Vince Hankes on Thrive Capital’s OpenAI Investment Decision

In this May 2023 interview excerpt, Harry Stebbings asks Thrive Capital partner Vince Hankes how the firm assessed its investment in OpenAI at a high reported valuation. The figures and market context are historical.

Hankes says the price prompted a heated internal discussion. Thrive makes decisions as a team, he says, and once a decision is made the partners commit to it despite earlier disagreements.

He acknowledges that a very high entry price requires exceptional outcomes to produce strong returns. The investment therefore involves both the possibility of substantial upside and the risk that those outcomes do not materialize.

Hankes argues that adoption of major technologies can be hard to forecast using ordinary spreadsheets. In his view, scenarios that initially look implausible can sometimes become realistic if a technology scales rapidly.

He describes balancing quantitative analysis with a qualitative examination of what could go right. Possible applications he mentions include search and workflow automation; he does not claim those outcomes are guaranteed.

He says early product adoption reinforced the firm’s view of scalability, while acknowledging uncertainty about the durable revenue model. The firm decided that potential compounding upside justified the price risk in its assessment.