Transcript: Democratizing Venture Capital: Why Individual Investors Need Private Markets | Mike Collins, Founder & CEO of Alumni Ventures | Startup Project #129

Nataraj: Hey Mike, thanks for coming on the show.

Mike: It's nice to be here.

Nataraj: So I think if you're an venture, if you're investing in startups or if you're an angel investor, I think people know about alumni ventures. but I think for our listeners, who don't know about alumni ventures, can you give a little bit of background about yourself and alumni ventures?

Mike: Sure. So I started in Venture Capital in 1986, right out of college in Boston at a firm called TA Associates. And was lucky to find something that I found very interesting. and I thought I was pretty good at it. and just got to work with really great people. And really have spent my entire career really at the intersection of technology and entrepreneurship and venture investing. I think I probably consider myself more of an entrepreneur than a than a VC. And I started Alumni Ventures in 2013. Raised our first fund in 2014. And our kind of what's special about alumni ventures is we're really focused on providing access and education to individual investors. and from on the investing side, we exclusively co-invest. and we really co-invest with really strong lead investors. So we've done Dozens and dozens of deals with, the big brand names of venture capital like Khosla and Sequoia and Andreessen and et cetera, et cetera, et cetera. There are a lot of, really strong VCs. We have a very large network of individual investors. a lot who attended one of our schools. So we're we have alumni funds at seventeen US schools like Dartmouth and Harvard and Stanford and MIT. So the individuals involved with us are pretty connected. So we have a great network and we have a great portfolio that is now something like fifteen hundred companies, and just some of the names, people

Mike: Might have heard of would be like Grok and Aura and I could go on and on. I would encourage people to visit our portfolio at AV.vc. I would leave out a lot of amazing companies if I just started rattle off names, but we're very proud of our portfolio. And I think in a nutshell, what's unique about us is, the network that the fact that we have so many individual investors, so many portfolio companies that we're really able to make connections within that net network. And that's very valuable to our to our portfolio companies and how we get into so many amazing deals.

Nataraj: So how is it different from like you mentioned you raised your first fund in twenty thirteen, twenty fourteen? So you have a fund that you're investing alongside with leads or investors who are from specific schools. how does it work? Like is someone just

Mike: Yeah.

Mike: Yeah. So I'll just break it down into a simple example. So we have an alumni fund around Dartmouth alums, which is my school, my undergraduate school. And that consists of individual investors who put money into a fund. So money gets pooled together into a fund. And then we invest it in a portfolio over twenty or thirty companies. So it is literally like a micro venture fund. And nowe're on Dart, the name of our Dartmouth fund is called Green D. And we're now raising Green D 13. So, we've been doing this a while. We raise a new vintage every year. And it is the magic of it is that by pooling money and pooling a lot of connections together. we're able to get into really good deals. And any individual within our network on their own would not be able to get into these deals. But by pooling money as individuals, and then it's not just the deals that particular we have 132 employees, we have 10, we have 40. Venture capitalists broken up into 10 venture capital teams. So we have a lot of people getting up every day to get access to the most competitive venture deals in the world. And so we have, we have offices in the venture hubs in Menlo Park and in New York and Boston. and we just open up offices in Tokyo and London. We have an office in Chicago. So We have scale. And by pooling little a lot of little investors together, we actually make a pretty big check. And even more importantly than our check size is we're able to help our portfolio companies. So from an individual perspective, number one, we believe that venture capital is a really important asset class.

Mike: It's pretty obvious that this is where value is created in an entrepreneurial economy. so it's really the engine of modern economies is, America's GDP has exploded over the last 30 years because we've been really great innovators and technologists, right? And if you look at the most valuable companies in the world, those are all venture back businesses. You know, SpaceX went public this year at one point seven trillion or something. That's bigger than the GDP of many economies. in the world. So it is the engine of the economy. And yet most individuals don't really have that in their equity portfolio. They most individuals just own public stocks. And so the truth of the matter is that really limits your access. To where value is created. So that's why we exist. We try to work individually with each one of our customers to understand where they are in their venture journey. We have a lot of education. We do webinars. We do in real life education. We have lots of videos on AV.vc for people who want to learn and how to get started. But we just think it's really important that more and more individuals have a portfolio that includes private companies as well as public companies. Now, every individual is different. And so, either in working with your partner or your financial advisor or getting on with Claude or OpenAI, you want to decide.

Mike: How much of your portfolio do you want in stocks? How much do you want in cash? How much do you want within stocks? How much do you want private versus public? But we think most people should have a vent a private equity portfolio, a portfolio of venture capital investments. For our point of view, a good venture portfolio, though, has 500 companies in it. It's not one or two deals. You know, that's even with public companies, you wouldn't just invest in one or two public companies. Most people buy an index. So that's even more true in venture capital because it is, it's a power law business. You know, with venture capital, you make 10 investments, five go to zero, three do okay, and two do great. Something like that, right? So, you don't get to just pick the good ones, you know. That's only in hindsight. And I've been long I've been around long enough to see that. You know, at the be at the beginning of the search era, right, there were a lot of search engines, before Google won. So, and there were more than one social network before, Facebook won. So, these things are only obvious in hindsight. That's why you need a large diversified venture portfolio. Like you should have a large diversified public stock portfolio. And that's where we try to, again, in a one-on-one basis, help our individual investors put together such a portfolio.

Nataraj: Is when you when you mention the example of Dartmouth, who's leading that fund? usually or is it like a is it more of a per deal based syndicate that is being formed whenever there is a deal?

Mike: No, it's a good question. So it's a fund. So we have a particular team that is responsible for the Dartmouth fund and several other funds as well. it's our green team that's led by Laura Rippe. Those of you that watch CNBC, Laura's on there a lot. but yeah, that team sources deals, gets up every day. The deals they source will obviously go into the Green D fund, but within each of our portfolios, we don't exclusively have one team source deals for one fund. So the Green D fund will not only benefit from the Green Team's deals, but there'll be deals drawn from our other funds, our other teams. So again, we have 10 teams within AV. So even if you're in just one alumni fund, you'll be sourcing all 40 people will kind of contribute to that.

Nataraj: How does it how does like a particular deal go to a particular fund if you have like different funds ongoing?

Mike: Yeah, so we have funds that are not just for alumni of our 17 schools. We have we have a lot of people who didn't go to one of these schools want to invest in venture capital. So we also have a foundation fund that is open to everyone. We also have vertical funds. So things related to AI, energy, defense tech, et cetera. So we have

Nataraj: Yeah, of course.

Mike: We have a whole family ofunds people can choose from. And when we source a particular deal, that deal goes through the due diligence process, it passes investment committee, and then it is allocated to the funds where it is a good fit. So if it is a deal sourced by our green team, it's obviously gonna go into the Dartmouth fund, but it also may be an AI deal. So it might a piece of it might go into the AI fund. And it might be a follow-on investment. So it might be into our later stage growth fund as well. So again, people can go and again To get started, it's usually just go into an alumni fund if you're an alum or our foundation fund is a great place to get started with us. And then you can go from there. And I think it's really important for people to, understand that this is a long-term investment, right? That building, making an investment. You know, we just had another company filed to go public today, and it's an investment that we made six years ago. So this is the opposite of like day trading on Robinhood. This is really about long-term wealth creation and get rich slow and do things in a disciplined long-term way. So when we consult with our clients, We really try to create kind of an annual budget and be sure that they commit to it over years. And so, if somebody has a hundred thousand dollars to invest in venture capital, we encourage people to break that up over four three, four years at least. And, you want to have a good foundation, diversified fund. And then if you want to do some

Mike: Individual investments or you really believe in health care being disrupted with AI and you want to invest in that fund. you do that on top of that base, just like you would do, I think in most people would advise in public equities is go into big diversified ETF. And then on top of that, if you want a REIT or you want a commodity fund or an international fund or a whatever, and you want to own f a handful of individual stocks because you have strong conviction, that's the smart way to do it. It is not kind of jumping lily pad to lily pad on a day-to-day basis. I am very skeptical always when I see people looking at their investments on their phone. Right? Like if you're looking that frequently You know, that is that's that's trading. And I think, being a trader as an individual investor is a very rare bird that it can do that successfully. So, I'm a bit old fashioned from the Midwest. It's like I think there's a right way to do venture capital. And that's where we try to really work and develop long-term relationships with our, something like twelve thousand clients now. we feel really good that we do it the right way.

Nataraj: You've been in venture for a while. how do you s do you see like things that not being done in the right way in venture right now or like in the last couple of years? Like what are the some of the I feel like VCs always tend to talk about only the positive things, or like the positive trends. And obviously those are all, flashy and real and yeah you're you see companies coming out. But I think very few people actually talk about either the negative trends or b statistics that are that are somehow like not fitting into the positive now.

Mike: Listen, I think on the negative side, I think that venture capital is still an asset class that is not accessible to enough people the right way. So, in the spirit of trying to protect people, we've created a system where you can go with your own money, you can gamble on Kalshi as much as you want. You can go on DraftKings, you can go to Vegas and do whatever you want with your money that is pure gambling. But you can't invest in an Andreessen Horowitz Series A deal unless you're a millionaire. So that's not a new problem, but I think that is if you want to know my opinion about the problems, I think that is a problem. I think we have also created an environment where the incentives to going public are declining every day. So the number of really strong, the number of IPOs, the number of public companies has actually declined. You know, when I started out in the business, companies would go public very early in their development at a very reasonable valuation. And you could wait until the IPO.

Nataraj: Why do you think that is?

Mike: And now that doesn't happen. Now most companies postpone being public as long as they can.

Nataraj: But is it is that because there are not enough benefits of going public or is that because there's now too much private capital that is available without doing the work for being what it takes to be public? Like which ones is the real reason here?

Mike: Both. I think on one hand, the traditional reasons one had to go public, which is access to capital to take care of your early investors and your employees, has gone away. A company that could go public can now provide liquidity through secondary sales to your early investors and employees. Is that a negative thing? Well, we've also created a system that creates a public market that is very short-term oriented. There's a lot of things in our society that are very much not thinking about the long term. So, there is a lot of pressure when you're a public company on your quarterly numbers. A lot of companies, have bad quarters and want to make decisions that might look bad in the short term. And I think a lot of entrepreneurs say. And, by the way, there are a lot of costs, both direct and indirect, in time. You're on analyst calls, and there's a whole bunch of stuff that is not running your business that comes with being a public company. Clearly, every day companies still choose that path. Just the number of late-stage, what we call late-stage private companies that are worth billions of dollars that clearly have product market fit. You know, companies like Anduril, Stripe, these companies, for all practical purposes, are not venture deals anymore.

Mike: Right. And there are hundreds and hundreds, if not well over a thousand, of these kinds of companies who could be public but have chosen to stay private. And yeah, do I think that is great? No, that is, the value is being kept to people who have an opportunity to invest in private companies. And so I think it's kind of undemocratic. And I think it's like, again, just this year's big example is SpaceX. If you were an individual investor, the first price you could buy SpaceX was $1.7 trillion. Okay. That means from zero to one point seven trillion dollars was captured by people like us who invest in private companies. So it's like to me that's not good. So that I would argue that's a second thing that is a systematic problem that I wish were better than it is. But I don't by the way, I don't see that changing. I see I see every year things that are reasons companies would go public being chopped away by being offered to them as private companies.

Nataraj: I mean, I think you're right. I also don't see that it changing, but I think There are more benefits actually to being public than staying private. I think the companies that are staying private are also using storytelling and also like monetizing the FOMO among which are capital funds, to raise, at valuations that are not actually reasonable. I mean SpaceX will in my opinion will become

Mike: That assumption, let me just push back on you. Underlying that assumption, what you're saying is private investors, and by the way, some of these are pretty sophisticated and experienced venture capitalists and pretty experienced sovereign wealth funds are more susceptible to that than the public is. Is that what you're saying?

Nataraj: Yeah, because I think there is that I am kinda saying it. obviously I've acknowledging that obviously, all the players are sophisticated here, but the problem is the private markets are not like true markets. like a couple of players are involved in any particular round. Like if I'm doing a really secondary offering for OpenAI at trillion

Mike: Okay.

Mike: Yeah, I will I will tell you if you're competing to get into the Series C round of a really good venture capital deal, it's as competitive as hell. So it it is n it is a marketplace. And if not, go raise your own A round and tr and tell me that it Yeah. Yeah.

Nataraj: No, no. I'm not saying I'm not saying it's not a marketplace, but I'm talking about these really super high valuations like where, we are now in trillions, right? I remember a time five years back where trillion is not even in the social vocabulary. and

Mike: Right. No, listen, I will agree with you. We do have common ground, which is AI is a big disruptive technology. And I have s I again I'm old enough to have seen the introduction of the personal computer and the internet and the smartphone and now AI. And in every one of these cycles, you have really profound disruption. You have amazing new businesses created, and you have some businesses whose valuation is insane. And that is absolutely true in AI, that there are cases where we shake our heads and we go, no way. That does not mean AI is not a real thing. That does not mean That it's not going to create amazing new companies and provide all kinds of benefits and unanticipated negatives and externalities as well. Every one of the every great technology moves things forward but also creates new problems. And this and AI is no different. And there's going to be many businesses. And this is again true in the internet. This is true in every and every new technology that there are people that just don't do their work, become irrational. again, I was around for the dot-com bubble. And you had, you have taxi drivers in San Francisco, pitching their, dot-com startup. You know

Mike: But if you but our job is to kind of look beyond that and look deeper and to say, is this a good team? Are they addressing a real problem? Are they solving something that's really hard that it's going to take five or ten years to figure out? there is a lot of that going on as well. And it's not just AI, there is real innovation required and taking place in energy. There's amazing things going on in defense tech, in logistics, amazing opportunities in healthcare. I am really optimistic about changing our healthcare system. I think we're going into an era of personalized medicine. I think we're going into an era of rapidly expanding understanding of How our biology works and drug discovery and some of the scourges of cancer and heart disease and diabetes, and I think we're already starting to see that with obesity, with some innovations in GLP one drugs that are really, not fully deployed across the population yet, but in pockets are really making huge differences for people. So I think, I'm a tech optimist for sure. and there will and there are there will definitely be corrections, there will definitely be failures. I just also though will warn people that in today's environment that there is a lot more economic incentive to emphasize the negative and to be a kind of a doomerist. Like I was, you know. I was

Mike: I was walking by, I don't know, I was at a conference or something. I was walking by a television just this weekend, and there was like, there was a Waymo accident in San Francisco. Right? Like that was news. Like, not that there's 40,000 deaths in the United States every year from automobile accidents and drunk drivers. And no, but there's a fender bender for a Waymo, kind of thing. So it's like. You know, but that's that's the culture we live in is like if you can write a piece that says, there is huge dissent and Anthropic among the management team, that gets somebody writes an article about that, somebody makes a big TikTok about that. It's not like, here's a here's a five-person company that is using AI. To totally get organized with their customers. That's not a news story, but that's that kind of stuff, the good stuff happens every day and no one writes about it. So, I do think what hits our brains as humans can sometimes be misleading because of, availability bias. That's what we all are seeing all the time.

Nataraj: Yeah.

Nataraj: Absolutely. I think talking about like good companies staying private, I think one of the things that good companies especially miss out by staying private, is for example, take the case of Stripe. I mean, I think the founders sort of like philosophically came to a conclusion that we would stay private forever. and I was looking at they're making trying to make two acquisitions. One is I think they're trying to acquire PayPal and at the same time acquire OpenRouter. And I compare that situation with what SpaceX did recently with acquisition of Cursor. By becoming public, SpaceX got this huge sort of leverage of using that public stock to buy interesting acquisitions.

Mike: Yeah, cheap public cheap public stock, right? To buy some yeah, cursor.

Nataraj: Cheap. Yeah. If Stripe was public, they could have probably made even more interesting acquisitions with easier without finding any other like private equity partners. But potentially this is another route they're opening up. But that's an interesting thing and that I recently thought someone like Stripe if they were public there could have been a trillion by now.

Mike: Yeah. And I think the stripe I think the Stripe guy Yeah. And I think the Stripe guys would argue it's like, we want to make strong strategic acquisitions and, pay a fair price. You know, I and I think it's like and there's ways to finite there is a lot of money in the entrepreneurial finance system period. And if you have a good idea and Stripe is an amazing company, and could they have could they have maybe gotten a little better deal by using kind of public stock currency? Maybe. But again, I think here's here is my Consensus on it, which is there is a thousand, let's just use a round number, there are a thousand really smart, successful entrepreneurs who are making in their self-interest a rational decision to stay private.

Nataraj: The first company I worked for as an engineer was Epic Systems in Madison, Wisconsin. You might know it.

Mike: One of the great private companies in America.

Nataraj: Yeah, well there's a lot of great private companies and its founder, Judy, wants to stay private and she thinks that's the best way to build long term sustainable business without, thinking about hey, what decisions mean for the next quarter? And that's a completely fair argument, What is currently happening in venture

Mike: Yeah.

Mike: Yeah. Yeah.

Nataraj: In terms of investing in AI, there was a statistic that I was seeing a couple of days back where I think eighty five percent of the capital went into AI, including several hundred-billion-dollar deals. Did AI fundamentally change the landscape?

Mike: Yeah. I yeah. I do think again, I think you have to bit dig into those numbers, which directionally you're correct about, which is there are these amazingly large deals happening. And if you look at the totals, you say, like, Anthropic raises sixty billion dollars. And these big labs raise enormous amounts of money. I think it's a little distorting because I think if you look at beyond besides those big mega deals, has that meant that there is no money at all for a healthcare tech startup? And I think if you peel away the big additive stuff. that didn't that wasn't in existence, 10 years ago. I think there is still plenty of money for good seed investments. There is still great Series A deals getting done in many sectors, right? So I think it's like, it's all going to AI. Look at 80, the venture industry invested 300 billion dollars last year. And 85% of it went to AI deals. Well, that was like five deals, kind of thing. So what you really want to do is go, has it dried up for everybody else? And I would say no. I would say it's at least at the same level, if not a little bit higher, because I think there's actually some spillover. I think if there's an area where there's You know, I think there's there was an there was a period where there was a lot of new venture firms being formed in kind of the COVID era. And a lot of those funds invested at kind of peak prices with their first fund. And they're all underwater and they're all going away. So I think there's probably a little bit of a dip at kind of maybe the Series A level.

Mike: Where going I would argue there's plenty of money at seed. And there's there's plenty of money if you break through and get real traction. Like at the Series A level, you've got to have your you gotta you gotta be performing. And it and that's probably if I say just in 2026, probably the tough spot. I would say it at kind of a Series A, moving from your seed. To your Series A is a big win-wing. but the thing about our business is the market corrects. And those firms that maybe just got formed and got carried away and didn't have good price discipline, they don't raise a second fund. And if there's too much money pouring into a sector that those That'll be bad investments and the market'll correct. So I, I come back to my main point is this is not a day trading industry. And if you're gonna like, I'm gonna form a venture fund today and invest in, labs, you're like ten years too late, right? So today you're looking at a startup that's doing the next thing.

Nataraj: The next thing that was the name of the book that the author of Moneyball wrote on Silicon Valley. Next thing. so you started Alumni Ventures. It's a pretty interesting model of like spinning up in a a new venture fund. Like if someone knew.

Mike: Yeah, right. Right. Exactly.

Nataraj: Is trying to raise their first one. Are there like any other innovative ways that have not been tried at or like angles that could be successful?

Mike: Yeah, I mean, I think if you're gonna start a fund, there's really kind of two paths. You build your track record within another venture fund, right? And that's kind of the age-old strategy, which is, back when I was starting, a couple of guys left TA associates to form Summit. And, There was a split between TA and Advent International. And so that's one way that new venture funds get started. And that's probably half of the venture industry. The other half is really probably in two flavors. They're just really successful entrepreneurs. That have just made enough money and developed a reputation, usually serial entrepreneurs that they form their own firm, right? And so it's kind of their personal brand at that point, where and a lot of times it's a chunk of their own money. And I think the third path is you just start small. And people who start as kind of a venture scout and then they become an angel investor and they do really well. And they make people money and one thing leads to another. And then they do a small fund, maybe two or three people get together. Those are really the past. I don't think that there's again a kind of a big idea. building businesses is hard and it takes a long time. I mean, Epic's been at it what, 30 years? Kind of

Nataraj: They're as old as Microsoft almost.

Mike: Yeah. So I mean it's like, these things and even with AI, where we've seen growth, like Anthropics growth is faster than any company I think in the history of mankind. so even with that, most good things are really hard and take a long time. And so, unfortunately we have a society that

Nataraj: Forty years.

Mike: Promotes a lot of like, you can get rich quick. This is, this can happen fast. This is easy. It's just not true in my life experience. Building things of real value is really hard and takes a long time.

Nataraj: I don't know if you've seen this whole sort of like Twitter culture of you only have two or three years to get rich before like the AGI takes over. and you remain part of a permanent underclass for the AGI or AI. Have you seen that phenomenon?

Mike: Yeah, I think I have and I don't buy it to be frank and I could be wrong. I think there's a difference between what a technology is capable of doing and the rate at which human beings can absorb that change. And I already think The frontier models are and the agentic harnesses are fully utilized by about one hundredth of one percent of the population, maybe. Right? You know, the average person on the street maybe can use ChatGPT to search for something or ask a question, but there's the rate at which technology improves, and then there's the rate at which societies and companies and individual human beings can absorb change. And that delta is really probably the gating factor right now. So it's like, and we heard this from like the leaders of the lab, but I think they're in a bubble. Right? You know, I think it just takes a lot longer. for these things to change the way I'm going to run my beverage company, or I'm going to run my hospital, or I'm going to create a brand new insurance company built on AI. Those things are hard and they take a long time. And you deal with human beings and you deal with change and you deal with, government, government restrictions and rules and pushback. And one thing I, we're already seeing is kind of an incredible backlash, which is again something I've seen time and time again, which is every new technology has like, whoa, slow down. It has, the interest in kind of regulatory capture.

Mike: You know, so these things kind of are all different, but they all have similar patterns. And so I think we can anticipate AI is going to be huge. It's going to, I think, impact every society, every company, every industry, every individual career. But not tomorrow. These things take time. A recent example is like self-driving cars, right? That technology, and listen, you go take a Waymo in San Francisco. It's great, and you can start to take them in other cities, Austin, Vegas now. They're creeping in. But Elon was saying three, five years ago, it's like, it's gonna be every car, it's gonna be, next year, it's gonna be self-driving. It's like,

Nataraj: It's almost twenty years now.

Mike: You know, my Tesla right now is just now becoming self-driving, really. But so these things, there's the entrepreneur kind of selling their story, and they have an incentive to like be optimistic and reality distortion field, but these things take time, I guess, is my bottom line.

Nataraj: I think every AI or technology problem has become similar to the self-driving problem, where like we get to the 80% really quick. The demos show that we can get there; the finish line becomes visible. The next 15 percent takes, maybe three, four years. But that last five percent is where the real adoption challenges come in. When we make 95 percent progress, early adopters fully adopt the product. But in the final five percent, you have to convince more cautious and late adopters. Getting the technology through that final five percent is the really hard part.

Mike: And that last five percent can take as long as the first ninety five percent.

Nataraj: It may actually take longer, as we've seen with self-driving cars.

Mike: I think we will see that with AI as well. And it's like even an implementation in our company of like, we are going to do this particular workflow in our finance department. First the demo's easy. The first 80% happens fast, two weeks. You know, as you point out, the next

Nataraj: But

Mike: Fifteen percent takes another two weeks, and then the final five percent, you may never even get there. It may always require a human to do the last five percent.

Nataraj: And that's where like the whole taking from a demo to production, it was like these are these things are not translating into production systems, is because of that five percent. And the core reason is till now programming was all deterministic, right? You know, X, Y, Z, step one after step two, and it's every algorithmic, reliable, deterministic algorithms. Now we have moved into probabilistic. The output is probabilistic and you have to react based on the output. So

Mike: Yeah.

Mike: Yeah.

Nataraj: Sometimes it's right, sometimes it's wrong, and you have to, acknowledge all the use cases possible. And that's where like you realize, okay, this five percent will actually need some human in the loop, or we need to find a system that might actually work, or we maybe should take a step back and not use it for end to end and use it for certain cases and not. So I think that's where like all these things are happening at the same time. I think this is a good we're almost reaching in the end of our conversation. any books or things that would help retail investors who want to, learn more about venture? what would you suggest folks learning from?

Mike: Yeah, it's been f it's been fun.

Mike: Yeah, I mean, I think first of all, I think AI is a great teacher. So it's like just sit down with, your frontier model and just start asking questions and talking and talking about what and what you don't know. So I think everybody really, now that, has access to AI has an incredible tutor at their disposal, which is non-judgmental. And you can kind of turn on and turn off whenever you want. So I think that's great. I also think, I'll sell my own book that A V dot VC. We have tremendous videos that are free. We have free webinars every week where we talk about different topics in venture capital. We have in real life events in major cities where you can come and Ask questions and learn and meet other people who may be in a similar part of your journey. I also think they're just, some classic books. again, kind of old school, The Innovator's Dilemma by Clayton Christensen, I think is kind of the Bible. Clay was actually, you know. One of the guys I met at HBS and a friend, just incredible human being, incredible thinker. I think there's other amazing books, Zero to One, Lean Startup. I think you want to understand kind of the I think you want to understand the journey of building a technology company is really important. I think some of it is just getting reps. This is very much kind of an apprenticeship job. but I think the discipline of making a venture capital investment decision applies to almost all good investing decisions. You know, it's about due diligence, it's about valuation, it is about risk-adjusted return, it is about the quality of the people.

Mike: You know, these things are, kind ofoundational and true. and then there's just having a really long term horizon. I think there is a lot of value to accrue and wealth to be created by having a real noise filter and kind of tuning out a lot of the day to day stuff, especially in our business, which is like, you know.

Mike: What goes on with, the a trade war with, Canada, or the yen, or the yen dollar exchange rate, which gets like hyped up in the news, is just irrelevant to a startup and their tenure journey to build a great company. So if you can kind of tune out a bunch of the noise, which is almost everything. And if you have a longer time horizon than the average human, which is very short and getting shorter, it seems, and you think about rebalancing your portfolio once a year, not once a day, you will do really well. I mean, one of the reasons people tend to do well with like their retirement money is they don't trade it. They invest it and they let it compound and sit for 20 years. And I was talking to a this is funny. I was talking to a large money manager. And, we were we were talking at my reunion actually about kind of like who what category of investors do the best. And he goes, It's actually the dead ones. And what he meant what he meant to say is, you know. Some accounts the person dies and it goes through probate and it's like, sometimes the people don't even know they own it. And so it's just in some mutual fund since nineteen sixty seven. And it just, it just compounded for fifty years and it just became, that ten thousand dollar investment in nineteen seventy four is now enormous just because of compounding. So

Nataraj: Isn't like there a great saying where it says all man's problems come from unable to just sit still and do nothing?

Mike: Yes. And I think when it comes to investing, I think there is, the rules I live by are basically, and one of the reasons we're co investors is it's in my DNA, which is, you do your work at the beginning. Is this a real problem? Is this a good team? Do they have a good approach? Do I believe in them? And then I make my investment. And then let them go. And, hopefully seven years later they've created an enormous amount of value. but one thing about venture capital is you can't, get pissed off at something and say, I'm out and date and sell everything, because you're, you're investing in a company and it's private and you can't really sell. So it's actually, I think, very healthy. If you were forced to do that with your public stocks, you would probably do better. If you could only trade them once a year, you would probably do better. Anyway, it has been a pleasure talking with you. And again, appreciate the opportunity, a great set of questions. And yeah, if you're if your listeners are interested in VC and want to learn more, check us out.