Stage-Agnostic Elephant Hunting
Pursue exceptional outcomes across stages and size exposure to absolute upside.
- Difficulty
- Expert
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 98%
Stage-Agnostic Elephant Hunting starts with the potential importance of a company rather than the conventional label attached to its financing round. Seed investments can offer enormous multiples, traditional venture rounds can provide meaningful ownership, and later-stage or secondary investments can produce large absolute returns with more protected downside. The investor selects governance, ownership, and check size according to the opportunity instead of forcing every company into one portfolio template. The mechanism requires disciplined sizing: a tenfold return on a tiny check may not affect a large fund, while a lower multiple on a very large investment can. Success is therefore measured through both multiples and absolute dollars returned.
Origin
Extracted from Acquired's discussion of Andreessen Horowitz investing from seed through growth and describing itself as hunting large outcomes.
Core principles
- 01Exceptional companies matter more than rigid stage labels.
- 02Investment size should reflect conviction, risk, and absolute return potential.
- 03Lower-multiple investments can matter when enough capital is deployed.
- 04Portfolio construction must accommodate different risk and governance profiles.
How to run it
- 1
Start with the company
Assess the company's potential importance, market, and strategic position before considering the round label.
Pro tip Ask whether the outcome could materially affect the fund.
Watch out Do not use a famous company name as a substitute for underwriting.
- 2
Classify the risk profile
Estimate technical, market, execution, financing, governance, and liquidity risks at the current stage.
Pro tip Separate remaining risk from risk already removed by prior investors.
Watch out Later stage does not mean risk-free.
- 3
Estimate absolute upside
Model both the expected multiple and the dollars that could return to the fund.
Pro tip Include realistic ownership dilution and exit timing.
Watch out A high multiple on an immaterial check may not justify organizational attention.
- 4
Size conviction
Set the investment amount and reserves in proportion to confidence, downside protection, and possible fund impact.
Pro tip Use larger checks only when the underwriting supports them.
Watch out Stage agnosticism is not permission to ignore concentration risk.
- 5
Choose situational governance
Take board rights or other protections only where they improve the investment and can be exercised effectively.
Pro tip Match governance to information and influence needs.
Watch out Governance agnosticism should not become governance neglect.
- 6
Reallocate with evidence
Increase exposure when the company validates the thesis and reduce or stop when evidence breaks it.
Pro tip Reserve enough capital to back emerging winners.
Watch out Do not confuse sunk cost with strengthened conviction.
In the wild
A venture firm deploys $50 million into a mature private-company transaction. The ownership percentage is small, but the large check, protected downside, and fast liquidity allow a roughly threefold return to contribute materially to a $300 million fund.
→ A nontraditional venture investment returns substantial absolute dollars quickly.
A bootstrapped company raises a $100 million round labeled a Series A. The investor evaluates the established platform and potential exit rather than rejecting it because the check and company maturity do not resemble a conventional Series A.
→ The investment reportedly produces about a billion-dollar return.
Common mistakes
Using stage agnosticism as an excuse
Investing everywhere without stage-specific expertise is undisciplined diversification, not elephant hunting.
Tracking multiples alone
A spectacular multiple may still be immaterial to a large fund when the initial check is too small.
Ignoring mandate expectations
Limited partners must understand the range of assets, risks, and liquidity profiles they are buying.
Is it for you?
Best for
It is best for investment organizations with broad expertise, sufficient capital, and access to exceptional companies across their life cycles.
Not ideal for
It is not ideal for small funds, narrowly promised mandates, or teams without the expertise to price multiple investment stages.
From the transcript
“Andreessen Horowitz will do any round at any time, we'll do seed, we'll do lots of seeds, and we won't take board seats in the…”
“We have all the models. We're elephant hunting, going after big game.”
“the magnitude is like at the end of the day, what really matters is the magnitude here.”
From the episode
Andreessen Horowitz Part II