E31: David Friedberg on How To Build a Billion Dollar Startup
David Friedberg sits down with David Weisburd to discuss the role of concentrated capital, venture capital's future, and the impact of capital saturation. Friedberg shares his experience joining Ohalo, the evolution of investment strategy, and the transition from VC to operator.
Key Points
- Top decile venture performance over the past decade has only yielded 3x returns, whereas simply buying the top 10 stocks on the Nasdaq would have resulted in 10x returns.
- The key to achieving significant breakthroughs in technology and business often lies in concentrating capital and talent on fewer, larger, and riskier projects rather than spreading resources thinly across numerous smaller ventures.
- Effective venture investing requires focusing on and supporting the most promising companies rather than attempting to salvage underperforming ones, as demonstrated by the power law of returns.
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Transcript
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