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From Trailer Park to Billions: The Brutal Honesty of G Squared's Larry Aschebrook

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What happens when someone with nothing to lose enters venture capital with a one-page binding contract and sheer determination? Larry Aschebrook's journey from an orange trailer in Utah to managing billions at G Squared reveals the brutal realities of building wealth, making catastrophic mistakes, and the psychological toll of extraordinary success.

Key Takeaways

  • Secondary market investing can generate massive returns when executed with deep research and concentrated bets—G Squared made 800 million on Coursera and billions on Spotify through this strategy
  • The "land and expand" approach works: start small to gain access, then concentrate heavily on winners—but requires enormous discipline to sell at the right time
  • 2020-2021 taught expensive lessons about believing your own hype: G Squared lost hundreds of millions by abandoning their proven model for traditional VC approaches
  • Liquidity is everything: focusing on DPI (distributions to paid-in capital) rather than paper returns separates sustainable firms from those playing with monopoly money
  • Concentrated portfolios amplify both wins and losses: 80-90% of G Squared's risk sits in just 10 companies, creating massive volatility
  • Success can be more dangerous than failure: prosperity breeds overconfidence, leading to expensive mistakes and departure from proven strategies

The Accidental Venture Capitalist: Starting with Nothing

Larry Aschebrook never intended to become a venture capitalist. Growing up in an orange trailer in Utah, surviving on government cheese and powdered milk, his path to billions began with a simple observation: the wealthy people he fundraised for at academic institutions had one thing in common—they made their money investing in private companies.

"I come from nothing. I was a fundraiser for academic institutions for their endowments. Everybody I raised money from made it investing in private companies... They're not that much different than me. I work hard. I'm smart enough. Maybe I can do it."

The transformation began at business school in 2010 when smartphones started running our lives. While classmates focused on traditional career paths, Larry started asking a different question: "Why don't I buy shares?" The problem? These companies weren't public.

His solution was beautifully naive: he created a one-page binding contract and started asking classmates to sell him their startup shares. That form, created at Arizona State's Carey School of Business, still floats around 15 years later—and has occasionally "bitten him in the ass" due to its binding nature.

The Bootstrap Years: Building on Borrowed Money

Larry's entry into venture capital required everything he had. After cashing in his retirement, going through a divorce, and starting over, he had almost nothing. His new wife brought $50,000 to their marriage. Together, they started buying shares in Twitter, Alibaba, Uber, and Spotify with their last money.

"Half of nothing's nothing. My wife came to our marriage with $50,000. I had went through a pretty tough financial situation... we started a journey together and she backed me with the 50 grand in my small amount of retirement."

The thesis was simple but prescient: coming off the financial crisis, fewer institutions would help companies go public, so companies would stay private longer. The average time from inception to IPO was extending from 3 years to 7-8 years. Today, G Squared's average portfolio company is 15 years old.

The Alibaba Breakthrough: When Lightning Strikes

The first major win came in 2014 when Alibaba went public. Larry had bought shares from Jack Ma's family office through a chain of introductions—the kind of serendipitous networking that defines early-stage venture capital.

"That's when I really felt the power of what I was trying to do when Alibaba goes public... there's a business here."

But Alibaba was just the beginning. The real game-changer was Spotify, where Larry would deploy 40% of his third fund and generate over a billion dollars in returns for his LPs.

The Spotify Saga: $150 Million in 60 Days

The Spotify investment story reveals both Larry's audacity and the relationship-driven nature of secondary investing. After his analyst Spencer Mloud suggested investigating Spotify in 2014, they flew unannounced to Stockholm in November, spending a week in terrible weather with a new baby, staying in an Airbnb.

A young lawyer, Peter Grenelius, took pity on them in the waiting room and agreed to a meeting. By the end, Spotify asked: "Do you think you could buy $150 million worth of stock?"

Larry said yes. He didn't have the money.

"We were in the process of raising the fund and I think we had like closed on $125 million."

What followed was a frantic 60-day global fundraising tour to raise $125 million. They reached day 59 with $141 million raised but needed $9 million more or the deal would collapse.

Larry borrowed the final $9 million from the seller.

"You call him up and say, 'I'm so sorry. I don't have the 9 million, but if you lend it to me, I'll close and I'll pay you back.' And he's like, 'Sure, I'll lend you [it].' It wasn't exactly that pleasant, Harry, but it worked."

The Concentration Strategy: Going All-In on Winners

G Squared's strategy crystallized around extreme concentration. Rather than diversifying across dozens of companies, they focused 80-90% of their risk on 10 companies. This "land and expand" approach meant starting with small checks to gain access, then building massive positions over time.

The first fund deployed $35 million across just seven companies: Alibaba, Spotify, Palantir, and Twitter dominated the portfolio. This concentration created extraordinary returns but also extraordinary risk.

"From the beginning, when you don't know what you don't know, I didn't like the idea of trying to manage a lot of these positions... So my idea was I want to have I wanted to put a little bit of money in, understand the businesses, and then pick a few and put all my money in."

The Secondary Market Advantage: Buying at Massive Discounts

In the early years, G Squared captured enormous value through secondary market discounts. When few secondary buyers existed, they could purchase shares at 35 cents on the dollar compared to primary investors.

"In early vintages, we got like 35 cents on the dollar by being a secondary direct buyer over primary buyers because there was no other secondary buyers."

This advantage came from solving real problems: employees leaving companies but unable to sell shares, funds needing liquidity, founders wanting to clean up cap tables. G Squared became the "janitor cleaning up the mess."

The strategy required building relationships with both companies and existing investors. Larry's team would sometimes complete 50 separate transactions to build a $75 million position, creating a "muscle memory" that competitors couldn't replicate.

The Big Wins: Billion-Dollar Outcomes

G Squared's track record through 2020 was extraordinary:

Spotify: Generated over $1 billion in returns, including $700 million in co-investments. They became a top-10 global shareholder, literally putting up signs in Spotify's break room: "We'll buy your shares."

Coursera: $800 million back to LPs as the largest shareholder with 16% ownership when it went public.

Lyft vs. Uber: Made 3x on Lyft while losing money on Uber, demonstrating the importance of exit timing.

Toast: Multiple on a business that revolutionized restaurant technology.

The success formula was simple: buy secondary shares of exceptional companies at discounts, concentrate heavily, and sell before or during public offerings to generate cash returns rather than holding paper.

The 2020-2021 Catastrophe: Believing Their Own Hype

Success bred dangerous overconfidence. After years of exceptional returns, G Squared abandoned their proven secondary strategy and started acting like traditional VCs, making primary investments at peak valuations.

"The main mistake we made was believing our own [bullshit]... coming up to that point we had some of the best returns in our industry."

The warning signs were clear but ignored. When Larry saw Toast trading at $76 per share on a ski lift in Montana, he realized they had a problem: "It's a great business, but 76 bucks a share. I mean, whoa."

They had deployed $900 million between COVID's start and 2021, much of it in overpriced primary rounds. Larry went back to his LPs with brutal honesty: "Listen, we [messed] up. We need to pivot. We need another 300 million bucks because I need to protect this thing."

The Rescue Mission: Structured Equity and Crisis Management

Rather than accepting losses, G Squared went on the offensive. As markets crashed, they ran toward burning buildings with cash, doing structured equity deals with minimum IRR hurdles and liquidation preferences.

"As that market's falling and the house is on fire, we're running in the front door with cash and we're going and doing minimum IR deals."

The structure was brutal but effective: regardless of paper valuations, companies had to generate 25% IRRs or 2.5x returns, whichever was greater. These ratchets accumulated daily, eventually consuming all value for later investors.

70% of their 2020 vintage became primary investments, with 40% including structural protections. It was financial warfare disguised as rescue capital.

The Theranos Lesson: When Spider Sense Saves Millions

Larry's most expensive personal lesson came from a near-miss with Theranos. After signing his binding one-page contract to buy $50 million in stock, something felt wrong during management meetings.

"Something didn't feel right. Don't know what it is. Can't say that I was like, 'Oh, it's a gigantic fraud.' I didn't know what it was."

His wife, an epidemiologist, had warned him the technology couldn't work. Larry's spider sense kicked in. He ripped up the contract and agreed to pay several million dollars personally to settle rather than expose his LPs to the fraud.

"That what that taught me was before we signed that paper, we better be certain because it cost me a few million dollars at a time where I didn't have a lot of money."

The Biggest Losses: 23andMe and Getir

23andMe: Despite good process and strong conviction, Larry's refusal to sell at reasonable multiples turned a potential 2x into a 70-cent loss on nearly $100 million invested. "That's me chasing multiple. And that's a problem in our strategy."

Getir: The grocery delivery company consumed $200 million across multiple rounds. Larry's fighting instinct—developed through childhood poverty—prevented him from walking away when he should have. "The next three years were some of the worst of my life."

The Getir experience taught him about the curse of his background: "When you grow up in like severe poverty, you're fighting with your siblings for everything... that doesn't leave you... it becomes a curse if you can't manage it."

The AI Concentration: Going All-In on Winners

Today, G Squared focuses heavily on AI leaders, particularly OpenAI and Anthropic. Larry's conviction is absolute: "If I could do anything... I would put my whole fund into OpenAI."

At $350 billion, he sees OpenAI reaching $1.5 trillion in five years—a 5x return with high confidence. Similarly, he's aggressively buying Anthropic at its $61 billion valuation, viewing both companies as having reached "escape velocity."

"I don't give a [damn] about the dilution. I care about the price I pay in dollars and the price I'm going to sell it at in dollars. I am focused on DPI, not TVPI."

G Squared now organizes investments around four mega trends:

  1. SaaS: Traditional software with AI embedded
  2. Fintech: Including positions in Revolut, Chime, and Monzo
  3. Consumer Internet: Platform businesses with network effects
  4. Mobility: Transportation and logistics innovation

Within each category, they build conviction positions in 2-3 companies, creating a portfolio where 10 companies represent 80-90% of their risk.

The Liquidity Obsession: DPI Over Everything

Unlike traditional VCs who can hold companies for decades, G Squared operates with a 5-7 year fund life focused exclusively on cash distributions. This creates both discipline and constraint.

"They have hired us specifically for this North Star DPI statistic... for 15 straight years across seven [funds]. Our LPs are looking for an ability to play the fastest growing, most dynamic technology companies in the world, and they want to get in and out with optionality."

The model works: if LPs get 4x cash-on-cash returns every 10 years with full liquidity, they can redeploy capital into the next cycle rather than waiting decades for traditional VC distributions.

The Psychology of Wealth: Money Doesn't Make You Happy

Despite generating billions for LPs and building substantial personal wealth, Larry maintains perspective rooted in his origins. "Money doesn't make me happy. Money makes my life easier."

His goal was always modest: "When I was growing up, I thought if I could just make $5,000 a month, I would be set." Success brought complexity, not just comfort.

The challenge became maintaining the edge that created success while avoiding the lifestyle inflation that destroys it. "The most difficult thing to do as you start to make real money... is keeping that edge that got you there."

Leadership Lessons: The Cost of Perfection

Larry acknowledges his intensity creates challenges for his team. "I think our people would like me to chill out just a little bit... unfortunately some really good people moving on that otherwise I would still like to be on the journey with me."

The perfectionist mentality that drives extraordinary returns also drives away talent. Building a firm that outlasts its founder requires delegation and trust—areas where Larry continues to evolve.

The Endowment Advice: Chase DPI, Not Paper Returns

When asked what advice he'd give endowment CIOs, Larry's response is unequivocal: "TVPI and MOIC are not the stats that people should be focused on... They're fake numbers. They should just chase DPI. It's the only thing you can use to buy food."

This philosophy separates G Squared from competitors playing with paper returns. In a world where liquidity is increasingly scarce, cash distributions become the ultimate differentiator.

The 20-Mile March: Discipline Through Volatility

G Squared operates on what Larry calls a "20-mile march"—consistent daily progress regardless of market conditions. Like Cal Ripken Jr. playing 16 consecutive seasons without missing a game, success comes from relentless consistency rather than spectacular bursts.

"Rain or shine, we're marching 20 miles and we're going to make progress... It's the grind and the willingness to have faith that you can do it and living and breathing the challenge and making it become your identity."

Future Vision: The Vampire and Zombie Problem

Looking ahead, Larry sees a bifurcation in private markets between companies that successfully integrate AI ("vampires") and those that don't ("zombies"). Most companies without AI in their DNA face existential threats.

"There's hundreds of them... there's far more zombies than there are vampires. I think it is a much more difficult transition to implement AI."

This creates opportunity for secondary investors to acquire stakes in struggling companies at discounts, then help restructure them for AI-enabled futures.

The Binding Contract That Started It All

Fifteen years later, Larry's original one-page binding contract still circulates in venture capital. Its simplicity—name, shares, company, dollar amount—reflects the no-nonsense approach that built G Squared.

But that contract's binding nature created both opportunities and obligations. When Larry's spider sense triggered on Theranos, walking away cost millions. When Spotify needed $150 million in 60 days, the contract forced creative solutions.

The document symbolizes Larry's entire approach: simple frameworks executed with absolute commitment, regardless of consequences.

Lessons from the Margins: What Poverty Teaches About Wealth

Larry's journey from government cheese to managing billions offers unique insights into wealth creation and preservation. Poverty taught him to fight for every advantage, but prosperity required learning when not to fight.

The same intensity that drove him from trailer parks to billion-dollar outcomes also created his biggest mistakes. Success demanded evolving beyond pure survival instincts while maintaining the edge that created competitive advantage.

His story proves that venture capital isn't just about picking winners—it's about having the psychological resilience to handle both massive wins and catastrophic losses while maintaining relationships with founders, LPs, and partners who trust you with their capital and futures.

Larry Aschebrook's brutal honesty about mistakes, losses, and the psychological costs of success provides a rare window into the reality of building wealth at scale. His willingness to share both triumphs and disasters offers invaluable lessons for anyone attempting to build lasting value in uncertain markets.

The trailer park kid who started with nothing now manages billions, but still remembers the government cheese. That perspective—maintaining hunger while handling abundance—may be the most valuable insight of all.

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