The long tail of funds that are subscale, I have predicted that you would see a 50% involuntary exit or

extinction rate. They're under-reserved. They've over-invested. They have too many portfolio

companies. Those companies are going to have to come back to the well and raise money, and they're

not going to be able to find investors. There's going to be a lot of down rounds, broken fund raises,

broken syndicates,

and those guys are going to go out of business. And that large LP looked at me and laughed and said,

Josh, that's ridiculous. It's not going to be 50%. It's going to be 90%.

I'm Ted Seidies, and this is Capital Allocators.

My guests on today's show are Josh Wolfe and Brett McGurk, partners at Lux Capital,

a $5 billion venture capital firm that specializes in emerging science and technology companies

that turn sci-fi into sci-fact.

Josh co-founded Lux and is a repeat past guest on the show.

His first appearance from 2018 discusses his story, including phrases,

chips and shoulders put chips in pockets,

failure comes from a failure to imagine failure, and directional

arrows of progress. Brett joined Lux last year following a 20-year career in public service,

where he advised four U.S. presidents and helped shape national security strategy across the

Middle East. Our conversation kicks off with Josh's state of the venture industry and Lux's positioning

within it.

Brett then describes his background, sovereign ambitions, and geopolitical risks.

We discuss directional arrows of progress across AI, CAPEX maintenance, biology, defense systems, and space. Before we get going,

you might be wondering why we've added these humorous little anecdotes to encourage you to spread

...