center of gravity right we talked about earlier like the growth of the southern california ecosystem like if you're building aerospace and defense companies like or manufacturer companies you should be down in southern california um if there's a ton of great startups in new york um there are literally like founders of some of the largest startups in our ecosystem that are down in miami that are down in austin like the ecosystem just got a lot more distributed and like i think that's a great thing so it's like this over extrapolation of like you know sfc there's zero or a hundred and it's like oh like it's always important and the ecosystem grew and now other cities are also important and like that's fine so i i you know for us it's like our largest positions are you know across all these cities um uh san francisco uh um new york new york and la yeah yeah so i mean like you know spacex and android are down uh down in southern california um and uh and you know we we sf for us is extremely valuable and still the hub.

58:57But, you know, it's obviously in today's universe, there's companies being built everywhere. And some of the top companies in our ecosystem are all very spread out. They're not all concentrated in one city per se. The other spicy take is also contrarian to Delian. I know for sure. So you're actually bullish on Europe. Can you explain this? Yeah, I guess all my takes are directly attacking that. You're spending too much time with Delian. Yeah, I just realized that. I can't wait to get fired on on Twitter. I am. Am I contringing on Bullshit Europe? Once again, on all these arguments, on all these points we're talking about, every argument that people would make on the other side, I agree with.

59:37I fully agree with all Europe's problems. I was born there. I'm half European. So there's a bit of some naive optimism here. That's totally fine. But the reality is there are two things that are interesting to me about Europe. One is for how difficult it is to build a company there because the capital markets are not so mature. When you build a winner, you don't have what you have in the US, which is like once there's a large, massive winner and outcome in the US, there's like 20 startups that get funded to go compete, right? And in Europe, it's not like that. The capital markets aren't mature.

1:00:08So you have, you know, we have a revolute type outcome. There's just not, you know, eight other revolutes in, you know, Romania, the revolute of Romania, the revolute of Spain, the revolute of France. They all get a ton of venture funding. They all try to each share. It just doesn't happen. just because of the lack of a mature capital markets there. So the winners there become really, really, they just accrue a ton of value and become real compounders. And so I think that makes Europe interesting, which is like any of the growth companies that break through are probably worth really leaning in on.

1:00:39And so I've been very, very, like, just very fascinated, spending a lot more time there as an investor. I'm sympathetic to all its problems. And then the other piece is, there's a real trend there in the defense ecosystem. Really? Yeah. So what's underappreciated is actually one of the reasons why I was out there before. One of the reasons that I'll give like what's sort of talked about a lot now in public, but maybe what's less appreciated. So what's talked about a lot is that there is obviously the administration is putting a lot of pressure on NATO countries in Europe to up their spending and reach their commitments.

1:01:12Most of them don't hit 2 % of GDP. Some countries, you know, and then after really more recently with the administration making that very clear that they're not just going to support Europe blindly and they're going to push for peace in Ukraine and that they need to take more responsibility for deterring Russia because the US can't and won't do it by itself, that's led to a real wake-up call. And in Europe, now folks are gearing up to pump a ton of more money into their defense industrial base. Some are even trying to talk about surpassing 2 % of GDP. And that's going to be tens of billions of dollars of spend that's going back in the defense sector there.

1:01:49The other thing that's not appreciated is most NATO countries, the majority of their spend is on US products. So it actually gets funneled back into the US industry. For some countries, like 80 % of their percentage of defense spend on GDP, 80 % of that spend goes back to US companies' primes. For some of the more mature companies, like 50%. But even then, it's a lot. A percentage of that is also going to shift to buying European, not buying American. So you get this like increase in spend that's going to flow. And then a larger percentage of that spend is going to just flow just to the European defense ecosystem.

1:02:23So it's a huge opportunity and a difficult opportunity because Europe has very different dynamics than the US, a lot similar to. So I won't say where I think the value actually is, but I have some ideas and I've been spending time there. And yeah, I think that's contrarian take is basically I think Europe is going to have some pretty large opportunities and outcomes. And the lack of capital markets there makes it difficult. But if you cross the chasm, there'll be big wins. I guess this leads like perfectly in to what I wanted to ask next on the future of 137 Ventures and for you in Ventures. So like, what does that look like in the next five to 10 years?

1:03:10Yeah. You know, I think for us, we're seeing a lot of pull into a lot of different opportunities. and across stages and strategies. And I think something really exciting. When we get pulled into things, we want to find areas where we think we have a competitive advantage and where we think there's less competition. And that still fit our investment thesis, right? Which is, you know, we want to build concentrated positions in generational businesses and do them in ways where we think we have information or access asymmetry or some competitive advantage. Fundamentally, we run a business with and our investors, our partners in that, you know, are big drivers in these decisions that we make.

1:03:52And so, you know, if we see an opportunity that they're supportive of, then we want to go after it. So I think, you know, what that looks like, you know, I think fundamentally it's going to be, you know, things that allow us to, you know, do what I was talking about earlier, right? where we can be longer term partners to these businesses, invest in different avenues across the life cycle of that business, and maybe even find creative ways to continue to support kind of investing in the ecosystem. If you had to sum up your philosophy as an investor, what would it be? You know, I'll start with like a broader point and then, you know, hit on my like investment philosophy.

1:04:34So broader point is, you know, one of the things that I don't think people think a lot about is how we talk a lot about the power law in venture, but the power law exists across the entire investment universe. There's a study by an ASU professor that looked at all publicly listed stocks over the last century. And it turns out that like four to five percent of those public listed stocks, so 45 percent of the companies, drove more than 50 percent of the returns. And 50 percent of those publicly listed companies returned less than treasuries. So basically it turns out that like in the investment universe, publicly in public equities, half of the companies barely performed against treasuries.

1:05:22And then like a tiny handful of companies drove, you know, the majority of the returns. So the power law exists in all the investment universe, in all equities, right? Public and private. And so with that, you know, the thing that for me, what's really driven my investment philosophy is that markets tend to over extrapolate the good and the bad. when they do, they make mistakes and there's dislocations. And when there's dislocations in the market, there's opportunity. And when there's opportunity, the best thing you can do is concentrate and double and triple down that opportunity. And so when there's a dislocation in the market, you make money.

1:06:01When you concentrate on that opportunity, you make a lot of money. And so for me, it's basically there's very few companies that matter. There's very few things that matter. Markets tend to make mistakes. And if you ever can find a dislocation in the market, you should plow as much money as possible into it. Great. Wow. That's a pretty dense philosophy. That's good. Just to close out, two more questions. One, what were your favorite moments of the last year? I think one of them is actually our founder summit that we do. you know we as a firm will host a bunch of our founders every single year we rent a resort out we actually host our LPs and then overlap so they get time with their founders then we have our founders founders bring their their their spouses they bring their kids it's it's very much like a just a retreat and just kind of you know get time away and build relationships with your peer group and they bring their spouses and their kids and it's really like a retreat and a vacation and And we have all of our top positions, all of our investments, all the founders come.

1:07:14And it's a really incredible time. One, because it's just, you know, it's pretty beautiful. But two, it's you really see like the power of relationships. And, you know, I think one of the things in our industry, even at growth, like founders and the talent matter and like relationships matter. And like, no matter where you go down the stage of investing, I think that like never gets lost, which is people just like doing business with people they like. Relationships really matter. And being able to create an ecosystem of, you know, relationships between all our founders is just really awesome. And so I look forward to that because, you know, there is a bit of like, what we do in venture is incredible from a relationship perspective and a lot of people become some of your close relationships and your friends.

1:08:00And so being able to kind of have those lines blurred at times is great. Um, and then another thing, um, for me, uh, personally, great memory from the year. Um, I got to do a road trip, uh, and a road trip all around the Alps, the Swiss Alps, the Italian Alps. It's pretty cool. Oh my gosh. That was pretty cool. Any trains? Uh, no trains, just rented a car and drove. And, uh, the highlight was, um, which I recommend anyone to do um well actually no i don't know if this experience will happen but you should still try it maybe well uh literally this is this is end of may june uh drove from zurich all the way through and then uh hit switzerland in switzerland it was snowing in the mountains so this was like full snowstorm like end of may june uh which is crazy and then you kept driving and you went down the mountains more and you ended up crossing the border into italy and it was full-on sunny like spring weather it was like craziest 24 hours i've ever had never experienced that uh that was pretty cool wow just like one of the most beautiful drives um that uh i've ever done and i highly i tell people all the time like rent a car and just go drive around and explore like it's it's unbelievable so i've done that in italy before with a group of friends it's the best experience it's good memories oh my god you get to drive with some crazy people around you yeah yeah yeah Yeah, it's great.

1:09:27It's great. So that's definitely up there. That's great. Okay, so just to close out, what are you most looking forward to this year? One, I'm really excited to continue to partner with some of these generational businesses that we've had the good fortune of being partners with. And as they stay private longer, we can continue to invest more and more and more and be along that journey. So I'm excited for that. I'm excited to, you know, these next set of companies that hopefully we get the chance to invest in and harder with. And so, you know, sometimes like I love, I love what I do and I love being able to help founders go after big dreams and big goals and, and see the impact that these businesses had and play a small role in that in any way I can.

1:10:09I'm excited for the Hill and Valley this year. You know, we have the next one coming up in April. And I think this one is, you know, just continuing that momentum and just seeing like the level of excitement for folks to, have connectivity within government and be a part of being a bridge to that, I think is really exciting. And the last is, you know, there's a lot of volatility in the world right now. There's a realignment going on. There's a ton of shifts. And I think those are always great opportunities, as I mentioned, because when there's volatility, there's dislocations and there's opportunities.

1:10:43And so I'm really excited this year to find an opportunity as an investor that I think is underlooked and maybe slightly contrarian, which is getting harder in venture. It's becoming a lot more consensus in our industry. So when you find the opportunity that people aren't looking at or fully seeing or appreciating, it's really exciting. So I'm hoping for one of those this year. Amazing. Well, I'm really excited for you. Awesome. This was an awesome conversation. We covered a lot. Christian, it was a pleasure. Thank you so much. Thank you.