WEBVTT - Sarah Cone Discusses Disrupting Venture Capital 0:00:02.240 --> 0:00:06.840 This is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:00:07.720 --> 0:00:10.920 This week on the podcast, I have an extra special guest. 0:00:10.960 --> 0:00:13.640 Her name is Sarah Cone. She is the founder and 0:00:13.680 --> 0:00:19.320 managing partner of Social Impact Capital, a venture capital investing 0:00:19.880 --> 0:00:24.640 with a really interesting slant, a tremendous track record which 0:00:24.680 --> 0:00:28.240 we're not allowed to discuss publicly, and a list of 0:00:28.560 --> 0:00:32.800 a list limited partners which I'm also sworn to secrecy on. 0:00:33.000 --> 0:00:35.320 But you can trust me when I say, Wow, these 0:00:35.360 --> 0:00:39.760 are some really bold faced names. UM certainly ones that 0:00:39.880 --> 0:00:45.960 anybody who tracks investing, politics, venture capital, technology would would 0:00:46.000 --> 0:00:51.080 surely recognize. Uh. Sarah has really a fascinating work history 0:00:51.520 --> 0:00:56.600 and a fascinating approach to disrupting UM the vent world 0:00:56.640 --> 0:00:59.920 of venture capital. Her approaches really to look for company 0:01:00.120 --> 0:01:02.800 is that not only are making a difference in the world, 0:01:02.880 --> 0:01:09.080 but can produce a strong internal rate of return. Her 0:01:09.160 --> 0:01:11.520 philosophy as, if you really want to impact the world, 0:01:11.560 --> 0:01:16.120 will build a billion dollar company and see how that 0:01:16.200 --> 0:01:20.760 changes how everybody lives, operates and behaves in the real world. 0:01:20.800 --> 0:01:25.440 It's really um quite fascinating. She's really charming and delightful 0:01:25.520 --> 0:01:30.440 and and really really intelligent. UM with just the world's 0:01:30.480 --> 0:01:35.080 craziest rolodex and some really interesting stories. So I think 0:01:35.080 --> 0:01:38.000 you'll find this really intriguing. I had a great time 0:01:38.000 --> 0:01:41.800 speaking with her. With no further ado, my conversation with 0:01:41.880 --> 0:01:48.640 Social Impact Capitals Sarah Cone. This is Masters in Business 0:01:48.840 --> 0:01:53.040 with very Ridholts on Bloomberg Radio. My special guest today 0:01:53.120 --> 0:01:56.920 is Sarah Cone. She is the founder of Social Impact Capital. 0:01:57.440 --> 0:02:01.120 She began her career at the VC group Omdior Network. 0:02:01.840 --> 0:02:05.200 Pierre Omdier was the founder of eBay. She was an 0:02:05.240 --> 0:02:10.200 associate at Illuminate Ventures, where she worked on B two 0:02:10.200 --> 0:02:14.440 B Software as a Service UH in Silicon Valley Venture 0:02:14.480 --> 0:02:18.600 Capital UH. In addition, she worked at the nonprofit Public 0:02:18.680 --> 0:02:25.120 Knowledge UH Group UH Tech Policy Public Policy Group. Sarah Cone, 0:02:25.480 --> 0:02:29.120 Welcome to Bloomberg. Thank you for having me. I mangled 0:02:29.360 --> 0:02:35.440 your background, but really, to state it more conversationally, you've 0:02:35.480 --> 0:02:38.320 worked at a number of the big giant tech firms 0:02:38.400 --> 0:02:42.000 right and in the early days of your career, Google 0:02:42.240 --> 0:02:47.880 and others. You've been moving in venture capital circles for 0:02:47.919 --> 0:02:53.799 a long time, and your VC social impact focuses on 0:02:54.000 --> 0:02:57.799 more than just technology. Tell us a little bit about 0:02:57.840 --> 0:03:02.600 what social impact capital does. So we are a venture 0:03:02.639 --> 0:03:05.880 capital firm, UM, but we go in as early as 0:03:05.960 --> 0:03:09.720 possible into what we call the best ideas and impact 0:03:10.120 --> 0:03:12.480 which we are we think are the company is most 0:03:12.520 --> 0:03:16.120 likely to have, you know, both make venture capital profits 0:03:16.200 --> 0:03:19.600 but also have an incredible, you know, world changing positive 0:03:19.600 --> 0:03:22.520 effect on the world. So it's both. It's not just 0:03:22.960 --> 0:03:28.000 socially responsible or impact investing for its own sake. You 0:03:28.080 --> 0:03:31.400 have limited partners and they're expecting a serious return on 0:03:31.480 --> 0:03:36.160 investment exactly. Um. I think what's pretty hilarious about my 0:03:36.280 --> 0:03:38.920 firm is that, in fact, um my LPs are sort 0:03:38.960 --> 0:03:42.360 of this who's who of capitalism and they I don't 0:03:42.360 --> 0:03:45.480 really have a single impact investor in the firm um 0:03:45.520 --> 0:03:50.120 at the moment. And they actually even have two LPs 0:03:50.200 --> 0:03:52.880 that are on the record stating how stupid they think 0:03:53.000 --> 0:03:56.120 impact investing is. So why do they give you money 0:03:56.160 --> 0:03:58.680 if they think what you do is stupid? Or are 0:03:58.720 --> 0:04:03.320 they looking past the impact side towards Well? I asked 0:04:03.360 --> 0:04:04.880 one of them one time, and I was like, why 0:04:04.880 --> 0:04:08.080 are you in this firm anyway? And he's he applied 0:04:08.120 --> 0:04:13.360 to me the performance, that's that's the interest, And well, 0:04:13.480 --> 0:04:17.239 I I know you were bound by non disclosure rules. 0:04:17.279 --> 0:04:19.600 You can't say who these people are, but I know 0:04:19.680 --> 0:04:22.200 who some of them are, and they are front page 0:04:22.720 --> 0:04:25.920 name brand investors. Is that a fair statement they are? 0:04:27.279 --> 0:04:29.640 Does that impact how you look at the world or 0:04:29.720 --> 0:04:31.200 is it it would be the same if it was 0:04:31.279 --> 0:04:36.640 just a big, faceless institution. Um, well, I have. It's 0:04:36.640 --> 0:04:38.960 sort of an internal joke at our firm because I 0:04:39.040 --> 0:04:43.000 refer to them as widows and orphans. Um. It's it's 0:04:43.040 --> 0:04:45.159 sort of a joke because of course they're you know, 0:04:45.279 --> 0:04:47.919 all sort of billionaires that are able to take on 0:04:48.040 --> 0:04:51.839 early risk in a young venture capital firm. Um. But 0:04:51.920 --> 0:04:54.800 it's aspirational because we aim, you know, to become a 0:04:54.839 --> 0:04:57.200 top tier firm that produces such great returns that I 0:04:57.279 --> 0:05:00.599 am allowed to manage the money of widows. So so so 0:05:00.880 --> 0:05:04.000 let's talk a little bit about that, because I think 0:05:04.040 --> 0:05:08.200 that's kind of interesting. There are friends and family rounds 0:05:08.279 --> 0:05:11.039 when somebody first gets an idea, and then there's the 0:05:11.680 --> 0:05:14.680 angel round and eventually you moved to big firms, A 0:05:14.839 --> 0:05:18.000 round to be around the sea round? Where is social 0:05:18.040 --> 0:05:22.919 impact in that spectrum of early to late venture investments. 0:05:23.640 --> 0:05:27.120 We are the earliest possible. Um, we like to go in. 0:05:27.240 --> 0:05:29.800 We'll do anything in the seed stage. So we'll do 0:05:30.080 --> 0:05:32.480 you know, pre see the seed stage has become even 0:05:32.480 --> 0:05:35.640 more segmented UM. So we'll do but we'll do anything 0:05:35.680 --> 0:05:37.799 in the seed stage. We'll do preseed, we'll do seed, 0:05:37.800 --> 0:05:41.000 we'll do seed extensions, UM sort of anything in the 0:05:41.000 --> 0:05:44.599 early days. And then what we do is what we 0:05:44.640 --> 0:05:48.560 specialize is is in creating these social impact companies, getting 0:05:48.600 --> 0:05:51.720 them into the place where they're real businesses, and then 0:05:51.760 --> 0:05:55.080 getting them led by top tier venture capital firms in 0:05:55.120 --> 0:05:57.680 the Series A and so far at the firm, we 0:05:57.720 --> 0:06:01.279 have an eight rate of doing that, meaning that you 0:06:01.360 --> 0:06:04.960 do a set of investment but eventually not bring in 0:06:05.000 --> 0:06:09.760 additional exactly the downstream money is, you know, from top 0:06:09.760 --> 0:06:13.520 tier firms. I love it because I get my you know, 0:06:13.600 --> 0:06:18.080 and the founders get their philanthropic business plots then funded 0:06:18.080 --> 0:06:22.120 by commercial capital because they are good businesses, and so 0:06:22.360 --> 0:06:24.880 they're able to do that. And now, how can you 0:06:24.920 --> 0:06:29.159 tell if you're so early stage, they really it's a 0:06:29.200 --> 0:06:33.080 business plan. It's a couple of founders, but typically there 0:06:33.120 --> 0:06:36.680 isn't a product, there's barely a website. Is it more 0:06:36.760 --> 0:06:40.720 idea than actual business? It definitely is. We're going in 0:06:41.160 --> 0:06:44.920 UM extremely early, and so I'm making these, you know, 0:06:45.000 --> 0:06:48.920 pretty risky bets, and um what, we spend a lot 0:06:48.960 --> 0:06:50.720 of time and diligence, We spend a lot of time 0:06:50.760 --> 0:06:53.039 with the founders, and we just do our best. But 0:06:53.200 --> 0:06:56.960 as in any venture capital portfolio, you expect a you know, 0:06:57.040 --> 0:06:59.000 a number of those to fail and then a number 0:06:59.000 --> 0:07:02.240 of them to succeed wildly and compensate for those failures. 0:07:02.000 --> 0:07:06.120 So let's talk about that distribution. Typically with a venture 0:07:06.160 --> 0:07:09.920 firm that are making let's call it a rounds, so 0:07:09.960 --> 0:07:13.000 they're a little more developed. There's it's not a finished product, 0:07:13.000 --> 0:07:15.720 but at least there's a product, some software, websites, something 0:07:15.720 --> 0:07:19.520 you can look at. Um with those sort of a rounds, 0:07:21.160 --> 0:07:28.560 typically ten or total bus another maybe they break even, 0:07:28.560 --> 0:07:32.320 t makes some money and it's a really small slice 0:07:32.360 --> 0:07:35.440 that really hits the bowl out of the park. What's 0:07:35.480 --> 0:07:38.400 it like when you're doing earlier seed stage? I would 0:07:38.440 --> 0:07:42.760 imagine the failure rate is much higher. Well at our firm, 0:07:42.920 --> 0:07:45.760 I mean, the funny thing about the venture capital industry 0:07:45.880 --> 0:07:48.640 is that you tend to there's not data published on 0:07:48.720 --> 0:07:51.400 it that is very reliable, so you tend to only 0:07:51.440 --> 0:07:53.800 know what's going on in your firm, and then sort 0:07:53.840 --> 0:07:57.120 of what you read in the media. So I've read 0:07:57.480 --> 0:08:01.440 um from on CB Insights that the failure rate for 0:08:01.680 --> 0:08:05.400 seed stage investing is that only of the follow on 0:08:05.560 --> 0:08:09.360 rounds get funding at all from seed stage deals. In 0:08:09.360 --> 0:08:11.720 our firm, we actually have a hundred percent hit rate 0:08:11.840 --> 0:08:15.320 right now. Um, but you know, it's venture capital, so 0:08:15.360 --> 0:08:18.559 you don't really know anything until seven years, ten years 0:08:18.600 --> 0:08:25.720 down the line back cycles. There's a huge lag It's 0:08:26.000 --> 0:08:29.480 It's pretty excellent though, because what it creates is this 0:08:29.680 --> 0:08:32.840 sort of uncompetite. I always describe venture capital is the 0:08:32.880 --> 0:08:39.000 only uncompetitive field in finance. Why is that? It's because 0:08:39.160 --> 0:08:42.640 they're basically no good venture capitalists in the world. So 0:08:43.000 --> 0:08:45.360 when you so by the time you learn and you 0:08:45.400 --> 0:08:48.000 actually really get the knowledge, which can you know, is 0:08:48.040 --> 0:08:50.920 seven to ten years down the line, it's this incredibly 0:08:51.000 --> 0:08:53.400 long lag time. So by the time you learn the 0:08:53.480 --> 0:08:56.600 lessons from that, all the technology has changed, all of 0:08:56.640 --> 0:08:59.600 the business models have changed, and the entire world has changed. 0:09:00.040 --> 0:09:02.800 So if you actually take those lessons and adopt them, 0:09:02.840 --> 0:09:06.320 which many venture capitalists do, then you're investing wrong in 0:09:06.360 --> 0:09:08.800 your next fund, and you see that play out over 0:09:08.880 --> 0:09:12.000 and over again. So I think that the only really 0:09:12.040 --> 0:09:16.160 good venture capitalists are the sort of intense real time 0:09:16.440 --> 0:09:19.520 learner venture capitalists. So it's sort of like looking at 0:09:19.559 --> 0:09:21.640 the light from a star. By the time the light 0:09:21.800 --> 0:09:23.640 gets to us that hey, that star could be gone 0:09:23.640 --> 0:09:26.000 from me exactly. That's the perfect way to describe it. 0:09:26.240 --> 0:09:30.080 Quite fascinating. Let's talk a little bit about um launching 0:09:30.080 --> 0:09:32.080 your own firm. You're here in New York, but you 0:09:32.200 --> 0:09:35.560 used to be out in Silicon Valley. What made you say, A, 0:09:36.000 --> 0:09:39.440 I wanna kick off my own shop and be let's 0:09:39.520 --> 0:09:41.840 leave all those people behind on the West Coast and 0:09:41.880 --> 0:09:45.840 come to New York City. Well, I started my own 0:09:45.960 --> 0:09:50.800 fund because I see this incredible arbitrage opportunity and earliest 0:09:50.800 --> 0:09:54.319 stage impact investing that I was not able to kind 0:09:54.320 --> 0:09:56.840 of concentrate on that thesis anywhere else in the world. 0:09:57.000 --> 0:10:00.120 So is it too niche, too small? Why couldn't you 0:10:00.160 --> 0:10:03.120 can't strain on that elsewhere? Well, what's wonderful is I 0:10:03.120 --> 0:10:05.640 always describe it as the you know, it's almost like 0:10:05.640 --> 0:10:09.240 an invisibility cloak because primarily no one in the world 0:10:09.440 --> 0:10:13.960 believes that impact investing can actually produce top tier returns. 0:10:14.440 --> 0:10:17.760 I keep hearing, By the way, it's political it's so yeah. 0:10:17.800 --> 0:10:22.400 I mean, I hear self indulgent luxury junk. I just 0:10:22.480 --> 0:10:25.760 completely I constantly hear this, and I constantly I'm like, 0:10:26.000 --> 0:10:29.000 vcs are like kind of always saying to me, like, Sarah, 0:10:29.080 --> 0:10:31.760 you're a great investor, you can just drop the social 0:10:31.800 --> 0:10:35.640 impact branding. Now I'm like, guys, this is what's producing 0:10:35.640 --> 0:10:37.920 their return. But I really I used to kind of 0:10:37.920 --> 0:10:42.000 annoy me, but I realized that this is actually my 0:10:42.080 --> 0:10:45.280 competitive advantage because it means that there's a ton of 0:10:45.280 --> 0:10:47.679 open ice here because no one else is, you know, 0:10:47.760 --> 0:10:51.240 coming into this field. So you know, when I'm getting 0:10:51.360 --> 0:10:54.439 better valuations than anyone else in the VC industry, when 0:10:54.440 --> 0:10:56.760 I'm getting into better companies than anyone else in the 0:10:56.800 --> 0:11:00.560 VC industry, then they're sort of baffled. They still don't 0:11:00.640 --> 0:11:03.720 understand it. Um, So this is it's a it's a 0:11:03.840 --> 0:11:08.960 fantastic competitive advantage. Bafflement is a great It really is. 0:11:09.520 --> 0:11:12.360 You know, I'm kind of intrigued by the concept of 0:11:12.440 --> 0:11:17.440 cumulative advantage, where firms that have done well attract a 0:11:17.520 --> 0:11:23.760 network of better vcs, better, better LPs, better companies. Do 0:11:23.840 --> 0:11:26.319 you see that in the social impact side or has 0:11:26.320 --> 0:11:31.119 it not yet developed that far? Where communal advantages is accruing. 0:11:31.280 --> 0:11:34.480 I think cumulative advantage is UM one of the most 0:11:34.520 --> 0:11:37.439 important things to any pc a firm period and one 0:11:37.480 --> 0:11:40.240 of our advisors for our firm, Ashby Monk, has actually 0:11:40.320 --> 0:11:44.800 written widely about this UM and we how we have 0:11:45.000 --> 0:11:47.120 thought about it at our firm is that we have 0:11:47.160 --> 0:11:50.280 an unusual structure in that it's a solo GP firm, 0:11:50.400 --> 0:11:53.680 but I work with a wide variety of venture partners 0:11:53.720 --> 0:11:58.080 and advisors that all have pretty specific domain expertise and 0:11:58.280 --> 0:12:03.080 specific institutional you know connections. What other venture firms are 0:12:03.120 --> 0:12:06.520 you working with is part of your broader network? Oh, 0:12:06.600 --> 0:12:08.520 I mean all venture It's a part of the industry 0:12:08.600 --> 0:12:11.560 that venture capital firms work with other venture capital firms. 0:12:11.640 --> 0:12:14.480 Every venture capital firm does that. I'm saying, we especially 0:12:14.480 --> 0:12:17.559 for follow up rounds, and we work with a bunch 0:12:17.600 --> 0:12:19.640 of you know kind of at our firm, we work 0:12:19.679 --> 0:12:22.920 with a bunch of academics and you know, um kind 0:12:22.960 --> 0:12:26.080 of people in industry and people out in the world. 0:12:26.679 --> 0:12:30.720 So more than just other other venture funts UM and 0:12:30.760 --> 0:12:34.200 this has been this has been an incredible accumulating advantage 0:12:34.200 --> 0:12:37.040 to us over time. What do you hear from your 0:12:37.080 --> 0:12:40.560 limited partners. Do they stay in close contact? How do 0:12:40.559 --> 0:12:43.400 you communicate with them? How often do you update that 0:12:44.240 --> 0:12:47.559 I have you know a small number of them, um 0:12:47.640 --> 0:12:50.960 that you know I'm in pretty close contact with, and 0:12:51.000 --> 0:12:54.240 then you know most of them I send quarterly updates 0:12:54.320 --> 0:12:58.360 to their people. And how do you source and find 0:12:58.440 --> 0:13:03.120 potential investments? I think that you know, we we basically 0:13:03.160 --> 0:13:06.079 scour the earth. I I, you know, will do anything 0:13:06.120 --> 0:13:08.440 to find an investment, and we look at everything. But 0:13:09.000 --> 0:13:12.160 I think most of our deals come in into primary ways. 0:13:12.440 --> 0:13:17.200 One is through the advisory board and venture partner network 0:13:17.240 --> 0:13:20.559 that I just talked about, And then the other way 0:13:20.720 --> 0:13:23.680 is that we sort of have a reputation as being 0:13:24.000 --> 0:13:28.160 good foundation builders for seed stage companies. So I got 0:13:28.160 --> 0:13:31.400 a ton of deal flow through Series A and later 0:13:31.520 --> 0:13:34.560 vcs that go, Hey, Sarah, I love this company. It's 0:13:34.640 --> 0:13:37.600 too you know early for me. You should take it, 0:13:38.000 --> 0:13:40.559 And I'm like, thanks, I'll invest in this and get 0:13:40.559 --> 0:13:42.680 it into great shape for you and pass it along 0:13:42.760 --> 0:13:45.920 when it's you know, interesting to you. What when you 0:13:45.960 --> 0:13:48.480 say pass along? What sort of resources do you pour 0:13:48.520 --> 0:13:51.480 into besides just writing a check? What else do you 0:13:51.520 --> 0:13:54.480 do to help a startup company get off the ground? 0:13:54.480 --> 0:13:57.600 And move forward. So we have these the venture partner 0:13:57.600 --> 0:14:00.520 and advisory board are this immense resource us for these 0:14:00.559 --> 0:14:04.200 people where we almost always will have the exact advice 0:14:04.280 --> 0:14:06.640 that you need for the exact problem that you have, 0:14:07.080 --> 0:14:09.360 and we sort of match it an ad hawk basis. 0:14:09.400 --> 0:14:12.280 So it's like, are you a biotech company that is 0:14:12.480 --> 0:14:15.120 wondering how to handle the FDA. Well, Linda a Vy 0:14:15.160 --> 0:14:16.920 who was the co founder of twenty three and me 0:14:17.120 --> 0:14:19.560 is on our advisory board, who knows a ton about that. 0:14:19.680 --> 0:14:22.240 So we just connect you for a call um and 0:14:22.280 --> 0:14:25.320 it's a lot better than you know, having some venture partner, 0:14:25.440 --> 0:14:28.640 I mean venture partner at a venture capital firm sort 0:14:28.640 --> 0:14:32.200 of pontificate on areas that they haven't had really really 0:14:32.400 --> 0:14:35.920 intimate familiar experience. So it's the network. What about the 0:14:35.960 --> 0:14:39.360 specific day to day of running and building a new 0:14:39.400 --> 0:14:41.840 from um. You know, we tend to sort of be 0:14:41.960 --> 0:14:45.680 hands off unless we're asked UM because we do a 0:14:45.720 --> 0:14:51.000 lot of upfront work um into our companies, so we 0:14:51.080 --> 0:14:55.600 tend to not sort of have the the the you know, 0:14:56.800 --> 0:14:59.080 we need so much help in this company. You know, 0:14:59.200 --> 0:15:01.560 we tend to only kind of invest in the companies 0:15:01.560 --> 0:15:04.400 that are pretty fully formed and then we're there to 0:15:04.480 --> 0:15:08.640 assist entrepreneurs with the best of class resources when they 0:15:08.680 --> 0:15:11.160 have trouble. UM. But other than that, we try to 0:15:11.200 --> 0:15:14.320 stand out their way of building huge companies and well, 0:15:14.360 --> 0:15:17.000 how how are the deals typically structured, what do they 0:15:17.000 --> 0:15:20.000 look like? What what does the entrepreneur give up and 0:15:20.000 --> 0:15:23.240 what do they get? So, I mean the entrepreneur gives 0:15:23.280 --> 0:15:26.640 up equity UM, and then they give up a controlling 0:15:26.680 --> 0:15:31.320 share something we usually try and target about twenty percent 0:15:31.560 --> 0:15:35.040 each share. UM. It depends a little bit on on 0:15:35.120 --> 0:15:37.520 what the metrics of the business are in the stage 0:15:37.520 --> 0:15:39.760 of the business. But we think that's a pretty you 0:15:39.800 --> 0:15:44.840 know fair We like clean, fair, middle of the road terms, 0:15:44.880 --> 0:15:48.200 and we think that works well. And how do you 0:15:48.280 --> 0:15:52.160 value a company when it's so early stage? That's UM, 0:15:52.720 --> 0:15:55.320 that's the magic UM. I actually have a PhD and 0:15:55.400 --> 0:15:58.440 applied math that sort of helps me do all of 0:15:58.480 --> 0:16:01.960 the evaluation. UM. But it's a it's one of the 0:16:02.000 --> 0:16:05.920 most questions that venture capitalists disagree on most of all 0:16:05.960 --> 0:16:11.200 in the in the profession. So with a more mature company, 0:16:11.920 --> 0:16:16.320 you have products, revenue, maybe even profits, and there's a 0:16:16.360 --> 0:16:20.560 formula to generate some multiple on that. But when it's 0:16:20.560 --> 0:16:24.480 so early stage, it feels so much squishier. How much 0:16:24.520 --> 0:16:26.800 of this is science and how much of this is art? 0:16:27.120 --> 0:16:29.760 I would say it's all art. I mean, the way 0:16:29.800 --> 0:16:31.760 to think about it is it's a discount on a 0:16:31.840 --> 0:16:37.520 future cash flow. But that's an imaginary thing. So it's 0:16:37.560 --> 0:16:41.560 a discount on your imagination. UM. And some venture capitalists 0:16:41.600 --> 0:16:45.760 are able to imagine greater scenarios and some venture capitalists 0:16:45.800 --> 0:16:48.800 have no imagination at all. So, and we haven't really 0:16:48.800 --> 0:16:51.960 talked about returns. We know you do subsequent rounds. What 0:16:52.040 --> 0:16:54.800 have the return has been like for the farm? Are 0:16:54.840 --> 0:16:57.120 you out? By the way, hedge funds I know are 0:16:57.240 --> 0:17:01.760 very much precluded from sharing return information except with their 0:17:01.880 --> 0:17:06.919 accredited UM potential investors. Are do you have similar limitations 0:17:06.920 --> 0:17:10.280 with venture I wish we could talk about our returns, 0:17:10.320 --> 0:17:17.199 but no, UM, it's the SEC frowns upon that. Under understood. 0:17:18.119 --> 0:17:20.800 Let's talk a little bit about some of the work 0:17:20.840 --> 0:17:26.159 you're doing in social impact investing, and in particular I 0:17:26.160 --> 0:17:31.680 want to ask you about defive ventures and build dot org. Um. 0:17:31.840 --> 0:17:34.800 We'll talk a little bit about about each of those. First, 0:17:35.160 --> 0:17:39.640 what was the motivation to start along a social impact 0:17:39.760 --> 0:17:46.720 access as opposed to merely doing early seed stage venture investment. Well, 0:17:46.760 --> 0:17:50.040 I love investing. I mean it's been my primary hobby 0:17:50.080 --> 0:17:53.119 in the world since I was eight. Um, but what 0:17:53.119 --> 0:17:55.719 were you investing in at eight? Well, you know public 0:17:55.720 --> 0:18:01.960 equities really, I mean yes, through through adults. But um so, 0:18:02.280 --> 0:18:06.200 I you know, back then, the stocks were in the newspaper. 0:18:06.320 --> 0:18:08.359 So I would come home from school every day and 0:18:08.840 --> 0:18:10.720 the first thing I do is get the newspaper and 0:18:10.760 --> 0:18:14.600 look at my stocks. Real um yes, but I never 0:18:14.960 --> 0:18:19.320 considered that I could go into finance as a career. Um. 0:18:19.400 --> 0:18:21.600 I didn't know any women in finance. It never even 0:18:21.600 --> 0:18:24.159 passed my mind. My what I wanted to do was, 0:18:24.280 --> 0:18:26.760 you know, to do something positive for the world, to 0:18:26.840 --> 0:18:32.120 go into public service. Um So it was quite a um, 0:18:32.160 --> 0:18:34.040 you know, great day in my life when I realized 0:18:34.080 --> 0:18:36.679 that I could actually combine those two things. And we 0:18:36.800 --> 0:18:40.640 talked about this briefly that it's neither impact first nor 0:18:40.920 --> 0:18:44.520 r o I first. It's you make the investment in 0:18:44.600 --> 0:18:47.000 a space that you might have been attracted to because 0:18:47.040 --> 0:18:51.040 of its impact component, But the investment in itself is 0:18:51.080 --> 0:18:55.040 strictly on the same metrics as any other venture investment exactly. 0:18:55.080 --> 0:18:58.240 I mean, my philosophy here is that you don't change 0:18:58.280 --> 0:19:00.879 the world by playing small games. You change the world 0:19:00.880 --> 0:19:04.000 by making billion dollar companies. And I want to encourage 0:19:04.160 --> 0:19:06.600 the sort of world change or do good our types 0:19:06.720 --> 0:19:10.520 like me to think bigger and to think more, you know, 0:19:10.640 --> 0:19:14.520 about building these huge companies that can do good. So 0:19:14.680 --> 0:19:16.760 I was going to ask you a question, but I 0:19:16.840 --> 0:19:20.800 kind of think you answered already. Typically venture investments are 0:19:20.800 --> 0:19:23.200 looking for an exit, either by going I P O 0:19:23.480 --> 0:19:28.480 or an acquisition. No different with impact investing, is that right? 0:19:28.760 --> 0:19:32.440 No different um in venture capital exits or everything. They 0:19:32.440 --> 0:19:35.240 are the returns to our LPs, so they really matter. 0:19:35.760 --> 0:19:39.119 So let's talk about those two firms. I mentioned that 0:19:39.200 --> 0:19:44.240 your adventure advisor to what is build dot org. Those 0:19:44.280 --> 0:19:47.680 are volunting. Those are actually volunteer um jobs that I 0:19:47.800 --> 0:19:52.520 do um. Build dot org teaches entrepreneurial skills to high 0:19:52.560 --> 0:19:56.680 school students and to five ventures teachers entrepreneurial skills to 0:19:56.880 --> 0:20:01.280 former inmates. So both very talent. I mean, the world 0:20:01.400 --> 0:20:04.760 is full of talented entrepreneurs, and I like to encourage 0:20:04.800 --> 0:20:08.920 all of them. I've read that venture investing is very 0:20:09.000 --> 0:20:12.840 much a relationship game. Do you do you think that 0:20:13.080 --> 0:20:18.679 is true? In venture investing as well as philanthropy. I 0:20:18.840 --> 0:20:20.760 definitely think that is true. I mean, I think that 0:20:20.800 --> 0:20:25.560 being human is a relationship game. But in particular with UM, 0:20:25.600 --> 0:20:30.040 you know, venture capital and philanthropy, you're dealing with these 0:20:30.080 --> 0:20:34.520 complex coordination problems, which is why they become social problems 0:20:34.560 --> 0:20:37.399 because they're so hard to solve. So you have to 0:20:37.480 --> 0:20:42.000 build these huge, extensive networks where you can interact with 0:20:42.080 --> 0:20:44.879 you know, the nonprofit sector, with government, with the for 0:20:45.080 --> 0:20:49.119 profit sector. UM. So we always very much concentrate on 0:20:49.240 --> 0:20:53.760 building these broad alliances between different people. And and let 0:20:53.960 --> 0:20:56.680 let me UM reference some of the work you did 0:20:57.440 --> 0:21:00.920 in in academics. You see Barkeley, you want a number 0:21:00.960 --> 0:21:05.440 of awards, the Advocacy Award for Persuasive Writing, the Jurisprunce 0:21:05.520 --> 0:21:08.080 Award for Academic Excellence. But I want to talk about 0:21:08.119 --> 0:21:14.359 your thesis Reforming Federal tax Policy to support Social Entrepreneurs 0:21:14.359 --> 0:21:18.320 that that received UM some honors as well. How does 0:21:18.400 --> 0:21:22.280 one reform federal tax policy and how does tax policy 0:21:22.359 --> 0:21:29.520 support social entrepreneurs? This is a very actually complicated tax 0:21:29.640 --> 0:21:34.800 policy question, UM, and it has to do with you know, 0:21:34.880 --> 0:21:39.200 kind of are you allowed to deploy nonprofit assets into 0:21:39.280 --> 0:21:43.040 impact investing. So if you're a nonprofit organization and you 0:21:43.080 --> 0:21:46.000 have a little spare cash, you are okay, can you 0:21:46.040 --> 0:21:50.320 put that into an social impact investing type of funds? Right, 0:21:50.440 --> 0:21:55.600 so you are allowed to deploy nonprofit money into you know, 0:21:55.680 --> 0:21:59.239 for profit businesses. Um. You know, the idea of it 0:21:59.280 --> 0:22:01.160 being a nonprofit. It is just that you can't ever 0:22:01.200 --> 0:22:03.359 take it out and buy a yacht or something. It 0:22:03.400 --> 0:22:05.159 has to kind of stay in the do good or 0:22:05.400 --> 0:22:08.520 realm as defined by the i r S. Anyway, so 0:22:08.520 --> 0:22:11.240 the i r S needs, you know, issue has issued 0:22:11.320 --> 0:22:16.359 rules around this. They're very unclear, um, and you know 0:22:16.440 --> 0:22:19.000 they kind of they kind of just make everyone nervous 0:22:19.040 --> 0:22:23.760 in this sector. So your thesis helped clarify those rules 0:22:23.840 --> 0:22:27.160 for the broader It suggested how I thought they should 0:22:27.160 --> 0:22:29.320 be clarified, and mainly that I think they do need 0:22:29.359 --> 0:22:32.399 to be clarified because no one is certain how to 0:22:32.440 --> 0:22:34.919 act in this realm and it's depressing. It. It's very 0:22:34.920 --> 0:22:39.960 important because actually the nonprofit sector is incredibly large. It 0:22:40.080 --> 0:22:43.680 is actually, you know, the nonprofit sector is actually six 0:22:43.760 --> 0:22:47.440 times larger than the entire venture capital industry. And it's 0:22:47.480 --> 0:22:49.879 a form of permanent capital as well. It is I 0:22:49.880 --> 0:22:53.200 mean well managed anyway, it should persist for forever. Exactly 0:22:53.280 --> 0:22:54.800 we think of you know, we tend to think of 0:22:54.840 --> 0:22:58.159 anything nonprofit is like, oh, they're these weak, poor, you know, 0:22:58.480 --> 0:23:04.199 cash drapped organization, but they definitely have those. But the 0:23:04.240 --> 0:23:09.240 sector as a whole is an incredibly wealthy sector. UM. 0:23:09.320 --> 0:23:12.480 And so these regulations really matter about how capital is 0:23:12.520 --> 0:23:16.040 deployed into the world. The Gates Foundation, the Go Down 0:23:16.119 --> 0:23:20.720 the List, the Bezos Foundation, the Case Found. These are giant, 0:23:20.840 --> 0:23:28.480 multibillion dollar entities and they're structured to to be UM perpetual. Yes, um, 0:23:28.520 --> 0:23:31.439 they you know, they have a large influence on how 0:23:31.600 --> 0:23:35.480 how capital is getting deployed. And the tax you know, 0:23:35.560 --> 0:23:38.200 the tax regime has a large influence. You know, the 0:23:38.240 --> 0:23:41.880 tax regime basically is controlling how that capital is getting deployed. 0:23:42.200 --> 0:23:48.520 Let's talk about some of the recent social impact type 0:23:48.560 --> 0:23:51.959 deals in the public sphere when when we look at 0:23:52.000 --> 0:23:55.080 something like Beyond Meat, that i p O has been 0:23:55.480 --> 0:24:00.720 wildly successful, far more than most of the other sorts 0:24:01.040 --> 0:24:06.560 of UM i p O s we've seen in generally, UM, 0:24:06.760 --> 0:24:09.000 at least, it's done better than most of the unicorns 0:24:09.000 --> 0:24:11.680 out there, like Uber and we work it certainly has. 0:24:11.800 --> 0:24:14.600 It was actually the best UM event. I rather, it 0:24:14.680 --> 0:24:17.840 was the best venture backed I p O in two decades. Really, 0:24:17.960 --> 0:24:22.919 so would you consider that like a social impact investment? 0:24:23.040 --> 0:24:26.719 I absolutely would. If my fund had existed, then no 0:24:26.800 --> 0:24:29.400 doubt we would be on that deal. Um. So that's 0:24:29.480 --> 0:24:32.080 the you know, that's the type of thing we're doing. Um. 0:24:32.160 --> 0:24:34.919 What else is taking place in the fake foods space? 0:24:35.000 --> 0:24:37.679 For lack of a better really, the I guess the 0:24:37.720 --> 0:24:44.120 better phrases green foods or low impact, low carbon impact foods. Um, 0:24:44.160 --> 0:24:45.760 how do you look at that space? What else is 0:24:45.800 --> 0:24:47.879 coming along there? Oh? We we're seeing a number of 0:24:47.880 --> 0:24:51.080 really exciting companies in that space. Food systems are a 0:24:51.119 --> 0:24:54.040 big problem in the world, and they're quite ripe for disruption, 0:24:54.119 --> 0:24:57.840 as venture capitalists love to say. Um. Some of the 0:24:57.880 --> 0:25:00.680 companies we have in that space are actually Wild Pets, 0:25:00.840 --> 0:25:03.560 which is a dog food company. I know we've talked 0:25:03.600 --> 0:25:05.600 about this company and you dislike it because you feed 0:25:05.640 --> 0:25:08.840 your dog steak every night. No, no, no, you can't 0:25:08.880 --> 0:25:13.359 steak us a little rich. We basically use Purina pro Plan, 0:25:13.640 --> 0:25:16.560 which is a commercially developed and then we put the 0:25:16.600 --> 0:25:21.360 Stella and Chewies toppers, and my dogs are so spoiled 0:25:21.359 --> 0:25:24.959 that despite all that delicious goodness, I'll give them a 0:25:25.000 --> 0:25:29.240 little little scrambled egg or a little something to just 0:25:29.440 --> 0:25:32.920 make it special. Well, I'm going to send you a 0:25:32.960 --> 0:25:36.520 bag of our vegan dog food, which is made from 0:25:36.560 --> 0:25:41.000 a mushroom that's actually higher protein than steak. It was 0:25:41.040 --> 0:25:43.480 developed with a veterinarian. It has all of them, you know, 0:25:43.520 --> 0:25:47.600 acids dogs need, and we have I jokingly call it 0:25:47.600 --> 0:25:51.720 our dogs Save the World thesis because it turns out 0:25:50.600 --> 0:25:54.719 that of the agriculture in the US growing neat just 0:25:54.800 --> 0:25:57.080 goes to feed dogs and cats. So we thought, you know, 0:25:57.119 --> 0:26:00.879 by replacing some of that with you know, this vegan 0:26:00.920 --> 0:26:04.840 alternative that is healthy for dogs, then you know that 0:26:05.000 --> 0:26:08.040 is a is an easier way than to ask people 0:26:08.080 --> 0:26:11.240 to give up their hamburgers and has a bigger impact. 0:26:12.000 --> 0:26:15.399 The other thing about it is that it looks like um, 0:26:15.480 --> 0:26:19.040 a vegan diet actually has longevity um effects on dogs. 0:26:19.040 --> 0:26:21.920 So we're going to be exploring that with some academics 0:26:21.920 --> 0:26:24.080 in the future. One of the dogs that actually lived 0:26:24.160 --> 0:26:27.560 the longest UM was on an all vegan and you 0:26:27.600 --> 0:26:29.120 know the when I think it was in the top 0:26:29.160 --> 0:26:32.199 four for the world's record holder of of you know, 0:26:33.040 --> 0:26:35.440 dogs that live forever. It was an incredibly long time. 0:26:35.480 --> 0:26:36.920 I think it was like a hundred and eighty five 0:26:37.040 --> 0:26:40.000 years and people years was on an all vegan diet. 0:26:40.320 --> 0:26:44.720 What's in? What's it in actual solar years? I don't 0:26:44.720 --> 0:26:47.640 really track the dog world very really well, aside from 0:26:47.640 --> 0:26:49.720 my daughter constantly begging me to get a dog. I 0:26:49.760 --> 0:26:54.800 will try vegan dog food, but from an evolutionary perspective, 0:26:55.400 --> 0:26:58.920 you know, the packs of wolves, they weren't hunting wild mushrooms. 0:26:59.000 --> 0:27:02.239 They were out hunting meat, and there seems to be 0:27:02.320 --> 0:27:06.520 a predilection towards that. Left to their own devices. Although 0:27:07.720 --> 0:27:11.760 dogs will eat grass, and we feed our dogs on 0:27:11.800 --> 0:27:18.919 occasion the stew of yams and spinach and other things 0:27:19.040 --> 0:27:23.159 carrots that are really good for their digestive system. My 0:27:23.359 --> 0:27:27.399 dogs are incredibly spoiled. Just so you know, we have 0:27:27.480 --> 0:27:31.080 a pool for the dogs. I they occasionally let me 0:27:31.160 --> 0:27:34.720 go in, but effectively the pool is there. Well, you 0:27:34.840 --> 0:27:37.480 have to tell me what they think about this dog food, 0:27:37.520 --> 0:27:40.560 because I've heard that the dogs love it. Yeah, we've 0:27:40.640 --> 0:27:42.840 you know, we did tests where we put two dog 0:27:42.880 --> 0:27:44.960 foods next to each other to see which ones the 0:27:45.040 --> 0:27:48.480 dogs would eat. Really wouldn't go to this, So yeah, 0:27:48.760 --> 0:27:50.679 all right, um, and what else? What else is in 0:27:50.720 --> 0:27:55.440 the food system space? We have another company called Endless 0:27:55.480 --> 0:28:00.560 West UM, which can molecularly manufacture foods. I'm scinated by 0:28:00.560 --> 0:28:03.080 that because I saw something not too long ago in 0:28:03.160 --> 0:28:07.720 Business Week where they were describing chicken make nuggets not 0:28:08.280 --> 0:28:14.200 from chicken, but from cells grown in a lab from 0:28:14.200 --> 0:28:16.760 a chicken. Exactly. It's the same space. It's a little 0:28:16.800 --> 0:28:20.360 bit different because that is um, they're not Endless West 0:28:20.400 --> 0:28:23.280 isn't doing proteins. That is what we call the cellular 0:28:23.320 --> 0:28:27.439 agriculture space. When you're growing a protein, that's very difficult, 0:28:27.760 --> 0:28:30.560 and we think that that technology is not really here 0:28:30.640 --> 0:28:33.240 yet in terms of cost, So we haven't gone into 0:28:33.280 --> 0:28:36.359 that space. Eventually, you got to think they Eventually, it 0:28:36.440 --> 0:28:39.120 definitely will happen, you know. I think it's still twenty 0:28:39.320 --> 0:28:42.280 years off before it's going to be you know, get 0:28:42.320 --> 0:28:46.080 down to the level. So you know, it's it's it's 0:28:46.120 --> 0:28:51.200 close on the horizon. Years people will be eating food 0:28:51.360 --> 0:28:55.719 that did not come from an animal other than a culture. Absolutely. 0:28:55.800 --> 0:28:57.960 I have tried it and it is wonderful and you 0:28:58.000 --> 0:29:00.480 cannot tell the difference. Um. The only problem is is 0:29:00.520 --> 0:29:03.640 that it's too expensive. You know, it's it's it's two 0:29:03.640 --> 0:29:07.080 tho dollars a pound to make and it shrinks up 0:29:07.120 --> 0:29:11.600 to almost nothing after Yeah, um so, but the so 0:29:11.640 --> 0:29:14.960 in other words, this is really just a efficiency and 0:29:16.120 --> 0:29:21.800 production issue. Once that is resolved and this becomes competitive 0:29:21.840 --> 0:29:25.200 price wise. Am I understanding this correctly? That sounds like 0:29:25.280 --> 0:29:29.120 this is inevitable. It's it's definitely inevitable. Yeah, it's one 0:29:29.160 --> 0:29:32.560 of those trends in the world that's quite amazing. Let's 0:29:32.600 --> 0:29:36.240 let's move away from the discussion on food systems because 0:29:36.320 --> 0:29:41.000 it's both fascinating and horrifying. Um Frank and foods, Let's 0:29:41.040 --> 0:29:45.560 talk a little bit about valuations. Um Mark and Reason 0:29:45.640 --> 0:29:49.200 suggested that valuations don't matter. You know, he said, if 0:29:49.200 --> 0:29:51.240 he would have paid double what he paid for Facebook, 0:29:51.240 --> 0:29:56.320 wouldn't remain any difference. Do you agree or disagree? Well, 0:29:56.360 --> 0:29:59.760 Mark Andrewson is completely right. I never disagree with Mark Andreason. 0:30:00.640 --> 0:30:04.360 Um so, he's completely right in that you there's you know, 0:30:04.400 --> 0:30:09.120 gonna be fifteen deals a year that you know, out 0:30:09.120 --> 0:30:11.680 of the thousands and thousands that you look at that 0:30:11.680 --> 0:30:14.960 are going to become these you know, outsized companies. As 0:30:14.960 --> 0:30:17.440 a venture capitalist. All you need to do is be 0:30:17.520 --> 0:30:20.280 in those fifteen deals, so it doesn't matter what you 0:30:20.320 --> 0:30:24.040 pay for them as a matter of practice. Um about 0:30:24.200 --> 0:30:26.400 if you look at what has actually happened in the world, 0:30:26.840 --> 0:30:29.720 the valuations of some of the biggest businesses in the 0:30:29.760 --> 0:30:34.120 world were incredibly low. So you know, Airbnb first started 0:30:34.200 --> 0:30:39.080 raising money at a one point five million dollar valuation. Yeah, 0:30:39.320 --> 0:30:43.000 Uber's valuation was at five million valuation, you know, So 0:30:43.040 --> 0:30:44.840 I almost look at it as if you're raising with 0:30:44.960 --> 0:30:48.760 two high of evaluation. It's like a negative signal um 0:30:48.800 --> 0:30:51.360 the low. I'm not sure if it's actually that the 0:30:51.480 --> 0:30:54.720 entrepreneurs are so good so they're optimizing the valuation in 0:30:54.760 --> 0:30:57.200 the seed stage for shots on the goal instead of 0:30:57.240 --> 0:30:59.400 owning a lot of the company, or if it's just 0:30:59.480 --> 0:31:02.880 that those ideas are so contrarian that no one wants 0:31:02.920 --> 0:31:05.880 them in the seed stage and they don't become obvious. 0:31:05.960 --> 0:31:08.200 So you know, kind of what we say is that 0:31:08.440 --> 0:31:11.240 in the seed stage, the wisest route to take is 0:31:11.280 --> 0:31:13.440 to optimize for shots on the goal and do a 0:31:13.480 --> 0:31:16.800 low valuation so you have more flexibility with your capital, 0:31:17.280 --> 0:31:21.640 and then every yeah, every subsequent round after that optimized 0:31:21.680 --> 0:31:28.920 for valuation. Quite quite quite fascinating. So Uber, Airbnb, we Work, 0:31:29.280 --> 0:31:32.120 Facebook all had very low I mean I don't track 0:31:32.200 --> 0:31:33.640 we work, so I'm not sure about that. But they 0:31:33.680 --> 0:31:37.120 all had surprisingly low valuations in the seed stage, and 0:31:37.160 --> 0:31:41.200 then they become these major companies, you know, peloton Um. 0:31:41.240 --> 0:31:45.520 It's the in the seed stage, they're not obvious. And furthermore, 0:31:45.760 --> 0:31:48.280 these deals robin Hood is another one, they're they're also 0:31:48.400 --> 0:31:55.040 widely shopped ump I mean Uber. I think when Uber 0:31:55.160 --> 0:31:58.400 was pitching to open rooms of angel investors um in 0:31:58.640 --> 0:32:03.080 in the seed stage? Is that unusual? Is usual? One 0:32:03.120 --> 0:32:05.800 on one? What what's the typical structure of those No, 0:32:05.960 --> 0:32:09.280 I mean it depends. I mean it sort of depends 0:32:09.280 --> 0:32:12.239 on the entrepreneurs network and and the sort of you know, 0:32:12.480 --> 0:32:15.560 the company. But it's a lot of these, a lot 0:32:15.600 --> 0:32:18.120 of the deals that become the biggest they're they're just 0:32:18.200 --> 0:32:21.520 not apparent at all at the seat stage. So um, 0:32:21.600 --> 0:32:25.680 they're out there, they're contrarian everybody who looks at it. 0:32:26.200 --> 0:32:28.080 And it's only with all of this kind of ex 0:32:28.200 --> 0:32:32.239 post factor um looking back that we we believe we 0:32:32.280 --> 0:32:36.400 believe that hindsight bias, of course, so obvious after the 0:32:36.400 --> 0:32:41.200 fact that it's going to be huge. That's right, that's 0:32:41.240 --> 0:32:46.200 that's really quite a quite interesting. Um. So I I 0:32:46.280 --> 0:32:50.240 go to these regular dinners that we host, where there's 0:32:50.240 --> 0:32:52.960 so much intellectual capital in New York. We try and, 0:32:53.720 --> 0:32:58.240 um just grab a group of random hedge fund economists, 0:32:58.280 --> 0:33:01.760 academic media people and see if there's an interesting conversation. 0:33:01.840 --> 0:33:03.440 Been to one of those I know, and it was 0:33:03.520 --> 0:33:06.920 one where I bailed. I think I was traveling. I 0:33:06.960 --> 0:33:08.920 missed it. I invited you to one and then didn't 0:33:08.920 --> 0:33:10.920 show up. I had the time of my life. Did 0:33:10.960 --> 0:33:13.400 you still? You know? Best friends with about four of 0:33:13.440 --> 0:33:15.400 the women that I met at that dinner. We we 0:33:15.480 --> 0:33:19.360 make it, you know, kind of gender blended where it's 0:33:19.400 --> 0:33:22.000 not just like eight white dudes. We don't love that. 0:33:22.480 --> 0:33:26.880 But um, you've tried to get some billionaires together for 0:33:26.920 --> 0:33:30.840 dinner on your own. How has that worked out? Oh? Well, 0:33:30.960 --> 0:33:33.680 So it's a It's an important part of our social 0:33:33.680 --> 0:33:37.160 impact capital is that we hold these Jeffersonian dinners, UM, 0:33:37.240 --> 0:33:40.600 where we bring you know, people in the world together 0:33:40.840 --> 0:33:44.200 to have honest dialogues about issues. UM. It's part of 0:33:44.240 --> 0:33:48.320 our you know, solving these complex coordination problems. So you 0:33:48.360 --> 0:33:51.960 actually have an issue to be if you say, Jeffersonian, 0:33:52.480 --> 0:33:56.440 I assume you mean a debate takes place. It's not. 0:33:56.280 --> 0:33:58.720 It's not such a debate. It's ah, you know, it's 0:33:58.720 --> 0:34:02.480 a it's an honest converse station about about real topics 0:34:02.520 --> 0:34:05.840 in an incredibly confidential forum. Um. So, you know, it 0:34:05.880 --> 0:34:08.400 gets harder and harder now in the world to actually 0:34:08.400 --> 0:34:10.359 have these forms where you can say what you think. 0:34:10.680 --> 0:34:16.120 So we try and convene those between different stakeholders, and um, 0:34:16.160 --> 0:34:18.319 this was one that was you know, I always joke 0:34:18.400 --> 0:34:21.120 about because it was a lot of billionaires and I 0:34:21.160 --> 0:34:24.799 was trying to bring them together and it was basically impossible. Um. 0:34:25.080 --> 0:34:28.560 You know, they all had different business rivalries against each other, 0:34:28.600 --> 0:34:30.239 and we're like, I won't get in the room with him. 0:34:30.280 --> 0:34:33.200 He sued my company for twenty years. And then they 0:34:33.239 --> 0:34:36.919 all had personal rivalries against each other, like I heard 0:34:36.960 --> 0:34:38.799 he went slept with my daughter. I'm never getting in 0:34:38.800 --> 0:34:41.080 the room with him. And then they all, you know, 0:34:41.760 --> 0:34:45.040 beyond that, they were all you know, they had political rivalries, 0:34:45.080 --> 0:34:48.760 like I totally disagree with what he thinks about tax policy, 0:34:48.840 --> 0:34:50.960 so I'm not going to talk to him. And at 0:34:50.960 --> 0:34:52.719 the end of it, I was like, well, you know, 0:34:52.760 --> 0:34:55.040 I finally brought it together. But at the end of it, 0:34:55.080 --> 0:34:56.960 I was like, the good thing about this dinner is 0:34:57.000 --> 0:34:59.560 that it really has impressed upon me that there is 0:35:00.160 --> 0:35:02.360 no way these people are getting in the room together 0:35:02.440 --> 0:35:06.759 to control the world. It's just there's no no trilateral commission. 0:35:08.200 --> 0:35:11.160 As a non billionaire, you definitely have this image that 0:35:11.200 --> 0:35:14.120 they all got in you know, some smoky room, you know, 0:35:14.239 --> 0:35:17.799 smoke cigars and just decide how the world is going 0:35:17.840 --> 0:35:20.399 to go. And I was like, I know firsthand now 0:35:20.480 --> 0:35:23.879 that that is completely impossible, and that's even before their 0:35:23.920 --> 0:35:28.200 impossible schedules. They're like, great, that sounds wonderful. Let's do it. 0:35:28.320 --> 0:35:33.280 I have an open lunch in you know. Yeah, that's hilarious. 0:35:33.400 --> 0:35:37.759 It's so no Illuminati running the world just it's I mean, 0:35:37.800 --> 0:35:39.719 you can never be sure, because it could have been 0:35:39.760 --> 0:35:48.080 all an elaborately coordinated plot about that, but I'm pretty sure. Hey, hey, 0:35:48.120 --> 0:35:50.839 this girl Sarah is hot on our trail. We need 0:35:51.000 --> 0:35:54.560 some ruse to throw her off. I know, let's make 0:35:54.560 --> 0:35:58.319 it impossible to do a dinner. She'll buy that, yeah, 0:35:58.360 --> 0:36:00.400 And then I I pulled it off the end, and 0:36:00.440 --> 0:36:02.719 then everyone just argued and it was incredible. And then 0:36:02.760 --> 0:36:04.440 at the end, they're like, this is this was more 0:36:04.480 --> 0:36:06.520 fun than these things usually are. What I was going 0:36:06.560 --> 0:36:08.799 to say, was it productive? If you got everybody in 0:36:08.800 --> 0:36:11.719 the room, did they have an intelligent conversation? We definitely 0:36:11.760 --> 0:36:15.120 did have a very intelligent conversation, and I I wouldn't 0:36:15.120 --> 0:36:18.680 call it necessarily so productive. Um, and that nothing really 0:36:18.719 --> 0:36:21.880 emerged in the best ideas, Like you know, things emerge 0:36:21.920 --> 0:36:24.839 out of them. But it's certainly I think, you know, 0:36:25.480 --> 0:36:28.480 gave people some understanding that they didn't have coming in. 0:36:29.040 --> 0:36:32.759 M quite quite interesting. Um. I got a bunch of 0:36:32.840 --> 0:36:35.359 questions I didn't get to. Can you stick around a bit? 0:36:35.400 --> 0:36:38.560 We have a ton more things to talk about. Absolutely, 0:36:39.200 --> 0:36:43.560 we have been speaking with Sarah Cone, founder of Social 0:36:43.600 --> 0:36:47.799 Impact Investing. If you enjoy this conversation, well be sure 0:36:47.840 --> 0:36:50.520 and come back for the podcast extras. Will we keep 0:36:50.560 --> 0:36:54.800 the tape rolling and continue discussing all things venture capital 0:36:55.000 --> 0:37:02.759 and impact related. You can find that at iTunes, Google podcast, Stitcher, Spotify, overcast, 0:37:03.080 --> 0:37:07.120 wherever your finer podcasts are sold. We love your comments, 0:37:07.120 --> 0:37:11.759 feedback and suggestions right to us at m IB podcast 0:37:11.880 --> 0:37:15.719 at Bloomberg dot net. Give us a review on Apple iTunes. 0:37:16.200 --> 0:37:19.160 Be sure to check out my weekly column on Bloomberg 0:37:19.200 --> 0:37:21.960 dot com. You can sign up from my Daily Reads 0:37:22.080 --> 0:37:26.000 at Redholts dot com. I'm Barry Dholts. You're listening to 0:37:26.120 --> 0:37:32.080 Masters in Business on Bloomberg Radio. Welcome to the podcast, Sarah. 0:37:32.080 --> 0:37:34.120 Thank you so much for doing this. We have been 0:37:34.160 --> 0:37:38.520 trying to get this together for quite a while. And um, 0:37:38.600 --> 0:37:41.520 you and I first met on Twitter, where all great 0:37:41.640 --> 0:37:47.080 venture investments begin their their lives. And um, you and 0:37:47.080 --> 0:37:49.600 I were arguing about something, but in a very polite, 0:37:49.600 --> 0:37:54.120 respectful way. We were disagreeing about something. I don't remember 0:37:54.200 --> 0:37:57.320 what it was me either. I. In fact, I frequently 0:37:57.360 --> 0:38:00.200 meet people in the world that say I was disagreeing 0:38:00.280 --> 0:38:03.839 with you on Twitter about something, and I have no recollection, 0:38:04.280 --> 0:38:07.400 and I have like I think some of this comes 0:38:07.480 --> 0:38:10.759 from years and years of blogging, back in the day 0:38:10.800 --> 0:38:14.640 when blogs had comments, and there would be this robust 0:38:14.680 --> 0:38:18.720 community associated with a blog. Um and the big picture 0:38:18.800 --> 0:38:22.000 during the financial crisis, you know, I do a blog 0:38:22.040 --> 0:38:24.799 post and I get a hundred comments and like this 0:38:24.960 --> 0:38:30.120 crazy robust conversation. But eventually tragedy of the commons rears 0:38:30.160 --> 0:38:34.920 its head and it became overran with trolls and spammers 0:38:34.960 --> 0:38:38.280 and other sorts of stuff. Who Hey, there's a crowd 0:38:38.280 --> 0:38:40.440 here that must have some value. Let me market my 0:38:40.560 --> 0:38:43.680 jump to that. Um So, I have zero tolerance for 0:38:43.760 --> 0:38:47.680 nonsense in blog comments and that's kind of carried over 0:38:47.840 --> 0:38:51.880 to Twitter. I'm I'm way too cute quick to mute 0:38:51.920 --> 0:38:57.440 people and probably too cute too quick to block people. 0:38:58.000 --> 0:39:00.200 That is the only way to use Twitter. Actually, I 0:39:00.239 --> 0:39:02.680 think Twitter is a very usable platform if you spend 0:39:02.760 --> 0:39:08.759 hours and hours curating and blocking people. Well, actually incubating 0:39:08.800 --> 0:39:12.160 a company at Social Impact Capital that we hope will 0:39:12.160 --> 0:39:15.000 solve that problem because we think it's actually the root. 0:39:15.080 --> 0:39:18.160 I mean, we have this information problem I think online 0:39:18.160 --> 0:39:21.120 now where we live in the information age, but the 0:39:21.160 --> 0:39:23.680 information that exists in the world is sort of getting 0:39:23.719 --> 0:39:29.319 worse and worse and acts. Yes exactly. So, um we 0:39:29.400 --> 0:39:33.440 are building a you know, a new social network. We 0:39:33.480 --> 0:39:35.680 call it a you know the ideas that it makes 0:39:35.920 --> 0:39:39.640 you know, our users smarter, and we are kind of 0:39:39.680 --> 0:39:43.399 partnering with what we call the offline intelligent networks, like 0:39:43.440 --> 0:39:46.200 the people that went to your dinner. Other examples are 0:39:46.239 --> 0:39:48.839 you know, milk in or WF um So, we're kind 0:39:48.840 --> 0:39:53.719 of bringing those together. So in between your meetings, offline. 0:39:53.960 --> 0:39:58.120 You can banter online um in a forum, and I 0:39:58.160 --> 0:40:00.360 think it's going to be incredibly interesting. Does that have 0:40:00.400 --> 0:40:02.919 a name yet that's public or is it still below 0:40:02.960 --> 0:40:06.000 the radar? But you will be the first to know, 0:40:06.239 --> 0:40:10.120 all right, I'm intrigued by that. So so I don't 0:40:10.120 --> 0:40:13.600 remember what we were arguing about with Twitter. I do 0:40:13.719 --> 0:40:17.680 think we discussed the soft block on Twitter, right the 0:40:17.880 --> 0:40:21.720 is it the mute? No? Alright, so the soft block. 0:40:21.920 --> 0:40:24.960 I'm going to reveal this, and this has been around 0:40:24.960 --> 0:40:27.800 for forever and I didn't invent this, but the soft 0:40:27.800 --> 0:40:31.440 block is simply, if someone is following you and you 0:40:31.560 --> 0:40:35.480 block and then immediately unblocked them, what you've effectively be 0:40:35.800 --> 0:40:39.719 effectively done is forced them to unfollow you. So then 0:40:39.840 --> 0:40:42.719 you so you block unblock them. Now they've unfollowed you, 0:40:42.719 --> 0:40:46.680 you mute them, and it's sort of like a stealth breakup. 0:40:46.840 --> 0:40:49.440 I did not know that. That is Twitter gold. I 0:40:49.480 --> 0:40:51.920 will tell you that people have have said to me 0:40:52.560 --> 0:40:56.279 it's life change, life changing, just like the only thing 0:40:56.360 --> 0:40:59.840 that's close to that. It used to be the ability 0:41:00.040 --> 0:41:03.360 to move the cursor on an iPhone by holding down 0:41:03.480 --> 0:41:06.279 the tab key, and you can now goes to the 0:41:06.600 --> 0:41:09.959 cursor where if you want. But the latest technology, which 0:41:10.320 --> 0:41:13.640 I tweeted, was you now have this ability I think 0:41:13.640 --> 0:41:16.960 it came out about a month ago, and or by 0:41:16.960 --> 0:41:20.560 the time this broadcast two months ago, that you can 0:41:20.840 --> 0:41:24.560 set your phone so that if a caller is not 0:41:24.719 --> 0:41:28.759 in your phone book, it automatically goes to voicemail, which 0:41:28.800 --> 0:41:32.399 means no more robot calls. This is why I came 0:41:32.440 --> 0:41:34.000 on the show, because I knew I was going to 0:41:34.080 --> 0:41:36.759 get this kind of life tips. Right, this is right, 0:41:36.840 --> 0:41:41.239 That's really what the show should be about, life changing technology. 0:41:41.280 --> 0:41:44.759 It's not even tech, it's technology settings. Somebody else has 0:41:44.800 --> 0:41:48.120 made a tech product that's so complicated that in order 0:41:48.200 --> 0:41:52.240 to derive value from it you need these little tweaks 0:41:52.280 --> 0:41:56.879 that suddenly Twitter is more worthwhile. And this iPhone, which 0:41:56.920 --> 0:41:59.600 is completely useless to me as a phone because of 0:42:00.040 --> 0:42:03.240 the robot calls, now is actually a fully functioning phone 0:42:03.560 --> 0:42:08.399 a decade after Steve Jobs first released it. That's now 0:42:08.440 --> 0:42:11.560 come up with a name for that, right, I get 0:42:11.960 --> 0:42:15.719 tech tweaks for geeks or something um silly like that. 0:42:15.960 --> 0:42:19.279 So there's there's a bunch I love these digressions. There's 0:42:19.280 --> 0:42:22.960 there's a bunch of questions I did not get to that. 0:42:23.080 --> 0:42:26.600 I want to work my way through. And I'm gonna 0:42:26.760 --> 0:42:29.279 give you a couple of options on some questions and 0:42:29.719 --> 0:42:33.600 if if you have a conflict or a compliance issual issue, 0:42:33.640 --> 0:42:37.000 will just wave them off. Um, early, early, early in 0:42:37.000 --> 0:42:40.120 your career, you did one off with Howard Buffett. Do 0:42:40.120 --> 0:42:42.719 you want to just discuss that really briefly or do 0:42:42.840 --> 0:42:46.680 we not want to talk about that next? That was 0:42:46.719 --> 0:42:51.280 way early in your career. Um, So such a corny question. 0:42:51.320 --> 0:42:54.120 How do you balance doing good with doing well? I'm 0:42:54.120 --> 0:42:59.640 gonna skip that. Um. It's so it's isn't it a 0:42:59.719 --> 0:43:03.279 terrible question? It really is? Um? But this is a 0:43:03.320 --> 0:43:08.760 good question. So you invest in a broad variety of areas. 0:43:08.800 --> 0:43:11.960 It's not like you have one teeny tiny niche. You're 0:43:12.000 --> 0:43:16.080 pretty pretty broad. What areas do you think are right 0:43:16.239 --> 0:43:20.600 for disruption? We've already talked about food processes. What else 0:43:20.600 --> 0:43:23.560 are you look? And social networks? What else is ripe 0:43:23.640 --> 0:43:27.759 for disruption? Well? I think as a venture capitalist, your 0:43:27.840 --> 0:43:31.719 most fundamental belief is that everything is right for disruption. 0:43:31.920 --> 0:43:38.320 So I think healthcare, you know, food systems, education, transportation, housing, water, energy, 0:43:38.400 --> 0:43:41.880 even social media is all right for disruption and my 0:43:42.040 --> 0:43:45.600 day is basically an endless stream of ideas in my 0:43:45.719 --> 0:43:49.400 inbox about how to disrupt all of these fields. Um. 0:43:49.440 --> 0:43:51.359 I joke that my inbox is pretty much the most 0:43:51.400 --> 0:43:54.680 inspiring place in the world. Really, that's quite interesting. So 0:43:54.800 --> 0:43:57.000 to feel that way about your inbox. I have an 0:43:57.080 --> 0:44:00.160 idea for a new company, but it will disrup up 0:44:00.239 --> 0:44:04.200 to venture investing. Yes, can I get capital is one 0:44:04.239 --> 0:44:07.479 of the most DISRUPTI you know, disruptible fields. Is that true? 0:44:07.560 --> 0:44:09.799 I was kidding, But is that really true? No, it 0:44:09.840 --> 0:44:12.960 definitely is true. I think, you know, I have a 0:44:12.960 --> 0:44:16.080 bunch of It's not really my field, but because you know, 0:44:16.160 --> 0:44:19.920 I think venture capital is fantastic. But certainly venture capitalists 0:44:19.920 --> 0:44:23.719 talk all the time about ideas to disrupt venture VC, 0:44:23.960 --> 0:44:29.000 disrupting vs. Well, what wasn't Andrews and Horowitz say, somewhat 0:44:29.000 --> 0:44:32.279 disruptive venture firm when they rolled out? They absolutely were. 0:44:32.600 --> 0:44:34.600 What were they doing that was so different than the 0:44:34.680 --> 0:44:39.320 Kleiner Perkins um of the world. Well, they really popularized 0:44:39.440 --> 0:44:44.799 the portfolio. Um, they really sorry, should we take that again? 0:44:45.080 --> 0:44:50.160 It's not the chime, Um, it's eleven o'clock. Yeah, I'll 0:44:50.160 --> 0:44:53.080 turn off this. So we both turned off a phone, 0:44:53.440 --> 0:44:57.400 and I forgot to turn off my other devices. Um. 0:44:57.480 --> 0:45:00.200 So I'll tell you another setting that I love. I 0:45:00.239 --> 0:45:02.640 don't know if it's on this What I want to 0:45:02.680 --> 0:45:07.480 do is, oh my god. Yeah, I didn't even know that, 0:45:08.320 --> 0:45:11.040 Oh my god until I leave this location. So now 0:45:11.080 --> 0:45:14.160 you will not get any noises until you really know 0:45:14.200 --> 0:45:16.000 how to operate this stuff. You know what it is. 0:45:16.080 --> 0:45:19.480 I'm an idiot savant with this stuff. You really should 0:45:19.520 --> 0:45:22.839 have a show just on this. No, because basically I'm done. 0:45:22.880 --> 0:45:26.080 I've given you my four biggest tricks. Now what do 0:45:26.120 --> 0:45:28.359 I do for the next two hours? Let's get to 0:45:28.440 --> 0:45:30.920 get it interspersed with the finance. So I'll tell you 0:45:30.960 --> 0:45:34.920 how I got that. I discovered that trick. Uh. By 0:45:34.920 --> 0:45:38.680 the way, I not discovered it. If it doesn't have 0:45:38.719 --> 0:45:41.560 anything to do with meat, he's not discovering. Um. I 0:45:41.640 --> 0:45:46.960 really hate whiney journalists complaining about plane delays. Um, and 0:45:47.000 --> 0:45:50.600 so I've tried really hard not to fall into that group, 0:45:50.960 --> 0:45:53.520 although it's really really challenge. I will say most of 0:45:53.560 --> 0:45:56.160 the arguments I get into on Twitter are when I'm 0:45:56.200 --> 0:45:58.840 on a plane delay, well, because you've got nothing to 0:45:58.880 --> 0:46:02.680 do with and your irritated, and it's like but I 0:46:02.760 --> 0:46:06.240 said on Twitter, God damn it, why does an Apple 0:46:06.360 --> 0:46:10.560 have a setting like I would shut my phone off 0:46:10.560 --> 0:46:13.920 to record something? Because everybody has a podcast. They all 0:46:14.200 --> 0:46:17.040 everybody in the world has this problem. They shut their 0:46:17.160 --> 0:46:21.279 ringer off to um to record a podcast, and then 0:46:21.320 --> 0:46:23.320 they leave and the ringer is off and they missed 0:46:23.600 --> 0:46:27.600 subsequent calls. Now, there is an entire subgroup of people 0:46:28.120 --> 0:46:30.759 who say, you turn your ringer on. What's sort of 0:46:30.760 --> 0:46:34.600 a monster? So I was intrigued by that. But the 0:46:34.680 --> 0:46:39.919 other group said, um, when I asked this question on Twitter, Yeah, 0:46:39.920 --> 0:46:43.120 this is a setting you could either turn your ringer 0:46:43.120 --> 0:46:45.760 off for an hour, or even better, turn your ringer 0:46:45.760 --> 0:46:49.160 off until you leave a given location. And I'm like, 0:46:49.239 --> 0:46:51.279 why didn't I know about this? And the answer is 0:46:51.760 --> 0:46:56.440 these things are so complex and so many new features 0:46:56.480 --> 0:46:59.480 come out it's impossible to keep up with. That's actually 0:46:59.520 --> 0:47:04.160 a perfect illustration of the thinking behind our social media platform. 0:47:04.400 --> 0:47:07.600 Is that what so everyone thinks that Stuart Brand said 0:47:07.719 --> 0:47:10.560 information wants to be free. It's been spread all around 0:47:10.600 --> 0:47:15.400 the internet that he said that. I feel somewhat sorry 0:47:15.400 --> 0:47:17.560 for him because he didn't actually say that. If you 0:47:17.680 --> 0:47:21.040 sort of the full quote was, you know, he said 0:47:21.120 --> 0:47:24.480 something like information wants to be expensive because the right 0:47:24.520 --> 0:47:27.680 information at the right time just changes your life, the 0:47:27.680 --> 0:47:30.200 most valuable thing in the world. On the other hand, 0:47:30.320 --> 0:47:32.920 information wants to be free because it's so easy to 0:47:33.000 --> 0:47:37.160 replicate and pass along. Now and he said, these things 0:47:37.160 --> 0:47:43.400 are going to be competing. Um, and context matters exactly. So, um. 0:47:43.440 --> 0:47:46.040 So social media is fantastic for kind of getting you 0:47:46.280 --> 0:47:50.040 the right information at the right time. Um. And so 0:47:50.080 --> 0:47:52.000 we're kind of, you know, creating the best platform in 0:47:52.040 --> 0:47:55.120 the world for that, except for the whole ambition, that 0:47:55.160 --> 0:47:58.640 whole undercoting democracy thing. We're going to try and not 0:47:58.640 --> 0:48:03.319 not do that. Not you're not going destroys that's on 0:48:03.360 --> 0:48:07.360 the mission statement. So okay, so maybe I have another 0:48:07.480 --> 0:48:12.959 technology tip. But it's just a website quote investigator dot com, 0:48:13.920 --> 0:48:16.719 which is awesome because you find out that all these 0:48:16.800 --> 0:48:20.320 quotes that you've been using your whole life are nonsense, 0:48:20.440 --> 0:48:24.360 I know, and especially Albert Einstein pretty much said nothing clever, 0:48:24.719 --> 0:48:30.120 nothing about compounding, nothing about hydrogen and stupidity, nothing about 0:48:30.320 --> 0:48:35.440 there are all these Einstein, Mark Twain, Marcus Aurolius. Go 0:48:35.760 --> 0:48:41.520 down the list of these people who you constantly see quoted. Um. 0:48:41.560 --> 0:48:44.400 It turns out that most of these quotes came about 0:48:44.800 --> 0:48:49.040 decades after they passed away, and and you can track 0:48:49.640 --> 0:48:54.880 end quote. Investigator does the genesis of these quotes based 0:48:54.960 --> 0:48:57.520 on when they first appeared in print, when they first 0:48:57.520 --> 0:49:00.360 appeared in a book, and if it's and whether or 0:49:00.400 --> 0:49:03.520 not it's in the person's body of writing, body of work. 0:49:03.880 --> 0:49:06.799 And so if something shows up fifty years after Mark 0:49:06.880 --> 0:49:10.560 Twain dies, probably not a Mark Twain quote, which is 0:49:10.600 --> 0:49:15.680 which is pretty amazing. So the public markets are fairly efficient. 0:49:15.880 --> 0:49:19.120 They do a pretty good job at figuring out what 0:49:19.160 --> 0:49:25.240 an appropriate valuation is relative to future discounted cash flow. 0:49:25.800 --> 0:49:29.720 How efficient are the private markets? How efficient are venture 0:49:29.760 --> 0:49:34.560 capital investing? Relative to what is or isn't no known? 0:49:34.600 --> 0:49:38.319 It seems more opaque then we we see in the 0:49:38.400 --> 0:49:43.000 public markets. Yeah, it's certainly more opague. Um, the information 0:49:43.080 --> 0:49:46.400 isn't public. In fact, I don't even know most of 0:49:46.400 --> 0:49:50.480 the performance of my very close friends in venture capital. 0:49:50.600 --> 0:49:53.239 So I always describe it like running a venture capital firm. 0:49:53.320 --> 0:49:56.360 I'm running Olympic race, but I don't even know what 0:49:56.480 --> 0:49:58.440 the times are of any of the people that I'm 0:49:58.480 --> 0:50:02.200 running against. Right, Um, so there's just not this information 0:50:02.239 --> 0:50:04.880 that you have in in the public markets in in 0:50:04.960 --> 0:50:09.240 private markets, and then simultaneously they just have two different 0:50:09.280 --> 0:50:14.200 incentive systems. So the private markets are basically these max auctions, 0:50:14.480 --> 0:50:17.960 and by the time you get to the public markets, um, 0:50:18.000 --> 0:50:20.160 you know, you're no longer a monopoly seller of your 0:50:20.200 --> 0:50:22.759 stock and you can't walk away to avoid setting a 0:50:22.760 --> 0:50:25.520 low price, and there are no transfer restrictions. So you're 0:50:25.640 --> 0:50:30.560 merging these two different incentive systems into each other. And 0:50:30.760 --> 0:50:32.919 I think it's like, you know, merging a car onto 0:50:32.960 --> 0:50:36.320 a high speed freeway. There's only a few drivers in 0:50:36.360 --> 0:50:38.960 the world that can really do that very well. So 0:50:39.040 --> 0:50:42.440 it's why I am incredible. I don't know, I'm not 0:50:42.480 --> 0:50:45.440 a great driver. It's why I am, um, you know, 0:50:45.640 --> 0:50:48.000 glad to be an early stage investing because by the 0:50:48.040 --> 0:50:51.200 time the companies get to that stage, you know, for me, 0:50:51.280 --> 0:50:53.000 it's like, is this going to be a hundred x 0:50:53.040 --> 0:50:55.799 on my return or a thousand X? And that's you know, 0:50:56.000 --> 0:50:59.880 my only worry there. How do you measure how impactful 0:51:00.520 --> 0:51:03.840 a given investment is? We've we've talked about how do 0:51:03.840 --> 0:51:08.400 you measure how successful something is? And that basically is 0:51:08.440 --> 0:51:12.399 the return on investment? But how can you determine whether 0:51:12.480 --> 0:51:16.879 or not something is moving the needle. So UM this 0:51:16.960 --> 0:51:18.960 was this is a this is always a big topic 0:51:19.000 --> 0:51:22.120 of debate in my firm and I when I originally 0:51:22.160 --> 0:51:24.799 started out my firm, I was dad set against UM 0:51:24.840 --> 0:51:29.560 any kind of impact investing metrics. Finally, my partner convinced 0:51:29.600 --> 0:51:32.880 me that these impact you know US US tracking and 0:51:33.000 --> 0:51:37.120 impact metric would be a good idea UM because LP 0:51:37.280 --> 0:51:40.080 has really really wanted this UM. You know, he thought 0:51:40.120 --> 0:51:43.200 for marketing the fund. He thought impact LPs would really 0:51:43.239 --> 0:51:46.920 really care about impact metrics. And I said, find one metric. 0:51:47.440 --> 0:51:51.240 It has to be something related to actually running the business. 0:51:51.320 --> 0:51:54.279 So that is what we do. UM. When we have 0:51:54.320 --> 0:51:56.880 an agree illegal agreement with our entrepreneurs when we make 0:51:56.920 --> 0:52:00.239 an investment that there's one metric they come up with it, 0:52:00.640 --> 0:52:02.960 I sort of have to approve of it because I 0:52:02.960 --> 0:52:06.520 don't want something that is not inherently related to running 0:52:06.520 --> 0:52:09.640 the business. UM. When you're an early stage startup, I 0:52:09.800 --> 0:52:12.920 always tell my entrepreneurs, because they're real do getters, always 0:52:12.920 --> 0:52:15.640 want to solve every problem at once, and I say, 0:52:16.000 --> 0:52:19.680 pick one. Solve it, like you know that by giving 0:52:19.760 --> 0:52:22.440 us your capital, we're working on all the world's problems, 0:52:22.520 --> 0:52:25.319 so you can rest assured that they are all. You know, 0:52:25.360 --> 0:52:27.680 progress is being made and all of them. You need 0:52:27.719 --> 0:52:30.080 to just get your one done. Is this for your 0:52:30.200 --> 0:52:33.840 entrepreneurs or your LPs or my LPs do not care about, 0:52:34.000 --> 0:52:36.279 you know, social impact at the moment, I'm hoping to 0:52:36.320 --> 0:52:39.680 attract some LPs into the firm that care about social impact. 0:52:39.920 --> 0:52:44.560 I would I would imagine given them, I'm looking for 0:52:44.600 --> 0:52:48.240 the right word and wokenesses in it. Given the rise 0:52:48.320 --> 0:52:52.360 of E S G investing and the push towards better 0:52:52.440 --> 0:52:57.399 governance and more diverse investing, that we would see more 0:52:57.560 --> 0:53:02.840 institutional investors into uh UM something like social impact. But 0:53:02.960 --> 0:53:07.480 you're relatively relevant to them, and I think someday will 0:53:07.760 --> 0:53:10.839 be incredibly popular with them. But in the beginning, they 0:53:10.880 --> 0:53:13.880 typically don't like to come into fund one right they 0:53:13.960 --> 0:53:15.719 have to. You have to see a three year or 0:53:15.800 --> 0:53:17.680 five year track records. I want to see you know 0:53:18.200 --> 0:53:21.080 that we can return cash to our back to our investors. 0:53:21.600 --> 0:53:25.920 Can what you do at the seed level scale. So 0:53:25.960 --> 0:53:28.480 if you get a Cowpers and some of these other 0:53:28.560 --> 0:53:31.760 giant firms, maybe a little bit of soft bank because 0:53:31.800 --> 0:53:34.480 they have more money than they know how to intelligently invest, 0:53:35.160 --> 0:53:38.080 can you scale up to tens of billions of dollars 0:53:38.280 --> 0:53:41.319 or by by nature does Early Seed have to be 0:53:41.400 --> 0:53:44.440 much smaller? No, um. That is one of the issues 0:53:44.440 --> 0:53:46.200 that I paid a lot of attention to and how 0:53:46.239 --> 0:53:49.279 I structured the firm so we can scale up to 0:53:49.800 --> 0:53:53.120 large au M and I actually have a plan for that. 0:53:53.200 --> 0:53:55.359 I feel like Elizabeth Warren, I have a plan for that. 0:53:56.000 --> 0:54:00.520 Um for everything. Yeah, too many plans, UM, but I 0:54:00.760 --> 0:54:03.000 care for all. Are you going to invest in that 0:54:03.160 --> 0:54:06.279 or or or are we going to see disruption of 0:54:06.320 --> 0:54:09.960 healthcare from the private sector instead of the political sector. 0:54:10.560 --> 0:54:14.000 I personally think that we are Americans, so we will 0:54:14.040 --> 0:54:17.480 see disruption from healthcare come from the private sector. But 0:54:17.960 --> 0:54:22.280 who knows what's going on with the Buffett Amazon Chase 0:54:23.719 --> 0:54:26.719 healthcare program that started a couple of years ago. I 0:54:26.840 --> 0:54:29.120 haven't heard anything about that. Yeah, it's right, I haven't. 0:54:29.200 --> 0:54:31.480 I haven't heard much about that either. I mean, they 0:54:31.480 --> 0:54:34.359 seem to be attracting good people, and I look forward 0:54:34.400 --> 0:54:37.959 to what they're going to do interesting. So we've seen 0:54:38.000 --> 0:54:42.239 all sorts of studies that suggest that the bulk of 0:54:42.360 --> 0:54:46.759 venture capital is Silicon Valley, New York, Boston, and then 0:54:46.800 --> 0:54:49.680 a vast waste land around the rest of the country. 0:54:50.200 --> 0:54:54.920 Steve Case is doing some some rise of the rest. 0:54:55.040 --> 0:54:58.120 They literally take bus trips to different cities to do it. 0:54:58.440 --> 0:55:01.439 But most of the rest of the country isn't seeing 0:55:01.440 --> 0:55:06.120 a lot of venture activity. What do you see across 0:55:06.120 --> 0:55:11.120 the country geographically for where entrepreneurs and venture capitalists can 0:55:11.120 --> 0:55:14.480 find each other? Yeah? Absolutely, I mean we invest all 0:55:14.520 --> 0:55:17.879 across the US, and you know some of our best 0:55:17.880 --> 0:55:21.200 performing companies are outside of the US. Where else have 0:55:21.320 --> 0:55:26.360 you invested? So not just US like New York and 0:55:26.760 --> 0:55:30.000 San Francisco, but global? What what other countries are you 0:55:30.040 --> 0:55:33.120 investing in? We even we have an investment in Africa, 0:55:33.160 --> 0:55:36.280 and we have an investment in the UK. Um London 0:55:36.400 --> 0:55:40.560 is becoming a great location for VC. Really why is 0:55:40.600 --> 0:55:44.759 that Brexit? I have no idea, really, I think it's 0:55:44.800 --> 0:55:46.920 I think it's you know, it's still a cosmopolitan city. 0:55:47.120 --> 0:55:50.680 But the engineers, you know, it's it's still somewhat livable. 0:55:50.920 --> 0:55:54.719 Brexit has depressed the prices um, so it becomes more reasonable. 0:55:54.880 --> 0:55:58.160 I wasn't kidding when the engineers the engineers salaries are, 0:55:58.239 --> 0:56:01.040 you know, they're more reason The bull done in half 0:56:02.000 --> 0:56:05.320 in half of San Francisco and New York is particularly 0:56:05.360 --> 0:56:08.200 bad because that, you know, all the fine Goldman pays 0:56:08.440 --> 0:56:12.919 enormous salaries to the engineers, so they're they're stealing all 0:56:13.000 --> 0:56:16.440 of the best talent. Doesn't that sort of vacillate depending 0:56:16.480 --> 0:56:18.839 on how well the stock market does. When the market 0:56:18.920 --> 0:56:21.320 is doing well, all these quands ends up going to 0:56:21.360 --> 0:56:23.399 Wall Street. When it's doing poorly, they go to tech 0:56:23.440 --> 0:56:25.759 company exactly. I mean, all of these are markets, so 0:56:25.920 --> 0:56:29.960 everything vacillates. So we have built, you know, a company 0:56:30.040 --> 0:56:32.400 where we can do deals anywhere. We just want to 0:56:32.440 --> 0:56:36.520 do the best deals in the world. And um, before 0:56:36.520 --> 0:56:38.680 we get to our favorite question, I just have to 0:56:38.719 --> 0:56:44.400 ask you about a magically delicious box of lucky Charms 0:56:44.880 --> 0:56:47.520 that you snuck into the White House. Can you can 0:56:47.560 --> 0:56:50.360 you explain that we did not sneak that into the 0:56:50.400 --> 0:56:53.120 White House? You are you are allowed to bring snacks 0:56:53.160 --> 0:56:55.279 into the White House, so you didn't sneak it in. 0:56:55.480 --> 0:56:59.000 You brought it in. So you do not deny I'm 0:56:59.000 --> 0:57:02.960 gonna imagine you're the water the impeachment hearings. You do 0:57:03.040 --> 0:57:06.760 not deny that you brought an authorized box of lucky 0:57:06.840 --> 0:57:11.520 Charms into the Truman lanes on the White house delicious. 0:57:11.640 --> 0:57:16.320 We had a breakfast. Um, we had a breakfast bowling session. 0:57:16.880 --> 0:57:22.440 Why well these Um, it was just it was, you 0:57:22.480 --> 0:57:25.040 know something, this was the Obama White House. Um, it 0:57:25.160 --> 0:57:27.360 was just something that we we they invited us to 0:57:27.400 --> 0:57:29.960 do because I'm a big bowler. I really like bowling, 0:57:30.080 --> 0:57:33.440 and we had some um you know, we're reaching some 0:57:33.480 --> 0:57:35.320 work with them, and it was it was a fun thing. 0:57:35.400 --> 0:57:38.560 So we invided some of our advisory board members bowing 0:57:38.600 --> 0:57:41.200 with that. So you skipped over the meaty part. What 0:57:41.280 --> 0:57:43.720 was the work you were doing for the Obama White House? 0:57:44.080 --> 0:57:47.080 Not allowed to talk about that. It's all n s 0:57:47.160 --> 0:57:49.840 A deep states. You like to work with I mean, 0:57:49.880 --> 0:57:52.720 we like to work with everyone, so you know, well 0:57:52.880 --> 0:57:55.800 we'll work with anyone who asks us. Will you know, 0:57:55.880 --> 0:58:01.000 show up anyone do anything. We're very nonpartisan. Great, that's fair. 0:58:01.040 --> 0:58:05.280 So let's let's jump to our favorite questions. One of 0:58:05.320 --> 0:58:09.120 which I changed just for you. What are you streaming, 0:58:09.320 --> 0:58:13.240 downloading or watching on TV? These days? Because I can't 0:58:13.240 --> 0:58:18.960 ask you a car question. You learned that the last time. Um, 0:58:19.280 --> 0:58:23.479 let's see and by the way, it turns out that 0:58:23.480 --> 0:58:26.320 that's a much more interesting question. It is such a 0:58:26.360 --> 0:58:31.640 good question because everybody who's over fifty has probably has 0:58:31.680 --> 0:58:34.960 a car, and lots of people under fifty, not only 0:58:35.320 --> 0:58:38.360 or under forty, not only don't they have cars. Half 0:58:38.360 --> 0:58:41.200 of them don't even have licenses. It's a fantastic question. 0:58:41.280 --> 0:58:45.240 It gives you someone's age, it gives you um there, 0:58:45.240 --> 0:58:49.080 you know, interest, social class, and it gives you how 0:58:49.120 --> 0:58:52.000 good their memory is about the car. Everybody remembers that 0:58:52.160 --> 0:58:54.800 the first car. Yeah, of course I have zero idea. 0:58:54.960 --> 0:58:57.200 I mean, I know what I know what Brando was. Sorry, 0:58:57.280 --> 0:58:59.800 you call those models. I know what model? What model is? 0:58:59.840 --> 0:59:03.120 It is a Buick, right, and that I would actually 0:59:03.320 --> 0:59:06.760 that's the make. That's the make. The model is the 0:59:06.880 --> 0:59:10.400 Buick Skylark or the This is like me inviting you 0:59:10.440 --> 0:59:12.520 on a finance show and going, what is the difference 0:59:12.560 --> 0:59:16.360 between a top and a blouse? Um? No, no, dude, right, 0:59:16.800 --> 0:59:19.480 So a blouse, I would I would be able to 0:59:19.520 --> 0:59:23.480 fake that. I would say, well, a blouse is usually 0:59:24.000 --> 0:59:27.680 a stand alone um, as opposed to a top, which 0:59:27.680 --> 0:59:29.720 is part of an outfit with a top and a bottom. 0:59:29.960 --> 0:59:32.680 Completely wrong, not but it sounds good, right, I could 0:59:32.720 --> 0:59:34.240 b s with the best of them. What is the 0:59:34.240 --> 0:59:36.880 difference between the top and a blouse. Um, usually just 0:59:36.960 --> 0:59:39.560 a top is more informal, and a blouse is more 0:59:39.680 --> 0:59:42.280 formal with buttons down. No, I don't like that. I 0:59:42.400 --> 0:59:44.160 like top is part of a set, a top and 0:59:44.200 --> 0:59:47.800 the bottom a blouse, freestanding. I'm gonna go with mine. 0:59:48.000 --> 0:59:51.480 Let you redefine there was. If I was in Ohio, 0:59:51.520 --> 0:59:53.880 I could get away with that. But here in New York, 0:59:53.920 --> 0:59:56.080 I actually have to be a reality. But I can 0:59:56.080 --> 0:59:58.400 tell you about the car I want there. You know, 0:59:58.480 --> 1:00:03.160 electric Porsche. It's so the take hand, Yes, really handsome car. 1:00:03.560 --> 1:00:07.920 Have you seen the new Ford Mustang E suv that 1:00:08.040 --> 1:00:13.040 came out yesterday? Yeah, So they basically took a Ford Mustang, 1:00:13.600 --> 1:00:17.720 which is a six or eight cylinder gasoline car. It's 1:00:17.760 --> 1:00:20.520 only been around for fifty eight years, so who cares, 1:00:20.960 --> 1:00:25.200 And they turned it into sort of an suv and 1:00:25.200 --> 1:00:30.400 and it's all all electric, competing with Um Model X 1:00:30.440 --> 1:00:33.400 and the Model three of Tesla. The interior looks like 1:00:33.440 --> 1:00:37.320 it's pure Tesla just ripped it right off of Elon 1:00:37.440 --> 1:00:41.560 musk Um. He's doing okay. Hopefully hopefully he comes out 1:00:41.560 --> 1:00:45.280 of this. I like he. You know, arguably Elon has 1:00:45.280 --> 1:00:50.479 already won everybody, definitely, right, everybody is now doing electric cars, 1:00:50.520 --> 1:00:53.919 so whether Tesla survives or not, he's already dentity. Every 1:00:53.960 --> 1:00:57.120 time Elon gets criticized on Twitter, which is quite a bit, 1:00:57.280 --> 1:01:01.560 I post the gift of him law landing the rockets, 1:01:01.600 --> 1:01:04.000 and I say, anyone that can do this deserves at 1:01:04.040 --> 1:01:07.080 least six months of criticism, free living, right, But he 1:01:07.160 --> 1:01:09.840 had that five years ago, and now that six months 1:01:09.880 --> 1:01:11.920 has a lot well lea should it should get you 1:01:11.960 --> 1:01:14.440 at least a decade. I mean, that's pretty impressive stuff. 1:01:14.480 --> 1:01:17.960 You know, mushing Solar City and with Tesla turns out 1:01:18.000 --> 1:01:21.960 to have been a mistake. But um, but you've got 1:01:21.960 --> 1:01:25.600 to give him properas were made. But you know, move fast, break, 1:01:25.920 --> 1:01:30.920 Everyone makes mistake. He is a very consequential entrepreneur and 1:01:30.960 --> 1:01:33.600 I'm fascinated by what he does, and I think people 1:01:33.640 --> 1:01:37.040 slag him way too much. I agree, and I think that, 1:01:37.120 --> 1:01:39.280 you know, I think what's great about him is that 1:01:39.360 --> 1:01:42.000 I hope he's you know, a lot of our entrepreneurs 1:01:42.000 --> 1:01:44.760 are inspired by him, and I think that he's inspiring 1:01:44.840 --> 1:01:48.120 a whole generation of young entrepreneurs to think bigger and 1:01:48.200 --> 1:01:51.080 to do bigger things in the world. The other day, 1:01:51.120 --> 1:01:55.240 I rarely flick around television anymore. I used to just 1:01:55.320 --> 1:01:58.880 sort of randomly rotate and see what's on. But I 1:01:58.920 --> 1:02:01.200 did this the other day actually, to be honest, I 1:02:01.240 --> 1:02:05.160 turned on the TV and what was on was a 1:02:05.760 --> 1:02:08.720 uh well, since the show ended, it has to be 1:02:09.920 --> 1:02:15.400 an older one. But um, a big bang episode one 1:02:15.520 --> 1:02:19.240 where it's Thanksgiving and they go to a soup kitchen 1:02:19.360 --> 1:02:23.000 to serve food and Elon Musk is on the episode 1:02:23.200 --> 1:02:26.320 cleaning dishes, and I have to tell you it, it's 1:02:26.360 --> 1:02:29.080 such a charming episode. You gotta give a guy like 1:02:29.120 --> 1:02:32.200 that props. All right, So let's get to our favorite 1:02:32.240 --> 1:02:36.040 questions that we ask all of our guests. Tell us 1:02:36.080 --> 1:02:39.600 what you're either streaming, down loading, or or watching, be 1:02:39.760 --> 1:02:45.360 it video or audio. Well I am. I am streaming 1:02:45.800 --> 1:02:48.880 Silicon Valley the Hbokay, so but I can not. I 1:02:48.880 --> 1:02:51.160 always fall asleep. I can never make it through. You know, 1:02:51.240 --> 1:02:53.120 you don't have to watch it when a broadcast, you 1:02:53.160 --> 1:02:56.560 can no I watch it. I usually I keep trying 1:02:56.600 --> 1:02:58.680 to make it through the episodes and then I fall asleep. 1:02:59.280 --> 1:03:02.640 What time starting right before bad? This is like my 1:03:02.640 --> 1:03:04.680 bad time thing I watched to tell That's what I'm 1:03:04.720 --> 1:03:09.080 suggesting is watch that the next to watch that on 1:03:09.120 --> 1:03:12.400 a Monday at eight instead of a Sunday at ten. 1:03:12.680 --> 1:03:15.240 That would be a good idea. But alright, so Silicon 1:03:15.360 --> 1:03:18.080 Valley love it. Yeah, it's atastic show. In fact, it's 1:03:18.080 --> 1:03:21.240 almost two realists and this is the last final season. 1:03:21.240 --> 1:03:23.760 I know. I'm very sad about it. Well, the only 1:03:23.760 --> 1:03:26.000 good news is when it's over, when I just hope 1:03:26.000 --> 1:03:28.360 the VC has got an exit. You know, that's a 1:03:28.360 --> 1:03:33.439 happy ending for me. Um. The whole Holy Purchase things 1:03:33.720 --> 1:03:37.400 that it was fantastic, but it is very accurate about 1:03:37.440 --> 1:03:40.480 how quickly fortunes in Silicon Valley can rise and fall, 1:03:40.560 --> 1:03:42.960 come and go very quickly. Give us another show. What 1:03:43.000 --> 1:03:46.800 else are you watching? Mm hmm, Well I'm a big 1:03:46.840 --> 1:03:50.200 West Wing fan as well. So I do you like 1:03:50.360 --> 1:03:54.240 anything has done? I do? In fact, I just saw 1:03:54.360 --> 1:03:58.040 his play to Kill a Mocking Verse, so amazing, right Badway, 1:03:58.120 --> 1:04:02.640 which was incredible with Jeff Daniels. Yeah, he was fantastic 1:04:02.680 --> 1:04:06.840 in it. The whole cast everybody was. Really he's my 1:04:06.960 --> 1:04:09.000 number one person that I would want on Twitter that 1:04:09.280 --> 1:04:11.920 isn't on Twitter. They I'm hoping that he'll come to 1:04:12.000 --> 1:04:16.200 our social media. Huh. That could be interesting. But Yeah, 1:04:16.280 --> 1:04:19.760 fantastic stuff. So if you like West Wing, you know 1:04:19.920 --> 1:04:24.120 the show he Sorkin did before West Wing was a 1:04:24.240 --> 1:04:28.280 delightful little show called sport Night and it only lasted 1:04:28.320 --> 1:04:31.000 like two and a half season, but it was really 1:04:31.040 --> 1:04:34.480 really good. You can stream that if you like that 1:04:34.560 --> 1:04:39.400 sort of fast paced, rapid dialogue, but a different context, 1:04:39.480 --> 1:04:42.520 not in the White House. It's all um, they're putting 1:04:42.560 --> 1:04:47.960 on an ESPN type show and all the characters are great. 1:04:48.200 --> 1:04:51.320 And I haven't seen it in years, but I remember 1:04:51.360 --> 1:04:54.160 really loving that show and was hugely disappointed when I 1:04:54.200 --> 1:04:57.080 was canceled. Alright, so we got Silicon Valley, got West Wing, 1:04:57.200 --> 1:05:00.600 Give me one more anything you're downloading or streaming. So 1:05:00.880 --> 1:05:05.760 Eric weinz he has a great new podcast called The Portal, 1:05:06.160 --> 1:05:08.920 which I listened to a lot. He had Pierre Till 1:05:09.000 --> 1:05:11.960 on the first episode and then Verner Hurtzog in the 1:05:12.040 --> 1:05:17.080 second episode. So that's fantastic. Really, I love getting new 1:05:17.200 --> 1:05:20.000 Uh he's my favorite new media star, and that he 1:05:20.080 --> 1:05:23.520 has these somewhat like you. He has these very you know, 1:05:23.680 --> 1:05:30.560 deep real conversations with Eric Weinstein. Oh okay, wow, this 1:05:30.680 --> 1:05:38.200 is relatively new, thoughtful and insightful conversation all right, I'm 1:05:38.240 --> 1:05:44.200 definitely checking this out. He looks vaguely familiar. This podcast 1:05:44.240 --> 1:05:49.240 does something different. All right, I'm definitely there. I'm definitely 1:05:49.280 --> 1:05:52.040 gonna check that out. Um, what's the most important thing 1:05:52.120 --> 1:05:57.760 people don't know about, Sarah Cone? Um? I think it's 1:05:57.760 --> 1:05:59.920 that my I r R is above my b M I. 1:06:00.040 --> 1:06:03.320 That is the main metric that I run my life by. 1:06:03.400 --> 1:06:06.720 So your I r R is above your b M I. 1:06:07.080 --> 1:06:10.160 And is this a metric that we see elsewhere? It's 1:06:10.200 --> 1:06:13.280 the It's the most important metric for the woman investor. 1:06:14.320 --> 1:06:18.560 So you're encouraging, though, um, either very high I r 1:06:18.800 --> 1:06:20.880 R or very low b m I. You don't want 1:06:20.880 --> 1:06:24.240 to give, not too low, not too low, So that 1:06:24.440 --> 1:06:26.680 that's kind of interesting. Mostly just high I r R. 1:06:26.840 --> 1:06:29.560 There you go. How about your mentors? Who who has 1:06:29.680 --> 1:06:34.360 guided your career? Um? In the world's venture investing? Oh well, 1:06:34.400 --> 1:06:37.720 so the person that really taught me m venture capital 1:06:38.120 --> 1:06:41.400 and this was a long time ago, um, before anyone 1:06:41.520 --> 1:06:44.720 cared about more women being in venture capital was Rob 1:06:44.800 --> 1:06:47.560 Hayes Um. And it's quite a funny story because he's 1:06:47.560 --> 1:06:50.360 a very famous venture capitalist. Now he led the seed 1:06:50.440 --> 1:06:53.160 round into Uber. He's been a long time partner at 1:06:53.240 --> 1:06:56.720 First Round Capital. He stays somewhat under the radar, but 1:06:56.800 --> 1:06:59.720 in Silicon Valley he's extremely you know, well known as 1:07:00.360 --> 1:07:03.640 as a great investor. But back then when he was 1:07:03.680 --> 1:07:07.560 my mentor, he really wasn't. He didn't quite have that profile. 1:07:07.680 --> 1:07:10.560 But I thought he was the smartest you know person 1:07:10.640 --> 1:07:12.920 investing in VC. So I basically just showed up at 1:07:12.960 --> 1:07:16.720 his doorstep at a mediaor network and said, Hi, I'm Sarah, 1:07:16.720 --> 1:07:19.000 and I'm going to learn venture capital from you. Don't worry, 1:07:19.040 --> 1:07:21.480 you don't have to pay me or anything. Um. And 1:07:21.520 --> 1:07:24.880 he said like, okay, well you seem, you know, pretty 1:07:24.880 --> 1:07:28.080 smart and hard working. Um, I guess I'll teach you 1:07:28.160 --> 1:07:31.120 venture capital, but I'm gonna pay you. Yeah. So I 1:07:31.200 --> 1:07:33.240 learned from him, and it was great because back then, 1:07:33.320 --> 1:07:36.120 you know, he he actually had the time to really 1:07:36.120 --> 1:07:39.280 teach me, you know, everything that he thought about venture capital. 1:07:39.320 --> 1:07:41.840 And now I get to go, um, yeah, I was, 1:07:41.960 --> 1:07:45.680 you know, mentored by this extremely famous um and and 1:07:45.760 --> 1:07:48.520 well known venture capitalists. So that's my advice to young 1:07:48.560 --> 1:07:50.840 people is that when you're seeking out your mentors, like 1:07:51.240 --> 1:07:53.160 seek the people that you know are going to be 1:07:53.320 --> 1:07:56.400 famous in ten years and learn from them, not the 1:07:56.600 --> 1:08:01.600 creative today. I literally wrote, I literally tweeted the other 1:08:01.680 --> 1:08:04.160 day there's there's a technical indicator that I think is 1:08:04.240 --> 1:08:08.600 just junk, the Hindenburg omen and that name was was 1:08:09.480 --> 1:08:13.480 the hint that it's junk. But I advise people the 1:08:13.520 --> 1:08:17.800 best way to use this is only follow the signals 1:08:17.840 --> 1:08:21.640 that precede big market crashes, ignore the rest of them. 1:08:21.720 --> 1:08:25.760 So you basically have the same philosophy. Go find a 1:08:25.880 --> 1:08:30.000 mentor who's going to be incredibly successful and famous, and 1:08:30.080 --> 1:08:32.640 find them ten years before they become successful, and just 1:08:32.720 --> 1:08:34.720 attach yourself exactly. And if you're going to be a 1:08:34.720 --> 1:08:37.000 good venture copitist at all, then you'll probably be pretty 1:08:37.040 --> 1:08:40.800 good at doing that. And any other vcs influenced the 1:08:40.840 --> 1:08:44.600 way you look at the world of venture investing startups, 1:08:45.920 --> 1:08:49.880 I'm really not so much influenced by other vcs. I'm 1:08:49.920 --> 1:08:53.600 I'm influenced by other areas of finance um particularly I 1:08:53.640 --> 1:08:57.320 mean hedge funds, particularly the very math heavy and research 1:08:57.479 --> 1:09:00.439 heavy hedge fund managers I love of, you know, I 1:09:00.479 --> 1:09:03.280 have a PhD in in math that I've done a 1:09:03.280 --> 1:09:05.800 lot of our portfolio construction work with and a lot 1:09:05.800 --> 1:09:08.640 of revaluation work with, and we're kind of doing some 1:09:08.720 --> 1:09:11.719 advanced work there, and then in due diligence as well. 1:09:11.760 --> 1:09:14.480 I love due diligence. I describe it as a combination 1:09:14.560 --> 1:09:18.759 of library research and financial modeling, spy work and gossip 1:09:18.880 --> 1:09:21.000 and it's basically the most fun that you could ever 1:09:21.080 --> 1:09:24.439 have trying to understand the world and every deal we do. 1:09:24.479 --> 1:09:27.080 I feel like, is this incredible sort of romp through 1:09:27.200 --> 1:09:31.000 some obscure, you know, realm of the world that I 1:09:31.080 --> 1:09:33.519 then gain a lot of knowledge about, which is what 1:09:33.560 --> 1:09:36.760 I love. So I'm I'm much more influenced by those 1:09:36.800 --> 1:09:40.160 investors rather than venture capitalists, who I like to mostly 1:09:40.200 --> 1:09:44.280 make fun of um by saying that it's and it's 1:09:44.320 --> 1:09:46.880 an industry where all the decisions are made by men's 1:09:46.920 --> 1:09:50.800 guts and the guts of their wives. And I only 1:09:50.840 --> 1:09:52.679 added that last part because I was saying that once 1:09:52.680 --> 1:09:55.920 to a very um famous and prestigious venture cap I said, 1:09:56.080 --> 1:09:58.600 you know, to this very famous and prestigious venture capital like, 1:09:58.680 --> 1:10:00.240 you know, sometimes I feel like I'm more king in 1:10:00.240 --> 1:10:02.559 an industry that's really just run by men's guts, And 1:10:02.600 --> 1:10:06.080 he was like, Sarah, that is completely untrue. You know, 1:10:06.240 --> 1:10:10.000 that is very offensive. UM My firm is also run 1:10:10.000 --> 1:10:13.120 by the gut feelings of my wife. She is an 1:10:13.120 --> 1:10:16.840 incredibly important part of my firm. And I was like, okay, well, 1:10:17.160 --> 1:10:19.720 so he kind of explains a lot. He kind of 1:10:19.800 --> 1:10:23.080 missed the point that I wasn't making a comment about gender. 1:10:23.240 --> 1:10:25.519 It was about guts. I was making a comment about 1:10:25.640 --> 1:10:30.840 gut right, talk talk about talk about missing the forest 1:10:30.880 --> 1:10:33.519 for the trees right there. Let's let's talk about books. 1:10:33.520 --> 1:10:36.000 What are some of the things you've really like to read, 1:10:36.080 --> 1:10:38.519 What do you like to recommend? Tell us what you're 1:10:38.520 --> 1:10:42.519 reading these days. Well, I have a um twenty month 1:10:42.560 --> 1:10:45.719 year old daughter, so I mainly spend my time reading 1:10:45.720 --> 1:10:48.479 to her. And there's this fantastic series of books that 1:10:48.520 --> 1:10:52.360 was written everybody poops, I'm familiar with it. It was 1:10:52.920 --> 1:10:55.480 the series of books was written by a quantum physicist 1:10:55.520 --> 1:10:59.400 and it just boils scientific principles down to baby language, 1:10:59.479 --> 1:11:03.160 so that it is it's it's like quantum computing for babies, 1:11:03.240 --> 1:11:09.639 neural networking for babies, chemistry for babies. So I read 1:11:09.680 --> 1:11:12.559 these to her every day and I have for now 1:11:12.640 --> 1:11:18.000 two years. You just solved a holiday present um issue 1:11:18.080 --> 1:11:21.200 for me. For somebody who I know who is really 1:11:21.200 --> 1:11:24.160 smart and just had a baby, and that's a perfect 1:11:24.520 --> 1:11:26.400 I'm a big fan of these books because they're the 1:11:26.439 --> 1:11:29.920 only books that are both interesting to me and her, 1:11:30.040 --> 1:11:33.240 so we love them and it works on both levels, 1:11:33.240 --> 1:11:36.559 it really does. And her her fourth word was adam, Um, 1:11:36.880 --> 1:11:41.439 so you know, so it was it's been fantastic. Um. 1:11:41.439 --> 1:11:43.599 We really love these books. So these are my favorite 1:11:44.240 --> 1:11:46.960 for babies. Yes, and my dream in life is that 1:11:47.000 --> 1:11:50.040 someone will write these about finance, so we need like 1:11:50.120 --> 1:11:55.400 monetary policy for babies, option trading for babies. It really 1:11:55.400 --> 1:12:00.360 needs to happen. What a genius idea. And the other 1:12:00.880 --> 1:12:05.160 non infant books you might want to mention, um, even 1:12:05.240 --> 1:12:10.080 if you haven't read them recently. Um, there's a book 1:12:10.200 --> 1:12:12.680 called Mating, which is a book of fiction that I 1:12:12.760 --> 1:12:18.879 love by Norman Rush and it's a it's a book about, 1:12:18.920 --> 1:12:21.000 you know, sort of the main themes of my life, 1:12:21.000 --> 1:12:23.880 which are you know, creating a better world and all 1:12:23.880 --> 1:12:27.280 the intricacies and human nous that goes on in that. 1:12:27.680 --> 1:12:30.280 I like it tell us about a time you failed 1:12:30.400 --> 1:12:34.280 and what you learned from the experience. Ah, well, this 1:12:34.479 --> 1:12:36.280 was one of the times. So I know, we have 1:12:36.320 --> 1:12:39.599 this mutual friend who's a venture capitalist. Um. Named Josh 1:12:39.640 --> 1:12:43.080 Wolfe at lux Capitalist, who is that this dinner? And 1:12:43.600 --> 1:12:47.120 so he so the one portfolio, the one company in 1:12:47.160 --> 1:12:50.479 my anti portfolio, which is the things the companies where 1:12:50.479 --> 1:12:52.600 you make a mistake and you didn't invest them. I 1:12:52.640 --> 1:12:54.479 didn't invest. He tried to get me into the seed 1:12:54.560 --> 1:12:58.280 round of this company called Citizen, and I said, you know, 1:12:58.320 --> 1:13:01.120 it's kind of a safe it's an app that's safety 1:13:02.000 --> 1:13:05.559 alert for people. I said, Josh, that is you know, 1:13:06.200 --> 1:13:07.960 it would be very important to the world, but it's 1:13:08.000 --> 1:13:10.800 completely ridiculous. No one will use it. I'm not even 1:13:10.800 --> 1:13:12.639 going to meet with the entrepreneur and waste their time. 1:13:12.680 --> 1:13:15.360 And really turned out to be completely wrong. Ten percent 1:13:15.520 --> 1:13:19.160 of New York City is now on this app. Really yea. 1:13:19.760 --> 1:13:22.280 And what does it do? It just tells you it's 1:13:22.280 --> 1:13:25.000 like safety alerts about what is going on, and then 1:13:25.040 --> 1:13:27.880 now you can also kind of take eyewitness accounts and 1:13:27.920 --> 1:13:30.800 report things to it. So you're gonna laugh about this. 1:13:31.160 --> 1:13:34.479 I know Josh pretty well and he never mentioned this 1:13:34.560 --> 1:13:38.719 company to me. But Eric Kamorrow is my chief operating 1:13:38.760 --> 1:13:42.360 officer at r w M, and she's the one who 1:13:42.400 --> 1:13:45.559 showed that app to me. And it's also a site 1:13:45.960 --> 1:13:48.840 and it shows you arrest here person with a gun. 1:13:48.960 --> 1:13:51.840 They're just all sorts of crazy things that have been 1:13:51.880 --> 1:13:56.040 filed through. They must just be scraping the information off 1:13:56.040 --> 1:13:58.559 a public source. Yeah, they definitely started with that, and 1:13:58.560 --> 1:14:01.160 they've kind of expanded from there into more things that 1:14:01.240 --> 1:14:03.559 you can do to keep the world safe as a citizen. 1:14:03.680 --> 1:14:07.240 But um so, my takeaway from that, well, first of all, 1:14:07.280 --> 1:14:10.000 aside from always listening to Josh Wolf, is that you 1:14:10.040 --> 1:14:13.760 should you should never you should never make venture investments 1:14:13.800 --> 1:14:15.920 with your gut because your gut is going to be wrong. 1:14:16.160 --> 1:14:18.360 Didn't you stay away from that? Now? But didn't you 1:14:18.479 --> 1:14:22.599 learn that from the other VCS wife, Scott I did? 1:14:22.680 --> 1:14:25.959 I mean, it's it's just amazing how all like everything 1:14:26.040 --> 1:14:28.600 just makes you like all the pressures in the industry 1:14:28.960 --> 1:14:32.680 are causing you to feel like your gut is you know, 1:14:32.920 --> 1:14:35.360 the best gut out of all the guts, and you 1:14:35.400 --> 1:14:37.880 have to constantly kind of be saying yourself, don't make 1:14:37.920 --> 1:14:42.080 gut decisions, don't make so so true story one of 1:14:42.120 --> 1:14:45.479 the things I'm gonna tell my war story, which makes 1:14:45.479 --> 1:14:48.439 the guys in my office cringe. So I began on 1:14:48.479 --> 1:14:54.000 a trading desk and eventually you learn how to listen 1:14:54.040 --> 1:14:58.479 to your own body's reactions. And I had a very 1:14:58.560 --> 1:15:02.639 identical experience to you you where I would someone would 1:15:02.680 --> 1:15:05.160 bring me a trading idea and I go, oh, that company, 1:15:05.200 --> 1:15:07.840 it's the worst. And after you miss a couple of 1:15:07.880 --> 1:15:10.800 good trades that way, you eventually figure out, oh, if 1:15:10.880 --> 1:15:14.120 my reaction is this is the worst, then most other 1:15:14.120 --> 1:15:17.800 people's reaction is this is the worst, and based on 1:15:17.840 --> 1:15:21.600 the work of gene Varma, it's probably reflected in the 1:15:21.680 --> 1:15:24.760 stock price, and now it's a good opportunity to buy it. 1:15:25.040 --> 1:15:28.320 So eventually I learned how to become more sensitive to 1:15:29.120 --> 1:15:33.280 my own reaction to something. But it took missing a 1:15:33.320 --> 1:15:37.200 lot of great opportunities to become aware of, Oh, everybody 1:15:37.240 --> 1:15:41.000 must feel this way, and therefore it's a contrarian indicator, 1:15:41.240 --> 1:15:45.040 not a don't listen to your gut. Is kind of 1:15:45.040 --> 1:15:47.719 the takeaway from that. That's an excellent way to frame it. Yes, 1:15:47.920 --> 1:15:50.519 it's it's kind of interesting. I'm fascinated by the fact 1:15:50.520 --> 1:15:53.880 that you were repulsed by a VC who did the 1:15:53.920 --> 1:15:57.759 exact same thing, and yet human nature, you couldn't help yourself. 1:15:58.040 --> 1:16:01.519 The world is full of hypocrites. I don't exempt myself. 1:16:01.520 --> 1:16:03.640 But you know, at least I'm trying to you know, 1:16:03.920 --> 1:16:08.519 that's not so much hypocritical as just the human condition. 1:16:08.600 --> 1:16:11.520 We can help but be a slave to our emotions 1:16:11.560 --> 1:16:14.320 to some degree. It's also the only one. I mean, 1:16:14.360 --> 1:16:16.800 I think more most vcs have more than one in 1:16:16.840 --> 1:16:22.320 their There's literally, wow, there's literally a cognitive bias called 1:16:22.640 --> 1:16:26.439 the bias bias that we all have a tendency to 1:16:26.640 --> 1:16:30.719 observe these biases and other people and be completely blind 1:16:30.880 --> 1:16:34.479 in our ourselfs. Like I'm always pointing pointing out to people, Oh, 1:16:34.600 --> 1:16:38.040 you're confirmation bias, and and of course I'm as guilty 1:16:38.080 --> 1:16:40.280 of it as anybody else, but we're blind to it. 1:16:40.280 --> 1:16:43.439 It's it's it's quite amazing. Um, what do you do 1:16:43.520 --> 1:16:45.280 for fun? What do you do when you're not reading 1:16:45.400 --> 1:16:50.559 quantum physics for babies to your daughter? Well, I started 1:16:50.600 --> 1:16:53.320 this social impact venture capital firm that you might have 1:16:53.400 --> 1:16:57.200 heard of. So I work a huge amount um and 1:16:57.400 --> 1:16:59.760 don't have too much time for fun. I hear it's 1:16:59.800 --> 1:17:03.479 not igislatively mandated to have hobbies, so I just don't 1:17:03.479 --> 1:17:09.439 have anything just anything like that. I pretty much just 1:17:09.600 --> 1:17:12.040 work and then take care of my baby. But I 1:17:12.120 --> 1:17:14.880 do my I take my baby um to art. We 1:17:14.920 --> 1:17:17.760 go to art galleries a lot because we live incredibly 1:17:17.840 --> 1:17:20.519 close to the art galleries and Chelsea, so it's a 1:17:20.640 --> 1:17:24.040 very convenient thing for us. Is she entertained by this? 1:17:24.160 --> 1:17:26.719 She loves it. And so I've started this Twitter account 1:17:26.760 --> 1:17:29.639 to you know, record her reactions to the art called 1:17:29.680 --> 1:17:33.599 Ada baby art critic and that's my hobby. What are 1:17:33.640 --> 1:17:37.360 her reactions to art? Well, she's had this incredibly complex 1:17:37.880 --> 1:17:41.120 language of art criticism. So when she was really little 1:17:41.120 --> 1:17:43.360 baby and she couldn't move her neck, I would sort 1:17:43.360 --> 1:17:45.599 of hold her in front of the works and then 1:17:45.640 --> 1:17:47.960 she would she would make a little sound like when 1:17:48.000 --> 1:17:50.479 she wanted to go to the next one, and sometimes 1:17:50.479 --> 1:17:53.360 she would look for hours, and I'd be like, okay, 1:17:53.720 --> 1:17:58.400 so representational contemporary and just basically go to whatever is 1:17:58.439 --> 1:18:03.800 close by, but geographic, geographic, anything, And you know, does 1:18:03.800 --> 1:18:06.400 she have a preference? Does she like? She definitely has 1:18:06.520 --> 1:18:09.479 favorite artists and they don't The disappointing thing to me 1:18:09.520 --> 1:18:12.000 is that they don't match mine. So well, that's a 1:18:12.040 --> 1:18:14.080 good thing. Yeah, I know, I say, it's good. It's 1:18:14.080 --> 1:18:16.280 good that you have your own characteristics. But what does 1:18:16.320 --> 1:18:19.280 she like? Um, she liked well. She was I always 1:18:19.320 --> 1:18:21.880 called her. She was born in the year of the 1:18:21.920 --> 1:18:24.719 month of Sai Twambly, so they were having a huge 1:18:24.720 --> 1:18:30.040 Si Twambly retrospective at um In. So we went to 1:18:30.080 --> 1:18:34.160 that every single day and she loved it. Those she 1:18:34.200 --> 1:18:37.120 would look at those for hours and hours. So I 1:18:37.160 --> 1:18:39.280 always but now she can do even better now now 1:18:39.320 --> 1:18:41.559 that she's too she's making her own works and she 1:18:41.600 --> 1:18:43.200 can even I think she can even do better work 1:18:43.680 --> 1:18:48.240 to have her tastes evolved. All they definitely they know 1:18:48.400 --> 1:18:50.479 she tends to like like so she she really she 1:18:50.520 --> 1:18:53.599 seems to really like Damian hurst Um a lot, like 1:18:53.680 --> 1:18:58.679 the Shark time. I really don't like him. I think 1:18:58.680 --> 1:19:01.479 he's kind of banal and commercial, but she loves vanal 1:19:01.680 --> 1:19:05.360 is the right word fraud um? So yeah, so we 1:19:05.520 --> 1:19:08.799 so we shop you like the urinal in the corner. 1:19:08.920 --> 1:19:11.040 She's never seen any shomp. We then there was so 1:19:11.120 --> 1:19:13.400 I love Sarah Ze and we went to the Sara 1:19:13.479 --> 1:19:15.840 Ze Show, which I loved, and she didn't like it 1:19:15.880 --> 1:19:17.479 at all. I was like, I don't, I don't know, 1:19:17.720 --> 1:19:20.040 like maybe you just don't really have good taste in 1:19:20.160 --> 1:19:23.320 art because you're just a baby, or maybe she has 1:19:23.400 --> 1:19:26.320 the purest taste in art. Have you taken her to 1:19:26.400 --> 1:19:30.080 the you know, MoMA just finished this wonderful renovation and 1:19:30.280 --> 1:19:35.640 there's a ton of twentieth century contemporary American artists, and 1:19:35.680 --> 1:19:39.240 if you like that sort of post impression. Yeah, she 1:19:39.280 --> 1:19:41.160 loves the I mean we go to the mat sometimes 1:19:41.400 --> 1:19:44.240 to MoMA. She likes, she loves Picasa. She she really 1:19:44.280 --> 1:19:46.360 likes all like. She likes a lot of the old art. 1:19:46.840 --> 1:19:49.559 And it's going to be hilarious. I'm thinking like Jackson 1:19:49.640 --> 1:19:53.280 Salek would be entertaining for a baby, or maybe Rothco, 1:19:53.439 --> 1:19:58.040 which I've evolved very much. She liked Troytin a lot, well, 1:19:58.120 --> 1:20:02.640 giant cartoons, why not in comics. Everybody likes that as 1:20:02.720 --> 1:20:05.080 a as a whatever. So then when she was a 1:20:05.080 --> 1:20:07.280 little bit older, she then would turn her head like 1:20:07.400 --> 1:20:10.320 dramatically away from the painting when she didn't want to 1:20:10.320 --> 1:20:12.320 look at it anymore. And then when she was even older, 1:20:12.400 --> 1:20:14.840 not than if she liked it, she would point. And 1:20:14.920 --> 1:20:18.040 now that she's older she can say no. So she 1:20:18.920 --> 1:20:22.080 go in front of them and the paintings and go no, no, no, 1:20:22.720 --> 1:20:24.439 that's funny, because that's what I'm like in a lot 1:20:24.479 --> 1:20:27.479 of museums. My wife, who who used to teach fashion, 1:20:27.479 --> 1:20:30.920 illustration and design is dragging around to every museum in 1:20:30.920 --> 1:20:33.439 the world and every now and then, but I don't 1:20:33.439 --> 1:20:35.920 repeat it. Usually I just look at something, go no, 1:20:36.200 --> 1:20:39.080 and onto the next. Um, what's the name of the 1:20:39.120 --> 1:20:44.520 Twitter account from your art critic? A d A baby 1:20:44.800 --> 1:20:50.320 art critic. That's hilarious hobby that now I know what 1:20:50.400 --> 1:20:52.120 you do for fun. That is a good hobby. So 1:20:52.120 --> 1:20:54.880 so let's talk about within the world of startups and 1:20:54.960 --> 1:20:58.240 venture investing, what are you most optimistic about and what 1:20:58.280 --> 1:21:02.360 do you least optimistic we're most pessimistic about. Well, I 1:21:02.400 --> 1:21:06.240 am still very optimistic about venture capital. Um. I think 1:21:06.360 --> 1:21:09.360 it's the most effective way to deploy capital that man 1:21:09.400 --> 1:21:13.320 has ever invented. And I'm incredibly excited that I am 1:21:13.360 --> 1:21:16.240 able to start deploying it to solving some of the 1:21:16.280 --> 1:21:20.439 world's most tough problems, which is this, you know, putting 1:21:20.520 --> 1:21:23.679 venture capital towards these problems has really never been tried 1:21:23.720 --> 1:21:27.200 at all at scale. So I think my fund, you know, 1:21:27.400 --> 1:21:29.839 this ability to do this is going to be incredibly exciting, 1:21:29.840 --> 1:21:31.559 and I'm excited to see what we can do in 1:21:31.600 --> 1:21:33.920 the world because we've already done so much you know, 1:21:33.960 --> 1:21:37.840 in the first three years of our existence, what I 1:21:37.880 --> 1:21:42.960 am the most pessimistic about is immigration. And I think 1:21:42.960 --> 1:21:47.320 that America's entire competitive advantage used to be, you know 1:21:47.479 --> 1:21:50.559 that all the smartest people in the world I wanted 1:21:50.600 --> 1:21:53.759 to come to America, and all the hardest working people 1:21:53.760 --> 1:21:56.080 in the world wanted to come to America. What is 1:21:56.080 --> 1:21:59.439 it fift of Silicon Valley c suite. Yeah, yeah, so 1:21:59.479 --> 1:22:03.160 it's you know, fifty five of all of America's billion 1:22:03.200 --> 1:22:07.439 dollar startups had an immigrant founder. So this is incredibly important. 1:22:07.479 --> 1:22:11.240 Immigration is incredibly important to the engine of the American economy. 1:22:11.280 --> 1:22:14.320 And I see us as a culture sort of becoming 1:22:14.439 --> 1:22:17.519 less welcoming to these people. Not very smart long term, 1:22:17.640 --> 1:22:21.120 is not very smart for you know, for for competition reasons. 1:22:21.200 --> 1:22:23.960 You know, in my opinion, if you walk a thousand 1:22:24.000 --> 1:22:27.120 miles with your child on your back and you apply, 1:22:27.360 --> 1:22:31.559 you know your you fit under American asylum laws. Come 1:22:31.600 --> 1:22:34.680 on in. You're extremely welcome in my country. So you're 1:22:34.680 --> 1:22:36.519 an American. You know, if you do that, you're an 1:22:36.520 --> 1:22:39.559 American to me. So I'm onto the assumption that the 1:22:39.560 --> 1:22:44.360 past three years is a temporary aberration and a setback, 1:22:44.439 --> 1:22:47.240 and it eventually it will revert to what the prior 1:22:47.320 --> 1:22:49.920 to d years alike. Although I could be wrong. I 1:22:49.960 --> 1:22:53.040 hope so, because we aren't an immigrant society, and one 1:22:53.040 --> 1:22:55.479 of the greatest things about America is our ability to 1:22:55.520 --> 1:23:00.320 incorporate all these ideas and differences into a tolerance. I DA. 1:23:00.360 --> 1:23:02.200 I don't think there's any country in the world that 1:23:02.200 --> 1:23:06.200 has done that as successfully as we have, and it's 1:23:06.240 --> 1:23:09.519 been a huge advantage to the economy. So to the 1:23:09.520 --> 1:23:12.799 extent that we are are turning in the opposite direction, 1:23:12.920 --> 1:23:15.360 our economy is going to get worse, and I very 1:23:15.439 --> 1:23:18.760 much worry about that. So a recent graduate comes up 1:23:18.760 --> 1:23:21.639 to you and says their interest in career um, either 1:23:21.680 --> 1:23:24.400 as a venture capitalist or in a startup. What sort 1:23:24.439 --> 1:23:28.719 of advice would you give them? Well, I tell them that, 1:23:29.280 --> 1:23:31.040 you know, I try to find out what they care 1:23:31.080 --> 1:23:33.800 about most in the world, and I say, do not 1:23:33.960 --> 1:23:38.479 compromise between that and making money, because you can do both. Um. 1:23:38.520 --> 1:23:41.960 It's the fundamental premise of my fund that you can, 1:23:42.200 --> 1:23:44.840 you know, accomplish what you most want to accomplish and 1:23:44.920 --> 1:23:47.439 make money. And if you don't do that and you 1:23:47.600 --> 1:23:50.000 just decide that you want to make money, you eventually 1:23:50.120 --> 1:23:54.120 end up incredibly old and bitter very quickly. I'm often 1:23:54.320 --> 1:23:56.599 told that I, you know, people seem to think I'm 1:23:56.640 --> 1:23:59.360 a lot younger than I am, which is always funny 1:23:59.400 --> 1:24:01.120 to me and I I think the reason is because 1:24:01.120 --> 1:24:03.679 I still have ideals and that makes you just appear 1:24:03.800 --> 1:24:06.600 incredibly young to the world. So I it's like some 1:24:06.760 --> 1:24:10.000 miracle face cream to just have ideals and continue to 1:24:10.040 --> 1:24:13.519 execute them because most people are giving those up. Huh, 1:24:13.840 --> 1:24:18.160 that that's the pressing. Um, I'm sorry, I'm meaning it's 1:24:18.160 --> 1:24:20.040 the pressing to you that most people are giving up 1:24:20.080 --> 1:24:23.320 their ideals. And our final question, what do you know 1:24:23.360 --> 1:24:26.559 about the world investing today? I want to say that again, 1:24:26.960 --> 1:24:29.679 our final question, what do you know about the world 1:24:29.760 --> 1:24:34.080 of startups and venture capital investing today that you wish 1:24:34.080 --> 1:24:38.400 you knew? Can I say twenty years ago, fifteen years ago, 1:24:38.439 --> 1:24:42.160 thirty it's not thirty years ago? No, Um, I mean 1:24:42.280 --> 1:24:45.760 I went so I'm somewhat late into the industry. So 1:24:46.000 --> 1:24:47.880 I wish that I had known that women could go 1:24:47.920 --> 1:24:50.559 into this field, because I would think they weren't allowed. 1:24:51.760 --> 1:24:54.760 I didn't that that thought didn't cross my mind, you know, 1:24:54.840 --> 1:24:59.240 because I was a child. So it's it's more that. Um. 1:24:59.280 --> 1:25:01.240 You know, it's more that if you don't see it, 1:25:01.360 --> 1:25:03.719 then it doesn't cross your mind that that's a career 1:25:03.760 --> 1:25:06.719 path for That's interesting. So I think that now there's 1:25:06.720 --> 1:25:09.920 all these incredibly amazing women that are inspirations to me 1:25:09.920 --> 1:25:13.120 and venture capital, like Marymaker, who just reached the first 1:25:13.160 --> 1:25:19.360 billion dollar venture capital fund. You know, yeah, she started 1:25:19.439 --> 1:25:22.040 on chop called bond. They just raised a huge fund. 1:25:22.760 --> 1:25:25.479 And so now it's it's extremely easy for me now 1:25:25.520 --> 1:25:27.920 to go, oh, I want to be like her. Let 1:25:27.920 --> 1:25:32.320 me man role models? How important that is? That? That's interesting? 1:25:32.320 --> 1:25:35.040 I don't I never really thought of that. Um, but 1:25:35.200 --> 1:25:37.800 I guess it a thing to think about think about 1:25:37.840 --> 1:25:40.320 because I go, why, I must have been really stupid 1:25:40.320 --> 1:25:42.280 that it never crossed my mind. But it just it 1:25:42.479 --> 1:25:45.160 literally didn't. I mean, finance was my main hobby, it 1:25:45.280 --> 1:25:48.240 was my main love in life, and it never occurred 1:25:48.280 --> 1:25:50.280 to me that it could be a career. It just 1:25:50.280 --> 1:25:53.800 just goes to show you that having role models make 1:25:53.840 --> 1:25:57.200 a big difference, and that's why these things seem to 1:25:57.200 --> 1:26:02.880 take generations to change. He and spleens um correct. A 1:26:02.920 --> 1:26:05.240 lot of the man splaining is correct. All right, Well, Sarah, 1:26:05.280 --> 1:26:07.400 thank you so much. For doing this, We have been 1:26:07.439 --> 1:26:11.559 speaking with Sarah Cone. She is the managing partner at 1:26:11.640 --> 1:26:15.880 Social Impact Capital. If you enjoy this conversation well, be 1:26:15.920 --> 1:26:17.439 sure to look Up an Inch or Down an Inch 1:26:17.840 --> 1:26:20.360 on Apple iTunes, where you can see any of our 1:26:20.360 --> 1:26:24.160 previous three hundred or so conversations that we've had over 1:26:24.160 --> 1:26:28.879 the past five plus years. We love your comments, feedback 1:26:29.000 --> 1:26:33.439 and suggestions right to us at m IB podcast at 1:26:33.439 --> 1:26:36.880 Bloomberg dot net. Check out my weekly column you can 1:26:36.880 --> 1:26:40.559 find that at Bloomberg dot com slash Opinion. Sign up 1:26:40.680 --> 1:26:44.280 for my daily list of reads that's at Rit Halts 1:26:44.320 --> 1:26:48.000 dot com. Follow me on Twitter at rit Halts. I 1:26:48.080 --> 1:26:50.400 would be remiss if I did not thank the crack 1:26:50.479 --> 1:26:53.800 staff that helps me put together these conversations each week. 1:26:54.360 --> 1:26:59.000 Karlin O'Brien is our audio engineer. Michael Boyle is my producer. 1:26:59.760 --> 1:27:03.439 My holbat Nick is my head of research. I'm Barry Riholts. 1:27:03.560 --> 1:27:06.960 You've been listening to Masters in Business on Bloomberg Radio 1:27:12.640 --> 1:27:12.680 m