Capital Allocators – Inside the Institutional Investment Industry Chamath Palihapitiya – The Social Capital Flywheel (Capital Allocators, EP.167)
Dec 7, 2020
Chamath Palihapitiya, founder and CEO of Social Capital and early Facebook employee, shares his transformative journey from Sri Lanka to venture capital. He discusses his mission to compound capital for societal benefit, emphasizing the importance of supporting diverse emerging managers. Chamath delves into the implications of low interest rates, creative investment strategies in climate change and healthcare, and lessons from childhood that shape his decision-making, all while reflecting on past mistakes that sparked personal growth.
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Chamath's Journey
- Chamath Palihapitiya's family moved from Sri Lanka to Canada due to civil war and his father's struggles.
- He worked in finance, tech, and venture capital, including Facebook, before founding Social Capital.
Institutionalization of Investing
- Chamath left Mayfield because he observed how institutionalization prioritized fees over risky investments.
- He realized venture capital, like other investment sectors, prioritizes minimizing risk to maintain predictable revenue.
Peter Thiel's Advice
- Peter Thiel advised Chamath to invest 60% of his own money in his first fund, leading to favorable terms.
- This allowed Chamath to prioritize carry over fees, resulting in significant returns.
