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Josh Kushner wrote his first-ever formal letter to backers of his $65 billion investment firm, Thrive. The letter is an opportunity to understand what Thrive is seeing real-time, and to better understand how Thrive is applying its strategy to this current moment. Letter to Thrive Capital Investors: In Thrive’s history, I have never written a formal investor letter. This year, because we will not be together for an Investor Day, I wanted to write to you directly. We are deeply grateful for your trust, and we feel a profound responsibility to continue earning it through our work. The principles that have guided Thrive since inception remain the same. What has changed is the world around us. I want to use this letter to share what we are seeing, how we are applying our strategy to this moment, and why the same principles that brought Thrive here continue to shape the work ahead. Our Strategy Thrive began with a simple but unconventional idea. 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. We wanted to build a firm with the freedom to follow its curiosity wherever the best opportunities emerged, and the discipline to act only when that curiosity became conviction. We have never believed that the traditional boundaries of our industry needed to define us, and we remain grateful to the partners who believed in this approach long before it was obvious. Our strategy has never been to be different for its own sake. Rather, the strategy has been, and always will be, to think from first principles about what founders need, where the best opportunities are emerging, and how we can build Thrive to concentrate our time, capital, and energy on the people and ideas we believe in most. We have long believed that a small number of exceptional companies create a disproportionate amount of value and can compound their advantages for far longer than the market expects. We also believe that being a meaningful partner requires time, context, and trust. You cannot know a company deeply from a distance. You cannot be a true partner in difficult moments without the time and context that concentration requires. That belief shaped the portfolio. It also shaped the firm. Since our founding, the scale of Thrive has changed, but the strategy and ethos of the firm have not. In every way, scale raises the standard. Today, Thrive manages more than $65 billion, more than half of which is driven by investment gains. But AUM will never be the product. We view it as a reflection of trust earned over a long period of time. The product of Thrive is the quality of our judgment, the depth of our partnership, the discipline of our process, and the culture of the team making decisions every day. Culture is a word that is easy to overuse and hard to define. For us, it has always meant a small number of simple things taken seriously. We try to listen more than we talk. We try to say “I don’t know” when we do not know. We try to be intellectually honest even when the truth is uncomfortable. We try to be ambitious while remaining self-aware. We try to be kind without being weak. We try to be tough without becoming callous. Gratitude without ambition can become nostalgia. Ambition without gratitude can become entitlement. We need both. We try to focus on our craft rather than the noise around us. This requires humility. It requires recognizing that the most important insight may come from the least experienced person in the room. It is not possible to always make the right decision, but it is possible for us to always have the right conversations. Above all, we understand that we will never be a finished product, either as a firm or as individuals. Excellence is not something we arrive at. It is the work itself. While I am proud of how far Thrive has come, and thankful for all we have built together, I am even more aware of how far we have to go. That tension has always been important to us as it has been part of the ethos of the firm from day one. We never confuse progress with arrival; as soon as we summit a mountain, we immediately look for the next climb. We remain early in our journey and a small percentage of our full potential. That reality is both humbling and motivating. Our Perspective The clarity of our thinking matters more today because the opportunity before us is so significant. There are moments in technology when progress feels linear, and moments when it begins to compound in ways that are difficult to understand in real time. Today feels like one of those exponential moments. Ideas that would have represented major breakthroughs only a short time ago now appear almost weekly. The pace of technological and scientific progress requires us to keep updating our understanding of what is possible, while remaining disciplined about where enduring value will accrue. Artificial intelligence is the most important technology paradigm of our lifetimes. The internet democratized access to information. AI has the potential to democratize access to intelligence. If that happens, the implications could be extraordinary. Every person, company, and institution may eventually have access to capabilities that were previously unavailable or unimaginable. Workflows will change. Products will change. Cost structures will change. Entire industries will be rebuilt, and the societal implications of both the magnitude and rate of change are likely to be profound. Our work with OpenAI has given us a close view of how quickly these models are becoming useful in the real world. The most important lesson is not any single benchmark or release. It is the rate of improvement. Systems are beginning to operate with greater autonomy, and the amount of work a model can complete in one uninterrupted effort is expanding quickly. For us, the conclusion is not simply that AI will create value. It is that we must be increasingly precise about where value will be captured, and where it will compound over time. One area we believe durable value will be created is in the infrastructure required for AI to scale: compute, power, networking, memory, advanced manufacturing, and the supply chains that enable models to be deployed at scale. As AI adoption grows, these inputs become increasingly important, and in some cases, increasingly scarce. These constraints will help determine the pace at which the shift occurs. It is difficult to overstate the magnitude of the opportunity. It would also be a grave error in our minds to let excitement weaken our investment discipline. In moments of euphoria, investors tend to convince themselves that second- and third-tier assets are actually first-tier. The story becomes so powerful that people stop making distinctions. Capital flows toward the theme rather than the company. Markets begin to reward proximity to the future rather than evidence of enduring quality. Within Silicon Valley in particular, the industry can become fixated on hyper-incremental technological turns rather than where the technology ultimately leads. We have seen this before, and we will see it again. Technological optimism and investment discipline are not opposites. In fact, the more optimistic we are about the size of a paradigm shift, the more disciplined we must be about where value will be captured. Not every company exposed to an important theme becomes important. Not every company using new technology becomes enduring. 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. We are independent because markets move between fear and enthusiasm, and neither is a substitute for judgment. In difficult moments, independence can mean moving toward an exceptional company while others move away. In euphoric moments, it can mean remaining patient while activity around us accelerates, knowing there will be future opportunities to partner with many of these same exceptional businesses but with a more attractive risk/reward calculus. It is only because of repeated lessons throughout Thrive's history that we have learned the highest-quality assets compound over very long arcs and, as such, patience, discipline, and conviction must sit together in equal measure. As we look at the world today, we increasingly organize our opportunity set across four categories: Emerging Technologies: These are businesses creating the building blocks of both new industries and new paradigms which will drive exponential change. Companies such as OpenAI, SpaceX, and Isomorphic represent what we believe are among the most important technology platforms being built anywhere in the world. They are difficult, deeply ambitious, capital-intensive, and, early on, very often misunderstood. We do not view these as reasons to avoid these businesses, and in many cases, they are part of what makes them important and defensible. Infrastructure and Applications of Emerging Technologies: These are businesses such as Stripe, Databricks, Anduril, and others whose products, data, distribution, and customer relationships can position them to be more valuable in an AI-first world. Some will underpin the infrastructure layer. Some will create domain-specific intelligence. Some will apply AI to existing workflows in ways that fundamentally improve the customer experience. The common thread is that they are deeply advantaged by technology paradigm shifts. Traditional Industries to be Transformed by Emerging Technologies: This is the work of Thrive Holdings. Since seeing the preview of ChatGPT in 2022, we have believed that AI would transform large, legacy industries that collectively represent several trillion dollars of enterprise value. But 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. The most important ingredients for applied AI are often proprietary data, domain expertise, workflow ownership, and the ability to implement change in real-world operating environments. Existing businesses often have these ingredients, but they do not always have the technology, talent, urgency, or ownership structure required to leverage them fully. That is why we started Thrive Holdings. Through Holdings, we have acquired more than 70 businesses that serve tens of thousands of customers. We now have a dedicated team of 35 engineers and operators working alongside the operators inside these businesses. On our accounting platform, we have built custom agents that have achieved 98% accuracy and reduced preparation times by up to 30% for tax returns. At our IT services firm, triage and resolution agents have reduced ticket completion time by 60% and are resolving 50% of all tickets end-to-end. We are proud of this scale and early impact. What is most exciting at Holdings is the progress happening inside the businesses themselves. In partnership with OpenAI, we are building increasingly capable custom models and proprietary systems that can change how these companies operate This work has also taught us that AI transformation is not only a model-layer problem. Models matter enormously. But real-world transformation requires product thinking, engineering, workflow design, incentives, training, and organizational change. It requires people who understand the business and people who understand the technology working together in a very deep way. In many ways, change management is the product. That is hard. It is also why the opportunity exists. Assets Counterpositioned to Transformation: This is the work of Thrive Eternal. Most of our time is spent thinking about the first-order consequences of AI. What becomes more efficient? What becomes cheaper? What becomes automated? What new products become possible? But there will also be second- and third-order consequences. In a world of abundant intelligence, certain scarce human experiences may matter more. In a world of fragmented distribution, trusted institutions may matter more. In a world where content and software become easier to create, assets rooted in identity, culture, community, history, and physical experience may become more valuable. Eternal was created to invest in a small number of these assets and steward them over very long periods of time. The objective is not to buy, optimize, and sell. This distinction is very important. We intentionally chose a permanent capital structure because the assets we want to own deserve a time horizon measured in decades. Each of these categories is distinct, yet the philosophy behind them is the same, and the strategic connectivity among them is foundational to the firm's strategy. The frontier companies help us understand where technology is going before it becomes obvious. That perspective makes us better investors in both the public and private markets, where we can identify the companies best positioned to benefit from new technology paradigms long before those advantages are fully reflected in their businesses or valuations. It also makes us better partners to the exceptional founders building the infrastructure and applications that bring these technologies into the real economy. Through Thrive Holdings, we learn what it actually takes to transform established businesses from the inside out, giving us hard-earned operating insights. And through Eternal, we better understand the characteristics that enable businesses to retain their relevance and compound through periods of significant change. That perspective strengthens our judgment around durability and long-term value creation across the firm. At the center of all of this is a simple belief: our job is to partner with the most talented and ambitious entrepreneurs in the world, develop a deep understanding of both technology and its practical implications, and build an organization where every lesson compounds across every strategy. Over time, we believe that this shared knowledge and perspective will become one of Thrive's most enduring competitive advantages. Our Work At the early stage, we remain focused on maintaining close contact with the frontier. Early-stage investing is the largest universe of opportunity and the clearest way to understand how the next generation of founders is thinking. We have been fortunate to partner with companies such as Cursor, OpenEvidence, and Physical Intelligence, which are helping define progress at the model, application, and infrastructure layers. We expect to continue investing at our historical pace through the remainder of the year, with a focus on emerging technologies, AI applications, and infrastructure. At the growth stage, we have built positions in existing growth-stage portfolio companies we have admired for a long time, including Anduril, Isomorphic Labs, Stripe, and OpenAI. We are humbled that founders increasingly seek Thrive as a lead partner. We will never take that for granted. Access is earned through judgment, work, and the quality of partnership after the investment is made. When Thrive leads an investment, we want that decision to communicate a deep belief in the quality of the team, the importance of the product, and the magnitude of the opportunity. We are also deepening our work in public markets. Historically, Thrive has made a small number of public market investments when we believed a business was meaningfully misunderstood. Today, we believe that understanding the most important public technology companies is increasingly essential to our work across the firm. Many of our growth-stage companies compete with, partner with, or become the next generation of public technology companies. The more precise our understanding of public markets, the better our judgment will be in private markets. Our targeted public market work is an extension of our desire to continuously learn, to sharpen our collective judgment, and to improve our ability to evaluate quality irrespective of where it exists. Our Performance We know that you have entrusted us with capital that supports universities, hospitals, foundations, families, countries and institutions whose work extends far beyond our own. We never forget who we work for. When we do well, the causes and people you support do well too. We are ultimately measured by the returns that we generate. That is appropriate. But returns are outputs. If we become too focused on the outputs, we will lose the very things that have enabled those outputs to exist. The inputs are the people, culture, process, data, discipline, judgment, and trust. This September will mark fifteen years since Thrive raised its first institutional fund. Since inception, Thrive funds have compounded capital at an aggregate gross IRR of 41% and an aggregate net IRR of 33%. Each of Thrive II to Thrive X ranks in the top quartile of its applicable benchmark based on net TVPI and approximately one-third of those funds rank in the top 5% on this metric. Over the last 12 months, we have generated more than $1B of liquidity and believe there may be an opportunity for billions of dollars in additional liquidity in the coming quarters. The reason to include these numbers is not to celebrate them, but to explain what produced them. A small number of decisions have mattered disproportionately. Each investment has taught us different lessons. Some taught us the importance of acting before something is obvious. Some taught us the value of concentration. Some taught us that the best founders can navigate periods when the rest of the world loses conviction. Some taught us that being early is less important than being right, and staying committed. We have also made our share of mistakes. We have invested in companies that did not become what we hoped, and we have passed on companies that became extraordinary. We have underestimated products, founders, and markets. The only way to improve is to be honest about these errors of judgment and to make sure that every success and every failure becomes a data point that makes the firm better. Our Team We have always believed in the power of a small team. Small teams require trust, clarity, and ownership. They also require exceptionally high standards. Each person at Thrive, regardless of function, must make the firm better. We have often used the concept of an artist colony internally because we believe the best people always want to be surrounded by others who care deeply about their craft. That has been true not only on the investment team, but also across portfolio impact, finance, legal, compliance, investor relations, data, product, and engineering. This commitment to individual and collective excellence is the source of our ability to perform for our founders and our limited partners. Across Thrive, our teams are operating at a very high level. The portfolio impact team is helping founders diagnose the most important problems in their businesses and reason from first principles toward the right answers. Our product, engineering, and data teams now represent approximately 10% of headcount and are reimagining how Thrive itself operates. We are building tools for the investment team, investor relations, diligence, portfolio monitoring, knowledge management, and internal workflows. These internal AI tools are saving thousands of hours of work per year and critically raising the standard for what each individual and each team can accomplish. We have always viewed Thrive as a company that happens to invest in and build other companies. In 2023, in order to think about how to best position Thrive strategically, we brought on a select group of strategic shareholders whose experience and global perspective have been invaluable to building Thrive and our portfolio companies, including Bob Iger, Henry Kravis, Mukesh Ambani, Jorge Paulo Lemann, Alexandre Van Damme, and Xavier Niel. As Thrive has continued to evolve, some of our closest partners have expressed interest in supporting Thrive in its broadest sense. We are therefore pursuing a similarly sized minority investment from our original shareholder group, together with a small number of new institutional partners. Beyond providing additional capital to support our long-term ambitions at Thrive, these partners bring experience, perspective, and strategic counsel that will help us continue building across each of our platforms for decades to come. Our intention would be to retain the capital on our balance sheet in order to continue investing strategically in Thrive. Across every dimension of team building and strategic positioning, we are asking the same question of ourselves that we ask of the companies with whom we partner: if we were building Thrive today, with the tools and resources now available, how would we build it? There should be no function and no process at Thrive that is protected simply because it is familiar. We need to keep shipping. We need to keep learning. We need to keep evolving and be open to new opportunities. We need to keep improving the product we deliver to founders and limited partners. Our Commitment Much has changed since we started Thrive. Much more will change in the years ahead. But the essence of who we are has always stayed the same. We must continue to think independently. We must continue to be ambitious. We must continue to be concentrated in people and ideas, as quality is scarce. We must continue to support founders in both their most exciting and most difficult moments. We must continue to be disciplined when others are euphoric, convicted when others are afraid. We must continue to be humble, as seeking external validation can distort judgment. Praise and criticism often arrive with the same lack of precision, and neither should change who we are. We must continue to earn your trust every day. I do not know exactly what the world will look like ten years from now. Anyone who convinces themselves that they can predict the future with certainty is not being honest. I do know that the work ahead will, at the very least, demand the same values, principles, and approach that brought us here. We feel extraordinarily fortunate to be building during a period of such profound innovation. I believe it is in moments of extraordinary change that Thrive is able to operate at the highest possible level as our small team and generalist mandate are purpose-built to identify and execute on the most compelling opportunities. We are grateful to the founders who allow us to be by their side. I am grateful to my colleagues at Thrive whose commitment to our work inspires me every day. And we are grateful to you for your trust, partnership, and support. We believe the opportunity ahead is larger than anything we have seen before, and we deeply believe that Thrive today is only a fraction of what it can become. yours, Josh