Josh Kushner has had a busy summer.

In the span of four months, he went from an IYKYK venture capitalist to one of the most consequential new owners in sports.

And while much can be said about the NYC billionaire, I've decided that today's Field Notes should be an investigation into one of the more interesting, and formidable, investment firms of our day.

Thrive Capital.

Historically a private, quiet luxury kind of guy, Kushner recently penned his first-ever letter to his LPs explaining the firm's investment approach and strategy.

I recommend reading the full thing here, but I'm putting my thoughts on it below so you don't have to.

Class is in session, let's begin. 📝📝📝

Kushner founded Thrive in 2009, at 24, and started with a $5M proof-of-concept fund before raising his first institutional fund of $40M two years later.

Fifteen years later, Thrive Capital is now your typical VC giant, stacking funds and stacking fees.

Thrive I ($5M), II ($40M), III ($150M), IV ($400M), V ($700M), VI ($1.0B),
VII ($2.0B), VIII ($3.0B), IX ($5.0B), and X ($10.0B).

The portfolio reads like a list of the last decade's most defining companies: Instagram, Spotify, Stripe, Anduril, SpaceX, Databricks, and since 2023, OpenAI.

Investing on the cutting edge of emerging technologies, Thrive is known for its strategy of “concentration and conviction,” aka backing the billion-dollar Brinks truck up to the handful of companies it believes are generationally and categorically defining.

But Thrive Capital is just the first leg of the stool.

Spun out in 2025, Thrive Holdings is the platform’s buy-and-build strategy.

Holdings acquires everyday businesses like accounting firms and IT services shops, more than 70 in total, and then plugs in a dedicated, OpenAI-powered team of 35 engineers and operators to rework how the sausage gets made.

OpenAI took a stake in Holdings last December, and in August, SoftBank, Altimeter and D1 backed it at a $12 billion valuation.

But the third leg of the stool is what's most relevant to the work we do here at Skybox.

Thrive Eternal.

It surfaced in April alongside a minority stake in the San Francisco Giants.

Eternal is a permanent capital holding company, built to own a small number of irreplaceable assets for decades rather than buy, optimize and sell them.

Bob Iger, already a Thrive shareholder since 2023 and set to leave Disney's board at year-end, heard the pitch and signed on as a senior advisor.

Before I get into the LP letter, take note of the sequencing of the build-out of the Thrive platform.

Each leg of the stool was built on what the last one taught.

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On August 12, Kushner and Iger, leveraging Thrive Eternal, agreed to buy Mark Walter's controlling stake in the Lakers at a $12.5B valuation.

It was an all-time record for a sports franchise and about 25% above the $10.0B Walter paid the Buss family barely a year earlier.

It reportedly came together in 72 hours, with no auction, after Walter's businesses became entangled in a federal investigation into ~$16B of loans tied to Walter and his holding company, TWG Global.

Then the Buss family followed.

Five of the six Buss siblings voted to sell the family's remaining 17.8% to the same group, which would take Kushner and Iger's side to roughly 83% of the team. Jeanie Buss, the team's governor, voted no and is fighting it, with a court hearing set for December 8 if there's no settlement.

The only problem was that existing NBA rules barred a private equity firm (Eternal) and its own principal (Kushner) from investing in the same team.

So in September, the league changed the rule.

A firm and its executives can now invest in the same franchise, as long as the firm holds no interest in any other NBA team.

No single fund can own more than 20% of an NBA team, and institutional money combined is capped at 30%.

Because Eternal can carry 1/5th of the Lakers at most, the rest of an 83% stake has to come from people.

Kushner will be the controlling owner and Governor, which means he must hold at least 15% ($1.9B) personally. Iger is reported as a minority owner and alternate governor (5%+). And a rag-tag team of billionaires will round out the rest with 5-10% stakes.

I imagine that Thrive will create some sort of co-invest sidecar vehicle which will enable their LPs to get direct exposure, although they will likely force those LPs to also put capital into Eternal itself as well at some sort of ~1:1 ratio.

And with Eternal's pitch to its own investors reportedly projecting the Lakers will be worth $30B+ within a decade, I’m sure they’ll fill it.

Amazing to see exemptions play out in real time.

What follows is a sort of quote and response, as I walk you through the most compelling and topical parts of the LP letter and their implications.

(1) Concentrated curiosity.

While most firms will pick a lane (seed, growth, software, consumer, etc.), Thrive refused the lane and kept the discipline.

No limits on where it looks, hard limits on how many it backs.

Opportunistic across stage, sector and geography now includes opportunistic across asset class.

(2) The long compound.

Every venture firm believes in the power law, but few are built to hold their winners beyond a ten-year clock.

Sequoia was an innovator here with their evergreen fund, but Thrive's best decisions have come from holding them, and Kushner reiterates later that "being early is less important than being right, and staying committed."

(3) AUM is not the product.

The product of capital allocators is judgment, and so it's no surprise that he funds judgment the way a company funds its product: product, engineering and data teams are now about 10% of Thrive's headcount.

And in 2023, Thrive sold a small GP stake (3.3% for $175M at $5.3B) to a group of strategic shareholders: Bob Iger, Henry Kravis, Mukesh Ambani, Jorge Paulo Lemann, Alexandre Van Damme and Xavier Niel.

Now it is going back to the same group, plus a small number of new institutional partners, for "a similarly sized minority investment." Bloomberg puts the firm's value at around $23B today.

And the capital isn't going to the partners, but in Kushner’s words, “our intention would be to retain the capital on our balance sheet in order to continue investing strategically in Thrive."

"We have always viewed Thrive as a company that happens to invest in and build other companies."

Their business is investing in businesses, so they invest in Thrive as such.

(4) Be precise.

Kushner calls AI "the most important technology paradigm of our lifetimes."

The internet democratized access to information, and in his words, AI "has the potential to democratize access to intelligence."

But his conclusion goes beyond "AI will create value" and moves toward what is more insightful: knowing where that value will be captured.

One place he sees durable value is the infrastructure AI needs to scale: compute, power, networking, memory and advanced manufacturing.

As adoption grows, those inputs become increasingly important, and in some cases, increasingly scarce, and "these constraints will help determine the pace at which the shift occurs."

Note that even inside the most abundant technology of our lifetimes, the value he points to is the scarce part.

(5) Euphoria erases distinctions.

"We have seen this before, and we will see it again."

In 1999, the thesis was right and the distinctions failed.

Companies added .com to their name and watched their stock jump.

By October 2002, the Nasdaq had fallen nearly 80% from its peak, and even Amazon, the first-tier asset of the entire era, lost more than 90% of its value before it became what everyone hoped it would be.

Betting on the internet trend was real, but betting on specific internet companies was very difficult.

He concludes: "the more optimistic we are about the size of a paradigm shift, the more disciplined we must be about where value will be captured."

(6) Four categories, one firm.

Thrive sorts its world into four categories:

In a firm with several platforms, each arm's main product is the information it feeds the others, not necessarily its own return.

It is also why Thrive is deepening its work in public markets, as so many of Thrive's private companies will compete with, partner with, or become the next public giants.

The stated goal is to "build an organization where every lesson compounds across every strategy."

Sounds a lot like the pattern recognition I champion here.

(7) Second- and third-order consequences.

We can continue to bang the "stop asking what AI is going to make cheaper, and start asking what AI will make more valuable" drum here at Skybox.

And I can keep quoting the Law of Digital Abundance at you and screaming from the top of my lungs that “the premium will shift to what AI can’t disrupt.”

But don't just take my word for it.

Take the word of someone who has a 41% gross and 33% net IRR since inception, with every fund in the top quartile on net TVPI, and more than $1B of liquidity returned to LPs in the last 12 months.

Word on the street is that Josh Kushner reads Skybox (he doesn’t, yet 👀).

While I have spent most of this year arguing that the assets AI cannot replicate get repriced upward as everything else becomes abundant, I realize now the degree to which everyone is saying the same thing.

I still believe it, but once "scarce cultural asset" and "the anti-AI bet" become commonplace vernacular, I get the gut feeling that we might be reliving 1999.

I fear that capital has stopped distinguishing between the scarce asset and everything standing near it, and a flooding of the zone is occurring with minimal discipline.

Valuations are soaring for emerging leagues that haven't proven they have staying power, and assets that merely sit next to scarcity are getting priced like they are the real thing.

Sports as an asset class is bifurcating into the haves and have-nots; enduring assets and non-enduring assets.

The Lakers are truly Tier 1 IP, and Thrive surely bought Fifth Avenue.

And although the price might not seem like it, that actually is discipline: paying a premium for one of the very few assets that we know for certain will be here 50 years from now.

The more you believe in enduring assets, the fewer of them you should believe exist.

Stay tuned and share this with someone who should be paying attention to where the Sports Economy is headed.

See you next Friday!

Email: [email protected]

– Matthew