Evaluation of specialized funds and absolute basis approach

Trae Stephens, General Partner at Founders Fund, joins Erik Torenberg to chat through how the firm's focus on independent thinking and debate culture, and counterintuitive lack of true process, has been key in helping them build an enduring fund. If you’re looking to improve your sourcing, tracking, and due diligence, check out: https://synaptic.com/turpentine

We're hiring across the board at Turpentine and for Erik's personal team on other projects he's incubating. He's hiring a Chief of Staff, EA, Head of Special Projects, Investment Associate, and more. For a list of JDs, check out: eriktorenberg.com.

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SPONSORS:

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RECOMMENDED PODCAST: 

Every week investor and writer of the popular newsletter The Diff, Byrne Hobart, and co-host Erik Torenberg discuss today’s major inflection points in technology, business, and markets – and help listeners build a diversified portfolio of trends and ideas for the future. Subscribe to “The Riff” with Byrne Hobart and Erik Torenberg: https://link.chtbl.com/theriff

RECOMMENDED PODCAST: LIVE PLAYERS

Join host Samo Burja and Erik Torenberg as they analyze the mindsets of today’s most intriguing business leaders, investors, and innovators through the lens of their bold actions and contrarian worldviews. You’ll come away with a deeper understanding of the development of technology, business, political power, culture and more. LIsten and subscribe everywhere you get your podcasts: https://link.chtbl.com/liveplayers.

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RELATED SHOWS:

If you like Turpentine VC, check out our show The Limited Partner with David Weisburd, where David talks to the investors behind the investors: https://link.chtbl.com/thelimitedpartner

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X / TWITTER:

@traestephens (Trae)

@eriktorenberg (Erik)

@foundersfund

@TurpentineVC

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TIMESTAMPS:

(00:00) Episode preview

(01:24) Debate culture and why that's key to Founders Fund's success

(03:59) How Founders Fund's pitch is different from a16z's

(06:56) FF’s unique market position

(09:09) How FF recruits their partners

(13:10) Sponsor: Synaptic

(14:16) The deal-making process, or lack thereof

(16:14) Governance at Founders Fund

(19:27) Comparing the YC approach 

(21:41) How they measure success against other funds

(22:50) Trae's journey at Founders Fund

(24:54) On incubating Anduril

(28:04) Why having no process forces partners to be higher conviction

(30:15) Core debates at Founders Fund

(32:24) The key to Founders Fund's current approach

(34:22) Trae's request for startups in gov tech

(36:03) Erik's On Deck question

(37:58) What does the future look like for Founders Fund?

(39:47) What gets misunderstood about the firm

(44:06) On Mike Solana

(47:01) The three eras of Founders Fund summarized

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This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.