Notes on Brian Singerman
“Not only are we sector agnostic, we’re stage agnostic. We invest in a company once we see it can be one of the most important companies on the planet.”
“I want to be involved with the world’s most important companies. Just find and invest in the world’s most important companies and the returns will follow.”
“…I really want to be doing something more interesting than this.” And I met up with the Founders Fund guys. They hadn’t made the investment, but were considering this crazy investment in something called SpaceX, and I was like, “Oh I want to be part of stuff like this.” And so I came on board, specifically, because SpaceX didn’t need a $50k check, SpaceX needed a real check. And I wanted to be part of that. That to me was an example of a world changing company. That is one of the most important companies on the planet. I came on board because I wanted to do stuff like that.”
- Stemcentrx: Invest $300 million on Stemcentrx. AbbVie acquired Stemcentrx for up to $10.2 billion. Founders Fund owned about 16%.
Thesis: Sector agnostic and stage agnostic
”..We have a ruthless focus on finding the most important companies on the planet. The reason we have a large fund is so we can write big checks. Not only are we sector agnostic, we’re stage agnostic. We invest in a company once we see it can be one of the most important companies on the planet. We came into Airbnb at the $2.5 billion round. Not the $5 m round. But when we do see that what differentiates us is we go big.”
“[Sean Parker] is a phenomenal pro-active venture capitalist. I am not a proactive venture capitalist. I am a reactive venture capitalist. I think I’m an excellent reactive venture capitalist. And I think in order to be truly, truly, truly sector agnostic, you have to be reactive.”
Conviction = Invest a lot
“There are very few VCs out there with that ability to identify and go large in what will be great companies.”
“We are looking for anything that can be the most important company on the planet. Maybe something in the early days doesn’t look like it, maybe it looks like it later.”
“The key to the strategy once we have conviction we are willing to invest a lot. So with Stemcentrx, over the multiple rounds of this company, we invested something like $300 million. It’s not enough to think something is going to be one of the most important companies on the planet you have to back it up. So, to me, venture capital is about having conviction and putting a lot of money behind it.”
We don’t ever think about co-investors
“We’ve made so many investments where we were the only ones in for a long time, like Palantir and Stemcentrx. People ask “Didn’t you want someone to come in and give validation?” What do I need validation from another VC for? No. If there’s another VC firm that really believes in the company, and they can be helpful, great. But I’m not looking for any validation from them.”
Focus on Long-term Value
We evaluate standalone companies to see how they will exist and thrive for the next 10 years. This is where all the value of a company and a fund comes from. Any time you think about exits is time you are not spending on building long-term value, and this can be disastrous for a fund.
FF Investing Process
The FF process is quite different from how most venture capital firms approve new deals — which typically involves majority or super-majority votes by general partners.
- FF has seven investing partners, three of whom are general partners. That latter group is Thiel, Keith Rabois, and Brian Singerman.
- For deals under $1.5 million, any two investment team members can cut a check. This includes general partners, partners, and FF's five principals.
- For deals between $1.5 million and $5 million, it takes one partner plus one general partner.
- For deals between $5 million and $10 million, it's one partner and two general partners.
- For deals over $10 million, two partners and all three general partners must approve.
- The same rules apply whether it is a brand new deal or a follow-on investment for an existing portfolio company.
- General partners must meet with company founders, either in person or virtually, before making their final decisions. That means any startup receiving more than $10 million must have met or at least spoken with Thiel, Rabois, and Singerman
Anonymous founder’s feedback
They led our (largish) seed round. Had a slightly negative experience with one partner, but the median person we worked with beat most firms we talked to in first principles thinking by quite a margin. They were all very bright and had a wide range of knowledge.
They were far less interested in “who else is in” and more interested in your analysis of your business from basic building blocks.
When we were doing due diligence on them, the main “complaint” we heard from people who had raised from them is that it’s hard to read their judgement. They may seem bearish on you then invest last minute or the opposite. Most people had great things to say though.