Anthony Pompliano (@APompliano) on why slugging percentage beats batting average:⁣ ⁣ "Stanley Druckenmiller, it's not how many times you're right or wrong. It's how much you make when you're right."

Michael Bruun of Goldman Sachs on the thing that never shows up on a balance sheet:⁣ ⁣ "Does this company have a good tech stack? Does this company have a homogeneous set of data? Is it a clean dataset?"⁣ ⁣ 25 ERP systems. No data lake. A dataset that's been neglected for years. None of that appears in the financials, but it determines how a company adopts AI, and Goldman bakes the cost of fixing it directly into their return model.⁣ ⁣ It's future-proofing. Fix the plumbing during the ownership period, and a strategic buyer sees a company that's already ready.⁣ ⁣ There's a J-curve. It costs real money upfront. But the alternative is selling a company that looks fine on paper and can't actually use the technology everyone assumes it can.

Ten years ago venture was a reputation business. ⁣ ⁣ Investors built decades-long track records and founders came to them.⁣ ⁣ Today it is a media business. TBPN gets acquired, Harry Stebbings deploys a billion dollars, and distribution matters as much as judgment.⁣ ⁣ The exit side changed too. Ten years ago you had 10 investments, one or two hit, the rest sat quietly, done. Now companies stay private forever and public markets are unforgiving, so big firms are standing up capital markets teams just to decide what to buy, hold, or sell.⁣ ⁣ Lightspeed has one. It didn't exist when Bill Gurley was blogging or Fred Wilson started writing.⁣ ⁣ Marketing, sourcing, exits — all getting institutionalized. The lone investor with a great instinct is turning into a firm with a media team and a trading desk.

Warren Buffett was once asked how he got so rich.⁣ ⁣ His answer: I started early. I'm in my nineties. I just compounded year over year.⁣ ⁣ People wrote that off as false modesty. But run the numbers. It's 25% compounded for eighty years. 10M to 30M to 50M to 100B. He didn't theorize the thought experiment. He lived it.⁣ ⁣ Compounding is the most undefeated idea in finance, and everyone still underprices it, because the hard part was never understanding it. The hard part is discipline. Not trying to be the hero. Letting the simple thing work.

In 2022, an investor drew Bryon Hargis a two-by-two matrix and put his company in the corner he called impossible. Over a hundred rejections followed. Today that company is valued at $13 billion. @hargsb, Co-founder and CEO of @Castelion , just closed a $1 billion Series C co-led by JPMorgan, Carlyle, and Andreessen Horowitz. But the more interesting story is what almost didn't happen. In the winter of 2022, after leaving @SpaceX to build hypersonic weapons, he was selling his 401k to make it through the month while his wife was expecting their second child. Here is how he described the rejection that stuck with him: "There was commercial, defense, software, hardware. He's like, you're on the quadrant of defense hardware, and not even in the middle of the quadrant. You're on the very corner. He's like, that's the realm of impossibility." He still remembers the exact phrase one investor used to describe the category: in the realm of the uninvestable. The market had not mispriced the technology risk. It had mispriced its own model. A decade of software-era venture had optimized for capital-light, fast-iterating businesses, and defense hardware failed every filter in that model: long cycles, heavy capex, a single customer with byzantine procurement. None of that made the category actually unfundable. It just made it invisible to investors running the wrong checklist. The turning point came less than a year later, when Andreessen Horowitz wrote a check. Doors that had been closed for a year opened within days. The technology had not changed. The willingness to underwrite it had. The lesson is not that defense tech is hot now. It is that the biggest returns tend to sit exactly where the standard model says not to look. We’d like to thank @AlphaSenseInc for sponsoring this episode! Full episode below 👇

A venture investor had one deal carrying his entire fund. His partner told him to take some money off the table before his wife killed him. He said no, and kept rolling every dollar of profit back into the company. Scott Voss, who has spent 27 years at HarbourVest, on why the best investors he has met refuse to de-risk their winners. "You gotta take some money off the table. Your wife is gonna kill you." "Look, Scott, this keeps us aligned. It keeps us hungry." Voss watched this play out with a friend who caught a power law outcome early and just kept re-upping through every new investment and continuation vehicle available, moving all his earned economics right back in. Most people would call that reckless. Voss calls it the reason his friend never lost the edge that made him great in the first place. He has seen too many investors take the big monetization event, relax, and quietly stop being dangerous. Getting rich is not the finish line. It is usually where the decline starts.

A venture fund put close to forty percent of its capital into a single company. Before most LPs would even let a GP finish that sentence. @aramverdi , Partner at @AccoladePrtnrs and former investor at Andreessen Horowitz, on why real conviction looks reckless from the outside. "We're totally fine with that level of concentration. We just back the fund." "We didn't push back. We're totally fine with it. We love GPs who have conviction." Diversification is sold as safety, but the math of venture punishes it. If you own five percent of a company that gets diluted down to two and a half by exit, you need ten separate billion dollar outcomes just to return half your fund. Almost nobody has ten of those in a portfolio. What you can have is one runner you actually believed in early, sized at real ownership, held all the way through. That is the entire game. Diversification protects you from being wrong. Concentration is how you get paid for being right.

AI’s next commodity isn’t chips — it’s compute itself. 💻 New episode with @bavaria_kush (22 year old a16z-backed @OrnnExchange CEO) on why GPUs will trade like oil, the coming futures market, and the real bottleneck everyone’s missing.