Alex Behring and Daniel Schwartz - Inside 3G Capital - [Invest Like the Best, EP.458]
Episode publishedPodcast: Invest Like the Best with Patr...Invest Like the Best with Patrick O'Shaughnessy
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Most software companies try to maximize your time on their app to juice engagement. Ramp does the exact opposite. Ramp understands that no one wants to spend hours chasing receipts, reviewing expense reports, and checking for policy violations. So they built their tools to give that time back, using AI to automate 85% of expense reviews with 99% accuracy. And since Ramp saves companies 5%, it's no wonder that Shopify runs on Ramp, Stripe runs on Ramp, and my business does too. To see what happens when you eliminate the busy work, check out ramp.com/invest. OpenAI, Cursor, Anthropic, Perplexity
Patrick O'Shaughnessy is the CEO of PositiveSum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of PositiveSum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc.
My guests today are Alex Behring and Daniel Schwartz, co managing partners of three g Capital. Three g's built one of the most distinctive firms in investing around a simple idea. There are only a handful of truly great businesses and even fewer great CEOs. So instead of diversifying broadly, they concentrate deeply. Their model is to raise capital with the intention of making just one investment per fund, commit meaningful amounts of their own money alongside their partners, and focus all their time and the best people on that single opportunity. What sets them apart is that they come to inve
So that comes from our Brazilian roots where my co founders had done this beer investment that had worked really well. And then as they branched off into private equity in a predecessor firm of this firm in Brazil, they attempted a bit the more traditional approach also. That went okay. But then we understood a couple of lessons from that. One was that really, really great businesses are rare. There are not that many of them to begin with. Secondly, the ones that exist, they are not oftenly actionable. So therefore, if you are going to be in the business of putting a lot of your own capital to
We have this luxury of only having to find one great business at a time. And I think, you know, if you're investing your own capital and if that's the lens through which you're looking at in the investment, you wanna be really patient and wait until you find that great business. The other way to look at is it's so hard for us to find a great business to invest in. How are we gonna find 10? It's so hard to find great people to be great CEOs. So like, how are we gonna find 10? So I think it's great to be able to buy one business every once in a while and send in your a plus plus players to get i
Is there any psychological fear pressure associated with knowing that it's just one all eggs in one basket and watch the basket very closely? Like, what psychology does that feel like?
As much as the psychology, I think it drives the investment process, a very rigorous analysis of what the downside can be. And in our case, the downside has to be capital preservation with some small return of sorts. And that drives business sort of decisions, and it also drives capital structure decisions. I think that's where it manifests itself the most. If you were to look at businesses that we didn't buy or deals that we didn't do over a long period of time, I think more often than not, that would be a function of us not being comfortable with a potential downside scenario or a downside c
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