E54: Trae Stephens on Founders Fund

In this episode of Turpentine VC, we revisit one of our most referenced interviews with Trae Stephens, General Partner at Founders Fund and co-founder of Anduril.Trae discusses the unique DNA of Founders Fund, emphasizing the firm's culture of open debate and high conviction in investments. He highlights the importance of concentrated portfolios, and how Founders Fund's no-process approach differentiates them from other VC firms. They also discuss Founders Fund decision-making, governance, and incubation practices.🔥 Apply to join over 400 Founders and Execs in the Turpentine Network: https://www.turpentinenetwork.co/—RECOMMENDED PODCAST:🎙️ This Won't Last - Eavesdrop on Keith Rabois, Kevin Ryan, Logan Bartlett, and Zach Weinberg's monthly backchannel. They unpack their hottest takes on the future of tech, business, venture, investing, and politics.Apple Podcasts: https://podcasts.apple.com/us/podcast/id1765665937Spotify: https://open.spotify.com/show/2HwSNeVLL1MXy0RjFPyOSzYouTube: https://www.youtube.com/@ThisWontLastpodcast—SPONSORS:☁️ Oracle Cloud Infrastructure (OCI) is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds and offers one consistent price. Oracle is offering to cut your cloud bill in half. See if your company qualifies at oracle.com/turpentine 🛠️ Building an enterprise-ready SaaS app? WorkOS has got you covered with easy-to-integrate APIs for SAML, SCIM, and more. Join top startups like Vercel, Perplexity, Jasper & Webflow in powering your app with WorkOS. Enjoy a free tier for up to 1M users! Start now at https://bit.ly/WorkOS-Turpentine-Network💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/ and mention “Turpentine” to skip the waitlist.—LINKS:Founders Fund: https://foundersfund.com/Anduril Industries: https://www.anduril.com/ —FOLLOW ON X:@eriktorenberg (Erik)@traestephens (Trae)@turpentinemedia (Turpentine)—TIMESTAMPS:(00:00) Intro(00:49) Debate culture and why that's key to Founders Funds success(03:39) How Founders Fund's pitch is different from a16z's(06:34) FF's unique market position(08:51) How FF recruits their partners(12:48) Sponsors: WorkOS and NetSuite(14:31) The deal-making process, or lack thereof(16:42) Governance at Founders Fund(19:55) Comparing the YC approach(22:09) How they measure success against other funds(23:18) Trae's journey at Founders Fund(25:21) Sponsor: Squad(26:31) On incubating Anduril(29:03) Why having no process forces partners to be higher conviction(31:50) Core debates at Founders Fund(33:58) The key to Founders Fund's current approach(35:56) Trae's request for startups in gov tech(37:12) The importance of team and talent(39:33) What does the future look like for Founders Fund?(41:22) What gets misunderstood about the firm(45:42) On Mike Solana(48:36) The three eras of Founders Fund summarized(52:09) Wrap