Jason Calacanis: hey everybody welcome to sunday we have a great vc sunday school today we're talking about founders who have other jobs the various times that that can work and the many many times when unfortunately we are unlikely to fund you if you have not quit your day job to focus 100 on your startup and then i'm going to interview joe blair the co-founder and general partner at baybridge ventures for this week in climate startups he is a climate investor who goes all the way back to the first clean tech wars and baybridge is a really interesting firm it is specifically focused on esg and sustainability and we're going to talk about how they look at that the metrics that they use to measure that in terms of their investing and just this lens on venture capital it's going

SPEAKER_03: to be a great show stick with us this week in startups is brought to you by linkedin jobs a business is only as strong as its people and every hire matters post your first job for free at linkedin.com twist vanta compliance and security shouldn't be a deal breaker for startups to win new business vanta makes it easy for companies to get a sock to report fast twist listeners can get one thousand dollars off for a limited time at vanta.com twist and spoken is a workplace podcasting platform that's loved by startups like robin hood and 15.5 they just launched spoken stories a new way for companies to build connection and community remotely get three months free at get spoken dot com twist that's g-e-t-s-p-o-k-n dot com slash twist all right it's sunday the longest week ever molly for

SPEAKER_08: jacob jesus mary joseph whoo but i'm alive i'm here i gotta make it you're doing it and he's still

SPEAKER_14: teaching he's still people jason is still dropping the knowledge you cannot stop him trying um interesting

Jason Calacanis: conversation today that was sparked by a tweet and and honestly like conversations we've had over and over internally i saw a tweet by alex iskold in early stage bc at 2048 bc who said and i quote it is shocking to me how many founders have not two but three or four currently active roles on linkedin including ceo of several unrelated companies or consultancy or an investment fund this is a massive red flag for me as a vc curious what other vcs think and if this is the new normal you know listen

David Friedberg: it's i'm the wrong person to ask about this because i have multiple projects right i do the podcast i have inside.com and i invest so i'm doing three things uh objectively and you know this is not the way to have breakout success especially early in your career i would say in your 20s and 30s you need to be laser focused on one thing and secure the bag and be ultra focused now there are three examples at scale of people being able to do this one is steve jobs who was the owner and chairperson of pixar uh and would spend a day there and then spend four days or five days at

SPEAKER_08: apple and obviously pixar and apple two iconic companies steve jobs iconic entrepreneur and of course my friend elon uh running uh spacex and tesla concurrently he did not want to run tesla has been very he was very clear about that publicly so i'm not speaking out of school here he went through four ceos he tried to hire just nobody could pilot that fighter jet and it really is like tesla's a fighter jet and there's i think one human who can actually handle the controls of it now that doesn't mean in 10 years like there might be enough enough controls in place and automation or whatever and a big enough team to do it um but you know he's a pretty unique individual in all the world in terms of his uh energy level and focus level and brain power and then there's jack uh third example uh with twitter

SPEAKER_24: and square and i think everybody believes that was a failure and twitter floundered and had chaos and according to all reports he might not have been in the building enough and in that's really where you start to see this is listen if everything's going well and it's steve jobs if it's elon you know in that case they were firing on cylinders they had very deep benches and that

SPEAKER_08: really is what it becomes about is like what's the bench like and if you look at the company's already

Jason Calacanis: established that's something right like i mean apple was already steve jobs had already resuscitated apple by the time he went to pixar it wasn't like i mean he didn't have the iphone now he didn't have

David Friedberg: the iphone yet so it was a little it was a little shaky actually you can read the book creativity inc we had ed catmull on this very podcast um and and steve's biography there were some shaky

SPEAKER_33: moments there so i he almost didn't pull it off but so it did it did work out after but i think it's

David Friedberg: because he had such deep benches at both places he did have a big talent pool and he was he pixar needed him as an investor and they needed him to push them they didn't need him to write toy story or to you know come up with the characters right whereas in the whole thing like you did with the

SPEAKER_37: bone all the way in the elon let's get to like early early yeah well hold on let me just give the elon

SPEAKER_34: case in the elon case he was writing the story he was creating the computer like tesla and spacex he's an engineer he was literally engineering the rocket and the car concurrently you know i witnessed it

SPEAKER_08: firsthand so that was different than steve jobs's situation and so i don't think this works at scale i don't think it works at low scale i don't think it's a good idea and i don't think it's a good idea for investors to invest in companies i'll just put it straight out there with young inexperienced first-time founders trying to do this it will result in failure

SPEAKER_15: now or an increase your failure it'll increase failure by five to ten x i would say

SPEAKER_45: yeah because focus is what it's all about especially if you're trying to get product market fit okay

Jason Calacanis: anyway continue so what about yeah i mean we talk about a lot about this internally like it is considered i think it's fair to say a red flag if a founder is not full-time at a company and also there were plenty of people in the comments like i think clearly this is about a this is sort of a different thing where he's talking about like you know somebody's already a ceo and they're trying to start a new thing and they've got all these different jobs um like you but but like but that's different from at least according to the responses on twitter right founders who are like broke right they're trying to bootstrap they're trying to hustle a thing and they have to have sort of a day job and but like at what point is it fair to say that it's a red flag as opposed to this is how you try to hustle your way into building a company when you don't have a lot of support behind this is um this is founders

SPEAKER_24: founders when when we're talking about founders in their 20s this is founders looking at elon

David Friedberg: or other people and um having just too much opportunity and not having enough focus and it's

SPEAKER_24: just a really bad idea now when i was doing silicon on reporter i was doing nothing else and when i say i was doing nothing else molly in my in my 20s i was not sleeping i was not going on vacation

David Friedberg: i was not i i didn't drink for maybe 12 years i didn't have one drink i didn't do anything you just choir boy because i literally felt i had to work seven days a week because the magazine business was so competitive in the 90s i was in my office i kid you not seven days a week there there were stretches where i probably worked 50 days in a row and i just took it as a personal pride to get on my scooter every saturday and sunday and go to my office and everybody who worked for me knew i'd be there uh from 11 to 5 ish and then i would go to i would have breakfast have a slow morning i go to my office then i would go to the gym where i play basketball in the mornings and then i would go to the office every day just trying to be more competitive and then when i did weblogs inc that was the only thing i did uh when i did mahalo only thing i did and really the only thing that really set me off on to doing multiple things was when sequoia asked me to be a scout and that was supposed to be a contained thing and the problem was i was just too good at it and you know and it just pulled me in and here i am now still running inside doing great making millions of dollars but would inside be doing better if i didn't have all this stuff of course it would be and so but i have resources i take zero dollar salary at inside so people don't know that i haven't taken a salary at inside for five or six years so that i would as a ceo of a company get paid 200k or something that's deployed into two other people and so that's how i justify it and you know i and the the profile i have helps me grow other things so if a founder was 27 years old and they had sold their company and they were sitting on i don't know 10 million dollars in cash in their bank account and they didn't take a salary at their startup and they had a little fund over here 10 million dollar fund of which 2 million was their own money and they had two partners on it and they could stay focused i.e raul from superhuman he has a little fund on the side i'm an lp and uh the first of that fund he has a partner on that raul can you stay focused on superhuman and then any sass person he meets who's like hey raul can i get advice he's like yeah what are you working on they tell him it's oh that's great yeah i'm happy to have a phone coffee or coffee with you meet my partner we'd love to put money in and raul will be a perfect example of somebody i i'm guessing raul puts 10 hours a month into his venture fund 20. he's got people over there he also has resources he sold his company before so when you're in your when you're 35 to 45 and you got your chip stack well people don't see the resources those people have in order to make that happen i have a lot of resources you see me like when we start a new project we're like oh this is under resourced i'm like great i just pick up a you know a duffel bag of cash and i throw it at the project great go here's more resources right what do you think elon does like oh yeah this company boring company needs stuff you can just chip off and just throw a bunch of resources at it and he's also the resources are not just cash there might be two killers that he's got from one of the other companies oh okay two killers go and i have that right so i have somebody who worked at inside kelly for four years and she wanted to be an investor said hey i'm working on inside is there any chance i can work as an investor and i just told the whole inside team you put in three good years at inside i'll get you a gig at launch and you can be an investor and i'll teach you how to be an investor one person has done that a second person is asking to do it so i can move people from one company to the other elon can do that see jobs could do that you know so you kind of it really is about resources more than it is about the individual's time but when you're young you don't have resources you don't have a huge chip stack sitting there you don't have an army of people you've worked with i can pick up the phone i call brian alvey i can you know call people in my circle who i know are killers and say i need help on something can i get you can i get 10 days can i get 30 days can i get you to work on this for a year and i can move you know talent around right and that's i think what a young person can't do if

SPEAKER_08: you're a vc you absolutely should not invest in any founder under 35 if they have four or five

SPEAKER_29: concurrent projects but you can have a conversation it seems like honestly even two even two as you

Chamath Palihapitiya: gear up for q4 in the fall you need to have the best people on your team and you need to be firing on all cylinders you can't have any waste and linkedin jobs is here to make it easier for you to find the right candidates faster and your first job post if you listen to this week in startups is always free linkedin jobs is the best hiring platform out there we all know that and how do we know it because we post all our jobs there and we consistently chef's kiss get our best candidates off of linkedin if you need any more convincing it's the world's largest professional network with every couple of weeks we have to update this number 810 million people creating a new job takes just minutes it's so simple and you can add that purple hiring frame around your linkedin profile you see that now so everyone knows you're hiring so if you're active on your feed and you're posting updates then people might see it go by they see you're hiring like i would like to work for that person boom you can also add screening questions which i love you can filter out all those non-serious candidates you don't want any drive-by resumes no you want people who want the job linkedin jobs helps you find the right candidates you want to talk to faster you know that and did you know every week nearly 40 million of the 810 million people on linkedin are looking for jobs so post your job for free at linkedin.com twist again if you want to get it for free you go to linkedin.com twist to post your

SPEAKER_57: job for free terms and conditions of course apply because they're giving you something for free so

SPEAKER_58: if you're a founder and you're coming to raise money like i understand you might have been bootstrapping

Jason Calacanis: but it's well take it off your linkedin but also it sort of seems like if you're if you've been bootstrapping you've been sleeping on the couch you've been doing another job when you're coming and asking for a million dollars or more that's when you gotta quit the day job right

SPEAKER_60: like you have to oh yeah so if we're just that day job you're working at google i'm talking now i'm

Jason Calacanis: talking day job right there's the you're running something else and you're trying to start a new thing sure that's one thing but if you're bootstrapping with a day job at what point do you need to clean that up and say i am going out and pitching to vcs now and they're going to want me to

David Friedberg: be full-time on this if it's a side hustle you cannot raise money for it under no circumstances shouldn't we had a company that we really liked they were three or four partners two or three uh say i think let's make up a number here four three of the four were still working their full time jobs at like you know major tech firms and every time they met with the vc they're like well when are you all going to jump off and they're like well you know we've got this like rest invest situation over here we're making a ton of money so it's like obviously this company is not a priority for you and so you're basically signaling if this company's not a priority for you why the heck should it be a priority for a venture capitalist who has other options and this is what you've learned in the first six months when you got here you were like

SPEAKER_65: chuck the guns out you're like i'm gonna fire some bozos like whoa whoa whoa whoa whoa put the gun

SPEAKER_67: down whoa whoa whoa we don't have that many bullets we don't have unlimited bullets here

SPEAKER_65: i was like put the guns down here's the sniper rifle away from the down take a deep breath

SPEAKER_24: put the sights on something and just breathe and slowly squeeze the trigger and let's you know hit it right and so you got to hit the target you know and and that's the the key

David Friedberg: here is vcs have their choices and now you have so many choices right so i've watched as your book of business has grown you got all these great founders you got all this great opportunity and you're like you know what the same company you would have been like we got to do this or why aren't we doing it and it's like now you're like you know what uh i need to see a little more i'm going to turn over a couple more cards i want to see this company get from two pilots to eight paying customers and i want to see why people churn and they need to fill these two positions i'll talk to them in six months and then that would be the right window for us to to invest and so that's what happens at all vcs is they think like this is the only window to invest and then you realize oh well this company is going to be going to make it it's going to be around for 10 years and i'm in early

SPEAKER_29: stage so i have four years and it's year two so i got two more years to place a bet here and i'm molly

David Friedberg: wood i'm jason calaganis you know whatever i have the they're going to take my money it's green they want me involved i can wait and so founders need to understand that dynamic as well if you're waiting

SPEAKER_65: and it's your side hustle we're going to wait but why wouldn't we wait why would we take more risk than you you own 80 of the company we own five we own ten you're not committed and you own 80 well you

David Friedberg: obviously don't think this is going to be a billion dollar company and we're here to build billion dollar companies so okay if at some point you get you're sending such a bad signal is what this is about now you know this really nice kid he's an indian kid uh he sat next to me on the plane he's

SPEAKER_15: like are you chasing calacanis why are you sitting in coach and i'm like because it's cheap and i'm cheap i was like 129 and i wanted 1200 for the seat up there for one hour i kind of take the 140

David Friedberg: bucks a thousand dollars and save the money anyway i talked to this kid he's indian he's got a lot of indian friends and he's a developer and he's like what should i do my career how do i like where should i go i was like you should host this stuff like i said if you got all your friends are indian why don't you go create a group of indian developers and you can all get together and share your life and you know whatever your your culture and because you're all at ucla and you miss your families wherever so you get to you know maybe all you know cook a meal or talk about your your common interest and then you i said you'll have a list of that 100 indian developers at ucla and you're going to be the person running it i said just make everybody dinner and get those 100 emails and you could have your your little group he's like i never thought about that i was like yeah be the host to be the ringleader so okay now i meet that kid let's say and he does this monthly dinner and it's on his linkedin and he starts a company uh which is a dev shop or it's a uh dev tools it's dev tools perfect and i say wait a second every month you have a hundred twenty year old ucla developers who've immigrated from india and are here and you're making dev tools and you get to show it to those hundred people or you could hire the best ones to work at your company all right well this is a creative to the company this would help the company this isn't a vc fund to go invest in people and be distracted and try to solve their problems this is like oh wow so you do need to think about that so if i have a podcast if let's pick a company in our part a sale plan let's pick one of your companies here so let's say sale plan decided they wanted to do a podcast and we're like oh god you're doing a podcast great it's going to take 10 hours a month of your life for the ceo let's say the founders did the podcast and it's about measuring and metrics in carbon and etc and right it's about carbon totally

SPEAKER_13: understanding fuel usage and shipping and commercial shipping and ports it's a shipping podcast they started shipping ports it's a shipping podcast i'm like open the aperture oh okay you're going to do

David Friedberg: 40 uh podcasts it's going to cost you a thousand a podcast it'll cost you 40 000 it'll cost you 10 hours per podcast it's 400 hours you're going to split that work between two founders 200 hours

SPEAKER_15: and then all the shipping people in the world are going to be listening to you as experts talk

SPEAKER_24: about shipping great do it yeah so is it in line and how much time in line and time it's about

David Friedberg: resources and people are resource constrained so if the project helps the the mothership great great

SPEAKER_14: you know fantastic so just think of love it yeah love it so founders if you're going to split your focus choose wisely that's what we're saying look at the percentage is it two percent of your time or

David Friedberg: twenty percent if it's two percent and it helps the mothership or it otherwise makes your life great

SPEAKER_04: nobody cares when it hits twenty percent yeah and if your company is your side hustle that's a deal

David Friedberg: breaker i mean come on what are we talking about here what are we talking about here you're working at google and then you're doing some stuff on the side like i get it if you're doing it on the side you're working at google and making 300 grand and rsu's and comp and your side hustle is making you a hundred thousand dollars a year more power to you but don't ask us to fund it you know like we need we need to be all in here to hit goals that's it very simple so but i you know alex uh you know doing this i i know alex he had a startup himself uh back in the day and he seems like he's a really good investor and it seems like a you know he would be helpful to a startup i think what he's trying to say here is like he wants to see people succeed he doesn't say this but i think this is what

SPEAKER_08: i didn't read his full thread if it's got more points to it but i think he's concerned about the founder's success is the founder going to succeed and that's really what this is about we we don't want to back founders who have set themselves up for failure the vcs and this is where alignment comes in this is the beauty of the silicon valley system it's the beauty of the american system it's the beauty of capitalism when it's run properly with the shares in companies we're all aligned to see these hundred million shares valued at a penny each or let's just say 10 cents each you got a hundred million shares valued at 10 cents each we all want to see them go to a dollar and then we want to go to ten dollars and then we're starting to go to a hundred dollars like we're all in it together and if you're not focused the share price doesn't go up and you know who gets hurt the most is the founders because they have the most number of those 10 cent shares we want to see you succeed

SPEAKER_14: uh that has been vc sunday school and speaking of focus actually super interesting uh this week in

SPEAKER_17: climate startups interview coming up next i love the algae company last week i'm really when sunday

David Friedberg: comes around i i mean maybe i shouldn't say this but i start with your interview and then i go back to our discussion on vc sunday school i don't want to tell people to skip ahead and for me it's for me it's super interesting i'm like a fan now because i'm just trying to understand and your interview

SPEAKER_29: techniques i told you this privately really you've you got the both sides of the blade are sharp here people so like molly's a little bit of a monster here in these interviews she's just hacking limbs

Jason Calacanis: it's good the mindset the mindset's starting to change i can feel the shift it's great i love it osmosis it's working osmosis and a learning environment because you know i mean our learning

SPEAKER_105: environment pd is good we like our pd here professional development this is i think you'll

Jason Calacanis: be interested in this because this is actually an investor i took a little bit of a departure away from like all the cool sci-fi companies with the mushrooms and the algae and like although i have this like alternative propulsion fuel thing that i gotta do anyway this is uh a very focused investor co-founder and general partner at baybridge ventures which is actually new brand new over in berkeley uh and but he's been a climate tech investor for a long time like clean tech 1.0 scars kind of thing and has started uh co-founded an esg and sustainability focused venture capital firm i'm super interested to hear your thoughts on this he also hosts a podcast called the epic human and it's a really interesting

SPEAKER_108: interview about a mission oriented venture capital firm is he uh e comma s comma g or is he e period s

SPEAKER_17: period g and we'll find out listen to this we'll find out yes g there it is well it's actually and

SPEAKER_14: he's he's separating in some ways and i was kind of interested in digging into this esg

Jason Calacanis: one category climate tech one category not necessarily the same and i think that's actually a really important distinction that the more we the more we make the more um we're in a new territory here yeah

SPEAKER_29: this is yeah exactly climate is just totally new even though it's been going on for 10 15 years

David Friedberg: those are kind of like the clone wars like it's like this thing that happened before what's happening now you know and most of the things the the failure rate of that whatever we're going to call it 15 first 20 years of climate technology you know with um vano khosla and john door and a lot of those folks i mean they just incinerated billions of dollars to kind of build the setup for what we're doing now

Jason Calacanis: and right you know i mean they planted all the seeds and and even you know and i was actually saying this last night at an event i'm like look it took 20 years that's outside the life of their fund their investors are not happy but though some of those early especially a lot of the solar investments some of that billion dollars that john door put in has returned two billion dollars yeah it's just not

SPEAKER_117: just 20 years it took a long time long it wasn't the time schedule and it wasn't the multiple but i think

SPEAKER_24: that means that this could be the window exactly but also we still could be early but that's the yeah and maybe hey maybe we're a little bit early or maybe it's gonna have a different return profile but it does feel primed right now yeah it does feel like a lot of components we're like one minute too early

Jason Calacanis: but finally we have a healthy ecosystem around this which is that the government has now said we will fund basic research science and r d got a customer then it can become our job to commercialize yeah like

SPEAKER_93: and they're customers too aren't they like if they're gonna say oh yeah the government's a buyer now

David Friedberg: for our companies 100 so if they're you know we're starting to see the emergence of buyers and it's

SPEAKER_08: not just feel good high-fiving which i think you know is a very important thing if people have to see an opportunity here uh you know for profits and and for return on investment roi dare i say and the technology everything that's happened in sensors happened in cloud computing you know the iphone you know all this stuff is kind of becoming the underpinnings it feels like for some change there so i use the sale plan example a bunch but and clarity i mean both both of my first two investments

SPEAKER_115: are in the measurement space which is a really investable and necessary category and they use a

David Friedberg: sas business model and so we we got 20 years of sas software here you know since you know benioff said like hey you know no more software everything's in the cloud so cloud computing has been really well established the business model the the the techniques for building the software the security all that so now you got that foundational layer is done okay now we go to sensors okay that's done you know we have tons of sensors and everything whether it's planes or phones or cars like the

SPEAKER_29: sensors are everywhere and the sensors are commoditized so you don't have to build the sensor the

SPEAKER_131: sensors are you know in taiwan and china both of them have a cheap hardware component which you know

Jason Calacanis: i think which we're seeing a lot like climate a lot of the climate tech unicorns blend some cheap hardware component with the right they're like hardware as a service or their hardware and their

SPEAKER_133: software but they're not high intensity hardware if that makes sense well unless yeah unless you want

SPEAKER_29: to back like an electric airplane or something you know or you know electric cars you know those things

SPEAKER_92: are going to be money incinerators they're going to be really hard to fund i start you'll just you don't

SPEAKER_19: even want to hear it i started yesterday with a rocket company i was like i think we already know a rocket company and that's going to be a tough one anyway tough one yeah it's hard it's hard but

SPEAKER_29: hardware hardware enabled sas or using hardware to enable something else to happen and that hardware is a commodity and you're not trying to make money from that the software layers or the you

SPEAKER_92: know whatever layer is driving the returns and that's super compelling for me at least yeah so

SPEAKER_142: great job i can't wait to hear it enjoy everybody i agree enjoy enjoy your and enjoy your sunday

SPEAKER_146: everybody yeah we'll see you tomorrow if you're a sass or services company that stores customer data

Chamath Palihapitiya: in the cloud then you need to be sock to verified from a third party if you're going to close big deals no sock to compliance no closing major customers no lighthouse customers for you oh no and vanta makes it so incredibly easy for you to get and renew your sock to on average vanta customers are sock to compliant in just two to four weeks compare that to three to five months without vanta and they partner with over two dozen audit firms who have been trained to file sock two

SPEAKER_149: reports directly within vanta this is a total no-brainer uh it's such a no-brainer i invested in the company i got a little slice i got a taste i wet my beak tons of my portfolio companies and my

Chamath Palihapitiya: founders use vanta and my bestie david sachs led the last round of financing what an amazing company congratulations to everybody who have at vanta and here's the best part vanta is going to give you one thousand dollars off that's right get a thousand dollars off at vanta.com twist that's v-a-n-t-a dot com slash twist for one thousand dollars off your sock two right now joe blair is co-founder and

Jason Calacanis: general partner at bay bridge ventures right across the bridge from me no wait same side of the bridge as me east bay east bay berkeley california which is i'm going to let you describe this better but which is the first purpose-built institutional esg and sustainability focused venture capital firm you also host a podcast the epic human podcast i want to take a whole bunch of those things like in order first of all tell me about the thesis and why would you be the first to do this sure sure no thanks for

SPEAKER_158: the question molly and great to be here um so uh so i'm a co-founder and general partner at bay bridge ventures as you mentioned uh we're the first purpose-built esg and sustainability focused venture capital firm i was actually uh speaking on a panel just last week um in palo alto and uh the organizers of the panel called out that we are the first north american firm that he was aware of that like had esg you know explicitly in our branding so um so that's been that's been confirmed elsewhere beyond uh beyond just ourselves but uh but basically what we're doing is we we built a new type of firm that's focused on climate tech health innovation and inclusive capitalism and where we have a multi-stage strategy where we can invest seed through series c and we actually built our own esg methodology after a couple of years actually of uh behind the scenes work consulting with some of the world's leading experts around esg and sustainability to develop this comprehensive holistic stewardship model that we think is really unique and industry leading um so i can't say too much about it because some of it is proprietary but um i can tell you that it's it's not um it's not simple and it's more than just a kind of a check the box uh type of exercise but uh but yeah we launched the firm in uh february of 2022 and as you mentioned we're across the bay bridge in berkeley uh in the same building actually as skydeck uh and uh just a couple blocks from uc berkeley skydeck of course is the

Jason Calacanis: incubator that is related to berkeley right to the on the cal campus yep right so uh smart location there good co-location in terms of snapping up young talent early absolutely i want to before i ask you more about how this plays out in terms of investing you have lots of investing experience chrysalix chrysalix venture capital uh obvious ventures a principal at coda capital how did all of that kind of get you here like certainly obvious i know well as a mission driven but not impact investing firm how did your experience lead you to like okay we're going to do this very specific thing with this

SPEAKER_04: very specific purpose raise our own fund and there will be a market for this yeah i appreciate that

SPEAKER_158: question um perhaps it might be helpful to go like just one or two steps further backward um just to kind of set the context how do i even ended up in venture capital which i really never expected to be so i i went undergrad uh to lehigh and studied mechanical engineering and then i stayed on to do a master's there um focused on software to control complex physical systems so atoms meeting bits um and i actually did my master's thesis on uh controlling plasma in a nuclear fusion reactor so that was my first kind of entree into the the energy industry and after that i went and joined a big fortune 500 company uh called ingersoll rand as part of their engineering leadership development program which basically had me moving around the united states working on different business units primarily focused on product and it was a great program but along the way i personally became very uh concerned about climate change and so uh i decided to take a risk and uh change my path and and go join a venture-backed clean tech startup uh and when i did that i realized that you know a i'm definitely a small company startup type of guy that was my the world that i wanted to be in uh b i was really fascinated by you know technology so again kind of tying back to the atoms meets bits of my of

SPEAKER_164: my education and the third piece is i loved working at a mission-driven organization all that said it was

SPEAKER_158: it was a fantastic fantastic experience but i knew i needed to learn a lot more about business so that's what led me to go to harvard business school to get an mba and while there i started my own company it was a d2c retail tech company focused on sustainability ran that for about a year but then ultimately uh felt called to venture and specifically going after some of these large kind of fundamental challenges and so uh like you said i i went and joined a clean tech venture capital firm after graduating business school and this was 2013 if you remember so it was a it was a pretty contrarian approach um at least in the eyes of some of my classmates and and a a handful of professors because at that time clean tech and venture capital were it was kind of like a contradiction and and it was it was kind of well understood that that doesn't work they're having this is like

SPEAKER_168: during the messy breakup period of clean tech and venture capital right exactly yeah i mean we had whole

SPEAKER_158: cases about why clean tech for venture capital doesn't work yeah um and we also and this was post solyndra yeah but just going back to me kind of with this kind of contrarian kind of approach that i have i felt very strongly that uh climate change wasn't going anywhere and it was it was going to continue to be a worse and worse problem over time and i also had a thesis uh that the only thing that was going to get us out of it was technology i mean policy is is also important but my view then as well as my view now is that technology is the primary way to solve climate change so i went and joined this firm it was a fantastic experience i got to learn about all the different uh kind of subcategories within climate tech and quite frankly i got to see some of the fallout of cleantech 1.0 um from uh from a first-hand point of view and got to see all the things that didn't work the technologies that didn't scale the products that weren't profitable and so it was an amazing learning experience but at the same time i got to see and invest in the seedlings of what has now become the climate tech 2.0 trend and so it was an amazing experience um and then as you said um i got to do some co-investing with obvious ventures who hired me and that's how i ended up moving down to the bay area and then later i was recruited to and obvious was great because i got to do not just climate tech investing but also health uh fintech and a few other categories and then i was recruited by a larger firm called coda capital where i was able to continue investing seed through series c in all of the same categories with uh an even heavier emphasis on ai ml and and scalable enterprise tech so it was kind of all these these experiences coming together uh in a unique combination that i think put me in a very unique position to launch this kind of a firm and then tied to that was meeting my two partners my one partner andrew karsh was working at calpers he spent 10 years at calpers managing direct investments before that he spent 13 years building investment strategies at credit swiss in london as well as new york and then my third partner uh kim colt who built her own vc platform called for good ventures investing in all the same categories that we invest in now climate tech health innovation and inclusive capitalism at the early stage uh for the last seven years and then before that she was goldman sachs and wharton and so we all came together uh close to three years ago um around this common vision for a a new type of venture capital firm that as you stated is focused on esg and sustainability and uh and then we we sort of crystallized our strategy towards the end of 2021 and uh and uh and then launched in 2022 you got all these remote workers right they're feeling

SPEAKER_24: disconnected maybe they're burnt out doing too much zoom and they miss connecting with all of their

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Jason Calacanis: amazing episode so what about the the fundraising process for you and then the the investment thesis would you say is different you know like are you deploying differently do you have a longer fund life have you is it impact investing or have you communicated a different type of return structure to lps or none of that are you like nope it all works exactly the same but does better sure uh so we

SPEAKER_158: are a very standard typical 10-year lifetime venture capital fund um part of our thesis is that you know historically investing in some of these categories has been viewed as concessionary our view is that this you know these three themes represent the uh the most promising and exciting investment opportunity of a lifetime independent of the impact whether it's environmental or or on human or humanity um that that these companies will have and basically what we we believe is that these three themes uh not only are they uh are they very compelling in venture investment opportunities individually there's also particularly interesting opportunities at the intersection of all three of those themes we think going after all of those three three themes collectively has some additional advantages and then the other piece that's different now than then is what we we we've seen is that you have all these foundational technologies whether it be you know ai and ml robotics and automation energy storage semiconductors advanced materials that are all have all evolved and matured over the past five to ten years in other industries that are now coming together in unique combinations to unlock applications new applications in all three of these themes so that for us is is why kind of it's the right time it's the right team we've been investing and building in these categories for 15 years um with a track record of seven exits and it's the right strategy um to go after it i like a little i like the mic drop

Jason Calacanis: there just track record of seven exits just saying nbd so when you think about these three themes you know it's fascinating to me how many people like people just say esg as a shorthand for some whatever they mean at any given time environmental social and governance how does that turn into a like can you

SPEAKER_187: give me an example of a company that you think might encompass all three of those themes so we're talking

SPEAKER_158: about two different things right so we're talking about um investment themes right so so for us that's climate tech health innovation and inclusive capitalism and then on the esg side we're talking about environmental social and governance and so those are are kind of two different uh paradigms that overlap in a lot of different ways um but what i would say is that you know there's traditionally on the esg side it's been primarily used in the public markets right and primarily as a negative filter for tobacco firearms fossil fuels and it really has is a lot easier in the public markets to track these things because all the data is public and there has definitely been some esg washing that i think we've seen in the public markets which is quite frankly is why there's been some backlash um so there's some work to do i think in our in our industry and trying to educate people as what esg actually is but then you take that and you apply that kind of methodology to the private markets and it's much different right data is not publicly available what's appropriate for the particular stage of company is different what's appropriate for a series c company is not necessarily what's appropriate for a series a company so that's why we had to kind of go back to the drawing board and redefine the way we see esg on a daily basis and what that means for companies not only in terms of how we make the investment um the themes we go after but also how do we help the companies over time stay true to their mission and to their values right but it does sound like you're describing and i

Jason Calacanis: think we're seeing this this is almost the sort of larger philosophical question we're seeing this split between like there may be climate tech companies those are not esg companies despite the e and that in some cases we might start separating climate and pure climate solutions from esg right

SPEAKER_158: and that that might be okay or necessary in some cases yeah i again i i i view them as two separate um kind of uh frameworks yeah that you know also like to be to be honest they're they're very interrelated um so but it's hard to you know completely separate them and it's also hard to to kind of try to map them one to one but on the governance side i think that's kind of a piece of esg that's quite that's actually spoken about i think the least but may actually be the the most important or one of the most important as you think about you know companies like we work that lost 40 billion in valuation because of a governance issue right and how can you implement the right kind of governance at the right time in a company's life cycle such that they prevent that kind of value destruction yep um does that suggest

SPEAKER_04: you intend to be a little more active as a fund in the in the governance department

SPEAKER_158: uh yeah i mean absolutely like the e and the s and the g are all key parts of our esg methodology yeah

Jason Calacanis: tell me about the methodology uh which you've called esg plus to the extent that you can because you said you know it's proprietary but it's an integrated into the investment process what does that mean

SPEAKER_19: integrated into the investment process and what can you tell us about it how it works sure sure so

SPEAKER_158: so there there's a little bit of secret sauce in there that i i can't uh necessarily divulge but um because it did take us a very long time to to come to what we've built today but what i can tell you is that um on the s side right so if you think about um diversity a lot of people think of that as just sort of a again sort of a checklist or a you know almost like a like a survey um but the way we think about it is there's diversity in there's diversity out so diversity in is who's on the team today who's going to be on the team in the future how do you help uh the companies with the recruiting practices and then diversity out who are the stakeholders that are going to be impacted by this by this uh this company and this technology so those are all kind of incorporated into our

SPEAKER_04: methodology i'm not trying to pry i just can't help it in the journalism way i mean are you running stuff through a program are you scoring investments i'll plead the fifth on that one it's just so

Jason Calacanis: interesting what's also interesting is i think is this question of intentionality you know we had a little bit of a debate um on our show last week as we're recording this about frank sleutman of snowflake saying you know i'm not gonna like sure diversity is great to have but i'm not going to effectively i think he was saying slow down for it right or at the words he used which i think are quite unfortunate was override merit and yeah and the and the the sort of the whole point is that there has to be intentionality and care and also we're in an industry venture capital that has failed to make a lot of meaningful progress around diversity and you could argue governance also and so i wonder you know like according to the stanford social innovation review only five of the top 50 bc funds have even mentioned esg or commitment to sustainability like how important is it to just fly this banner

SPEAKER_158: so so i have to chuckle a little bit because i don't know this person that that you referenced but the reason uh so so first off to to just state the facts um and you're probably aware of this and your listeners are too but some people don't know this so it's worth repeating is that of the united states uh aum that's privately managed uh only 1.4 is managed by diverse or female managers right so that you know considering females are 50 percent of the population 55 of college graduates it's it's really a stunning number and then so so the way we look at it is that diversity is is actually a strength um so if you look at the latest research from harvard business school what they'll show you is that venture capital teams that have heterogeneous genius makeup will outperform homogeneous teams by up to 32 percent so um again it this kind of ties back to our earlier conversation about like this this historic viewpoint around things being concessionary exactly if you think about it in the opposite way it's actually a major advantage and that's why we launched um you know our firm is 60 uh diverse owned and managed and also you know have put in place policies and uh and values to ensure that we make sure that our our investment team is continuously um very diverse from both a female

Jason Calacanis: and underrepresented community member point of view yeah and then on top of that on top of addressing this already serious issue that's really complicated and tricky and takes time and intentionality and care you're going super hard tech synthetic biology ai and big data advanced computing sensors and iot obviously you know as you said this is part of your background um tell me about your research and and diligence process and evaluating these really hard tech things that you know you're still seeing

SPEAKER_158: lots of vcs in the climate space and elsewhere stay away from sure sure so so just to to frame it you know on one hand you have uh you have you know fantastic organizations like breakthrough energy ventures and and other types of organizations that do have that longer time frame in terms of the returns that are expected and they're really working on those moonshot type of ideas that may take five to ten years to develop the technology and then on the other side you've got you've got a number of of firms that are maybe newer to climate tech that say hey we'll just use our our silicon valley software playbook and we'll just do software we are more uh kind of in the middle in that we have deep experience in evaluating and investing in these fundamental technologies that i mentioned earlier so we're capable of understanding and evaluating the technology we have industry experience and operating experience in some of these industries and the one thing another thing that's different between now and 15 years ago is that the supply chains for a lot of these technologies has really evolved considerably um which which kind of de-risks a lot of these uh companies that are putting

SPEAKER_173: together unique technologies in different uh and unique applications so it sounds i mean it sounds

Jason Calacanis: like and this is probably this is very wise in my opinion it sounds like you're saying we're not going

SPEAKER_88: to throw software out with the baby right like we're absolutely bathwater like if it's a great solution we're going to go for it but we're not going to be scared of hardware or hard tech exactly right

SPEAKER_158: exactly right we there there will definitely be um amazing climate tech opportunities that are strictly software and we are very excited and and uh to invest in those that said what what makes us a little bit more unique is that we are open to and excited to invest in some of these other harder tech technologies most of which by the way are also enabled by software yes definitely i think somebody

Jason Calacanis: made the point the other day that most of the climate unicorns if not all are hardware and software at this point what are you super into like are there certain categories of all of this that you know as you dig down even further that you're really excited about there's a lot of themes i you know i i get

SPEAKER_158: this question a lot i would say that you know i'd almost take the opposite approach at this point where you know we've sort of been immersed all three of us have been immersed in all of these categories for so long that we're not necessarily hunting in any one of them in particular but when we but because of our experience when we see an opportunity in one of those spaces that's a step change or or a

SPEAKER_164: game changer in that specific category we recognize it right away and we we go very aggressively

Jason Calacanis: is there well let me ask you try to pin you down on the opposite side then is there something that you see everybody really excited about that you think we're wasting time on i will i will go out on a

SPEAKER_158: limb and i will say that i am skeptical i i won't say that we would never look at it or invest but i am skeptical of uh this this uh investment thesis around the intersection of uh climate tech and uh you know nfts uh and blockchain um i worry there's you know there's just you know hype to the square root of hype um happening or to the power of hype happening and uh and people trying to um uh trying to find opportunities where you know it's really technology in search of a market where we're

SPEAKER_173: really more focused on market opportunities where technology can really solve a major problem yeah

SPEAKER_04: i i listen i'm on you're very diplomatic i am on record as saying that i think that you know every crypto fund is basically my enemy at this point okay so we're in good company about that one yeah exactly

SPEAKER_211: so what um and then for entrepreneurs who are going to want to come and see you what's your

SPEAKER_164: what is your stage so uh seed through series c and we are uh very excited and happy to talk to entrepreneurs who are who are building awesome joe blair co-founder and general partner at baybridge

SPEAKER_198: ventures thanks so much for the time appreciate it thank you molly great to be here all right

SPEAKER_236: everybody thank you for joining us for an amazing week jason is off to bed as he should be he's gonna rest

SPEAKER_14: up over the weekend but we're gonna be back tomorrow tomorrow is another day and there will be more

SPEAKER_98: more to discuss we'll be with you stay tuned