In Thrive Capital’s first-ever investor letter, founder Joshua Kushner has some unexpected things to say about his venture capital rivals on the West Coast.
“It is difficult to overstate the magnitude of the opportunity,” Kushner wrote about AI in the letter, leaked to Bloomberg. “It would also be a grave error in our minds to let excitement weaken our investment discipline. … Within Silicon Valley in particular, the industry can become fixated on hyperincremental technological turns rather than where the technology ultimately leads.”
While his secretive New York-based firm, just like those in Silicon Valley, is betting heavily on AI, Thrive is doing so differently, he argues. There’s no so-called spray-and-pray investing. Thrive tends to go big on the companies it backs. Bloomberg estimates about 90% of its capital is poured into the top 15 investments in each fund.
That makes Thrive, he contends, a company of independent thinkers. “We are independent because markets move between fear and enthusiasm, and neither is a substitute for judgment.”
His comments are in direct contrast to one of the basic premises of Silicon Valley venture capital: that it is a business of “outliers” as espoused by Marc Andreessen.
In the “outlier” view, a VC firm makes a lot of bets, prepared to lose money on many — even most — of them. The few big hits will be so lucrative that they will cover the losers and much, much more. That philosophy leaves VCs forever looking for the next OpenAI or another mega hit. It can also lead to, as we saw during the post-pandemic lean years, cutting ongoing support for startups not deemed to be on track to be the biggest winners.
In contrast, Kushner writes, “We believed an investment firm could be opportunistic across stage, sector, and geography, while remaining deeply concentrated in a small number of people and ideas.” The idea is to “build Thrive to concentrate our time, capital, and energy on the people and ideas we believe in most.”
He also dismisses Silicon Valley’s idea that VCs are in the business of disrupting incumbents.
“Unlike many of our peers, our conviction was not only that these industries would be disrupted from the outside in but also that many would be transformed from the inside out,” he wrote about AI’s impact.
Thrive has largely stuck to this thesis. Its deepening relationship with OpenAI is its biggest example. The VC firm is a major investor in the AI lab. But in December 2025, the roles switched when OpenAI took an ownership stake in Thrive Holdings, the VC firm’s spinout. Thrive Holdings buys companies and then works with OpenAI to give them an AI makeover. Part of the deal involved OpenAI dedicating employees to work with Thrive’s companies.
Thrive Holdings has bought more than 70 businesses and has a team of 35 engineers. Kushner says its accounting platform uses agents to produce tax returns 30% faster with 98% accuracy, and its IT services firm has agents independently solving half of its help desk tickets.
Still, Thrive’s strategy is working in part because it nabbed stakes in some of the industry’s best-performing startups ever. Its $516 million 2022 early-stage fund, for instance, made early bets on OpenAI, Anduril, and SpaceX, and is now worth more than $3.7 billion as of the end of June, Bloomberg reports. Thrive has, over its 15 years, increased its stakes in all of them (and also had a sizeable stake in Cursor, which just closed its sale to SpaceX).
It has also backed Wiz, Ramp, and Stripe, to name a few other big names. Plus, it has led seed investments in new labs like Essential AI, founded by former Google Brain researcher Ashish Vaswani, the lead writer of the famed “Transformers” paper that spawned today’s AI industry.
All told, Thrive has $60 billion of assets under management, Kushner revealed in the letter. He reports impressive profits: a gross internal rate of return (IRR) across all funds of 41% and a net IRR of 33%. Thrive has returned more than $1 billion of liquidity to its investors in the last 12 months alone, he said.
“There may be an opportunity for billions of dollars in additional liquidity in the coming quarters,” he promises.
He doesn’t specify which companies are headed for their exits, but obviously the SpaceX IPO was a start, and OpenAI is working toward its own public debut.
It should be pointed out that both Kushner’s and Andreessen’s approaches obviously work in terms of making money. Andreessen Horowitz returned $25 billion to its investors between 2009 and 2025, according to the last leaked returns, reported by Eric Newcomer.
Thrive’s philosophy of concentrating capital may not even be possible for most smaller, scrappy emerging seed funds, whose founders weren’t born into the kind of access that the son of a billionaire New York real-estate family has.
That said, Kushner’s general premise of how overheated Silicon Valley’s AI investing has become isn’t wrong either. As he puts it: “Not every fast-growing business is exceptional. And not every exceptional company is a great investment at every price. Our responsibility is to maintain those distinctions.”
Facts Only
* Joshua Kushner wrote about AI opportunities in an investor letter leaked to Bloomberg.
* Thrive tends to invest heavily in the companies it backs, with about 90% of capital poured into the top 15 investments in each fund.
* Kushner argued against "spray-and-pray investing."
* Thrive seeks to be independent by remaining focused on judgment, as markets move between fear and enthusiasm.
* The traditional venture capital view posits that VCs seek "outliers" willing to risk losses for a few major hits.
* Kushner believed an investment firm could be opportunistic across stage, sector, and geography while concentrating on a small number of ideas.
* Thrive's strategy involves transforming industries from the inside out rather than solely disrupting them from the outside.
* Thrive invested in OpenAI and its spinout, Thrive Holdings, which now partners with OpenAI for AI makeovers.
* Thrive's $516 million 2022 early-stage fund involved bets on OpenAI, Anduril, and SpaceX.
* Thrive has increased stakes in these investments over 15 years and backed companies like Wiz, Ramp, and Stripe.
* Thrive has backed seed investments in labs like Essential AI.
* Thrive has $60 billion in assets under management.
* The firm reported a gross internal rate of return (IRR) of 41% across all funds and a net IRR of 33%.
Executive Summary
Full Take
The central tension in this narrative lies between the "outlier" philosophy prevalent in traditional venture capital, which accepts high risk for potentially massive reward, and Thrive’s strategy of deep concentration and opportunistic breadth. The critique leveled against the outlier model suggests that focusing solely on mega-hits risks cutting support for promising but slower trajectories, while Thrive's approach seeks to capture value by concentrating resources where conviction is highest. This sets up a systemic divergence in risk management: one path favors high-variance outlier bets as the primary driver of success, and the other prioritizes structured conviction and strategic integration across multiple opportunities.
The operational evidence—Thrive’s success with foundational AI bets like OpenAI, coupled with its internal operational capabilities (e.g., agent-driven tax returns)—suggests that achieving high returns is possible through a hybrid model: using deep concentration to focus energy while maintaining enough breadth to capture systemic shifts. The shift from focusing purely on "disruption" to focusing on "transformation" reflects a necessary evolution in understanding technology's impact. The implication for the wider VC landscape is whether concentrating capital within expert-backed, deeply integrated entities offers a more resilient path for long-term value generation than the pure outlier hunt.
Bridge Questions: If concentration proves difficult at the seed stage, what mechanisms exist to ensure that smaller funds can achieve similar levels of focused conviction and integration? How does the success of integrating with dominant players like OpenAI fundamentally change the dynamics of seeking "outlier" bets in nascent technological fields? What are the long-term risks associated with prioritizing internal conviction over external market breadth?
Sentinel — Human
The text appears to be a synthesized journalistic piece effectively weaving direct quotes, financial statistics, and philosophical arguments into a coherent narrative about venture capital strategy.
