The Exchanges

Q And then final one, the most recent publicly announced investment. And why did you say yes and get so excited?

A I'd say probably the most recent one is a company called Lightship, which is doing direct-to-patient clinical trials. The biggest driver of cost in pharmaceutical companies and why drug prices are so high is that the trial process is so long and expensive. And if you can shorten the trial time, every day you shorten clinical trials is a million dollars that is saved to the healthcare system. And this company is basically, instead of having you go to Stanford or Berkeley, Go to the hospital, wait in line, figure out where to go to, to participate in a clinical trial. They'll do it all at your home. They'll find you online. They'll enroll you online in a really easy way, and they'll do everything at home, and we think that'll make clinical trials as much as 30 to 40% more efficient.

AI assessment note: “the most recent one is a company called Lightship, which is doing direct-to-patient clinical trials.”

Q Well, that is very, very kind of you. Uh, ego is a wonderful thing, so thank you for that, but I would love to start today with a little bit on you. So tell me, how did you make your way into the world of venture and come to found one of the leading firms of the last decade in Kostler?

A It's a complete accident. So I was working on the genome projects with Craig Venter in the late nineties. So at this point, you know, I was in graduate school. I heard Craig talk and I, and I was still doing DNA sequencing the old fashioned way with radioactive isotopes and developing my own film. And he was talking about these magical machines that could sequence the whole human genome. And I ended up leaving with a master's. I went to go work for him. And I soon moved up to actually running the Probably the largest group at the Institute for Genomic Research without a PhD, which was super fun, and we sequenced the first plant to ever be sequenced, which was Arabidopsis thaliana, and the way to think about why is that even relevant, this little mustard seed plant, is to think about it as the reason we study mice and rats is because they are somewhat of a proxy for human, and Arabidopsis is similarly somewhat of a proxy for corn, wheat, soybeans, and other higher level crops. So I was doing that And at some point, Craig and I both thought the right thing to do would be go to business school, and he had moved on to Solera, which was a public company that was a private effort to sequence the human genome. And my goal was to go to business school, and I chose Harvard, come back, and work for Craig again at Solera, and one day maybe run the company. Instead, soon after I started bu…

AI assessment note: “It's a complete accident. So I was working on the genome projects with Craig Venter”

Q the final segment before the quickfire, though, and it's really a question of kind of inflection moments in people. This is an interesting one. From the inflection moment perspective, what was, and this is a tough one to ask, what was one of the most kind of formative moments and experiences for you as an investor? Does it stick out to you, and how did it change how you think?

A It's probably right when I started working with Newbar at Flagship was meeting Steve Quake, who at that time, Steve is one of the legendary professors in biophysics, He's now co-head of Chan Zuckerberg, was a Howard Hughes tenured professor at Stanford, and when I met him, it was right after I left business school in 2002, and he was a professor, a junior professor at Caltech, and he had published a paper on single molecule sequencing, which would be ultimately what Illumina has done. At that point, Illumina was probably worth three hundred million, and now they're worth forty-six billion, and now everyone's getting their genome sequenced, et cetera, et cetera, and that wasn't particularly Steve's technology, but You know, getting to, like, meet someone like that, and Steve and I are still very close friends. We've done three companies since together, and I'm being like, wow, like, you can read a scientific paper, partner with a professor, and then start a company that we started, a company called Helicos that went public, and I was like, this is what I want to do the rest of my life. I was technical enough where I could get the credibility of the scientists and the professors, and I had enough business acumen where I could help them commercialize, and I said, this is where I want to do the rest of my life, and You know, with Helicoast, we brought on Steve Chu as an early advis…

AI assessment note: “meeting Steve Quake... I was like, this is what I want to do”

Q Can I ask the final question before the quick fire? And was it your wife's statement there, and kind of reinforcing support, that mitigated the self-doubt? How did you get over self-doubt? It's something I, off the whole time.

A Again, being honest, it was obviously my wife's support is the most important thing on the planet to me. I started to see a therapist, who I still see, and I recommend to everybody. It's a great thing to do. And I read a lot of books, like, You know, Eckhart Tolle's power of now, which, you know, talks about living in the present, and not thinking about the past and future, and meditating, and making time for myself, exercising more, and so there's not one answer, unfortunately, but there are answers, and I think those things collectively together, I have to remind myself, you know, you still go into self-doubt a lot, and keeping those things together, and doing that on trying to be as regular as you can on those things, that makes a big difference.

AI assessment note: “I started to see a therapist... read a lot of books... meditating”

Q big question for me because, you know, when you ask investors what they like to It's always great founder, great product, big market. And, uh, then, you know, I have other people on the show that say, actually, I don't look for big markets. That's actually irrelevant. I look for markets that are tiny and growing or whatever the explanation could be. How do you approach market sizing today, Samir?

A I don't want to take any market risk. So I want the market to be big, but I also really like to pride myself on finding market where technology is yet to innovate because I want to take large, large technical risk. That's what I love. I get up really excited to And that's why I've invested across so many different sectors. And the common thread is, oh, there's some massive technology risk or change that I'm investing in. And that's my favorite thing in the world to do. But I don't want to take market risk. I don't want to take tons of R&D, engineering, technical risk, only to know that no one cares. So for example, if there's a big market, and I think the current product is not great, and I can put a product in there that's If it takes an extra two years of R&D to get 10 X better, that's fine. I can model that. R&D is 250 K fully loaded per scientist, per engineer, per year. That's my cost. That's my burn. So if it's going to take two years longer, I know how much more money I have to put at risk in order to get to a point where it's going to fly off the shelf. The problem with going to market, small markets are just really tough. You don't know how big the market is. You have to do market discovery. You don't know what your cost of sales is. You don't know how long it takes to spin up a salesperson, what their quota should be. You don't know what the payback period is, the cus…

AI assessment note: “I don't want to take any market risk. So I want the market to be big”

Q Absolutely. I'm glad it's not a naive question, but they also often are in regulated markets. And you said that about kind of clean tech and your fellow brethren running for the hills. In terms of regulated markets, often investors similarly run for the hills. Why do you maybe like regulated markets? Markets. And have there been some big lessons for you in scaling efficiently in these regulated markets?

A Yeah, I don't think I look for regulated markets. I think, you know, in healthcare and food, energy have just been regulated markets. I do think that the regulated markets tend to fit the thesis that we mentioned, which is they tend not to have had as much innovation because people are scared of them. And if you can enter those markets with a technology innovation, you can get in at a low valuation cost point. The markets tend to be pretty sticky because there's not a lot of competition. And you can have some of the great, great successes there. But they take a lot of guts, they take a lot of money, and they take time. But some of the most successful companies in our portfolio have been in regulated markets. Square is in the banking industry. Gardent and Oscar have been in the healthcare industry. Impossible Foods is in the food industry. These are, you know, very, very regulated markets, and they've been some of our biggest wins. They also form a natural barrier to entry, right?

AI assessment note: “I do think that the regulated markets tend to fit the thesis that we mentioned”

Q But the first was you mentioned about the kind of piling into the winners, and absolutely, but it made me think in terms of that first investment decision-making process, and then the reinvestment decision-making process. How does it look for you at Coastal, and how does it differ for initial versus reinvestment?

A Well, it depends on the size. So if it's a seed fund kind of investment, so, you know, a million or two million bucks, then what we look to do invest in, we call it option value investing, is that we make that investment because we have a thesis that this could be a billion dollar opportunity, but we need to see something. Can they recruit the right team? Can they address some binary technical risk or something along those lines? Will the market develop the way that we think we do? We want to then be in a position where we have an informed and early opinion on that company when it comes for a series A or series B. At that point, if it's not going to be a billion dollar company, it probably doesn't make sense to put a lot of more money and time into it. If we think it's going to be a big, big kind of win, then we want to leave the next round. So then we'll come in and do a lot of diligence and we should have a front row seat to lead the round because we're already in the company and we already own some of the companies. So in terms of total dilution to the founders, it's less for them. And so that's how we treat the seed company investments is it's really option value investing. We want to be in a position to really lead the next round. And with that seed money, some of the key risks, which will help us decide whether or not this is a multi-billion dollar potential opportunity. …

AI assessment note: “if it's not going to be a billion dollar company, it probably doesn't make sense”

Q nascent industries before really ventures really hit them hard and the effects that that may have on price. In some cases, price though is maybe higher than one would like in a lot of cases today. Peter Fenton said on the show, when it comes to price sense, Never turn down a deal based on valuation. It's a mental trap. How do you think about your own price sensitivity today?

A I have a great point. You know, I think it also depends on what stage. So if you're looking at a company that's valued at 15 or twenty billion dollars, of course you have to think about valuation, right? And it also depends on your return threshold. But at that stage that Peter looks at companies or I look at companies, the company is going to be a success or not. It doesn't matter. You know, I don't remember You know, I think when we invested in the Series A of Square, I think it was around a thirty million dollar valuation. It was Jack and Jim in a PowerPoint. Seemed incredibly expensive back in 2008 or nine when we did this investment. It seemed incredibly expensive at that time to pay 30 pre for a PowerPoint. And obviously now, like, who cares? Companies worth twenty five billion dollars. If it was 30 pre, 90 pre, it wouldn't have made a difference. And so I think I do agree with Peter on that. If the up Outside is a billion-dollar company, and you're in early, you just have to have the conviction that you want to do the investment and go do it. But, you know, when we come to writing the series A-like checks, obviously not every company achieves that, and very few do, but we have to have an opinion that it could.

AI assessment note: “I think I do agree with Peter on that. If the up Outside is a billion-dollar company”

Q Totally agree. And I love that in terms of kind of being in the They have. In terms of the reinvestment, what does that look like then?

A Yeah, that's where I was going to get to. Look, I think of it as, hey, if you and I made a bet at the beginning of the Super Bowl, and I said, hey, you can change your bet, Harry, at halftime, of course you would do that. You have more information. So to me, I think pro rata is a total cop-out. I think when a company comes for a reinvestment, we need to have a strong opinion on it. We should be redoing all of our diligence and seeing if the key risks have been addressed and what we think of the team and what we think of the prospects and what we think of the competition. But we should then make a decision. I mean, the only time we should do pro rata is if that's the maximum allocation we can get, or we think that the company is worth continuing, and we don't want more exposure, but if we don't do our pro rata, the round falls apart. Other than that, we should either do more than pro rata, or much less to zero of pro rata, because we get to change our bet. And if you don't change your bet, and the house is against, right, in blackjack, Every hand you have, the odds you're going to lose are greater than the hands you're going to win. So if you get something where you can double down or split, you've got to push all your chips to the table. Because if you just make the same bet on every hand, you're going to lose. It's just math. And it's the same thing in venture. The odds of one…

AI assessment note: “we should either do more than pro rata, or much less to zero”

Q mention the time allocation there, and it's one that I struggle on because I hear a lot of different opinions on the show. Some say spend time with the winners, that's what's going to drive the returns. Others say, you know, spend time with the strugglers, that the winners don't actually need you. How do you think about time allocation and actually where you divide your time between the portfolio?

A I look at it as an X, Y axis of which of the companies are going to drive returns for our fund. Because again, we don't get a scorecard in terms of percentage of successful companies. Our scorecard is cash on cash return and IRR. So I look at which investments are going to potentially drive returns for the fund on one axis. And on the other axis, is my time involvement going to make a difference? So there are plenty of successful companies where I could spend all the time in the world on it. It's not going to change the trajectory of the outcome. And those are ones that you shouldn't spend a ton of time on, because all you'll probably end up doing is bothering the entrepreneur. But for many companies, and the ones I take the biggest pride in, there's a large potential return, and our time actually helps drive that. And those are the ones that are the most fun to work on. On the strugglers, you know, it's really tough. You know, we get so emotionally involved in our companies, it's hard to just abandon them. And that's probably one of the things that we all could do better is knowing when to cut off companies Sooner, not spending as much time with a company that just aren't going to drive a return. We do that because we are emotionally attached to the company. We're loyal to the entrepreneurs. Sometimes there is an outcome, like an acquisition or something that would provide som…

AI assessment note: “I look at it as an X, Y axis of which of the companies”

Q big question for me because, you know, when you ask investors what they like to It's always great founder, great product, big market. And, uh, then, you know, I have other people on the show that say, actually, I don't look for big markets. That's actually irrelevant. I look for markets that are tiny and growing or whatever the explanation could be. How do you approach market sizing today, Samir?

A I don't want to take any market risk. So I want the market to be big, but I also really like to pride myself on finding market where technology is yet to innovate because I want to take large, large technical risk. That's what I love. I get up really excited to And that's why I've invested across so many different sectors. And the common thread is, oh, there's some massive technology risk or change that I'm investing in. And that's my favorite thing in the world to do. But I don't want to take market risk. I don't want to take tons of R&D, engineering, technical risk, only to know that no one cares. So for example, if there's a big market, and I think the current product is not great, and I can put a product in there that's If it takes an extra two years of R&D to get 10 X better, that's fine. I can model that. R&D is 250 K fully loaded per scientist, per engineer, per year. That's my cost. That's my burn. So if it's going to take two years longer, I know how much more money I have to put at risk in order to get to a point where it's going to fly off the shelf. The problem with going to market, small markets are just really tough. You don't know how big the market is. You have to do market discovery. You don't know what your cost of sales is. You don't know how long it takes to spin up a salesperson, what their quota should be. You don't know what the payback period is, the cus…

AI assessment note: “I don't want to take any market risk. So I want the market to be big”

Q speak, but I do want to ask, because you've now been in venture for over 17 years, and one big thing for me is, you know, I've never seen the boom and bust, something that you have seen. When we discussed it with Josh at first round, he said the bust made him more conservative. How did seeing the boom and bust impact your investing mindset, do you think, Samir?

A Josh is an excellent investor, and I'm a big fan of his. I tend to disagree. I think In this business, being conservative is a real problem, because we're in the business of returning 20% or greater net IRR to our investors, and we don't get judged by how many companies succeed out of the number of companies we invest in. We get judged by what is our return, and these are all things I've learned really from Vinod. The other thing is you never want to sell your winners too soon, because you just don't know which one's going to be a winner, and when you get one, you got to ride it To the highest possible number. And you can only lose one times your money, but the upside is completely uncapped. And we've seen that, you know, across our funds as well. We've seen, you know, some really super successes. So I think if you start to become more conservative, you really start to not take the type of risk and the radical technical risks, especially in our shop, that you need to, to get the outsized returns. And I think you also limit the volatility. And as such, You won't get the outsized returns, and you won't get the kind of returns that people invest in our asset class to get. The other thing I'd say is that, you know, you get these booms and busts. I've lived through two. I've lived through the dot-com boom and the oh-eight boom and bust. And what, what tends to happen is the companie…

AI assessment note: “I tend to disagree. I think In this business, being conservative is a real problem”

Q speak, but I do want to ask, because you've now been in venture for over 17 years, and one big thing for me is, you know, I've never seen the boom and bust, something that you have seen. When we discussed it with Josh at first round, he said the bust made him more conservative. How did seeing the boom and bust impact your investing mindset, do you think, Samir?

A Josh is an excellent investor, and I'm a big fan of his. I tend to disagree. I think In this business, being conservative is a real problem, because we're in the business of returning 20% or greater net IRR to our investors, and we don't get judged by how many companies succeed out of the number of companies we invest in. We get judged by what is our return, and these are all things I've learned really from Vinod. The other thing is you never want to sell your winners too soon, because you just don't know which one's going to be a winner, and when you get one, you got to ride it To the highest possible number. And you can only lose one times your money, but the upside is completely uncapped. And we've seen that, you know, across our funds as well. We've seen, you know, some really super successes. So I think if you start to become more conservative, you really start to not take the type of risk and the radical technical risks, especially in our shop, that you need to, to get the outsized returns. And I think you also limit the volatility. And as such, You won't get the outsized returns, and you won't get the kind of returns that people invest in our asset class to get. The other thing I'd say is that, you know, you get these booms and busts. I've lived through two. I've lived through the dot-com boom and the oh-eight boom and bust. And what, what tends to happen is the companie…

AI assessment note: “I tend to disagree. I think In this business, being conservative is a real problem”

Q Totally agree. And I love that in terms of kind of being in the They have. In terms of the reinvestment, what does that look like then?

A Yeah, that's where I was going to get to. Look, I think of it as, hey, if you and I made a bet at the beginning of the Super Bowl, and I said, hey, you can change your bet, Harry, at halftime, of course you would do that. You have more information. So to me, I think pro rata is a total cop-out. I think when a company comes for a reinvestment, we need to have a strong opinion on it. We should be redoing all of our diligence and seeing if the key risks have been addressed and what we think of the team and what we think of the prospects and what we think of the competition. But we should then make a decision. I mean, the only time we should do pro rata is if that's the maximum allocation we can get, or we think that the company is worth continuing, and we don't want more exposure, but if we don't do our pro rata, the round falls apart. Other than that, we should either do more than pro rata, or much less to zero of pro rata, because we get to change our bet. And if you don't change your bet, and the house is against, right, in blackjack, Every hand you have, the odds you're going to lose are greater than the hands you're going to win. So if you get something where you can double down or split, you've got to push all your chips to the table. Because if you just make the same bet on every hand, you're going to lose. It's just math. And it's the same thing in venture. The odds of one…

AI assessment note: “I think when a company comes for a reinvestment, we need to have a strong opinion”

Q mention the time allocation there, and it's one that I struggle on because I hear a lot of different opinions on the show. Some say spend time with the winners, that's what's going to drive the returns. Others say, you know, spend time with the strugglers, that the winners don't actually need you. How do you think about time allocation and actually where you divide your time between the portfolio?

A I look at it as an X, Y axis of which of the companies are going to drive returns for our fund. Because again, we don't get a scorecard in terms of percentage of successful companies. Our scorecard is cash on cash return and IRR. So I look at which investments are going to potentially drive returns for the fund on one axis. And on the other axis, is my time involvement going to make a difference? So there are plenty of successful companies where I could spend all the time in the world on it. It's not going to change the trajectory of the outcome. And those are ones that you shouldn't spend a ton of time on, because all you'll probably end up doing is bothering the entrepreneur. But for many companies, and the ones I take the biggest pride in, there's a large potential return, and our time actually helps drive that. And those are the ones that are the most fun to work on. On the strugglers, you know, it's really tough. You know, we get so emotionally involved in our companies, it's hard to just abandon them. And that's probably one of the things that we all could do better is knowing when to cut off companies Sooner, not spending as much time with a company that just aren't going to drive a return. We do that because we are emotionally attached to the company. We're loyal to the entrepreneurs. Sometimes there is an outcome, like an acquisition or something that would provide som…

AI assessment note: “I look at it as an X, Y axis of which of the companies”

Q you have for me? I joined my first board a year ago. What advice would you have for me having had all the board experience that you have? In terms of how to really build that environment of safety for the founder, in terms of how to really bring the best of yourself to the board meeting, how to build the relationship with the other board members, is that important?

A I think you need to develop trust with the entrepreneur that I like to think I have. I'm sure I don't with all of mine, but with many of my entrepreneurs, they know that I have their back, but I'll also be the toughest on them and tell them like it is, at least from my purview. Doesn't mean I'm always right. And I think the very good entrepreneurs really appreciate that, that you don't throw them under the bus. You're very direct and honest with them. When you need them, you're there. You know, I think my, my entrepreneurs will tell you that, hey, if they need someone, a board member to interview somebody, go recruit someone, go make an introduction. They can count on me to do that. They also know that if they mess up or if they're missing something, I'll be very, very tough on them. And there's ways to do it. You don't humiliate people. You don't do it in a public setting. You don't yell at them. You don't use unnecessary language. But, you know, you drive the point home, and I think the good entrepreneurs appreciate that and want that.

AI assessment note: “I think you need to develop trust with the entrepreneur that I like to think I have.”

Q I totally understand everything you're saying, but I always feel Oh my God, I'm just incredibly nervous about having to carry the company for years personally. How do you feel about that? And is that actually quite a naive thought process given the cost basis that you understand?

A No, it's not naive at all. It's what really killed the cleantech industry. And there are a lot of reasons, but one of the reasons was that all my fellow brethren in the venture industry ran for the hills. And then you had all these companies, I think some that deserve to fail and some that deserve to live that unfortunately didn't get that chance because there was no more money. And, you know, on many of those companies, we were the funders of last resort, and that, that was quite a big burden. And we carried it for some, and we're unable to carry it for others. But we definitely now, when I think about some of the harder tech areas I invest in, I think about, okay, if there's a rainy day, and we're delayed by two years, and that two-year burn that I just calculated for you is beyond the means of us, who else should I bring in, or who else would be there to invest? And in a lot of those companies, the answer is, well, it's not going to be another venture group. It's going to be a strategic And for a strategic, you have to carry the company longer to get it where it's appetizing for a strategic. And the strategic process also doesn't just take a couple months. It could take a year. So you have to start that process earlier. And so, you know, and we've seen examples of those across our portfolio.

AI assessment note: “No, it's not naive at all. It's what really killed the cleantech industry.”

Q You mentioned some incredible companies there and the impact that they've had on society. I do want to ask, you know, as we both know, not everything can and will go up and to the right. Failure does happen, and an adventure happens often. How do you think about learning through failure? And when you think back on this, is there a moment that really sticks out to you?

A Oh, yeah, absolutely. Well, I've failed a lot. You could argue that the whole cleantech sector was a failure. I think I'm proud of our portfolio in there. We will end up positive, and there's a number of companies that are worth north of a few billion dollars there that are making real impacts. But in the middle of that cleantech bust where companies were failing, there was no funding, it was just a mess. It was a dark point for me personally, and I, you know, I had to really do some real soul-searching. I was like, you know, am I even any good at this? Do I know what I'm doing? It's just a human emotion, right? It's easy to kind of brag about all your winners, but you know, the reality of where you learn more and where you get better is when you really evaluate where you're really bad at things and getting self-aware about that. And so it was actually in that time, it sounds funny, but I read a book called Eating Animals by Jonathan Safran Foer because I was pretty depressed. I was like, I can't believe that in San Francisco with all this venture backing, we can't do anything about climate change and that no one cares. And we learned that consumers won't pay more for power. Consumers won't pay more for fuel for their cars. And I'm like, I can't believe this. Like, are we really just going to let climate change go unabetted? And with all the money we've spent and technology can…

AI assessment note: “in the middle of that cleantech bust where companies were failing”

Q Absolutely. I'm glad it's not a naive question, but they also often are in regulated markets. And you said that about kind of clean tech and your fellow brethren running for the hills. In terms of regulated markets, often investors similarly run for the hills. Why do you maybe like regulated markets? Markets. And have there been some big lessons for you in scaling efficiently in these regulated markets?

A Yeah, I don't think I look for regulated markets. I think, you know, in healthcare and food, energy have just been regulated markets. I do think that the regulated markets tend to fit the thesis that we mentioned, which is they tend not to have had as much innovation because people are scared of them. And if you can enter those markets with a technology innovation, you can get in at a low valuation cost point. The markets tend to be pretty sticky because there's not a lot of competition. And you can have some of the great, great successes there. But they take a lot of guts, they take a lot of money, and they take time. But some of the most successful companies in our portfolio have been in regulated markets. Square is in the banking industry. Gardent and Oscar have been in the healthcare industry. Impossible Foods is in the food industry. These are, you know, very, very regulated markets, and they've been some of our biggest wins. They also form a natural barrier to entry, right?

AI assessment note: “they tend not to have had as much innovation because people are scared of them.”

Q Absolutely. It is. And that is incredibly rewarding in terms of where you spend your time. A lot of that is also on the boards themselves. And from my, uh, crunch based research, it's about over 3000 hours that you've spent on boards. So with the experience in mind, how have you seen yourself evolve and develop over time as a board member?

A That's a good question. And my entrepreneurs will probably answer that better. I think You know, I'm understanding where and when to push, and where are the parts of the company that the board can add the most value. And I help my entrepreneurs with that as well. So I tell them, hey, look, make sure at least 48 hours before the board meeting, you've sent a pre-read. And for goodness sake, please don't just read us those slides. You've got three to four hours with six or eight busy, intelligent people, hopefully, and you've got us in a room together now for four hours. Do you really just want to read us slides? Is that what you want to get out of that? Do you want to assume, which you should, that we all do the pre-read and start this board meeting with one slide where you say, here are the two or three things that are keeping you up at night. And then we can use the board deck as a way to kind of talk about it. But I think that's really, really important. And I think the other thing is rather than having the entire management team presented every board meeting is let's pick, you obviously need the CFO and things like that to present, but you know, let's pick one thing that we're really going to drive deep on. Is it Research. Is it sales and marketing? Is it HR? Is it regulatory? Whatever it is, let's really do one focus area per board meeting where whoever the leader, he or she…

AI assessment note: “I'm understanding where and when to push, and where are the parts of the company”

Q Well, that is very, very kind of you. Uh, ego is a wonderful thing, so thank you for that, but I would love to start today with a little bit on you. So tell me, how did you make your way into the world of venture and come to found one of the leading firms of the last decade in Kostler?

A It's a complete accident. So I was working on the genome projects with Craig Venter in the late nineties. So at this point, you know, I was in graduate school. I heard Craig talk and I, and I was still doing DNA sequencing the old fashioned way with radioactive isotopes and developing my own film. And he was talking about these magical machines that could sequence the whole human genome. And I ended up leaving with a master's. I went to go work for him. And I soon moved up to actually running the Probably the largest group at the Institute for Genomic Research without a PhD, which was super fun, and we sequenced the first plant to ever be sequenced, which was Arabidopsis thaliana, and the way to think about why is that even relevant, this little mustard seed plant, is to think about it as the reason we study mice and rats is because they are somewhat of a proxy for human, and Arabidopsis is similarly somewhat of a proxy for corn, wheat, soybeans, and other higher level crops. So I was doing that And at some point, Craig and I both thought the right thing to do would be go to business school, and he had moved on to Solera, which was a public company that was a private effort to sequence the human genome. And my goal was to go to business school, and I chose Harvard, come back, and work for Craig again at Solera, and one day maybe run the company. Instead, soon after I started bu…

AI assessment note: “It's a complete accident. So I was working on the genome projects with Craig Venter”

Q So do you stack rank the companies kind of quarterly and then allocate capital accordingly? What does that actual kind of Granular decision making look like.

A I don't think we stack rank them, but we definitely look at our companies every quarter and say, you know, where are the ones where we think we can make a very good return? Not only can we make a very good return, but our involvement would help drive that to a better outcome. But there's some companies look that are just doing great and our involvement isn't going to be that consequential. Now, you know, we can help recruit or stuff like that, but it doesn't make sense for us to allocate more time to them. But there are companies, you always discover it, that if we spent more time, whether it's helping recruit or helping make introductions or helping strategize, that we could have a mark different in something that could go from a moderate to a high investment, a high return of investment. If we spend more time, we should be doing that, and we evaluate that, and that, those companies change. Sometimes there's companies you spend a lot of time on a year, and either they graduate to, they don't need our time as much, or It doesn't matter how much time we spend on it. It's not going to be a big return. And those, those companies kind of come in and out of that. So I think we definitely spend a lot of time thinking about time allocation. I don't, we don't stack rag care companies.

AI assessment note: “I don't think we stack rank them, but we definitely look at our companies every quarter”

Q Are you ever worried about the weight of your words? Being so direct and candid as you are, and as David at Karen so appreciates, he told me, are you ever worried that actually the weight of your words as a board member and the figure that you are, it carries a lot of weight?

A It's a great question, and I think I often tell some of my CEOs, I say, look, for God's sake, don't listen to everything I say, and certainly don't do Everything that I say, because I don't have the context you do. You know, I'm spending some time with you on a weekly or monthly basis. You're living this 2407. But listen and see what you can apply or what you agree with to make your business better. If a CEO, if he or she just listens to everything I say, then they're definitely not the right entrepreneur. They're definitely not the right CEO. And they can't whipsaw because one person tells them something. So I'm very clear with them before we get into the relationship. But look, I'm going to have strong opinions. I'm going to be your biggest supporter and your toughest critic. And you have to figure out of the things I tell you what are worth listening to and what aren't correct. And that's going to be your job. But do not whipsaw based on what I tell you, because I don't have the context, the expertise. You need to use that information the best you can.

AI assessment note: “for God's sake, don't listen to everything I say, and certainly don't do Everything”

Q Absolutely. It is. And that is incredibly rewarding in terms of where you spend your time. A lot of that is also on the boards themselves. And from my, uh, crunch based research, it's about over 3000 hours that you've spent on boards. So with the experience in mind, how have you seen yourself evolve and develop over time as a board member?

A That's a good question. And my entrepreneurs will probably answer that better. I think You know, I'm understanding where and when to push, and where are the parts of the company that the board can add the most value. And I help my entrepreneurs with that as well. So I tell them, hey, look, make sure at least 48 hours before the board meeting, you've sent a pre-read. And for goodness sake, please don't just read us those slides. You've got three to four hours with six or eight busy, intelligent people, hopefully, and you've got us in a room together now for four hours. Do you really just want to read us slides? Is that what you want to get out of that? Do you want to assume, which you should, that we all do the pre-read and start this board meeting with one slide where you say, here are the two or three things that are keeping you up at night. And then we can use the board deck as a way to kind of talk about it. But I think that's really, really important. And I think the other thing is rather than having the entire management team presented every board meeting is let's pick, you obviously need the CFO and things like that to present, but you know, let's pick one thing that we're really going to drive deep on. Is it Research. Is it sales and marketing? Is it HR? Is it regulatory? Whatever it is, let's really do one focus area per board meeting where whoever the leader, he or she…

AI assessment note: “I'm understanding where and when to push”