August 1, 2025 • 63 mins
In this episode, Andrew Cleland who is the Chief Investment Officer of Techstars, shares his journey from early career interests to significant roles at Techstars and Time Warner. He discusses his entrepreneurial beginnings and the transition to Time Warner post-9/11, emphasizing talent attraction and retention strategies. Andrew reflects on his experiences at Comcast Ventures, offering career advice on upskilling and distinguishing between venture capital and private equity skills. The conversation delves into Techstars' role in the venture market, investing in deep tech, AI's impact, and accelerator acceptance criteria. Andrew concludes with insights on knowing your business, focusing on early-stage startups, and the importance of giving back.
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(00:00):
Get about the job.
(00:01):
How about I pay for a free weekend in New Yorkfor you, and you have to wear a suit for an
hour.
How about that?
And I said, okay.
Yeah.
That that sounds good.
So let's do that.
So he he he got me out there.
I spent an hour with him and with a bunch ofothers in a suit, and and I got super excited
(00:23):
about it.
Of course, it was, like, the biggest businessissue of the time.
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
(00:46):
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
All right, so really excited to have my guesttoday.
I've got Andrew Cleanland.
He's a Chief Investment Officer at Techstars.
His responsibilities span from everything fromstrategic leadership to the accelerator, to
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directing Techstars' strategy, developing itsinvestment products.
And Andrew before that has had two decades ofexperience as an institutional venture investor
along with several years of operationalexperience working at different startup
companies.
Previously, he was at Comcast Ventures, youknow, really building that portfolio on the
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corporate, venture, you know, strategy, andthen he was a managing director for eleven
years.
You know, he built the corporate ventures EastCoast office team while founding CV's
Enterprise Seed Investment and EntrepreneurResidence Program.
Previously, he was a Managing Director ofInvestments at Time Warner Investments, where
he focused on early stage media technologycompanies.
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Andrew has invested over a $100,000,000 acrossthemes including big data, artificial
intelligence, robotics, marketing tech, youname it.
He holds and has held numerous board seatsincluding FanDuel, Data Plus Mouth, Regatta
Data, Giugano, and several more.
He lives in New York, just like me with hiswife and two children just like me.
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And outside of work, he likes to paint, run,and kick around soccer balls and and, knockout
tennis balls.
But, Andrew, you know, welcome to the show.
Excited to go much deeper on the State ofVenture, because you guys see a lot of volume,
right, with all the programs that you guys haveand the global platform that you've built,
which I'm very familiar with.
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So welcome to the show.
Thank you for making time for us today.
Thanks, man.
Thank you for that intro.
You hit almost every point on my CV.
It's amazing.
Yeah, I memorized it too.
No, just kidding.
I memorized a five paragraph intro foreverybody.
Yeah, that's a unique skill.
Yeah, it's the only skill I got.
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Try train well.
But anyways, Andrew, why don't you go back alittle bit?
Tell me a little bit about your early days.
Tell me a little bit about your family.
You know?
I mean, what what did you think you were goingto do growing up?
What did your parents do for a living?
And Yes.
How did that kind of form your career interestsand your first stages in your career?
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Know, the platform that we've built, obviously,we've built an engaged community of people that
are looking to sharpen their skills and, youknow, number one, break into venture capital,
private equity, investment banking, and thenalso eventually build their own practice.
Can do that as an entrepreneur and kind ofbuild a strategy for a big conglomerate like
Comcast, or you can actually just go out and bea breakthrough manager and be a spin out fund
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manager and build something of your own.
But tell me tell me kinda the beginning days ofhow you kinda thought about your career and and
how that, you know, navigated to where you arenow.
Yeah.
Yeah.
Well, first of all, I totally agree with you.
Many, many paths to success, and so there's noone linear path.
And I think it's pretty true of me too.
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I didn't really I wasn't one of those kids whogrew up thinking, you know, I wanna be x or I
wanna be y.
And also, I think helpful to understand that Igrew up in Europe.
Right?
I grew up in The UK, and there's there is adifferent kind of mentality.
You asked about family and education stuff.
There just is a different culture over therewith respect to education that I've come to
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really understand because I have American kidswho grew up in The US, and so Sure.
I got to experience both sides of it.
But so to answer your question, I'm a Londonkid, so very urban.
Lived all my life in either London or New York,but with a a father who was a demographer and
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so was an academic or worked for institutionsassociated with the World Bank, and was always
traveling to Sub Saharan Africa or SoutheastAsia, and would bring back these amazing tales
of travel and different cultures.
So I always had a very kind of worldwide viewgrowing up, and the rest of the family medical.
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So there's kind of some assumption that I mightbe a doctor when I grew up, but that bug didn't
bite me for whatever reason.
I went to school, I went to college in The UK,I didn't really know what I wanted to do.
I chose you're required to stream really earlyin The UK, so I chose English, physics, and
math just to try and get as broad a grip on,you know, the range of possible outcomes as as
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I could.
And I did economics at college just because Ifelt economics really ranged from almost
psychology at one end to hardcore math at theother, and it would give me the flexibility to
head in the direction that I most wanted.
And I I went to a college in The UK that looksmuch more American in style, so I did
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criminology and psychology and Englishliterature and English history and math and
econ, and ultimately spent lots of my timedoing things like game theory, which was the
part of econ that I got most excited about.
So graduated.
Again, didn't really like have a conviction forwhat I wanted to do.
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I knew I wanted to learn, and I wanted I wasn'tafraid of hard work, so I joined one of the big
consulting firms.
I worked for Booz Allen Hamilton for about fouryears when I graduated college, and went to
business school during that time.
Came out, and then and then I had builtbusinesses at college very casually.
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I'd run music businesses.
I'd started nightclubs, and I would DJ in theback room, and I'd invite my favorite DJs over
from The US to play in the club.
And and I'd really done that because I fell inlove with music.
Vinyl is really expensive.
And so I needed to get an income stream tocover my vinyl habit.
So I'd kinda done these small entrepreneurialthings in college.
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And then coming out of business school, it was'99, and, joined with a couple of others to
start a a.com in the music business.
So that was my first kinda entrepreneurialventure.
So tell me about the origin story of that thatbusiness.
And you know, I I've been thinking about this,so I'm really into music as well.
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And I've been playing with a lot of vibe codingtools recently.
So I just think it'd be I'm just excited to seewhere that goes.
You know, if you can completely use some typeof vibe coding to kinda come up with a beat, a
symphony, and then lay down a track and thenmaster it.
Yeah.
Obviously, that's where we're heading.
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Right?
But would love to hear the origin story, youknow, with your love of music and how you built
that and, you know, how you get customer.
Or or real vibe coding, which is, you know, I'mgonna be at the beach tomorrow.
I want a kind of Brazilian theme, and I'm gonnabe with 12 others, and it's got to be this kind
of tempo.
Write it for me.
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So I was a very urban kid and like a lot ofinner city kids, I was running nightclubs at
university.
I was going out to nightclubs a lot.
I was I enjoyed music.
I had a real passion for it.
I don't have much musical talent, but I couldDJ.
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I can hold a beat.
And so I was being a consultant and workingreally hard and also trying to have a personal
life around the edges as well.
And I graduated from business school, and Icame back to my consulting firm.
And it was clear, at least I had enough aboutme to realize that something super interesting
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was going on.
And if I stuck at the consulting firm, I'd missout on it.
And so, you know, I'd had I built businesses asa very modest manner in college, but I wanted
to jump out and make sure that I didn't misswhat I thought was going to be a really
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important event in my business life.
So I started looking around, and I gotintroduced to two other founders.
One was a Goldman Sachs banker and the otherone headed dance music for Sony Worldwide.
And the idea was the idea was to corner a setof rights, and those rights were dance music
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rights because dance economics of dance musicis structured completely different to any other
genre.
In any other genre, composer and artist reallymatter.
That's where the rights value sits.
In dance music, you had a lot of single trackproducers and composers, and it's really the DJ
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that lends their imprimatur that aggregates alot of the value in that market.
And The UK was was a big dance music countrymore so than The US, and so The US music
industry was less attuned to where theeconomics were shifting in dance music, and so
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we saw an opportunity to go and kinda run thetable on music rights and dance music.
So we went out, we signed up 20 of the world'sbest known and biggest DJs, and we created a
record label and an events company and onlineretail and and and sought to drive that that
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value.
And the business worked.
The business was profitable.
We grew it to about 30 people.
It was profitable, and it was a real business.
But it was clear that the offline pieces of thebusiness were working well, and the online
pieces, it was still early.
It was still just difficult to ship bits atthat point.
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And so good entrepreneurial experience withoutit being the kind of .com rocket ship that I
had hoped that it might be.
Sure.
And then walk us through kind of the nextadventure after that.
So was a chief operating officer of of thecompany that I just described, and one of my
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former colleagues from Booz Allen had gone overto New York to join Time Warner, and he reached
out to me kinda out of the blue and said, look.
We're just about to merge with AOL.
We wanna take this business global because bothbusinesses are pretty US centric at the moment,
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Time Warner and AOL.
Yeah.
And we want somebody who is European, you know,kind of digital ready, entrepreneurial, and has
consulting experience.
And and so I was a I was a kind of unique fitand known to him.
He worked in the newly formed strategy group,and so he said come over and work for us.
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And the idea was I'd go over and work for TimeWarner for a couple of years, get to know
everybody there, and then run European strategyin London when those two years were up.
And I said, no, I'm not interested.
I'm running this.com and I'm having fun.
I like it.
I think it it's has has all this potential.
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And he said something smart, which was, okay.
How about this then?
Forget about the job.
How about I pay for a free weekend in New Yorkfor you, and you have to wear a suit for an
hour.
How about that?
And I said, okay.
Yeah.
That that sounds good.
So let's do that.
So he he got me out there.
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I spent an hour with him and with a bunch ofothers in a suit, and and I got super excited
about it, of course.
It was, like, the biggest business issue of thetime.
And and so long story short, I wrapped it up atthe at the.com and joined actually joined I
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agreed to join Time Warner in something likeAugust '1 and would physically move there in
October '1.
And so in between September 11 intervened andit was just a weird time.
Phoned up Time Warner.
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It's very kind of naive, I guess, inretrospect, but I phoned up Time Warner and
said, Look, you know, this has just happened.
Do I still have a job?
Like, what's going on?
And they were like, of course you do.
Like, yeah, starting in twenty eight days orwhatever.
But it felt like a massive, massive event to usin London.
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And when I arrived in New York, it felt thatway in Manhattan.
I don't know.
Were you around in Manhattan in no one?
No, I wasn't actually.
No.
Yeah.
So my so my my impression was when you arrived,and I arrived, whatever, twenty five days after
the event or something, everything belowHouston was just blitzed.
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Like, the city was in shock, and you could feelit for months after.
You smell the dust, and you could see all thatYeah.
You know, police ticker tape, and it was just avery different city.
And then everything above Houston was kind ofmidtown as normal.
There's huge cultural chasm around Hauston.
Weird time to be there but I've been there eversince.
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That's amazing and you know I'm hearing aamazing sales story.
Right?
Hey.
You know what?
Here's an irresistible offer.
Come out to New York for the weekend.
Come in.
So I think that's just kind of a a skill thatprobably cascades in terms of just getting the
right people no matter what it takes, even ifyou gotta give them an irresistible offer.
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That's how they got you to come out there forthe weekend.
But what was it about that weekend, that onehour in the suit that made you cross the line
and say, look, this is what I want to do.
Because in the beginning you were just like,look, I don't want to do this.
I'm having a lot of fun.
I don't think this is something that I reallywant to do.
So what was it that kind of got you over theline?
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It was really easy.
It was you know I wanted to do entrepreneurialstuff I was doing it with a bunch of really
good people in London so that had somestickiness to it.
But walk into the Time Warner offices, they'rejust merging with AOL, like the energy there
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was we're gonna rip it up, right?
We're gonna we've just brought two of thebiggest companies in the world together.
You know I was excited about the Internet.
This was the powerhouse of the Internet.
You know the level of ambition and the qualityof the people being aggregated around that
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ambition, the EU felt like you could movemountains.
And and as I say, it was clear that the companythat I'd helped to found in London was gonna do
fine, but it probably wasn't going to be agiant hit.
And so you walk into, first of all, a friendwho I loved, and then with a group of people
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who are some of the most talented people I'veever worked with, going, look, we've got to
solve this problem about how to bring theinternet and media together and build massive
international businesses off the back of it.
The level of scale of ambition and talentbehind it all kind of aligned.
And then, you know, the offer, stay here, getto know us, get to understand how we work, and
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then you run European strategy for this.
BMR is difficult to resist.
So, you you know, right now at Techstars,you're you're pretty much running a pretty
massive franchise, and it's important to hirereally good talent.
So you can't fly everybody in for the weekend,obviously.
So what are some other learnings that you'vetaken away from just trying to retain number
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one, attract talent and retain them?
I think, you know, the spirit ofentrepreneurship, you know, will continue to
persist forever.
Right.
And just kind of just that energy of justbuilding something and and getting it to scale.
But what are what are some things that you'velearned around just attracting and retaining
talent?
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I think the way I've always worked and the wayit works in investment firms that I know you
really care about is essentially, even if it'sa larger company, it's little teams.
Mhmm.
And it always feels kind of family, and oftenthere's a mentor mentee model because it's an
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apprenticeship business.
Sure.
Yeah.
You can learn some skills in an academicfashion, but really you do most of your
learning by doing and by studying what yourlonger tenured peers or your bosses are doing.
And so in that environment, I think the firstthing to make sure is that you're doing a job
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that you really love and that you're reallyexcited about, and then you communicate that
enthusiasm to people you work with, and youmake sure that you trust them, and that you're
straight with them, and that you're giving theminformation, and that you're protecting them,
and that you're helping them to thrive and growand be as good as they can be.
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So I think I think it's not the world'sgreatest management challenge, you know, it's
very easy if you care about people and you careabout growing their skills.
It's very easy to do that because you're inrelatively intimate groups, groups of five or
six or seven people that might rely upon you,and through personal efforts you can
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communicate a lot of that value.
It's different to big manufacturing companieswhere you've got to have systems and you've got
to have values and you've got to do everythingat one or two degrees removed.
That's a bigger management challenge.
No.
Absolutely.
Do you feel that and I feel like this happenedto you with the Time Warner deal.
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Do you feel that sometimes you see someone andyou just know that they're supposed to be on
your team?
And you in the in that instance, you might haveto do what it takes to get that person to come
aboard.
And I feel like sometimes you see the talent inthem that maybe they don't even see themselves.
So it's kinda and I and I I personally havedone that with hiring specific people on my
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team.
Was like, look.
You know what?
You should do this thing.
And that person actually had doubts.
But, like, I don't know.
I I think it's gonna be too difficult.
And I was like, no.
You can do it.
Yeah.
You know?
So I don't know if you've ever experienced thatwhere you've seen something bigger in someone
else that they haven't even seen themselves,and it takes someone like you to kinda help
them see that?
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Yeah.
There's a couple of different instances.
There's just there's just raw diamonds that areclearly elite talent, and that's really easy to
recognize.
Sure.
That's really easy to recognize.
And honestly, if you're that level of talent,you probably have some understanding yourself
that you're good.
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That's kind of in the easy box.
There's there's another type which is thisperson can be stretched a lot, and I think
that's the example that you're talking about.
Like, you know, they have a background wherethey've never really been stretched and
demanded of, and you see that potential and youcan lay it out in front of them.
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I think that's rare and very rewarding when ithappens.
I think the best answer to your question is Ithink it's very easy to tell fit quite quickly.
I think I found it very helpful to also havepeople do little elements of the job
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technically to see whether they're a great fittechnically for the job, because you can People
can get flustered if they don't have the skillset yet.
That's not to say that they can't get the skillset, but people can get flustered around
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technical tasks that throw them and then theythrash a little bit.
And that's very difficult actually to to getfrom a straight kind of fit interview.
So I like I like the parallels of both.
Sure.
No.
That's great.
Yeah.
Appreciated that perspective.
I'd live I'd love to go to the next careermove.
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So talking a little more about maybe somelearnings that you had working at Comcast and,
and maybe just some things that you'd like totake away in terms of reflecting on those
lessons that you learned.
And I and I see it as kind of a a naturaltrajectory because you kinda, you know, oversaw
the merger, and kinda manage that process withTime Warner and AOL.
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So it's like, hey.
You know what?
This is the perfect person to come in and andrun Comcast.
We'd love to, you know, learn a little moreabout that stage in your life.
Well, so so you're right.
But but backing up a little bit, I ultimatelythe pitch made to me was, you know, go back to
Europe after a couple years.
Obviously, that didn't happen.
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Obviously, it didn't happen for obviousreasons, right?
Which is AOR started to crater, and the focusbecame not how do we take over the rest of the
world, but how do we make sure we fit TimeWarner and AOL together in the best structural
way possible that retains value while AOL youknow, struggles with its business model,
(24:11):
frankly.
So that that became the issue for three or fouryears, and I worked on a bunch of the
businesses.
I worked on you know, I did some of the VODstrategy for Time Warner Cable, and I worked on
content stuff for Turner and digital stuff forTurner, as well as AOL issues.
And then after about four, four and a half yearoh, the big project I did was this is
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interesting, was we flirted for about a yearwith merging AOL with MSN.
And I worked hard on that deal, trying tofigure out what the merger would look like and
how the pieces would fit together and what thebenefit would be and so on.
And difficult deal to do, tens and tens ofbankers on that deal.
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Like that is one of the most richly bankeddeals I've seen in my career and a lot of hard
work.
And so we did that work for a year, and thenGoogle swept in at last minute and kind of took
the deal away from Microsoft.
And so we kind of collapsed over the finishline, rinsed out and exhausted from working
(25:24):
intensely on this deal for a year.
And my boss at that point took a well deservedsabbatical.
And and Time Warner offered me a choice.
He said, look, you can be number two strategyglobally for Time Warner, or you can go venture
past.
And I took path number two because I was donewith strategy by that point.
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And I'd always had an interest in venture, andI loved that venture, kind of offered some
elements of strategy plus plus plus, and yougot your homework marked.
The thing that I found most frustrating aboutstrategy was you do good work, but you'd never
really understand because it would getintermediated by, you know, implementation.
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You never really understand the full impactthat you could have.
Venture is very clear.
Like, if you're good, you'd get rewarded andvice versa, you know, allowing for luck and and
over time and so on.
So I did that, and I ultimately ended upworking for Time Warner's Investments Group for
about five years as an MD.
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And then in '11, Comcast Ventures I'd worked alittle bit with Comcast Ventures, co invested
with them and created ideas with them as agroup.
And they came along in 2011, very similarsituation actually.
They would Comcast was just merging with withNBC, and on the back of that, wanted to expand
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its investment activities, both to both toinvest more prolifically, but also more
strategically across media as well.
And so they approached me and said, Look, we'recurrently based in Philly, we're going to re
headquarter into San Francisco, but we alsowant somebody to help stand up a New York
office, would you consider that?
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And I was pleased to do so, because ComcastVentures is a was run, at least structurally,
as a typical venture firm.
So it's most easily thought of as a one LPventure firm.
It had Time Warner Investments was trulystrategic and structured as a strategic
(27:38):
investor.
Stinker Ventures was much more like atraditional venture firm, and I was I was
looking for that kind of opportunity at thatpoint.
So that took me to Comcast Ventures.
I stayed there for about eleven years.
Really great bunch of colleagues, very goodculture.
I think we did some good work there, and hadthe opportunity to work on a bunch of deals
(28:04):
that I appreciated, but also do things likestand up our EIR program and encourage some of
our early stage enterprise investing activityas well.
So I got a question.
You know, this is kind of a career advicequestion.
So what are some things that you need to thinkabout when you're upskilling from becoming
(28:27):
maybe an analyst to a principal to now becomingan MD?
What are the different delineations?
You know?
So in terms of, like, your your leadership, areyou managing a team?
Are you having more trigger pull capabilities?
And then what should you think about whenyou're recruiting to kinda shoot for those more
senior roles?
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What are some of the characteristics?
If you were to kinda hire, you know, a senior,you know, managing director or a partner or
just, you know, pretty much like a juniorpartner, But what's kind of the secret sauce
that is important to get to that level ofleadership and asset management?
I think it follows a I think most careers ormost business careers at least follow the
(29:10):
following shape, which is analyst, manager,salesperson.
And so as an analyst, you've gotta be good at,you know, breaking down the numbers and coming
up to well reasoned, well researched, wellsupported, well argued conclusions.
As a manager, you gotta manage the work and getthe trains to run on time and make sure that
(29:34):
work gets done efficiently and to the kind ofto goal.
And then and then the last third of your careeris can you sell in some form or another.
Right?
You may not be selling a widget for a price,but you may be selling services or you may be
selling your partnership to founders as theythink about increasing their business, or you
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may, you know, you may you may have torepresent the interest of the investment firm
that you're that you're a partner of, and youwanna see succeed and grow by making sure that
people choose you, either as an LP or as a as afounder looking for a partner.
(30:22):
And so if you're recruiting, I think yourquestion was junior partnerships, you wanna see
the combination of charisma and storytellingand presentation that will allow that person to
have a successful last third of their career.
(30:42):
You make a good point.
I mean, because this is very prevalent also inthe legal industry.
Right?
You're an associate, you're an analyst, you'rean associate, then I think you're like a
senior, you know, associate.
And then I think when you become a partner, youknow, everybody's accountable, especially at
the partner level to produce.
So they have to actually bring in.
And, you know, I learned about that not toolong ago that, you know, that responsibility
(31:06):
relied on the legal team.
You know, if you wanna kinda grow in the ranks,you you have a certain amount of producing that
you have to do as an attorney, especially atthese bigger law firms.
And then to your point, you know, in the in theventure space, getting a stake in the
partnership, there is some LP capital that yougot to bring in.
(31:28):
I'm trying to think of some other practices,probably consulting.
Consulting
for sure.
Yeah, that is a good point.
It is pretty parallel across any industry.
So that's good advice.
Then kind of going a couple levels down in theranks, what are some characteristics as you're
(31:53):
recruiting?
We talked about talent that a investor shouldhave.
You know, coming in at maybe the analyst level,what are some skills that they have to master?
You know, obviously, sourcing, screening,taking taking deals to the Monday partner
meeting.
And then, you know, how does that differentiatewhen they're becoming an associate or a
principal or a senior associate in terms ofresponsibility, skill set, maturity level, all
(32:17):
that kind of stuff?
Yeah.
The the table stakes is ability to, managenumbers and not only to be able to run
sometimes complicated analyses and make goodcommonsensical decisions about where to
estimate and where to be precise, That allfalls within the kinda table stakes analyst
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role.
What your I'm gonna talk about the ventureindustry for a moment.
It's a little bit different in private equityas I understand it.
But in venture, you're also looking forsourcing edge.
And so you're looking for somebody who isn'tjust successful in the backroom, but is able to
(33:13):
build a network, build a set of reciprocalrelationships where they get early heads up on
interesting founders.
Founders like being with them.
Founders will share information with them, andthey reward those relationships appropriately.
So they, you know, they trade information, theyswap leads with other investors that might suit
(33:39):
those other firms better than our firm.
They know how to build personal relationshipsthat are trusting and also protective of
people's information.
So it's appropriate relationship building.
They're not trading on founder information thatwas told to them in confidence, but they might
(34:05):
give a founder a heads up that an investorwould be a great fit for them.
So you as a more junior person, you're lookingfor both of those skills because a venture firm
needs the biggest sensor network possible.
And there's there's two modes, right?
One is one is, you know, do I have the big earsopen for deal flow that might come across the
(34:33):
transom that might surprise me and that I mighthook into as something new that I never thought
about, but I quickly recognize as incrediblycompelling.
And the other mode is, you know, outside in,I'm gonna look at a part of the market that I
think might be interesting.
I'm gonna pick something at random, likequantum, right?
(34:55):
I believe I'm gonna kind of place a stake inthe ground that quantum is gonna be a really
important investment thesis for the next fiveyears.
I'm gonna go out and I'm gonna understandeverything that I possibly can about quantum,
industry structure, unit economics, bigplayers, best scientists, best research groups
(35:17):
in the world, and I'm going to understand thattheme and thesis as well as I possibly can, and
then I'm gonna, in a considered way, place twoor three bets with the best companies I could
find.
And so you you do both, and you need it kind ofdivides your brain into the skills that you
need to do both, right?
(35:38):
You need a kind of consulting, analytical,market brain to go after the second motion, and
you need that personable, network y, buildrelationship brain to hear about the first
mode.
And then what would be the differences that youwould say would be relevant for private equity?
(35:59):
So when you're thinking about, you know, maybebuyout or growth equity or just late stage
investing, what are some of the additionalchops that you think are important on the PE
side?
I think you should handicap this answer becauseI'm just less well qualified to answer it.
So my impression is that the private equityindustry is a relatively more orderly market in
(36:29):
the sense that deals are relatively well known.
Even the dynamic which is yields some greatfunds over the last twenty or thirty years,
which is, you know, reaching out to privatecompanies and kind of prompting them to move
(36:50):
towards taking private equity money.
Even that market, my understanding isreasonably played out and everybody understands
the dynamics well enough that they're unlikelyto do a private one on one deal anymore.
And so it's a little bit less about discoveringgems in the marketplace that other people
(37:13):
haven't discovered yet or getting to themquickly and moving quickly.
It's a little bit more about okay, there's apipeline of deals that is relatively well
understood by the market at the moment.
We need to think about them in a more acutekind of value generating way, and we need to
(37:38):
understand how we add value to those deals, andwe need to find an edge in order to get to the
right outcomes for us as a fund.
So it's a little bit less about, you know, rawsourcing.
It's a little bit more about, okay, how do wefind the deals that we think we're uniquely
suited to pursue and and add value to?
(37:58):
Sure.
No.
I totally agree with that.
And tell me a little more little bit more aboutmaybe a couple more learnings about Comcast,
and then we'll love to hear about what happenedafter that.
So I'm assuming the the next step after thatwas was Techstars.
Yes, it was.
So so learning from Comcast is, you know, greatpeople and great culture get you a long way.
(38:25):
It was a was a it was a really good team doingwork in the right way.
One of the other takeaways was Comcast for along time ran it the right way, which is they
recognized that they set a frame for a aplaying field within which we could play.
(38:50):
So nothing too crazy far afield.
So I don't know what would be an example ofthat.
So, you know, they wouldn't get excited aboutconsumer good stuff, for example.
But, basically, if you think about the set ofassets that Comcast had, almost anything within
the technology space was fair game to go investin.
(39:12):
Because if those companies became really bigconsequential companies, it almost certainly
would have a touch point with one of ourbusinesses.
Yeah.
And so Comcast was enlightened enough as astrategic investor to say, like, super light
touch.
You guys just go find great technologycompanies and maximize returns.
(39:37):
And by doing so, you will maximize strategicvalue for us, and that culture sustained for a
long time and produced some really greatresults for them, not only in terms of
investment returns, but also, you know,partnerships and strategic deals that they
considered as well.
(39:58):
And so actually, yeah, ultimately that shifteda little bit because the company ultimately
decided that it wanted to bring in ourinvesting activity for a bunch of complicated
(40:19):
reasons to do with to do with shareholders.
It wanted to bring in that capability to be alittle bit more strategically focused and a
little bit more directed in a straight linemanner upon, look, this is what we need to get
done in the next five or ten years.
And and you guys have been really successful byranging broadly.
(40:41):
Now focus your efforts and help us within thisset of of targets.
And and so I helped the company transition thegroup and and helped them stand up the new set
of principles, but I still wanted to investbroadly in a much more traditional kind of
(41:02):
venture capital like manner, and I had twoconvictions.
One was I think that early stage is the mostinteresting part of the venture marketplace.
My belief in venture is that it's maturing asan industry and it will continue to standardize
and it will continue to consolidate, and Ithink we see that happening at the middle and
(41:27):
growth layers in the venture market.
The early stage market is very difficult tocommoditize and make orderly.
It's this noisy, chaotic marketplace of ideasand talent.
It's really difficult to point math at thatproblem and solve it.
And so that, I think, will always be the partof the marketplace that you get most rewarded
(41:52):
for investing into, because you've got to solvea really difficult set of problems in order to
select well at that stage.
And yet it's a really noisy market with a tonof new companies formed, new funds formed,
chasing those ideas.
And so it is the richest, most rewarding partof the market, but also one that is very well
(42:20):
populated with early stage funds, and sometimesearly stage funds that aren't that long tenured
and are still learning their trade, which makesthe early stage market subject to winners curse
deals as well, because there are early stagefunds that will lean into deals that don't have
(42:42):
ten years of experience and don't have thediscipline yet to price appropriately.
So I knew I wanted to do early stage, but Ialso knew that I wanted to find a platform or
an entity that had some structural advantage,some reason that it would sustainably win over
the long term.
(43:03):
Mhmm.
And textiles got me to pay attention to theirbusiness model, and I found those two things in
the business model.
It was investing at scale into early stage,which was what I wanted to do, but it was doing
so in a manner that provided some returnsadvantage in the manner in which it was
(43:25):
investing, which is via an accelerator model.
And a model that I even after almost twentyyears in the venture business had never really
understood as a venture partner before.
Yeah.
One thing I'll say is, know, the other extremewith corporate venture is, you know, just going
through five layers of leadership to make adecision.
And, you know, it's gotta be approved by thefinance department.
(43:49):
So it's you're you're essentially kind of goingthrough a budgeting exercises to make an
investment and by the time it's approved, thedeal's closed.
So I think that's kind of the extreme that I'veI've heard from friends that work at big CBCs.
Even though they say that they have a fund, youknow, it's just kind of a whole budgetary
exercise where from what I've heard too, youknow, at some of these other more nimble firms
(44:13):
that are forward thinking, you know, they wannarun the firm like a like an investment firm.
They wanna hire talent that has, you know,built franchises on the investment management
side before and just kinda building an actualtrue firm where there's number one strategic
value, but then there's also some financialupside as well that could be recycled in the
(44:34):
future.
So I think that's kind of interesting to hearabout that.
Yeah.
You're dead right.
There's a lot of pitfalls you can fall intowhen you're setting up a CVC group.
And one is in effect not to let your investorsoff the leash.
They need to be able to operate in real timewith the market, and if you're gonna put them
(45:00):
through four layers of management to makedecisions, you've lost before you start.
You you really have.
You will only you will almost by definitionselect for the worst deals if you set it up And
in that so if you're not prepared to let yourinvestors react in the market, and if you don't
(45:22):
trust them to do deals right, then youshouldn't start in the first place.
The other really difficult thing for corporatesto get their heads around is there's a
marketplace for talent in venture, and andthere's a method for paying that talent.
And it doesn't line up very well with corporatea scales or corporate pay methods or even
(45:48):
corporate pay, you know, compensationphilosophy.
And you can you can maybe get by for a littlebit if you trust your investors and if you let
them off the leash and you happen to spot a midcareer executive who you trust and you're going
to empower.
(46:09):
That person will do the job for less thanmarket pay for a few years, but long term, you
won't manage to sustain that.
There just is a market for venture talent, andit takes corporations with a little bit of
bravery or internal fortitude to be prepared tocompensate their venture teams in line with the
(46:38):
market.
If you don't compensate your venture teams inline with the market, then you will get you'll
get people who you'll either get lucky oryou'll get people commensurate with the pay and
(46:59):
you'll see it in your returns.
Ultimately, these things start to play out.
Yeah.
The two the two cliche comments are you gottaspend money to make money and you get what you
get what you pay for pretty much.
Right?
So it's It scales.
Right?
So you're typically not you're typically notpaying out a lot of fixed salary.
Sure.
And so you you won't end up with egg on yourface if the venture team doesn't perform.
(47:25):
Mhmm.
But if the venture team does perform, you'vegot to be prepared to reward the team, I think.
Otherwise, over the long term, it's it's gonnabe tough to hold it together.
Yeah.
No.
I totally agree.
Well, we'll love to hear a little bit moreabout your role at Techstars, the state of the
market right now with Venture and kind of whatyou're seeing.
(47:47):
You know, I talked about vibe coding.
So that's a hot topic right now and just kindof the whole direction where AI is headed.
But tell me what you're seeing, you know,because you guys and then maybe, you know, give
us an update on kinda how the cohorts arestructured, when the next one is, how many you
have active globally.
(48:08):
Would love just kind of a overarching update onthe on the Techstars franchise.
Cool.
I'll I'll I'll try to provide a 60,000 footview.
So my job, I guess, I'll start.
It it's it's reasonably broad on the investingside.
(48:29):
So I am responsible for forming capital.
I'm responsible for deploying capital, and I'mresponsible for the strategy around that and
the products that we put into the marketplace.
And so that's the breadth of what I do.
I have a lot of talented colleagues that sitalongside me who manage the operations of how
(48:53):
we deliver that value.
So Techstars is one of the originalaccelerators, and so take half a step back.
Unlike a traditional venture firm, we providecash to founders, but also service.
And that service is effectively putting themthrough entrepreneurial boot camp for thirteen
(49:17):
weeks.
And that thirteen week process is verystructured and well refined over the eighteen
years that we've been in business and involvesa packing mentorship around founders, for
(49:38):
example, and effectively and coaching them veryactively.
And the idea is that typically we work withfounders that are earlier in their
entrepreneurial journey, and they're just aboutto make a set of decisions that are going to
define the trajectory that their companiestravel along.
(49:58):
How do I go to market?
Do I bet more on marketing or sales?
How do I structure my sales force?
How do I price?
What tech stack should I choose?
What's my next hire?
How should I manage talent?
What culture should I set?
There's a bunch of really important questionsthat founders either default into unthinkingly
(50:18):
or give a lot of consideration to.
And our founders are typically elite upon oneor two or three of those dimensions, but
they're not elite across all 20 decisions thatthey're gonna have to make.
And so there's a lot of value to surroundingthem with senior mentorship and complementing
their experience with, you know, tenured peoplethat have been through these situations many
(50:43):
times or seen these situations many times andcan help them make the right decision for their
business.
And by making the right decision for theirbusiness, they save themselves running up a
dead end and having to reverse out of it, youknow, potentially very painfully in the in the
in the instance of choosing the wrong technicalstack, for example.
Sure.
(51:03):
And wasting time and wasting investors'capital.
And so that's the value prop.
That's that's what we actually deliver.
And I'm on the investing side, and I have a setof colleagues who are managing how we run those
those programs and make sure that founders seevalue out of those programs.
(51:26):
So that that's that's what the business is.
We run we're running something like 13 programsat the moment.
There is a fund which I oversee which is justfor which is purely tuned to LP returns, and
(51:48):
then we also partner on occasion withcorporations or occasionally universities to
help them stand up these kinds of boot campprograms.
And we advise and manage the capital that goesinto those programs as well.
That's a little bit more irritated for singlecorporate partners or occasionally academic
(52:14):
institution partners.
But the main fund is built just for LPinvestment returns.
And it's highly selective.
So I'll just speak about the main fund now.
We approve about let me think, we approve about100 deals a year, and over the course of three
(52:38):
years of running that fund, we'll look atsomething like 30,000 applications.
That's very highly discriminating.
We apply a little bit of AI at the front endjust to clean up applications that we know
ultimately won't make the grade, and then weput it through a series of human reviews, and
(53:00):
ultimately each managing director running aprogram will put together a slate of compelling
opportunities that might be, for example, werun a a program in conjunction with NASA, and
so we run a space program, so it'll be a slateof fifteen, sixteen, 17 space companies, and
ultimately we'll get down to six or seven oreight approved, Similar with Johns Hopkins and
(53:27):
CareFirst, we run a program that focuses on AIin health tech and focuses on that particular
part of the market.
And then we run a series of generalizedprograms as well.
Does that give you a sense
for the business?
(53:47):
No, that's definitely really helpful.
And I've co invested with you guys and justlove the community that you guys are building.
I've taken a unique approach to looking at deeptech companies versus software companies.
So I would love to hear if there's any kind ofthoughts around strategies around how you guys
(54:09):
invest, what you're looking for in founders.
Obviously, you're looking at like capitalintensive businesses, I would assume if you're
looking at a space company that this founderreally needs to be able to raise a lot of
capital.
And on top of that, the other characteristic isthey need to have some type of tech barrier.
They need to build a company that is highly,highly defensible, where some of those bars of
(54:31):
defensiveness are not as clear with softwareand not as much of an issue because you can fix
that with sales.
You can fix that with, you know, automationsor, better ways to get out into the market with
with, you know, paid ads.
Right?
So any insights that you have in terms of thedifferent sectors that you guys are investing
(54:53):
in, whether it's highly deep tech versus thestate of AI?
Would love to hear what you're hearing fromyour managing directors across those different
industries.
Well, if we think about deep tech for a moment,the I think I think the first thing to say is
you gotta understand the kind of bet thatyou're making.
(55:15):
And some deep tech bets are look, if they solvenuclear fusion, then there's a huge market for
it.
Right?
It's just kinda obvious.
It is almost a binary outcome technical riskbet.
(55:35):
And there are different classes of bets, whichyou kind of alluded to, which is okay, well we
have a really interesting technical product,but how do we get that out into the market?
And the two places that we've chosen to partnerhave been thoughtful because it's difficult to
break into the space ecosystem.
(55:57):
If you come up with an interesting technology,if you solve an interesting technology that
doesn't really guarantee that the company'sgonna be successful, you have to break into
that ecosystem.
And that's not necessarily sales in the waythat one might think about enterprise software
sales where you can carry a bag and go around aton of prospects.
(56:20):
There's a very limited number of customers, andso partnering with NASA and JPL Labs helps our
founders kind of enter that ecosystem from dayone and solves one of the big problems about
how do you penetrate the market.
So we isolate down those bets a little bit moreinto technical risk.
(56:42):
There's a very similar story on the healthcareside.
It is difficult to penetrate healthcaresystems.
They're difficult entities to kind of getgrappling hooks on and start conversations
with.
And by partnering with the partners that wehave in that program, we can help to solve a
problem for our entrepreneurs right from thestart.
(57:05):
And our founders get input from our partners onrefining their ideas to make sure that there's
there's good market fit there as well.
So that's on the on the deep tech side.
On AI, you know, there's any length ofconversation we can have on AI.
I think our view is AI is clearly a horizontal,it's seeping into everything.
(57:33):
We see it referenced to a greater or smallerdegree in almost every company that we see.
We believe in that value.
AI is going to solve a lot of problems for alot of different companies and enable them to
move further, faster, at lower cost.
(57:53):
And so it's becoming almost table stakes forany discussion that we have around it, and it
feels silicon chips aren't the right analogy,but it feels like, you know, loud maybe, even
(58:14):
for enterprise software, but an even biggershift.
It is huge and monumental, and I'm prettyconvinced the biggest business issue that we'll
see in our careers, and we just need to thinkabout AI in a way that humans find difficult to
(58:37):
think about rates of change.
Humans are reasonably okay at seeing linearrates of change, but find it difficult to
imagine exponential rates of change, and soyou've just got to make sure that you sit back
and say, okay, but in two years' time, whatwill the state of the market look like?
(58:57):
Because it's going to take you two years tobuild a solution.
Are you being ambitious enough?
Are anticipating the competitor set that youreally should be thinking about?
Because the world within AI in particular isgonna look very different in two years' time.
Sure.
Well, two final questions.
I know we're coming up on time.
(59:18):
What characteristics do you think are importantto be accepted in your accelerator?
Because I know you guys have a really strongfilter.
And then to wrap up, just, you know, would begreat if you had a piece of advice from maybe a
past mentor or maybe just a work experience?
Just reflecting on this entire conversation andtaking a look back, you know, what what piece
(59:41):
of advice would you give, whether it's lifeadvice or professional advice.
So again, what makes a great founder and pieceof advice?
Okay.
Great questions.
Look.
The thing the thing I find alwaysdifferentiates great founders is you can sit
with them at a bar or you can sit with them ina pitch meeting, and they can go 20 layers deep
(01:00:07):
in the company.
They know every metric.
They know their business.
And that is not a that's not a cure all, butthat is that is a signal of a really high
quality CEO, a really high quality founder thatthat knows every single detail of the business.
(01:00:30):
Still respectful of their colleagues, you know,hands out responsibility to their colleagues,
but knows everything.
Like in an early stage business, the CEO shouldknow everything.
The counter to that is a CEO that needs to turnto an executive to get a lower order number in
(01:00:51):
the business is sometimes correlates with redflags.
So know your business really well, know everynumber, be detailed about it, pay attention to
the details because you're worrying about everysingle detail in order to turn all the cogs
into the exact right position to make the magichappen and the and the sparks to fly within the
(01:01:12):
business.
And then and then a piece of advice, I'm I'mgonna I would have given you this answer before
I joined Techstars, but aligned really wellwith one of the Techstars mottoes, which is
give first.
I would have phrased it before I joinedTechstars as kind of pay it forward, but I
think it's something that actually The US doesexceptionally well.
(01:01:36):
I'm in London at the moment, so I may bethinking about some of the cultural
differences.
The The US and US venture in particularly inparticular is very good at, hey.
I know you don't know me that well, but I needthis kind of favor.
Will you do it for me?
And, and eight times out of 10, people will dothat for you, and you should be doing the same
(01:02:04):
things for other people.
It is incredibly accelerating for one's career,and you should give first without asking for
anything in return, and you will see therewards come back to you many fold.
I really think, you know, be a good person, tryto help other people out, that value will come
back to you multiple times.
(01:02:25):
I totally agree.
And, Andrew, thank you for paying it for.
Really appreciate you taking time out to, toeducate us on so many pieces of your career and
also just kind of all the great work thatTechstars is doing.
So, hopefully I'll see you when you get back toNew York and we'll get together for a cocktail
or something.
Sounds great, Sean.
Bye bye.
(01:02:45):
Take care.
Thanks, Bye.
Appreciate it.
Bye.
Get about the job.
(00:01):
How about I pay for a free weekend in New Yorkfor you, and you have to wear a suit for an
hour.
How about that?
And I said, okay.
Yeah.
That that sounds good.
So let's do that.
So he he he got me out there.
I spent an hour with him and with a bunch ofothers in a suit, and and I got super excited
(00:23):
about it.
Of course, it was, like, the biggest businessissue of the time.
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
(00:46):
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
All right, so really excited to have my guesttoday.
I've got Andrew Cleanland.
He's a Chief Investment Officer at Techstars.
His responsibilities span from everything fromstrategic leadership to the accelerator, to
(01:10):
directing Techstars' strategy, developing itsinvestment products.
And Andrew before that has had two decades ofexperience as an institutional venture investor
along with several years of operationalexperience working at different startup
companies.
Previously, he was at Comcast Ventures, youknow, really building that portfolio on the
(01:30):
corporate, venture, you know, strategy, andthen he was a managing director for eleven
years.
You know, he built the corporate ventures EastCoast office team while founding CV's
Enterprise Seed Investment and EntrepreneurResidence Program.
Previously, he was a Managing Director ofInvestments at Time Warner Investments, where
he focused on early stage media technologycompanies.
(01:53):
Andrew has invested over a $100,000,000 acrossthemes including big data, artificial
intelligence, robotics, marketing tech, youname it.
He holds and has held numerous board seatsincluding FanDuel, Data Plus Mouth, Regatta
Data, Giugano, and several more.
He lives in New York, just like me with hiswife and two children just like me.
(02:16):
And outside of work, he likes to paint, run,and kick around soccer balls and and, knockout
tennis balls.
But, Andrew, you know, welcome to the show.
Excited to go much deeper on the State ofVenture, because you guys see a lot of volume,
right, with all the programs that you guys haveand the global platform that you've built,
which I'm very familiar with.
(02:37):
So welcome to the show.
Thank you for making time for us today.
Thanks, man.
Thank you for that intro.
You hit almost every point on my CV.
It's amazing.
Yeah, I memorized it too.
No, just kidding.
I memorized a five paragraph intro foreverybody.
Yeah, that's a unique skill.
Yeah, it's the only skill I got.
(02:59):
Try train well.
But anyways, Andrew, why don't you go back alittle bit?
Tell me a little bit about your early days.
Tell me a little bit about your family.
You know?
I mean, what what did you think you were goingto do growing up?
What did your parents do for a living?
And Yes.
How did that kind of form your career interestsand your first stages in your career?
(03:21):
Know, the platform that we've built, obviously,we've built an engaged community of people that
are looking to sharpen their skills and, youknow, number one, break into venture capital,
private equity, investment banking, and thenalso eventually build their own practice.
Can do that as an entrepreneur and kind ofbuild a strategy for a big conglomerate like
Comcast, or you can actually just go out and bea breakthrough manager and be a spin out fund
(03:45):
manager and build something of your own.
But tell me tell me kinda the beginning days ofhow you kinda thought about your career and and
how that, you know, navigated to where you arenow.
Yeah.
Yeah.
Well, first of all, I totally agree with you.
Many, many paths to success, and so there's noone linear path.
And I think it's pretty true of me too.
(04:07):
I didn't really I wasn't one of those kids whogrew up thinking, you know, I wanna be x or I
wanna be y.
And also, I think helpful to understand that Igrew up in Europe.
Right?
I grew up in The UK, and there's there is adifferent kind of mentality.
You asked about family and education stuff.
There just is a different culture over therewith respect to education that I've come to
(04:32):
really understand because I have American kidswho grew up in The US, and so Sure.
I got to experience both sides of it.
But so to answer your question, I'm a Londonkid, so very urban.
Lived all my life in either London or New York,but with a a father who was a demographer and
(04:54):
so was an academic or worked for institutionsassociated with the World Bank, and was always
traveling to Sub Saharan Africa or SoutheastAsia, and would bring back these amazing tales
of travel and different cultures.
So I always had a very kind of worldwide viewgrowing up, and the rest of the family medical.
(05:21):
So there's kind of some assumption that I mightbe a doctor when I grew up, but that bug didn't
bite me for whatever reason.
I went to school, I went to college in The UK,I didn't really know what I wanted to do.
I chose you're required to stream really earlyin The UK, so I chose English, physics, and
math just to try and get as broad a grip on,you know, the range of possible outcomes as as
(05:46):
I could.
And I did economics at college just because Ifelt economics really ranged from almost
psychology at one end to hardcore math at theother, and it would give me the flexibility to
head in the direction that I most wanted.
And I I went to a college in The UK that looksmuch more American in style, so I did
(06:06):
criminology and psychology and Englishliterature and English history and math and
econ, and ultimately spent lots of my timedoing things like game theory, which was the
part of econ that I got most excited about.
So graduated.
Again, didn't really like have a conviction forwhat I wanted to do.
(06:30):
I knew I wanted to learn, and I wanted I wasn'tafraid of hard work, so I joined one of the big
consulting firms.
I worked for Booz Allen Hamilton for about fouryears when I graduated college, and went to
business school during that time.
Came out, and then and then I had builtbusinesses at college very casually.
(06:53):
I'd run music businesses.
I'd started nightclubs, and I would DJ in theback room, and I'd invite my favorite DJs over
from The US to play in the club.
And and I'd really done that because I fell inlove with music.
Vinyl is really expensive.
And so I needed to get an income stream tocover my vinyl habit.
So I'd kinda done these small entrepreneurialthings in college.
(07:17):
And then coming out of business school, it was'99, and, joined with a couple of others to
start a a.com in the music business.
So that was my first kinda entrepreneurialventure.
So tell me about the origin story of that thatbusiness.
And you know, I I've been thinking about this,so I'm really into music as well.
(07:39):
And I've been playing with a lot of vibe codingtools recently.
So I just think it'd be I'm just excited to seewhere that goes.
You know, if you can completely use some typeof vibe coding to kinda come up with a beat, a
symphony, and then lay down a track and thenmaster it.
Yeah.
Obviously, that's where we're heading.
(07:59):
Right?
But would love to hear the origin story, youknow, with your love of music and how you built
that and, you know, how you get customer.
Or or real vibe coding, which is, you know, I'mgonna be at the beach tomorrow.
I want a kind of Brazilian theme, and I'm gonnabe with 12 others, and it's got to be this kind
of tempo.
Write it for me.
(08:25):
So I was a very urban kid and like a lot ofinner city kids, I was running nightclubs at
university.
I was going out to nightclubs a lot.
I was I enjoyed music.
I had a real passion for it.
I don't have much musical talent, but I couldDJ.
(08:47):
I can hold a beat.
And so I was being a consultant and workingreally hard and also trying to have a personal
life around the edges as well.
And I graduated from business school, and Icame back to my consulting firm.
And it was clear, at least I had enough aboutme to realize that something super interesting
(09:11):
was going on.
And if I stuck at the consulting firm, I'd missout on it.
And so, you know, I'd had I built businesses asa very modest manner in college, but I wanted
to jump out and make sure that I didn't misswhat I thought was going to be a really
(09:31):
important event in my business life.
So I started looking around, and I gotintroduced to two other founders.
One was a Goldman Sachs banker and the otherone headed dance music for Sony Worldwide.
And the idea was the idea was to corner a setof rights, and those rights were dance music
(09:57):
rights because dance economics of dance musicis structured completely different to any other
genre.
In any other genre, composer and artist reallymatter.
That's where the rights value sits.
In dance music, you had a lot of single trackproducers and composers, and it's really the DJ
(10:19):
that lends their imprimatur that aggregates alot of the value in that market.
And The UK was was a big dance music countrymore so than The US, and so The US music
industry was less attuned to where theeconomics were shifting in dance music, and so
(10:43):
we saw an opportunity to go and kinda run thetable on music rights and dance music.
So we went out, we signed up 20 of the world'sbest known and biggest DJs, and we created a
record label and an events company and onlineretail and and and sought to drive that that
(11:05):
value.
And the business worked.
The business was profitable.
We grew it to about 30 people.
It was profitable, and it was a real business.
But it was clear that the offline pieces of thebusiness were working well, and the online
pieces, it was still early.
It was still just difficult to ship bits atthat point.
(11:28):
And so good entrepreneurial experience withoutit being the kind of .com rocket ship that I
had hoped that it might be.
Sure.
And then walk us through kind of the nextadventure after that.
So was a chief operating officer of of thecompany that I just described, and one of my
(11:52):
former colleagues from Booz Allen had gone overto New York to join Time Warner, and he reached
out to me kinda out of the blue and said, look.
We're just about to merge with AOL.
We wanna take this business global because bothbusinesses are pretty US centric at the moment,
(12:14):
Time Warner and AOL.
Yeah.
And we want somebody who is European, you know,kind of digital ready, entrepreneurial, and has
consulting experience.
And and so I was a I was a kind of unique fitand known to him.
He worked in the newly formed strategy group,and so he said come over and work for us.
(12:40):
And the idea was I'd go over and work for TimeWarner for a couple of years, get to know
everybody there, and then run European strategyin London when those two years were up.
And I said, no, I'm not interested.
I'm running this.com and I'm having fun.
I like it.
I think it it's has has all this potential.
(13:04):
And he said something smart, which was, okay.
How about this then?
Forget about the job.
How about I pay for a free weekend in New Yorkfor you, and you have to wear a suit for an
hour.
How about that?
And I said, okay.
Yeah.
That that sounds good.
So let's do that.
So he he got me out there.
(13:25):
I spent an hour with him and with a bunch ofothers in a suit, and and I got super excited
about it, of course.
It was, like, the biggest business issue of thetime.
And and so long story short, I wrapped it up atthe at the.com and joined actually joined I
(13:46):
agreed to join Time Warner in something likeAugust '1 and would physically move there in
October '1.
And so in between September 11 intervened andit was just a weird time.
Phoned up Time Warner.
(14:07):
It's very kind of naive, I guess, inretrospect, but I phoned up Time Warner and
said, Look, you know, this has just happened.
Do I still have a job?
Like, what's going on?
And they were like, of course you do.
Like, yeah, starting in twenty eight days orwhatever.
But it felt like a massive, massive event to usin London.
(14:30):
And when I arrived in New York, it felt thatway in Manhattan.
I don't know.
Were you around in Manhattan in no one?
No, I wasn't actually.
No.
Yeah.
So my so my my impression was when you arrived,and I arrived, whatever, twenty five days after
the event or something, everything belowHouston was just blitzed.
(14:52):
Like, the city was in shock, and you could feelit for months after.
You smell the dust, and you could see all thatYeah.
You know, police ticker tape, and it was just avery different city.
And then everything above Houston was kind ofmidtown as normal.
There's huge cultural chasm around Hauston.
Weird time to be there but I've been there eversince.
(15:15):
That's amazing and you know I'm hearing aamazing sales story.
Right?
Hey.
You know what?
Here's an irresistible offer.
Come out to New York for the weekend.
Come in.
So I think that's just kind of a a skill thatprobably cascades in terms of just getting the
right people no matter what it takes, even ifyou gotta give them an irresistible offer.
(15:39):
That's how they got you to come out there forthe weekend.
But what was it about that weekend, that onehour in the suit that made you cross the line
and say, look, this is what I want to do.
Because in the beginning you were just like,look, I don't want to do this.
I'm having a lot of fun.
I don't think this is something that I reallywant to do.
So what was it that kind of got you over theline?
(16:01):
It was really easy.
It was you know I wanted to do entrepreneurialstuff I was doing it with a bunch of really
good people in London so that had somestickiness to it.
But walk into the Time Warner offices, they'rejust merging with AOL, like the energy there
(16:24):
was we're gonna rip it up, right?
We're gonna we've just brought two of thebiggest companies in the world together.
You know I was excited about the Internet.
This was the powerhouse of the Internet.
You know the level of ambition and the qualityof the people being aggregated around that
(16:45):
ambition, the EU felt like you could movemountains.
And and as I say, it was clear that the companythat I'd helped to found in London was gonna do
fine, but it probably wasn't going to be agiant hit.
And so you walk into, first of all, a friendwho I loved, and then with a group of people
(17:10):
who are some of the most talented people I'veever worked with, going, look, we've got to
solve this problem about how to bring theinternet and media together and build massive
international businesses off the back of it.
The level of scale of ambition and talentbehind it all kind of aligned.
And then, you know, the offer, stay here, getto know us, get to understand how we work, and
(17:38):
then you run European strategy for this.
BMR is difficult to resist.
So, you you know, right now at Techstars,you're you're pretty much running a pretty
massive franchise, and it's important to hirereally good talent.
So you can't fly everybody in for the weekend,obviously.
So what are some other learnings that you'vetaken away from just trying to retain number
(18:01):
one, attract talent and retain them?
I think, you know, the spirit ofentrepreneurship, you know, will continue to
persist forever.
Right.
And just kind of just that energy of justbuilding something and and getting it to scale.
But what are what are some things that you'velearned around just attracting and retaining
talent?
(18:24):
I think the way I've always worked and the wayit works in investment firms that I know you
really care about is essentially, even if it'sa larger company, it's little teams.
Mhmm.
And it always feels kind of family, and oftenthere's a mentor mentee model because it's an
(18:48):
apprenticeship business.
Sure.
Yeah.
You can learn some skills in an academicfashion, but really you do most of your
learning by doing and by studying what yourlonger tenured peers or your bosses are doing.
And so in that environment, I think the firstthing to make sure is that you're doing a job
(19:13):
that you really love and that you're reallyexcited about, and then you communicate that
enthusiasm to people you work with, and youmake sure that you trust them, and that you're
straight with them, and that you're giving theminformation, and that you're protecting them,
and that you're helping them to thrive and growand be as good as they can be.
(19:36):
So I think I think it's not the world'sgreatest management challenge, you know, it's
very easy if you care about people and you careabout growing their skills.
It's very easy to do that because you're inrelatively intimate groups, groups of five or
six or seven people that might rely upon you,and through personal efforts you can
(20:03):
communicate a lot of that value.
It's different to big manufacturing companieswhere you've got to have systems and you've got
to have values and you've got to do everythingat one or two degrees removed.
That's a bigger management challenge.
No.
Absolutely.
Do you feel that and I feel like this happenedto you with the Time Warner deal.
(20:25):
Do you feel that sometimes you see someone andyou just know that they're supposed to be on
your team?
And you in the in that instance, you might haveto do what it takes to get that person to come
aboard.
And I feel like sometimes you see the talent inthem that maybe they don't even see themselves.
So it's kinda and I and I I personally havedone that with hiring specific people on my
(20:49):
team.
Was like, look.
You know what?
You should do this thing.
And that person actually had doubts.
But, like, I don't know.
I I think it's gonna be too difficult.
And I was like, no.
You can do it.
Yeah.
You know?
So I don't know if you've ever experienced thatwhere you've seen something bigger in someone
else that they haven't even seen themselves,and it takes someone like you to kinda help
them see that?
(21:10):
Yeah.
There's a couple of different instances.
There's just there's just raw diamonds that areclearly elite talent, and that's really easy to
recognize.
Sure.
That's really easy to recognize.
And honestly, if you're that level of talent,you probably have some understanding yourself
that you're good.
(21:31):
That's kind of in the easy box.
There's there's another type which is thisperson can be stretched a lot, and I think
that's the example that you're talking about.
Like, you know, they have a background wherethey've never really been stretched and
demanded of, and you see that potential and youcan lay it out in front of them.
(21:54):
I think that's rare and very rewarding when ithappens.
I think the best answer to your question is Ithink it's very easy to tell fit quite quickly.
I think I found it very helpful to also havepeople do little elements of the job
(22:17):
technically to see whether they're a great fittechnically for the job, because you can People
can get flustered if they don't have the skillset yet.
That's not to say that they can't get the skillset, but people can get flustered around
(22:39):
technical tasks that throw them and then theythrash a little bit.
And that's very difficult actually to to getfrom a straight kind of fit interview.
So I like I like the parallels of both.
Sure.
No.
That's great.
Yeah.
Appreciated that perspective.
I'd live I'd love to go to the next careermove.
(23:02):
So talking a little more about maybe somelearnings that you had working at Comcast and,
and maybe just some things that you'd like totake away in terms of reflecting on those
lessons that you learned.
And I and I see it as kind of a a naturaltrajectory because you kinda, you know, oversaw
the merger, and kinda manage that process withTime Warner and AOL.
(23:24):
So it's like, hey.
You know what?
This is the perfect person to come in and andrun Comcast.
We'd love to, you know, learn a little moreabout that stage in your life.
Well, so so you're right.
But but backing up a little bit, I ultimatelythe pitch made to me was, you know, go back to
Europe after a couple years.
Obviously, that didn't happen.
(23:45):
Obviously, it didn't happen for obviousreasons, right?
Which is AOR started to crater, and the focusbecame not how do we take over the rest of the
world, but how do we make sure we fit TimeWarner and AOL together in the best structural
way possible that retains value while AOL youknow, struggles with its business model,
(24:11):
frankly.
So that that became the issue for three or fouryears, and I worked on a bunch of the
businesses.
I worked on you know, I did some of the VODstrategy for Time Warner Cable, and I worked on
content stuff for Turner and digital stuff forTurner, as well as AOL issues.
And then after about four, four and a half yearoh, the big project I did was this is
(24:35):
interesting, was we flirted for about a yearwith merging AOL with MSN.
And I worked hard on that deal, trying tofigure out what the merger would look like and
how the pieces would fit together and what thebenefit would be and so on.
And difficult deal to do, tens and tens ofbankers on that deal.
(25:00):
Like that is one of the most richly bankeddeals I've seen in my career and a lot of hard
work.
And so we did that work for a year, and thenGoogle swept in at last minute and kind of took
the deal away from Microsoft.
And so we kind of collapsed over the finishline, rinsed out and exhausted from working
(25:24):
intensely on this deal for a year.
And my boss at that point took a well deservedsabbatical.
And and Time Warner offered me a choice.
He said, look, you can be number two strategyglobally for Time Warner, or you can go venture
past.
And I took path number two because I was donewith strategy by that point.
(25:46):
And I'd always had an interest in venture, andI loved that venture, kind of offered some
elements of strategy plus plus plus, and yougot your homework marked.
The thing that I found most frustrating aboutstrategy was you do good work, but you'd never
really understand because it would getintermediated by, you know, implementation.
(26:09):
You never really understand the full impactthat you could have.
Venture is very clear.
Like, if you're good, you'd get rewarded andvice versa, you know, allowing for luck and and
over time and so on.
So I did that, and I ultimately ended upworking for Time Warner's Investments Group for
about five years as an MD.
(26:30):
And then in '11, Comcast Ventures I'd worked alittle bit with Comcast Ventures, co invested
with them and created ideas with them as agroup.
And they came along in 2011, very similarsituation actually.
They would Comcast was just merging with withNBC, and on the back of that, wanted to expand
(26:54):
its investment activities, both to both toinvest more prolifically, but also more
strategically across media as well.
And so they approached me and said, Look, we'recurrently based in Philly, we're going to re
headquarter into San Francisco, but we alsowant somebody to help stand up a New York
office, would you consider that?
(27:16):
And I was pleased to do so, because ComcastVentures is a was run, at least structurally,
as a typical venture firm.
So it's most easily thought of as a one LPventure firm.
It had Time Warner Investments was trulystrategic and structured as a strategic
(27:38):
investor.
Stinker Ventures was much more like atraditional venture firm, and I was I was
looking for that kind of opportunity at thatpoint.
So that took me to Comcast Ventures.
I stayed there for about eleven years.
Really great bunch of colleagues, very goodculture.
I think we did some good work there, and hadthe opportunity to work on a bunch of deals
(28:04):
that I appreciated, but also do things likestand up our EIR program and encourage some of
our early stage enterprise investing activityas well.
So I got a question.
You know, this is kind of a career advicequestion.
So what are some things that you need to thinkabout when you're upskilling from becoming
(28:27):
maybe an analyst to a principal to now becomingan MD?
What are the different delineations?
You know?
So in terms of, like, your your leadership, areyou managing a team?
Are you having more trigger pull capabilities?
And then what should you think about whenyou're recruiting to kinda shoot for those more
senior roles?
(28:47):
What are some of the characteristics?
If you were to kinda hire, you know, a senior,you know, managing director or a partner or
just, you know, pretty much like a juniorpartner, But what's kind of the secret sauce
that is important to get to that level ofleadership and asset management?
I think it follows a I think most careers ormost business careers at least follow the
(29:10):
following shape, which is analyst, manager,salesperson.
And so as an analyst, you've gotta be good at,you know, breaking down the numbers and coming
up to well reasoned, well researched, wellsupported, well argued conclusions.
As a manager, you gotta manage the work and getthe trains to run on time and make sure that
(29:34):
work gets done efficiently and to the kind ofto goal.
And then and then the last third of your careeris can you sell in some form or another.
Right?
You may not be selling a widget for a price,but you may be selling services or you may be
selling your partnership to founders as theythink about increasing their business, or you
(30:00):
may, you know, you may you may have torepresent the interest of the investment firm
that you're that you're a partner of, and youwanna see succeed and grow by making sure that
people choose you, either as an LP or as a as afounder looking for a partner.
(30:22):
And so if you're recruiting, I think yourquestion was junior partnerships, you wanna see
the combination of charisma and storytellingand presentation that will allow that person to
have a successful last third of their career.
(30:42):
You make a good point.
I mean, because this is very prevalent also inthe legal industry.
Right?
You're an associate, you're an analyst, you'rean associate, then I think you're like a
senior, you know, associate.
And then I think when you become a partner, youknow, everybody's accountable, especially at
the partner level to produce.
So they have to actually bring in.
And, you know, I learned about that not toolong ago that, you know, that responsibility
(31:06):
relied on the legal team.
You know, if you wanna kinda grow in the ranks,you you have a certain amount of producing that
you have to do as an attorney, especially atthese bigger law firms.
And then to your point, you know, in the in theventure space, getting a stake in the
partnership, there is some LP capital that yougot to bring in.
(31:28):
I'm trying to think of some other practices,probably consulting.
Consulting
for sure.
Yeah, that is a good point.
It is pretty parallel across any industry.
So that's good advice.
Then kind of going a couple levels down in theranks, what are some characteristics as you're
(31:53):
recruiting?
We talked about talent that a investor shouldhave.
You know, coming in at maybe the analyst level,what are some skills that they have to master?
You know, obviously, sourcing, screening,taking taking deals to the Monday partner
meeting.
And then, you know, how does that differentiatewhen they're becoming an associate or a
principal or a senior associate in terms ofresponsibility, skill set, maturity level, all
(32:17):
that kind of stuff?
Yeah.
The the table stakes is ability to, managenumbers and not only to be able to run
sometimes complicated analyses and make goodcommonsensical decisions about where to
estimate and where to be precise, That allfalls within the kinda table stakes analyst
(32:45):
role.
What your I'm gonna talk about the ventureindustry for a moment.
It's a little bit different in private equityas I understand it.
But in venture, you're also looking forsourcing edge.
And so you're looking for somebody who isn'tjust successful in the backroom, but is able to
(33:13):
build a network, build a set of reciprocalrelationships where they get early heads up on
interesting founders.
Founders like being with them.
Founders will share information with them, andthey reward those relationships appropriately.
So they, you know, they trade information, theyswap leads with other investors that might suit
(33:39):
those other firms better than our firm.
They know how to build personal relationshipsthat are trusting and also protective of
people's information.
So it's appropriate relationship building.
They're not trading on founder information thatwas told to them in confidence, but they might
(34:05):
give a founder a heads up that an investorwould be a great fit for them.
So you as a more junior person, you're lookingfor both of those skills because a venture firm
needs the biggest sensor network possible.
And there's there's two modes, right?
One is one is, you know, do I have the big earsopen for deal flow that might come across the
(34:33):
transom that might surprise me and that I mighthook into as something new that I never thought
about, but I quickly recognize as incrediblycompelling.
And the other mode is, you know, outside in,I'm gonna look at a part of the market that I
think might be interesting.
I'm gonna pick something at random, likequantum, right?
(34:55):
I believe I'm gonna kind of place a stake inthe ground that quantum is gonna be a really
important investment thesis for the next fiveyears.
I'm gonna go out and I'm gonna understandeverything that I possibly can about quantum,
industry structure, unit economics, bigplayers, best scientists, best research groups
(35:17):
in the world, and I'm going to understand thattheme and thesis as well as I possibly can, and
then I'm gonna, in a considered way, place twoor three bets with the best companies I could
find.
And so you you do both, and you need it kind ofdivides your brain into the skills that you
need to do both, right?
(35:38):
You need a kind of consulting, analytical,market brain to go after the second motion, and
you need that personable, network y, buildrelationship brain to hear about the first
mode.
And then what would be the differences that youwould say would be relevant for private equity?
(35:59):
So when you're thinking about, you know, maybebuyout or growth equity or just late stage
investing, what are some of the additionalchops that you think are important on the PE
side?
I think you should handicap this answer becauseI'm just less well qualified to answer it.
So my impression is that the private equityindustry is a relatively more orderly market in
(36:29):
the sense that deals are relatively well known.
Even the dynamic which is yields some greatfunds over the last twenty or thirty years,
which is, you know, reaching out to privatecompanies and kind of prompting them to move
(36:50):
towards taking private equity money.
Even that market, my understanding isreasonably played out and everybody understands
the dynamics well enough that they're unlikelyto do a private one on one deal anymore.
And so it's a little bit less about discoveringgems in the marketplace that other people
(37:13):
haven't discovered yet or getting to themquickly and moving quickly.
It's a little bit more about okay, there's apipeline of deals that is relatively well
understood by the market at the moment.
We need to think about them in a more acutekind of value generating way, and we need to
(37:38):
understand how we add value to those deals, andwe need to find an edge in order to get to the
right outcomes for us as a fund.
So it's a little bit less about, you know, rawsourcing.
It's a little bit more about, okay, how do wefind the deals that we think we're uniquely
suited to pursue and and add value to?
(37:58):
Sure.
No.
I totally agree with that.
And tell me a little more little bit more aboutmaybe a couple more learnings about Comcast,
and then we'll love to hear about what happenedafter that.
So I'm assuming the the next step after thatwas was Techstars.
Yes, it was.
So so learning from Comcast is, you know, greatpeople and great culture get you a long way.
(38:25):
It was a was a it was a really good team doingwork in the right way.
One of the other takeaways was Comcast for along time ran it the right way, which is they
recognized that they set a frame for a aplaying field within which we could play.
(38:50):
So nothing too crazy far afield.
So I don't know what would be an example ofthat.
So, you know, they wouldn't get excited aboutconsumer good stuff, for example.
But, basically, if you think about the set ofassets that Comcast had, almost anything within
the technology space was fair game to go investin.
(39:12):
Because if those companies became really bigconsequential companies, it almost certainly
would have a touch point with one of ourbusinesses.
Yeah.
And so Comcast was enlightened enough as astrategic investor to say, like, super light
touch.
You guys just go find great technologycompanies and maximize returns.
(39:37):
And by doing so, you will maximize strategicvalue for us, and that culture sustained for a
long time and produced some really greatresults for them, not only in terms of
investment returns, but also, you know,partnerships and strategic deals that they
considered as well.
(39:58):
And so actually, yeah, ultimately that shifteda little bit because the company ultimately
decided that it wanted to bring in ourinvesting activity for a bunch of complicated
(40:19):
reasons to do with to do with shareholders.
It wanted to bring in that capability to be alittle bit more strategically focused and a
little bit more directed in a straight linemanner upon, look, this is what we need to get
done in the next five or ten years.
And and you guys have been really successful byranging broadly.
(40:41):
Now focus your efforts and help us within thisset of of targets.
And and so I helped the company transition thegroup and and helped them stand up the new set
of principles, but I still wanted to investbroadly in a much more traditional kind of
(41:02):
venture capital like manner, and I had twoconvictions.
One was I think that early stage is the mostinteresting part of the venture marketplace.
My belief in venture is that it's maturing asan industry and it will continue to standardize
and it will continue to consolidate, and Ithink we see that happening at the middle and
(41:27):
growth layers in the venture market.
The early stage market is very difficult tocommoditize and make orderly.
It's this noisy, chaotic marketplace of ideasand talent.
It's really difficult to point math at thatproblem and solve it.
And so that, I think, will always be the partof the marketplace that you get most rewarded
(41:52):
for investing into, because you've got to solvea really difficult set of problems in order to
select well at that stage.
And yet it's a really noisy market with a tonof new companies formed, new funds formed,
chasing those ideas.
And so it is the richest, most rewarding partof the market, but also one that is very well
(42:20):
populated with early stage funds, and sometimesearly stage funds that aren't that long tenured
and are still learning their trade, which makesthe early stage market subject to winners curse
deals as well, because there are early stagefunds that will lean into deals that don't have
(42:42):
ten years of experience and don't have thediscipline yet to price appropriately.
So I knew I wanted to do early stage, but Ialso knew that I wanted to find a platform or
an entity that had some structural advantage,some reason that it would sustainably win over
the long term.
(43:03):
Mhmm.
And textiles got me to pay attention to theirbusiness model, and I found those two things in
the business model.
It was investing at scale into early stage,which was what I wanted to do, but it was doing
so in a manner that provided some returnsadvantage in the manner in which it was
(43:25):
investing, which is via an accelerator model.
And a model that I even after almost twentyyears in the venture business had never really
understood as a venture partner before.
Yeah.
One thing I'll say is, know, the other extremewith corporate venture is, you know, just going
through five layers of leadership to make adecision.
And, you know, it's gotta be approved by thefinance department.
(43:49):
So it's you're you're essentially kind of goingthrough a budgeting exercises to make an
investment and by the time it's approved, thedeal's closed.
So I think that's kind of the extreme that I'veI've heard from friends that work at big CBCs.
Even though they say that they have a fund, youknow, it's just kind of a whole budgetary
exercise where from what I've heard too, youknow, at some of these other more nimble firms
(44:13):
that are forward thinking, you know, they wannarun the firm like a like an investment firm.
They wanna hire talent that has, you know,built franchises on the investment management
side before and just kinda building an actualtrue firm where there's number one strategic
value, but then there's also some financialupside as well that could be recycled in the
(44:34):
future.
So I think that's kind of interesting to hearabout that.
Yeah.
You're dead right.
There's a lot of pitfalls you can fall intowhen you're setting up a CVC group.
And one is in effect not to let your investorsoff the leash.
They need to be able to operate in real timewith the market, and if you're gonna put them
(45:00):
through four layers of management to makedecisions, you've lost before you start.
You you really have.
You will only you will almost by definitionselect for the worst deals if you set it up And
in that so if you're not prepared to let yourinvestors react in the market, and if you don't
(45:22):
trust them to do deals right, then youshouldn't start in the first place.
The other really difficult thing for corporatesto get their heads around is there's a
marketplace for talent in venture, and andthere's a method for paying that talent.
And it doesn't line up very well with corporatea scales or corporate pay methods or even
(45:48):
corporate pay, you know, compensationphilosophy.
And you can you can maybe get by for a littlebit if you trust your investors and if you let
them off the leash and you happen to spot a midcareer executive who you trust and you're going
to empower.
(46:09):
That person will do the job for less thanmarket pay for a few years, but long term, you
won't manage to sustain that.
There just is a market for venture talent, andit takes corporations with a little bit of
bravery or internal fortitude to be prepared tocompensate their venture teams in line with the
(46:38):
market.
If you don't compensate your venture teams inline with the market, then you will get you'll
get people who you'll either get lucky oryou'll get people commensurate with the pay and
(46:59):
you'll see it in your returns.
Ultimately, these things start to play out.
Yeah.
The two the two cliche comments are you gottaspend money to make money and you get what you
get what you pay for pretty much.
Right?
So it's It scales.
Right?
So you're typically not you're typically notpaying out a lot of fixed salary.
Sure.
And so you you won't end up with egg on yourface if the venture team doesn't perform.
(47:25):
Mhmm.
But if the venture team does perform, you'vegot to be prepared to reward the team, I think.
Otherwise, over the long term, it's it's gonnabe tough to hold it together.
Yeah.
No.
I totally agree.
Well, we'll love to hear a little bit moreabout your role at Techstars, the state of the
market right now with Venture and kind of whatyou're seeing.
(47:47):
You know, I talked about vibe coding.
So that's a hot topic right now and just kindof the whole direction where AI is headed.
But tell me what you're seeing, you know,because you guys and then maybe, you know, give
us an update on kinda how the cohorts arestructured, when the next one is, how many you
have active globally.
(48:08):
Would love just kind of a overarching update onthe on the Techstars franchise.
Cool.
I'll I'll I'll try to provide a 60,000 footview.
So my job, I guess, I'll start.
It it's it's reasonably broad on the investingside.
(48:29):
So I am responsible for forming capital.
I'm responsible for deploying capital, and I'mresponsible for the strategy around that and
the products that we put into the marketplace.
And so that's the breadth of what I do.
I have a lot of talented colleagues that sitalongside me who manage the operations of how
(48:53):
we deliver that value.
So Techstars is one of the originalaccelerators, and so take half a step back.
Unlike a traditional venture firm, we providecash to founders, but also service.
And that service is effectively putting themthrough entrepreneurial boot camp for thirteen
(49:17):
weeks.
And that thirteen week process is verystructured and well refined over the eighteen
years that we've been in business and involvesa packing mentorship around founders, for
(49:38):
example, and effectively and coaching them veryactively.
And the idea is that typically we work withfounders that are earlier in their
entrepreneurial journey, and they're just aboutto make a set of decisions that are going to
define the trajectory that their companiestravel along.
(49:58):
How do I go to market?
Do I bet more on marketing or sales?
How do I structure my sales force?
How do I price?
What tech stack should I choose?
What's my next hire?
How should I manage talent?
What culture should I set?
There's a bunch of really important questionsthat founders either default into unthinkingly
(50:18):
or give a lot of consideration to.
And our founders are typically elite upon oneor two or three of those dimensions, but
they're not elite across all 20 decisions thatthey're gonna have to make.
And so there's a lot of value to surroundingthem with senior mentorship and complementing
their experience with, you know, tenured peoplethat have been through these situations many
(50:43):
times or seen these situations many times andcan help them make the right decision for their
business.
And by making the right decision for theirbusiness, they save themselves running up a
dead end and having to reverse out of it, youknow, potentially very painfully in the in the
in the instance of choosing the wrong technicalstack, for example.
Sure.
(51:03):
And wasting time and wasting investors'capital.
And so that's the value prop.
That's that's what we actually deliver.
And I'm on the investing side, and I have a setof colleagues who are managing how we run those
those programs and make sure that founders seevalue out of those programs.
(51:26):
So that that's that's what the business is.
We run we're running something like 13 programsat the moment.
There is a fund which I oversee which is justfor which is purely tuned to LP returns, and
(51:48):
then we also partner on occasion withcorporations or occasionally universities to
help them stand up these kinds of boot campprograms.
And we advise and manage the capital that goesinto those programs as well.
That's a little bit more irritated for singlecorporate partners or occasionally academic
(52:14):
institution partners.
But the main fund is built just for LPinvestment returns.
And it's highly selective.
So I'll just speak about the main fund now.
We approve about let me think, we approve about100 deals a year, and over the course of three
(52:38):
years of running that fund, we'll look atsomething like 30,000 applications.
That's very highly discriminating.
We apply a little bit of AI at the front endjust to clean up applications that we know
ultimately won't make the grade, and then weput it through a series of human reviews, and
(53:00):
ultimately each managing director running aprogram will put together a slate of compelling
opportunities that might be, for example, werun a a program in conjunction with NASA, and
so we run a space program, so it'll be a slateof fifteen, sixteen, 17 space companies, and
ultimately we'll get down to six or seven oreight approved, Similar with Johns Hopkins and
(53:27):
CareFirst, we run a program that focuses on AIin health tech and focuses on that particular
part of the market.
And then we run a series of generalizedprograms as well.
Does that give you a sense
for the business?
(53:47):
No, that's definitely really helpful.
And I've co invested with you guys and justlove the community that you guys are building.
I've taken a unique approach to looking at deeptech companies versus software companies.
So I would love to hear if there's any kind ofthoughts around strategies around how you guys
(54:09):
invest, what you're looking for in founders.
Obviously, you're looking at like capitalintensive businesses, I would assume if you're
looking at a space company that this founderreally needs to be able to raise a lot of
capital.
And on top of that, the other characteristic isthey need to have some type of tech barrier.
They need to build a company that is highly,highly defensible, where some of those bars of
(54:31):
defensiveness are not as clear with softwareand not as much of an issue because you can fix
that with sales.
You can fix that with, you know, automationsor, better ways to get out into the market with
with, you know, paid ads.
Right?
So any insights that you have in terms of thedifferent sectors that you guys are investing
(54:53):
in, whether it's highly deep tech versus thestate of AI?
Would love to hear what you're hearing fromyour managing directors across those different
industries.
Well, if we think about deep tech for a moment,the I think I think the first thing to say is
you gotta understand the kind of bet thatyou're making.
(55:15):
And some deep tech bets are look, if they solvenuclear fusion, then there's a huge market for
it.
Right?
It's just kinda obvious.
It is almost a binary outcome technical riskbet.
(55:35):
And there are different classes of bets, whichyou kind of alluded to, which is okay, well we
have a really interesting technical product,but how do we get that out into the market?
And the two places that we've chosen to partnerhave been thoughtful because it's difficult to
break into the space ecosystem.
(55:57):
If you come up with an interesting technology,if you solve an interesting technology that
doesn't really guarantee that the company'sgonna be successful, you have to break into
that ecosystem.
And that's not necessarily sales in the waythat one might think about enterprise software
sales where you can carry a bag and go around aton of prospects.
(56:20):
There's a very limited number of customers, andso partnering with NASA and JPL Labs helps our
founders kind of enter that ecosystem from dayone and solves one of the big problems about
how do you penetrate the market.
So we isolate down those bets a little bit moreinto technical risk.
(56:42):
There's a very similar story on the healthcareside.
It is difficult to penetrate healthcaresystems.
They're difficult entities to kind of getgrappling hooks on and start conversations
with.
And by partnering with the partners that wehave in that program, we can help to solve a
problem for our entrepreneurs right from thestart.
(57:05):
And our founders get input from our partners onrefining their ideas to make sure that there's
there's good market fit there as well.
So that's on the on the deep tech side.
On AI, you know, there's any length ofconversation we can have on AI.
I think our view is AI is clearly a horizontal,it's seeping into everything.
(57:33):
We see it referenced to a greater or smallerdegree in almost every company that we see.
We believe in that value.
AI is going to solve a lot of problems for alot of different companies and enable them to
move further, faster, at lower cost.
(57:53):
And so it's becoming almost table stakes forany discussion that we have around it, and it
feels silicon chips aren't the right analogy,but it feels like, you know, loud maybe, even
(58:14):
for enterprise software, but an even biggershift.
It is huge and monumental, and I'm prettyconvinced the biggest business issue that we'll
see in our careers, and we just need to thinkabout AI in a way that humans find difficult to
(58:37):
think about rates of change.
Humans are reasonably okay at seeing linearrates of change, but find it difficult to
imagine exponential rates of change, and soyou've just got to make sure that you sit back
and say, okay, but in two years' time, whatwill the state of the market look like?
(58:57):
Because it's going to take you two years tobuild a solution.
Are you being ambitious enough?
Are anticipating the competitor set that youreally should be thinking about?
Because the world within AI in particular isgonna look very different in two years' time.
Sure.
Well, two final questions.
I know we're coming up on time.
(59:18):
What characteristics do you think are importantto be accepted in your accelerator?
Because I know you guys have a really strongfilter.
And then to wrap up, just, you know, would begreat if you had a piece of advice from maybe a
past mentor or maybe just a work experience?
Just reflecting on this entire conversation andtaking a look back, you know, what what piece
(59:41):
of advice would you give, whether it's lifeadvice or professional advice.
So again, what makes a great founder and pieceof advice?
Okay.
Great questions.
Look.
The thing the thing I find alwaysdifferentiates great founders is you can sit
with them at a bar or you can sit with them ina pitch meeting, and they can go 20 layers deep
(01:00:07):
in the company.
They know every metric.
They know their business.
And that is not a that's not a cure all, butthat is that is a signal of a really high
quality CEO, a really high quality founder thatthat knows every single detail of the business.
(01:00:30):
Still respectful of their colleagues, you know,hands out responsibility to their colleagues,
but knows everything.
Like in an early stage business, the CEO shouldknow everything.
The counter to that is a CEO that needs to turnto an executive to get a lower order number in
(01:00:51):
the business is sometimes correlates with redflags.
So know your business really well, know everynumber, be detailed about it, pay attention to
the details because you're worrying about everysingle detail in order to turn all the cogs
into the exact right position to make the magichappen and the and the sparks to fly within the
(01:01:12):
business.
And then and then a piece of advice, I'm I'mgonna I would have given you this answer before
I joined Techstars, but aligned really wellwith one of the Techstars mottoes, which is
give first.
I would have phrased it before I joinedTechstars as kind of pay it forward, but I
think it's something that actually The US doesexceptionally well.
(01:01:36):
I'm in London at the moment, so I may bethinking about some of the cultural
differences.
The The US and US venture in particularly inparticular is very good at, hey.
I know you don't know me that well, but I needthis kind of favor.
Will you do it for me?
And, and eight times out of 10, people will dothat for you, and you should be doing the same
(01:02:04):
things for other people.
It is incredibly accelerating for one's career,and you should give first without asking for
anything in return, and you will see therewards come back to you many fold.
I really think, you know, be a good person, tryto help other people out, that value will come
back to you multiple times.
(01:02:25):
I totally agree.
And, Andrew, thank you for paying it for.
Really appreciate you taking time out to, toeducate us on so many pieces of your career and
also just kind of all the great work thatTechstars is doing.
So, hopefully I'll see you when you get back toNew York and we'll get together for a cocktail
or something.
Sounds great, Sean.
Bye bye.
(01:02:45):
Take care.
Thanks, Bye.
Appreciate it.
Bye.
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