Figma, Scale, Wiz: Inside Index's Decacorn Factory

way I put it for this particular statement was, you know, very much playing the long game. The fact that if you are to get into this industry and this job, you’ve gotta commit for ten, fifteen years at least and focus on not on the outside reward or not on the external progressing as a career, but very much more on the internal and and doing it for the right reasons, which is investing in great companies, supporting great founders. That was what I really meant by that.

I don’t know if I would say tourist VC, but I would say it’s the asset class has has institutionalized. You know, funds have become larger. There’s there’s more people in in in general, by and large. And so you bring people who may sometimes wanna wanna have a career, choose it as a as a career more than as a calling. Me, personally, I think us at Index see this job as a calling.

Not entirely. No. I know there is a there is a a meme, which is the industry is diverging into two camps. You either either have the the mega funds, the asset gatherers, or you have the tiny boutique shops. And I don’t truly believe in that. I think there is a there is a third way, and, you know, Index is in that third way, where you need enough scale to help support the founders. And we think always from the founder’s point of view, what is how can we best serve them?

And you need a a minimum size to really help them to kinda invest across stages, support them from inception to to IPO. You need a minimum size. I also don’t think you you need a a GGAS size to really support them. I think this push towards larger asset gathering is very is very good for VCs who do it. You know, it can make a lot of sense financially. It can make a lot of sense for them. I’m not sure it makes so much sense for the entrepreneurs themselves.

So I do believe there is there is a third way. What do you think that minimum size is then? Exactly where we are. How big are the latest funds? We have $300,000,000 seed fund, 800,000,000 venture fund, and 1,500,000,000 growth fund. That’s the latest. And that is the minimum for what you need. Perfect. I wouldn’t say that’s that’s the minimum. I I we see it as the right size to both support entrepreneurs with the right amount of capital and then, you know, have enough to pay for the infrastructure that we have.

I’m not sure you can have venture like returns at 300,000,000,000. I think you can have amazing returns. You know, can you have But you could five seventy x. You could five x. Can you can have a do that. Yeah. Check. You know, absolutely. The the math makes sense. Do you need dedicated funds to do that, or can you do it in more in a more ad hoc way? You know, I think that’s that’s a question. That is on the later stage set set of things, obviously.

We, you know, on the on the early stage, you know, either seed or early venture or early growth, I I don’t think you need, you know, those those mega assets. And I think they they distract you, and they tend to pull you towards the later stage. And, you know, if if you have much capital to deploy, obviously, you will tend to focus more on the later stage, on the very big checks. And I think if you wanna help and support at the earlier stage, you you know, it can be an impediment.

This is not how we see seed at all. Every check is high conviction. We don’t make as many as as a result, but, you know, we we have high conviction checks, and we work closely with these funders even at the seed stage. We it’s the same as if you were a series A. Our goal is very simple. You know, we wanna be as early as possible, be become the largest shareholder, and become the the most valued and most referenced investors in those companies.

What I’ve changed my mind on is if you start from the founder and if you really think through how can you best help them, you know, what is the most helpful way that you can interact with them at the early stage especially. How does that help them that you have 10 different products. You that you do LBO, you do credit. How is that helpful to an early stage founder? It’s not. And so if you really think from that first principle, okay, what are the resources you need to be really helpful in those early stages?

And again, in the service for us of building both the biggest ownership and the best reference from those founders, it’s not this super large scale multi product. You need enough, again, to support them, but you also need to be small enough to kind of keep that interpersonal relationship and that close support where they know they can call 10 people at Index, you know, get help on anything that may happen to them. And you don’t necessarily have that in such a personal and trusted way in a much larger company where people move around a lot more.

A lot of our people have been around for ten year plus, you know, even in our strategies team. And that creates a a level of trust and and competency that it’s really hard to replicate in much larger on on much larger organizations.

Yeah. And and and, if you look at the principal rank, you know, we have a lot of people who’ve been around for a long time. If you look at the strategist rank, we have a lot of people who’ve been here for a long time. So there has been turn over in the industry, you know, at large. Interesting question. Do you think consistency of team correlates to venture returns? I was chatting with, you know, with Ilya at Quantum Light about it the other day. And they said the the number one fact that they that they noticed was a good predictor of future returns was whether a partner was on the on the Midas list.

A partner an early stage investor in the company was on the Midas list, which kind of tend to show that there is a persistence of returns in terms of proven investors Yeah. All the

Two things. One is I I didn’t investigate I think as much as as you did but my view on the manners list is it’s a really good list for who was a great investor ten years ago. That’s kind of how I would describe it because if you look at a lot of these companies there were deals that were made you know ten years ago. And so I think it is really accurate to show you who made great investment ten years ago. Is it very accurate to see who is a great investor today or in the future?

I think there is some persistence of returns and there’s a lot of studies that have shown that. But it’s not definitely there are a lot of great investors today who are not yet on the list, but will be in the future that, you know, should be on it.

necessarily need your help. The best founder that I’ve seen are very good at reaching out to investors and people around them on very specific topics when these people it’s leveraging the right people at the right time and being very specific about that versus going to, I think that’s a little bit the, a lot of the approach that we see in the market is like, it’s a one stop shop for everything. I don’t think the best founders use their investor or their or their supporters that way.

I don’t prefer any of those types. The way I think about it is slightly different. You know, the the what I love in founders is unique insights. And that unique insight can come so the unique insight can come from two places. It’s one experience and knowledge of of an industry. The other one is just sheer intelligence and and ability to break down complex problem into very simple ones. And, you know, if you think about all the best founders, you know, I’ve worked with and, you know, you have worked with, I think they they tend to have this one similarity, which is they can come up with a a very simple insight, something that sounds very simple, but actually incredibly deep and profound and defensible.

And they typically come at it from first principle thinking. I mean, I think first principle thinking gets thrown out a lot, but the very best founders, they have that. And so if you take, you know, Nikolay Stebbings, you know, as an example of that, a lot of his decisions and a lot of his coincides were just linked to that first principle thinking. So he thought about, okay, FX, for example. FX for large corridor where you have a lot of volume of of transfer cost nothing. So it should be given for free, you know, to the market.

And then once you have that, that’s a really good hook, and then you can build something else. And if you think about most of the great companies, they have one simple insight, but that is very deep original. That’s the core of what I look for in founders is, and I wanna sit there and then they will teach me something that they have come up with either thanks to the experience and, but more, you know, usually from that deep thinking that they’ve done and where they’ve solved this problem.

Look at, you know, Will at Deliveroo, for example, his insight was very much the product is the delivery, which sounds obvious, but it’s not the digital experience. It’s the speed and quality of the delivery. And if it has to come below twenty minutes, that’s the, if you can get that consistently, that is the product. Everything else is a is a distraction. That’s the core product, and that’s what we

I think it it goes down without great execution that comes with it. I think that on its own is not enough. I still think it gives you it gives you an advantage, but then I agree.

That’s a typical you know, that that’s a very common way of of making mistakes and and putting this like,

So I think, look, market timing is a real thing. You know, you you you can be right, but it can be that again, if you look at food delivery, it’s it’s interesting. People try to do Deliveroo five or six. It was a French company. I forgot the name. That was it was doing Deliveroo, but what the what they didn’t have was they didn’t have smartphone penetration. So they had to call drivers to tell them where to go and where to deliver. And, you and obviously that didn’t scale.

And there was no efficiency, and they would take fifty minutes. It would be very expensive. And so you needed to have not only the invention of the smartphone, but you need to have everyone, including drivers, having smartphones for the something like Deliveroo to exist. So clearly, they hear that it’s a true you know, the the concept was there, but the technology just didn’t follow. I think in the case of of of Cowboy and and micro mobility in general, I think the timing was was absolutely correct.

The challenge here in this industry is that if you are selling the hardware, it’s a you know, it’s mostly a hardware product, and hardware is is really hard. If you don’t sell software on top. You rely on on a very complex supply chain that’s been which has suffered a lot over the past years, obviously. It’s a volume game. You need to have distribution. You need to have relationships. So so it you need to raise a lot of money to build all all of those assets, and the return on that capital is not as good as on pure software businesses.

If you’re selling a service, so, you know, Lime and Bird and those, I think you can have a a large scale, but it is so operationally complex. And you’re also competing with a lot of subsidized transportation. So you are charging full price for a service that is, you know, offered at a discount by a lot of municipal services. And and you’re fighting against a lot of regulation, a lot of, you know, a lot of changes. I still think that some companies will do well actually in that space.

I think Lime is is doing well. I think Dot is doing pretty well. Think they they will they will be okay at the end, but it’s clearly

Yeah. That’s that’s probably the hardest the hardest one. And, actually, you know, it’s funny. It doesn’t only it’s only the bad investments or the mediocre of so Any investment gives you some form of bias. You know, if it’s a great investment, then everything else may look, you know, not so great in comparison. And, you know, I’ve I’ve suffered certainly from that, you know, on the fintech side, for example, where, you know, I was lucky enough to be early in Revolut, and then I looked at a lot of other fintech investments.

We’re like, well, Revolut can do this. Revolut does it better. Or you know? So so I think it goes it goes both ways. And you’ve

We could have invested in any you know, in a lot of other neobanks. Contour would be a really good example of that. A lot of, you know, remittance and certain corridors. Then so there’s

Yeah. Yeah. I mean, that that’s that’s our you know, that’s absolutely our position. There are still some really good companies that we could have invested in. I would say, so going back to your original question, this idea of keeping a beginner’s mindset is absolutely essential for any investor. It’s and it’s really hard to do. The what the example we always use at index is is Spotify. And to your point, it wasn’t because of a bad investment. It was because of a mediocre investment, which is different.

Wow. Wow. You know, we had just invested in Last FM, a totally reasonable outcome. It was we saw how the sausage gets made in that industry and the power of the labels, and we’re like, gosh. This is impossible to make money. And we really love Daniel, and we saw that the product was phenomenal, there was some early traction. But we had this bias of, oh, the music industry is so hard. You know, it’s never gonna happen. And that’s why we passed multiple times. And when we wanted to come back, it was it was too late.

And so I I think It my own

But, you know, so so I think the learning here is when you have again, it goes back to the founder. When you have and we knew because, you know, Daniel was working at at one of our companies. So we we knew the guy was was incredible. And so when you have such a unique founder that, again, does have a unique insight about about the industry and has the ability to execute on it. And also in this case, you see real signs of execution. Don’t overthinking. I think that’s a that’s a problem that we have, and I I chat with a lot of VC who say, you know, it’s kind of pretty widespread in the industry.

Like, you think you’re, you know, you want to be very smart. You want to be very diligent. You want to and so there’s a tendency to overthink. And, you know, when something has a fantastic founder and has real movement, then sometimes you just need even if it’s an industry, my god, I’ve been burnt in the past, don’t ever think it.

team, team, and team. I would say that’s that’s that’s, you know I’m back to that as as the number one. But, you know, I would say, you know, I I I probably used to think, you know, market, team, and traction. Now I’m kind of putting the other around, so kind of

I don’t think it means less. Finding product market fit is the hardest thing in in any business, and and tons of founders walk around in the desert for years without ever finding it. So I think we shouldn’t minimize or trivialize, you know, finding real traction and having real revenue traction. I think this is this is remarkable, and it should be celebrated. Obviously, if you are talking about AI, auditing the quality of that revenue is critical. That’s what we spend a lot of our time doing is, you know, is that is that revenue long lasting?

Is is it sticky? The more cohorts you have, the more you can see the numbers. If you don’t have that, then it’s gonna be, talking to customers. And also really trying to understand their use case. If something that’s more like project based, and then they want to use it once, and then they will switch to something else potentially. Or it’s something that, especially if it’s inserted inside their workflow, you know, Cursor is a good example, you know, that we’ve made a a bunch of those type of investments, then in all, like, even if the number didn’t show it yet, in all likelihood, the

We have a a a different size of quorum depending on the size of the checks of who needs to be there. There are always folks from each office. So it’s very important, you know, because we work as as one team across offices. And then we we vote. We vote one to 10. You can’t vote five and six. So you have to be, you know, for or against. And then it’s kind of a so it’s a qualified majority, essentially. So if if the average is above six, you know, the the deal is the deal is approved.

And so that that mechanism, you know, is the same. And then there’s also some latitude if you if you have, you know, very high conviction on the deal at the early stage. I think we have a bias for, you know, to action. And, again, going back to having a beginner’s mindset, the person who spend a lot more time with a certain team is obviously better placed to make a judgment call on that team, and so there is, you know, this kind of a collective trust into the partner’s judgment.

But if you wanna

check on the spot, you can do it? Not exactly on the spot, but but you can definitely, you know, make the deal happen. What was the most

I’d say, you know, Revolut was pretty controversial, actually, of all the deals. Yeah. It’s it’s funny. It’s it’s it sounds you know, in retrospect, it sounds bizarre, but it it it may end up being one of the most successful or maybe the most successful, but it was definitely one of the most controversial. The reason for that was that and it was quite a few fold. The the first one is it was a very European product, you know, and I think the product made a lot of sense for the European audience.

Didn’t make as much sense in The US context where FX frankly is not a big topic. So I think that that was one element where, you know, think US based folks were less familiar with the product and, you know, didn’t resonate as well. The other issue we had is it was especially in the early stages, it was a kind of, you know, negative gross margin business. I mean, they were basically giving away effects. They weren’t charging for anything else. You had a little bit of interchange, but not that much.

And so you had a very low gross margin business, and, obviously, that wasn’t that attractive. And, you know, and the more they scale, and they scale very fast, all organic and word-of-mouth, the more, you know, they were burning capital. So so it wasn’t an obvious one. And I think I thought Unique at the time wasn’t a natural, you know, kind of storyteller and and and fundraiser. So I think for all those reasons, it wasn’t it wasn’t an an, you know, it wasn’t an obvious an obvious deal, which, by the way, I think that’s that’s one of the learning is beware of gross margin in the early days.

And I think that’s a mistake we made a couple of times, and I think Snowflake was a similar story. What do you mean by that? Well, it means that, you know, you have a lot of businesses that in the early days have really bad gross margin, very low gross margin. So, you know, Revolut is an example. Snowflake was an example. Deliveroo is an example. Deliveroo was an example. All the LLM providers were, you know, very clear examples of that. And I think a lot of the LLM, you know, or or a lot of the AI apps have similar characteristics.

I think if that’s the only thing that’s holding you up, in most cases, I would totally ignore it. Because the reality is, you know, when you’re getting started, you know, optimizing for your for high gross margin is the last thing you should be doing. You’re entirely focused on on growth and building the product. But in most cases, you know, especially in pure software businesses, you will find ways to optimize your gross margins and the cost, whether it’s the underlying cost of technology you’re using is going down.

I mean, you know, the the AI apps is is a good example of that, where the the cost of the price per token keeps on going down. Or you can just optimize your infrastructure a lot better when you have a lot more volume, and

So if you judge your you know, if you made your judgment based on gross margin at that time, on the price of token at the time, you would have missed on, you know, really

It may. It’s not really what we see. You know, we we we consistently invest about half in Europe and half in The US, and we have a global one global bar. And I think that’s the way we see the world. And we we don’t we’re not fighting for local maximum. We’re we’re fighting for a global maximum. You know, we wanna be in the very best businesses globally and be the, you know, the reference investors in in those.

Yes. I think the answer the answer is yes by and large. So, you know, if there’s one team that is aware aware of those differences, I would say it’s it’s Index. We are very well aware of it, and we take into account when when we vote on deals. And that’s also why we leave a lot of latitude, especially in the when you have data, it it’s different because, obviously, you know, data can can speak for itself.

But I think when at the earlier stage, to your point, the presentation matters a lot more, and that’s where leaving more latitude to the partner or the investor who is closer to the founder and spend more time with them is super important because, yeah, I mean, we we’ve had that in the past for sure.

Yeah. I think he’s he’s absolutely right. You shouldn’t lose you shouldn’t lose a deal on price, especially I think it’s especially true in the early stage. We never pass, and we never lose a deal or or pass on the deal because of price in the early stage. I think that is absolutely correct. You know, where does it stop? Or I mean, and then

Is that

really how we think, to be honest. You know, this kind of risk reward profile, you don’t know. Right? Because you don’t really have a good sense for the size of the reward. And I think in general, by and large, we’ve been, you know, the industry has even kind of, you know, underestimated the size of the outcome. I mean, you mentioned the scale of the revenue growth, the scale of the of the market caps of these businesses. We didn’t think that that would be the case, you know, even, you know, ten years ago.

So, you know, at the early stage, if you had known at the time that the outcomes could be so large, well, then maybe, you know, it was a very fair reward for the risk you were taking. So I think in the early stage, I think it’s I think he’s absolutely right. The only question is how far does it extend, you know, in valuation? You know, when you’re at you know, you mentioned, you know, OpenAI at 100,000,000,000. Is is 1,000,000,000,000 still, you know, a mental trap? Or is it I I don’t know.

So there there must be some moment where you get into a slightly different realm and where the distribution of outcomes becomes narrower and the likelihood of you know? And you so you have a better understanding of where the company will act. You know? The closer you get to IPO, the closer you should have a sense for what is the valuation, and so you have a better sense for that risk reward profile that you that you are mentioning. In the early stage, this is so far out.

You don’t really know. So I think, again, if you go back to the first principle of if you have this extraordinary founder and there’s real traction, then, you know, don’t overthink it.

Oh, yeah.

Definitely. And so there is a too high price. Yeah. There is is a price, there is the amount raised, and there is the maturity of the business. What we’ve all seen these companies that, you know, raise tons of capital at a very high price before they had proper, you know, product market fit. They thought they had it, but a lot of it was subsidized by investments. And then when they stopped investing because they realized, well, you know, it’s not customers who are acquiring are not profitable, so we need to stop it.

It doesn’t really make sense. Then they realized that having all this money and all this team, they you had to spend, especially in Europe where it takes a long time, they had to spend a year or two reducing the size of the team, going back to the basics. And so trying to find product market fit after you’ve grown so much and had so much capital and at such a high valuation makes it really, really tricky. And so that that is that is dangerous.

Yeah. We’ve done it in in in some occasions. You know, again, when we found, you know, extraordinary founder with revenue traction or open source traction, and we’ve done that in in a couple of open source companies, then it can totally make sense, and you can really you know, you can get amazing rewards for that.

I mean, the time have changed for sure. You know, when I started fifteen years ago, and we were, you know, all aiming for 20% was kind of the minimum bar. This is you know, you can still we still have some 20% ownership, but it is obviously getting getting a lot harder. For us, the goal is to get double digit ownership at exit. You know, that is typically where we if if we look at the the performance of the fund, most of our returns have been generated by companies where we own close to or more than double digit ownership at exit.

And so that’s what we’re trying to aim for.

Yeah. In the earlier stage, for sure. I mean, I think for us, especially at seed stage, you know, our approach to seed is is much more collaborative. You know, the idea is we don’t wanna compete with with people like you and and and, you know, and other other seed funds and and angels. You know, we wanna bring them along. We wanna work together. It’s conviction investing, and we’re gonna pull our weight and be super involved. But this is not the stage where we wanna maximize ownership and, you know, so we’re not gonna have sharp elbows at that at that stage.

Later on, you know, especially at, you know, at series A and Bs, that’s where we really wanna you know, because of the time we’re gonna spend helping these companies and and, you know, spend time on the board and be, you know, hopefully, the reference investor, that’s where, you know, we need a minimum ownership. Do you have investments in any of the LLM providers?

of the we’ll see at the end of the journey. I think it’s the pure venture multiple will likely be lower than some of the other categories in the past. I think that is that is clear. The difference is that the size of the outcome and the speed, very importantly, the speed at which the size is gonna get reached means that you can have especially if you can deploy a lot of capital, you will still be able to generate a lot of absolute returns. So in terms of performance, we’ll still be very high.

In terms of pure multiple on early stage investments, it may be may be slightly lower because of dilution.

Yeah.

Yeah.

Well, the notion of sovereignty and tech sovereignty is is a real notion. I think it’s important. You have to recognize that there’s a big part of the economy that has to think that way, where, you know, you have geopolitical realities that matter. And so if you’re a government entity, if you are a quasi government company, may want and or even have to use, you know, local providers eventually, you know, at some point. So I do think there is a large part of the market that needs and want local providers, especially, you know, assuming that they are close to the frontier or at the frontier.

And so so I think there is a real there is a real market case for that. There’s also a lot of, I think, you know, localization, customization that can and need to happen. And so I think there’s going be a great enterprise market for those providers. So, yeah, I think there is a market. Is it going to be smaller than OpenAI? Yes, For sure.

that having, you know, government entities or quasi government entities support local innovation is important. I I think the way to do it is not necessarily to I think that it it they should be customers. I think they they should buy those products, and and and and they should, you know, they should help them as as customer rather than, you know, as investor necessarily. Do you think TikTok should be allowed, though, for example? I think it should be allowed, but there should be a bigger conversation about social networks and about the openness of algorithms, which then only apply to to TikTok, but applies to x, applies to Facebook.

I think those algorithms should be public, should be able to be audited by by anyone, but also included kind of independent auditors. They are not regular companies. They are utilities. They are critical infrastructure for the economy and for our political systems. And as such, I think they require treatment that is different from any random, random startup.

different from before. If I look at Index, you know, I was I was looking at the at the numbers. So we’ve been around for thirty years. We invested, I think, $11,500,000,000. We’ve returned, I think, about close to thirty, and we still have, you know, 20 plus in, you know, in in in holdings. Most of that is basically concentrated in eight, nine companies. And we’ve invested in close to 400 companies over the years. So, you know, it’s like so so the the power law and the concentration of returns in a small number of names, I mean, we’ve experienced it ourselves at at, you know, at our level.

And so I don’t think it’s that different than than it was before. I mean, I don’t I don’t see anything that that indicates that it’s gonna be that different. And that’s why making sure you are in those category leaders early enough to have big enough ownership and also, you know, earning the reference from the founder of being the reference investor is the most powerful.

That was just before I started, but we did that with Zendesk, for example, where, you know, we passed on on on the on the AI, especially. You know, if you look at the memo and the variation at the time, it’s it’s quite funny. Don’t remember exactly where it was, but very different from where where it is today, as you can imagine. And we came in later at

For sure. I mean, you know, you have to worry. I mean, having said that, a big part of the compensation for these early stage companies is around options. That’s the only way for startups to really compete with these large established players, whether it’s OpenAI or whether it’s, you know, even Google and Microsoft and and and the, you know, the established publicly listed large tech companies. So I think with that, you know, if you can tell a good enough story about this future value creation, there is no amount

I’m not sure it’s changed so much. If you look at the most incredible companies in the past, know, you you look at Revolut, you look at Deliveroo, all of these companies, the amount of work that these founders and these early teams put in was tremendous. I mean, it it was seven days a week. You know, it was nights and weekends. I mean, that’s what it was. And I think that’s what it takes. When you are going into those hyper growth mode, you know, and you go for the venture backed route, that is, you know, that is part of the journey.

That is kind of, you know, in in many ways what you’re saying for. In you need to have two things. One is you need to make a lot of experimentation, maybe iteration. And so that typically means, you know, the longer you work, the more things you can try. And then you need to have a very high kind of growth curve and and be able to learn very quickly from those experimentations. I think the main change to me is how open people are. And I think it’s good because then there is no mismatch of expectation.

You know, you’re not joining a company and they’re like, shit, you know, they’re working so hard that this is I can’t do it. This is not for me. There’s real alignment between, you know, what you’re saying and what you’re doing. And I think that’s that’s actually positive. When you think about the word liquidity, what are your biggest lessons on when is the right time to sell? You know, you talked about market timing, and we don’t try to time the market at entry, and we don’t try to time it at exit either.

We were not public market investors. We tend to have a very standard liquidity program when a company goes public, where we sell, you know, every quarter over three years in a very recurring, regular, preset way in in many ways. We obviously have you know, we have an we set up exit committee with a where you have four people on, including the partner who led the deal and then another partner who didn’t lead the deal and is not as close. So we always have kind of healthy debates, we kind of add we can adjust at the margin.

But by and large, our view is don’t try to be too smart. And then so it’s always the same. Then when things go really well and you’ve sold to a little bit of shit, know, but then you also have the, you know, the opposite where if you hadn’t done that very systematic approach, you would you know, you wouldn’t have realized a lot liquidity. So all in all What what did you sell too early and you’re most oshit about? I mean, you know, we were a very large investor in Robinhood.

We sold quite a bit at a lower price than where it is today. You know, we still have a large stake, but, there’s always there’s always gonna be contra examples. That’s the clear one given the and I you talked about their their recent, price price action. Do you think

Yeah. You know, they are contra examples for sure. When we ran the analysis, and we did run the analysis, obviously, we didn’t, you know, come up with it, you know, randomly. It came out that For a bit of a decision. Did it. Oh, fuck

And, obviously, you know, it’s hard to do the counterfactual because you can never sell only at the top. I mean, that that you know, I wish we could, but that that’s just not gonna happen. So but if we if we looked at if we had taken different schedules, we would have been worse off. And so we felt that overall, if you look across a basket of portfolio and again, we know it’s portfolio approach, so you may be wrong on one or two. But if you take a portfolio approach and you do it for long enough and consistently enough, then we, you know, we realized that that was that was the best outcome.

We may again, you know, we may over time in certain situations, you know, like Revolut we’ve been in for for ten years so that you’re kind of getting to the end of of a fun cycle. So, yeah, we’re we’re not entitled. I think Would you buy and large sell second in Revolut? We we didn’t share that. But we’re definitely not opposed to it in general. I think in I wish I could bought it. By by and large, we tend to hold pretty much everything until IPO.

Do you think that will change? It may. You know? We we don’t have any we don’t have any taboo. We may have funds that are just, you know, at the end of their life’s life cycle, and we wanna realize some level of liquidity. I don’t think we’ll ever sell a lot. And again, it goes back to my first point about the returns being so concentrated in small number of names. When you are fortunate enough to be a big owner in one of those names, you wanna, you know, I think you wanna ride it to, you know, for as long as as you can, and also, you know, get the best price discovery is on the public market.

And so you wanna get access to that that price discovery. By and large, we we will keep until until

But was

for

It’s funny. You know, like, Figma is a is a a is a great example of that. I mean, I think you pick a really good one where, you know, Dylan, was telling his anecdote where he would you know, we have his CEO retreats every year. And he would come on, and he would keep on coming back, you know, year one, year two, three, year four, and he would still not launch. So was like, why are we still inviting him? Like, what what you know? And Danny, you know, to this his absolute credit, Danny’s level of conviction behind Dylan at Figma is unparalleled.

I don’t think there are many examples in the business of of an investor that has had that level of conviction for so long. We’re talking years. It was like, no, I really believe in, you know, I think this this founder is really special. I think the product the the fact that actually he’s not launching that he’s wants to build all those, you know, the right feature for good reasons. Not that he doesn’t wanna launch, that he can’t launch. It’s that he knows that he needs to have that minimum level of of feature set to be competitive and and and for it to work.

And and then he was, you know, was always a massive supporter even in that long period where there was just, you know, not even a a product out there. With respect then, why let Greylock lead the a? It’s the same with with every company. Like, you you don’t invest in every single run on every single one of your companies, so I don’t think it’s any different. But we invested in, you know, every round.

Because the you know, as soon as the product was launched, the traction was was undeniable and Across the whole portfolio? Oh, you mean okay. I thought you you meant about Figma. Oh, no. All about Figma. Yeah. Yeah. Fucking. Okay. Yeah. No. No. Across the portfolio yeah. Of course. Yeah. We we we made that we made that mistake before. But again, you know, it evens itself out. What do you mean your portfolio?

I think there were times, and I think especially in, you know, high valuation, kind of frothy time, you have moments where you doubt yourself. You run your analysis, your own analysis, and you come up with a valuation and and the potential for the business. And then someone comes on and says, well, I’m gonna pay two x the price. And I’m gonna put, you know, two x the money that that we thought we we would put. And with this incredibly high level of conviction and speed and you know, like, fuck.

Like, did I, you know, do do they know something I don’t? Like, did I did I miss something? Also, you know, I think we have a there is a tendency where sometimes you talk about, you know, asymmetry of information, but it goes both ways. Where sometimes you’re so close to a business, you really see how the sausage gets made. And can end up being more negative or more focused on the negative than the positive. And so having external validation of people who are new to the business, just look at the data, look at the team and say, it’s worth X, and that X is two X what you think it’s worth.

You know, sometimes you may think, well, maybe I’m being too negative because I see some things, but actually, if I were a new investor, I may be willing to pay two x two x the price. And so there are some moments where I say, well, let’s do a pro rata and be part of it because maybe we are missing something. It’s clearly it’s it’s a different trajectory, and and sometimes that was the wrong call.

We don’t waste cycles going incredibly detailed in into those. I think we focus more on, you know, sensitivity analysis. So we focus on what are the few levers that really matter for this business and where do we think they’re gonna go. But we focus much more on the founder, the founder dynamic, the talent that they bring to the team much more than than doing in number crunching. We’ve

I saw them pitch at Seat Camp at the you know, one of the demo day. You know, I think that’s one interesting thing is, typically when you have exceptional companies, one of the indicator is that you will have multiple touch points about that company over a very short amount of time. So you will, I will see them at sitcom, but someone will, you know, I will see an ad or I will download the app and someone will mention it to me, your friend, and then another.

So in general, you you have three or four touch points. And and and for me, that’s a big signal where, oh, there is something happening here. If I hear a lot about something in a very short amount of time, like they’ve called you know, they’re in the side guys. They’ve they’ve they’ve really hit a nerve. I think that’s what happened with Revolut where I saw them at sitcom, but somebody else mentioned them to me, and I was using the app. And one of my partners had you know?

So I think it was a multiple it was a it was a multiple signals, but I think the the sitcom one was the was the first one.

Yeah. I think I I don’t exactly remember how how I got introduced. You know, I think I may just have gone to him after after the pitch. And also, I think we were also we had been introduced through another source. And I think one of my partners had also been introduced. Know, again, I think typically there are multiple touch points when some of these companies. But the reasons why I had a lot of conviction was I came in with a prepared mind, meaning that I had been looking at the space for a little while.

I had looked at a company in The US called Simple. You probably wanna bond them, but, you know, it was the first real neo bank. It sold to BBVA. Yeah. Exactly. Yeah. Dude. There you go. I’m a student of this business. I I But yeah. So so, you know, simple had been around. And, you know, again, interestingly, going back to beginner’s mindset, a lot of people who had backed simple were like, well, it doesn’t work. Like, it can’t work. Look at this. You know, you know, you get bought.

At best case scenario, you get bought by an incumbent and, you know, it will never work because people don’t and the main reasons was people don’t wanna switch bank accounts. It’s a pain. Like, why would you switch bank accounts? You know? And it’s like, oh, it’s gonna be on mobile. But, like, well, my bank has a mobile app. Why do I care? And so I had met you know, I looked at simple I had met Monzo as well, actually. I I was looking for a trigger.

Like, what would convince people to switch bank accounts, which is such a pain? And what I really love with Revolut was a simple trigger with effects. And, you don’t you know, they didn’t sell people, oh, you’re gonna switch bank accounts. They sold, oh, you’re travel you’re a Brit traveling to Portugal for a stag weekend. You know, you’re gonna get fleas by your bank. Why don’t you get a Revolut card? And I thought that was such a clever insertion point. And then from that point, Nick’s view was from the beginning was that he wanted to be the global money app, offer every product.

But the insertion point, I thought, was really effective, and that’s how they managed to grow so so quickly and and organically for the longest time. That because they had this very clear value proposition that was a lot easier than saying, oh, you need to sign up with

You know, if you ask Nik, I think he will say the he will say the opposite, which is if you were to do it again, he would probably go for banking license earlier. No. I love the ball. Yeah. No. Seriously? Yeah. I mean, I heard it said that couple a of times because and you see it today. It’s a lot easier to get a banking license you are before you have scale than than after you have scale. But he would have been

Yeah. So exactly. I think that we don’t know the we don’t know the counterfactual. So it it may have been the case. Look. I think the reality, I think they had the right strategy. It’s hard to argue with the I mean, if you look at the outcome and you compare with all of the other players in the space, they clearly had the best strategy based based on based on the outcome. But it is true that it’s harder to get a banking license later when you have a when you have a very large scale.

I think what was really interesting with Revolut, and which I think is more more important than the banking license, is the global approach to to the business. And and I think, again, that’s something that was very contrarian at the time. And again, it came from his first principle thinking. The conventional wisdom at the time was banking is highly local, massive regulation. And so you have to go very deep in one market. And once you’ve won that market, then maybe you’ll expand to a second market or a third market.

But that was a conventional wisdom at the time. And his view was the opposite. Was like, look, banking is a digital service, meaning a single unified platform can deliver the exact same experience across every market in the world. There is no different product that is required in Indonesia versus in Poland or in Estonia, and the same app can do it all. The regulation, know, the compliance, the front end, which products you can offer to whom. So all of that varies, but the underlying principles of storing money, lending money, transferring money, all of that, this is just a software and a data play, which is the same.

So you can have a single piece of code that works across the globe. So that was his vision. And so from the get go, he started multi multi country as well as multi product. We really started multi country. One of the decisive factors in Revolut’s success is the ability to passport across the European Union. And, you know, having a license in Lithuania that you can then export and serve the entire of the European Union without having to go market by market. I mean, they had to go market by market eventually to kind of give local high bands and go deeper, but they could start offering the basic product across Europe with just that one license.

That’s what really gave them the scale and the geographical expansion to kind of keep growing and growing faster and compound know, over time. And I think that’s why why is it important? I think it shows that when you give European founders one unified market to compete on, they can be as big, if not bigger, than anyone in the world. And I think Revolut is probably, you know, one of, if not, the best neobank in in the market in in in many ways. It’s it’s, I think, better than than anything, you know, in The US for I

The European Union should look and really study that example. Said, okay. What are the ways we could replicate that and really have a unified market? And, we’re very involved with, with EU Inc, which is this initiative to have one kind of single unified status and a super simple way for companies to expand across Europe. And I think that could be an absolute game changer.

The two of But I’m sorry. That’s the other way to put it. What do you

You know, I would say it again. It’s the first principle thinking. It’s the fact that he he never takes anything for granted. Like, he never he never listened to conventional wisdom. If you tell him, oh, that’s how it’s done, he will challenge that. What why? And then he will think about it himself, really break it down into small pieces, solve that problem, and then he will come up with his own answer. He will use experts to kind of inform his his thinking, but he will never just take things at face value.

And the result of that is that he then comes up with very original ideas and original ways of of working. I mean, does have some inspiration. I mean, you know, Red Elio is is obviously one, and the way he runs Revolut has has a lot of similarity with with Bridgewater. But I think that’s that’s what’s made him so special. And then you add that to an incredible, you know, intensity and ability to maintain that intensity over time, over a very long period of time in very difficult situations.

That’s what, you know, really, you know, sets him apart. And then the scale of the ambition. You know, I think that’s something that a lot of founders, they wanna win something small, and he doesn’t. He he he never there is nothing that is too big or too complex. Like, you know, eventually, he thinks he’s convinced there is there will be one global money app and that he can be that one global money app that could be better you know, bigger than when we first met. He wanted to be bigger than JPMorgan.

There’s still some way to go for sure, but that’s how big he thought from the get go. It wasn’t something that came over time. That was because he thinks about it rationally. He’s like, why wouldn’t it there’s no reason. There’s no law of physics that says that it can’t be, you know, as big.

That’s a that’s a good that’s a good question.

Yeah. No. I’m a generalist in terms of sector focus. But if you you know, going very deep on a specific sector’s nuance, that’s not my my my strengths. And also, you know, I haven’t been an operator and a founder, so I I won’t try to you know, I will never be on a board on a on a board meeting and and kind of go super deep on your product. I will try to, again, go to the level that is generalizable and help share what I’ve seen in other places instead of just going super deep and owning that one thing.

When has not being deep hurt you? I think there are some certain investment decisions that had I known more about a certain industry, I probably, you know, wouldn’t have, you know, made the investment. Yeah. Africa has been tough. Yeah.

I don’t think people should want to have a career in venture. I think that’s the wrong motivation. I don’t think it is like an investment bank or like a consulting firm where you join and you can move up the ranks, and that’s kind of a well established thing. I think there’s a part of Do you

No. I I think that’s exactly the right reason to do it. What I’m saying is not that. What I’m saying is people shouldn’t join venture for the status that it brings. That’s what I mean by that. You didn’t do it for the status. You did it because you thought this you were extremely excited by the technology by working with with founders to your point, being part of it. And whether the which title and which fund and which didn’t matter to you. And what mattered to you was working with with founders and being part of that movement because you couldn’t think of anything else to do in your life.

That’s the right motivation to do it. Dude, eleven years ago, Europe, it was not like a status game being in Mexico.

Exactly.

I don’t I don’t want to hurt anyone’s feeling. Think You won’t hurt anyone’s feelings? No. I think I’d say Yan is probably the the strongest. Yeah. I mean, if you look at if you look at his track record, you know, the consistency and some of the incredible winners that he has, I think he’s a I think he’s a great picker.

Yeah. You know, historically, I’ve always admired USB. Fred Wilson’s blog is the reason why I joined venture, to be honest. You know, I think what he did there in terms of educating people, explaining how venture works, explaining how entrepreneurship works, his level of sophistication in understanding and explaining business models, in picking the right themes early. So I think historically, I would say Fred and USV, they were huge inspirations. And, you know, I spent time with them that I’m in New York and every the way they operate, very unique way, very collegial, the way that they’ve decided to stay small against the grain and of the industry, always being against the current.

I really admire them. Yeah. You can invest in one seed fund. Which seed fund do you invest in? I like I like Nikolay adjacent a lot. I invested personally, and I think he’s a I think he’s a very unique

I still remember meeting at Personio, that first meeting. And I think it’s it’s actually the case with most investments where it’s it’s a yes immediately. Like, you meet the person, you hear them talk for five minutes, you’re like, yeah. We should do the deal. You know, if if I had done that with every investment, I would probably, you know, done a lot better than I have and not overthink it. But, yeah, you

the clarity of the

Yeah. Exactly. I I mean and we we had the same, and that we ran the same analysis where if we had said yes to every single company that had come to present at the partnership, we’d we’d have done a lot better than than we have. Simply because it goes back to the parallel. Like, you miss one, you know, we we and we missed a few I mean, like, just imagine just Spotify. You know? That’s it. Is that the

Well, I would say a recent one. I finished a gambling man about Massa from SoftBank. Oh, this is what’s his face?

It’s amazing. It’s it’s such a unique I mean, it it’s bigger than it’s bigger than on ground

Yeah. Like, it’s everything is just it’s life that is bigger than fiction. But I think what’s what’s amazing with him is this ability to again, talking about ambition, he could have been the king of Japan and, you know, just run a very successful company then. But no. He thought global from day one. There was nothing that was too big for him. He went out to raise 10,000,000,000, and and then on the on the go, he decided to raise 100,000,000,000 and become the biggest and most successful that was the the target, to be the biggest and most successful investor, you know, in the world.

So he had no limits. He took very, you know, he’s and he keeps on taking, you know, extremely big bets. And he he he lost it all multiple times, but never stopped and just went back at it. And I think when you read these kind of stories, it shows you that a lot of the limits, they are in your own like, you make your own limits. You you know, you could say, oh, if you fail, oh my god. I’m bad. You know, it’s never gonna work.

He never thought that way. Well, okay. Like, you know, let’s get back on and move on to the next one. And then let’s focus on let’s launch the next business and and make it make it all back. And it came from from not much, and it’s like just the story is incredible. Such a lesson in in the power of ambition and hard work and thinking big. I thought it was really I thought it was really inspiring and a fascinating story.

I met my wife, I was anti wedding. I wasn’t sure I wanted kids. So it took me a long time. We only got married, I think, eleven or twelve years in. So so, you know, it took me a a little while, and we already had kids. We looking to get married. Sooner than that. Yeah. Yeah. So it it took me a little while. I absolutely love it and recommend it. I think it brings a level of commitment that is that is amazing. It kind of grounds you.

A level of commitment that you don’t have with not being married. Yeah. Exactly. And we’ve seen having kids is part of, you know, like, really helps with that. And and you start thinking as a family instead of as an individual, and I think that’s that is so powerful, you know, changing your relationship with your parents. You know, the spotlight is not on you anymore. You know, you started to start start to think in a longitudinal way. Like, you start thinking generation, which is very diff much more long term, which I think is is incredibly powerful.

In terms of getting married, we are very, very different, very different. We come from very different culture, very different family. You know, I’m an only child. She has three brothers and sisters. You know, she comes from Congo originally, so it’s very communal. There’s always lot of people. Mine is, you know, very different. And so at first, I was pretty judgmental. And I was like, oh, you know, it’s different from what I know. And it’s, you know, I have the truth and that’s how things should be.

And and, you know, and she it was so different. And I didn’t French. Yeah. French. And I and I and I didn’t fully appreciate it. And then now, you know, I’ve learned to appreciate and value those differences, you know, a lot. I think she’s right on most things, and I think we are trying to bring and build a culture in our family that is kind of a mixture of of both of our, you know, our respective cultures. Yeah. I think that that lessons of appreciating people differences and how they make you how they make you better and they challenge your set minds, I think, is great.

And that’s also what I love with this job, you know, in in some ways What did challenge

The importance of family is a is a, you know, is is a big one. You know, the importance of the beauty of having large family, the beauty of having kids. I mean, I was I was close to my to my parents, but I never thought as as a you know, in such a communal way.

It is true that it has an impact. I think I think you shouldn’t, you know, we shouldn’t lie. I mean, I mean, you you you’re you’re obviously more focused, and, again, you’re more long term thinkers in in many ways. But it is true that, you know, you don’t have as much time. You have to limit what you do and really, really, you know, prioritize. It makes you well, I think the the first thing that’s amazing is that it means that whenever you come home, you have this unlimited amount of love and purity.

And so no matter so it makes you become you a lot more relativist versus what’s happening at work. You know, where you come home and you know that there is these people who don’t care about any investment. Like, it’s so especially when you talk to young kids and you try to explain what you do as a job. Like, my oldest is eight. Gonna turn eight soon, and she still don’t fully understand what I’m doing. So for ten years, they won’t understand. Then you realize if you can’t explain it to your child and they don’t fully get it, then it’s it’s quite abstract.

And it’s not really you know, it’s not the true reality. You know? It it’s it doesn’t really impact people’s life so much on a concrete basis. So it makes you just a lot more I think it’s easier to distance yourself in in many ways.

So it is it is very humbling. You don’t, yeah, you don’t waste time. You know, you have you have even I know you are very good at prioritizing and managing your time, but I think having kids makes you even less tolerant of wasting time. Because any moment you spend on the road, at a conference, at an event that you shouldn’t be on, it’s time you’re not spending with, you know, with the most important

Well, first of there’s no one running Index, and and Danny didn’t have a mantle. Purely equal partnership. If you look at you know, I was looking at the data, so we

Like Yeah. It’s a very equal partnership. And, you know, even in terms of performance, so I mentioned there’s, like, eight companies that represent the largest share of of of return. There has been involvement from seven partners for for these eight companies. The performance is totally spread across the partnership, and the responsibilities are totally spread across the partnership as well. We don’t have a CEO. We don’t have a managing partner. So we do make, you know, collegial decisions. So I have no ambition of becoming Index CEO because there is no Index CEO.

For me,

Datadog, Roblox. It’s pretty It’s pretty much it’s fine. Pretty nuts. Yeah.

But, yeah, they’re all, you know, all from, you know, from seven different part and from five different locations too. You know, they are not all in the valley. Like, was always kind of the key focus at Index, as I was saying, is, you know That is come from anywhere. There is Amsterdam.

So that’s not my you know, that’s definitely not my mission. I I will keep doing this job. Who did Roblox? Lox? Neil. Yeah. I will keep doing it as long as and for as long as I as I can, to be honest, because I I love it for two main reasons. One is the people. And I mean, and, again, know, Index is all about the people. And people is both the founders I work with. I mean, it’s obviously pretty incredible to see them seeing Nick at, at seed versus Nick now, you know, Will at seed and Will now, like, they are totally it’s it’s just I love seeing them becoming so successful and wealthy and established and transformed as leader.

It’s it’s it’s just incredible to to witness. And I I, know, I learned so much from them, and I’m so grateful to to be part of that. But it’s also the people at Index. And the good thing when you’ve been around for a long time is that pretty much everyone who works at Index have had a part in, you know, in hiring at some point. So it’s only people I really enjoy being with. And it’s also just people in the ecosystem. I think what what’s very special about venture and that that and there’s a lot of beef on Twitter and so on and so forth.

But if you compare with any other industry, it’s nothing. And most of our relationships are very cordial, and they are very cooperative because we’re creating value. There’s so much value creation that happens that you don’t have to of course, you compete to win a deal, but then you can still go on at the next round, and it’s it’s okay. You can still make, you know, a really good return, and and you and you will end up working closely with so many different people. And I enjoy most of the people in the in the industry that that I work with.

And then the second thing is more philosophical. You know, I’m kind of a technohumanist in in many ways, where I think well, I don’t think. Think it’s a fact that technology is so critical to alleviate human suffering and pain and disease. Imagine a life without technology, how exposed you are to wild animals, to the elements, to, you know, we forget about that, but but our life was shit, you know? We would get sick, we would get eaten alive, we would get and everything that we’ve done is to extract ourselves and escape that condition.

And to me, that’s still what we’re doing today. We just want, you know, we are building the tools. And in our case, as investors, we are helping funders build the tools that will make our lives less painful, longer, happier, you know, more meaningful. And every technology will come with its downsides, but then you have more technology to solve the downsides and then keep that will going. And I think that’s an incredible human adventure, and I love being, you know, a very small part of it.