The Exchanges

Q Got it. And what are the other companies, the other three companies?

A Yeah, sure. The second company is called Super. They're based in Mexico City, and it's a parametric insurance company that's starting in Mexico. And parametric insurance is simple. It's insurance based on parameters. What are the parameters? If X, then Y. And the first product is earthquake insurance. That pays out automatically if the earthquake happens. So, uh, if there's an earthquake of a certain magnitude within a certain radius of you, you automatically get paid a certain payout. And this is a, uh, yeah, a game changer in this market, which is the insurance is not well penetrated in this market. And so they're starting with earthquake insurance because that was, you know, a good place to start a big audience, but, uh, parametric insurance can be used in many other fields such as, you know, hurricanes can be next. Uh, life insurance is a parametric product. They'll do many others and also plan to move beyond Mexico. Um, the third company we invested in is called Quinn. It's a cloud-based operating system or, you know, emergency or, uh, electronic health record for smaller hospitals. And there, you know, this is a big opportunity. Typically has been a tough sales cycle selling into hospitals, but we really like this team and what they've been able to do. And, you know, you might say this is not a fintech company, but for us, this really fits our ethos that everything is a f…

AI assessment note: “The second company is called Super... The third company we invested in is called Quinn”

Q So you said in one of your interviews that, uh, you were making software for hospitals and you hated it. What was that time? And what made you then invest in a hospital software company?

A Yeah, it's a great question. So yeah, this is a long time ago. So it was, uh, 2002 to 2004. I worked at a company called Cerner. It's now a pretty successful public company. Um, you know, it's actually since, since the time that I was there, the company has 10 to 15 next stock price, and it's now a 20 plus billion dollar company. And they make software for large hospitals, and they're used at many hospitals around the world, including the largest hospitals. It was a tough business for me to be in because I didn't like certain things about the sales cycle and the product and the control I had over what I was building was minimal. Um, what I'm excited about in Quinn is there Building it all with the right end customer in mind. And I think they're going to build a really phenomenal product. Um, and their focus on these smaller hospitals is a good one. Um, the larger hospitals all have massive customization needs, which the smaller hospitals have.

AI assessment note: “It was a tough business for me... What I'm excited about in Quinn is”

Q And why do you say that? Those were the best years of venture.

A Yeah, there were, uh, there were, there was not yet enough capital in the system and there were very many good ideas. So, uh, right now there are many good ideas, but also many other people doing the same idea. It's a lot of competition and that costs money. And at that time, there also were not that many investors. So valuations were much lower. Um, you know, these days in the States, A seed round is, you know, somewhere Between now I'm seeing really crazy stuff. I would say seed round valuation is somewhere between 10 and twenty million dollars. It's insane. And, uh, pre-seed, you could call it five to 10. Um, at that time, uh, you know, we were investing in companies that had one and a half, two, three, four million dollar valuations. And, uh, So if you think about the outcome required, uh, it's much higher than it was then.

AI assessment note: “there was not yet enough capital in the system and there were very many good ideas”

Q So you, you mentioned that, you know, at that point in life, you know, you, you were in job. Uh, what were the key, if I could ask in the last 1015 years, key moments in your life that would say your, your, that shifted your orbit for the positive, if you get what I mean?

A Yeah, sure. I think, you know, one is simply, as I mentioned, living in India on that 2000 rupees a month, that, that was very influential to me. And I think one of the things you learn about when doing that is in India, you would call it Jugaad here, you know, we'd say like scrappiness. And I think that's very important. I think it's important in The people that I choose to work with also have a good ability to be scrappy. And that's true in my companies. And it's just, you know, surviving and so much of success in startups is literally just surviving and not giving up, uh, through any adversity. If you just keep going, uh, eventually it, If you work hard enough and are smart enough, eventually you'll make it work. And so I try to find people that are scrappy as much as possible. So that, that was one, uh, big point for me. Uh, and then the other was just finally doing my own thing. Like, you know, Growing up with Indian parents, they always, of course, they wanted me to be a doctor, and then if not a doctor, then an engineer, and have a study job. And my parents left India in the seventies, so their impression of the world is that, that success is Having a consistent and steady job. And so when I was quitting my job to do a startup, it was uncertain for them. They, you know, they didn't like that idea. They said, why don't you just do that on the side? There's not going to be…

AI assessment note: “one is simply, as I mentioned, living in India on that 2000 rupees a month”

Q Yeah. And, and how did you, you know, since you had an early exit in 2012, you know, just one and a half years into the business, how did you spot your early angel investments? Because that must have been pretty tough. You know, you need to have a lot of luck on your side being an angel.

A Yeah, um, definitely. I had a lot of luck on my side, no doubt about it. Um, What I did was, so I was living in Chicago at the time. I moved to San Francisco in. And I became an angel investor for a few reasons. One, uh, you know, meet people, make friends. Uh, I figured I could, you know, meet interesting people that are trying to change the world. And some of these would become my friends. And that worked out a little bit. Um, I figured I could be inspired by these people and think about businesses that I want to start, and maybe I would join them in their pursuits. And then I thought, you know, final thing, I thought maybe I'll make money if I'm good at it. And I naively thought of myself as being good at it at that time. Of course, I had a lot to learn. And early on, I did, uh, By dumb luck have some successful companies. Um, but it was an easier time to be an investor in 2012. There were a lot fewer investors. Um, You know, you could literally just show up at YC demo day, invest in a few companies and have a good chance of success. There's nothing like that today. Like, you know, at the time, the YC demo days were one 10th the size that they are today, and the quality was higher. Um, and you know, nothing like it anymore. It's gotten to be a much more difficult business to be in the business of venture. Uh, and I think returns will show that, you know, being a seed investo…

AI assessment note: “You could literally just show up at YC demo day, invest in a few companies”

Q uh, you know, uh, initial investments and, uh, there are some others, right? What, what, what kind of, you know, what, what were you looking at very early stage because majorly Other was Instacart, right? So you have an inclination towards fintech. What, what, what's that inclination? And how do you spot very early, you know, companies in fintech that you believe are going to become tomorrow billion dollar companies?

A I think primarily at the stage that I invest, which is pre-seed and seed, what I look for more than anything else is The founder's vision. Do I believe that this founder is going to be able to execute on their vision and be relentless in that pursuit? And that's the number one thing beyond that, everything else changes, but what I'm investing in is a founder and a set of founders. And that's, that's really what I look for and everything, you know, everything changes, you know, famously actually, um, Amazon.com. One of the names that, uh, that Jeff Bezos was going to call the company was relentless. And even today, uh, if you go to relentless.com, it actually redirects to Amazon. So I look, I look for founders, uh, playing in a big market because, you know, you can be relentless in a small market and It still won't do that well. So I think, you know, ultimately you have to be able to build into a larger market, but, uh, that, those are the two things I count on more than anything else. And then beyond that, you know, we look for how much traction have they achieved? Are the terms right? Uh, Is there a technology advantage? Is there a reason that it exists now? These sorts of things.

AI assessment note: “what I look for more than anything else is The founder's vision.”