00:00There was a lot of interest in the fund. I want to kind of start with mechanics. So you raise
00:04your next fund. We say it's oversubscribed. Clearly LPs are increasingly interested in
00:11exposure to defense tech. How did you raise the fund? What was the process like? How did you
00:16settle on the amount? Sure. Thanks, Ed. Well, it's great to be back here. It was on about a year
00:21ago
00:21when we were discussing Operation Midnight Hammer. So it's terrific to be back here on your show.
00:27Well, and before I dig into those questions, I'd like to just say, you know, we're very thrilled
00:31to be here, particularly ahead of America's 250th anniversary. This is a great country. Each
00:36generation inherited a stronger country from the last. So our central question is, what are we going
00:41to do to build for the next generation? And, you know, that's why we set out to start Marlinspike.
00:47That's why we just went after Fund 2. And we don't see the Fund 2 closing as the end of
00:53the road.
00:53We really see it as the beginning of Marlinspike as an enduring investment institution. And so to get
00:59to the fund mechanics, we set out to raise $75 million. This was a continuation of our Fund 1,
01:04which was raised in 2022. Very, very challenging capital raising times, but we feel really good
01:10about the team and our portfolio companies and our strategy and mission for that fund. So Fund 2 is
01:15really a continuation of that. We're pleased that we more than tripled assets. We wanted to have a fund
01:20size that was modestly sized relative to some of the big multi-billion dollar funds and firms out
01:27there. So we could stick to our knitting, be leaders in our companies, take concentrated conviction
01:34positions, and really help and guide our companies to put up uncapped returns for our investors.
01:40We just showed some of the existing portfolio. And, you know,
01:48late stage growth name. What is the rest of the market in the field like? What else is out there
01:55to find?
01:58Well, I mean, clearly, Andruil is a special company. You know, when I ran a family office,
02:02I invested in SpaceX 12 years ago. We invested in pounds here before they went public, before we
02:07launched Fund 1. Andruil is one of our key names in Fund 1 along with Armada. So we've got a
02:13history of
02:14looking at these interesting opportunities. And in many cases, investing before it becomes obvious.
02:19I mean, now, obviously, Andruil is obvious. They've absolutely executed and killed it. And
02:24we think there's still a lot more room to grow. And what's important about, you know, the leading
02:28companies in our space is that they have, you know, broken through and they have shown that they can
02:33execute, operate and scale. And so what we're really looking for is who are the next batch of leaders
02:38that are coming up? And I saw in your logos there for Fund 2, we have a number of these
02:44companies already in the fund. We actually launched the fund in 24. So we like to say,
02:49building the plane while flying it, which is a neat trick where you're raising money and investing
02:54along the way. So we see companies like Layup and Advanced Manufacturing, Kodiak and Autonomous
03:00Trucking, Jet Zero, we think is going to be the next national champion for aerospace for our country.
03:05So these are the companies you might not know about now, but we think you're going to know about
03:09them pretty soon. The general broad idea is that the government of today is more open to doing
03:18business with more nimble, largely Silicon Valley based technology companies, right outside of the
03:25legacy primes. Do you see evidence of that? Like when you're modeling for the future growth of the
03:30portfolio companies, you have line of sight to them winning those awards through the Pentagon,
03:35Department of War, etc.? Yes, correct. But that's not that's not all that we do. So this is really
03:41about a new area, a new era in American industrial renaissance. So we see the convergence of AI,
03:48autonomous systems, advanced manufacturing, not only are they serving mission sets for national
03:52security, but also the commercial market. So we like that convergence of those sectors,
03:57because we think that that can really be the highest growth and the biggest productivity
04:02increase for our country and our portfolio companies. So that's why we're doing this,
04:08because it's going to make America and our economy and national security stronger.
04:12Neil, would you call yourselves a venture capital firm or how would you describe the sort of mechanics
04:19of what you do? And the reason I ask that is I'm really interested in in this sector, specifically
04:24defense, what the exit strategy looks like traditional path to IPO, or if actually more likely you see
04:30strategic investors come in, acquisitions happen by those bigger legacy primes.
04:36So, you know, look, there's three classic ways to get an exit. You know, one company goes all the
04:42way to an IPO. Two, some type of M&A or three, the secondary markets are really building and expanding.
04:49So, you know, we often look at the secondary markets, both buying and selling as a ways to augment
04:54our portfolio. But I think what you'll see from us continually going forward is we're going to take more
04:58of a leadership role. You'll see us leading more seed rounds and series A's, leaning into series B
05:04companies where we can make a real impact with our team, our access and our insight. So that's really
05:09our sweet spot. And again, a lot of those companies, you know, these are ideas that might not be obvious
05:13for everybody, but they become very obvious to us. And we see these companies as potential,
05:18not only national champions, but just inevitable companies that have to happen.
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