Patient Capital in an Impatient World Backing the Builders of Tomorrow

I know it goes without introduction but joining us today is Himantene Asia one of the most influential venture capital leaders. You must have come across his organization but SEO of General Catalyst. He oversees a portfolio of more than 800 companies including Stripe, Snap, Grammarly. So, thank you for having an impact on all our lives. Um, Herman, if you ha, in case you haven't come across this, is a long-term advocate for responsible innovation, of which I'm a huge fan, championing the idea that building with purpose is not at odds with building at scale.

So, we'll try to explore some of these themes today. It is a pleasure having you with us. Our theme for today is uh patient capital in an in impatient world. So, it's natural for me to start by asking this question. What is patient capital?

Yeah. So I think um when you think about a lot of what technology innovation uh presents as an opportunity today, it is actually about redesigning a lot of our societal systems. We are in the world of global resilience and applied AI. We're thinking through what core institutions like health, education, financial services, they're all going to look like. And so you have to build these companies in a way that they the these companies can endure for a long time.

And that means they have to be good uh for society otherwise they will not be able to endure. In order to really do that you have to make the right choices around technology, policy, capital, inclusivity and uh building those companies is hard. I don't think that's uh the mindset of move fast and break things gets you there. So you have to make the right choices where you have urgency in the short term but you know that these things will take a while to build and having a capital that has that perspective is essential to be able to build these kinds of companies.

But then who is impatient? Is it the investors? Is it the founders? Who's uh who's sitting on the edge of their seats every day?

Okay, so we just invested in uh Enthropic. It's a company that went from less than a billion dollars to going to be approximately $10 billion in a year. when you see AI pulling forward that kind of progress and on the other side you're saying hey let's be patient and build companies for a decade to transform these industries the the ecosystem the talent

that wants to build this they need to they need to have that kind of a mindset that not everything is going to inflect really fast but in the long term can be very very valuable so investors employees founders everybody has to have that kind of an aligned mindset to build a company like that

and so building on that how should founders think about their capital structure. So evently it it makes sense to you to really think through about the type of people you want to be investing with you.

So look when you are building for 20 30 years just relying on traditional mindset of raise venture capital again progress keep raising venture capital keep diluting isn't actually the right way to capitalize the business. I think as technology becomes more pervasive, we do need a more differentiated capital stack.

Yeah.

So that when you think about taking venture capital risk early on versus funding uh predictable sales and marketing of your company later on, you need more differentiated sources of capital to do that. So I think I think being smart about how to manage your balance sheet, how to raise capital, what sort of capital is aligned for which stage of the business is something that uh we really try to discuss with our founders. uh you know as we build these companies with them

do you feel uh sometimes founders startups rush to get more capital do they have a good sense of when they're ready to get more uh investment

yeah so in in an environment like this where there's so much exuberance around AI and we're seeing the the really good companies scale so fast capital becomes fast and loose because there's so much activity investors don't have time to properly think every deal is competitive and so uh the things get rushed. So what happens for founders is you raise capital and new investors come in and say, "Oh crap, missed that round. Let's give you a markup to more take capital. Take more capital from us. We'll mark you up."

That sounds good in the short term, but first of all, it's you're diluting yourself for capital that you didn't really need. Second, you're creating valuations that maybe you're too are too far ahead from where your business should be. So it's it may be the interest of the investors to get ownership in your company, but may not be the right thing for your company. And so just being disciplined about that is on one side, but there is a trade-off. If capital is abundant, you do want to make sure you've raised enough that you can take long-term uh bets in your business.

Uh but you also want to make sure that just because you raised it doesn't mean you have to spend it.

Yeah.

So you want to decoupble this idea of, hey, let me go create a strong balance sheet for myself, but then be disciplined about not really spending in these uh crazy environments just because everything is fast and loose. any uh examples you can share with us? I know we like to u uh hear about the examples that perhaps didn't work so well, but maybe also examples that did manage capital effectively.

I mean, we you mentioned Stripe earlier. I've been invested in Stripe uh we made our first investment in 2010.

So, it's been 15 years. We've invested in that company probably about 14 times. So, they uh raise capital sort of every uh year, year and a half over the last 15 years. But they were very disciplined. Just because they raised capital didn't mean they increased their burn rates.

They they focused on what mattered most. They didn't try to go too many build too many products at the same time. They didn't try to overinvest in sales and marketing. They just focused on understanding their ICP which was a new company starting and making sure they had the right market share worldwide in doing that. And and if something was a distraction from that, just because they had a strong balance sheet didn't mean they had to spend it.

And that that was a very fiscally prudent way to go scale the business over the last 15 years. that company is now worth over 100 billion.

Wow.

And uh uh they didn't really actually uh get that diluted because they were very disciplined, but they also built the business very capital efficiently because of the same discipline.

Fantastic. So maybe I'll go a bit more macro here. Um just building on that, I know you touched on some of it, but is there a belief that the venture uh industry holds that you don't you don't think aged uh well? I'll tell you our examples at Hub71. I think we're so accustomed to seeing uh founders, startups pitch a certain way, expect there are certain outcomes if they present it a certain way.

But are these now uh models outdated? Is there something we should be conscious of especially in the world of an AI revolution?

So I think I think there's one um if you go back to 2007 which was really the beginning of the social mobile cloud era. So the last let's say until 2022 when Chad GPT was launched. those 15 years. Uh what was really interesting was there was this notion of you had a great founding team that was usually a product and an engineering team and you built something really sharp as a wedge which you got product market fit on and then you scaled doing customer acquisition using a lot of the platforms that have been built. Right?

So this was this whole minimum viable product and then scale. If you fast forward to what happens today uh with AI where technology is constantly uh changing and we're actually in a period where code mostly self-writes right you don't need as many engineers uh and so what's happening is that you're going from a minimum viable product to a minimum viable relationship

can you go build a relationship with a customer go in there have what's widely known as a forward deployed engineering model bring the AI capabilities and just solve their problems.

Yeah.

And not worry about uh what is the sort of uh core sharp wedge that you're building to solve everybody's problem

because technology can write products at scale for you. Uh given all the cloud code and cursor and all the techn cognition other companies that are being built today well you don't need to have a really really repeatable

uh product AI just makes it repeatable for you. So I think that behavior is actually changing in many ways in what kinds of companies getting traction today versus 10 years ago.

No, definitely the value of relationship always sense you know um we've been lucky enough with Rob 71 to have visited multiple jurisdictions. I'd say predominantly over the past year or so and every environment is very different on how you should approach it. Uh some uh ecosystems are a bit more assertive aggressive than others. Others are very conscious on how you build these relationships. So that's definitely a common denominator across um everything that we have uh seen.

But you know uh when we started hub 71 of the things entry points uh please do not publicize this too much uh but we always thought we needed to be this you know a bit of an outlier a bit of a uh don't want to say a huge rule uh uh rule breaker but an explorer. Um we thought that you know whenever you build a tech ecosystem you need to disrupt it. Is there one rule generally across venture that you think should be broken um regularly?

H one rule that should be broken regularly I I think um other than sort of this orientation that I was mentioning on you know repeatability of a product that's that actually is a pretty big departure in terms of what needs to be done. I would say the other thing is uh if you look at certain geos because languages can all be supported by technology the used to be are you going to go you know only serve English speaking countries and are you going to build your global businesses a certain way that's another place where things are changing how you think about international uh is very very different

and the last thing I would say is because in core industries every geography wants strategic autonomy

you have to think about building these companies in a way they're resilient for your own uh region first and foremost.

So, how do you really do that effectively while being being well positioned to eventually be global?

Yeah.

Because I do I do think uh over time markets you'll swing from globalization to deglobalization and in the end you want to build these companies in a way that you win your market. You're always well positioned to be global and those are those are uh departures from the way we used to think about building these companies.

No, definitely. And that's a a great segue to the next question I had in mind. Um what are the key factors for tech ecosystems to be genuinely attractive for uh founders? You mentioned, you know, their ability to focus on the region and then expand, but there are there any uh factors that tech ecosystems should think of again selfishly thinking about top 71 don't get a lot of opportunities like this. So we'd love your advice.

Look, I I so I I I have a belief that uh if you think about the last 30 years, why was Silicon Valley, which is where I'm based, I used to be in Boston and I moved to Silicon Valley 15 years ago because that was the place where you could build the world's most interesting companies. The reason was because you needed not only capital uh but also strong engineering talent uh a density of that to be able to build these companies because every company essentially is a founder a vision and engineers

at the beginning. So could you actually get really good talent to go solve these problems that these companies wanted to do? again with AI with cloud and cognition and other technologies you don't need as many engineers uh going forward and I actually think that's a really interesting opportunity that democratizes how entrepreneurship can diffuse across the planet there's a lot of capital here uh if you're effective at using AI there's a lot of opportunities in terms of you know industries where uh you know Abu Dhabi is trying to be uh globally a leader Yeah.

So you have capital, you have effective use of AI. Well, you can build it here then. So I think I think that mindset is available all over the world after this, which is a good thing. We want important companies being built everywhere, not just in a certain region.

And I love that you mentioned Abu Dhabi. So what should Abu Dhabi be doing more of?

Look, I think I think u um I've spent time here trying to understand healthcare. I've spent time here trying to understand the the financial markets opportunity. I I think there can be great global opportunities in terms of building here. Uh so big big believer in financial services, big believer in health, the heavy investment in AI will create an environment

where you should be able to build these kinds of companies here. Last thing I'll say is if you look at uh transformation of AI services with AI every region this is not Abu Dhabi specific comment you need to you need to make that transition in a way that the productivity gains that come from melting labor are captured in your region. So need to think about that whole sort of cloud uh strategy not just the AI strategy. So the the the productivity is captured here.

I see. So when you think

sovereign sovereign strategy if you will.

So when if you think about an ecosystem builder like cup 71 any piece of advice I should take home with me?

Yeah my biggest piece of advice is if you look at every important company

Yeah.

and you say what's the culture that that company has. It's different from the last the the other important company. Every great company has a unique culture. So the way you create a hub,

the biggest piece of advice I would have is create it in a way that each company can breathe and create its own culture versus harmonizing it because that's just the the input into building great companies is letting these companies develop their own unique cultures.

Hub 71 team, please take notes. I'll I'll grill you on this later. Um I'll maybe I'll wrap it up with this question. If you give uh if you can give founders one piece of advice for 2025 um that would still matter in 2050 or beyond, what would it be?

Um look, I think startups are in some ways the world's most important institutions now because we're rebuilding everything and you trust startups more than you maybe trust even the government in their ability to solve important problems, right? But that also comes with a lot of responsibility. And so uh you know understanding that not only are you a leader for your business but you also have to have leadership in society. I do think that's an important thing that's going to be increasingly true as we diffuse AI over the next 25 years and build these companies. And so constantly thinking about not just your own company, your customers but also society at large is very important.

A lot of companies in this room that are being built today are going to impact jobs uh in a material way.

Yeah.

If if we all make jobs go away, that's also not a functioning society. And so just thinking through that every time you create productivity with your technology, how do you also think about reskilling humanity to do interesting things? That's kind of your responsibility as well. That's not just the government's responsibility.

You gave me the theme for Hub 71 2026, reskilling humanity. Uh guests, thank you so much. Yeah, you must realize it's not a conversation about chasing valuation. It is about durable value creation, trusted partnerships, and disciplined execution. Patient capital rewards evidence-based progress and a purpose-led building.

Abu Dhabi's ecosystem in investing for the long term and when building something uh when you build something that works and compounding momentum is clear, value will align with the capital and it will find you. Amad, thank you so much. It was a pleasure spending time with you. Appreciate your time.