00:00I thought a good place to start is talk a little bit about the LPs, you know, where the money
00:05is
00:05coming from and how much push you are getting to participate in the deal flow in that
00:11re-industrialization movement. Ed, great to be here and thanks for having me. We raise capital
00:19from U.S.-based LPs. It's a non-profit organization, University Endowments Foundation,
00:24hospital system, et cetera. We started the film 11 years ago with one goal. And our belief that the
00:32economy, that the U.S. economy needs to grow much faster, nor to a 5%. And it's going to happen
00:38only
00:38from physical industries because they are combining 85% of the world GDP. And to tell you the truth,
00:44we kind of forget to build hard companies in this country and we are super excited to be back in
00:49the
00:49market with capital to support the founders and operators. You've grown the firm as well in the
00:56last couple of years. Joe Pfaff came from T. Rowe Price. You have Jitembel, Charlie Mwangi, who are
01:03alumni of Rivian and Tesla in Charlie's case. What's the strategy with these two new funds and how are
01:10you going to use your talent bench to get out there, do something interesting? Yeah, we don't think
01:17ourselves as a venture capital necessarily or growth capital. We call ourselves operators with capital
01:22because we believe that in order to build companies that manufacturing chips and building rockets and
01:28doing mining, it's required a different model. And you need an operators that was on the other sides
01:33to support those founders along the journey. And, you know, I'm joking with my friends that I used to say
01:41that this is the best time to build in this country from Henry Ford or Carnegie or post-World War
01:46II.
01:47And I actually changed my quote to, this is the best time to build in this country, Prius. And we
01:53have
01:54now the five forces aligned, what we call internally the eclipse, capital, policy, technology, talent,
02:00customer demand. And those forces was not aligned in this country for us to build those type of
02:05companies. They were only aligned in one other country that compete with us, and it's China.
02:11It's interesting that you say policy is aligned. And we've just been out particularly thinking about
02:16defense tech, Lior. And for many, yes, the signals are all there. Demand is being said. But how much
02:22money is actually being allocated by the government to startups right now? How much do you need to help
02:27fill that gap with some of your follow on funding?
02:29Yeah, I'm actually sitting right now in a hotel in Washington, D.C., going to talk on stage with
02:36Jamie Dimon on J.P. Morgan SRI around Defense Production Act. And I cannot remember someone
02:43like me is visiting so often Washington, D.C. and have the CEO of the largest bank in the world
02:49allocating one and a half trillion of J.P. Morgan to support those businesses.
02:53So it's not only we need to do it in order to protect democracy, that, of course, should be the
03:00number one goal. The second thing is there is a significant increase of customer demands by the U.S.
03:06governments and others as well capital. And probably the most interesting part is the talent. The best
03:12people in the world right now wants to build companies and physical industries.
03:15Look, you've raised 1.3 billion in total, and it's divided between where you're going to be
03:21allocated in growth stage. We can understand some of the winners you've already got. We've seen a
03:25phenomenal portfolio, an economy you say you've built. But where's exciting at the very early
03:30stage? Where do you want to be going out and looking for? Where does the puck move?
03:34Yeah, it's interesting. As you can imagine, I get that question a lot of like, OK, you raise new
03:41capital. Which industries you're going to invest? And in some way we talked about defense,
03:46building chips, building fabs, doing mining, building batteries 10 years ago. So the reality
03:53physical industries are not new things. They've been here for so long, and they are combining
03:5785 percent of the world GDP. And I think bringing those digital tools that we are all so familiar
04:04from Silicon Valley, anything from physical AI now to LLMs and others, the latest and greatest in
04:09robotics, and apply them to the physical world, you basically are going to create the largest companies in
04:15the world. I mean, you just literally in your show talked about Samsung bidding earnings. You talked
04:20about Entropic Google chip. You talked about my friends René Hass from Arm moving to a full stack.
04:25Everything that is interesting right now is happening in physical industries.
04:30You've done some really interesting deals. So I think about, for example, also spun out of Rivian.
04:35You took it out of Rivian early and wrote quite a large check. You've used similar mechanisms,
04:42some scaring spin-off, some others. Do you have a different way of doing things? Could we see a
04:47similar spin-off type deal out of this fund?
04:54Yeah. I remember I got the first phone call, I think, from one of our LPs in 2018. And he
04:58was like,
04:59Lior, why the heck are you building a company you're supposed to invest? And I'm like, hey,
05:03I'm an operator. I like to build companies. I'm not going to stop building companies.
05:06And I think, you know, what you're seeing, Ed, is the model of how you build companies is shifting
05:12as well. Yeah. Because just based on Caroline, great questions on the defense is you need scale
05:18out of the gate. So if you're going to take the traditional C, Series A, Series B, Series C,
05:23it's just too slow. And if there is an asset that I can spin out, if there is a talent
05:27that I can take,
05:28if there is a customer, I can build a company for that demand. Right.
05:33As an operator with capital, we have full flexibility.
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