NEW: How 137 Ventures Built… | Sourcery Newsletter Summary

1. Key Themes

Theme 1: Concentrated Conviction in Private Markets Compounds Extraordinary Returns

137 Ventures built a ~$20B position in SpaceX through roughly two dozen investments over 16 years, never selling a single share. The strategy was deliberate accumulation at every available entry point — secondaries, tenders, and primaries — rather than a one-time early bet.

"We continued to invest, really many times over the last 16 years, so I don't actually know what the total count is, but we've probably made two dozen investments in the company."

Theme 2: The Structural Shift to Staying Private — and the Secondary Market It Created

137's core founding thesis, formed circa 2011, was that regulatory changes (specifically the JOBS Act eliminating the 500-shareholder rule) would allow great companies to stay private far longer, creating massive compounding opportunities for private market investors. That thesis has since been validated at scale.

"Our belief was companies were gonna stay private longer... what that meant was there'd be a lot more opportunities to invest in those businesses, and especially if they were great companies, then that was just a lot more time they could compound."

The secondary market has since exploded as the proof point: global secondary volume reached $240B in 2025, up 39% year over year and nearly double the 2021 peak. Secondaries now represent 31% of all venture deal activity, up from 16% in 2020.

"When we went out and talked to institutional limited partners, they were not necessarily of the mind that the industry was changing and this was going to be a thing... at this point, we've more or less won the argument, but that was not true 16 years ago."

Theme 3: Operational Transformation — How SpaceX Became an Investable Business

The SpaceX thesis wasn't just a founder bet — it was underwritten on specific operational inflection points. Two structural shifts made the launch business durable enough to keep buying.

"Historically it had been cost plus, and they had transitioned to a firm fixed price model."

"Making the Falcon 9 partially reusable fundamentally changed the economics of the business."

On launch dominance: SpaceX is expected to launch close to 200 times in a single year, while "no one else in the world is launching even 15, 20 times."

Theme 4: Companies Over Categories as an Investment Framework

137 explicitly rejects sector-based investing, concentrating instead in individual durable winners rather than spreading across category competitors.

"A lot of people, they think about categories, we think about companies... We looked at probably every SpaceX or every space investment for, I don't know, 15, 20 years, and the good investment was SpaceX."

"What you don't wanna do is have 1,000 different companies that kinda all sound the same, and they're all duking it out to end up with like a small piece of the market."

Theme 5: The IPO Wave as Culmination — Not the End — of the Secondary Era

Fishner-Wolfson frames the SpaceX IPO not as the end of the private market opportunity, but as the final liquidity event in a multi-decade cycle that secondaries served throughout. OpenAI and Anthropic filing confidential S-1s signals more large-cap private exits are coming.

"SpaceX is the big one to kinda start this, but I mean, as you mentioned, OpenAI & Anthropic both filed their S-1s confidentially."

The secondary market enabled liquidity for employees and investors for years while companies stayed private. The IPO is simply the terminal event in that same thesis playing out.

2. Contrarian Perspectives

Contrarian 1: Partial Liquidity for Founders Sharpens Focus Rather Than Dulling It

The dominant VC orthodoxy holds that founders who take chips off the table lose hunger. Fishner-Wolfson directly challenges this, arguing that removing existential financial pressure enables better long-term decision-making — not distraction.

"I don't think I've ever seen anyone take money for fun money."

His evidence: the use cases for founder liquidity are mundane and stabilizing — buying a first home, paying off student loans, covering medical events. These are not lifestyle upgrades; they are financial floor-setting that lets operators play a longer game.

Contrarian 2: Ownership Percentage Targets Are a Distraction in Venture

Standard VC fund math requires owning a minimum percentage of each company to generate meaningful returns at fund scale. Fishner-Wolfson dismisses this as dogma inherited from flawed shortcuts.

"For us, all I care about is cash on cash returns."

His evidence: Peter Thiel took 10% of Facebook and generated one of the greatest venture returns in history. Optimizing for ownership targets, he argues, causes investors to miss or under-invest in the best businesses. The Hadrian position, for example, is "four, maybe five checks" deep — accumulated over time without anchoring to a target percentage.

Contrarian 3: The Secondary Market IPO Wave Will Grow It Further, Not End It

Conventional wisdom might read a wave of large private company IPOs (SpaceX, and potentially OpenAI, Anthropic) as shrinking the available secondary market. Fishner-Wolfson argues the opposite — those IPOs are simply the final stage of a lifecycle that secondaries served throughout, and the pipeline of private companies needing interim liquidity keeps growing.

"The market has expanded by a couple orders of magnitude since when we started the business."

Supporting data: Average secondary bids reached 106% of NAV in Q1 2025 — the first premium since 2021 — after bottoming near 60% of NAV in 2022, signaling renewed structural demand, not saturation.

3. Companies Identified

SpaceX Commercial launch and satellite internet company Why mentioned: Core investment — 137 owns 1%+ of SpaceX, worth ~$20B at the $1.77T listing valuation; stock opened at $150 on IPO day and closed up ~19%, pushing market cap above $2T.

"This will most likely define my career." — Justin Fishner-Wolfson to the NYT

Impulse Space In-space mobility / last-mile orbital transport company Why mentioned: 137 co-led the $500M Series D with BANNER VC at a $4B valuation; founded by SpaceX propulsion veteran Tom Mueller. Represents 137's company-over-category thesis applied to in-space mobility.

"We got excited about what they were doing and kind of the unique capabilities that they had... how that was specifically relevant for commercial but also for government as well."

Cognition AI coding and software development company Why mentioned: 137 backed Cognition over foundational model labs on a platform lock-in thesis — the firm's expression of its AI view.

"These are the only guys who can give you access to all the underlying models without the lock-in."

Anduril Defense technology company Why mentioned: Named as a marquee portfolio holding alongside SpaceX; part of 137's defense-adjacent concentration thesis. (No direct quote specific to Anduril beyond portfolio listing)

Hadrian Industrial/precision manufacturing company Why mentioned: Case study in 137's multi-check, concentrated follow-on strategy.

"Four, maybe five checks" deep.

Palantir Data analytics and government software Why mentioned: Named as a marquee holding; listed as a realized public exit. (Portfolio reference only)

Brex Corporate card and financial software platform Why mentioned: Named as a marquee portfolio company; also appears as a newsletter sponsor. (Portfolio reference only)

Physical Intelligence Robotics / embodied AI company Why mentioned: Listed as a recent frontier deployment in AI, defense, and industrial systems. (Portfolio reference only)

Varda Space Industries In-space manufacturing company Why mentioned: Part of 137's aerospace portfolio concentration alongside SpaceX and Impulse. (Portfolio reference only)

Ramp Corporate spend management platform Why mentioned: Named as a marquee portfolio holding. (Portfolio reference only)

Gusto Payroll and HR software for SMBs Why mentioned: Named as a marquee portfolio holding. (Portfolio reference only)

Figma Collaborative design software Why mentioned: Listed as an enterprise software portfolio position. (Portfolio reference only)

Airbnb / Uber / Flexport / Coupang / Wish / DiDi Various consumer, logistics, and e-commerce companies Why mentioned: Historical portfolio positions; Airbnb, Coupang, Wish, and DiDi listed as realized public exits. (Portfolio reference only)

4. People Identified

Justin Fishner-Wolfson Co-Founder & Managing Partner, 137 Ventures Why mentioned: Central subject of the article; architect of the ~$20B SpaceX position built over 16 years.

"This will most likely define my career."

Alexander Jacobson Co-Founder, 137 Ventures Why mentioned: Co-founded 137 with Fishner-Wolfson; was part of the internal debate about continuing to invest in SpaceX when Starlink fundraising introduced new risk.

"There was a lot more risk on the table." — on the decision to keep investing during the Starlink raise

Gwynne Shotwell President, SpaceX Why mentioned: Fishner-Wolfson stood next to her in the control room during the third (failed) Falcon 1 launch in 2008; held up as a model operator.

"The calm person in the middle who can just help people get to the right answer."

Elon Musk CEO, SpaceX / Tesla / X Why mentioned: Credited as a key reason for continued conviction in SpaceX; held up as the definitive lesson in first-principles operating.

"A first principles approach to everything and a flexibility that when you have new data you can easily change your mind."

Tom Mueller Founder, Impulse Space; former SpaceX propulsion engineer Why mentioned: Founder of Impulse Space, which 137 co-led at Series D; he built the Merlin engine that sits in 137's office. (Referenced by context and the Merlin engine detail; no direct quote attributed to Mueller in this article)

Eric Romo Early operator, Impulse Space Why mentioned: Provided an outside-in endorsement of 137's credibility and investment significance.

"137 has known us for a while. They were a relatively small shareholder before this round and decided this was the right time to step up... It was exciting to see them essentially decide that we were the next big ones in space. That's a real big endorsement coming from somebody who owns more than 1% of SpaceX."

Brad Gerstner Founder & CEO, Altimeter Capital Why mentioned: Cited as the source for secondary market pricing data at the All-in Summit (106% of NAV in Q1 2025). (Data attribution only; no direct quote)

Peter Thiel Co-Founder, Founders Fund Why mentioned: Ran Founders Fund, where Fishner-Wolfson first invested in SpaceX in 2008; cited as an example of ignoring ownership targets in favor of cash on cash returns (10% of Facebook). (Referenced by context; no direct quote in this article)

5. Operating Insights

Insight 1: Structured Tenders Are a Talent Retention and Loyalty Mechanism

Running company-organized tenders is not just a liquidity tool — it is a culture and retention lever. Employees who can access liquidity periodically remain committed to the mission. Handling it badly (as Facebook reportedly did early on) creates perverse incentives where employees must quit to access their equity.

"If you run a tender, turns out your employees are gonna assume that you're gonna run another tender, right? And for the most part, people don't really like it when prices go down."

Facebook "basically started telling people 'If you sell shares, we're gonna fire you'"— framed as the cautionary failure mode.

Insight 2: Test Failures Are a Signal of Iterative Capability, Not Incompetence

The third Falcon 1 launch failed after two minutes of flight. Rather than viewing that as a disqualifying failure, Fishner-Wolfson (and Founders Fund) treated Shotwell's immediate, methodical response as evidence of organizational resilience and execution capacity. The failure of a test is less important than the quality of the team's response to it. That $20M investment is now worth "well into the tens of billions."

"What are you going to do?" [Fishner-Wolfson asked Shotwell]. Her answer pointed to a 'possible software timing issue' and a plan to build another rocket and try again.

Insight 3: Cash on Cash Discipline Beats Ownership-Target Optimization

Investors (and by extension operators setting up cap tables) should optimize for absolute return on capital deployed, not percentage ownership. Anchoring to ownership targets causes managers to pass on investments or undersize positions in the best companies.

"For us, all I care about is cash on cash returns... You don't really wanna get dogmatic on the things that don't matter. You wanna stay focused on things that do matter."

6. Overlooked Insights

Overlooked Insight 1: SpaceX's Self-Funding Launch Business Minimized Dilution and Made Secondary Accumulation Possible

A structural advantage that enabled 137's position-building is often understated: because the Falcon 9 was profitable, SpaceX "rarely needed to raise large amounts of outside capital." This meant the cap table was not being continuously diluted by large new primary rounds, and it meant the tender/secondary market was the primary mechanism for getting access to shares — precisely 137's core competency. The business model shift to fixed-price contracts wasn't just good for SpaceX's P&L; it was the precondition for the secondary accumulation strategy to work.

"Historically it had been cost plus, and they had transitioned to a firm fixed price model... making the Falcon 9 partially reusable fundamentally changed the economics of the business."

Overlooked Insight 2: Starlink's TAM Was Always Demand-Obvious; the Real Unlock Was Unit Economics Clarity

The article notes that Fishner-Wolfson and Jacobson nearly didn't continue investing when SpaceX began raising for Starlink (citing "a lot more risk on the table"). What made Starlink finally underwritable wasn't a demand discovery — it was the moment the cost to build the constellation became modelable from early satellite data.

"Probably 2019 or so" was when early satellites were up and unit economics became modelable. The addressable market — tens of millions of Americans without high-speed internet, plus a global market — was always obvious. The bottleneck was whether the supply side could be built economically.

This is a template for evaluating capital-intensive infrastructure bets: demand is often knowable early, but the investment case turns on unit economics clarity, not market size analysis.