20VC with Harry Stebbings• Jun 16, 2025• 1:47:28Interview

Larry Aschebrook, Founder & MP @GSquared: How We Lost Money on Uber and Made Millions on Lyft

From 20VC with Harry Stebbings

Larry Aschebrook•Founder & MP, GSquared

Executive Summary

G-Squared employs a high-conviction, concentrated portfolio strategy, allocating 80-90% of risk to just 10 companies, leading to both massive wins (Spotify, Coursera) and significant losses (Getir, 23andMe).
Founder Larry Ashbrook is highly critical of the traditional venture capital model, calling the 10-year fund lifecycle "fundamentally broken" and advising LPs to focus solely on DPI (Distributions to Paid-In Capital) over metrics like TVPI.
The firm learned hard lessons from the 2020-2021 market bubble, admitting to overpaying for assets and getting caught in the "Silicon Valley mentality," which prompted a period of soul-searching and a strategic pivot.
G-Squared leverages the secondary market for unique access, a strategy core to its origin and recently used to acquire a significant stake in Anthropic through the FTX bankruptcy auction.

9 quotes

Concerns Raised

The traditional 10-year venture fund model is broken and unsustainable as companies stay private longer.
Herd mentality and hype cycles in Silicon Valley lead to poor investment decisions and capital misallocation.
Concentrated portfolios, while powerful, can lead to monumental, nine-figure losses on single investments.
Over-reliance on unrealized gains (TVPI/MOIC) masks poor fund performance and a lack of real cash returns (DPI).

Opportunities Identified

Making large, concentrated investments in category-defining companies like Spotify and Anthropic.
Utilizing secondary markets and distressed situations (e.g., FTX bankruptcy) to acquire shares in high-quality assets.
Investing in foundational AI models and the "picks and shovels" infrastructure supporting the AI ecosystem.
Capitalizing on the extended private market lifecycle by providing late-stage liquidity.

Key Themes

Concentrated Portfolio Construction

G-Squared's core strategy involves making large, concentrated bets on a small number of late-stage private companies. This is exemplified by allocating 40% of a fund to Spotify, which generated a $1 billion return, but also resulted in monumental losses like an estimated $500 million on Getir.

This high-risk, high-reward approach deviates from traditional VC diversification, offering the potential for outsized returns but also exposing LPs to significant single-company risk.

Critique of the Venture Capital Industry

Ashbrook argues the standard VC fund lifecycle is "fundamentally broken" because companies stay private much longer. He criticizes the industry's focus on vanity metrics (TVPI), herd mentality, and a lifestyle that distracts from generating actual cash returns (DPI) for LPs.

This provides a contrarian viewpoint for LPs evaluating managers, emphasizing cash-on-cash returns and questioning the sustainability of the prevailing industry structure.

Lessons from Market Cycles

The discussion candidly reflects on the mistakes made during the 2020-2021 ZIRP-fueled bubble, including overpaying for SaaS companies and succumbing to market hype. The experience led to a painful but necessary strategic re-evaluation and a renewed focus on disciplined capital deployment.

This serves as a cautionary tale for investors about the dangers of FOMO and the importance of maintaining valuation discipline, even when capital is abundant and markets are euphoric.

Leveraging Secondary Markets

The firm's origin is rooted in buying secondary shares of companies like Twitter and Alibaba before it was a common strategy. This approach continues to provide a strategic edge, allowing G-Squared to acquire stakes in sought-after companies like Anthropic by bidding on shares from distressed sellers like the FTX estate.

This highlights the secondary market as a critical tool for gaining access to oversubscribed, late-stage companies and potentially acquiring shares at a discount, especially during market dislocations.

The Role of 'Productive Paranoia'

Ashbrook attributes key successes, like avoiding a major loss in Theranos, to a sense of "productive paranoia." This mindset, born from his personal background, drives a relentless focus and a healthy skepticism that helps navigate market hype and avoid catastrophic errors.

This underscores the importance of psychological fortitude and rigorous, independent due diligence in investment management, especially when faced with popular but potentially fraudulent opportunities.

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