Key facts
- Thrive Capital founder Joshua Kushner criticized Silicon Valley VCs' AI investment strategies in the firm's first investor letter.
- Kushner advocates for concentrated investments in strong people and ideas, contrasting with the "outlier" model of making many bets.
- Thrive Capital focuses on deep investment, with about 90% of its capital in its top 15 investments per fund.
- Thrive has a significant investment in OpenAI and its spinout, Thrive Holdings, has acquired over 70 companies for AI makeovers.
- Thrive's 2022 early-stage fund, with investments in OpenAI, Anduril, and SpaceX, is now valued at over $3.7 billion.
- The firm manages $60 billion in assets and reports impressive returns, including a gross IRR of 41%.
Joshua Kushner, founder of Thrive Capital, has voiced criticism of Silicon Valley venture capitalists' approach to investing in artificial intelligence. In Thrive's inaugural investor letter, Kushner argued that the industry's fixation on incremental technological advancements and a "spray-and-pray" investment philosophy overlooks the ultimate potential of AI.
Kushner contrasted Thrive's strategy, which involves deep concentration in a small number of people and ideas, with the prevalent Silicon Valley model of making numerous bets with the expectation that a few outliers will generate massive returns. He stated that Thrive aims to concentrate its time, capital, and energy on the most promising ventures, rather than seeking to disrupt industries solely from the outside.
Thrive Capital's approach has led to significant investments in companies like OpenAI, Anduril, and SpaceX. The firm's spinout, Thrive Holdings, acquires businesses and enhances them with AI, having already purchased over 70 companies. Kushner highlighted the success of Thrive's 2022 early-stage fund, which has grown to be worth over $3.7 billion from an initial investment of $516 million.
With $60 billion in assets under management, Thrive Capital reports a gross internal rate of return of 41% and a net IRR of 33%. Kushner indicated that billions of dollars in additional liquidity could be realized in the coming quarters, potentially through exits like the SpaceX IPO and OpenAI's anticipated public debut.
While acknowledging that both Kushner's and Marc Andreessen's contrasting philosophies have proven profitable, Kushner emphasized the importance of maintaining investment discipline, noting that "not every fast-growing business is exceptional. And not every exceptional company is a great investment at every price."