Josh Wolfe on Lux Capital's $1.5B fund, the bifurcation of venture, and defense tech IPOs coming in 2026

investing in the company's stock. While while the founders have given away in excess of $1 billion in charitable donations and still counting. Wow. What a run for the Home Depot founders.

Well, what a run for Josh.

The moment you've been waiting for. We have Josh Wolf in the Reream waiting room and here he is in the TV Ultra. Josh, how are you doing? You look fantastic. Uh, have you did you have a good break? Are you off to a good new year?

Seems like it great new year. Uh, and what's the news? It seems like you're kicking off 2026 with the bang.

We We raised a new fund. We uh we're excited. Yeah.

How much do you

We raised a billion five and uh

Oh, we got the gongs.

Let's go.

Excited about the You know, it's crazy. I remember

20 years ago, 20 plus years ago, we raised our first fund and it was 100 million and I struggled to hit it. We got 92.1. I'll tell you to this day I remember literally every single person that said yes or no.

Yeah. Every single person.

Everybody.

Uh how many of them are still along for the ride? Do you go back?

I think we have 12 people who are OG Lux investors that are like part of our family that I love

at this point. That's fantastic.

That's amazing. Uh yeah, there's been uh we we covered

narrative violation. The Wall Street Journal today is saying that you're cooked. They're saying US venture capital fundraising declined 35% in 2025. uh how did you get it done? What are the markets like? Uh is this what are the big you're reading? When you see a headline like this, 35% down and yet you're doing well. What's the secret to success?

I think I think it's right. I think the headline is right. Um you know, we all spoke I want to say back at um

Valley. Yeah. And we were talking about the minnows and the megas and I had made this thing that maybe was like a sort of prediction but an anticipation that basically you were going to have this bifurcation where you would have a long tail of the small funds that were going to basically disappear. And I know you guys hit on that earlier but I was with one of my large LPS and I was like I think you're going to see 30 to 50% extinction rate sort of involuntary uh exit and this

that idea of like a lot of people are on their last fund. They just don't know it yet.

People have never been through a cycle. They have inadequate reserves. They haven't invested in succession planning. They're in the wrong sectors. They are in sectors that have too much capital. They don't have enough. And they were basically in a market where everything was going up and to the right. And they looked really smart. And they're not idiots, but um you know, usually in up markets, people look smarter than they are. In down markets, they look dumber than they are. And in this particular case, uh the prophecy was like 30 to 50% would end up disappearing and going extinct. And this LP laughed at me and he's like, Josh, it's going to be 90%. So, he was even more aggressive.

And and I think that's going to happen. Um some will join bigger platforms and get absorbed. And you're seeing that. um GC bought you know a group out of Europe and you'll see other people sort of tuck into some of the other big platforms those are the minnows at the other end you got the megas and the megas you know there's probably five or six firms that are basically like 80 to 100 billion AUM today and growing and I actually think that they will voluntarily exit so you will actually see IPOs probably from Andre GC GA a handful of others that are basically gearing up to be multi-asset platforms and they're amazing investors they're great people but it's just changing the game so you got small fries that are basically exiting and people that are emerging managers. A few will enter and grow. We were once an emerging manager and entered and grew. And then you have large guys that are basically gearing up, I think, to go public. So, it's a it's probably I don't know 12 firms, you know, in the middle that are like between$1 and $3 billion. They can do like early 100k checks and late $150 to $200 million checks and and I think for the next few years that's going to be the the place to be.

More positively, how excited are you for this moment to have this amount of capital to deploy? I've read your letters as long as I've been in in the in in the industry and it feels like Lux as a fund was really built for this moment. Everything from, you know, hardware to uh bio to AI, all these things that you've been writing about forever feel like they're having, you know, such a moment.

Uh it is and I got to be honest, it's as much as the team is out on the edge scouting it is really about the founders that we back. So you look at you know Brian and Palmer and Trey and Matt at Anderol like they have just absolutely crushed it. You know this was at a time when nobody wanted to fund defense 7 years ago. Being able to be found investors in Ander seeing the success that they're having the success that I anticipate from here is just incredible. You look at Casser and Applied Intuition I got to say amongst 350 400 companies that we've funded over the past 20 years. It is one of our only cash flow positive businesses and they're just also crushing it.

They will they will get a gong you know uh

many times. many times,

you know, uh, cognition and hugging face and and we've got an amazing team, you know, I mean, you know, Brandon Reeves and Graceford and Peter Abear and Shaheen Farie and Lanjang and Dina Shaker, like Shak Veta, like they're they're just all out crushing it and I'm very grateful. I feel like we've got the best team on the field and more importantly, I feel like we've got the best founders. Um, Eric at Modal and the team at RAMP and I just feel extremely fortunate that we get to partner with these guys and it's like the gift that keeps on giving. So my biggest thing to my team right now is don't screw it up. Don't, you know, we've got a good thing going. Be humble.

Yeah.

Uh you are only as good as your last deal and um serve our entrepreneurs and make them successful and they will make us successful and I feel very grateful.

How are you thinking about uh this year? What are you focused on uh and most excited about personally from an investing standpoint?

Most important investment that we've made as a firm internally has been our young team that is just like again kicking ass now. But in terms of sectors, I'd say generally about a third of what we do is aerospace and defense. So we're doing that globally. You know, we're airland, sea space, cyber, and um beyond and now subsea and subterranean, which is wild. That was something that Palmer himself was talking about

years ago, and I thought it was crazy, but of course we've seen that in everything from the southern border to to Gazin and Israel. Uh it's a real thing. And uh so we're now in the US, we're in the UK, we're in Israel, we're in Bulgaria. Um us in Delhi and uh in Durac, right? Exactly. Uh we're in Japan.

Don't they have some cash flow? I thought Enduro had some cash flow.

I don't know if it's cash flow but just like remarkable economics. It is a great a great founder great business.

Um I'd love to do something in India in defense and um I'm very bullish as you know you may have heard about this IMAC corridor between India Middle East and Saudi and UAE and Israel and Jordan, the Mediterranean and Europe and so I just think that whole thing in the aerospace and defense segment US and allies is going to be a big deal. You see Trump putting out, you know, a billion, a trillion five on the defense budget. Enormous amount of spend. You had the clip from Palmer earlier today, which was awesome. And um the incentive alignment so that the bloated bureaucratic beltway bandits are starting to realize like it's not just about hyping your pipeline as a defense company, but actually delivering real uh material and weapon systems to the war fighters. So that's pretty critical. So that's one sector. Biotech, you know, has been in the doldrums for the past, I don't know, two years. uh XBI is up 50% in the past 6 months and I think you're going to see an enormous resurgence in cutting edge biotech particularly at the intersection between AI you know we were founding investors in this company evolutionary scale that we took out of meta and then CZI ironically ended up buying them just you know a few weeks ago

so I think you're see more and more of that um and then everything in embodied intelligence you know the next wave of AI and computer infrastructure is not just going to be two-dimensional AI it's going to be 3D so some of that is bio some of that is robotics some of that is automation industrial, but I think that you're going to see some huge deals, some really big dollar deals

um around this idea of embodied intelligence where physical intelligence and locky groom and and the team uh are just incredible, but you'll probably see two or three other things that are adjacent areas, not specifically robotics of how do you take some of the great inspirations of our low power brains and embody that so that we're not having hundreds of thousands of GPUs and NVIDIA clusters, but instead doing both edge inference and really interesting biological inspire ired ways of having AI into the 3D world which is going to be wild. So excited about all that.

That's amazing. Uh it's sort of a bad time to start to become a venture capitalist. We we are seeing this K-shaped dynamic. A lot of small funds want

not necessarily a bad time to be a may maybe not the best time to start your own fund.

But I want but I want some advice for someone who is who who can't be talked down from it. Uh maybe the person who's going out

join a great fund.

Join a great fund. Is that your advice or what if someone says I want to start I want to start a fund?

When we started Lux it was at the tail end of the dot boom bust and I was like let's carve a niche out that nobody else was doing. There are going to be brilliant people. I mean I got to be honest like you know whether personally some of the partners or or the firm in some small ways there are brilliant people that I know that are going to be launching funds and they have networks and access and kinetic activity and there is this barbell. You know, you have older folks in the industry who have access to influence, but you have younger people that every night they are out and pulling together incredible engineers and developers and entrepreneurs. And I would never count those people out. Now, they're going to need capital over time, and there'll be people that we partner with, but over time, they will go from a small fund to a big mega fund. So, I'm actually I would never discourage anybody from starting a fund. It is one of the great entrepreneurial things to do. to totally but but yeah if you go back to 2021 where where the numbers that we're referencing and that the journal is referencing it's like if you knew founders people would be like well here's 20 mil you know it's like I don't think we need that many more funds like that it's like you want the you want the life's work

uh allocator who has a differentiated view etc if if somebody was saying in 2023 445 that you're going to start a media business that is going to become like lightning in a bottle and compete with CNBC and be more relevant to a younger generation and be broadcasting on Twitter. You'd be like, "What?" But you guys are crushing it. You have found a niche. You've got a vibe. You're you're just it's incredible. And so, why shouldn't somebody be able to do an adventure? I will never discourage anybody that wants to start a venture firm as long as they're thinking about how do I do this in a really distinguished differentiated way and I can be so good that they can't ignore me.

Yeah. How uh what are your LPs thinking about the IPO window this year, next year? It feels like there might be trillions of liquidity coming to the tech industry. Is that going to have an effect on at the early stage at the next sca the next stage of scaleups? Uh will that affect VC dynamics or is that kind of just you know a foregone conclusion at this point?

No, I think that you're going to have a big set of IPOs. I mean everybody sort of knows the names off the tip of their tongue, but yeah,

probably six to 10 companies I think this year have such high demand. They've so far been rewarded by basically saying no and waiting and having ever higher rounds and lower cost of capital. I do think when you even look at Palanteer and the valuation of Palunteer and Alex and the team are amazing but to me it is less about Palunteer and more about huge amount of pent-up demand for next generation defense tech. I think if and when you ever do see a debut from Andreal, no idea on the timing, size, all that kind of stuff, but the demand is going to be really high, you know, and uh you see it in the private markets now just as a proxy. We used to get bids on the secondary market for a lot of our companies either sort of at last round price or maybe at a discount to NAV, you know, to the discount to last round price. Most of the bids we get for our companies now, uh particularly the ones that could be or will be going public are at premiums. And so I think the demand is really high. It will usher in a next generation of companies and it will happen in AI compute. You'll see it in some of the big foundation labs. You'll see it in biotech. I think you're going to see a window over the next six months where you see a ton of really interesting biotech IPOs and it'll happen in aerospace and defense in this next generation. And this whole confluence will just make a ton of sense. this arc from Google having its employees protest, you know, uh, working on Project Maven to seeing the rise of Ander to seeing Trump's, you know, lashing the existing bureaucratic, uh, uh, prime and then you see mega IPOs and these nextgen companies that didn't exist 10 years ago being worth more than some of the existing primes. I think it is going to be a bellweather for the industry and it is great to be American. It is great to have American capital markets. Capital wants to go where it is welcome and stay where it is well treated and it is here. So, super bullish.

Yeah. Well said. What uh what is an object need to what qualifies an object to get on your shelf here?

Oh, yeah.

You you got to be part totem of my like nostalgic childhood, you know? I've got uh I don't know. You know, this is the the Cyclone, which is uh the scariest roller coaster.

Oh, yeah. In that's where I grew up in Coney Island, Brooklyn. I will never forget my scrappy roots. Um,

it's a wooden roller coaster, right?

It is a wooden roller coaster. I'll tell you it is the scariest roller coaster in the world. Not by virtue of speed or descent, but it is so old. Your ride may be the last. [laughter] And the thrill of that is like, you know, mind-blowing. I've got my first uh Game Boy, you know, if you you had Palmer, you rocking the new mod retro. I've got my first uh

Nintendo Donkey Kong uh you know, flip. I like when I was so this is my childhood, you know. Uh and it's the things that inspired me from

all from science fiction to science fact. It's uh it's it's what it's all the little totems that have made me.

I love it. I love it.

Well, thank you for giving us the update. I'm sure you'll be back on uh many more times this year. It's going to be massive year and I look forward to it.

Yeah, we'll talk.

Congrats on what you built.

Thank you for being part of your whole team. Multiple times last week, last year we got to hang out and it was really really fun. So, thank you so much to look forward to. Cheers.

We'll talk to you soon. Have a great rest of your day.

Um, the last thing I want to talk about is this new Fujifilm camera um that has a very interesting feature uh that allows you to take photos from any period in time. So instead of baking in filters or lenses or anything that you could that you could change, uh you can it it you hold it like a old Fujifilm camera, but there is a dial on the side that will let you select a decade. So you can say, I want the photo, I want this particular photo, the next photo that I take, I want it to look like it was taken in the 1930s. I want it to look like it was taken in the 1970s. I want it to look like it was taken in 2010 and it will emulate that directly on the device. Bake that into the file that it gives you.

Is it is it film only or does it actually give you a digital?

I believe it's I believe it's digital. Let's read from this. It says as at the Fujifilm new product experience event, I tried out the generation checky Instamax Mini Evo Cinema that can shoot Oh, it can also shoot videos. Uh a design that evokes 8 millimeter film cameras. It comes equipped with a dial called the Jedai dial that lets you enjoy effects inspired by the 1930s to 1920s. Of course, it offers the fun of Chucky. Uh, and it's model and it's a model that also lets you enjoy that analog like operation feel. So, I believe it's a video camera that uh will spit out an MP4 on a memory card that you can upload to whatever you want. Maybe we should get one around the uh studio. Uh, we should get one that's uh connected over HDMI into the stream and we can and we can use that like we've used the VHS camera in the past that you may have seen here on TBPN. Uh, anyway, uh, anything else we should

Trump just ordered the US government to buy 200 billion in mortgage bonds to drive uh, mortgage rates down. Says he's bringing back the American dream.

More debt for the American taxpayer.

Interesting. uh more debt for the for America to to bring down the uh rates for Americans.

That could be good, I guess.

Could work. Yeah,

we will see.

Uh there's also a new Hyundai Whimo. Uh and uh CES, it's estimated to cost $42,000, which if true is like a 10x decrease in the price of the Whimos. Um, uh, political reality being a little bit spicier says this is the end of the cyber cab before it's even born. The and the ability to adapt the Whimo sensor tech to almost any vehicle means Whimo can pick and choose vehicles based on grade, market fit, and other variables. So, you could be in a rougher environment with a lot of potholes. You you you build a Whimo out of a G Wagon, I suppose. Um, maybe you're if you're on uh clean streets, you go with something.

And what's up with this? Will I am has a car. It's a threewheel.

Also, we just really quickly I need to clarify this because we have to issue a correction. Uh this is completely fake news because there's a apparently there's a uh a community note on this that says this is actually a different company's Hyundai Ionic 5 self robo taxi. It's not. So, uh we will see where this completely fake news. Uh anyway,

but apparently Willam has a new micromobility EV. It's three wheels. This thing looks absolutely insane. Greg Greg Brockman was was uh fired up on it. Looks straight out of Tron.

Mhm.

I I like the look. And uh we should get Will I Am on the show to talk about Trinity.

That would be great.

It's It's going to be They're selling this on Kickstarter.

That's wild. I wonder

Yeah, sort of a motorcycle that doesn't require as much balance. I wonder where this would be the most popular. It certainly looks cool. Feels It seems like a fun thing to go for a drive in. I wonder if it's more e experiential or supposed to be something that uh you would actually commute in. Uh driving through Los Angeles and that feels a little treacherous to me. I don't know that I would actually choose to do that, but uh maybe maybe it was a replacement for the golf cart.

Very yeah, very curious on price point as well on where this will land, but uh we'll work on getting Will I am on the show to talk about it.

Uh thank you for tuning in today. Super fun show. So many great guests. uh billions billions of dollars in uh fundraisers and uh I can't wait for tomorrow.

I can't wait for tomorrow either. Uh and we will see you tomorrow at 11 a.m. Pacific. Leave us five stars on Apple Podcast and Spotify. Subscribe to TBPN's newsletter at tbpn.com. And we will see you tomorrow.

Thank you folks. Good night.

Have a great afternoon.