The Exchanges

Q And then on the thematic element, what do you make of the rise of thematic investing with very specialized funds?

A It can cut both ways. And I think in one sense, you do have a lot of benefits in, uh, number one, building, you know, a network or building a talent base or just Just getting more bank for your time and for your buck, because that idea of, okay, I have one success in that space or in that trend, you can kind of leverage that, and you're kind of seen as the expert, and people kind of come to you for that, so there are definitely benefits and network effects from that. It's also an easier story to explain to the outside world, like, you know, this is my swim lane, and this is what I'm looking for, so think of me for A, B, and C, and don't think of me for other things, but on the other hand, you're kind of really... Number one, if that industry or that sector is out of favor, you have your, your, your glory days, but you kind of go away with that. And, and number two, you know, it's very hard to branch and think differently. And you might miss big tectonic shifts in other areas that because you're so down looking at, okay, what's the best call the enterprise deal that I can see right now that you might be missing out on a bunch of other very interesting and big movements in the industry that you're not catching.

AI assessment note: “It can cut both ways. And I think in one sense, you do have”

Q Can I ask, should that accountability and responsibility for when the algorithm should decide and when there should be a human interaction, should that responsibility fall to the board, the CEO, uh, maybe more macro regulation on kind of morality of Algorithms. What's your thoughts on kind of who the ultimate decision maker should be in that case?

A I think it should be a layer of conversations, right? I think first of all, the, the engineering, the engineering team coding should understand, okay, what are the possible implications and ramifications of what I'm doing now? And you should think about, okay, do I have an enough cognitively diverse enough group of people asking this question and understanding really what's going on here? And that should bubble up To the combination of things and decisions going on at a, at a company. So the CEO should be aware, and then it should roll up to the board. And we should also, as a board, think about, okay, what's happening with the industry overall? And does a regulatory conversation need to happen, right? So it should be done at every level. And I think that the operative words are number one, transparency, number two, diversity, right? Like if you look at, uh, what Amazon is doing with Alexa, they have not only for females working on it, but they have also a psychologist, uh, Working on it. They have, uh, you know, people with experience in, in other areas that are not just engineers thinking, thinking about, okay, what relevancy means or what is applicable here from a pure technological zero and one perspective.

AI assessment note: “So it should be done at every level.”

Q Okay, so let's start with what do you know now that you wish you'd known when you started in VC?

A I think for me, the biggest lesson was approach each conversation, each pitch with a yes mentality, right? So thinking about how does reality look like if this company is successful, let's leave the how aside for a minute. Let's get creative and let's stretch Our imagination. And is this something worth, you know, worth building? I think if you just kind of go into the nitty gritty of let's talk about the next 12 months, 18 months right now in the early days of the conversation, or if we approach it with a no mentality, you really fail to see the things are uncomfortable. You know, it's not natural to human beings to think exponentially. And you can get false confidence on the short-term execution. So be a skeptic optimist. That's my learn.

AI assessment note: “the biggest lesson was approach each conversation, each pitch with a yes mentality”

Q last few years in the industry, and it's the rise of operational value add within VC, and then the rise of thematic investing within VC, so much so that you have kind of thematically specialized funds. What's your take on these two? Let's start with operational value add. Is it so value add? Is it that tangible proposition, or is it a bit of marketing BS? Let's start with that.

A I think, you know, Harry, I think in the end of the day, it really comes down to the proposition that you have, the skills that you bring, and the founders that you partner with. You know, some founders are going to be fantastic at figuring out technology, figuring out hiring a technical environment, but they've never scaled a company before, so in that environment, maybe bringing in some operational expertise is helpful, but if you talk to a That, that really, that's really not what that founder needs. They will need high level contacts with customers bringing me great revenues. Let me think about the areas that I should be thinking about that I'm not. Push me. Am I growing fast enough? Not fast enough. What are the big strategic things that I should be thinking about that I'm not? And in that sense, that entrepreneur doesn't care too much about the operational value, right? I think the important thing is you should only do it if it matches your skills and it matches your The relationship and the way you want to work with your founders, right? You shouldn't, you shouldn't do it because the industry is doing it. You shouldn't do it because LPs, you know, expect to come to you and say, how do you have value to your companies? And if your answer is, listen, I actually partner with great people who don't need a lot of help from me in the sort of nitty gritty, but they need high va…

AI assessment note: “in that environment, maybe bringing in some operational expertise is helpful, but if you talk”

Q And then on the thematic element, what do you make of the rise of thematic investing with very specialized funds?

A It can cut both ways. And I think in one sense, you do have a lot of benefits in, uh, number one, building, you know, a network or building a talent base or just Just getting more bank for your time and for your buck, because that idea of, okay, I have one success in that space or in that trend, you can kind of leverage that, and you're kind of seen as the expert, and people kind of come to you for that, so there are definitely benefits and network effects from that. It's also an easier story to explain to the outside world, like, you know, this is my swim lane, and this is what I'm looking for, so think of me for A, B, and C, and don't think of me for other things, but on the other hand, you're kind of really... Number one, if that industry or that sector is out of favor, you have your, your, your glory days, but you kind of go away with that. And, and number two, you know, it's very hard to branch and think differently. And you might miss big tectonic shifts in other areas that because you're so down looking at, okay, what's the best call the enterprise deal that I can see right now that you might be missing out on a bunch of other very interesting and big movements in the industry that you're not catching.

AI assessment note: “It can cut both ways. And I think in one sense, you do have”

Q Can I ask, should that accountability and responsibility for when the algorithm should decide and when there should be a human interaction, should that responsibility fall to the board, the CEO, uh, maybe more macro regulation on kind of morality of Algorithms. What's your thoughts on kind of who the ultimate decision maker should be in that case?

A I think it should be a layer of conversations, right? I think first of all, the, the engineering, the engineering team coding should understand, okay, what are the possible implications and ramifications of what I'm doing now? And you should think about, okay, do I have an enough cognitively diverse enough group of people asking this question and understanding really what's going on here? And that should bubble up To the combination of things and decisions going on at a, at a company. So the CEO should be aware, and then it should roll up to the board. And we should also, as a board, think about, okay, what's happening with the industry overall? And does a regulatory conversation need to happen, right? So it should be done at every level. And I think that the operative words are number one, transparency, number two, diversity, right? Like if you look at, uh, what Amazon is doing with Alexa, they have not only for females working on it, but they have also a psychologist, uh, Working on it. They have, uh, you know, people with experience in, in other areas that are not just engineers thinking, thinking about, okay, what relevancy means or what is applicable here from a pure technological zero and one perspective.

AI assessment note: “I think it should be a layer of conversations... it should be done at every level.”

Q Okay, so let's start with what do you know now that you wish you'd known when you started in VC?

A I think for me, the biggest lesson was approach each conversation, each pitch with a yes mentality, right? So thinking about how does reality look like if this company is successful, let's leave the how aside for a minute. Let's get creative and let's stretch Our imagination. And is this something worth, you know, worth building? I think if you just kind of go into the nitty gritty of let's talk about the next 12 months, 18 months right now in the early days of the conversation, or if we approach it with a no mentality, you really fail to see the things are uncomfortable. You know, it's not natural to human beings to think exponentially. And you can get false confidence on the short-term execution. So be a skeptic optimist. That's my learn.

AI assessment note: “the biggest lesson was approach each conversation, each pitch with a yes mentality”

Q last few years in the industry, and it's the rise of operational value add within VC, and then the rise of thematic investing within VC, so much so that you have kind of thematically specialized funds. What's your take on these two? Let's start with operational value add. Is it so value add? Is it that tangible proposition, or is it a bit of marketing BS? Let's start with that.

A I think, you know, Harry, I think in the end of the day, it really comes down to the proposition that you have, the skills that you bring, and the founders that you partner with. You know, some founders are going to be fantastic at figuring out technology, figuring out hiring a technical environment, but they've never scaled a company before, so in that environment, maybe bringing in some operational expertise is helpful, but if you talk to a That, that really, that's really not what that founder needs. They will need high level contacts with customers bringing me great revenues. Let me think about the areas that I should be thinking about that I'm not. Push me. Am I growing fast enough? Not fast enough. What are the big strategic things that I should be thinking about that I'm not? And in that sense, that entrepreneur doesn't care too much about the operational value, right? I think the important thing is you should only do it if it matches your skills and it matches your The relationship and the way you want to work with your founders, right? You shouldn't, you shouldn't do it because the industry is doing it. You shouldn't do it because LPs, you know, expect to come to you and say, how do you have value to your companies? And if your answer is, listen, I actually partner with great people who don't need a lot of help from me in the sort of nitty gritty, but they need high va…

AI assessment note: “You shouldn't do it because the industry is doing it.”

Q question? It's a lot of this, uh, although incredibly valid and worthwhile at the inception stages of a company building, does it not go contra the thesis of kind of aggressive growth when VCs invest? Because a lot of this, A, takes kind of a lot of time and diligence, but, but also kind of requires an extension of runway potentially to ensure that all these precautions are in place.

A And that's why you should plan for it, right? And you should build, and it's not a matter of process for process sake. Right. And I mean, we're, we're hearing some stories about companies pushing the gas just to show numbers that the industry expects, where they promise products and products are not ready. They take money from customers when, you know, products are not ready, or they're feeling that pressure to, um, be too optimistic about where they're, where they're at in terms of product and into the sense of some people calling BS on it. I don't think those are sustainable business practices. And that's the balance, right? You should figure out, okay, if I'm going to be successful, those things matter, right? And, and become sort of part of your culture, become sort of part of your KPIs. Uh, and if you need a little bit more capital to do that, do so, make that part of your plan instead of going bare bones, ignoring these things and, and, and later figuring out, okay, I need to invest in these areas and you can't go back.

AI assessment note: “make that part of your plan instead of going bare bones, ignoring these things”

Q You also mentioned the transformation that you saw at that very kind of poignant time being 2008. I'm intrigued here. When you look back now to that time and compare it to now, how has what it takes to be a successful emerging manager changed in your eyes, having seen that with Stanford and then seeing that now with the development of Felicis and now joining Lux?

A So I think the, you know, even when I invest today as a GP, like I'm always asking that question of what has changed now that makes New things, important, big, sustainable things possible, right? And when you think about the beginnings of venture capital as an industry, that, that big thing was people actually willing to take a risk on the unknown, and access to capital was the, the defining, you know, why now response, kind of going back 30, 40 years. But then, you look at how the industry evolved, and the cost to start companies, and the way companies were started, if you think of, Cloud, mobile, processing power, all those things that happened in the past, you know, call it 1520 years, they made founders need differently, and I saw what in 2006, seven, eight, people kind of taking that big step back and say, okay, what's changed now, and what do founders really need, and that answer changed from just capital to, to partnership, support, relationship, understanding, and just a different type of relationship, and that's really what made this whole sort of Smaller funds possible. Newcomers say, okay, we can start from the ground up in a different way. That was the big change.

AI assessment note: “that answer changed from just capital to, to partnership, support, relationship, understanding”

Q Can I interject there, Anos? You said about the interaction with the top GPs from the best funds, as you said, being with the Stanford Endowment Fund. I'm intrigued. What were the big takeaways from really communicating and working alongside them and having that kind of continuous flow of communication?

A Yeah. I think the best firms, they really build something to last beyond themselves, right? They have that idea of there is an opportunity in time right now that I'm seizing, but you have to understand that the opportunities and the markets, they change on you. So how it is that I think of my culture, my team, my processes, even my LP base to really be sustainable and allow me to be successful. 3040, 50 years from now. It's not just that short-term opportunity that, you know, it makes sense right now, and then it breaks five years from now. So you're thinking about the type of people you bring, what is your unique sauce, and how you're going to win, and how you're going to continue to keep winning, and that's really important. And how do you match the LP's expectations to, I'm going to do X, Y, and Z? Does that match with your understanding? Does that match your risk profile? And are you, like, a great partner to meet down the long run? So that understanding and that awareness is really, really important. And that's when you build something sustainable.

AI assessment note: “I think the best firms, they really build something to last beyond themselves”

Q question? It's a lot of this, uh, although incredibly valid and worthwhile at the inception stages of a company building, does it not go contra the thesis of kind of aggressive growth when VCs invest? Because a lot of this, A, takes kind of a lot of time and diligence, but, but also kind of requires an extension of runway potentially to ensure that all these precautions are in place.

A And that's why you should plan for it, right? And you should build, and it's not a matter of process for process sake. Right. And I mean, we're, we're hearing some stories about companies pushing the gas just to show numbers that the industry expects, where they promise products and products are not ready. They take money from customers when, you know, products are not ready, or they're feeling that pressure to, um, be too optimistic about where they're, where they're at in terms of product and into the sense of some people calling BS on it. I don't think those are sustainable business practices. And that's the balance, right? You should figure out, okay, if I'm going to be successful, those things matter, right? And, and become sort of part of your culture, become sort of part of your KPIs. Uh, and if you need a little bit more capital to do that, do so, make that part of your plan instead of going bare bones, ignoring these things and, and, and later figuring out, okay, I need to invest in these areas and you can't go back.

AI assessment note: “if you need a little bit more capital to do that, do so”

Q You also mentioned the transformation that you saw at that very kind of poignant time being 2008. I'm intrigued here. When you look back now to that time and compare it to now, how has what it takes to be a successful emerging manager changed in your eyes, having seen that with Stanford and then seeing that now with the development of Felicis and now joining Lux?

A So I think the, you know, even when I invest today as a GP, like I'm always asking that question of what has changed now that makes New things, important, big, sustainable things possible, right? And when you think about the beginnings of venture capital as an industry, that, that big thing was people actually willing to take a risk on the unknown, and access to capital was the, the defining, you know, why now response, kind of going back 30, 40 years. But then, you look at how the industry evolved, and the cost to start companies, and the way companies were started, if you think of, Cloud, mobile, processing power, all those things that happened in the past, you know, call it 1520 years, they made founders need differently, and I saw what in 2006, seven, eight, people kind of taking that big step back and say, okay, what's changed now, and what do founders really need, and that answer changed from just capital to, to partnership, support, relationship, understanding, and just a different type of relationship, and that's really what made this whole sort of Smaller funds possible. Newcomers say, okay, we can start from the ground up in a different way. That was the big change.

AI assessment note: “that answer changed from just capital to, to partnership, support, relationship”

Q What's your most recent and final question here? The most recent publicly announced investment and why you said yes.

A I'm going to twist the question a little bit because I've, you know, the last public announced investment was at Felice's a while back And, but I did do a stealth investment here at Lux and it's a company that is tackling a key problem in sort of the high bandwidth connectivity space. Like, so if you think about there's going to be sensors everywhere, there's going to be processing that's distributed on the edge fast and also happening in the cloud. Connectivity is a really important tissue to allow a lot of applications. And I found a wonderful team that is just really perfect to Create a wild product experience in, um, you know, not easy, but, uh, very meaningful, high bandwidth, uh, connectivity space that I'm super excited about, and stay tuned. Sorry that I twisted the question.

AI assessment note: “I'm going to twist the question a little bit”