Why don't we go ladies first here and introduce yourself, Lisa, and then we'll go
down the line and just we're actually going to do this as a speed panel, which is
different than kind of a back and forth. It's kind of going to give you time to
introduce yourself, provide your perspective. If you want to mention the name of your
firm, et cetera, where you're based out of what your investment focus is, what you'd
like to source from the room, and then the million dollar insight you want to
provide.
focus. Uh, we do later stage venture, uh, we're sector agnostic. I guess it's easier
to say what we don't invest in, more than what we invest in. We don't do real
estate, and we don't do funds. Um, everything else we pretty much look at. We are
fairly heavy in biotech and life science, but we also do consumer, energy.
Now we're even dipping into crypto, which, it's not my favorite. favorite. Let's see,
what's the next question? Preferred investment structures. We're straight up equity
investors, typically.
Types of investments we're looking for. Okay. Later stage venture, pre -IPO is always
interesting. We want to see traction. We want to see revenue. And then for me
personally, I'm an earth shot prize nominator, so I'm always interested in innovative
technologies, climate tech, anything ESG focused that might be interesting to nominate.
So on the earlier side, I would personally look at that. On the family side, we're
looking for later stage opportunities that we see having a potential IPO within about
two years time frame. And last but not least, oh my, number one most valuable
insight. Well, I guess get the notes before you come on stage.
I would say invest in what you understand and what you know. I think that too many
people chase after the latest, greatest thing. I've seen families run around like
little kids playing soccer in a pack, you know, it was like, oh, SPACs, no, no
SPACs. And then it was EV, and then it was blockchain crypto, Web 3, and now it's
AI, AI, AI, AI. Not that any of those are bad, but if you're a serious investor,
know what you're investing in. Have some expertise. Don't just chase the latest and
greatest. Right. Great. Under five minutes. And be quick. Wait, wait, under five
minutes. So I've got a follow -up question. For venture capital and angel investing,
early -stage investing, it is a lot harder to gauge who to trust when you can't
look and look at, oh, they have a million EBITDA or two million EBITDA or they've
been in business for 17 years and this many employees. To me, that seems like very
tough, but you've done it over and over again. So what are some like inside
baseball secrets that you could share with families here who have an interest in
that area and they don't wanna lose their money every time and could learn one from
you? Bless you. - Bless you. Not sure it's inside baseball as much as common sense.
I think the management team, the founder, You really have to understand your
business, and you have to be able to translate that understanding quickly. I can't
tell you how many times we've seen a good product or a good technology, and we
know immediately the company is not going to work because the founder or the
management team is not solid. Something disruptive, you know, you want to look at
something that might have a real potential to do something that no one else is
doing. If you are going to be looking at something that is already out there and
there's a lot of it, then you'd better have something that's the reason why your
company is going to do a better job of it than what already exists. So I would
say first and foremost, you know, jockey not horse. You've got to trust the team.
I always ask my founders a series of questions and one of those questions is what
do you see as the biggest potential problem for your business. And if they answer
with like raising capital,
it should be something that's real. I ended up investing in a company that I wasn't
even particularly interested in and when the founder answered the question that I
asked and she said, "The physical and mental health of my team, "because if they're
not strong, we're not gonna make it." And I immediately knew that this was a
founder that stood how to actually grow a business. Everybody can lead with, oh,
the total addressable market is $5 trillion, and we're gonna go from negative 10 ,000
this year to $20 million next year with absolutely no way to get there. That stuff
is just ridiculous. I want somebody realistic. I want someone that can come to me
and say, look, this is what we've got. Realistically, it's gonna take us this long
to get there. This is our plan to get there, this is why we're the ones to do
it. If you can answer that, then you're worth looking at. Otherwise,
you're a science project or a dreamer or a flipper, you know, the person, if
somebody comes to me and says, "Here's my plan to get out of the business before
I've even built it," I immediately think like, "You're not even interested in growing
your own company." So if I wanted to do that, I could just bet on a lot of funds
that can quickly exit for me. So that's it. - Right, like Bezos says he wants a
missionary, someone who's gonna champion something, not a mercenary, who's just kinda
in and out real quick. So I find, 'cause I'm not a VC expert, it's not an area I
focus on, but I don't know if I've seen too many pitch techs or any pitch techs
in VC that do look realistic to me as a non -VC person. They're almost all crazy
hockey stick right after investment. What percent do you think are really realistic
or do you see them all as super rosy? No one ever puts a bad one or a bad
scenario out. Yeah, you never see a deck that doesn't go like this, you know, in
the chart of growth. I would say, obviously it depends on the stage. If they're a
little bit later stage, they actually do have revenue or traction and they can show.
If not, I want to see a realistic timeline. And yeah, if you're telling me that
you can go from zero to $50 million in a year. I'd like to know where the drugs
are that you have, and can I have some? Because I think it's just insane. Unless
you're a really, really well -known person that people are going to throw money at
before you do anything just because you're you, right? If somebody's like, oh, well,
Sam Altman is in this, and so we're going to give him $100 billion. That's but
that's not usually what I get into. - Right, right, great, awesome. Well, one note I
wrote down here is that the founder matters more perhaps than the opportunity because
if it's the opposite, like it doesn't really matter what the opportunity is if you
don't like the founder, right? So, awesome, appreciate you sharing that. David, why
don't we have you go next and go through some of the same questions. - I'm a multi
-family office CFO. I work in a lot of capacities for families, helping them out
just on basic accounting to being a controller to really helping them manage a lot
of the family dynamics and making a lot of decisions on their behalf. What's really
interesting about this position is I'm not necessarily sourcing any deals for them
but you're standing right beside them as they're operating throughout their financial
life and you become this person that's almost this financial this financial therapist
for them, where you're helping them make decisions with their family and how they're
communicating issues. And with that, I've really had the pleasure of seeing a lot of
different families doing a lot of different things. I've seen folks who have made a
lot of money in the stock market, I've seen them do it in options and commodities,
I've seen people make a lot of money in real estate, I've seen it in alternatives
and private equity and venture capital and so seeing all these has just been
honestly a privilege.
And what I see is once the money is made, oftentimes people take a couple of
different routes. Some folks, depending on what their horizon is for their family,
they may decide to keep it very, very simple. I've seen folks just put investments
in, you know, seven index funds and that is where they go. Other families who may
want to grow, they're continuing to invest in private equity and real estate and
diversification in that regard. And so some of the investment structures that I'm
seeing, specifically from the family side, if they're trying to transfer the wealth,
I see folks using a lot of family limited partnerships where they can use a lot of
gifting synergies in that where they can also get synergies with the family members
maybe getting into a deal that they couldn't do individually. So they get some of
that family buying power, if you will, and then that is able to alleviate some of
the administration that goes on managing that asset and the communication. They may
have one point of contact or somebody in the family office who's doing that. And
so, I'd say the most valuable million dollar insight that I've learned is really
know your audience and know the family that you're talking with. Sometimes there's a
lot going on inside the family and to be able to educate them and help everybody
understand what type of investment you're getting into. There may be a lot of
opinions in the background as to why you're doing that. And the family may not even
be clear on what they want to invest into. So I think it's really important that
you're very, very patient with them and understanding that they're juggling a lot of
things on their end as well. And this may or may not be the right investment but
also lead with education too. And that people are curious, people wanna learn and
helping them understand that is ultimately helping both piece out in that regard.
- Great, yeah, you mentioned some valuable things. I saw a survey of institutional
investors, which I think source ideas on LinkedIn, we could probably all agree, less
than a family office would. And it said that 30 % of institutional allocators are
influenced by and read content and white papers, et cetera, through LinkedIn. So I
think the percentage of family offices that do is probably 50 % or higher, and you
talked about education. I think also being patient, being politely patient and
following up and persistent, but also sometimes people complain if they meet with a
son or a daughter or a family and they're like, oh, you're not the decision maker,
well, she told me that up front, what a waste of time, but it might be worth a
50 million or 100 million dollar network family, and they're just not respecting that
process of being patient and building the trust. So I'd like you to comment, 'cause
we have another minute left here. For those in the audience who are trying to build
the trust with the exact families that you work with and represent, et cetera, what
do you see works in building the trust besides education and being patient? Because
a lot of people who, if you speak at an event or you have a LinkedIn profile and
say you're an investor, you're gonna get approached hundreds of times a day, a week,
a month. So what makes the difference? Who gets through and who earns their trust
at the end of the day? - Yeah, I think first is understanding what they're
passionate about. Think about, you know, on one side of the coin, which side are
you on if you're trying to raise money and there is no passion for that. Move on,
right, respect their time. If they're interested in tax advantages, then it's like
understanding what it is that they want is very, very helpful.
And then just not looking at them like an object, you know, money is only a
magnifier for who we all are, and the more money that you have, it really magnifies
that personality or that trait of who you are. So they're just human beings and
everybody puts their pants on one leg at a time. >> All right. Great. Thank you.
Good timing. Kevin, thanks for coming back. Do you want to introduce yourself,
and a little bit on your perspective, preferred structures, et cetera, Kevin, yes.
- Hi everybody, Richard, thank you for this opportunity. - Thank you for this
opportunity. - No problem. - And I'm really happy to tell you a little bit about our
family and what we do. We've been, we're an old stage family office,
we've been around 20 years, which is relatively new and relatively old in a lot of
What we do is, is we take, we have an internal motto, catch the current,
make the wave. And so what we do is we take early stage technologies and we roll
them out around the world. We've done business in 80 countries and we still do
business in probably 40, 45 of them through family offices and not through
politicians. Politicians come and go, family offices stick around, and particularly
foreign family officers stick around for generations after generations. We really like
patented technologies because when you own the patent, you own the real estate and
then you lease it out, you license it out, whatever. And a lot of people don't
understand how powerful a patent is. Early in my career, I met the two doctors who
were about to get the patents on alpha hydroxy acids. The women in the audience
would probably not know, would know all about it, and the men wouldn't. It's the
wrinkle crete, the retinols and AHAs. The people who were in charge of retinols,
Johnson and Johnson, brought me into these people and said, "We've got a conflict.
"They need a pit bull, lawyer, businessman like you." Frankly, and I don't like the
word I, and I don't like the word I, but I guess my team, we brought it to 80
countries. It was in 40 % of all skin products in the world. We generated almost a
half a billion in royalties and sold it to Johnson and Johnson for a nice piece of
change. Patents. Right now we have a portfolio of patented technologies and we're
very, very pleased with that. And to be honest with you, people come to my son and
myself and my team and say, "I've got a patent, but I need you to monetize it and
help us strategize it all over the world." So, For example, those AirPods with
Apple, we own the patents. Apple's aware of us, et cetera, and we'll work on it.
We also own the patents and all skincare and cannabis, CBD, et cetera. We also own
all the patents on refrigerant gas, which reduces your electrical bill by 20 to 40%,
and all you do is take two to four hours to replace it. We're in 150 installations
in the United States, and my job is bring it into national. I have teams in 14
countries in South America. I'm now working in Europe, et cetera. But that's what we
do is we create joint ventures with very wealthy, very successful,
but most of all operations -oriented, penetration -oriented family offices.
We make them our joint venture partners, and then we work in the trenches in each
country. And so we're building patent portfolios. The two that I'm most proud of are
the refrigerants, and I love all the patents. But one that I have to show you,
'cause it's crazy, and one of the principles is out there.
And Camille, you're in the audience someplace, you laughed when I brought this out.
- I am here, Kevin. - There you are.
That, you can eat it. It's water soluble. We are now a preferred provider to
Walmart, and now we just gotta deal with subway, but this is not recyclable plastic.
It's made from sugar cane waste, which is all over the place, and it is totally
and 100 % soluble. So you put it in your washing machine, et cetera,
et cetera, and it's gone. This will, in our hope, in our prayers, and we are
already talking to people all over the world, will replace plastics. So that's what
we do. So what's our structure, you ask? I teach at Cornell and Stanford. I taught
a full course for 16 years at Cornell on two weekends every spring. I say, when
you have a patent at NMIT, and when you have a patent technology, you create a
grid. What are your products across the top? How many different products or
applications do you have? And how many channels of distribution do you have? In
AHAs, I had 35 boxes to fill. So what I did is I went to Avon and I said you
can have one box glycolic acid door -to -door And I said you I need 25 million
dollars is a paid -up license and in those days That was a lot of money, okay, and
they didn't give us 25 million dollars They give us 22 we never raised another
penny of capital. It was organically generating capital So what we do is we monetize
patents but we build the investment portfolio in a non -dilutive way way.
And we also do straight investments, Richard. So we have probably a couple dozen
companies. We're in rare earth mining in Montana, et cetera, and Vietnam. Vietnam's
number two to China in rare earth. So we're very diversified, but we prefer patents.
And our target, as I said, is patents and bringing it into our global network in
Asia, South America, Europe, Middle East. But what is our insight is it a fad or
is it a trend? And can we make it a trend catch the current make the wave?
Can we truly make it a wave and we don't want to be involved in a wave when it's
about to crash on shore. We have no interest in being me twos. My son laughs at
me. Dad you go to all these family office places. I stay he created rice cold brew
coffee. He's so much more creative than me. I, my two partners, we created Sobi
beverages, fastest growing beverage company ever. We are a great combo. He's creative,
but I gotta, I gotta tell you something, Richard. When I meet an entrepreneur and I
try to be nice and etc., and kind and all that stuff, you better know your
numbers. If you, if the CEO says to me, "Gee, talk to my chief and after officer,"
because I'm not sure what I've done this past month or this past quarter, we move
on. If you don't know your numbers, you don't know your business because the key to
business as well as personal relationships is pattern recognition, Richard. - Right.
- Pattern recognition. Good pattern, pump it. Bad pattern, correct it fast. - Awesome,
so much value right there. We talk about a lot as a team. If something's not
working well, we fix it like the same day we realized that it's not working.
Tillman Frittata has a book called "Shut Up and Listen." He owns the Houston
Rockets. He's a billionaire and one of the top seven things that he stresses is you
have to know your numbers or you're dead. There's no way to operate without knowing
your numbers. So that's amazing. And I don't think it came up on the digital asset
panel just because of who is on the panel wasn't what they were focused on, but
digital assets is like real estate. and a lot of people don't see that, the spatial
occupation of certain areas, and then if others enroach in that territory, they have
to pay you a licensing fee, et cetera. - Data is value. - Data is value, yeah,
awesome. Yeah, data became worth more than oil a decade ago, right? So-- - One more
thing, missionaries and mercenaries. - Right. - You want to invest in missionaries,
right? - Right, right, yeah, and probably there's not a single person in this room
that loves the fact that they use any plastic. So that's like one of the coolest
ideas I've seen at our events for a while. So appreciate you being here, Kevin, and
thanks for speaking again at the event. Awesome, Donald, you wanna wrap us up and
share your five minutes? - Absolutely, thank you for having me, Richard, and it's
great to be here with esteemed colleagues such as yourselves, learning more about
patents as well. So that's really cool. We're a single family office for a Latin
American family. I started my career at JP Morgan here in the city, so it's very
close and dear to my heart. And essentially, the family plucked me out and gave me
an interesting opportunity. I was ready to do something that was more creative and
it had more degrees of freedom, which this family office has let me to do. And
essentially, we invest in a broadly diversified, multi -acid class portfolio within
public investments. You know, We have equities, we have active managers, passive
strategies, and I think we have a meeting with Dan Pinkerton after that, so I'm
excited to talk to him about that. But something that's been interesting that I've
worked on specifically for this family, and it's something that's more in -house. I
really had the idea last year to create a strategy that was proprietary, that was
in -house, that was differentiated, and like Kevin mentioned, pattern recognition and
data is very important. So I started doing back tests to determine what could
generate additional alpha or outperformance in the long run through different cycles
compared to just investing directly in indices such as the S &P 500 or the NASDAQ.
And so I ran back tests, kind of became obsessed with determining what would have
happened if I would have gone to fastest growing sales companies or earnings growth
or filtering for liquidity or momentum and I kind of started building a formula
which we now use internally since December 1st of last last year.
We're up about 45 % year -to -date and you know we're happy with the results and
hoping to grow that even further but that's just one of the areas that we invest
in. The family is also heavily involved in real estate, direct, you know we don't
really go through funds although always happy to open to review opportunities. And we
have so many sponsors here and great opportunities as well, so I'm excited to speak
with some of you all. Investment structures, in terms of preference, we are offshore
investors, so if there are offshore feeders available or certain offshore friendly
investment structures, that's where we would normally invest in. And When it's in
real estate, we tend to, you know, the principal likes to have full control of the
building or the project for clear reasons. And I guess if I would have an
investment advice or some valuable business advice for you all, it would have to be,
you know, for me personally, being creative and also combining that with a passion
for just iterating and improving and constantly questioning your own original thesis
it leads you to create something that's unprecedented and sometimes really interesting.
You know, you just don't settle for less and you keep constantly iterating and
improving and use data and resources to your advantage. I think nowadays, I mean
chat GPT was mentioned, but there's just such a vast amount of resources and data
out there that if you just can separate the noise from the signals and identify it
and take advantage of it and ride the trends and obviously avoid pitfalls.
I think you can really create a strategy that's well -structured and solid and great
for the long term. - Great, and if there was like one or two really specific
niches, like when you meet with your team, like, hey, make sure you keep an eye
out for this and this state or this and this country, is there like one or two
things you could-- - Sure, absolutely. Something that we've been looking at, I mean,
we have certain buckets to fill within our strategic asset allocation, and I know
private credit has been all the rage. I mean, we would be very selective with, in
terms of the manager, you know, would like to see a long track record, but
essentially being able to get some, you know, interesting yields, something that's
been kind of tried and true, well tested over time. Some manager that has had
experience through different cycles. That's probably something that we would be looking
at on a selective basis. - Okay, great. And then last question for you is that,
with all the hundreds of LinkedIn messages and emails you get, what makes it past
the filter when you don't have time to read an essay -long email and you're trying
to figure out who's the credible creative founder and all the things you just talked
about? - Sure, that's a great question. I think when it's referred by someone that I
know, perhaps a common connection, not just kind of a blast where hundreds of people
could be receiving this, but instead something where it comes out of personal
connection. Perhaps you both attended the same university, you both have mutual
connections in LinkedIn, or you've attended the same event, so I think that that
would help. - Right, right, yeah, for sure. I got an email the other day that had
the wrong name on the email to me with someone I haven't met, like in a different
part of the country, and And it said, "Oh yeah, your name came up twice over lunch
today from my colleague." And it's like this fake reference. They're like, "Oh,
you're at the same event as us last week in Monaco." I was like, "For sure I
wasn't in Monaco last week." And I saw lots of people pretending to have something.
Yeah, big red flag. It happens a lot in our industry. People trying to fake a
affiliation of some way. Anyone else on the panel that wants to add something that
you wrote down and you'd love to share with the audience or you thought of of all
the other panelists are speaking, yeah, Kevin. - Can I just say something about
valuations? You know, entrepreneurs just, they have a disease and it's overvalued
their technology. And you want to create a staircase in your company and that means
up in valuations, not down. And the original investors should be,
at least partially, your second and third round investors, at least you hope they
And then when you tell investors that you raised money on 10 million, but now we're
at 5 million or 150, they feel down because they feel like they lost money. The
second part of that valuation game is don't drink your Kool -Aid, okay? Just because
you raised money on a $20 million valuation and you got a million dollars of
friends and fools and whoever to put money in your company does not mean that
you're worth $20 million. And too Many young entrepreneurs start gloating and they
tell their wives, whoever in their life, that they're now a multi -millionaire when
they don't have anything until they close that deal and finally sell a company, go
IPO or whatever venting there is for cash flow. So don't drink your Kool -Aid and
make sure you have realistic valuations so you reward the good investors that you
bring on early. I think that's a so spot on like Kevin O 'Leary countless times on
Shark Tank is like I don't care if you did eight million dollar friends and family
welcome to the Shark Tank you know I think you should take it out behind the barn
and shoot that thing you know it's worth nothing so he'll be pretty straight with
people on exactly that point we're gonna add something Lisa yeah I'd say skin in
the game we want to see that somebody has also invested themselves now if they
don't have money to invest that skin in the game can be they're not taking a
salary salary, they're working full -time, they've mortgaged their house, but I want
to know that that person is every bit as invested in this company as we are in
terms of shared risk, so I would look at that. And then just one comment, people
do always say, you know, how do you get deals? And of course there is a network
of people in that you trust, but I do think that one of the issues for getting
capital to women and getting capital to people of color is that they don't have the
right network sometimes and so they're not in that shared trusted community. And so
what I'd say to the investors out there is like, invite somebody into the room.
Allow them to get to know somebody so that they can become trusted because not
everyone is born with friends and family that can write checks and it's unfair if
we as investors only look at the people that our friends from Wharton refer. that
will never change it. So that's my little lecture. (audience applauding) - Awesome,
yeah, I live in a house with five females, three daughters, mother -in -law and my
wife, lots of Taylor Swift fans, and we have more than 50 % of our staff as
female. We try to go out of our way to get amazing female family office executives
on stage. If anyone has references, they don't have to be a family office, just an
investor or someone who runs an investor club, that'd be amazing. But also for
investors here in the room, if you'd like to bring your spouse, your son, your
daughter, and leverage our platform to groom the next generation, the ideas that
could get exposed to here, it could put off a light bulb, like, oh, working in
investments doesn't mean I have to sit and calculate numbers in a spreadsheet and
sit for my CFA for seven years and study textbooks and formulas. Like, there's a
lot more to the investment industry, relationship building, finding exciting
technologies, and it could open up their idea. And they're mind that might think, I
wanna be a teacher, I wanna be a teacher, nothing wrong with that, it's amazing to
be teachers, we need great teachers, but it could be a teacher in the IP industry,
it could be a teacher to family offices, et cetera. - Can I give you one line?
- Yeah. - Pillow partners will make or break your business. Make sure that you get
to know the pillow partners and make sure you respect and make sure they know what
you're doing and why you're doing it and how their spouse or whatever is a very
important part of your company. Pillow partners will make or break your business. One
billionaire recently told me that who you spend your life with is more important
than how you spend your life. So that was a pretty, pretty good quote. All right,
let's see our panelists. Big round of applause. That was great.