Latest / Masters in Business / David Hall Discusses the State of Venture Capital (Podcast)

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David Hall Discusses the State of Venture Capital (Podcast) · Masters in Business

• 0:02
  Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
• 0:09
  Speaker 1: This week on the podcast, I have an extra special guest.
• 0:13
  Speaker 1: His name is David Hall and he is a partner
• 0:15
  Speaker 1: at Rise of the Rest UH seed funds. A little background,
• 0:20
  Speaker 1: I previously had interviewed both Gene Case, who runs the
• 0:25
  Speaker 1: Case Foundation and is a former early executive at A
• 0:30
  Speaker 1: O l and coincidentally married to Steve Case, the co
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  Speaker 1: founder of A O l um And she introduced me
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  Speaker 1: to Steve Murray, who works at Revolution Partners Fund, which
• 0:42
  Speaker 1: is run by Steve Case. And in my research with
• 0:46
  Speaker 1: Steve Murray, I came across Rise of the Rest and
• 0:50
  Speaker 1: afterwards he said, Oh you're interested in this, I got
• 0:53
  Speaker 1: a guy you have to speak to UH and his
• 0:55
  Speaker 1: name is David Hall. If you are remotely interested in Oh,
• 1:00
  Speaker 1: my goodness, so much stuff. The state of venture capital
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  Speaker 1: in America today, Why it doesn't have to just be
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  Speaker 1: focused on three areas, namely San Francisco, Boston in New York.
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  Speaker 1: How much entrepreneurship, technology, startup energy is in the rest
• 1:17
  Speaker 1: of the country. Well, you're going to find this conversation
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  Speaker 1: absolutely fascinating. With no further ado, my chat with David Hall.
• 1:29
  Speaker 1: My special guest today is David Hall. He is a
• 1:32
  Speaker 1: partner at the venture capital fund Rise of the Rest
• 1:37
  Speaker 1: Seed Funds, part of Revolution Partners VC. He comes to
• 1:42
  Speaker 1: us with a b a. In Economics from Morehouse College
• 1:45
  Speaker 1: and an NBA from Harvard. Prior to joining Revolution, he
• 1:49
  Speaker 1: worked at The Washington Post as the director of Planning
• 1:52
  Speaker 1: and Developing, managing corporate M and A and investments, and
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  Speaker 1: helping to launch a number of new print and dig
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  Speaker 1: dual publications. David Hall, Welcome to Bloomberg. Thank you, Barry.
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  Speaker 1: It's a pleasure to be here. So I've been speaking
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  Speaker 1: to a number of vcs over the past couple of years,
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  Speaker 1: and I'm always fascinated by their backgrounds. Your background is
• 2:14
  Speaker 1: a little unusual. How do you get from the Washington
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  Speaker 1: Post to the world of venture Let's let's start with
• 2:20
  Speaker 1: what were you doing at the Washington Post. Yeah, so
• 2:23
  Speaker 1: I went to the Washington Post. Actually interned at the
• 2:26
  Speaker 1: Washington Post company between my first and second years at
• 2:29
  Speaker 1: Harvard Business School, and it was for me, it was
• 2:32
  Speaker 1: a perfect big place because where do newly minted MBAs
• 2:35
  Speaker 1: want to go. They want to go to industries that
• 2:37
  Speaker 1: are in crisis, And there was no greater crisis in
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  Speaker 1: the two thousand early two thousand's than the print newspaper
• 2:45
  Speaker 1: let me interrupt. You newly minted MBAs want to go
• 2:48
  Speaker 1: to industries in crisis. I always thought they either wanted
• 2:50
  Speaker 1: to go to high paying Wall Street jobs or high
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  Speaker 1: paying Silicon Valley jobs. You're suggesting other Well, I figured
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  Speaker 1: I could always end up in one of those high
• 3:00
  Speaker 1: paying coastal jobs. But but for cutting my teeth, I
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  Speaker 1: needed to manage a business through disruption, and and that,
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  Speaker 1: to me was going to be such an interesting you know,
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  Speaker 1: how how could I be the savior of of the
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  Speaker 1: great gray Lady of of of Washington at least? And
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  Speaker 1: managing a business through disruption sounds a lot like what
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  Speaker 1: vcs look for in startups. It's, you know, I was
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  Speaker 1: reflecting on the train up here from from Washington, how
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  Speaker 1: much of what I've been working on has been kind
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  Speaker 1: of accumulative. It's it's looking for these these How do
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  Speaker 1: you recognize disruption before it hits? And then how do
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  Speaker 1: you manage through the disruption? And how do you and
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  Speaker 1: now from a from an investor's perspective, how do you
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  Speaker 1: manage that process? Sort of indirectly because we're not in
• 3:43
  Speaker 1: the company every day, but we're advising these companies about
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  Speaker 1: disruption that's either coming or disruption that hopefully they're creating
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  Speaker 1: with their products and services that they're launching. Quite quite interesting.
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  Speaker 1: So that was your first experience in the workforce. How
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  Speaker 1: did you tack from that or to venture. It's easy
• 4:00
  Speaker 1: to talk about, but but it's actually more visual. You know.
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  Speaker 1: I was sitting there one day at the Washington Post,
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  Speaker 1: and it's the only place I've ever worked where sitting
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  Speaker 1: at your desk reading the newspaper was called product research, right,
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  Speaker 1: And so I was reading an article. I was reading
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  Speaker 1: an article about Steve Case and the firm that he
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  Speaker 1: just launched after leaving a well time warner, called Revolution,
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  Speaker 1: and it was gonna build these big iconic businesses that
• 4:22
  Speaker 1: we're gonna tackle really tough problems around healthcare and and
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  Speaker 1: financial services. And it just was so exciting to me.
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  Speaker 1: I said, I've got to I've got to plot my
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  Speaker 1: way there. I you know, I did a little cyber
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  Speaker 1: stocking at the time, finding out where the Revolution offices were.
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  Speaker 1: I did some LinkedIn searches to find who I knew there,
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  Speaker 1: and ended up finding a woman that I went to
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  Speaker 1: a business school with who was there a couple of
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  Speaker 1: free coffees for her and and a glass of chardonnay,
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  Speaker 1: And I found myself with with an email introduction to
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  Speaker 1: one of the one of the founders. And that's that's
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  Speaker 1: how it started. And and not I have to point out,
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  Speaker 1: unlike most of the big vcs, Revolution didn't set up
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  Speaker 1: shop in New Yorker, Boston or anywhere in the Bay area.
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  Speaker 1: In Silicon Valley. They're pretty close to where the Washington
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  Speaker 1: Post is headquarters. It's it was three blocks. It was
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  Speaker 1: the easiest commute for an interview I've ever had. Yeah,
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  Speaker 1: I mean, you know, the Revolution story and and and
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  Speaker 1: what Steve has built and others have built with Revolution
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  Speaker 1: is really phenomenal in in the Washington, D C. Area.
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  Speaker 1: It's you know, it's been his home. A O. L.
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  Speaker 1: Grew up in the in the Dullest Corridor. Has been
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  Speaker 1: a phenomenal explosion of just capital ingenuity in that area
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  Speaker 1: and has helped spawn, you know, the grandchildren of A. O. L.
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  Speaker 1: Or now companies like Vox Media, which is you know,
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  Speaker 1: run by Jim Bangkoff, who was at A O L.
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  Speaker 1: Or even living Social which was a huge company that
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  Speaker 1: was run by a former product manager at Revolution Health.
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  Speaker 1: So you're still seeing these spillover effects of of that
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  Speaker 1: that sort of huge entrepreneurial flashpoint with A O L.
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  Speaker 1: Now I think of that area as very heavily um
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  Speaker 1: laden with telecoms and other networking firms. Uh, is there
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  Speaker 1: any cross pollination with Revolution or you have a very
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  Speaker 1: specific set of things you focus on and telecom may
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  Speaker 1: not be it. Well, I mean, given given sort of
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  Speaker 1: the A O L uh DNA of our place, there's
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  Speaker 1: a lot of a lot of focus on on on
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  Speaker 1: social networking, social media, and and general consumerism, like how
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  Speaker 1: how do we how do we make the lives of
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  Speaker 1: consumers better, easier, faster, cheaper by by investing in a
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  Speaker 1: lot of products that that's sort of where the consumer
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  Speaker 1: is the end user. So a lot of our investments
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  Speaker 1: throughout time have been either B to C directly or
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  Speaker 1: B two B two C, where where the end user
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  Speaker 1: the business might not necessarily be generated from the consumer,
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  Speaker 1: but the end user was a consumer. Because just you know,
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  Speaker 1: the A O L D N A is really pervasive
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  Speaker 1: about how do you make it how do you make
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  Speaker 1: it easy for the average Joe to get online. That's
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  Speaker 1: exactly what the on ramp to the internet. That's how
• 6:54
  Speaker 1: we described A O L for forever um. So does
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  Speaker 1: that background own change what you look at how you
• 7:04
  Speaker 1: look at it, or what you put company capital in.
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  Speaker 1: What's the impact of the A O L background is it?
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  Speaker 1: Is it just so obvious, is hey, we're used to
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  Speaker 1: doing U B two C sort of investments, business to
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  Speaker 1: consumer sort of investments, or is there a change in
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  Speaker 1: the entire process of what comes your way and the
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  Speaker 1: way you consider it. Well, I guess the way that
• 7:28
  Speaker 1: I'd most likely consider it think about it is we
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  Speaker 1: really approach things from a brand building perspective. How do
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  Speaker 1: you build the brand so that it helps the consumer
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  Speaker 1: recognize that there's there's trust behind the brand, there's a simplicity,
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  Speaker 1: there's a real value add that's coming through through the
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  Speaker 1: products that we're backing. I would also say that you know,
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  Speaker 1: we're also as we deploy capital and a lot of
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  Speaker 1: the deals that come to us are deals that that
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  Speaker 1: are are pretty focused on consumer stuff. We we have
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  Speaker 1: a lot of B two B this to business and
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  Speaker 1: investments as well, but but you know, a lot of
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  Speaker 1: the deals that we see just end up being really
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  Speaker 1: strong consumer brands. I previously had one of the partners
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  Speaker 1: in your firm, Steve murray on an. I discussed ever
• 8:14
  Speaker 1: so briefly Rise of the Rest with him, and he said, Hey,
• 8:19
  Speaker 1: I got a guy you should speak to about this.
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  Speaker 1: Name is David. I love this concept, and I have
• 8:25
  Speaker 1: to just give a really brief explanation and then let
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  Speaker 1: you dive into this. So most of the venture capital
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  Speaker 1: money spent in the United States, it's San Francisco, it's Boston,
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  Speaker 1: it's New York. They're a handful of other places, but
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  Speaker 1: there are these huge stretches of entrepreneurs and innovators and
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  Speaker 1: technologists that it's a venture capital desert. What led to
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  Speaker 1: the development of Rise of the Rest side funds and
• 8:54
  Speaker 1: tell us how it came about and how it actually operates. Yeah, sure, it's.
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  Speaker 1: It's It's actually stems from a very very simple premise.
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  Speaker 1: We believe that great entrepreneurs can start great businesses anywhere,
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  Speaker 1: and for so long in our country's history, or at
• 9:07
  Speaker 1: least in the current and in the recent history and
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  Speaker 1: the digital history digital era, that that that belief was
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  Speaker 1: epicentric to the coastal hubs of As you said, San Francisco,
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  Speaker 1: New York, in Boston, and one of the things that
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  Speaker 1: we've been doing at Revolution when working with Steve, we
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  Speaker 1: started in twenty fourteen these these bus tours, which became
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  Speaker 1: themed Rise of the Rest bus tours. And let's put
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  Speaker 1: a little flesh on that. Half a million dollars, a
• 9:31
  Speaker 1: bunch of people pile into a bus, you go to
• 9:34
  Speaker 1: a specific city. What happens there, it's it's it's we started.
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  Speaker 1: We kicked it off in Detroit, and we start in
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  Speaker 1: the morning. We we convene the leadership, I like to
• 9:43
  Speaker 1: call it the suits and the T shirts getting together
• 9:45
  Speaker 1: for the first time. Will bring the politicians, the mayors,
• 9:48
  Speaker 1: the governors, the state and federal officers. Will bring the
• 9:52
  Speaker 1: heads of economic development, the university presidents or business school deans.
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  Speaker 1: Will bring the heads of the tent pole companies, those
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  Speaker 1: big success companies that have kind of broken out and
• 10:02
  Speaker 1: made a name for themselves. But we'll also bring the startups,
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  Speaker 1: the T shirts, the guys who are guys and girls,
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  Speaker 1: guys and ladies who are cranking every day on building
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  Speaker 1: the next app or the next B two B sas
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  Speaker 1: business and bring them together to say what's going on
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  Speaker 1: in Detroit, in Nashville, in Pittsburgh, what's happening in this city?
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  Speaker 1: What industries are flaring up? What are you what are
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  Speaker 1: you noticing about the flow of talent, the flow of capital,
• 10:27
  Speaker 1: the flow of ideas into and even out of your city.
• 10:31
  Speaker 1: We follow that with visiting, going out and seeing that,
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  Speaker 1: talking to these companies, and and going and being in
• 10:38
  Speaker 1: their physical spaces and meeting as many companies as possible
• 10:41
  Speaker 1: in that venue. And then and then we in the
• 10:43
  Speaker 1: day with a celebration. We do a pitch competition where
• 10:46
  Speaker 1: the winner has historically received a hundred thousand dollar investment,
• 10:49
  Speaker 1: but it's a way for the community to show the
• 10:51
  Speaker 1: best of the future and you know, a handful of ideas.
• 10:55
  Speaker 1: How that's evolved over time. We've done it now in
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  Speaker 1: thirty eight different cities on silly seven different wars, so
• 11:00
  Speaker 1: we've we've literally been you know, from from places like York, Pennsylvania,
• 11:06
  Speaker 1: down to New Orleans, which is near my hometown, uh
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  Speaker 1: and seen seen this play out in so many different cities.
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  Speaker 1: And it's what you walk away from is both like
• 11:17
  Speaker 1: the how different cities take entrepreneurship differently and how they've
• 11:22
  Speaker 1: had to deal with it differently, which is not not
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  Speaker 1: undifferent from how or indifferent from how they've had to
• 11:27
  Speaker 1: to historically deal with economic ebbs and flows. I mean,
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  Speaker 1: one of the things that's really interesting to me is
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  Speaker 1: we see a lot of robotics in Pittsburgh, for example,
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  Speaker 1: because of the focus of Carnegie Mellon, but also the
• 11:39
  Speaker 1: history of steel there, which kind of makes sense if
• 11:42
  Speaker 1: you draw a narrow line between steel to robotics. Right.
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  Speaker 1: You see a lot of advanced manufacturing in Detroit, which
• 11:48
  Speaker 1: obviously makes a lot of sense, but interesting. You'll see
• 11:50
  Speaker 1: some interest, some really interesting things like ed tech in
• 11:52
  Speaker 1: New Orleans. Why because Katrina forced New Orleans to rethink
• 11:57
  Speaker 1: their entire education system, and you saw a lot of
• 12:01
  Speaker 1: Teach for America alums coming there to be helpful, but
• 12:04
  Speaker 1: then being entrepreneurial about how do they how do they
• 12:06
  Speaker 1: solve these problems and these these these Teach for America
• 12:09
  Speaker 1: alums mostly started businesses in New Orleans focusing on education
• 12:14
  Speaker 1: and education reform. So you see this, this the legacy
• 12:17
  Speaker 1: of the great industries of America and steel and manufacturing
• 12:21
  Speaker 1: take place. But also you see the resurgence because of
• 12:24
  Speaker 1: current situations in places like New Orleans that that that
• 12:27
  Speaker 1: launched these burgeoning industries and things like education technology. So
• 12:31
  Speaker 1: what are some of the advantages of not being in
• 12:34
  Speaker 1: these coastal urban centers. When you roll into a Detroit
• 12:37
  Speaker 1: or a Pittsburgh, I have to imagine the costs of
• 12:41
  Speaker 1: everything are are a fraction of what San Francisco is.
• 12:44
  Speaker 1: It's so funny. I was on a call just the
• 12:46
  Speaker 1: other day with a company that relocated from Boston to Wisconsin,
• 12:51
  Speaker 1: and they were able to extend their burn by over
• 12:53
  Speaker 1: six months just by redomiciling the company. Right, So I
• 12:57
  Speaker 1: think that I think that there are a couple of things.
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  Speaker 1: I think that obviously, the call of living differences are
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  Speaker 1: really different, and and and and you can grow a
• 13:04
  Speaker 1: company a lot farther on on the same amount of funding.
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  Speaker 1: But I think you're also seeing the flow of talent.
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  Speaker 1: I think you're seeing people graduate from, you know, the
• 13:14
  Speaker 1: University of Michigan, or graduate from Georgia State or Georgia Tech.
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  Speaker 1: And say, you know what, I don't I don't necessarily
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  Speaker 1: feel like I want to go to these these these
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  Speaker 1: coastal hubs. I want to I want to stay here.
• 13:25
  Speaker 1: I want to become an entrepreneur. And it's easier because
• 13:27
  Speaker 1: my network is here. It's it's it's it's a more livable,
• 13:31
  Speaker 1: more affordable, definitely more affordable environment. But but the jobs
• 13:35
  Speaker 1: are now starting to happen. It's it's part of the
• 13:37
  Speaker 1: flywheel that we're seeing this flow of talent boomerang back
• 13:41
  Speaker 1: home because that's where they want to be. And and
• 13:44
  Speaker 1: I think that you know, the combination of those two
• 13:46
  Speaker 1: factors with the flattening of of the you know, it's
• 13:50
  Speaker 1: never been cheaper to start a business because of you know,
• 13:53
  Speaker 1: things like a laptop and an internet connection in Amazon Cloud,
• 13:56
  Speaker 1: and you're pretty much ready to get ready to go,
• 13:58
  Speaker 1: and and and that wasn't always the case, you know,
• 14:00
  Speaker 1: a decade twenty years ago. Just to say the least,
• 14:03
  Speaker 1: there is a giant um demand for STEM jobs even
• 14:08
  Speaker 1: in the highest paying silicon valley and and biotech in
• 14:12
  Speaker 1: in Boston and a little bit of everything in New York.
• 14:16
  Speaker 1: Do you run into an issue of shortage of of
• 14:19
  Speaker 1: skilled cat labor in in those towns that may not
• 14:23
  Speaker 1: be known for their their tech workers. So I would
• 14:27
  Speaker 1: you know that that's a that's a common issue. We
• 14:30
  Speaker 1: hear a lot and I think that the real, the
• 14:32
  Speaker 1: real focus is for a lot of the early stage jobs.
• 14:36
  Speaker 1: A lot of the you know junior folks, the entry
• 14:38
  Speaker 1: level jobs. They're coming right out of the university. So
• 14:41
  Speaker 1: it's it's no different from leaving Morgan's Morehouse and coming
• 14:45
  Speaker 1: up to New York to work at Morgan Stanley. These
• 14:47
  Speaker 1: folks graduate from you know, Vanderbilt and then go work
• 14:51
  Speaker 1: directly into one of the Nashville startup Nashville startups, I think,
• 14:56
  Speaker 1: what about koders and and statistical analysts is I guess
• 15:00
  Speaker 1: designers you could pretty much find it. You can find
• 15:02
  Speaker 1: a lot of these folks anywhere, and I think you're
• 15:04
  Speaker 1: you're starting to see the recruiting of them away from
• 15:07
  Speaker 1: the hubs. One of the big challenges for for for developers,
• 15:11
  Speaker 1: particularly in in the coastal hubs, is there's such a
• 15:14
  Speaker 1: high opportunity cost on their talent. Right if if you
• 15:17
  Speaker 1: have a bad quarter as a startup or miss a
• 15:19
  Speaker 1: couple of year milestones, half of your development staff is
• 15:22
  Speaker 1: looking for another job because they recognize that, you know,
• 15:25
  Speaker 1: unless they work for Google, Yeah and and so. But
• 15:28
  Speaker 1: but but in Madison or in Detroit, like, you've got
• 15:31
  Speaker 1: a stickier employee, and we're seeing that those folks end
• 15:34
  Speaker 1: up staying around longer, being more productive. You know, they're
• 15:37
  Speaker 1: able to get a backyard and start a family. I mean,
• 15:40
  Speaker 1: I I saw a deck one time. We're a we.
• 15:44
  Speaker 1: The question was asked, what about recruiting, How hard is
• 15:46
  Speaker 1: it to recruit? And the the entrepreneurs showed a slide
• 15:50
  Speaker 1: of a birthday party. He says, it's easy for me
• 15:52
  Speaker 1: to recruit because I can promise this. I can't promise
• 15:54
  Speaker 1: a backyard birthday party in San Francisco, New York. And
• 15:57
  Speaker 1: and I have to point out and ask you about
• 16:00
  Speaker 1: the board of advisors for um Rise of the Rest.
• 16:05
  Speaker 1: This is just an astonishing list. Jim's Barksdale of of Netscape,
• 16:10
  Speaker 1: Jeff Bezos, Tory Birch, Ray Dalio, Steve Case, John Dor.
• 16:14
  Speaker 1: I'm just I'm gonna stop there. But that's just an
• 16:17
  Speaker 1: unbelievable list of investors. It goes on and on and on.
• 16:21
  Speaker 1: What's it like working with a group that August and esteem.
• 16:26
  Speaker 1: We are beyond privilege that that that those those notable entrepreneurs, investors,
• 16:31
  Speaker 1: business leaders, among the best of our era, have decided
• 16:34
  Speaker 1: to join us on this mission. And you know, we
• 16:36
  Speaker 1: think that the things that they saw in us, and
• 16:39
  Speaker 1: and and sort of the implicit mission of what we
• 16:41
  Speaker 1: were doing, of democratizing this flow of capital was really important.
• 16:45
  Speaker 1: But we also think that they're they're you know, they're investors.
• 16:47
  Speaker 1: These folks understand business and they understand that there's something
• 16:51
  Speaker 1: going on in the heartland, there's something going on in
• 16:53
  Speaker 1: the middle of America that you know, either their personal
• 16:56
  Speaker 1: portfolio didn't necessarily have have a enough allocation, but also,
• 17:01
  Speaker 1: you know, a lot of these folks are from you know,
• 17:03
  Speaker 1: David Rubinstein, one of our LPs is from Baltimore. You know,
• 17:06
  Speaker 1: Basis is from New Mexico. Their their hometowns are these
• 17:09
  Speaker 1: cities that have been left behind a lot of times.
• 17:12
  Speaker 1: And of course everybody wants to see their hometown flourish,
• 17:14
  Speaker 1: and they want to see the return of jobs to
• 17:17
  Speaker 1: to a lot of these places where where they they
• 17:19
  Speaker 1: have they haven't seen the economic growth and vitality that
• 17:23
  Speaker 1: that that we've seen a lot on the coasts. Fascinating.
• 17:27
  Speaker 1: So let's talk a little bit about private markets and
• 17:29
  Speaker 1: and venture investing. Why is it that when we look
• 17:34
  Speaker 1: at private pre public companies, there's an expectation that the
• 17:40
  Speaker 1: performance is going to be so much better than the
• 17:43
  Speaker 1: public markets. You know, why shouldn't people just buy an
• 17:46
  Speaker 1: index fund and forget about it? Is? Is how someone
• 17:49
  Speaker 1: put it the question to me, So I'm gonna pass
• 17:51
  Speaker 1: it to you. What are the potential upsides of a
• 17:55
  Speaker 1: venture investment? Well, well, I I think you know. The
• 17:59
  Speaker 1: first thing is the appetite and ability to allocate risk.
• 18:04
  Speaker 1: Whereas because of regulation, because of just the the the
• 18:09
  Speaker 1: cost and visibility of being public, it's harder for companies
• 18:12
  Speaker 1: in the public markets to do that. But on the
• 18:13
  Speaker 1: private side, we're able to see things before they're before
• 18:17
  Speaker 1: they're ready for prime time, where they're still very risky
• 18:20
  Speaker 1: and can completely flame out. Right. The risk of every
• 18:23
  Speaker 1: round of investment that we do a revolution and the
• 18:26
  Speaker 1: rise of the rest we we we run the risk
• 18:28
  Speaker 1: of the company calling us up one day saying it
• 18:29
  Speaker 1: didn't work. And you know, as as as as painful
• 18:33
  Speaker 1: as that is, they're luckily for us, there's so many
• 18:36
  Speaker 1: more calls that say, hey, it's working really well, or
• 18:39
  Speaker 1: it's what we think. We've got eighty percent of it
• 18:41
  Speaker 1: figured out, and and then the risk has been greatly reduced.
• 18:45
  Speaker 1: But the opportunity is still huge to come up with,
• 18:48
  Speaker 1: you know, the next social network. You know, it's it's
• 18:51
  Speaker 1: really risky when it's a little a little face app
• 18:54
  Speaker 1: for Harvard University students. It's a lot less risky when
• 18:57
  Speaker 1: Facebook is going from the United States into the world world.
• 19:00
  Speaker 1: And I think that that's that's where the public markets
• 19:03
  Speaker 1: do really really well at assessing risk. I think the
• 19:06
  Speaker 1: private markets do really really well at sort of evaluating
• 19:09
  Speaker 1: and managing risk before the drug is cleared FDA approval.
• 19:12
  Speaker 1: So let's let's talk about those numbers. And I'm not
• 19:15
  Speaker 1: going to hold you to a specific number, but my
• 19:19
  Speaker 1: general understanding of the way venture investing works is your
• 19:23
  Speaker 1: expectation is that the vast majority of investments are going
• 19:28
  Speaker 1: to be that phone call, hey it didn't work out.
• 19:32
  Speaker 1: How many break even or better? And how many are
• 19:35
  Speaker 1: just outsize giant winners. I mean, look, I think every
• 19:39
  Speaker 1: every venture capitalist underwrites a little bit differently. Um, you know,
• 19:43
  Speaker 1: we don't really talk about sort of how we think
• 19:45
  Speaker 1: the the ebbs and flows of the market will will
• 19:47
  Speaker 1: affect us. The goal obviously for us is to have
• 19:50
  Speaker 1: as few, uh as few zero returners as possible, and
• 19:54
  Speaker 1: we think one of the benefits of of our geographic
• 19:57
  Speaker 1: focus outside of the coast actually benefits us be because
• 20:00
  Speaker 1: again the dollar goes longer, and a little bit of
• 20:03
  Speaker 1: this sort of Midwestern and southeastern and and and just
• 20:08
  Speaker 1: the the ethos of the people is I'm not gonna
• 20:10
  Speaker 1: let this fail. And and and you know, we typically
• 20:13
  Speaker 1: find companies that are farther along in their revenue cycles.
• 20:16
  Speaker 1: So they're there, there have been, They've been a lot
• 20:19
  Speaker 1: more de risked than than the proverbial napkin on a
• 20:21
  Speaker 1: in a Silicon Valley coffee shop. Right, And so we
• 20:24
  Speaker 1: we we see that really interesting. We also think look
• 20:27
  Speaker 1: on the upside and then the hockey stick side. We
• 20:31
  Speaker 1: think that there's lots of opportunity outside of the traditional
• 20:34
  Speaker 1: the judicial coast to see those those companies really accelerate
• 20:38
  Speaker 1: and have this explosive growth because because of the flows
• 20:42
  Speaker 1: of capital are so or so have been so flattened. Um.
• 20:45
  Speaker 1: But I'm really you know, to answer your question, I
• 20:48
  Speaker 1: think that there are a handful of companies that are
• 20:51
  Speaker 1: are going to go go to zero. That's just the
• 20:54
  Speaker 1: nature of the beast. Um. For for me, it's all
• 20:56
  Speaker 1: about protecting the middle and the upside and making sure
• 20:58
  Speaker 1: that those companies that have a ants are introduced to
• 21:01
  Speaker 1: the right customers and partners and and and executives from
• 21:04
  Speaker 1: recruiting so that they can actually skyrocket on onto some
• 21:07
  Speaker 1: real successes. Are you finding the valuations are better away
• 21:11
  Speaker 1: from the coasts and that the ability to um pick
• 21:16
  Speaker 1: and choose your spots is a little easier than perhaps
• 21:19
  Speaker 1: what people are dealing with in the Bay area. Yeah,
• 21:22
  Speaker 1: I think so. I mean, I think we're seeing a
• 21:24
  Speaker 1: lot of um less competitive valuations. I think there's still
• 21:29
  Speaker 1: I think they're still froth in the market, and and
• 21:31
  Speaker 1: and in every market. But we were we are finding,
• 21:35
  Speaker 1: by and large, our buying prices are a lot better
• 21:38
  Speaker 1: than than some of our our our value competitors and
• 21:41
  Speaker 1: New York competitors are seeing in in the standard Series
• 21:46
  Speaker 1: A or series seed round that we would invest in.
• 21:49
  Speaker 1: And and since you brought up froth in the market, um,
• 21:52
  Speaker 1: we've seen a number of unicorns over a billion dollars
• 21:55
  Speaker 1: in the private market, although a few of them seem
• 21:58
  Speaker 1: to have gotten their wings clipped uh recently. Um, how
• 22:03
  Speaker 1: do you view this sort of cycle? How frothy is it?
• 22:06
  Speaker 1: It doesn't feel to me like this is situation because
• 22:11
  Speaker 1: so many of these companies seem to be either generating
• 22:14
  Speaker 1: revenue or heaven forbid actually making profits. How do you
• 22:18
  Speaker 1: look at that froth and the overall cycle. So I
• 22:22
  Speaker 1: was literally cutting my teeth in during the first big,
• 22:27
  Speaker 1: big sort of tech correction UM and then was working
• 22:30
  Speaker 1: at Revolution during the big economic recession of oh eight
• 22:33
  Speaker 1: oh nine. This, this, as you said, seems different to me.
• 22:37
  Speaker 1: And I think it's because we're seeing these companies stay
• 22:41
  Speaker 1: private longer and not rush for a public market exit.
• 22:44
  Speaker 1: And I think that that that helps them figure it
• 22:47
  Speaker 1: out right. Like you know, folks were financing on S
• 22:50
  Speaker 1: one one threats and eight o nine and and that
• 22:54
  Speaker 1: didn't play out very well for them. And I think
• 22:56
  Speaker 1: you're seeing the companies take the time and and build
• 22:59
  Speaker 1: the gale necessary to get it right when when the
• 23:03
  Speaker 1: I p O actually ends up happening. Quite interesting. Let's
• 23:07
  Speaker 1: let's talk a little bit about the sort of venture
• 23:09
  Speaker 1: investing you guys do at UM Revolution. What sort of
• 23:14
  Speaker 1: returns are you looking for on any specific funds or
• 23:19
  Speaker 1: any specific investment. Yeah, you know, we're we're a traditional VC.
• 23:23
  Speaker 1: You know, we want to put a dollar in the
• 23:24
  Speaker 1: machine and get more than a dollar, hopefully hopefully a
• 23:27
  Speaker 1: five or a ten coming back on out of the machine.
• 23:30
  Speaker 1: But but but but to me, the goal is also
• 23:32
  Speaker 1: about building these great iconic companies that are tackling some
• 23:36
  Speaker 1: of the toughest problems that we as a society are
• 23:39
  Speaker 1: facing around healthcare and education, transportation, food security, and things
• 23:44
  Speaker 1: like that, because I think that those are those are
• 23:46
  Speaker 1: gonna be big winners for investors over security, having great
• 23:52
  Speaker 1: and and and open access to healthy, clean food options
• 23:56
  Speaker 1: because we're you know, we're still trying to make sure
• 23:59
  Speaker 1: that we have a healthy population, and and there are
• 24:02
  Speaker 1: lots of businesses that are working really hard to get
• 24:05
  Speaker 1: Farm to table is sort of the yeah, the rule
• 24:10
  Speaker 1: of the day, but but just trying to figure out
• 24:12
  Speaker 1: how do we make how do we do that at
• 24:13
  Speaker 1: a sustainable, scalable level. Right farm to table in Brooklyn
• 24:17
  Speaker 1: or or the city or even the suburbs are small
• 24:20
  Speaker 1: restaurants and local farmers and it's very high end and
• 24:24
  Speaker 1: very chicy. You're talking about a much broader approach, And
• 24:27
  Speaker 1: I want to mention industries that you're looking to disrupt
• 24:30
  Speaker 1: include food, healthcare, transportation, agriculture. These are like basic foundations
• 24:37
  Speaker 1: of society. How can you disrupt those? Yeah, So the
• 24:40
  Speaker 1: way that we think about that and and we largely
• 24:43
  Speaker 1: see opportunity through the lens of geography, and that we
• 24:46
  Speaker 1: think that, you know, the then if you're going to
• 24:50
  Speaker 1: come out with the newest farm tech business, kind of
• 24:55
  Speaker 1: hard to see how that's going to be a guy
• 24:56
  Speaker 1: from midtown Manhattan coming up with that or a lady
• 24:59
  Speaker 1: from Silicon Valley who's gonna be able to come come
• 25:01
  Speaker 1: up with those ideas who's never spent time on the farm.
• 25:04
  Speaker 1: And we think that there are, you know, lots of
• 25:06
  Speaker 1: experts in places like Des Moines or St. Louis who
• 25:08
  Speaker 1: know a bit about farming and agriculture. We think there
• 25:11
  Speaker 1: are lots of manufacturing experts who who come out of
• 25:14
  Speaker 1: places like like Detroit and and and an Arbor who
• 25:17
  Speaker 1: can help us build things as a as a country.
• 25:19
  Speaker 1: And so we we think that those types of opportunities
• 25:22
  Speaker 1: are gonna come perhaps outside of the Valley and outside
• 25:25
  Speaker 1: of New York. And let let me be clear, because
• 25:27
  Speaker 1: it was one of the criticisms. We get it. Our
• 25:29
  Speaker 1: fund a lot is about about bashing the valley, and
• 25:32
  Speaker 1: and we are definitely not not bachelors of the valley.
• 25:36
  Speaker 1: We appreciates looking valley. They are the cathedral that every
• 25:39
  Speaker 1: other city aims to be as it relates to sort
• 25:42
  Speaker 1: of allocating capital and assessing risk for for early stage entrepreneurs.
• 25:46
  Speaker 1: And and I tell you know, a lot of the
• 25:47
  Speaker 1: cities when we go and tour always ask us what's
• 25:50
  Speaker 1: one thing that they do in the valley better than
• 25:52
  Speaker 1: what we do, you know in pick a city. And
• 25:54
  Speaker 1: the answers always they accept failure and they accept risk
• 25:58
  Speaker 1: so differently then you know of the cities in the
• 26:03
  Speaker 1: country because because it's it's it's just woven into the
• 26:06
  Speaker 1: ethos of Silicon Valley. Things fail, but out of that,
• 26:09
  Speaker 1: like like Phoenix's, you know, these great companies can emerge
• 26:13
  Speaker 1: from entrepreneurs we've had massive failures, and so we go ahead.
• 26:18
  Speaker 1: We just we love to to highlight you know, we're
• 26:21
  Speaker 1: not We're not looking to steal share from New York
• 26:24
  Speaker 1: or Boston to the valley. We're looking to grow the denominator.
• 26:26
  Speaker 1: And say, you know, if of all venture capital went
• 26:30
  Speaker 1: to three states last year, Massachusetts, New York, and California.
• 26:34
  Speaker 1: One percent of venture capital goes to a place like Michigan,
• 26:37
  Speaker 1: one percent goes to Georgia. There's a lot of smart
• 26:39
  Speaker 1: people in those states. And if we can just not
• 26:42
  Speaker 1: not move California from to lift Georgia from one to
• 26:47
  Speaker 1: two percent, but just grow the denominator. So it really
• 26:52
  Speaker 1: because the beauty of what we do is, you know,
• 26:55
  Speaker 1: as an asset class venture largely creates jobs. Right when
• 26:59
  Speaker 1: when we write a when I'm investing in a company,
• 27:01
  Speaker 1: the first thing I always ask is what are you
• 27:03
  Speaker 1: gonna do with the money, And almost always the first
• 27:06
  Speaker 1: answer is We're gonna hire you know, It's not it's
• 27:08
  Speaker 1: not we're going to close the factory to generate profitability,
• 27:11
  Speaker 1: or we're gonna close the trade at a you know
• 27:13
  Speaker 1: three A or a I R R. It's I'm gonna
• 27:16
  Speaker 1: go hire fifteen developers and to community managers and and
• 27:21
  Speaker 1: a CMO because we're trying to build something great. And
• 27:25
  Speaker 1: that to me, you know that we all know in
• 27:27
  Speaker 1: cities and politicians are well aware of things like the
• 27:29
  Speaker 1: tech multiplier, where every technology job generates you know, five
• 27:34
  Speaker 1: to six general economy jobs. So when they go out
• 27:37
  Speaker 1: and hire five people, that's you know, another dentist that
• 27:40
  Speaker 1: gets hired, or another restaurant that needs to open, or
• 27:44
  Speaker 1: a coffee place that needs to open on the corner
• 27:46
  Speaker 1: to help sort of accommodate all of that growth in
• 27:49
  Speaker 1: some of these heartland areas that have been losing for
• 27:52
  Speaker 1: the last couple of years. I love your take on
• 27:55
  Speaker 1: on failure in Silicon Valley. My favorite thing on some
• 27:59
  Speaker 1: of their VC Bay area websites is their list of
• 28:03
  Speaker 1: here's yeah, we we said no to Ober, we said
• 28:06
  Speaker 1: no to Apple, we said no to Amazon, like their
• 28:08
  Speaker 1: list of failures, and it's a badge of honor. You're
• 28:11
  Speaker 1: you're dead right on that. It's quite it's quite fascinating.
• 28:15
  Speaker 1: So when you're putting together a portfolio of companies, when
• 28:20
  Speaker 1: when I look at a portfolio of stocks, I want
• 28:22
  Speaker 1: to see some US companies, some emerging market companies, some
• 28:26
  Speaker 1: European and Asia, Japanese companies. How do you approach creating
• 28:32
  Speaker 1: a portfolio? Do you think in terms of different sectors
• 28:36
  Speaker 1: and a distribution of risk? Tell us about how you
• 28:39
  Speaker 1: go about doing that. Yeah, so we were we're obviously
• 28:43
  Speaker 1: a geographically diverse because that's part of part of our
• 28:46
  Speaker 1: our mandate. But but in that we we we have
• 28:49
  Speaker 1: lots of different industries, We have lots of different business models,
• 28:53
  Speaker 1: and you know, some are like like we've talked about
• 28:55
  Speaker 1: a little earlier, some are directed consumers, some are business
• 28:58
  Speaker 1: to business and and you know, summer like will likely
• 29:01
  Speaker 1: end up being pro cyclical, some will likely be countercyclical.
• 29:04
  Speaker 1: And so I feel like as we you know, as
• 29:07
  Speaker 1: we take a step up and look broadly at our portfolio,
• 29:10
  Speaker 1: we do have a range of of of really interesting
• 29:13
  Speaker 1: business models in in in targets of the economy that
• 29:18
  Speaker 1: are different. You know, we've got some healthcare companies, We've
• 29:20
  Speaker 1: got some retail or e commerce companies. We've got a
• 29:24
  Speaker 1: handful of food opportunities that we're pursuing. And so uh,
• 29:27
  Speaker 1: food different from agriculture or one and the same we
• 29:31
  Speaker 1: we see food in agriculture is perfectly commingled. And we've
• 29:34
  Speaker 1: got some some some longer plays and in the actech business.
• 29:37
  Speaker 1: And we also have a couple of of of food
• 29:40
  Speaker 1: brands that were also really excited about. I remember reading
• 29:43
  Speaker 1: and it's a couple of years ago already. I think
• 29:45
  Speaker 1: it was Wired magazine. You talk about ag tech, there
• 29:48
  Speaker 1: are these big commercial like John Dear tractors, and people
• 29:53
  Speaker 1: pretty much created a using an iPhone and a satellite
• 29:57
  Speaker 1: receiver a way to self pro him these tractors to
• 30:02
  Speaker 1: do a whole field with nobody sitting in the cab.
• 30:05
  Speaker 1: Long before they were self driving cars and trucks. It
• 30:09
  Speaker 1: seems that tractors were pretty much the first to do that.
• 30:12
  Speaker 1: When you talk about ad tech, is that the sort
• 30:15
  Speaker 1: of stuff you're referring to, or is it more specific
• 30:18
  Speaker 1: um soil chemistry and material science and things along that
• 30:22
  Speaker 1: or a little bit of everything. It's a little bit
• 30:24
  Speaker 1: of everything. I'll give you an example. We're investors in
• 30:26
  Speaker 1: a business called app Harvest. App Harvest is based in Pikeville, Kentucky.
• 30:30
  Speaker 1: And what this business does, and it's so fascinating. The
• 30:34
  Speaker 1: founder and entrepreneurs is just this really dynamic guy and
• 30:37
  Speaker 1: he's found he's basically turning abandoned coal mines into hydroponic farms,
• 30:44
  Speaker 1: hydroponic greenhouses, and he's hiring former coal workers to come
• 30:48
  Speaker 1: work these new farms on on what used to be
• 30:52
  Speaker 1: a coal mine. And so to me, that's that's the
• 30:55
  Speaker 1: the essence of ingenuity, Like how do you take abandoned
• 30:58
  Speaker 1: awful coal mines and tournament to really high, high quality
• 31:03
  Speaker 1: produce that by by virtual Being in Pikeville, Kentucky is
• 31:07
  Speaker 1: like less than a day from of the United States, Right,
• 31:10
  Speaker 1: That's that's how you deliver a better, higher quality product
• 31:14
  Speaker 1: to a greater degree of people than than while doing
• 31:18
  Speaker 1: it in a way that lifts up a community that's
• 31:21
  Speaker 1: been you know, by almost by definition sort of impacted
• 31:25
  Speaker 1: by the change in one sort of the the economy.
• 31:28
  Speaker 1: How do you respond when someone comes along and pitches
• 31:30
  Speaker 1: you something like that. My immediate reaction is growing food
• 31:34
  Speaker 1: in coal mines? That sounds horrible. How do you get
• 31:37
  Speaker 1: by that initial wow, that's pretty wacky and out there,
• 31:40
  Speaker 1: or have you trained yourself to sort of say, huh, well,
• 31:44
  Speaker 1: that's interesting. The hardest thing about being a venture capitalist
• 31:48
  Speaker 1: is to always avoid that initial gut reaction of that
• 31:53
  Speaker 1: will never work, because you'll that will never work yourself
• 31:56
  Speaker 1: to death less business and and and for me, the
• 31:59
  Speaker 1: question always in that being well, how can that work?
• 32:02
  Speaker 1: Imagine the possibilities and imagine how like, like, how can
• 32:05
  Speaker 1: these ingredients be put together? You know, flour, sugar, eggs,
• 32:09
  Speaker 1: milk independently would all taste gross, but you put them
• 32:12
  Speaker 1: together and you come out as a cake. How can
• 32:14
  Speaker 1: you assemble these ingredients to to be a cake as
• 32:17
  Speaker 1: opposed to you know, a mudpie? Right? And I think
• 32:19
  Speaker 1: that's that's one of the challenges we face every day
• 32:23
  Speaker 1: is is because nothing's ever gonna work, and and we're
• 32:26
  Speaker 1: we're looking at ideas and a power point deck, talking
• 32:29
  Speaker 1: to founders with with hopefully some high degree of domain expertise,
• 32:33
  Speaker 1: because it gives them the authority to talk about, you know,
• 32:37
  Speaker 1: hydroponic farming and abandoned coal mines. But but but you've
• 32:41
  Speaker 1: got to start looking through and saying, all right, well
• 32:43
  Speaker 1: if if, if this guy is able to get you know,
• 32:46
  Speaker 1: this technology, and and maybe find this scientist and maybe
• 32:50
  Speaker 1: pull together this other expert, like he's got a very
• 32:54
  Speaker 1: credible shot and making this all work. And I love
• 32:58
  Speaker 1: doing this at at the Seed stay Age, right. And
• 33:00
  Speaker 1: one of the other benefits of our job is we
• 33:02
  Speaker 1: get to see this stuff before it's really ready for
• 33:05
  Speaker 1: mass consumption. We typically like to invest post product market fit.
• 33:10
  Speaker 1: But but but but before before sort of mass adoption
• 33:14
  Speaker 1: and and so it's really interesting to see sort of
• 33:16
  Speaker 1: the reaction of the first handful of consumers and and
• 33:19
  Speaker 1: and and customers of some of these products. How do
• 33:21
  Speaker 1: they react, how how how resonant is the product as
• 33:24
  Speaker 1: as it's starting to hit the market. You know, the
• 33:27
  Speaker 1: parallel in the public markets is simply when someone tells
• 33:30
  Speaker 1: me an idea about a stock, and my immediate reaction is, oh,
• 33:34
  Speaker 1: that's a dog. Probably means the worst of it is
• 33:37
  Speaker 1: already priced, and I've taught myself to recognize that over
• 33:41
  Speaker 1: the years. But you're talking about stuff that's so high
• 33:44
  Speaker 1: concept and so interesting. I find that fascinating your responses.
• 33:49
  Speaker 1: How can we make that work? We have been speaking
• 33:52
  Speaker 1: with David Hall. He is a partner at Rise of
• 33:55
  Speaker 1: the Rest seed Fund, part of Revolution Partners. If you
• 33:59
  Speaker 1: enjoy this conversation, be sure and come back for the
• 34:02
  Speaker 1: podcast extras, where we keep the digital tape rolling and
• 34:05
  Speaker 1: continue to discuss all things venture capital. We love your comments,
• 34:09
  Speaker 1: feedback and suggestions. You can write to us at m
• 34:13
  Speaker 1: IB podcast at Bloomberg dot net. Follow me on Twitter
• 34:17
  Speaker 1: at Rich Halts. You can check out my Deli column
• 34:19
  Speaker 1: on Bloomberg dot com. I'm Barry Hults. You're listening to
• 34:22
  Speaker 1: Masters and Business on Bloomberg Radio. Welcome to the podcast, David,
• 34:40
  Speaker 1: Thank you so much for doing this. This is really
• 34:42
  Speaker 1: fascinating stuff. I am endlessly in treged by the ideas
• 34:49
  Speaker 1: um within the venture community, and you guys are actually
• 34:54
  Speaker 1: disrupting the way traditional venture capital is done. It's amazing.
• 35:00
  Speaker 1: At the vast majority of the states in America don't
• 35:04
  Speaker 1: have a whole lot of venture investing, and I really,
• 35:07
  Speaker 1: I really am fascinated by that. So I didn't mention
• 35:11
  Speaker 1: Steve Case, who is the founder of a O L.
• 35:15
  Speaker 1: Really this seems to be his brainchild. Is that a
• 35:18
  Speaker 1: fair assessment? So? So, how did this come about? And
• 35:22
  Speaker 1: how was this announced? Was it supposed to be a
• 35:25
  Speaker 1: one off when Steve first um did this? Or give
• 35:31
  Speaker 1: us a little little background on that. Yeah, So I
• 35:34
  Speaker 1: think that the notion of the Rise of the Rest
• 35:36
  Speaker 1: started as as just an interesting slogan for how how
• 35:39
  Speaker 1: can we engage some of these communities and and find
• 35:43
  Speaker 1: find great entrepreneurs, find great deal flow for our funds.
• 35:47
  Speaker 1: But as we started to uncover what's going on in
• 35:50
  Speaker 1: these communities, it grew to its own, It spawned its
• 35:54
  Speaker 1: own sort of life and its own own being, and
• 35:57
  Speaker 1: it was really interesting to become part of these communities.
• 36:00
  Speaker 1: And what it ended up being for us was a
• 36:02
  Speaker 1: great way to meet and have authentic relationships with the
• 36:05
  Speaker 1: people on the ground and a lot of these cities
• 36:07
  Speaker 1: that we're building the businesses and supporting the entrepreneurs. It's
• 36:11
  Speaker 1: it's interesting, it's so great to meet the the entrepreneurs
• 36:15
  Speaker 1: support organizations, the ecosystem building organizations like the accelerators and
• 36:20
  Speaker 1: the incubators, which have really exploded over the last couple
• 36:23
  Speaker 1: of years, and and and understand how they are supporting
• 36:28
  Speaker 1: and having to do it differently and often very grassroots
• 36:32
  Speaker 1: and a lot of these communities where it isn't sort
• 36:34
  Speaker 1: of the thing that you do, and and and and
• 36:37
  Speaker 1: having that that drive to keep going and saying, you
• 36:40
  Speaker 1: know what we're gonna We're gonna bring our We had
• 36:42
  Speaker 1: eight companies in our last accelerator class, We're gonna expand
• 36:45
  Speaker 1: it to ten companies in this next cycle. Like that's
• 36:48
  Speaker 1: really interesting. And so what we were doing and what
• 36:50
  Speaker 1: Steve lad and you know, Steve's I've come to respect
• 36:54
  Speaker 1: him more and more the longer I've worked with him.
• 36:56
  Speaker 1: I've been working with him for over a decade now.
• 36:58
  Speaker 1: And you know this is there a lot of people
• 37:00
  Speaker 1: of Steve's caliber that spend their time doing lots of
• 37:03
  Speaker 1: other things. Steve Steve invests in entrepreneurs. That's his passion
• 37:07
  Speaker 1: and that's what he does. And and it's been great
• 37:09
  Speaker 1: to learn from him on on having that be part
• 37:12
  Speaker 1: of not only his legacy but his passion to invest
• 37:15
  Speaker 1: in entrepreneurs and and traffic in these great ideas and
• 37:19
  Speaker 1: great future. I mean, he's he's one of the most
• 37:22
  Speaker 1: accomplished futurists I know about thinking about where the where
• 37:25
  Speaker 1: the ball is going and trying to sort of marshal
• 37:28
  Speaker 1: the resources to be there and in in revolution as.
• 37:32
  Speaker 1: I think the symphony that he's been able to create
• 37:35
  Speaker 1: by bringing the right people together to help execute on
• 37:38
  Speaker 1: that that vision of of of really thinking about the
• 37:41
  Speaker 1: future and thinking about how entrepreneurs can drive and be
• 37:44
  Speaker 1: changing change agents in the future and again some of
• 37:48
  Speaker 1: the bigger problems that we're going to be facing, which
• 37:51
  Speaker 1: which is why I would guess that list of notables
• 37:55
  Speaker 1: who were on the who are investors in and board
• 37:59
  Speaker 1: members of Rise of the Rest, I'm not going to
• 38:01
  Speaker 1: read the names. Go to their website and look at it.
• 38:04
  Speaker 1: It's the most mind blowing list of investors I've ever
• 38:08
  Speaker 1: seen associated with one organization in my entire life. It's
• 38:13
  Speaker 1: it's astounding, and I don't even want to build up
• 38:17
  Speaker 1: the hype too much. Just go go to the website
• 38:19
  Speaker 1: and check it out Google Rise of the Rest funds
• 38:22
  Speaker 1: um investors or advisors, and it's it's really astonishing. You
• 38:27
  Speaker 1: mentioned um incubators and other types of accelerators. You know,
• 38:33
  Speaker 1: we know about those in cities like Boston and New
• 38:35
  Speaker 1: York and San Francisco, and there were a number of
• 38:39
  Speaker 1: some of which one actually went public. There were a
• 38:41
  Speaker 1: number of of incubators that had been around for a while.
• 38:45
  Speaker 1: Where are you finding incubators outside of the coasts and
• 38:49
  Speaker 1: are they private? Are they public? Are they private public
• 38:52
  Speaker 1: joint ventures? Tell us a little bit about yes. Simply
• 38:56
  Speaker 1: you find it takes different different types of organizations to
• 38:59
  Speaker 1: help the war, the the the ecosystems, right. I mean,
• 39:02
  Speaker 1: there are quite a few, and most, the majority, overwhelming majority,
• 39:05
  Speaker 1: i'd say, are private enterprises that people are running and
• 39:08
  Speaker 1: hopefully running for profit. Some include coworking, so that there's
• 39:12
  Speaker 1: like a real business model there. Others are you say coworking, Um,
• 39:17
  Speaker 1: I immediately think of we works, But that's not what
• 39:20
  Speaker 1: you're necessarily referring. Very similarly, you you the entrepreneur rents
• 39:24
  Speaker 1: desk space, and so that becomes the revenue model, the
• 39:27
  Speaker 1: business model for the coworking space and helps to feed
• 39:30
  Speaker 1: the incubator or accelerator. But but we we've seen dozens
• 39:34
  Speaker 1: of models of how this can work and you know,
• 39:37
  Speaker 1: and I think a lot of them are specific for
• 39:39
  Speaker 1: the company, specific for the city of geography, but the
• 39:43
  Speaker 1: goal is unlocking entrepreneurship. It's taking the man or woman
• 39:48
  Speaker 1: who's working for one of the big companies in the
• 39:51
  Speaker 1: city saying, you know what I can. I've been working
• 39:55
  Speaker 1: at Procter and Gamble forever in Cincinnati, and I love
• 39:57
  Speaker 1: what I do. But boy, I have a great e
• 39:59
  Speaker 1: commerce opper community that'd love to go and start. And
• 40:02
  Speaker 1: now there's a vehicle for them to extract themselves from
• 40:05
  Speaker 1: that big corporation and like, go start a startup somewhere.
• 40:09
  Speaker 1: So let's let's talk about some of the cities you've
• 40:11
  Speaker 1: been to. You mentioned Detroit, Pittsburgh, Cincinnati, um, New Orleans.
• 40:16
  Speaker 1: What other cities have have you guys invested in and
• 40:21
  Speaker 1: how do they vary um from location location geography to geography. Yeah,
• 40:27
  Speaker 1: so we've you know, we've been You've named a few
• 40:30
  Speaker 1: of the cities, but cities from as small as a
• 40:32
  Speaker 1: couple hundred thousand people to as large as you know,
• 40:35
  Speaker 1: three or four million people. We are most recent seventh
• 40:38
  Speaker 1: Rise of the rest tour three or four million. That's
• 40:40
  Speaker 1: like Chicago. Is that what we're talking about. You know,
• 40:42
  Speaker 1: we we went to Dallas, Chattanooga, Birmingham, Memphis, and Louisville,
• 40:47
  Speaker 1: Kentucky on our last tour. That's a great cross section
• 40:49
  Speaker 1: of the types of cities that we go to. Some big,
• 40:52
  Speaker 1: you know, big major cities that that everybody has heard of.
• 40:55
  Speaker 1: Others all these cities are people cities people have heard of,
• 40:57
  Speaker 1: but but others less well known for being tech hubs.
• 41:01
  Speaker 1: Like I don't think of Chattanooga as a tech hub,
• 41:03
  Speaker 1: and you'd be surprised to find out that Chattanooga has
• 41:06
  Speaker 1: such a strong logistics tech industry that well, I think
• 41:11
  Speaker 1: it's there the proximity of Chattanooga to both obviously Atlanta,
• 41:15
  Speaker 1: which is a huge because you have, um who, you
• 41:19
  Speaker 1: have a couple of airlines there, a couple of transportation companies,
• 41:24
  Speaker 1: but then you go up to Chattanooga and it's it's close,
• 41:26
  Speaker 1: it's it's it's close to lots of that transportation tech hub,
• 41:29
  Speaker 1: but also a lot of freight travels through Atlanta through Chattanooga.
• 41:33
  Speaker 1: And even the winner of our Rise of the Rest
• 41:35
  Speaker 1: tour in in Chattanooga this year. It was a company
• 41:37
  Speaker 1: called Freight Waves that is waves, not freight wave freight
• 41:41
  Speaker 1: WA waves yea. And what that company is doing is
• 41:44
  Speaker 1: building the technology platform to help shippers properly assess and
• 41:50
  Speaker 1: and and and UH book freight. So it's a data
• 41:53
  Speaker 1: platform that helps them determine the freight cost because of
• 41:57
  Speaker 1: all sorts of things like fuel and temperature and load
• 41:59
  Speaker 1: it's being being transported between any two end points. Hard
• 42:03
  Speaker 1: industry that was basically done analog up until these guys
• 42:07
  Speaker 1: have come along and help them, help them digitize this
• 42:10
  Speaker 1: and create a fulsome platform for for the transmission of freight.
• 42:15
  Speaker 1: That that's quite fascinating. What what cities have surprised you?
• 42:18
  Speaker 1: That seems like an interesting surprise. What else has really
• 42:21
  Speaker 1: surprised you, either in their focus or any other way. Yeah,
• 42:26
  Speaker 1: so I'd say one of the big surprises to me
• 42:29
  Speaker 1: was Indianapolis. Um, Indianapolis is obviously a great city, has
• 42:33
  Speaker 1: storied American city. And what one of the things and
• 42:37
  Speaker 1: one of the big highlights is there was a business
• 42:39
  Speaker 1: they're called Exact Target that sold a salesforce for multiple
• 42:42
  Speaker 1: billions of dollars. The founders of Exact Target after they
• 42:46
  Speaker 1: sort of spun out of the salesforce, UH world, double down,
• 42:50
  Speaker 1: triple down in Indianapolis and and created an ecosystem. They're
• 42:55
  Speaker 1: focused on B two B business to business softwares of
• 42:58
  Speaker 1: services companies, and so they've really like anchored themselves around
• 43:03
  Speaker 1: this notion of B two B sas is going to
• 43:05
  Speaker 1: be what Indianapolis is known for, at least from a
• 43:08
  Speaker 1: technology a startup perspective, and it's become a hub. They've got, uh,
• 43:12
  Speaker 1: the founders that have created a company called the High
• 43:15
  Speaker 1: Alpha Studio. They've got a fund there they invest in
• 43:18
  Speaker 1: and handfuls of companies that are coming out of Indianapolis
• 43:20
  Speaker 1: and who would have thought right, And it was so
• 43:23
  Speaker 1: it was such a sort of great ecosystem that Salesforce,
• 43:26
  Speaker 1: after their acquisition of this company, Exact Target, moved it's
• 43:30
  Speaker 1: HQ two to Indianapolis and now has one of the
• 43:33
  Speaker 1: largest buildings UH in the city of Indianapolis is by
• 43:36
  Speaker 1: Sales is owned and operated by Salesforce and has a
• 43:39
  Speaker 1: couple of thousand employees in Indianapolis. And so it's it's
• 43:42
  Speaker 1: amazing to see how that city has kind of really,
• 43:46
  Speaker 1: you know, really exploded in growth around a couple of
• 43:50
  Speaker 1: founders who said, we're gonna double down in our in
• 43:52
  Speaker 1: our hometown. That's what give me one more city. That
• 43:55
  Speaker 1: kind of was like, wow, I didn't expect to see
• 43:57
  Speaker 1: that an overwhelming set at voices or you know, well,
• 44:01
  Speaker 1: I'm trying to come up with a really good, good
• 44:03
  Speaker 1: example for you. I mean, I'll go back to to
• 44:07
  Speaker 1: to Chattanooga. I was really surprised. I mean, they you know,
• 44:11
  Speaker 1: they're they're a handful of just really great companies. There's
• 44:14
  Speaker 1: a company we were not investors in, but but it's
• 44:17
  Speaker 1: it's a logistics and a moving company called Bellhops based
• 44:20
  Speaker 1: in Chattanooga. That's a really strong company. And seeing how
• 44:22
  Speaker 1: a city that that's not the largest city by by
• 44:25
  Speaker 1: any stretch of the word, has really focused on building
• 44:29
  Speaker 1: this really dense community. We have this this this phrase
• 44:32
  Speaker 1: that we use a lot called network density, which you
• 44:35
  Speaker 1: know network density, network density, which means how how can
• 44:39
  Speaker 1: you how can you create this this tight network of
• 44:42
  Speaker 1: people of entrepreneurs of of of of uh fans of entrepreneurship,
• 44:48
  Speaker 1: bring them together and have your little city play a
• 44:51
  Speaker 1: lot bigger or at least have the startup part of
• 44:53
  Speaker 1: your little city play a lot bigger, right, And what
• 44:56
  Speaker 1: they've been able to do and by bringing you know,
• 44:59
  Speaker 1: fun and startup accelerators in the Chattanooga area. Together, they've
• 45:03
  Speaker 1: created this strong network where everybody knows each other and
• 45:07
  Speaker 1: all the entrepreneurs are are are talking about, you know,
• 45:11
  Speaker 1: best practice, sharing and and recruiting new people. When new
• 45:14
  Speaker 1: people come in, they meet a handful of the executives
• 45:17
  Speaker 1: at other companies that say, you know, come move from
• 45:20
  Speaker 1: Chicago to Chattanooga. We'll we'll show you around, We'll we'll
• 45:23
  Speaker 1: take you out on the on a on a boat,
• 45:24
  Speaker 1: and you know, really wine and dine you as a
• 45:26
  Speaker 1: community to say that you're joining our community, not necessarily
• 45:30
  Speaker 1: just joining this company. Interesting you mentioned Chicago. Have you
• 45:33
  Speaker 1: spent any time in the West Loop that that's a
• 45:35
  Speaker 1: little bit of a tech hub that seems to be exploding.
• 45:38
  Speaker 1: We're really excited to have one of my one of
• 45:40
  Speaker 1: my UH portfolio companies that we invested in earlier this
• 45:43
  Speaker 1: year is a Chicago based company called Foxtrot that's on
• 45:46
  Speaker 1: a trend that I love on the future of retail.
• 45:49
  Speaker 1: Foxtrot is reimagining the convenience store. We we all know
• 45:53
  Speaker 1: lots of convenience stores and and and obviously we're sitting
• 45:55
  Speaker 1: in New York City where where the corner bodega is people.
• 45:59
  Speaker 1: People love their their corner bodegas, but in a lot
• 46:02
  Speaker 1: of America there there isn't that that sort of deep
• 46:05
  Speaker 1: passion around around your convenience store. Foxtrot does half of
• 46:08
  Speaker 1: its business through mobile app orders that get delivered to
• 46:12
  Speaker 1: your door in and you know, in less than an hour.
• 46:15
  Speaker 1: And it's a great business, perfect for launching in a
• 46:19
  Speaker 1: city like Chicago. And and we're really excited about that
• 46:22
  Speaker 1: opportunity because we think that you know, there hasn't been
• 46:25
  Speaker 1: a lot of disruption in the convenience store market and
• 46:27
  Speaker 1: over a generation. And being able to have really cool
• 46:30
  Speaker 1: products ordering ordered at the tap of a phone, but
• 46:33
  Speaker 1: also be be your corner store that you walk past
• 46:36
  Speaker 1: and get a bagel and a coffee on your way
• 46:38
  Speaker 1: to work in the morning. Is is actually pretty cool
• 46:40
  Speaker 1: that that's interesting? So I wanted to I was gonna
• 46:43
  Speaker 1: ask you how you source companies, But I'm going to
• 46:46
  Speaker 1: change that question a little bit. When you announce, hey,
• 46:49
  Speaker 1: here's our new tour and we'll go into these five cities,
• 46:52
  Speaker 1: does that open a floodgate of inquiries or are you
• 46:55
  Speaker 1: still flipping over rocks to find where the next great
• 46:59
  Speaker 1: entrepreneur is? When we go to a city and we
• 47:02
  Speaker 1: announced that we're gonna come to the city, we we
• 47:04
  Speaker 1: get scores of applications to participate. Even in our pitch competition,
• 47:10
  Speaker 1: we're able to put those companies in our database and
• 47:12
  Speaker 1: start to track them. Um. We we we really have,
• 47:17
  Speaker 1: I think, have taken a more data driven approach to
• 47:19
  Speaker 1: looking at and lots of different companies across the country
• 47:22
  Speaker 1: because it's the only way that we're gonna be able
• 47:23
  Speaker 1: to do it with a relatively small team at scale,
• 47:26
  Speaker 1: and and we also rely heavily on our network partners.
• 47:29
  Speaker 1: So when we go to these cities, we meet the
• 47:31
  Speaker 1: local vcs and the regional vcs and we asked them, hey,
• 47:34
  Speaker 1: you know, are there what are the two or three
• 47:36
  Speaker 1: companies that you guys are most excited about in Raleigh, Durham.
• 47:39
  Speaker 1: And they're happy to tell us the two or three
• 47:41
  Speaker 1: companies that they're most excited And you do that to
• 47:43
  Speaker 1: two or three local funds and you've got to you know,
• 47:46
  Speaker 1: a dozen companies at the end of the day that
• 47:48
  Speaker 1: that are you know, ones that that tend to bubble
• 47:50
  Speaker 1: above the some of the rest. But but it's also
• 47:53
  Speaker 1: a temporal thing, right you come back six months later
• 47:56
  Speaker 1: and it's a new batch of companies. So we we
• 47:58
  Speaker 1: we love to maintain these really authentic relationships with with
• 48:02
  Speaker 1: the partners and investors in the community, and then that
• 48:06
  Speaker 1: helps introduce us to the entrepreneurs that are really making
• 48:08
  Speaker 1: a difference. Huh, what what about competition? You mentioned other
• 48:12
  Speaker 1: vcas and areas. Are you at all concerned that you're
• 48:15
  Speaker 1: going to start running into competition in some of these
• 48:18
  Speaker 1: places or is it still a sort of cooperative, friendly
• 48:23
  Speaker 1: um group of other players in the same space who
• 48:26
  Speaker 1: might be co investors in the same companies. Yeah, I
• 48:29
  Speaker 1: I see them more as as collaborators and competition. We
• 48:33
  Speaker 1: we we need people were We're not going to write
• 48:35
  Speaker 1: a full investment round. If a company is doing a
• 48:38
  Speaker 1: five million dollar series seed round, we're not going to
• 48:41
  Speaker 1: do that entire round. So if we do some of it,
• 48:43
  Speaker 1: we're gonna need other people to help participate. And it's
• 48:45
  Speaker 1: always helpful to have you know, local eyes and ears
• 48:48
  Speaker 1: on the ground who know the company, or know the founder,
• 48:50
  Speaker 1: or know the have domain expertise in in the business
• 48:53
  Speaker 1: and so being able to bring all of those folks
• 48:55
  Speaker 1: into the round is one of the reasons why we're
• 48:59
  Speaker 1: doing this we were able to be massive connectors of
• 49:02
  Speaker 1: of You know, if you might be a healthcare expert
• 49:05
  Speaker 1: fund based in Nashville and if we found a healthcare
• 49:08
  Speaker 1: deal in in St. Louis, we'd love to bring you
• 49:10
  Speaker 1: guys into that deal because it just only helps make
• 49:12
  Speaker 1: that deal, helps de risk the deal to our limited
• 49:15
  Speaker 1: partners in our and our fund, but also helps potentially
• 49:18
  Speaker 1: expand that the access for that company. So it's not
• 49:21
  Speaker 1: just network density, but then it's the network effect cross
• 49:25
  Speaker 1: pollinating from city to city. You got it quite interesting. Um,
• 49:29
  Speaker 1: do you have a target for number of investments you're
• 49:32
  Speaker 1: gonna make each year or is it really you just
• 49:35
  Speaker 1: kind of take it as it comes. Yeah, I think
• 49:37
  Speaker 1: we'll do about a hundred hundred fifty investments out of
• 49:40
  Speaker 1: this fund over the next couple of years. But we're
• 49:42
  Speaker 1: we don't have a specific target. We we again are
• 49:45
  Speaker 1: being super opportunistic about about finding great companies in in
• 49:50
  Speaker 1: in in these regions. And you mentioned this fund. My
• 49:53
  Speaker 1: assumption is this is set up as a traditional VCG
• 49:57
  Speaker 1: general partners and limited partner. There's any thoughts on is
• 50:01
  Speaker 1: there going to be a rise of the rest to
• 50:03
  Speaker 1: rise the rest? Three you're gonna stack that down down
• 50:06
  Speaker 1: the years. What happens when you basically say, okay, we're
• 50:10
  Speaker 1: filled up. You know, I'm focused on deploying the hundred
• 50:13
  Speaker 1: and fifty million that our limited partners have invested in
• 50:16
  Speaker 1: and in us in this fund and and and hope
• 50:19
  Speaker 1: to really make a difference and obviously create a lot
• 50:22
  Speaker 1: of value and and and and in the fund that
• 50:24
  Speaker 1: we're in. You know, who knows what the future is
• 50:26
  Speaker 1: gonna hold, But we're super excited about about the limited
• 50:31
  Speaker 1: partners trusting us in the capital that we're deploying into
• 50:33
  Speaker 1: what I think are a fantastic array of companies that
• 50:37
  Speaker 1: that showcase the best of of what's going on in
• 50:40
  Speaker 1: you know, at least forty seven of the fifty states,
• 50:43
  Speaker 1: although we do have investments in California and in in
• 50:46
  Speaker 1: uh in in New York, but but not necessarily in
• 50:49
  Speaker 1: Silicon Valley or City. And you know, I've danced around
• 50:53
  Speaker 1: this question, and you you came close to answering it,
• 50:56
  Speaker 1: but I haven't asked it, So let me just blurt
• 50:59
  Speaker 1: it out. Um. I have to imagine there are a
• 51:02
  Speaker 1: lot of misconceptions about venture investing in general. You reference
• 51:07
  Speaker 1: the misconception about your relationship with Silicon Valley, But just
• 51:11
  Speaker 1: speaking broadly, what do you think is is some of
• 51:15
  Speaker 1: the biggest misconceptions about how venture capitalists operate what they
• 51:19
  Speaker 1: invest in, just generally speaking, So I think from the
• 51:25
  Speaker 1: from the capital deployment side, the biggest misconception is that
• 51:29
  Speaker 1: it's easy. Is that you just you sit around listening
• 51:32
  Speaker 1: to a couple of pitches and whenever something rang out,
• 51:35
  Speaker 1: you're right a check. And I mean, and you know,
• 51:37
  Speaker 1: we we apply science, we apply data to to to
• 51:40
  Speaker 1: our decision making, and you know, and and we we
• 51:45
  Speaker 1: do a lot of work. I mean, we're it's not
• 51:47
  Speaker 1: just come in for a pitch and come out thirty
• 51:49
  Speaker 1: minutes later with with the check, right, I mean the
• 51:52
  Speaker 1: closest we get to that or in our pitch competitions.
• 51:55
  Speaker 1: But but but for our our our our normal investments,
• 51:58
  Speaker 1: we're doing due diligence and we're asking big questions about
• 52:01
  Speaker 1: the market opportunity and about the founder's domain expertise, and
• 52:04
  Speaker 1: about all sorts of ebbs and flows of the real
• 52:08
  Speaker 1: market opportunity in the business model. I think from the
• 52:10
  Speaker 1: capital receiving perspective, I think the biggest misconception is that
• 52:17
  Speaker 1: a lot of entrepreneurs have great companies, but they're not
• 52:20
  Speaker 1: necessarily venture backable. And I think that there's this this
• 52:23
  Speaker 1: misconception that that venture is is the the financing source
• 52:29
  Speaker 1: of of of kings. And and you know, I was
• 52:32
  Speaker 1: tell whenever I start having conversations and talk to particularly
• 52:36
  Speaker 1: large audiences of of entrepreneurs, I say, the first best
• 52:39
  Speaker 1: source of financing is revenue. Right, revenue doesn't take any
• 52:43
  Speaker 1: of your company, you don't have to pay any of
• 52:44
  Speaker 1: it back. And if you can scale your company through revenue,
• 52:47
  Speaker 1: that's best. But a lot of a lot of folks
• 52:49
  Speaker 1: have really good businesses that just aren't necessarily venture capital
• 52:53
  Speaker 1: are VC backable businesses because they're either not growing at
• 52:58
  Speaker 1: a scale or have a broaden off large enough market opportunity.
• 53:02
  Speaker 1: I mean, typically venture capitalists are looking for billion dollar,
• 53:05
  Speaker 1: billion dollar businesses and and we have a specific model
• 53:09
  Speaker 1: to help help help de find what that means. And
• 53:13
  Speaker 1: you look at companies like Uber, it's totally reimagining the
• 53:16
  Speaker 1: taxi dispatch industry. Period. That's a billion that's it's easy
• 53:20
  Speaker 1: to see the global unstoppable. But there are there are
• 53:25
  Speaker 1: lots of there's lots of really good, really small, really
• 53:28
  Speaker 1: great small businesses where the proprietors are going to be millionaires,
• 53:32
  Speaker 1: but those aren't necessarily always great venture backable businesses makes
• 53:35
  Speaker 1: a lot of sense. The one question I before I
• 53:38
  Speaker 1: get to my favorite questions, the one question that has
• 53:41
  Speaker 1: been um annoying at me has been this, what cities
• 53:44
  Speaker 1: have you not gotten to that you're looking forward to
• 53:47
  Speaker 1: going and doing a rise of the Rest tour through. So,
• 53:52
  Speaker 1: like I said, we've been the thirty eight cities. You
• 53:55
  Speaker 1: can do the math and know that there are lots
• 53:56
  Speaker 1: of cities that we haven't been to. You know, we
• 53:59
  Speaker 1: we we are in the process of thinking through and
• 54:02
  Speaker 1: and plotting out our our next tour. But we I'll
• 54:05
  Speaker 1: leave as a nugget and we'll we'll make sure that
• 54:08
  Speaker 1: very you're on the list of people that we tell
• 54:09
  Speaker 1: when we we decide where we're headed the bus to next.
• 54:12
  Speaker 1: But it's it's you know, we we look to find
• 54:14
  Speaker 1: cities where there's been some some entrepreneurial some startup activity,
• 54:18
  Speaker 1: where there's been a few successes and their their their
• 54:21
  Speaker 1: companies to point to where there's a willingness by all
• 54:25
  Speaker 1: of the stakeholders, from the local university to the politicians
• 54:29
  Speaker 1: who are leaning in on saying, yeah, we we support startups.
• 54:32
  Speaker 1: We we want that type of ecosystem to be in
• 54:35
  Speaker 1: our town, and we want to try to have those
• 54:39
  Speaker 1: those cities flare up on our map and get in
• 54:41
  Speaker 1: front of us. And we have we've got to we've
• 54:43
  Speaker 1: perfected the way of getting it done now and and
• 54:45
  Speaker 1: we'll we'll we'll let you be among the first to
• 54:47
  Speaker 1: know where we're headed ups. I'm looking forward to it,
• 54:49
  Speaker 1: all right. So let's jump to some of my favorite
• 54:51
  Speaker 1: questions we ask all of our guests. Tell us the
• 54:55
  Speaker 1: most important thing people don't know about your background. So
• 55:01
  Speaker 1: that's a pretty easy one for me, and and it's
• 55:03
  Speaker 1: it always surprises you want. I want to see the
• 55:05
  Speaker 1: look on your face. I'm sorry you guys can't see
• 55:06
  Speaker 1: it who are listening, But I am a former competitive swimmer.
• 55:10
  Speaker 1: I was going to say that, you know, I was
• 55:12
  Speaker 1: going to guess, yeah, hard, hard, hard for those of
• 55:15
  Speaker 1: you guys listening. I am six ft tall, two d
• 55:17
  Speaker 1: and fifty something. He's a solid. I thought you're gonna
• 55:20
  Speaker 1: tell me you were like a middle linebacker, not competitive swimmer.
• 55:24
  Speaker 1: What you swim? I I swim. Uh started at age
• 55:28
  Speaker 1: six and swam through college, actually through first couple of
• 55:31
  Speaker 1: years of college, but I did a lot of medley
• 55:35
  Speaker 1: and sprint freestyle because I just obviously I'm not gonna
• 55:38
  Speaker 1: do distance. I definitely don't have a body for distance
• 55:40
  Speaker 1: um recreationally, and you know, I have to take the
• 55:44
  Speaker 1: kids out. But for me it was such an important
• 55:46
  Speaker 1: thing because number one, it's it's the perfect both individual
• 55:50
  Speaker 1: and team sport. And so he really teaches you how
• 55:53
  Speaker 1: to how to be a member of the team, but
• 55:55
  Speaker 1: also how to really focus. And then the second thing
• 55:58
  Speaker 1: for me that it really taught was how to It
• 56:00
  Speaker 1: showed the direct link between preparation and execution. Right, you
• 56:04
  Speaker 1: go to practice, you work hard, and practice, your times
• 56:07
  Speaker 1: get lower, you win, and and and this the side
• 56:09
  Speaker 1: benefit was it also taught me to deal a little
• 56:11
  Speaker 1: bit with with defeat and losing, because it's just it's
• 56:14
  Speaker 1: important for six and seven and twelve year old to
• 56:16
  Speaker 1: learn that also important for forty somethings to learn. That.
• 56:20
  Speaker 1: Tell us about some of your early mentors who affected
• 56:23
  Speaker 1: the way you look at the world of investment. So
• 56:27
  Speaker 1: the first, obviously, and I'm sure this is something you
• 56:29
  Speaker 1: hear a lot, is it was my dad. I mean,
• 56:31
  Speaker 1: he's a dentist, just retired dentist, but an entrepreneur, a
• 56:37
  Speaker 1: small business owner. And my first job was working in
• 56:40
  Speaker 1: this office and seeing seeing how it's it's a daily
• 56:45
  Speaker 1: seven opportunity, thinking about you know, the practice and the
• 56:48
  Speaker 1: building and the employees that you've got working for you,
• 56:51
  Speaker 1: but also seeing the benefits that come from working really hard.
• 56:54
  Speaker 1: And so he you know, we we we working and
• 56:58
  Speaker 1: work was always important in stress to our in our
• 57:00
  Speaker 1: in our home, and and being thoughtful and being really
• 57:04
  Speaker 1: good to to the people that worked for you was
• 57:06
  Speaker 1: also a really important character uh uh. Character building that
• 57:10
  Speaker 1: that I saw through my dad every day. UM My
• 57:13
  Speaker 1: uncle Eugene Flood is a was was was working on
• 57:17
  Speaker 1: Wall Street. Kind of opened my eyes. I worked for
• 57:19
  Speaker 1: several years after college at Morgan Stanley. UM huge mentor
• 57:24
  Speaker 1: to bring me, take a little southern boy from Louisiana
• 57:28
  Speaker 1: and expose them to sort of the the machinations of
• 57:31
  Speaker 1: Wall Street. Was really a big eye opener and career
• 57:34
  Speaker 1: changer for me. So let's talk about venture investors who
• 57:37
  Speaker 1: affected the way you approach um deploying capital as a
• 57:42
  Speaker 1: as a venture capitalist. So this is gonna sound a
• 57:44
  Speaker 1: little contrarian, but um, the again, having worked at the
• 57:48
  Speaker 1: Washington Post company under Don Graham and the Graham family,
• 57:52
  Speaker 1: who were heavily influenced by Buffett. You know, it was
• 57:55
  Speaker 1: a board member and a shareholder for a very long time. Yeah,
• 57:58
  Speaker 1: and and but the essence of that for gilosophy is
• 58:00
  Speaker 1: kind of invest in what you know and and and don't.
• 58:04
  Speaker 1: Don't don't try to to to force fit an idea
• 58:10
  Speaker 1: or a company in a certain in a certain milieu
• 58:13
  Speaker 1: where where it's gonna it's gonna it's gonna go where
• 58:16
  Speaker 1: the company needs to go. And and and and I
• 58:18
  Speaker 1: really appreciate particularly the notion that that you know, if
• 58:23
  Speaker 1: if if you don't understand it, you can't invest in it.
• 58:26
  Speaker 1: And so you've got to be smart about figuring out,
• 58:29
  Speaker 1: like what what makes sense? How do you follow the
• 58:31
  Speaker 1: money from the customer's wallet to the cash register? And
• 58:34
  Speaker 1: if it takes too many hops and starts to get
• 58:36
  Speaker 1: a little blood blurry, then that's it's hard for me
• 58:39
  Speaker 1: to want to back that type of company. Everybody's favorite question.
• 58:43
  Speaker 1: Tell us about some of your favorite books, be the fiction, nonfiction,
• 58:47
  Speaker 1: venture investing, or otherwise. So the book that I really
• 58:52
  Speaker 1: like and have gone back to, it's a little tiny,
• 58:54
  Speaker 1: thin book, but it's called The Inner Game of Tennis,
• 58:57
  Speaker 1: and it's by a guy by by the name of
• 58:59
  Speaker 1: Timothy Galway and basically talks about how do you how
• 59:02
  Speaker 1: do you maintain high levels of performance while still being
• 59:07
  Speaker 1: relaxed and and sort of allow your your inner game
• 59:10
  Speaker 1: the game that you know, not the game that you
• 59:14
  Speaker 1: necessarily practice for, but what happens when you're on the
• 59:16
  Speaker 1: court playing how do you how do you perfect that
• 59:19
  Speaker 1: game as opposed to the very mechanical of throw the
• 59:22
  Speaker 1: ball up, hit the serve and and make sure the
• 59:24
  Speaker 1: ball goes in to like you're playing against an opponent,
• 59:28
  Speaker 1: how do you make that? How do you allow yourself
• 59:30
  Speaker 1: to relax and and practice that? And it's it's so
• 59:34
  Speaker 1: the implications of the book will beyond the tennis court
• 59:37
  Speaker 1: have been huge for me from from a business perspective one.
• 59:40
  Speaker 1: How do you maintain intensity while still being relaxed and
• 59:43
  Speaker 1: thoughtful about about how you can approach the game from
• 59:46
  Speaker 1: a different angle that that's fascinating. Any of the books
• 59:49
  Speaker 1: you want to mention um I just finished reading recently
• 59:52
  Speaker 1: a book called Disintegration by Eugene Robinson who at the
• 59:56
  Speaker 1: Washington Post. It's a fascinating take for me on on
• 1:00:00
  Speaker 1: the subsegmentation of Black America. Basically, African Americans for for
• 1:00:05
  Speaker 1: so long have been considered by politicians, by by marketers
• 1:00:10
  Speaker 1: to be relatively monolithic but uniform block. They're all going
• 1:00:13
  Speaker 1: to vote this way, they're all going to do, They're
• 1:00:14
  Speaker 1: gonna buy this kind of product. But but in reality,
• 1:00:18
  Speaker 1: Robinson points out that there are four different types of
• 1:00:20
  Speaker 1: real subgroups. The elite, so the Obama's and the Oprah's
• 1:00:24
  Speaker 1: of the world. The middle class, which is the broad
• 1:00:28
  Speaker 1: sort of group of us that are African American and
• 1:00:30
  Speaker 1: college educated and who are who are working and living
• 1:00:33
  Speaker 1: parts of the American dream. But then the two that
• 1:00:36
  Speaker 1: are really interesting to me were the emergent class. So
• 1:00:38
  Speaker 1: this is the group of folks that are are biracial
• 1:00:43
  Speaker 1: or biracial with with African American being part of that
• 1:00:46
  Speaker 1: that that composition, but also the African diasporan immigrants who
• 1:00:50
  Speaker 1: are first, second, third generation immigrants who have a totally
• 1:00:54
  Speaker 1: different view of themselves because some of them aren't necessarily
• 1:00:56
  Speaker 1: African Americans, they might be Nigerian Americans. But but but
• 1:01:00
  Speaker 1: the the notion that that they see the world and
• 1:01:02
  Speaker 1: they they act and and interact with the world differently.
• 1:01:06
  Speaker 1: And then the final group was the what he calls
• 1:01:09
  Speaker 1: the abandoned, which are the folks that just have really
• 1:01:12
  Speaker 1: been left behind and are are the folks that that
• 1:01:14
  Speaker 1: we hear about and read about frequently in the news.
• 1:01:16
  Speaker 1: And it just understanding that that that that black America
• 1:01:20
  Speaker 1: is is really sub segmented into these different groups that
• 1:01:23
  Speaker 1: have you know, obvious similarities but but some pretty stark
• 1:01:27
  Speaker 1: differences was a really fascinating reason. Some of the data
• 1:01:29
  Speaker 1: on that fourth group is really very discouraging in terms
• 1:01:33
  Speaker 1: of employment gains, wage gains. It's just the numbers have
• 1:01:37
  Speaker 1: been pretty, uh, pretty intimidating. I'm going to definitely take
• 1:01:41
  Speaker 1: a look at that book. I have to ask you
• 1:01:43
  Speaker 1: if you play tennis um and and if the book
• 1:01:47
  Speaker 1: was at all helpful, it you know, my results not
• 1:01:51
  Speaker 1: necessarily worthstanding, But to me, yeah, it was absolutely That's
• 1:01:54
  Speaker 1: that's it's it's one of my passions. I you know,
• 1:01:56
  Speaker 1: I try to get out as frequently as I can.
• 1:01:58
  Speaker 1: I just registered for a new flex league, so I'm
• 1:02:01
  Speaker 1: excited to get out on the court and and and
• 1:02:03
  Speaker 1: work out some of the cobwebs. But yeah, the the
• 1:02:06
  Speaker 1: ability to to relax on the court and focus not
• 1:02:12
  Speaker 1: focus on the mechanics of getting in the right position,
• 1:02:15
  Speaker 1: but just play and breathe and and and then control
• 1:02:19
  Speaker 1: that that you can't that you can't that you can control,
• 1:02:22
  Speaker 1: right like, so you can control how many times you
• 1:02:24
  Speaker 1: bounced the ball, and you and and it really teaches
• 1:02:26
  Speaker 1: you to focus on the things that you can control,
• 1:02:28
  Speaker 1: because there's so much that you can't control. So in
• 1:02:30
  Speaker 1: that moment, focus on breathing and focus on where you
• 1:02:33
  Speaker 1: want to hit the ball as opposed to the exact
• 1:02:35
  Speaker 1: mechanics of how you're gonna stand and how you're gonna
• 1:02:37
  Speaker 1: position your racket and your feet to hit the ball.
• 1:02:40
  Speaker 1: So it's a it's a great reads. The book is
• 1:02:42
  Speaker 1: was published in the seventies and has been used. I mean,
• 1:02:45
  Speaker 1: like folks like Billy jing King swear by it, and
• 1:02:48
  Speaker 1: it's The author has now written several other books about like,
• 1:02:51
  Speaker 1: you know, the inner game of golf and the inner
• 1:02:52
  Speaker 1: game of business and things like that. But but for me,
• 1:02:56
  Speaker 1: the application as somebody who loves tennis and loves playing
• 1:02:58
  Speaker 1: tennis into business this into my personal life has been
• 1:03:01
  Speaker 1: a really helpful. Guy. That's fascinating. I am late to
• 1:03:04
  Speaker 1: the game of tennis. I only started playing with in
• 1:03:06
  Speaker 1: the past few years. Um and my one of my
• 1:03:11
  Speaker 1: biggest issues. I do these drills on Monday nights and
• 1:03:15
  Speaker 1: most of the I shouldn't say most, about two thirds
• 1:03:19
  Speaker 1: of the it's men's drills. Two thirds of the guys
• 1:03:23
  Speaker 1: are considerably younger than me. And then there's a group
• 1:03:26
  Speaker 1: of guys in their fifties and sixties, most of whom
• 1:03:29
  Speaker 1: are are either good or very good. And the problem
• 1:03:33
  Speaker 1: with playing with the young studs are that they want
• 1:03:36
  Speaker 1: to crush the ball. It's baseball. And as much as
• 1:03:40
  Speaker 1: I laugh at them, it's like unforecedra unforced era. When
• 1:03:43
  Speaker 1: you're playing with big hitters, you can help. The crowd
• 1:03:47
  Speaker 1: sucks you along and suddenly I'm trying to smash the
• 1:03:50
  Speaker 1: ball and it's a constant effort. I love that idea
• 1:03:54
  Speaker 1: of relaxed intensity, don't try and kill the ball, play
• 1:03:58
  Speaker 1: within yourself. And but you you mentioned that, and I
• 1:04:01
  Speaker 1: immediately went to that, I'm going to crush this ball
• 1:04:04
  Speaker 1: Roger Federer style. But you're not retro Federer. You don't
• 1:04:08
  Speaker 1: have that swing. Just get get the ball across the
• 1:04:10
  Speaker 1: net the place that you wanted to go. If you
• 1:04:12
  Speaker 1: can hit the ball where you want it to go,
• 1:04:14
  Speaker 1: you will nine times out of ten win the point. Right,
• 1:04:17
  Speaker 1: And if you if you can focus on just that,
• 1:04:19
  Speaker 1: hitting the ball where you want it to go. Well,
• 1:04:21
  Speaker 1: before I learned the proper mechanics, I could literally put
• 1:04:24
  Speaker 1: the ball anywhere on the court, not with power and
• 1:04:27
  Speaker 1: not with speed, but I I could kiss any line
• 1:04:30
  Speaker 1: I wanted to. Once I learned the proper way to
• 1:04:33
  Speaker 1: stroke a ball, that skill set took a step back
• 1:04:37
  Speaker 1: as you start learning the mechanics and becoming more comfortable
• 1:04:41
  Speaker 1: with it. But um, it's like Mike Tyson says, though
• 1:04:44
  Speaker 1: all of that preparation goes out when you get hit
• 1:04:46
  Speaker 1: in the fits exactly That's exactly right. And and that
• 1:04:49
  Speaker 1: testosterone poisoning, that competitive spirit. These are drills. It doesn't
• 1:04:54
  Speaker 1: there's no winning and losing. Who cares? You get sucked
• 1:04:57
  Speaker 1: right into it. It's the most amazing it of of
• 1:05:00
  Speaker 1: crowd psychology. Yeah, it's I'm gonna look into that book
• 1:05:04
  Speaker 1: because it's definitely uh appealing. And and and once again
• 1:05:07
  Speaker 1: we digress about tennis instead of talking about what we
• 1:05:10
  Speaker 1: should be talking about. Um, so let's talk about the
• 1:05:14
  Speaker 1: venture capital industry. What's changed since you've joined the industry,
• 1:05:18
  Speaker 1: and is this for the better or the worst? Yeah,
• 1:05:21
  Speaker 1: I'd say the biggest thing has just been the the
• 1:05:24
  Speaker 1: influx of data into the industry. You know. It's it's
• 1:05:27
  Speaker 1: funny we we require and and suggest and advise our
• 1:05:31
  Speaker 1: companies to leverage data and your decision making. And I
• 1:05:34
  Speaker 1: think for the for the first time now we've got
• 1:05:37
  Speaker 1: huge sets of big data that help us understand and
• 1:05:40
  Speaker 1: rank and and and target entrepreneurs. And so it's it's
• 1:05:44
  Speaker 1: important for us to to leverage this data because it
• 1:05:47
  Speaker 1: helps us. It helps us make better decisions and helps
• 1:05:50
  Speaker 1: us be more algorithmic about our decision making. But it
• 1:05:52
  Speaker 1: also really helps us recognize that we can bring in
• 1:05:56
  Speaker 1: more entrepreneurs of color and women entrepreneurs into the fold
• 1:05:59
  Speaker 1: because we're not necessarily relying on just network pattern matching
• 1:06:03
  Speaker 1: from from guys who went to Harvard or guys who
• 1:06:05
  Speaker 1: went to Stanford who all look alike. And so it's
• 1:06:07
  Speaker 1: it's I'm happy that that that's the case because it's
• 1:06:10
  Speaker 1: making the table bigger and adding allowing us to add
• 1:06:12
  Speaker 1: more seats to the table of of entrepreneurs and broaden
• 1:06:15
  Speaker 1: that scope of entrepreneurs. Particularly for as we were talking
• 1:06:18
  Speaker 1: about earlier some of the people who who have been
• 1:06:21
  Speaker 1: left behind. Even further so, when we look at um
• 1:06:26
  Speaker 1: the sort of demographics of of who venture investing is
• 1:06:30
  Speaker 1: giving money to. Specifically, do you think Revolution is more diverse,
• 1:06:35
  Speaker 1: more gender friendly, more people of color friendly than the
• 1:06:39
  Speaker 1: typical let's call it Stanford based or Stanford located vcs.
• 1:06:45
  Speaker 1: I don't know what what other other vcs UH entrepreneurs
• 1:06:50
  Speaker 1: look like. I'm very proud. Data is not broadly shared,
• 1:06:53
  Speaker 1: to say the least, but I'm very proud that that
• 1:06:55
  Speaker 1: we we've got quite a few entrepreneurs of color, women
• 1:06:58
  Speaker 1: entrepreneurs um in in our portfolio, and and they've performed
• 1:07:03
  Speaker 1: thus far really well. We we One of our exits
• 1:07:05
  Speaker 1: was by an African American female entrepreneur who had this
• 1:07:09
  Speaker 1: business part Pick that was sold to Amazon and part
• 1:07:12
  Speaker 1: part Pick. It's it's it's like Shazam for visual search.
• 1:07:17
  Speaker 1: So take a picture of something and it will run
• 1:07:19
  Speaker 1: its algorithm and say this is most likely a screw
• 1:07:22
  Speaker 1: and you can you know, and and Amazon acquired the
• 1:07:24
  Speaker 1: business a couple of years ago, and you know, and
• 1:07:27
  Speaker 1: so when I use the Amazon app and say I
• 1:07:30
  Speaker 1: want to see this, well, you can take a photo
• 1:07:32
  Speaker 1: of something. There are parts of the Amazon app. I
• 1:07:34
  Speaker 1: don't know exactly how how it's been filtered into the
• 1:07:37
  Speaker 1: Amazon application and basically algorithm, but yeah, that basic concept
• 1:07:41
  Speaker 1: is part of that part of that part of the
• 1:07:43
  Speaker 1: Amazon DNA now and you know, and I'm just very
• 1:07:48
  Speaker 1: proud of that. I'm very proud that we you know,
• 1:07:50
  Speaker 1: we we look at a broader we have a broader
• 1:07:54
  Speaker 1: aperture for for who is an entrepreneur and and and
• 1:07:57
  Speaker 1: what types of investments were willing to make. Tell us
• 1:08:00
  Speaker 1: what else you're really excited about these days? Oh, my
• 1:08:03
  Speaker 1: tea is a little bit earlier, But I'm really excited
• 1:08:05
  Speaker 1: about thinking about the future of retail. You know, we
• 1:08:08
  Speaker 1: every every e commerce is eating the world, yet eighty
• 1:08:10
  Speaker 1: five or some of the things that we buy are
• 1:08:12
  Speaker 1: still things that you buy sort of in person. And
• 1:08:15
  Speaker 1: we were investors and I mentioned this company, Foxtrot, which
• 1:08:18
  Speaker 1: is redoing the convenience store. We're also investors in a
• 1:08:21
  Speaker 1: in a company called Neighborhood Goods. It's a Dallas based
• 1:08:25
  Speaker 1: company that's looking to sort of reinvigorate the department store model.
• 1:08:29
  Speaker 1: You walk into a department store today, you see more
• 1:08:31
  Speaker 1: employees than you do customers walking around. And that's because
• 1:08:34
  Speaker 1: it's it's become so transactional. Uh, you want a white shirt,
• 1:08:38
  Speaker 1: you go to the department store, you buy a white shirt.
• 1:08:40
  Speaker 1: But if you wanted to go and see what's there,
• 1:08:43
  Speaker 1: you don't naturally think to go walk through a department
• 1:08:45
  Speaker 1: store and and sort of browse and be, be and
• 1:08:48
  Speaker 1: and have have an experience. And and what what Neighborhood
• 1:08:52
  Speaker 1: Goods is looking to do is is sort of bring
• 1:08:53
  Speaker 1: back some of that experience. It's almost really a throwback
• 1:08:56
  Speaker 1: to the way that the department stores used to be
• 1:08:58
  Speaker 1: where you'd get you know, you can go and brows
• 1:09:01
  Speaker 1: and look at at something that's seasonally appropriate, but also
• 1:09:04
  Speaker 1: have a bite to eat at the lunch counter, and
• 1:09:07
  Speaker 1: you know, you have a broader array of things to buy.
• 1:09:11
  Speaker 1: And and so these guys are curating lots of digitally
• 1:09:14
  Speaker 1: native brands that are looking for retail points of presence
• 1:09:17
  Speaker 1: because it's become obvious with businesses like Warby Parker, like
• 1:09:21
  Speaker 1: having stores actually matters because people want to touch and
• 1:09:25
  Speaker 1: feel and experience your product. But then there are other
• 1:09:28
  Speaker 1: larger and more mainstream brands that are looking for new
• 1:09:30
  Speaker 1: ways to activate and and show off their products to
• 1:09:33
  Speaker 1: their their existing consumers as well as new consumers. And
• 1:09:36
  Speaker 1: then you see lots of like um makers, local folks,
• 1:09:40
  Speaker 1: local craftsmen that have cool products that they want to share.
• 1:09:43
  Speaker 1: They don't have a big showcase arena to do that.
• 1:09:46
  Speaker 1: And then obviously wrap that all around with food and
• 1:09:48
  Speaker 1: community music, art, and it's a really cool installation in
• 1:09:53
  Speaker 1: in sort of how how we think, or at least
• 1:09:56
  Speaker 1: the company thinks consumers want to shop in the next
• 1:09:58
  Speaker 1: next generation. Tell us about a time you failed and
• 1:10:01
  Speaker 1: what you learned from the experience. So I was a
• 1:10:05
  Speaker 1: banker and and you know there there there are no
• 1:10:08
  Speaker 1: no limit to the failure stories there. But one particular
• 1:10:12
  Speaker 1: moment where I I I consistently said yeah, I understood
• 1:10:17
  Speaker 1: what I was doing and had no idea what I
• 1:10:20
  Speaker 1: was doing, and I got it wrong. The the end
• 1:10:22
  Speaker 1: result of the analysis was completely wrong. And for that,
• 1:10:26
  Speaker 1: for me, was was a hard failure to take because
• 1:10:28
  Speaker 1: I never wanted to be the guy that got it
• 1:10:31
  Speaker 1: completely wrong. But what it led me to understand and
• 1:10:34
  Speaker 1: recognize is that I'm not going to walk away if
• 1:10:37
  Speaker 1: I don't understand what's going on. Like I asked that,
• 1:10:40
  Speaker 1: don't assume that I asked the dumb questions. You know,
• 1:10:44
  Speaker 1: in a world like like banking, you get caught up
• 1:10:46
  Speaker 1: in the jargon, and folks were dropping all sorts of terms.
• 1:10:48
  Speaker 1: I had no idea what they meant, and instead of asking,
• 1:10:51
  Speaker 1: I just tried to figure it out. And two o'clock
• 1:10:54
  Speaker 1: became four o'clock became six o'clock in the morning, and
• 1:10:56
  Speaker 1: I'm still looking at the blank screen. And it was
• 1:10:59
  Speaker 1: it was an embarrassing, awful failure. But it was the
• 1:11:03
  Speaker 1: last time I ever had that failure. Interesting, Um, what
• 1:11:06
  Speaker 1: do you do for fun? We know you played tennis,
• 1:11:08
  Speaker 1: but outside of that, tell us what you do to
• 1:11:11
  Speaker 1: keep either mentally sharp or fit outside of the office. So, ye,
• 1:11:15
  Speaker 1: tennis is the main thing. I've got two young kids
• 1:11:17
  Speaker 1: and try to spend as much time with those folks,
• 1:11:19
  Speaker 1: and and you know, they're they're they're young boys, and
• 1:11:22
  Speaker 1: all they love to do is run around and and
• 1:11:25
  Speaker 1: so I I get a good work out with with
• 1:11:27
  Speaker 1: those folks. But uh, it's it's it's it's harder these
• 1:11:31
  Speaker 1: days to find that time to to get sharp and
• 1:11:33
  Speaker 1: and I really I struggle with it. It's one of
• 1:11:36
  Speaker 1: the things that I really work on. But but I'm
• 1:11:38
  Speaker 1: recognizing more and more now that I've got to take
• 1:11:41
  Speaker 1: the hour or two hours for myself and either go
• 1:11:43
  Speaker 1: play tennis or go right on the peloton or whatever,
• 1:11:46
  Speaker 1: and and and try to try to sweat it out
• 1:11:48
  Speaker 1: a little bit. If a millennial or recent college grad
• 1:11:52
  Speaker 1: came up to you and said they were interested in
• 1:11:54
  Speaker 1: a career in venture investing, what sort of advice might
• 1:11:57
  Speaker 1: you give them? I would say, start a business, become
• 1:12:01
  Speaker 1: an entrepreneur. I I the I don't think that this
• 1:12:06
  Speaker 1: was given much to my generation of of of college graduates.
• 1:12:10
  Speaker 1: And I think again, as we talked about the cost
• 1:12:11
  Speaker 1: of starting a business or nothing, and the opportunity cost
• 1:12:14
  Speaker 1: of doing it when you're twenty two, you know, if
• 1:12:17
  Speaker 1: you fail, you dust yourself off and onto the next
• 1:12:20
  Speaker 1: go on to you know, go get a regular job there.
• 1:12:22
  Speaker 1: But but you have so few opportunities to start a
• 1:12:24
  Speaker 1: business and live off of Ramen noodles for for a
• 1:12:28
  Speaker 1: year with your three three best mates in in a
• 1:12:31
  Speaker 1: in a in a tiny either coworking co living facility
• 1:12:36
  Speaker 1: or or small cheap apartment. Starting a business, all you
• 1:12:39
  Speaker 1: need is good WiFi. Like you said, good WiFi, and
• 1:12:42
  Speaker 1: and and and Amazon Web Services account you've got a
• 1:12:44
  Speaker 1: business going, so I think that they should start businesses.
• 1:12:47
  Speaker 1: That's the best way to learn this job by being
• 1:12:50
  Speaker 1: an entrepreneur. And and my final question, what is it
• 1:12:54
  Speaker 1: that you know about venture capital investing today that you
• 1:12:57
  Speaker 1: wish you knew fifteen years ago or so when you
• 1:12:59
  Speaker 1: again started. I wish I appreciated more how much this
• 1:13:03
  Speaker 1: was an apprenticeship business, right, how much you've got to
• 1:13:06
  Speaker 1: learn from people, And you've got to You've got to
• 1:13:08
  Speaker 1: sit there and and sort of really it's it's hard
• 1:13:12
  Speaker 1: to do this unless you've been an entrepreneur and have
• 1:13:15
  Speaker 1: lots of domain expertise. But by going through the typical channels,
• 1:13:20
  Speaker 1: you've got to learn from somebody else. You can't read
• 1:13:22
  Speaker 1: books about this, you can't watch Shark Tank and and
• 1:13:26
  Speaker 1: come away as as a VC. You've got to learn
• 1:13:28
  Speaker 1: from other people. And then by asking questions, you know, so,
• 1:13:32
  Speaker 1: so was that a good or a bad company? And
• 1:13:34
  Speaker 1: having those questions asked to you and developed that that
• 1:13:37
  Speaker 1: gut and that that that that insight and intuition around
• 1:13:41
  Speaker 1: around what makes a good founder and what what's what's
• 1:13:44
  Speaker 1: the right business opportunity? A lot of that's got to
• 1:13:47
  Speaker 1: be shown. You've got to be shown the way or
• 1:13:48
  Speaker 1: shown a handful of examples on how to do it,
• 1:13:51
  Speaker 1: because every VC is a little different. But I think
• 1:13:53
  Speaker 1: that that most of us, as you talked about, from
• 1:13:55
  Speaker 1: sort of business mentors. We learned how we approached these
• 1:13:58
  Speaker 1: from from other people, from books or or from classes.
• 1:14:02
  Speaker 1: Quite fascinating. We have been speaking with David Hall. He
• 1:14:06
  Speaker 1: is a partner at the Rise of the Rest seed Fund,
• 1:14:09
  Speaker 1: part of Revolution UH Partners. If you enjoy this conversation,
• 1:14:14
  Speaker 1: well be sure and look up an Inch or down
• 1:14:16
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• 1:14:20
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• 1:14:23
  Speaker 1: any of our other two hundred or so UH previous conversations.
• 1:14:28
  Speaker 1: We love your comments, feedback and suggestions right to us
• 1:14:32
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• 1:14:37
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• 1:14:40
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• 1:14:45
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• 1:14:50
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• 1:14:54
  Speaker 1: Michael bat Nick is our head of research. I'm Barry Rehults.
• 1:14:58
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• 1:15:02
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