Episode summary
$1 Trillion Investor on the Future of Venture Capital
How I Invest With David Weisburd
· · 41 min · Hosts: David Weisburd · Guests: Miguel Luina
Summary
Miguel Luina argues that venture and growth have become too large a part of private markets to ignore: they now represent 31% of private markets, so skipping the asset class is effectively taking a short position on a third of the index. He says the old public-market model, where investors captured huge upside in IPOs like Amazon, has shifted; increasingly, the biggest returns are being created inside private markets before companies list.
He also says the current environment is making it easier to see who truly has skill. Early revenue growth in AI businesses can make selection look obvious, but he warns that many of today’s winners are still too young to know which companies will ultimately dominate. For Hamilton Lane, the edge comes from sourcing, selection, access, and increasingly liquidity management, because the best venture managers can now use secondaries and continuation vehicles to recycle capital and reduce the long lockups that have historically plagued the asset class.
Luina is skeptical of indexing venture. He says the median venture fund can be one of the worst asset classes in the world, but the best managers and the best companies still justify active, concentrated investing. His preferred approach is flexible across funds, co-investments, and secondaries, with the mix shifting by stage: more fund exposure early, more co-investment and secondary capital later, and enough diversification to capture outliers without diluting conviction.
Key takeaways
- Miguel Luina says venture and growth are 31% of private markets, so avoiding them is effectively being short 31% of the index.
- He argues the best venture managers differentiate themselves through sourcing, selection, access, and the ability to generate liquidity over time.
- Luina says indexing venture is a poor strategy because the median venture fund can be one of the worst asset classes in the world.
- He believes secondaries in venture are unusually attractive because less than 0.5% of venture's $3.4 trillion NAV trades, creating a buyer's market.
- Hamilton Lane’s view is to use funds early, then use co-investments and secondaries later to double down on winners at better prices.
Notable quotes
“It's a portion of the market that you just can't ignore”
“The median return is would be one of the worst asset classes in the world, if not the worst”
“If you're not putting an allocation into these venture-backed businesses, you're not capturing that whole portion of the market”
“our focus is really on investing in the best possible opportunities and compounding them over time”
“Invest in relationships and don't underestimate the power of compounding in relationships and in everything that you do”
How the episode opens
31% of all private markets today is venture and growth. — Yeah. — What does that mean for investors?
It's a portion of the market that you just can't ignore. It's a portion of the market that historically these institutional investors had access to through their public market investments. Amazon went public in the late '90s.
It had $19 million of revenue and had a $350 million market cap. Had you invested in the series A of Amazon, by the time it went to an IPO, you generated 10 times your money. If you had invested in the IPO, you generated something like 2,000 times your money on it.
The better place to invest in Amazon was as a public company.
My guest today is Miguel Luina, co-head of global venture capital at Hamilton Lane, a firm with more than $1 trillion in assets under management and supervision. In today's conversation, Miguel shares the lessons Hamilton Lane has learned from evaluating and investing into venture firms across multiple market cycles, what separates great venture investors from average ones, and where Hamilton Lane believes the next generation of outsized returns will come from. Without further ado, here's my conversation with Miguel.
Before we started recording, we were talking about the three largest IPOs going on. We've had SpaceX, then Anthropic seems to be going next, and then OpenAI will probably by the end of the year. What are the second-order effects of these liquidity events for venture LPs?
First off, it's going to create a lot more cash and a lot more liquidity to reinvest into the market. We've seen this kind of dynamic within venture where the longest-term investors in venture have been overallocated to the asset class. Because venture has been one of the best-performing strategies, at least within the private markets, over a longer period of time.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- venture capital
- private markets
- vc liquidity cycle
- continuation vehicles
- secondaries
Companies and tickers mentioned
- AMZN
- Amazon
- SpaceX
- OpenAI
- Anthropic
- Hamilton Lane
- AlphaSense
Watch the episode
Watch “$1 Trillion Investor on the Future of Venture Capital” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from How I Invest With David Weisburd
-
Hunter Walk: Why Venture is Getting Harder, Picking Great Founders, and Investing Against Consensus -
True Anomaly’s Even Rogers on Space Warfare, China’s Military Advantage, and the Defense Tech Boom -
Finding the Next Anthropic, Quantifying Venture Capital, and the Science of Picking Winners -
Why 95% of AI Projects Fail, Anthropic still at $2T?, and Why AI Is Still in the First Inning -
Peter Thiel's 27-Year Partner on the AI Bubble, the Venture Capital Crisis, and the PayPal Mafia -
Why Venture Is Eating Public Markets, Picking Great VCs, and the AI Boom w/Brijesh Jeevarathnam
How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
