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20VC: Why VCs Should Care More About Cost of Capital and Less About Ownership, Investing Lessons from working with Peter Thiel at Founders Fund, Why Liquidity Aligns Incentives Between Founders and Investors & Why It Is The Last Double That Matters in Ven

Feb 4, 2021

Justin Fishner-Wolfson, founder of 137 Ventures, shares insightful lessons from his time at Founders Fund, emphasizing that liquidity is key for aligning interests between VCs and founders. He discusses why traditional perceptions of ownership in venture capital are outdated and how focusing on the 'last double' matters more for returns. Justin also explores decision-making parallels between poker and investing, and stresses the importance of strategic portfolio diversification to navigate the evolving tech landscape.

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ANECDOTE

Justin's Career Path

Justin Fishner-Wolfson attended Stanford at 15 and worked at the State Department.
He joined Founders Fund before it became institutional, eventually leading SpaceX and Spotify investments.

ADVICE

Investing Principles from Peter Thiel

Focus on investing in great people tackling big opportunities.
Prioritize businesses with long-term sustainable advantages like network effects or economies of scale.

INSIGHT

The Last Double

The last double in investment value is the most crucial for venture returns.
Focus on where growth transitions from exponential to linear.

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Justin Fishner-Wolfson is founder and the managing partner of 137 Ventures, a growth-stage venture firm that provides customized liquidity solutions to founders, investors, and early employees of high-growth private technology companies. Their portfolio includes the likes of SpaceX, Wish, Anduril, Flexport, and Rigup to name a few. Previously, Justin worked on the investment team at Founders Fund and before that served in the US Department of State under Alan Larson, Undersecretary for Economic, Business and Agricultural Affairs.

In Today’s Episode You Will Learn:

1.) How Justin made his way into the world of venture with Founders Fund and how that led to his founding 137 Ventures? What specific lessons did he learn from Peter Thiel that he has applied to his investing mindset?

2.) What does Justin mean when he says, "it is the last double that matters"? Why does Justin believe that liquidity aligns incentives between VCs and founders? When is the right timing for this liquidity and are there limits to the sizes of secondaries founders and teams should take?

3.) How does Justin think about his own price sensitivity today? Why does Justin believe that the conventional VC views on ownership are outdated and no longer as relevant to this class of company? How does Justin think about diversification among the portfolio today? What is the right level? What is too diversified? What is too concentrated?

4.) Why does Justin believe that standard thoughts around CAC/LTV are wrong? How have they changed over time? How should founders think about this and present these metrics to investors? Given these metrics, how does Justin feel about the revenue multiples we are seeing today both in private and public markets?

Item’s Mentioned In Today’s Episode

Justin’s Favourite Book: The Hitchhiker's Guide to the Galaxy

Justin’s Most Recent Investment: Lattice

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