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The Twenty Minute VCLarry Aschebrook, Founder & MP @GSquared: How We Lost Money on Uber and Made Millions on Lyft
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At a glance
WHAT IT’S REALLY ABOUT
From Trailer Park To Tech Titan: G Squared’s Wild Ride
- Larry Aschebrook, founder of G Squared, recounts his unconventional path into venture and growth investing, starting from buying secondary shares in elite tech companies with his last savings and no formal VC background.
- He explains how a concentrated, secondary‑heavy strategy in names like Alibaba, Spotify, Coursera, Lyft, and others generated enormous DPI for LPs, but also how overconfidence and 2020–21 exuberance led to painful mistakes in Uber, 23andMe, Getir and an overextended 2020 vintage.
- Larry dives into the mechanics of direct secondaries, structured primaries, heavy co‑investment, and why his firm optimizes relentlessly for cash returns and velocity of capital rather than paper multiples.
- Throughout, he reflects candidly on firm building, ego, co‑invest pitfalls, AI positioning, and how his upbringing in deep poverty still shapes his risk appetite, paranoia, and desire to build an enduring investing franchise.
IDEAS WORTH REMEMBERING
5 ideasA concentrated, secondary-led approach can massively outperform—if you truly earn your information edge.
G Squared built very large positions in a small number of winners (Alibaba, Spotify, Coursera, Toast, Lyft, Revolut) by starting with small secondary checks, using them as a “Trojan horse” to get primary‑level data and founder access, and then scaling positions aggressively where the numbers supported it.
DPI and velocity of capital matter more than paper multiples in illiquid venture portfolios.
Larry is explicit that his firm is hired to return cash, not show high TVPI/MOIC; they optimize for 2–2.5x net in about five years, sell aggressively (often pre‑IPO), and avoid holding public positions long term—even when this means missing enormous theoretical upside in stocks like Palantir.
Guardrails and process discipline are critical to surviving euphoric markets.
In 2020–21, G Squared relaxed its quantitative discipline, leaned too heavily on qualitative signals and ‘who’s in the round,’ diversified decision‑making away from its core PMs, and overpaid for growth, leading to a challenged 2020 vintage that had to be repaired through structured deals and painful triage.
Co-investment can be a powerful scaler—but only if tightly tethered to core conviction positions.
Early on, G Squared used large co‑invest pools (sometimes 4x fund size) to be relevant in mega deals, but the 2020–21 experience showed that bespoke, one‑off co‑invests around LP preferences create misalignment and recrimination; now they limit co‑invest to their own top positions and equal‑weight portfolios.
Listening to “spider sense” and walking away early can be as valuable as a great investment.
Larry’s near‑investment in Theranos, which he pulled back from at personal cost after bad gut feeling and his wife’s scientific skepticism, likely averted catastrophic financial and reputational damage—sharpening G Squared’s diligence checklists and conviction to walk away even late in a process.
WORDS WORTH SAVING
5 quotesWe made a ton of money on Lyft and we lost money on Uber.
— Larry Aschebrook
I went back to our LPs and said, 'Listen. We fucked up. We need to pivot. We need another 300 million bucks because I need to protect this thing.'
— Larry Aschebrook
The money’s there, you close. Start deploying it. Build a portfolio. Show some improvement in NAV. It is inertia that makes it easier.
— Larry Aschebrook
I think the main mistake we made was believing our own bullshit.
— Larry Aschebrook
TVPI and MOIC are not the stats that people should be focused on… You can’t buy food with MOIC.
— Larry Aschebrook
High quality AI-generated summary created from speaker-labeled transcript.
