# Mega-funds and early-stage funds need separate benchmarks

Markdown copy of https://realalpha.app/s/mega-funds-and-early-stage-funds-need-separate-benchmarks/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Jack Selby](https://realalpha.app/people/jack-selby/) · Jack Selby is a Managing director at Thiel Capital, early PayPal team member, and Clarium Capital cofounder. · Joined PayPal as an original employee, led international operations, and co-founded Clarium Capital with Peter Thiel.
- Host: [David Weisburd](https://realalpha.app/people/david-weisburd/)
- Show: How I Invest
- Episode: [Peter Thiel's 27-Year Partner on the AI Bubble, the Venture Capital Crisis, and the PayPal Mafia](https://realalpha.app/v/4VjI-3FcHSg/), Nov 4, 2026
- Moment: 38:46 to 41:29 of the episode (3 min), playing on https://realalpha.app/s/mega-funds-and-early-stage-funds-need-separate-benchmarks/; the episode from there: https://realalpha.app/v/4VjI-3FcHSg/?t=2326

## Quote

> “I think the mega funds are a **different asset class**. I'm not saying they're better or worse. They're just in a different bucket.”
> — [Jack Selby](https://realalpha.app/people/jack-selby/) at [40:13](https://realalpha.app/v/4VjI-3FcHSg/?t=2413) · How I Invest

## Takeaways

1. He views mega-funds and early-stage funds as different asset classes.
2. His strategy targets middle-market geographies without taking control stakes.
3. He wants to work with founders who welcome his help.

## About this segment

Jack Selby separates mega-funds from smaller early-stage managers, comparing his approach to middle-market private equity. LPs may need distinct benchmarks for funds with different ticket sizes, ownership models and return profiles.

From “Peter Thiel's 27-Year Partner on the AI Bubble, the Venture Capital Crisis, and the PayPal Mafia”, Nov 4, 2026. [Watch the full episode](https://realalpha.app/v/4VjI-3FcHSg/)

## Transcript

From the transcript How I Invest publishes with the episode.

[38:58](https://realalpha.app/v/4VjI-3FcHSg/?t=2338) helps get to an aspect of this that I think is arguably more interesting. So as the mega funds get larger and larger and larger and have to write minimum tickets that are commensurately very large themselves, who fills that gap below that? So they're sucking up. They're hoovering up all the capital. Who's left to write those tickets that are less than $20,000,000? Are these the little micro funds that are gonna do that?

[39:22](https://realalpha.app/v/4VjI-3FcHSg/?t=2362) It's a real gap that's being left. So I think that has to be examined. And then if you're an allocator, do you put a fund like mine or benchmark, relatively small funds, in the same bucket as Marc Andreessen, who manages, I don't know, $60,000,000,000? Are those the same investment type managers? Like, if you have a Yale endowment model, what buckets do you put those two firms in? Do you put them in the same bucket?

[39:45](https://realalpha.app/v/4VjI-3FcHSg/?t=2385) Empirically, it seems like no. I had Eric Swertsum from AngelList, and AngelList is very interesting because they have one of the biggest datasets in the world. I think arguably the biggest on... When it comes to startups. I think 25,000 companies or so. And especially today, they use AI. They use the latest machine learning, and they figured out an interesting thing, which is they couldn't run the same mathematical models on Olive Venture.

[40:09](https://realalpha.app/v/4VjI-3FcHSg/?t=2409) In other words, it was essentially two completely different and idiosyncratic asset classes, aka the early stage and the late stage. So even mathematically, it doesn't compute to just focus on venture capital as one asset class, meaning to assess precede the same way as you would a pre IPO company. Totally agree. Yeah. I think the mega funds are a different asset class. I'm not saying they're better or worse.

[40:31](https://realalpha.app/v/4VjI-3FcHSg/?t=2431) They're just in a different bucket. And earlier stage guys, like with what I do, I think we're in a different bucket. There's almost an analogy with what we do as being akin to middle market private equity in the sense that there's a difference... Important difference in the sense that I'm investing in business that are... You know, businesses that are in these middle market geographies. I'm not taking control stakes, but I only wanna work with entrepreneurs that want my help.

[40:52](https://realalpha.app/v/4VjI-3FcHSg/?t=2452) So it's like synthetic control. And because it is venture, I do have more of a chance of going to zero than a typical, you know, private equity type business, but hopefully, that is compensated by the fact that my company should have better growth rates. They should have better margins, so, therefore, they should have a better multiple. Other than that, you could put me in the middle market private equity bucket if you so chose, because I think there is a a high degree of similarity.

[41:13](https://realalpha.app/v/4VjI-3FcHSg/?t=2473) Perhaps not surprisingly to listeners, I'm very optimistic on venture capital. I'll tell you why.