A16Z's David George on How Private and Public Markets Fused Into One

SPEAKER_2 (0:02)

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Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:24)

Tracy, it feels like 2026 could be a big year for some mega IPOs that have been private for a while. There's talk about a SpaceX IPO possibly, maybe some of the big AI labs, like some pretty massive companies that might be hitting the market soon.

Tracy Alloway (0:41)

Someone recently gave me a Facebook IPO hat from JP Morgan when they worked on it. Like, I'm very proud. I need to start wearing it around the office.

Joe Weisenthal (0:49)

Yeah, I remember.

Tracy Alloway (0:50)

But that was like, that was a mega IPO at the time. And there was so much hype about it and then like technical difficulties. So many people eager to get in on that one.

Joe Weisenthal (1:00)

It's so many funny people called that a flop, I guess, because of the technical difficulties and it didn't do that great for a little bit. That would have been a great time to buy it.

Tracy Alloway (1:07)

Yeah, seriously.

Joe Weisenthal (1:08)

The interesting thing about the market or one of the interesting things about the market is you have these companies that are going to IPO when they're already gigantic. So like people point out that in earlier eras, they might have IPO when they're like billion dollar companies. And now they're like octacorns or whatever. And then you have other companies that are also enormous. And there's no it's not clear that they're going to IPO at all. At all. You know, I saw a headline about Stripe perhaps raising more money. People they could have probably IPO years ago. And one of the questions I have is, are companies choosing not to IPO or delaying IPO because the public market is not that fun? Or because the private market has gotten so much richer, so much more liquid, etc., that that impulse to go public just isn't the same way as it might have been in a different generation?

Tracy Alloway (1:55)

Yeah, this has kind of been a long running question in the market for a while now. But one thing I would just point out on the last point, it feels to me like companies in the private market, even though they're in the private market where presumably the pool of capital is smaller, it feels like they're always fund raising.

Joe Weisenthal (2:11)

This is the other thing too, it used to be when I started covering tech companies, it was like, they were Series A round and Series B round and C. And now it just seems like this permanent round, especially with some of the AI companies.

Tracy Alloway (2:23)

Always be raising.

Joe Weisenthal (2:24)

Always raising. Anyway, we need to learn more about how giant companies are thinking about capital markets, both public and private. And I'm really excited to say, we do in fact absolutely have the perfect guest. We're going to be speaking with David George. He is the head of the Growth Fund at Andreessen Horowitz, A16Z, someone perfectly situated to explain of all these things that's going on. So David, thank you so much for coming on Odd Lots.

David George (2:49)

Hey, great to be with you all.

Joe Weisenthal (2:50)

What is a Growth Fund? What is the... I thought all VC was growth. What does it mean when we talk about a Growth Fund or a Growth Round when we're talking about private markets?

David George (2:58)

Yeah, so first of all, it's great to be with you all. Thanks for having me. Excited to have this conversation.

So, our early stage funds invest in companies that are growing fast too. So, if that's not clear, that is what we seek to do across all pools of capital. For us, the Growth Fund is a fund that invests in companies at the later stage of their life cycle. So, typically once they found product market fit. And our early stage funds invest in companies early stage when they're kind of trying to find product market fit. We invest in companies once they have found product market fit. So, that's the delineation. Right now, we're investing out of our fifth Growth Fund. It's about a $7 billion fund. If you combine the committed capital of our five funds, it's about $22 billion in overall committed capital.

Tracy Alloway (3:41)

What percentage of the Growth Fund is sort of directly obtained from the early stage funds? Because I imagine that's a good pipeline for you guys, right?

David George (3:52)

Yeah, it's a great pipeline for us. We do both. So, we have examples of investments out of the early stage and in companies that for whatever reason, we were not early stage investors. So, some of our largest investments in the Growth Fund are companies like Databricks and Stripe that we were early stage investors in. And then some of the largest investments are companies like SpaceX and OpenAI and Waymo and Roblox and Figma that we were not early stage investors in. And the first time that we invested was in the Growth Fund. So, it's about 50-50. We love to invest in companies where we know the founders really well. One of the things we talk about all the time is GameFilm. This is something that public market investors are very familiar with.