Peter Singlehurst: Lessons from Turning Down Stripe, Coinbase and Losing Money on Northvalt

(instrumental music plays) I think what people realize today is that you can build a better business by staying private for longer. You're starting to see the evolution of these very large, company-facilitated secondary rounds. I can see those starting to become more of a feature. There's lots of investments we've made that have been painful experiences. But ironically, I would say not all of our bad investments are necessarily mistakes. We haven't taken the plunge into any of the big AI LLM companies 'cause we still are trying to define what we think competitive advantage will look like at the large language model level.

Ready to go? (instrumental music plays) Peter, we last did this on Zoom. I'm so pleased that we get to do this in person. Thank you so much for joining me today.

It's a pleasure, Harry. Really nice to see you again.

It's so good to have you here. But listen, I actually scrapped the, like, "How did you get into venture?" question 'cause it was bluntly very obvious for a lot of people who went to Stanford and studied CS that they would then, you know, become what they did. But we were just chatting now, and you said about how you got into private company investing, and it was so cool. I wanted to ask it on the show. So, how-

(laughs) .

... did you get into private company investing at Baillie Gifford? What was that moment?

Well, so, so the specific moment was, um, I was on a, a public market strategy. It's called the Long-Term Global Growth Strategy. It's a $50 billion public market strategy. And this was in 2014. I was working with, uh, three very senior investment partners within the firm, James Anderson, Mark Urquhart, Tom Slater. And we were starting to see these private companies, uh, of real scale, the sorts of companies that we'd always invested in. And back then, it was, like, you know, businesses like Airbnb and Spotify. And, uh, and Tom, and Mark, and James, like, they kind of had their hands full looking after these tens of billions of dollars of our clients' capital. And so we were sat in a, a room, and, uh, and, uh, James said, "Well, like, who, who's, who's going to do this? Who's going to look at these private companies?" And I just put my hand up, and I said, "Well, I'll, I'll do it." And, uh, that's sort of how it all started.

Were you nervous?

Um, no. Maybe I should have been. If I'd known what I was letting myself in for, I would have been nervous.

What would you advise yourself now, knowing all that you do, telling that younger self entering the position you were?

That's a really hard question because the, the natural tendency there is to give advice that would help you avoid all the mistakes that you made. But the mistakes that you made are the things that have helped you learn, right? So, I'm not sure I would give myself specific advice about the, the craft of investing because I, I, I think that's something you can only learn by experience. I think what I would say to myself is, when it comes to thinking about how you can bring this capability and this offering to more of our clients, I would say to myself, "Be a little bit less purist." We, we were, um, you know, when we first started doing this, we were doing it from within these permanent capital vehicles, and we continued to do that. And it's amazing for being super long-term. Um, but the result of that was that we had a lot of our clients who wanted, uh, to be investing with us in the kinds of companies that we were investing in, these kind of high-growth, you know, often quite large private companies, but they just couldn't do these permanent capital vehicles. And they were sort of saying, "Look, can you just do a more traditional fund structure?" And I wish we'd compromised, or not compromised, we'd been aware of some of those trade-offs earlier on.