Uncapped #27 | Vince Hankes from Thrive Capital
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this podcast episode, Jack interviews Vince Hankis, a partner at Thrive Capital, exploring the evolution and investment philosophy of one of venture capital's most concentrated growth funds. Vince details how Thrive has transformed from a $10 million fund in 2009 to a $5 billion powerhouse, making massive concentrated bets on companies like OpenAI, SpaceX, Stripe, and Databricks. (00:31) The conversation reveals Thrive's unique approach of making only 10-12 investments per fund with enormous check sizes, sometimes exceeding $1-2 billion per company. (02:00)
- Main themes: Concentrated investing at scale, the power law dynamics of venture capital, building conviction through long-term relationships, and the evolution from contrarian outsider to consensus platform while maintaining independent thinking
Speakers
Vince Hankis
Vince Hankis is a partner at Thrive Capital, where he has worked since 2019 and been instrumental in most of the firm's major investments including OpenAI, SpaceX, Databricks, and Stripe. Prior to joining Thrive, he worked at Tiger Global Management, bringing quantitative investment experience from managing a $3 billion private fund and $15 billion hedge fund. He joined Thrive when it was a $1 billion fund and has helped scale it to $5 billion while maintaining the firm's concentrated investment approach.
Jack (Host)
Jack is the host of this podcast and appears to be an experienced venture capital professional with deep knowledge of the industry. He demonstrates familiarity with Thrive's portfolio companies and investment strategies, suggesting he has significant experience in the venture capital ecosystem and likely leads or has led a venture-backed company himself.
Key Takeaways
Concentration Requires Deep Conviction and Long Relationship Building
When writing billion-dollar checks into companies, Thrive cannot afford to be uncertain about outcomes - they need "almost dogmatic conviction" that their investments will succeed. (20:40) This level of conviction requires extensive relationship building over years, not months. For example, Thrive made their first Stripe investment almost ten years before writing their massive $2 billion check, and they spent eighteen months getting to know Isomorphic before investing. (21:01) This approach fundamentally changes how venture capital works - instead of waiting for companies to pitch them, they proactively identify and court potential investments over extended periods, building deep product and team understanding that enables confident large-scale bets when the timing is right.
Start with Qualitative Analysis, Validate with Quantitative Data
Thrive's investment philosophy prioritizes understanding people, products, and market dynamics before diving into financial metrics. (08:23) As Vince explains, if you start with numbers and they deteriorate, you lose confidence entirely. However, if you build conviction around the team, product, and long-term market opportunity first, temporary financial setbacks don't shake your fundamental thesis. This approach proved crucial during their Stripe investment when post-COVID market conditions made the company appear less attractive on paper, but their deep understanding of the founders and long-term e-commerce trends allowed them to invest with confidence during a contrarian moment.
The Power Law Favors Investing in Established Winners at Scale
Thrive's data analysis reveals that over the last decade, 75 companies reached $100 billion+ valuations while only a few hundred reached $10 billion+. (12:06) This creates better odds picking from established winners scaling toward $100 billion than trying to identify the few companies among thousands that will reach $10 billion. The strategy recognizes that most enterprise value creation happens in a company's second or third decade, precisely when companies like Stripe, Airbnb, and Uber are entering their most valuable growth phase. (13:34) This insight drives Thrive's concentrated approach of betting large on proven platforms rather than diversifying across earlier-stage opportunities.
Competitive Advantage Comes from Playing Where Few Can Compete
Thrive deliberately focuses on investment sizes that most firms cannot match - billion-dollar checks that only a handful of firms globally can write. (23:33) This creates a less competitive environment compared to traditional growth investing where hundreds of firms compete for $100 million rounds. The strategy requires significant scale and a founder-led culture that enables quick, decisive decision-making without bureaucratic approval processes that plague partnership-governed firms. (25:18) By operating in this rarified space, Thrive can spend extensive time with companies knowing they're one of only a few viable partners, creating stronger relationships and better deal access.
Maintain Independent Conviction Despite Market Sentiment
Thrive's most successful investments often come from contrarian moments when market sentiment turns negative on great companies. Their Stripe investment exemplified this - when post-COVID numbers decelerated and competitors looked more attractive, Thrive doubled down based on long-term conviction about e-commerce growth and the founding team's capabilities. (06:25) Similarly, their Carvana investment required buying more shares when the stock dropped 90%+, demonstrating how independent analysis of fundamentals can create opportunities when others are driven by short-term market movements. (27:43) This requires building organizational culture that rewards contrarian thinking and long-term conviction over consensus-driven decision making.
Statistics & Facts
- Over the last decade, 75 companies reached $100 billion+ valuations while only a few hundred reached $10 billion+, creating much better odds for picking established winners scaling up rather than early-stage companies reaching initial scale. (12:06)
- Over 500 companies per year now raise at least $100 million in capital, representing massive saturation in what was historically considered "growth" investing territory. (15:23)
- Stan Druckenmiller noted that 120% of AI profits currently come from NVIDIA, meaning most AI companies are losing money while NVIDIA captures all the economic value in the ecosystem. (41:53)
