Philosophy of Investment: Beyond Competition

In this episode of Turpentine VC, we revisit one of our most referenced interviews with Trae Stephens, General Partner at Founders Fund and co-founder of Anduril.

Trae discusses the unique DNA of Founders Fund, emphasizing the firm's culture of open debate and high conviction in investments. He highlights the importance of concentrated portfolios, and how Founders Fund's no-process approach differentiates them from other VC firms. They also discuss Founders Fund decision-making, governance, and incubation practices.

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LINKS:

Founders Fund: https://foundersfund.com/

Anduril Industries: https://www.anduril.com/ 

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FOLLOW ON X:

@eriktorenberg (Erik)

@traestephens (Trae)

@turpentinemedia (Turpentine)

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TIMESTAMPS:

(00:00) Intro

(00:49) Debate culture and why that's key to Founders Funds success

(03:39) How Founders Fund's pitch is different from a16z's

(06:34) FF's unique market position

(08:51) How FF recruits their partners

(12:48) Sponsors: WorkOS and NetSuite

(14:31) The deal-making process, or lack thereof

(16:42) Governance at Founders Fund

(19:55) Comparing the YC approach

(22:09) How they measure success against other funds

(23:18) Trae's journey at Founders Fund

(25:21) Sponsor: Squad

(26:31) On incubating Anduril

(29:03) Why having no process forces partners to be higher conviction

(31:50) Core debates at Founders Fund

(33:58) The key to Founders Fund's current approach

(35:56) Trae's request for startups in gov tech

(37:12) The importance of team and talent

(39:33) What does the future look like for Founders Fund?

(41:22) What gets misunderstood about the firm

(45:42) On Mike Solana

(48:36) The three eras of Founders Fund summarized

(52:09) Wrap