Gestire 11 MILIARDI 📈 Founders Fund, il fondo di Peter Thiel

Summary

In this insightful interview, Mathias Vantinen, partner at Funders Fund, shares his journey from Argentina to Silicon Valley, detailing his experiences with startups and venture capital. Highlighting Funders Fund's unique approach to investing, Vantinen emphasizes the importance of founder support and unconventional strategies that have led to successful investments in companies like Stripe, Figma, and Trade Republic. The conversation delves into the firm's philosophy, the European startup ecosystem, and the future of AI, offering valuable insights for aspiring entrepreneurs.

Takeaways

• 🚀 Founders Fund is a prestigious venture capital firm with $11 billion in assets under management, known for investing in successful startups like SpaceX, Airbnb, and OpenAI.
• 📚 The firm was founded by Peter Thiel, a billionaire, author of 'From Zero to One', and the first investor in Facebook, who also founded Palantir.
• 🌟 Mathias Vantinen, a partner at Founders Fund, has played a significant role in investing in startups such as Stripe, Figma, Scale.ai, and Trade Republic.
• 🌱 Mathias began his career at Insight, a venture capital firm in New York City, before joining a startup in Barcelona and later working at Alphabet's Google Capital.
• 🔍 The startup world has evolved since 2012, with venture capital transitioning from a cottage industry to a more established sector, popularized by movies like 'The Social Network'.
• 🤝 Mathias emphasizes the importance of building relationships with entrepreneurs and assessing businesses to identify opportunities for significant growth.
• 💡 Founders Fund's core philosophy includes backing founders all the way and never replacing them with professional management unless the company fails to progress.
• 🛡 The fund values unconventional thinking, high integrity, a strong work ethic, 'skin in the game', and low ego, fostering a team culture focused on collective success.
• 🌐 Mathias sees a significant opportunity in international investments, particularly in Europe, where the market for services like Trade Republic is vast and underserved.
• 📈 Despite the cyclical nature of retail brokerage, Trade Republic's growth during the pandemic demonstrated the company's ability to capitalize on market tailwinds.
• ⚖️ Founders Fund is selective with its investments in AI, having made strategic bets on companies like Palantir, DeepMind, OpenAI, and ScaleAI, focusing on long-term potential rather than short-term trends.

Q & A

What is Funders Fund and what makes it prestigious in the venture capital world?

Funders Fund is a venture capital firm based in San Francisco with 11 billion in assets under management. It is renowned for investing in successful startups such as SpaceX, Airbnb, OpenAI, and Asana. Founded by Peter Thiel, it is known for its unique approach of supporting founders and not replacing them with professional management teams.

Who is Mathias Vantinen and what is his role at Funders Fund?

Mathias Vantinen is a partner at Funders Fund. He has played a significant role in investing in startups like Stripe, Figma, Scale.ai, and Trade Republic. His background includes working at Insight, a venture capital firm in New York City, and Alphabet, Google Capital, before joining Funders Fund.

What is the significance of Mathias Vantinen's first job at Insight for his career in venture capital?

Mathias Vantinen's first job at Insight exposed him to the startup world and taught him essential skills such as how to communicate with entrepreneurs, identify key questions, assess businesses, and build relationships, which laid the foundation for his career in venture capital.

How did the startup world differ in 2012 compared to today?

In 2012, the startup world was much newer and less established compared to today. It was perceived as unconventional to choose a startup like Insight over traditional finance giants like Goldman Sachs. However, the popularity of Facebook, Twitter, and movies like The Social Network was starting to shift perceptions.

Why did Mathias decide to join a startup he was following with Insight, Wallapop?

Mathias joined Wallapop because he was passionate about the opportunity in the secondhand marketplace and wanted to experience what it was like to be on the other side of the table, working with the management team to scale a product and achieve international expansion.

What is unique about Funders Fund's approach to investing compared to other venture capital firms?

Funders Fund is unique in its commitment to backing founders all the way, its lean team structure, and its unconventional approach to investing. The firm avoids internal competition and focuses on collective success, with partners investing personally in the companies they believe in.

What does 'skin in the game' mean in the context of Funders Fund?

'Skin in the game' refers to the personal investment made by Funders Fund partners into the companies they support. This aligns the risks of the partners with those of the clients and demonstrates their commitment to achieving excellent returns for the fund.

How does Funders Fund's investment approach differ from the traditional venture capital 'spray and pray' method?

Instead of investing in a large number of startups with the hope that a few will succeed, Funders Fund focuses on making concentrated investments in companies they strongly believe in. They are not concerned with the number of deals but rather the quality and conviction in their investments.

What qualities does Funders Fund look for in startup founders?

Funders Fund looks for founders who are ambitious, determined, relentless, charismatic, and have high integrity. They value founders with a competitive streak, a strong vision, and the ability to think from first principles to solve problems innovatively.

How did the COVID-19 pandemic impact Trade Republic, a company Funders Fund invested in?

The COVID-19 pandemic turned out to be a tailwind for Trade Republic as more people were at home and trading became more active. The company's user base grew from 60,000 to over a million within a year, making it one of Funders Fund's most successful investments.

What advice does Mathias Vantinen give to young entrepreneurs who aspire to create a big company?

Mathias advises young entrepreneurs to work at the best startup they can find to gain experience working with top talent. This experience is more valuable than starting a company without understanding what excellence looks like in a startup environment.

Outlines

00:00

🌟 Introduction to Funders Fund and Mathias Vantinen

The script introduces Funders Fund, a prestigious venture capital firm with significant assets under management, known for investing in successful startups such as SpaceX and Airbnb. It highlights the firm's founder, Peter Thiel, and touches on the role of Mathias Vantinen, a partner at Funders Fund, who has been instrumental in investing in companies like Stripe and Figma. The narrator expresses gratitude to Trade Republic for indirectly sponsoring the video and facilitating the connection with Funders Fund. The background and experience of Mathias Vantinen are explored, from his early career at Insight to his work at Alphabet and eventual role at Funders Fund, emphasizing his hands-on approach and the importance of understanding the startup world from the ground up.

05:00

🚀 Mathias Vantinen's Venture Capital Journey and Investment Philosophy

This paragraph delves into Mathias Vantinen's first-hand experience in venture capital, starting at a young age with Insight, where he was tasked with identifying and engaging with promising entrepreneurs. It discusses the evolution of the startup world from 2012 to the present, highlighting the shift in perception from traditional finance to startup culture. The narrative also covers Mathias's decision to join a startup, Wallapop, and the valuable insights he gained from that experience. His subsequent move to Alphabet's venture capital division and eventual transition to Funders Fund is outlined, emphasizing the importance of long-term investment focus and the unique culture of collaboration and collective success at Funders Fund.

10:03

💼 Funders Fund's Unique Approach to Investing and Company Culture

The script outlines the founding principles of Funders Fund, which include a commitment to backing founders and a refusal to replace them with professional management unless absolutely necessary. It describes the firm's lean team structure, with a small number of highly skilled individuals, contrasting it with traditional funds that often have large, less experienced teams. The core values of the firm are highlighted, such as unconventional thinking, integrity, work ethic, and low ego, which contribute to a collaborative environment. The paragraph also discusses the firm's investment strategy, which focuses on long-term relationships and deep understanding of companies rather than short-term gains.

15:05

🤝 The Selective and Concentrated Investment Strategy of Funders Fund

This section of the script focuses on the investment strategies employed by Funders Fund, emphasizing the firm's selectivity and concentration of capital in a few chosen startups. It explains that partners at Funders Fund have the autonomy to manage large investments and are trusted to make decisions based on their expertise. The script also discusses the firm's aversion to rules, instead favoring a flexible approach that allows for the breaking of their own guidelines when necessary. The importance of building deep relationships with companies over time and the firm's willingness to invest significant amounts into their most promising ideas is underscored.

20:05

🌐 Funders Fund's Global Perspective and Investment in Trade Republic

The script discusses the global investment approach of Funders Fund, with a particular emphasis on Mathias Vantinen's experience in Europe. It narrates the story of how Funders Fund invested in Trade Republic, a European banking and brokerage platform, highlighting the rapid growth of the company amidst the COVID-19 pandemic. The investment's success is attributed to the founder's vision, the market opportunity, and the firm's ability to identify and capitalize on emerging trends. The paragraph also touches on the cyclical nature of retail brokerage and the importance of a strong team to navigate market fluctuations.

25:09

🏆 The European Startup Ecosystem and Funders Fund's AI Investments

This paragraph explores the differences between the European and U.S. startup ecosystems, noting the challenges faced by European startups due to language and regulatory diversity. It also addresses the cultural differences in work ethic and the perception of building large, successful companies. The script mentions the lack of $100 billion companies in Europe and the potential for the continent to produce such entities in the future. Additionally, it covers Funders Fund's investments in AI, including Palantir, DeepMind, OpenAI, and ScaleAI, emphasizing the firm's foresight in investing in these companies before AI became a widespread trend.

💡 Advice for Aspiring Entrepreneurs and the Importance of Experience

In the final paragraph, Mathias Vantinen offers advice to young entrepreneurs, recommending that they work at the best startup possible to gain valuable experience and understand what it takes to build a successful company. He suggests that this experience is more beneficial than starting a company without first witnessing excellence in action. The script concludes with the narrator's personal reflections on the insights gained from the interview and an invitation for viewers to engage with the content by subscribing to the channel and sharing their thoughts.

Keywords

💡Venture Capital

Venture capital refers to the financing provided by investors to startups with perceived long-term growth potential in exchange for equity or debt. In the video, Funders Fund, a venture capital firm with 11 billion in assets under management, is highlighted for its investments in successful startups like SpaceX and Airbnb, showcasing the role of venture capital in fueling innovation and growth.

💡Peter Thiel

Peter Thiel is a renowned billionaire entrepreneur, author of 'From Zero to One,' and co-founder of PayPal. He is also the founder of Palantir and the first investor in Facebook. In the context of the video, Thiel is the founder of Funders Fund, emphasizing his influence and the firm's commitment to backing founders and their visions.

💡Startup

A startup is a young company that aims to develop, design, and implement new technologies, products, or services, often in a rapid and flexible manner. The video discusses the journey and investment in various startups, such as Trade Republic, and the importance of identifying and supporting the right founders and ideas.

💡Investment Thesis

An investment thesis is a theory or idea about how a particular investment will generate returns. Funders Fund's core thesis, as mentioned in the video, is to support founders and never replace them with professional management, which is a key principle guiding their investment decisions.

💡Asset Under Management (AUM)

Asset under management refers to the total market value of investments that a firm manages on behalf of its clients. The video script mentions Funders Fund's AUM as 11 billion, indicating the scale of the firm's investment capabilities.

💡Founder-Led Growth

Founder-led growth is a concept where the original founders of a company continue to lead and scale the business. The video emphasizes Funders Fund's belief in this approach, stating they will never fire a founder, highlighting the importance of the founder's vision and leadership in a company's success.

💡Due Diligence

Due diligence is the process of investigating and evaluating a potential investment to confirm its value and potential. In the video, Mathias describes the comprehensive underwriting process involved in making large investments, which includes building deep relationships and high conviction on various aspects of a company.

💡IPO

An initial public offering (IPO) is the first sale of stock by a company to the public. The video discusses the potential for Funders Fund to hold shares of a company even after an IPO, indicating a long-term investment perspective and the possibility of continued growth post-IPO.

💡Skin in the Game

Skin in the game is a term used to describe the risk one takes on in a given situation, often referring to having personal investment at stake. The video mentions that Funders Fund partners invest personally in the companies they believe in, aligning their risks with those of the investors.

💡Cultural Fit

Cultural fit refers to how well an individual's values, beliefs, and behaviors align with those of an organization. The video touches on the cultural differences between the U.S. and Europe, particularly regarding work ethic and the potential impact on the success of startups and the creation of billion-dollar companies.

💡Portfolio Company

A portfolio company is a firm in which an investment company has invested and that is part of the investor's portfolio. The video script discusses Funders Fund's portfolio companies, such as Trade Republic, and how they have been positioned to benefit from market conditions post-investment.

💡Unconventional

Unconventional refers to ideas, methods, or solutions that do not follow the usual or traditional norms. In the context of the video, Funders Fund values unconventional thinking among its team members, which contributes to a diverse range of perspectives and strategies in their investment approach.

💡High Integrity

High integrity implies a strong moral and ethical code and being trustworthy. The video mentions Funders Fund's hiring process, which emphasizes finding individuals with high integrity, suggesting that trustworthiness is a key trait for long-term success in the investment world.

💡AI Investments

AI investments refer to capital allocated to companies or technologies involving artificial intelligence. The video notes Funders Fund's strategic investments in AI, such as Palantir, DeepMind, and OpenAI, reflecting their foresight and belief in the transformative potential of AI.

Highlights

Funders Fund is a prestigious venture capital firm with $11 billion in assets under management.

The firm has invested in renowned startups such as SpaceX, Airbnb, OpenAI, and Asana.

Founded by Peter Thiel, author of 'From Zero to One' and first investor in Facebook, Funders Fund is known for its unconventional approach.

Mathias Vantinen, a partner at Funders Fund, has played a key role in investing in successful startups like Stripe, Figma, and Trade Republic.

Trade Republic, a sponsor of the channel, facilitated the connection with Funders Fund for the video.

Mathias Vantinen's background includes working at Insight, a venture capital firm in New York, and Alphabet's Google Capital.

Vantinen's first job involved extensive outreach to entrepreneurs, learning to identify and assess potential investments.

The startup world in 2012 was in a nascent stage compared to its current maturity.

Vantinen's experience includes working for a startup, Wallapop, which he helped scale and eventually merge with NASPERS.

At Alphabet, Vantinen focused on international investing, which led him to Funders Fund for its singular focus on venture capital.

Funders Fund operates on a lean team model, with around 20 investment professionals and no more than 40 total staff.

The firm's values include unconventional thinking, high integrity, and low ego, with a collective focus on returns rather than individual deals.

Funders Fund's investment approach is highly concentrated, often investing significant portions of their fund into a small number of top companies.

The firm's partners have a high degree of autonomy and are trusted with large investments based on their expertise and judgment.

Funders Fund seeks founders with ambition, determination, and a competitive streak, as well as the ability to think from first principles.

The investment in Trade Republic exemplifies Funders Fund's approach, identifying a strong founder and a significant market opportunity.

Despite the challenges of the COVID-19 pandemic, Trade Republic experienced exponential growth, reflecting the firm's ability to identify and capitalize on market trends.

Vantinen discusses the differences between the European and U.S. startup ecosystems, noting the maturity and cohesiveness of the U.S. market.

Funders Fund has been selective in its AI investments, focusing on companies like Palantir, DeepMind, OpenAI, and ScaleAI.

Advice for young entrepreneurs includes gaining experience at successful startups to understand excellence before starting their own ventures.

Transcripts

I've been to Funders Fund in San Francisco, with 11 billion in assets under management,

and one of the most famous and prestigious venture capital firms in the world.

You've invested in SpaceX, Airbnb, OpenAI, Asana, and so many other successful startups.

Funders Fund was founded by the legendary Peter Thiel, billionaire, author of the book

From Zero to One, first investor in Facebook and founder of Palantir. In addition to him,

many of the fund's 12 other partners are not well-known people, acting without publicity

and achieving great results. One of them is Mathias Vantinen, partner of Funders Fund.

He has played a very important role in investing in startups like Stripe, Figma, Scale.ai,

but especially Trade Republic, which I know very well and I have been in their offices.

They are sponsors of my channel and I have to thank them because even though this video is

not directly sponsored, they were the ones who put me in touch with Funders Fund and made

this video possible. Let's get started. Since very little is known about Mathias,

let's start with his background. Mathias, I'm originally from Argentina.

My first job right out of college was working at Insight, which is a venture capital firm

based in New York City. That led me to the world of startups. I actually joined a startup

in Barcelona. So I did that for a while and then came back to the world of investing.

I spent two years at Alphabet, Google Capital, doing it there. And then I decided I wanted to

do it at the best possible place in the industry and all roads led me to Founders Fund and working

with Peter. So Mathias has been working in the startup field since day zero. So I asked what he

had learned from his first work experience. As a 20, 21 year old, you're thrown into the wolves

and you're told here's a phone and a computer, go talk to interesting entrepreneurs and come back

when you have good investment ideas. You're doing 40, 50, 60 calls a week, flying around trying to

find companies that are under the radar that could be very big. And it was across categories,

but mostly focused on software and consumer internet. You learn how to talk to entrepreneurs.

You learn how to find what are the questions that really matter. What are the companies that could

get really big? How do you build a relationship with an entrepreneur? How do you assess the

business? How do you convince them to take your money if you find a really good opportunity?

In all this, you must remember that the startup world in 2012 was completely different.

It was much newer. I mean, obviously the world of venture capital is several decades old.

It was a little bit more of a cottage industry back then. I think in 2012,

it was nowhere close to what it was today. And so when I told my family and friends that I was,

instead of going to Goldman Sachs, I was going to go to this place called Insight. It was perceived

as being a little bit crazy and unconventional. Fast forward 10 years later, more people would

rather go to the Insights of the world than Goldman Sachs of the world. And so it has definitely

shifted. But I think even back then it was recognized that startups were a real thing.

Facebook, Twitter, movies like The Social Network have really popularized the concept of going to

startups instead of the traditional world of finance. And so even though it was nowhere close

to where it is today, there was already enough energy going in that direction. As is often the

case in the venture capital world, Matthias at one point decided to go to work for a startup he was

following with the firm. I joined a company that I invested in when I was at Insight called Wallapop.

We found it when it was still quite young, had something like 20, 30,000 users. I kind of fell

in love with the opportunity of secondhand marketplaces and how large they can get,

given that it is one of the most kind of special areas of the internet,

is helping people transact with each other at kind of a very mass market opportunity.

Among other things, in fact, to date he has invested in a very large startup that is

always in the secondhand merchant, namely Kavak. It's a category that I've always liked,

that's close and dear to my heart. When we led the Series B at Insight in this Barcelona-based

company, got very close to the management team, and I could have continued at Insight making

investments, but I wanted to see what it was like to be on the other side, work with the management

team on really scaling a product, international expansion, and really going for a large outcome.

And so I joined, and it was a really kind of fun, interesting journey. We ended up expanding

into the US, and then this new wave of companies that were capitalizing on the mobile opportunity

came in to really kind of attack. And so in the US, it got very competitive. This is kind of

in around 2015, we ended up merging our company with NASPERS, and we ended up exiting. And so

that's when I decided to go back to investing. After going through this experience, he came

back into the world of investing with a much deeper understanding. Assisting in the growth

and sale of a startup is not a common occurrence in one's daily life. My job back then was just

make sure we raise enough money and then figure out how do you invest this capital in a way that

really moves the needle and maximize the ROI on that capital. And so my job is simply get this

to 10 million users. After that, he went to work at Alphabet, that is Google, in the division that

deals with venture capital, that area of Google that deals with investing in startups. Back in

2016, Alphabet still very much perceived as golden standards in tech. And I think eight years later,

now it's a little bit different, where they're perceived to be more of a mature monopoly that's

no longer as innovative as it was back then. But I spent two years there also doing a lot of

international investing. And through that time, I knew that I wanted to do investing over the long

run, but I wanted to do it at a place where it's the only focus. And when you're doing it at Alphabet,

you're one of many teams doing a bunch of different things. And so it's not really the core business.

And I'd always been a big fan of Peter Thiel. And when I got a chance to spend time with him and the

rest of the team, to me, it was an absolute no-brainer. So I spent basically two years

building relationships with the team here and joined full-time in 2018. Two years? That's an

investment. Yeah, best investment I ever made. So after his experience at Alphabet, where he

specialized even more on the European and international market, he decided to join

Funders Fund, which he was able to join after two years of relationship with the fund team.

So I asked at this point for a little more information about Funders Fund, how it came about

and how it operates. Founders Fund started as a result of Peter's journey with PayPal and the rest

of the PayPal founders. Their experiences running that company with VCs were quite mixed in the

sense of the way traditional venture capitalists used to operate was very much find a good opportunity

once the founders could no longer scale, fire them and bring in a professional management team.

History has shown us that some of the best companies have been scaled by their founders.

And so Founders Fund was really about, let's find founders and back them all the way. And the

core thesis is we will never fire a founder from their company. If a company is no longer working,

we'd rather just move on to the next company. It started as a result of their experiences.

And over the years, it went from being a small quasi-family office for Peter and the PayPal

founders to becoming this multi-stage, quite large investment team, large from a capital standpoint,

but still very, very lean from a team standpoint, where we have a very broad mandate, where we can

invest in any category, any type of company, sector, geo-stage, agnostic, with kind of a very

few fundamental ideas behind the firm. The team you said is very lean. It's like around 20 people,

right? So the investment team, we're about 13 people to include the entire team with operations,

brand, legal, et cetera, no more than 40, which is abnormally lean for our industry.

In short, it is very difficult to find funds that invest so much money, but with such a

small team. Usually, traditional funds hire hundreds of people with front lines that are

always very low level. But in Funders Fund, they are few in number, but extremely skilled.

In addition to the basic philosophy of believing in the founder and not replacing him or her with

a manager as soon as possible, Funders Fund adheres to very specific values.

Unconventional, high integrity, high work ethic, skin in the game, and very low ego. Internally,

we don't have this culture of competing with each other on who gets to do which deal. We have

one collective carry pool and we're all rowing together to figure out how do we make the most

money collectively for ourselves and our investors. It's not necessarily what I've

perceived and experienced in other firms, but it's very much how do we find the handful of

companies that really move the needle. That's the opposite of Wall Street. The ego is the main

source of that. Sharks, wolves trying to maximize their own revenue. In this case,

it's maximize the company revenue. We're very hardcore capitalists, but maybe internally,

we're a little bit more communists in that. Can you explain all the other traits?

Unconventional, you can interpret it in a few different ways. When you look at most other

firms, everybody seems to have a pretty similar background, finance, operational at startups.

When you look at the team at Founders Fund, everyone is really unique. We have a rocket

scientist. We have a defense founder. We have the founder of PayPal. You have a bunch of different

backgrounds, whether it's what they actually did, where they come from, their philosophies. That

creates a culture and a dynamic in which we can run multiple different strategies at once. And

when we meet a founder, they are able to work with Founders Fund collectively. Instead of there being

one partner that's interchangeable with everyone else, they work with the team more broadly.

They can go to different partners within Founders Fund and know that they're going to get a varying

set of perspectives, which I think makes us quite unique relative to the rest of the industry.

So everyone has his own point of view, his own uniqueness. Your view is unique on international

investments, right? And there's another trait you said is skin in the game.

One negative thing about our industry in the last five years is that many funds have tried to get

as large as they possibly can because they make so much money on the fees, which is why you see a

lot of funds deploying as much money as possible, tying bonuses to how much money you can deploy.

And here at Founders Fund, we all write huge checks internally to the fund. And even very

frequently to the companies we invest in, we'll invest personally as well. Peter is by far the

largest LP in the fund. And so we're not just in the asset and fee accumulation game. We want to

have excellent returns for every single fund. Skin in the game is Silicon Valley jargon,

but business jargon in general. And it means putting yourself out there, but more importantly,

that your risks are aligned with the client's risks. A lot of investment funds play the game

of accumulating as much capital and as many fees as possible and not having the best performance.

So they don't give a damn whether the investors in the fund then profit or not. They only care

that the fund is as big as possible because then the fees are a percentage of what they manage.

In Funders Fund, it's not like that. In fact, right on the website, on their manifesto page,

it says that the investments of the partners themselves in the fund are the main part,

the relative majority partner, we can say. And that's why for them,

the most important thing ever is just the returns of the fund.

A lot of time getting to know anybody before we hire them. We don't have cohorts or classes

of analysts the way many other places do. We typically hire one, maybe two people a year.

And usually it's a result of many years of getting to know them. And one of the fundamental

non-negotiable pieces is having high integrity. You look the track record. Is this guy reliable?

Navarro-Kant said that if you want to invest in a long-term game, you should be high integrity

because people are going to remember what you did. It's important to pick an industry where you

can play long-term games and with long-term people. So those people have to signal that

they're going to be around for a long time, that they're ethical and their ethics are

visible through their action. Tell me more about how a deal works.

What's your specific kind of investments? How much does it last? When do you sell?

Every partner does this differently. The process is going to look a lot different

for a $2 million seed investment than it looks for a $300 million pre-IPO investment. I spend

most of my time on the growth side. We're investing out of a $3.5 billion fund. We're

typically those investments are the result of years of getting to know companies really well,

deep relationship building, high conviction on the market, the product, the team, much more

comprehensive type of underwriting. Whereas for a seed or series A investment, it usually comes

down to having a very strong gut feeling on the investment and founder assessment where your

perspective on the moat and some of the other characteristics won't be as fully fleshed out

as it might be for a very large investment. With regards to how long we hold wide variance,

some companies have sold pretty quickly like Oculus, others like SpaceX. We've been investors

in almost the very beginning and would like to continue to hold those for a very long time.

Even if we distribute shares post an IPO, we can personally choose to hold those shares

indefinitely. Yeah. If you don't sell after an IPO. So you don't have a specific rule. Depends

from the investment. We generally shy away from having any rules whatsoever. Maybe we have general

heuristics guidelines or beliefs that we have, but even all of those are meant to be broken and

you can make the best returns when you're willing to break your own rules. So as Mathias is explaining,

the individual partners have immense responsibility. They manage investments of

even 50 or 500 million dollars and they are not supervised as in normal companies,

but they have wide autonomy and trust their knowledge and instincts. They do not have

a real corporate head, although there is a hierarchy anyway. Peter is for sure the

undisputed leader of the firm, but the way he leads is not quite a top-down mandate. It's more

so we go out and find interesting opportunities and then he's our thought partner and helps us

get to the right decision. But it's much different from the way maybe a company would run. You said

you spend years building relationships and getting to know the company before investing.

Aren't you afraid that it's going to blow up before you invest? There's always a risk of missing

some companies. It's impossible to be in every single important company. It's rare for a company

to just have one crazy inflection point and then you've missed the boat. Most of the world's best

companies have had several points of entry where the risk reward is quite attractive. Even if you

miss the initial crazy inflection point, there's always a little bit of concern about missing it.

A combination of the mindset of a venture capitalist, but also the mindset of a hedge fund

and optimizing everything in terms of risk reward, and sometimes investing a $100-$500

million investment in a company that's already inflected where there's still a 5, 10, 20x,

arguably a much better investment than doing a basket of seed investments, most of which won't

work and one of which will. We don't obsess over missing companies in the early days,

as long as we find good points of entry later on. To understand it, the classic venture capital

method is to invest right away and fast in a lot of startups, knowing that only a very small

percentage will make it and the performance of those who do make it will go to make up for the

fact that all the others will have failed. Founders Fund does not do this, partly because

this strategy often does not work. Instead, what Founders Fund does is to study more, to wait

longer at the cost of missing even small opportunities with the goal, however, of making

only deals they really believe in. How many deals do you make in a year? It's not a number that we

track. We don't really obsess over those metrics. We tend to think of it more in terms of dollars

that we invest and how concentrated those dollars are. We want to concentrate as much as we can

into our best companies. We have no problem putting a third of a fund into our best idea

and having the entire fund in no more than 10 companies on the growth side. So we think of it

more in terms of are we putting the highest number of dollars into the best companies at the lowest

possible price. The 10 top companies sum it up for the majority of the fund. Absolutely. That's also

unusual for funds, especially in startup because you need to invest in 10,000 startups. Yeah,

we're not doing the spray and prayer approach. So not only are the people few and they make

giant DLP, but also the fund money is extremely concentrated in a few startups. So the

responsibility of finding the right founders is really high. And so I asked Mathis, how do you

find the right founders? Do you have a checklist or do you go by intuition? There's definitely no

checklist. The right founder might look very different for one company than it looks for a

company. Dylan field is the right company for a design software company, different personalities,

different approaches. There's no one size fits all for investing. I do think you need to be

incredibly ambitious, super determined, relentless, charismatic, also high integrity,

crazy determination to kind of bend the world to your will and be able to convince people to join

you in your journey, whether it's employees, investors, customers. And that's usually what

we see makes a difference between the companies that are good and the companies that are excellent

are those founders that just will not give up and have that insane competitive streak internally.

Sometimes they've been competitive in the past, whether it's in math or in sports, whatever it

is, but you need to be extremely competitive given that this is a competitive world and no one's

going to hand it to you. And so there's no specific set of traits, but what we look for is that killer

instinct and being incredibly ruthless. What about hard skills? Do you value them? There's no

specific hard skills that we always want to see. We're naturally drawn to engineers because they

have first principles thinking. When you have someone who's not an engineer and there's plenty

of exceptions to what I'm saying, but they will just kind of throw money or people at problems

instead of taking a step back and spending the whole night figuring out the problem from a first

principle standpoint. A good founder is ambitious, never gives up, and tends to be a technician,

is someone who looks for solutions, and is not just a business person who maybe tries to solve

problems with money, but even before that applies first principle thinking, that is, he tries to

figure out at the grassroots how to solve problems, not like everyone else does, but in an innovative

way. At this point, I asked Matthias how the investment they made in Trade Republic had played

out. I got to know the founder of Trade Republic last year. I even made a video where I go into

the company and show everything, but if you don't know him, Trade Republic is a European bank and

broker, born in Germany, that allows everyone to invest in a simple and effective way, without

falling into pitfalls of scam things, without falling into technicalities and unjustified fees

of traditional banks. But in a short time, even just from the phone, it allows you to invest,

not pushing you to trade at weird things, but invest for the long term.

The fact that Founders Fund decided to invest in Trade Republic for me,

is a giant green flag. So let's take a look at how this investment came about.

I've been going to Europe for sourcing deals for maybe 10 years now. Every trip, I go to a handful

of cities, I take a bunch of meetings in each one, come back at the end of the trip, reflect on it

and figure out if anything really stood out. This one in particular, I was in Germany, it was right

before the pandemic, February of 2020. I had like 10 meetings in Berlin that day. A seed investor

told me one of their companies was promising. I ended up taking a 7 a.m. meeting, which even my

jet lag was 11 p.m. at night or something crazy like that. And I had this breakfast meeting that

I was not terribly excited for. And then I met Christian and I was just blown away because he's

exactly the kind of founder that we look for, which is extremely competitive, intense, really

thoughtful, had thought through every single one of my questions. He showed how much he had thought

of it through every angle, from a product standpoint, technology standpoint, regulatory standpoint.

And he had that rare combination of things that we look for and a grand vision that was super

exciting. And so immediately after the meeting, I knew that like this was a meeting that I had come

for on this trip. He was going to California the week after. I immediately lined up meetings for

him to meet the rest of our partnership. So a week after that, we spent time here. And then with Peter

in L.A., within a week, we had the deal signed up. So it wasn't years of relationship this time?

That was a rare instance. The years relationship tends to be for the very large checks. This was a

Series B. I would say that it was like an abnormally short period of time to make the decision. But it's

one of those rare instances in which, from our vantage point, it was such a no-brainer that we

took the risk on this could obviously not work out. And that's the risk you always take in venture.

But we didn't find any red flags. A clear leader in the space emerging in Europe and a really

extraordinary founder. What about the business model, the vision, everything? Why were you

convinced? You know, the wealth market is something that here in the U.S. has been more addressed for

several decades now. And it's kind of ingrained in U.S. culture that people save money and invest

in the stock market. It's a much more mature industry. And we had looked at companies like

the Robin Hoods of the world, got close, but ended up not investing. Part of that is because banks

in the U.S. serve the market quite well. But in Europe, the bar is so much lower, meaning the

incumbents are so much worse. It's just not really an addressed market. And culturally, societally,

Europeans do not invest in the stock market the way Americans do here in the U.S. We recognize

the market opportunity being gigantic. There's a pension gap in Europe. This was by far the best

company addressing that market. So Matthias saw an opportunity in Trade Republic on the one hand

because there was already a great case study in America, namely Robin Hood, which, however,

founders fund had not invested in in the past. And also in Europe, compared to America, the need

for such services was even higher and therefore having both a market hole and an already approved

business model, namely that of Robin Hood, which then in America was very successful. The opportunity

in Trade Republic was great. And then, as Matthias said, the founder apparently is a dragon. But so

how did this deal go and what happened after the investment? Right after we made the investment,

the world imploded. When I ended up going back to Germany to close the deal, COVID cases were

already spiking. So I flew to Germany against the advice of some friends and colleagues that it was

not necessary to go to Germany, but there was no way that I was not going to sign up this investment.

Right after we made the investment, we were concerned about our entire portfolio,

because most of our portfolio companies were rocked by the pandemic, some in a bad way,

some in a good way. Trade Republic was one of the ones that was the clearest beneficiaries

because everybody was home. The stock market was super volatile. Everyone was trading. Some people

ended up getting stimulus checks by the government once those came out. And a lot of that money went

into the stock market. And it was one of those companies that was just perfectly positioned

to benefit from a gigantic tailwind. So when we invested in Trade Republic, it had 60 or 70,000

customers. And within a year, it had reached over a million. It was a crazy good investment.

It was an incredibly good investment very early on. Of course, retail brokerage is highly cyclical.

It's very different from a SaaS company that's more steady and consistent. With the retail

brokerage, you might have a year that's incredibly good, and then a year that's maybe flat.

Depends from the market.

And it's highly dependent on the macro. These kinds of companies will always have incredible

years and then software years. And it's not indicative of the long-term trajectory of the

company. But the important thing is that you have a team that is building the foundation and

executing such that when the tailwind comes, you're able to ride the wave successfully. And then when

the winter comes and no one's trading, you're able to ride out the winter profitably, efficiently

without running out of money. That's what we've always insisted on the company. So that's been

the story of Trade Republic, which is a little bit bumpy, but over a long enough horizon and

timeframe, a very clear trajectory to what we think is $10, $20 billion opportunity.

So the investment was great. In fact, today, Trade Republic is worth more than $6 billion.

On the one hand, they were lucky. In fact, Founders Fund invested the very year of COVID,

the year Trade Republic grew from 70,000 to more than a million users. But as Mattias said,

for businesses like brokers, growth is not always equal, but cyclical. So some years are very good

and some are not. And the company's skill is in navigating these phases well. In my opinion,

Trade Republic is doing that. In fact, I invest my savings with them. I am ambassador of my channel.

And as usual, I leave you in description, although this video technically is not sponsored,

but I thank them for allowing me to make this video. So I'll leave you in the description,

the link for you to do Trade Republic as well and try it out. It's done in five minutes. By the way,

there's also interest on uninvested, unencumbered cash, and there's no fees on accumulation plans.

And I even use their card as well, which allows me to have a save back on everything I spend.

Well, let's continue. I asked Mattias, since he is very knowledgeable about the European market,

what he thought about the startup system in Europe. I think there's a few differences here

in the US, much more of a mature market, right? So people have been building startups here for

30, 40 years, whereas Europe, the tech ecosystem is maybe 20 years old, but like in a big way,

it's maybe only 10, 15 years old. Most of the $100 billion companies you've seen have come out

of the US or China, but Europe has yet to produce any $100 billion companies. And they have a few

companies that are close. Audi and Revolut are going in that direction. But so far, we haven't

seen that $100 billion company come out of Europe. In the US, we have multi-trillion dollar companies.

A bunch of reasons for that. The US is like one large cohesive market with 400 million people

and a huge economy. Europe is really just a combination of countries expanding internationally

from place to place is quite challenging, different languages, different regulations.

The product market fit in Italy is different than it is in Germany and different than it

is in France. And so the challenges you have to overcome in Europe are much more different and

more difficult. I would argue that in the US where you launch and you have the entire market

being addressable in most categories. And then I think the US and Europe are a little bit different

culturally. In the US, you have a very intense competitive capitalistic perspective and the

work ethic that the median employee has is maybe different than you will find in Europe where

there's a bit of a mindset. Do you work to live or do you live to work? You need to find the hardest

working people in Europe to dream and to want to work 80 hours a week and to want to build $100

billion company. Our frustration in investing in European companies is that it's rare to find that

team that wants to leave everything in the line to go build a huge company. No, I mean,

right now there is, but there is less culture of branding, I would say. Yes, it's more American.

So I think it still exists in certain companies in Europe. So you don't want to completely generalize.

Also because it's about believing that you can do it. In the States, many people from the beginning

believe that they can do it if they work hard enough. In some countries, some people in Europe,

they just think it's impossible. You do see European founders that come do it in the U.S.,

right? So if you look at Toby, German founder, you know, built this company in North America,

the founder of Datadog, French. You can have excellent outcomes from European founders and I

think there will be in Europe as well. But I think many of those would much rather come build their

companies in the U.S. And that's also because of the ecosystem. U.S. already has a pretty strong

and developed ecosystem. What's the difference between European ecosystem, startup ecosystem

and U.S. ecosystem? The European ecosystem is just younger. 10-15 years ago when I was at Insight and

going to Europe, it was a very nascent ecosystem. You received investors, your resources available

to entrepreneurs, but probably most importantly, just less experience where if you're building a

company in the U.S. 5 or 10 years ago, you can go hire people that have seen scale at Facebook,

at Google, at Microsoft. The talent that you can attract already has a playbook, already know what

it's like to build a high-performance startup. In Europe, that kind of experience wasn't really

available 10 years ago. Now you're starting to see a new wave of companies where they can go attract

engineers and product managers and salespeople that have seen scale, that they know what it's

like. Whether it's in Europe or people that have done it in the U.S. and want to go back to Europe,

it's catching up from an experience standpoint. But of course, the U.S. has the advantage of

been doing this for decades. Now, if you look at the European market, that's no longer an excuse.

Companies, founders, they have talent to pick from. And now it's just a question of where do

the most inventive people want to build their companies? Because they can do it in Europe,

they can do it in the U.S. The question is, you know, where do they want to do it?

Matthias' answer was not very reassuring. Basically, he told me that in Europe,

the bright people are there, but they often go and do companies in America,

because the ecosystem in America is much more advanced. In Italy, for many years,

it was almost non-existent. Only now, finally, have things changed and maybe sooner or later,

we will see the first hundred billion dollar European startups. The bet is,

will the bright people in Europe do business here or will they leave?

Let's get even more specific though. I asked Matthias what he thought about Italy in particular.

I've been surprised that we haven't seen more companies come out of Italy. The Nordics used

to be where most companies would come from in Europe. Then Germany and France, the UK,

Spain and Italy are maybe a little bit behind. And I love to see good companies come out of

Italy and so I'm excited to see where you guys can produce. This answer will be even less

reassuring. What Matthias basically does is he goes and finds promising startups where they are.

It's not that he decides to go to a certain country and then he finds the startups,

but it's the other way around. First, he finds the startups and then he goes to the countries

where they are. And he has never delved into Italy because no Italian startup has ever attracted him.

My approach isn't to go from country to country doing a top-down analysis. It's more so meeting

the companies that are breaking out wherever they might come from. So it's a little bit more reactive

and less geo-oriented and I've yet to find an extraordinary company come out of Italy in the

tech space. Well, I still can't end this interview before asking what he thought about AI and how

Fonder's Fund is doing in this field. AI is one of those things where in some ways a buzzword and so

we're always very careful not to just go after the latest fad and put a bunch of money and lose a

bunch of money. And so that just means that we've been very selective with the number of investments

that we make. Over the years, our two big bets in AI were Palantir and DeepMind. Before it was cool.

Yeah, exactly. I mean, Palantir in the early days, I don't know that it branded itself as an AI company

but now very much is one of the biggest in the space. DeepMind, a company that we backed and

ended up getting sold to Google. And in this newer wave, we've made three big bets in the space. One

is OpenAI, which we perceive to be a clear winner in the LM space. ScaleAI, which is a labeling

provider and infrastructure provider, where we invested in 2019 and is now also one of the most

important players in the space. And then our most recent investment, more of a venture bet than a

growth one, is Cognition Labs, which is developing the world's first software developer.

After this answer, I felt a little bit not silly because obviously Fondr's fund has invested in AI.

In fact, they were really among the first ones to do it when it was not yet fashionable. It invested

precisely in DeepMind. Palantir was made by Peter Thiel precisely. And then, of course, they also

invested precisely in OpenAI, which is the most famous company in this field right now.

What advice would you give to a young entrepreneur that dreams to create a big company?

I think the most important thing is to go work at the best startup you can possibly find.

Sacrifice everything, whether it's time, energy, money, location, whatever it is you have to do

to go find the highest potential company. Go work there, even if it means long hours and no pay.

Get the experience of what it's like to work with A-plus talent, and that will inform your view

on how to build your own company later on. So to me, it's all about positioning yourself to be able

to join the best possible team. From there, you'll develop your thinking, your network, so you can

then start your own company, but I would not recommend starting your own company until you've

seen what good, great and excellent looks like. I think it's a lot more useful than having a degree.

This advice, a lot of dreamy guys rightly want to change the world right away by creating their

own startup, and instead sometimes it is much better to first gain the knowledge,

maybe going to work for a successful startup, find out what it means to be excellent,

and then try to do it again. I would add maybe not necessarily working for somebody else,

but somehow getting in touch with those realities, because I do that.

This video I made I think more for myself than for you, I am, I won't deny it.

Really a fanboy of both Peter Thiel and Fanders Fund. Matthias turned out to be really super

interesting, and the answers he gave me were all on the immensely valuable piece. No fluff, no spin,

you can tell we're talking about a different category. I take home a lot of insights,

the importance of selecting the right people, this care, this being manic not only in choosing

the right fanders, but also the right contributors and fund partners, and then letting them operate,

not to mention the values, the importance of the skin in the game. If you go to their site anyway

you can find all the startups they have invested in, they are all interesting, I took a tour the

other day, delve into them because they are very cool. Let me know what you think in a comment,

I am very curious, like this video, and subscribe to the channel to see the next ones. Not everyone

is subscribed to the channel, in fact very few of those who watch my videos, so subscribe,

it is important. Hello