What Travis Kalanick Taught Bradley Tusk, & Why He Closed His VC Fund
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
Bradley Tusk, CEO of Tusk Ventures and former political advisor to Uber during its early regulatory battles, joins Molly O'Shea to discuss the intersection of politics, technology, and venture capital. Tusk shares his skeptical view that the $2 trillion projected AI infrastructure spending for 2026 may be driven more by short-term share price narratives than long-term economic necessity. (01:25) He explains his decision to shut down his traditional VC fund model in favor of an equity-for-services approach, drawing from lessons learned working with Travis Kalanick and Mike Bloomberg.
- The conversation explores the economics of venture capital fund management, the premium AI companies receive in valuations, regulatory challenges, and Tusk's philosophy on zero-sum versus abundance thinking in both business and life.
Speakers
Bradley Tusk
Bradley Tusk is the CEO and co-founder of Tusk Ventures, a venture capital fund focused on startups with regulatory challenges. He previously served as Mike Bloomberg's campaign manager during his 2009 mayoral race and became Uber's first political advisor in 2011, helping the company navigate regulatory battles across the United States. Tusk also founded Tusk Strategies, a political consulting firm, and owns P&T Knitwear, an independent bookstore and podcast studio in Manhattan's Lower East Side.
Molly O'Shea
Molly O'Shea is the host of Sourcery, a venture capital podcast that features interviews with investors, founders, and industry leaders. She focuses on exploring the intersection of technology, business strategy, and market dynamics in the venture capital ecosystem.
Key Takeaways
Question the AI Infrastructure Investment Narrative
Tusk challenges the conventional wisdom around massive AI infrastructure spending, suggesting that the projected $2 trillion in 2026 investments may be driven by short-term share price considerations rather than genuine long-term economic need. (01:25) He points to DeepSeek's inference model as an example of how technological breakthroughs could make current massive compute investments unnecessary. The key insight is that investors should critically evaluate whether infrastructure spending is based on actual technological requirements or market narrative manipulation. (03:10)
Equity-for-Services Can Outperform Traditional VC Models
Based on his experience managing three venture funds totaling over $200 million, Tusk explains why he abandoned traditional fund management for an equity-for-services approach. (37:00) He discovered that founders primarily wanted his regulatory expertise, not his capital, leading him to realize he could own 100% of the upside rather than sharing 80% with limited partners. This model eliminates fundraising burdens, portfolio construction requirements, and board seat obligations while focusing purely on value creation through specialized skills.
Turn Customers Into Political Advocates
Tusk outlines "Travis's Law" - the strategy developed during Uber's early regulatory battles of turning customers into political advocates. (32:35) When taxi lobbies tried to shut down Uber in various markets, the company built functionality directly into their app allowing users to contact city councilmen and state senators to defend the service. This approach proved more powerful than traditional lobbying because it represented genuine constituent voices rather than corporate influence, ultimately helping Uber win regulatory battles across America.
Mid-Sized VC Funds Face Structural Economic Challenges
Tusk provides detailed analysis of why funds in the $70-140 million range represent the worst possible size for venture capital management. (44:30) These funds are too small to generate significant management fee income but too large to quickly reach carry thresholds. His Fund 1 at $35 million achieved 5x returns and quick carry distribution, while his $140 million Fund 3 will likely provide good LP returns but minimal GP economics due to the higher hurdle rate and extended timeline to reach carry.
Focus on Relationships and Purpose for Long-Term Happiness
Drawing from behavioral economics and happiness science research, Tusk advocates for prioritizing two fundamental elements: relationships with people who provide unconditional support, and activities that provide meaning and purpose. (18:00) He illustrates this with his decision to operate a money-losing bookstore rather than fly private, calculating that the validation and community impact from the bookstore generates significantly greater personal satisfaction than the convenience of private aviation for the same annual cost.
Statistics & Facts
- AI infrastructure spending is projected to reach $1.5 trillion in 2025 and $2 trillion in 2026, according to Tusk's research and analysis. (01:25)
- Tusk's first venture fund at $35 million is currently sitting at approximately 5x returns, while his second $70 million fund is at 3.5x with no distributions to date. (44:30)
- According to Carta data mentioned in the discussion, Series A companies with AI components receive approximately a 30% valuation premium compared to non-AI companies. (49:22)
