Carnegie Mellon's Miles Dieffenbach: Can Mega Funds Still Produce Venture Returns?
Origins: Inside Venture CapitalShow Notes
Miles Dieffenbach's path into venture started with getting cut from the Pittsburgh Steelers. A team captain at Penn State, Miles signed with the Steelers as a priority free agent, played four preseason games, and was released - at 310 pounds, eating 7,000 calories a day, and paying for his own food for the first time in his life. He took the first job he could get, at CBRE, then moved to a real estate private equity firm, his first real look at private markets. When he saw a job posting at the Carnegie Mellon endowment, he didn't know what an endowment did. He applied anyway, got the job, and has been there for close to a decade. Today he is managing director of investments at CMU, where he oversees a roughly $4 billion endowment with close to a quarter allocated to venture - a notably larger share than at many peer institutions. And he has run the math on where the asset class is headed. With fund sizes and the asset base up 10 to 15X over the past 15 years, he expects the beta of venture to be much worse going forward, and past performance to be a far weaker forward indicator than it used to be. Nick and Beezer dig into how CMU underwrites every fund to a 4X net target, benchmarked against a public market equivalent that has compounded at 17 to 18% net since 1998; why a 2 and 20 fee structure on what is really large-scale growth equity can strip away the alpha; and why CMU is largely not active with multi-stage firms today. Miles also explains how he evaluates GPs, starting with whether they have their own cash in the fund, why it's nearly impossible to manage out AI exposure in any diversified portfolio, how secondaries work differently for seed funds and multi-stage firms, and why he believes true early-stage venture will always have a protected moat - and remains the innovation engine of the United States. Quotes “Are you putting your own cash into the fund? Which is, venture as an asset class seems pretty allergic to that concept. Would it hurt for you if this fund didn't do well? Would you experience the pain that we do, or are you just getting a free call option on our money? And if it hits, you win. If it doesn't, you've collected $30 million in management fees.” “Venture has changed as an asset class from its scale perspective so drastically over a short period of time that it's very hard to look at those returns from 10 years ago and then pattern match that to ‘we're gonna expect those returns today.’ That's the really hard part of an LP job.” Time Stamps [01:02] Meet Miles Dieffenbach: From the Steelers to the CMU Endowment [04:58] Points on the Scoreboard: Can You Hide in Venture? [07:53] Why Venture's Beta Will Be Worse Going Forward [10:07] How CMU Picks: Fat Right Tails and Entry Ownership Math [10:50] The Anthropic Math: Why a Huge Outcome Won't Return a Mega Fund [12:28] Underwriting to a 4X Net: The Public Market Benchmark [13:56] Are LPs Subsidizing Bad Returns? [16:30] 2 and 20 on the Qs: How Fees Strip Away the Alpha [17:31] Long Feedback Loops and How AI Saved the Day [19:09] Why Sovereign Wealth Funds Still Pay the Fees [21:06] Missionaries vs. Mercenaries: Finding Great Pickers in AI [22:25] GP Commitment and the Free Call Option [23:42] Why CMU Won't Back a Manager for Just a Fund or Two [25:41] When CMU Doesn't Re-Up [26:46] Bigger Exits, but Not $20 Trillion IPOs [27:39] Nowhere to Run: Managing AI Exposure at the Endowment Level [30:34] Can Venture Be Bubbly While Public Markets Reprice Risk? [32:32] Secondaries: Seed Funds vs. Multi-Stage Firms [34:31] Liquidity, Opportunity Funds, and Conflicts of Interest [37:02] Why Early-Stage Venture Still Has a Moat [39:14] Venture as America's Innovation Engine Links Connect with the guest and hosts on LinkedIn! Miles Dieffenbach
Nick Chirls
Beezer Clarkson
Learn more about: Carnegie Mellon University Investment Office
Dan Levine's post on venture's declining return targets
LGT Capital Partners
Asylum Ventures
OpenLP
More from Origins: Inside Venture Capital
What happens when you take the most exclusive asset class in the world and list it on the New York Stock Exchange? Sarah Pinto is finding out in public, every trading day. Sarah spent close to a decade investing in mission-driven growth-stage companies at Emerson Collective, the organization founded and led by Laurene Powell Jobs, where she helped build the venture effort and backed names that are now household ones: OpenAI, Anthropic, and Coinbase. She began investing in July of 2008, which turned out to be an instructive moment to start, and has been focused on tech since 2010. Today she is a portfolio manager at Robinhood Ventures, where she runs two funds built around a structural problem rather than an appetite one: only about 1% of Americans have any exposure to private companies, because most people aren’t accredited. Robinhood Ventures Fund I (RVI) is a ’40 Act closed-end fund that IPO’d in March 2026 and holds a concentrated portfolio of late-stage frontier companies: Databricks, OpenAI, Stripe, and SpaceX among them. Fund II (RVII) is the other side of the barbell: a BDC investing in a broad, diversified portfolio of Y Combinator seed-stage companies. Beezer digs into the machinery and the tensions - why the ’40 Act and BDC wrappers make any of this possible, how she pitches founders against Sequoia and Index, whether venture really belongs in a public product at all, and what the data actually shows about how retail investors behave when the price drops. It is a conversation about access, structure, and the strange discipline of running a venture portfolio in full public view. Quotes “Only about 1% of Americans have any exposure to privates, because most people aren’t accredited. Which means that they can only watch companies like Anthropic or OpenAI emerge from the sidelines. They can’t be a part of it. They can’t actually benefit from that value creation.” “Most of my GP equivalents at other funds don’t have to be marked to market every single day, whereas I am. That is the challenge. It comes with a lot of additional scrutiny and it comes with volatility that you don’t have if you are private. But it is the only way today that the SEC will let non-accredited investors invest - and frankly for good reasons.” “The CFOs of the companies we invest in know that retail is 25% to 30% of the stock market. In the same way that you bring crossover institutional investors into your late rounds, you should probably bring retail as a constituency. It’s the one constituency you don’t talk to until your IPO. And now you really need them.” Time Stamps [01:05] Meet Sarah Pinto: Emerson Collective to Robinhood Ventures [03:58] The Through Line: Investing at the Intersection of Purpose and Returns [05:46] Why Only 1% of Americans Can Access the Private Markets [07:10] What Emerson Collective Was Built to Do [08:15] RVI and the '40 Act Innovation: A Venture Fund That Trades Like an ETF [09:49] Robinhood as Both Distribution and Product [11:29] How the Portfolio Actually Gets Built [14:02] What You're Really Diligencing When You Buy the Fund [14:33] Why the Apple IPO Math Doesn't Work Anymore [15:44] Marked to Market Every Single Day [16:44] What Changes When You Manage Venture Publicly [19:38] The Pitch to Founders: Why Robinhood Is an N of One [21:35] Retail as a Constituency Before the IPO [23:58] Is Venture Really a Public Product? [24:19] Learn by Doing: Fees, Disclosure, and the $25 Share [28:01] RVII and the Other Side of the Barbell [29:48] Why YC: The Power Law, Concentration, and Hard Data [31:11] Taking a Seed Fund Through the LP Inquisition [31:59] The Live Roadshow and the Most Edgar Filings in IPO History [33:13] What's Next for Robinhood Ventures [36:30] Getting More Women Investing Early Links Connect with the guest and host on LinkedIn! Sarah Pinto
Origins hosts Nick Chirls (GP, Asylum Ventures) and Beezer Clarkson (LP, LGT Capital Partners) unpack their recent conversation with Alec Litowitz, founder of Magnetar Capital and founder and managing partner of QStar Capital. They discuss what changes when a rigorously structured public-markets mind looks at early-stage venture, why “answering uncertainty” is a sharper frame than simply living with it, and where TVPI stopped telling the truth after 2021. For a monthly roundup of the latest venture insights, including the newest Origins episodes, subscribe to the OpenLP newsletter – delivered straight to your inbox: https://subscribe.openlp.vc CHAPTERS: [00:00] Welcome to Origins [00:45] Alec Episode Takeaways [01:03] Agency, AI & Where the Human Still Matters [01:45] Why Structure Is Such a Powerful Tool [03:31] How Structured Can Seed Investing Really Be? [04:31] How Venture Answers Uncertainty [04:51] The Portfolio Review Nick Wants to Try [05:51] TVPI as a False Signal & the SaaS Regime [07:33] Do LPs Even Look at TVPI Anymore? Learn more about OpenLP: https://openlp.vcLearn more about Asylum Ventures: https://asylum.vcLearn more about LGT Capital Partners: https://www.lgtcp.com
What does it take to build a profitable company for a decade without ever really needing the money you raised? According to Joshua Browder, it comes down to one trait he looks for in every founder he backs: grit. Josh is the founder and CEO of DoNotPay, the consumer platform he started the summer before he enrolled at Stanford to help friends fight parking tickets. Nearly ten years later, DoNotPay has helped millions of people appeal tickets, cancel subscriptions, and fight companies and the government - and it's profitable enough that it pays dividends back to its own investors and team. Along the way, Josh raised from Andreessen Horowitz and Founders Fund, took the Thiel Fellowship (leaving Stanford one class short of his degree), and built a reputation as one of the more unconventional operators in consumer tech. Today, Josh also runs Browder Capital, a solo-GP pre-seed fund now on its fourth vehicle and backed by institutions including Sequoia. His model is deliberately narrow: one founder at a time, often moved into his own spare bedroom, with full access to his network until they raise an institutional seed round - then he moves on to the next. Nick and Josh get into the early days of DoNotPay - jailbreaking iPhones, an unauthorized Pret A Manger app that nearly got him sued at 14, and the Huffington Post post that took the company from 10 users to 50,000 in a week - and how that scrappy, bootstrapped era shaped the way he runs the company today. They also dig into DoNotPay's ongoing arms race with robocallers and big companies, why Josh thinks grit beats IQ when evaluating founders, how he tests for it in real time, and why - even as a full-time investor - he'd tell almost anyone to start a company before starting a fund. Time Stamps [02:27] Josh Browder's Origin Story: From London to Stanford [04:08] Jailbreaking iPhones, Selling Apps, and the Pret A Manger Cease-and-Desist [06:32] Coding DoNotPay the Summer Before Stanford and Going Viral Overnight [10:08] Nonprofit or For-Profit? A Cold DM From Marc Andreessen [11:30] Inside the Thiel Fellowship: Money, Peers, and Community [14:21] Going Solo, Sitting on Cash, and Finding a Business Model [15:00] Bootstrapping Then vs. Today's Mega Seed Rounds [17:55] Profitable, Dividend-Paying, and Barely Touching Its Capital [18:28] The Consumer Growth Playbook: Organic, SEO, and GEO [19:59] The Arms Race With Big Companies: DoNotPay's Robocaller Trap Card [24:04] How Browder Capital Started and the Owner.com Bet That Beat the Best VCs [25:29] The Model: One Founder, One Spare Bedroom, at a Time [30:54] Why Grit Beats IQ – and How Josh Tests for It [34:57] The Rise of "Ideological Fraud" in the Age of AI Deep Research [35:32] Lessons From Four Funds: Zero Reserves and Going Institutional [37:16] How Operator-GPs Won Over Institutional LPs [39:32] Final Advice: Start the Company, Not the Fund Links Connect with the guest and hosts on LinkedIn! Joshua Browder
Origins hosts Nick Chirls (GP, Asylum Ventures) and Beezer Clarkson (LP, LGT Capital Partners) unpack their recent conversation with Thomas Kristensen, Beezer's new colleague at LGT Capital Partners. They discuss what it actually takes to merge investing teams, why the endowment model still matters, and how a platform built on 700+ years of institutional history changes how you think about surviving venture cycles. For a monthly roundup of the latest venture insights, including the newest Origins episodes, subscribe to the OpenLP newsletter – delivered straight to your inbox: https://subscribe.openlp.vc CHAPTERS: [00:00] Welcome to Origins [00:44] Thomas Episode Takeaways [01:06] LP "Co-Founder Dating" - How Beezer & Thomas Built Alignment [01:42] Culture Fit Without the Questionnaire [04:35] Surviving Venture Cycles [06:24] The Endowment Model Revisited [07:41] Why LGT's Longevity Is a Competitive Advantage [09:38] What LPs Should Offer GPs Beyond Capital Learn more about OpenLP: https://openlp.vcLearn more about Asylum Ventures: https://asylum.vcLearn more about LGT Capital Partners: https://www.lgtcp.com
What separates the investors and founders who thrive in moments of radical change from those who don’t? According to Alec Litowitz, it isn’t intelligence or emotional maturity - it’s adaptability. Alec is the founder of Magnetar Capital, one of the most respected multi-strategy hedge funds in the world, and the founder and managing partner of QStar Capital, his single family office and investment platform. Over a 30-year career that began at J.P. Morgan, continued as a founding partner and global head of equities at Citadel, and culminated in building Magnetar from scratch, Alec developed a framework he calls the Adaptability Quotient - AQ - for making decisions under genuine uncertainty. His book, The Adaptability Quotient, publishes September 15th. Today, through QStar, Alec invests with no fund mandate and no LP constraints - thematically across both public and private markets, in everything from CoreWeave and SpaceX to top-tier VC and PE managers. That unconstrained vantage point, combined with three decades of pattern recognition across market regimes, gives him a distinctive lens on where venture capital sits inside the current moment of change. Nick and Beezer dig into the core distinction Alec draws between risk and uncertainty - a difference he argues most investors collapse at their peril - and how the AQ framework maps directly onto how founders build, how VCs back them, and how the venture ecosystem itself needs to adapt. They also get into what he calls the second cognitive revolution: why AI isn’t just a new tool but a system-level regime change, what that means for the capital stack and liquidity timelines in venture, and why the answer for smaller players isn’t resistance - it’s remapping. Quotes "What entrepreneurs get paid for is not risk. They get paid for uncertainty, for resolving the uncertainty. People may stay at some stranger's house or they may not, but I don't know the probability. If it's high, I have a business. If it's zero, I don't have a business. Let's go resolve that probability. And when someone does a startup and tests it, raises money, probes around it, and gets feedback loops - the answer is yes. That's what they get paid for, for resolving that uncertainty." Time Stamps 00:00 What Entrepreneurs Actually Get Paid For 00:31 Introducing Alec Litowitz: Citadel, Magnetar, and QStar 02:49 Three Career Chapters and the Through Line: A Systematic Approach to Uncertainty 06:09 The Book: Why Alec Wrote The Adaptability Quotient 07:29 AQ Defined: Why IQ and EQ Aren’t Enough When the Frame Itself Changes 9:40 Why QStar: No Constraints, No Mandates, Just Mapping the Moment 12:22 QStar’s Investment Framework: Thematic, Top-Down, Technocentric and Anthrocentric 14:51 Why Venture Still Matters: The Venture 20, the Mag Seven, and Where Disruption Lives 17:03 Risk vs. Uncertainty vs. Black Swan: The Framework Most Investors Get Wrong 22:30 Applying AQ in Venture: MVPs as Probes, Pivots as Feedback Loops 22:51 A Case Study in Failing Without Feedback Loops 24:33 The Second Cognitive Revolution: Why AI Is a Regime Change, Not a Tool 29:20 Is SaaS Uninvestable? What Becomes Abundant and What Becomes Scarce 32:53 Mapping the Venture Ecosystem: Capital Intensity, New Entrants, and IRR Pressure 37:08 The Liquidity Problem Reframed: DPI, TDPI, and Timeline Mismatch 40:12 Secondary Markets as a Structural Response 43:48 Final Advice: Upgrade Your Operating System Links Connect with the guest and hosts on LinkedIn! Alec Litowitz