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I Asked a $450M VC Where to Invest in 2026

My First Million

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  • Asymmetric Risk And Portfolio Power Law
    • Investing teaches you to value asymmetric risk where small downside and huge upside change decision-making.
    • Sheel Mohnot uses the $3M vs $300M example and portfolio theory: a few winners (≈10) drive most returns from hundreds of bets. Transcript: Sheel Mohnot From investing that apply to life? I think, you know, one is just like upside can be greater than downside. Like, so if I invest in a company, let’s say I put $3 million into a company, there is a possibility of it being $300 million. But the downside is capped at $3 million. I could only lose $3 million. I could gain 300 million bucks. Yeah. Sam Parr Cause if you don’t work in investing or anywhere where you have that sort of asymmetric risk versus return, let’s just say you have a hourly wage job, right? Like you’re sort of, your mind gets trained into this linear. I put one in, I get one out, right? Like I can’t put one in and get 50 hours of pay out of this next hour. That doesn’t really ever happen in a normal job. But if your job is investing, you’re like, of course, that happens all the time. I lose one times my money, but sometimes I gain 100 or 1,000 times my money back. And that kind of breaks the brain and you sort of like start to see, you know, other opportunities similarly that have that, as they say, the asymmetry of risk return. All right. So that’s one. There’s something around this portfolio theory, like, you know, out of the 450 million you deploy, right? Like, what does winning look like? You probably need to return some multiple of that 450 million. So what does winning look like for you? You put in 450, what do you need to get out for this to be a success? A couple billion dollars. A couple billion dollars. Let’s say 2 billion. Let’s just use a rough math. Let’s say it’s 500 million to make math easy. Right. So 500 million, 4X it, that would be great over some 10-year period. Now, of that 2 billion, how many companies would you go into? And of those, how many companies would be responsible for returning all of that money? It’s only going to be a few, right? Give me the math there. Sheel Mohnot Yeah. So almost all of the returns are going to come from like 10 companies out of hundreds that we will have invested in. Correct. Sam Parr And so there’s something like that in life too, right? Whether it’s like people you meet or dating or like there’s some portfolio theory, some power law where the few will drive like all of the joy, the value, the relationships, the opportunities, Whatever. And then you just do the rest because you need portfolio in order to find the few that are like the big outliers. It’s true. Sheel Mohnot And it’s also, it’s also in a related note, there’s like, if you increase the surface area of companies you meet, you have the better odds of finding that one, like when you really know It’s going to work. (Time 0:00:40)
  • Create Mini Yachts To Compound Relationships
    • Build “mini-yachts” to create warm introductions and compound social capital through events, newsletters, or hosting.
    • Examples: dinner parties, Travis Kalanick’s Jam Pad, and Chris Saka’s Tahoe guest house accelerated deal flow. Transcript: Sheel Mohnot Right. There’s a great blog post this guy wrote called Building Your Own Yacht. Sam Parr Have you ever read this blog post? It’s like very obscure. I got this from some random Twitter account, the real estate G6. Sorry. Like normally I’d be like pretty low expectations, but this is over delivered. And so basically it argues the following. It says most people in their life, they don’t do anything that compounds, right? Like most people are non-compounders in general. Okay. So we, then we kind of know that, okay, money has this compounding thing, right? You can compound some interest rate of return, 10% a year in the S&P 500. And over every 10 years, that’s going to, or every seven years, that’s going to double. Great. So you sort of see compounding financially, but everything compounds, including skills, knowledge, everything else. And he has this story about building your own yacht. So let me read this out for you. Okay. So he goes, if you aren’t familiar, Aristotle Onassis, by the way, this might be a totally fictitious person for all I know, but it doesn’t matter. The story works either way. He was one of the wealthiest businessmen of the 20th century. He started off as a tobacco trader and he ends up, you know, being this big shipping magnet, right? So he’s like, he makes his bones in the shipping industry. He’s dating famous actresses. Okay. So he lives this life, but he has this one sort of hack for relationship building. He called it building your own yacht. So he basically talks about how this guy, basically his, one of his investments was this yacht, which seems just like a splurge purchase, like a discretionary purchase. But he argues, like, think about the power of having a yacht. And he goes, the way that humans are wired is like, we are very suspicious of cold introductions, strangers on the street, people emailing you that you don’t know. But like a warm introduction or a warm relationship is so much, you’ve already bypassed like 10 hurdles that come from taking somebody from cold to warm. And so he argues, he’s like, think about it this way. If you think about relationships, you would want to have, if you meet somebody, you want to do business with them, or you just want to socially connect with them, you would want social Proof. Like, is this person cool? Are they legit? Are they friends with people that I already am friends with or respect? And basically he’s like, from the moment you step foot on a yacht, social proof is done, credibility is done. And he’s like, on top of that, you enter their frame. Like you are literally on their turf. And he’s like, there’s also the law of reciprocity, which is like, if I invite you or give you something, there’s a part of you psychologically that will want to reciprocate and return In some way. And often the law of reciprocity, the way it works is like, it’s not one for one. So like, if I, you know, just do you a quick favor, bring you a drink, and then I ask you for a much bigger ask than the drink, you’re more likely to say yes to it. And so he talks about how, and he’s like, yeah, okay, that works with the yacht. But he’s like, in life, there’s actually all these little yachts that you can create that don’t cost the same amount as a yacht. So, you know, you host a dinner, right? You create an event. You send out, you know, free materials, a newsletter, content. Those are all, these are all little yachts. You can create, create all this like inbound luck and relationships and things that can compound because you create this like asset that you get to use from there on out. (Time 0:03:06)
  • The Default AI Assistant Wins
    • The AI race centers on who becomes each person’s default assistant with embedded personal context.
    • Sheel predicts one dominant model will own contextual data (email, conversations) and act as your everyday chief-of-staff. Transcript: Sam Parr I’m curious your point of view. That there’s this race. And I don’t fully understand the idea of a race because it seems like whatever one company does, the other companies have six months later. So I’m not sure like, if you got to the finish line, then what? What is the finish line and how do you win this supposed race? I’m not sure about that, but obviously so much money’s being invested that somebody believes that there’s like a victory condition of this race. So I’m curious about that part of it first, like the concept of an AI race. What do people actually mean and how is that going to play out? So many things in life have been winner take all, in tech especially. Sheel Mohnot So like there’s one major search engine and there’s one, you know, Facebook on social media. Of course there are others, there’s Twitter out there, but a lot of these businesses have scaling returns or network effects. And the same is true in AI, probably like one company is going to have all of the context they need to be your best assistant. And so I feel weird saying this because I use, I right now use Claude, Gemini and Chat every day. And some queries, I’m doing the same query on each. But in the long run, that’s not really sustainable. And also not everybody’s like me. Most people are probably just going to have one. (Time 0:11:34)
  • Verticals Survive Through Domain Context
    • General-purpose models threaten many point tools, but domain-specific workflows, integrations and compliance can protect verticals.
    • Examples: legal, healthcare, Salesforce integrations need domain context and human-in-the-loop safeguards. Transcript: Sheel Mohnot Gemini has, and I think the momentum on consumer right now. Then there’s the enterprise piece, which is like a lot of enterprise folks use Claude. And I personally use Claude more than I use ChatGPT. And it just allows me to do more things. Like for the kind of research I do on companies claude is just my partner it’s my sparring partner like i’ll it’s like having like we actually didn’t hire somebody this year because we’re Using claude more than ever well you essentially did you hired a person named yeah exactly exactly okay so there’s the race to have everybody gets the sort of all intelligent super helpful Sam Parr Always next to you chief of staff that. That’s the ChadGPT analogy. Then you have, you know, like in Game of Thrones, you’d have like whoever is like really good at the sea battles, right? The ocean stuff. That’s let’s say Enterprise and Anthropics doing pretty well there right now. And they’re all going to compete for everything, but like they’re doing pretty well right now. And then you have the King of the North. So you have Elon up there and he’s marching and he’s like, I’m going to put data centers in space and I’m going to catch up with Grok and we’re going to win. And so what do you, what’s your take on how that, where does he go? How does that work? Sheel Mohnot I would never, ever, ever bet against Elon, but as of right now, I find Grok to not be as useful, but I think it’s possible that everyone has their favorite. And over time, people sort of slot into their favorites. Sam Parr Right. It’s like Coke, Pepsi. Sheel Mohnot Yeah, like Coke, Pepsi. Right now, if you are working in code, you’re probably using Anthropic. Sam Parr Right. Okay, so now, okay, let’s keep going through the battle. Then you have all these SaaS companies. You’ve got, you know, Today’s Sponsor, HubSpot, you’ve got Salesforce, you’ve got like Adobe, Figma, all these companies that are like cranking on revenue and growth and earnings. And then their stock is just plummeting because the market believes that like, they’re going to, going to get somehow eaten away but i believe it must be that that’s why the stock is going Down the business fundamentals are strong but there’s this question of 20 years in the future is this company stronger or has it just been eaten away by ai that can do all these things What do you think happens there is that overblown is that is it a buying opportunity or are you equally suspicious of the future of these companies? Sheel Mohnot I’m suspicious of the future of a lot of these companies. And I just think about myself. Like right now, I already am doing a lot of image creation in Gemini, Nana Banana. I’m a paid user of Canva, a bunch of Adobe products. And yet now most of my image generation is already on Nano Banana. It’s just so much easier. Sam Parr Right. Sheel Mohnot So then like, can those guys build it? Probably yes. Like some of them already have pretty good stuff. Like Adobe’s AI stuff is very good. Figma is good. But will there just be one model to rule them all? And I’ll just do everything in there. It’s my assistant. My assistant’s doing it for me. (Time 0:14:23)
  • Use Model Updates As A Stress Test
    • Test whether a new model update helps or harms your product: if it helps, build on it; if it kills your value, rethink the product.
    • Sam Altman’s test distinguishes builders who benefit from base models vs. those cannibalized by them. Transcript: Sam Parr And then there’s other companies that are terrified when we say there’s a new model update because we might have just swallowed what they did. And you should think really carefully. And their response was sort of like, OK, so wait, what are those things that you’re not going to do? Right. It’s like a meme where it’s like, wait, so are you going to say what they are or we just need to guess? It seems like an ever-expanding scope. That’s pretty tough. It seems like the lawyer one would probably be easier because A, lawyers, it’s a workflow-specific thing. There’s security compliance. There’s really a lot of nuance that you would have to build on top of that. Even if ChatGPD can quickly generate a document and write it or read it, still probably there’s enough domain-specific workflow and risk where somebody specializing in it will solve The hundred small problems that the lawyers care about that ChatGPD’s product managers aren’t going to care to do. Totally. Sheel Mohnot I think that’s true. And I think in the case of HubSpot or Salesforce, I think those things are going to change overnight. I think it’s going to be, people are going to keep using those systems of record for a long time. And basically, we talk about what matters. And it’s what you just said, domain context and workflows. So if you’ve got the specific terms and norms of a given field, if it’s healthcare, legal, accounting, you can produce more trusted outcomes. And integrations. So integrations into your Salesforce instance are valuable. Or in health, EHRs, or whatever the case may be. And then there’s also some compliance and human-in element that I think really matters. (Time 0:18:47)
  • Put Money Into Vertical AI Not Mega LLMs
    • Invest in vertical AI where workflow and trust matter, not in headline-valued base models.
    • Sheel favors enterprise/verticals (legal, health, niche creative like Suno) over betting on $100B+ general LLMs. Transcript: Sam Parr Where would you put the bets? Let’s take a million dollars. Where are you putting the bets? Yeah. Sheel Mohnot So I would say like right now with, you know, Anthropic being valued at nearly 400 billion and opening eye at like 800 billion. I don’t I’m not going to put it there. Like how how big could those companies get and what’s the risk reward? I think, you know, could they be trillion dollar companies? Yeah, but they better be trillion dollar companies. Right. Like if they’re not, that’s a failure. Right. So I’m not putting it there. It’s wild to think that like, we only had the first trillion dollar company, like not that long ago. Yeah. Sam Parr And now- Those are what, six, seven years ago, I feel like. It was a really big deal. Sheel Mohnot And now we have basically almost trillion dollar private companies that didn’t even exist 10 years ago. It’s crazy. Okay, so where would I put that money? So I think it’d go back to this. Like, where are the vertical opportunities that are very interesting? Consumer side, I think it’s tough for me to find one because on the consumer side, it feels like I probably am going to be using Gemini or ChatGPT or one of those generalized models. They’re going to end up getting my context for the stuff I need. (Time 0:20:56)
  • Drive Adoption By Teaching Your Parents AI
    • Teach nontechnical people to use AI and delegate small tasks to it to multiply productivity quickly.
    • Sheel coaches his parents to use AI for errands and research instead of asking him for help. Transcript: Sheel Mohnot Think everyone, and I’m encouraging my parents to do it too, should just be, and this is like an easy answer, should be just using AI more. I think when my parents give me an assignment, like my parents often are like, hey, Steele, can you book this for me? I’m their personal assistant. And now I’m trying to teach them to use AI. And actually they’re doing it. And it actually kind of surprised me, but they’re able to look stuff up on AI that they weren’t doing a month ago. And they’re getting answers. And I’m also encouraging them not to send me like stupid fake forewords and to look everything up and make sure it’s legit. (Time 0:37:37)
  • Content As A Scalable Competitive Moat
    • Content scaled seriously becomes a competitive moat for firms and creators when executed at high investment and professionalism.
    • Examples: Andreessen Horowitz and MrBeast beat peers by treating content like a full-scale product and team. Transcript: Sam Parr They put out a lot of content and it’s worked for them. And that was pretty strategic of them, right? So like they enter the VC world, they want to do well. To do well in the VC world, you need to have a brand that will either bring deals to you or get you access into a deal when you want it to be able to go lead that round, right? Yeah. Sheel Mohnot And so I guess give me the inside baseball there. How did they approach that problem? How did they solve that problem? Yeah. So you need a brand. You want to be recognized. And the way they did it, like, so first of all, it’s only like 15 years old, Andrews and Horowitz. And if you look at the other storied firms, Benchmark, Sequoia, etc., they’re a lot older and they really earned their reputation, Sequoia even earlier, but Benchmark in the dot-com Era. So these guys basically said, like, we’re going to do it differently. And we’re going to provide, instead of just having one partner to work with, you’re going to work with a whole team of people. And we’re going to support it with content. So we’re going to promote our portfolio with content, but also people are going to listen to that content. They’re going to think about Andreessen Horowitz and think like, those are smart people I want to raise from. And it really, like, before Andreessen Horowitz, there was not a lot of content on venture. Like, a couple guys had blogs, and Andreessen totally changed the game. And actually, they learned from Michael Ovitz. I think Ovitz did a lot in building this CAA into this, like, you have this whole team of support around you, and that’s what Andreessen modeled it off of. Sam Parr Right, right. Yeah, it seems like, you know, you had Fred Wilson have a blog or whatever. Yeah. And I’ve seen this now in a couple spaces where we all think we’re doing the thing. Like I would say at the time, there were some VCs who thought we were doing content. What do you mean? Oh yeah, I have my blog. And then they’re like, somebody brings the gun to a knife fight where they’re like, oh, here’s what we’re going to do. We’re going to invest essentially, you know, like, how much do you think they spend every year on just the media and content side? Like, what do you think is the expense part of the P&L for them? It’s got to be easily tens of millions. Easily tens of millions, exactly. Tens of millions of dollars on content. So you’re like, we’re doing content. And then they were like, well, here’s what we’re going to do. We’re going to build this like a company. And we’re going to like, they made acquisitions in that space. They bought Eric’s company. They, they have huge teams of people. They create multiple shows. They like have studios, sets, they go on tour. They’re spending a huge portion of their time just going on other shows. And so they go in with just a level of seriousness and scale that just blows other people out of the water. And I’ve seen this over and over again. The Charlie Munger quote, take a simple idea, but take it seriously. Where it’s like, we’re doing this, right? And the Mr. Beast, like we got to know Jimmy recently. Yeah. Like last few years. And like he did the same thing. Like YouTubers were a thing and YouTubers would do these stunts or challenges. (Time 0:41:00)
  • Due Diligence On The Breaking Bad House
    • Sheel and friends considered buying the Breaking Bad house, modeled Airbnb returns, and set a $900k max bid.
    • The house eventually sold for over $1M to streamer Aiden Ross, who had unique monetization advantages. Transcript: Sheel Mohnot This week. I thought this might be fun. Basically, two weeks ago, I saw that the Breaking Bad house, you know, the house that Brian Cranston throws the pizza on top of, was for sale in Albuquerque. Iconic. Iconic house for anybody who’s seen Breaking Bad. And so a friend of mine, a friend me it was for sale, and I was like, we need to buy this. Was this like very publicized or like kind of a friend just noticed, hey, that’s the house? How popular was this? It was publicized. It got out there. And it was listed at $400,000 because it’s kind of like a small, it’s like a 1,900 square foot house in the suburbs of Albuquerque, like 25 minutes from downtown. And I immediately was like, we need to buy this house. It was listed $400,000. And so we booked a flight to Albuquerque like an hour later. And we built this model around what are we going to do with this house? How much can we spend on it? So you go to the house. Sam Parr Does it look like the show inside still, or it looks totally different? It looks totally different on the inside. Okay, so they changed the inside. Yeah. Huge mistake. When they did the show, that was just someone’s home? Sheel Mohnot Basically, they rented for this? And it’s this family that’s lived in the house since the 70s. They bought it for almost nothing in the 70s. And then they got a call from the show saying like, hey, your house looks like a normal house in Albuquerque that we might want to use. They only use the exterior of the house. They didn’t use the interior of the house for filming. Sam Parr Oh, okay. Gotcha. And are they, were they just annoyed people kept taking pictures of the house? Because in San Francisco, there’s like the full house house that was a couple blocks from me and just people were constantly stopping and taking photos of it. Sheel Mohnot Yeah, yeah. It’s extremely annoying for them. So much so that they built a fence around the house so you couldn’t actually throw pizza over. And then the neighbors are pissed. It’s not a good situation. So they were like, let’s sell this house. And they listed it for like fair market value might be $350,000, like looking at comps. And they listed it for $400,000. And they had tried to do like a museum or something, but they got, they got shut down by the city. And so it’s been, you know, the show has been off for what, like 12 years. They could have, they could have turned it into something amazing in the meantime, but they did. They just continued to live there. And so they sell for 400, they listed $400,000. We say, okay, like how much can we make off this thing if we turn it into an Airbnb? And I love experiences that are also the house. Like I stayed in Brian Chesky’s house. I’ve stayed in this, like I’ve seen a bunch of architects homes around the world. Like I love unique architecture. So I thought like, I could turn this into an Airbnb. What do we do? So we like built this model around it. Like assuming we assumed we could charge $800 a night versus like, it’s a four bedroom place in the area. You might be able to charge $250 a night. But given, given that it’s an iconic place, like if I went to Albuquerque with some friends, I would definitely want to stay in the house. It would be worth it for the story. We assumed like 60% occupancy. We made a bunch of assumptions based on information we learned. Like we looked up what the Stranger Things house is going for, all sorts of stuff like that. And then also like what the rules around short-term listings are. We actually spent time with an Airbnb consultant. Like I called up an Airbnb consultant, spoke to her for an hour and got some ideas there. And like, I had this other idea of like, I’ll build an RV, like his RV and just park it out front. That’ll be another bedroom because there’s not enough space in the house. And so we basically got comfortable that we could spend $900,000 for this thing and it’d be worth it. I’m sorry. Sam Parr So the math was you thought, you know, worst case scenario, worst case scenario is ridiculously low, so you didn’t even need to worry about that one too much, but you were basically, The expected case was that it would make like $175,000 a year of rental income off the Airbnb, and that it would cost $120,000 to run, and you’d net something like $55,000, $60,000 a year Off this rental property that you own in Albuquerque, and more importantly, epic story. Sheel Mohnot An epic story. Absolutely epic story. And it was just like, it was honestly so fun. Like actually part of the thing, part of what I love about my job is I get to do this. Like I get to do due diligence on a space I don’t know much about. And over the course of the next day, like I learned a lot about Airbnbs. I learned about a lot about Breaking Bad, a lot about this house. To be clear, does this have anything to do with your job? This is not to do with your job. No, no, no, but due diligence. My job is, like, doing diligence with companies, right? Use the same skills, gotcha. Yeah, same skills. So we decided we could spend around $900,000, and it would be worthwhile. It would make us a decent return, and then also, to your point, be just an epic story. It’d be so fun to own it. Right. But then the major risk was Albuquerque has these short-term rental laws where neighbors can call, call this hotline and basically shut you down if they’re unhappy. And so there was some concern that that happens. And if, if the short-term rental ability goes away, this house becomes worth $350,000, like exactly, you know, what every other house around it is. And so there was some risk there that it’s hard to price in, but basically we decided we could spend up to $900,000 and ultimately the house went for over a million. We don’t know exactly how much, but it was sold to Aiden Ross, who, uh, for those of you who don’t know, who’s a popular streamer. And, you know, for him, he’s got a totally different revenue stream, which is like he can make a ton of money streaming to this audience. He can market to this audience. So he came at it with something that we just don’t have and can’t compete with. But it was really fun doing this. (Time 0:44:53)