Brian Singerman on Venture Pricing, Founder Selection and Anduril

Founders Fund partner Brian Singerman tells Harry Stebbings that he began investing in startups while working as a Google engineer and engineering manager. After meeting Sean Parker, he joined Founders Fund around the time the firm was considering an investment in SpaceX.

Singerman says venture investing differs from the conventional phrase “buy low, sell high” because an investment may take a decade to produce a payoff. Price still matters: paying too much limits potential upside, even if the main objective is to back outstanding companies.

In an interview recorded around October 2022, he sees a mismatch between private companies’ last financing prices and public-market valuations. Many strong private companies can wait rather than raise. He pays attention to macro conditions but says he does not believe he can reliably predict them.

He warns that recapitalizations can have damaging effects on companies even if they appear cheap to investors. Founders Fund, he says, has no pressure to deploy at prices it considers unreasonable and can wait for good companies at terms that preserve upside. That is his account of his firm’s approach.

Looking back, Singerman agrees the firm deployed too quickly in 2021. He also says that year benefited from its practice of distributing public shares after lockups instead of assuming it could outperform public-market investors. His description of the firm’s results is not a complete, independently verified return history.

He says hindsight makes mistakes easier to see than future conditions. His basic formula remains backing the best founders and companies at prices he considers attractive. At the time he had personally slowed his investing because he could not obtain acceptable prices for some companies he liked.

Singerman says he had made one major investment that year: a $200 million check into Anduril. He was pursuing other opportunities but would not name them. Founders Fund’s stake creates a direct financial interest in his later praise of Anduril.

For founders considering fundraising, he says he cannot forecast whether conditions will improve. His practical advice is to plan around current conditions and seek capital on terms that do not cripple the company; some businesses, he acknowledges, will nevertheless close.

Founder quality is central to his judgment, but Singerman says a company must also address a large enough market to matter to a multibillion-dollar fund. He cites Airbnb’s network effects and the lodging market as examples of what he saw, reflecting Founders Fund’s investment interest.

He does not believe anyone can reliably identify a future $100 billion company at seed stage. Investors can instead judge whether a team has a much better chance than most. The distinction is between a probabilistic thesis and certainty about an outcome.

Singerman says he does not personally plan reserves for each deal: if a later opportunity is attractive, a subsequent fund can invest in the same company. He acknowledges that Founders Fund has unusual latitude because of its history and says investors who dislike cross-fund investing need not participate. His account does not eliminate potential conflicts between funds.

Success can help a firm gain access because founders recognize its brand, he says, but it does not automatically improve the ability to find companies. He breaks the job into seeing opportunities, selecting them and getting access, and considers all three important.

As his network ages, Singerman says sourcing becomes harder: investors must keep meeting new people and cannot rely indefinitely on old networks. Partners at Founders Fund use different approaches; some also build companies, which he says can keep relationships fresh.

Singerman attributes Founders Fund’s resilience to adapting rather than treating its past methods as fixed. He says the firm hires people with distinctive strengths rather than copies of existing partners, citing a colleague with enterprise-sales expertise. These are his claims about his employer’s practices and strengths.

Rather than telling a new partner to replicate his style, he says they discuss how to use that person’s particular expertise to find, choose and win investments. His own gaming analogy is to identify an advantage and use it where others cannot easily replicate it.

Singerman dislikes formal private-company board work and says governance and financial analysis are not his strengths. He prefers regular strategy dinners with founders to discuss a company’s unique advantage and how to build on it. He later distinguishes this from the value that qualified board members can provide.

He accepts that he has overestimated advantages and made mistakes. Venture decisions lack perfect information, he says, so investors must make judgments, learn when they are wrong and refine them. His emphasis on upside reflects his strategy and is not a general prescription to ignore losses.

He says he personally struggled to assess founders when meetings were limited to video during the pandemic, and considers meeting in person important to his own process. That is his experience, not evidence that remote assessment cannot work for others.

For new fund managers, Singerman advises raising a fund small enough that a preferred check size can be meaningful. His example is that a manager comfortable with a $5 million maximum check should consider a much smaller fund rather than taking on a scale that makes strong multiples harder.

Large checks are central to his own style. He says he wishes the firm had invested more in Airbnb at an earlier round, but acknowledges that losing a $500 million investment would make it hard to generate multiples on a fund. Examples and retrospective comparisons are his own.

He predicts his $200 million Anduril investment will become $2 billion and says he is confident it will not be lost. This is a highly uncertain forecast, not an achieved return or guarantee; Founders Fund is invested in the company.

Singerman says he complements his own weaknesses by working with partners who have different skills, including company building, financial analysis and macroeconomics. He remains open to hiring someone whose distinct strength fills a need the firm had not previously identified.

On references, he prefers questions that do not reveal the answer the interviewer wants. He also favors multiple conversations and acknowledges hiring mistakes. Since diligence is never perfect, he says, the firm must learn and adapt rather than stop making decisions.

He advises younger investors to learn from losses without becoming so shaken that they cannot make another investment. In his view, judgment under uncertainty is unavoidable, though he does not suggest that instinct makes any particular investment safe.

Asked for his most successful investment, he names several Founders Fund investments but does not provide a single personal return. He says distributions around the end of 2021 worked in the firm’s favor; the interview does not provide the full cash flows or performance needed to assess that claim.

Singerman describes wanting strong returns for himself and limited partners with relatively little public fame. He identifies openness to unusual ideas as a strength and says a weakness is that he often neglects skills in which he is already weak.

Fatherhood has changed his schedule: he tries to be home for dinner with his two children, reducing time for evening founder meetings. It has also forced him to work on skills he cannot simply delegate, he says.

Although he dislikes formal board meetings, Singerman values directors with deep sector knowledge, governance or financial skills and useful relationships. He says the most helpful person depends on the company and its needs, rather than on an investor’s reputation alone.

On Anduril, he says Founders Fund had invested $400 million in total, including the more recent $200 million check. He cites its team, product capabilities and government relationships as reasons for his conviction in defense technology. These are an investor’s interested assessment and do not establish future returns or the merits of its products.

Singerman says he believes Anduril assembled an unusual team at a time when many technology founders were reluctant to work in defense. Stebbings thanks him for the conversation, and the interview ends.