Prompt Cast
Altos Ventures' Investment Strategies and Mistakes
TLDR Altos Ventures made significant investments in Roblox and Woowa Brothers, focusing on companies with exponential growth potential and passionate founders. They prioritize long-term growth, building relationships with entrepreneurs, and recognizing special companies for successful investments.
Timestamped Summary
00:00
Ho Nam from Altos Ventures invested multiple hundreds of millions of dollars into Roblox, becoming the largest shareholder at the time of IPO, despite originally having just an 85 million dollar fund.
06:59
Altos Ventures invested in Roblox in 2007, despite the founders initially being skeptical of VCs, because of the company's exponential growth, engagement, and early monetization, as well as the passion and vision of the founder, Dave Bazuki.
13:37
Altos Ventures made multiple investments in Roblox, including buying secondary shares, and considered selling the company at one point but received offers below their desired price.
20:17
Altos Ventures decided to buy more shares of Roblox instead of selling at a lower price, and later sold 15% of their position, which they thought was a $200 million mistake but turned out to be a billion-dollar mistake.
26:59
Altos Ventures bought more shares of Roblox instead of selling at a lower price, and later sold 15% of their position, which they thought was a $200 million mistake but turned out to be a billion-dollar mistake.
33:35
Altos Ventures considered taking Woowa Brothers public when it reached $20 million in revenue, but decided to continue investing and eventually sold their shares at a higher price.
39:56
Altos Ventures made several billion-dollar mistakes, including not taking Woowa Brothers public and not investing in Roblox, but they eventually started investing in Woowa Brothers and raised a $30 million SPV for secondary shares, which triggered the registration requirement for the entire platform.
46:58
Altos Ventures looks for entrepreneurs who have found their true life's calling and have a mission, rather than just looking for deals that make money, and they believe that if they support these people in building something special, the money will follow.
53:43
Altos Ventures pays attention to companies when they reach 10 to 20 million in revenue, and they focus on finding companies with the potential to scale up to hundreds of millions in revenue rather than those that will plateau or decline at that level.
01:00:08
Altos Ventures focuses on people and their life cycles, and while they prioritize capital efficiency, they are willing to invest heavily in companies with potential for growth and success, as long as they can control their own destiny and protect the founders.
01:06:27
Altos Ventures takes a different approach to valuing businesses, focusing on understanding the potential and inner workings of a company before determining its value, and they prioritize long-term growth and building companies rather than flipping them for quick profits.
01:13:05
Investing for decades allows you to build a mental database of knowledge about different companies, their teams, and their potential for long-term growth, which can help you recognize truly special companies and make informed investment decisions.
01:20:05
In order to recognize truly special companies and make informed investment decisions, it is important to consider factors such as the company's ability to generate cash and its potential for profitability, as well as the presence of a protectable moat, which can come in the form of network effects or unique know-how.
01:26:37
The third factor in making investment decisions is the relationship with the company, as having a deep relationship and proprietary knowledge can provide advantages, but if that relationship fades over time, it may be best to sell shares and part ways.
01:33:07
Ho Nam from Altos Ventures discusses the importance of holding onto shares for capital needs and returning capital to LPs, as well as the value of practicing public market investing as a VC.
01:39:34
Ho Nam from Altos Ventures discusses his recent increase in Twitter activity and how he has been using the platform for engaging in conversations and meeting interesting individuals, particularly individual investors who have certain advantages over institutional investors.
01:46:12
Ho Nam from Altos Ventures discusses the value of engaging with individual investors on Twitter who prioritize generating great returns over protecting the fund management business, and emphasizes the importance of finding people who believe in and back you, regardless of track record or doubters.
Categories:
Technology
Business
