Unglamorous Billions

[Unglamorous Billions @FourInsights]

There are billions of dollars in secondary shares that are not actually shares. Across OpenAI, Anthropic, Andruil, and many others.

[Matt Grimm @mttgrmm]

Wanted to add a clarification/followup here.

Have chatted with @packyM directly and more thoroughly understood the sequencing, and I fully retract my implication that Packy and/or Not Boring have acted inappropriately or unethically.

As I now understand it, Packy and Not Boring use the AngelList platform to manage their entities (which lots of funds do!). USVC is, of course, a new fund affiliated with AngelList.

Ankur seems to have asked for Packy's permission to email his LPs. Packy says he did not give Ankur a list of contacts, but that USVC already had a list. Packy said they could email his LPs. Ankur represented they had Anduril permission, and Packy took them at their word.

Ankur emailed Packy's LPs (see attached photo) representing that they had Packy's permission and that they'd "only consummate the transaction with company signoff." I understand Ankur/USVC may have similarly solicited the LPs of other fund entities managed on the AL platform.

Anduril did not, in fact, sign off. We probably don't even have the legal standing to sign off or not, but saying one thing and doing the other is, IMO, a bit deceptive.

One of Packy's LPs agreed to sell their position in Packy's SPV to USVC. This transaction did not require Packy's approval (which is odd to me, but ok). The transaction was completed on the AngelList platform. Thus USVC is an investor in Packy's Not Boring SPV, which in turn does actually own some direct Anduril shares.

Packy's got a fair point that many VC or PE funds routinely have investors that need liquidity for whatever reasons, including diversification, emergencies, taxes, other investment opportunities, or just plain old "I want cash." Anduril has had many early investors in exactly that position, and we've gladly facilitated transactions for folks to get liquidity.

Those transactions, however, are usually *very* quiet and do not result in chest pumping flexes from investors touting their access so as to gin up interest and raise more money for their funds.

Packy also asked me a very reasonable question... why do I care so much?

There are a few reasons. First, honesty is important, and there are genuine bad actors in the secondary markets. Indeed a gentleman just got sentenced to 4 years in prison for fraudulently representing access to Anduril shares: https://t.co/AAmErbPPGF My spidey senses start to tingle when I see investors we've never heard of or specifically not brought into rounds representing Anduril access they don't have... what's going on here? Obviously I don't think that is what Packy or USVC are doing here, and I'm explicitly not drawing a comparison between either of them and the Pennetta case, but that case is a main driver why I care about honesty and transparency in these markets. Along those lines, USVC's own website represents the fund is an Anduril shareholder (and not a shareholder in Not Boring SPV). Maybe semantics, sure, but as Packy's followup tweet clarifies, his entity does have a carry that USVC's position would be subject to... do the investors in USVC know that? To his credit, Ankur's tweet thread did clarify the SPV holding... in tweet 4.

Second, transparency is important. Investors buying into USVC (or any other SPV/secondary entity out on the market) have zero access to any of Anduril's financials, strategy, plans, goals, etc, nor do they for any other company they're hawking access to. We've never shared any information with Ankur or USVC, so we know they can't be sharing any (accurate, at least) information with their investors. The angle of "what story are they pitching about us" does genuinely concern me... my cofounder Trae and I have both seen "pitch" decks or, in one case, sat in on a webinar where an investor (not USVC, to be clear) was pitching Anduril with *completely wrong information.* Some of the information was falsely flattering, some of it falsely negative... but false either way. Pretty wild! It's not hard to imagine someone forwarding a deck like that to a journalist or tweeting it out, and then there's a public record of fake information with some vague "sources say" attribution. Not great!

Third, smart companies care a LOT about managing the pace of fundraising, which investors they're targeting for which round, what valuations are justified they can feel comfortable growing into, etc. We genuinely want to make our investors money by spending their cash on growing Anduril through hiring, new factory buildouts, new R&D efforts, etc... and we are *extremely* diligent about who we're bringing into the fold, what promises we're making them, what targets we think we can realistically hit, etc. Every company should be the same! Secondary buyers throwing around inaccurate information to solicit interest or brokers making commission based on transaction *volume* in a thinly traded market is not conducive to our goal of carefully managing growth and investor expectations. Clearly that's not what Packy was doing here, but I can't speak to USVC's side.

So TL;DR - I retract any negative implication about Packy, clearly not his intent to facilitate anything unethical. The reader can take their own position on USVC's conduct.

[Unglamorous Billions @FourInsights]

@paulg @kanateven Any real reason this is true besides your subjective feel and Legora is a YC company. Harvey is crushing it on all levels. Also is the war really between these two companies in a $100B+ market?

[Unglamorous Billions @FourInsights]

Paying up (2.5%) to invest in SpaceX, Anthropic and others is not a deal.

[Unglamorous Billions @FourInsights]

@blakeir @johncoogan @tbpn This is true.

[Unglamorous Billions @FourInsights]

@suni_code poverty just go buy yourself a nice avacado toast.

[Unglamorous Billions @FourInsights]

@juliarturc This is all so real. Has to feel how Wall Street felt maybe 25 years ago.

[travis kalanick @travisk]

Atoms.

https://t.co/nbCnIkI3RD

[Unglamorous Billions @FourInsights]

Plaid, one of the US’s biggest financial technology firms, secured an $8 billion valuation in its latest funding round, according to people familiar with the matter https://t.co/WniIDnSlFw

[Unglamorous Billions @FourInsights]

The PayPal Problem: Why a $1.75 TPV Trillion Company May Be Looking For A Buyer, by @mattaparker https://t.co/LaDJztDr92

[Unglamorous Billions @FourInsights]

@ZeffMax killer hire!

[Unglamorous Billions @FourInsights]

The PayPal Problem: Why a $1.75 TPV Trillion Company May Be Looking For A Buyer, by @mattaparker https://t.co/LaDJztDr92

Check out @EconomyApp and @reductoai

[Unglamorous Billions @FourInsights]

FIS Earnings, Anthropic vs. The Pentagon, and Why Stablecoins Are a B2B Story, by @mattaparker https://t.co/WCw2HAXTp3

[Unglamorous Billions @FourInsights]

Earnings Week, Agentic Commerce, and the 40,000-Acre Problem https://t.co/QsYhJsnap4 via @YouTube

[Unglamorous Billions @FourInsights]

mid substackers are changing the world and moving the market. No excuses.

[Unglamorous Billions @FourInsights]

Founders are now just as likely to make life changing wealth through secondaries as they are via M&A or IPOs.

A Third, A Third, A Surprising Third https://t.co/6zasT4IjR7

[Unglamorous Billions @FourInsights]

@pdrmnvd This is dealmaking 101.

[Unglamorous Billions @FourInsights]

@ben_aguilera @HarryStebbings engagement, likes and analytics tools could do a lot of it.

[Unglamorous Billions @FourInsights]

@HarryStebbings Definitely an interesting use case we are far from it but working on something here.

[Unglamorous Billions @FourInsights]

Opus 4.6 does feel like a let down.

[Unglamorous Billions @FourInsights]

Ribbit Capital always wins.