Billion Dollar Moves™ with Sarah Chen-Spellings | Global Venture Capital
00:06:37 · Michael Anders, Sarah Chen-Spellings, Michael Anders
[00:06:37] S0: And I went to Fidelity to their charitable services group and led up kind of the fundraising efforts for Fidelity's charitable platform, which also included a pooled income fund and an outsourced foundation product. In that role, I started meeting some very affluent individuals, all of whom were very eager to talk about their philanthropy. And, occasionally, one of these individuals or folks around the ecosystem would bring up this guy, Divesh Makan. And candidly, I had been sort of scarred by the wealth management industry. I've been wildly under impressed by it. And so the idea of joining a wealth management platform was really uninteresting for me at the time. But so many interesting people and smart people and people I admired so much kept telling me I had to meet this guy, Divesh. And so in 2005, Divesh and I went for our first cup of coffee, and it was really love at first sight. [00:07:37] S3: And soon, Mike would begin to shape what would eventually become iconic. But first, they had to challenge the very idea of what wealth stewardship could be, starting with one simple idea. [00:07:48] S4: What we figured out for us is we wanted to be the best caddy in the world to the best golfers in the world. And we knew very early on that being the best caddy was an honor in itself.
00:07:59 · Michael Anders
[00:07:59] S0: How do we surround ourselves with clients that are much smarter than we are, much more relevant than we are? How do we create a community of exceptional founders and CEOs who by listening to more than we talk at Yeah. Would give us a view of the world from their perch. And the collective wisdom of this group would be pretty informed, pretty unfiltered, and collectively would help us shape a view of where the world was today and where it was going. Over time, we started realizing these clients are not just exceptionally smart, but they're highly relevant. They're gonna see a lot of really interesting deal flow. And in isolation, the tech guys would probably see a lot more tech deal flow. The consumer guys would see a lot more consumer deal flow. But collectively, and in sharing this deal flow, they would build diversification across really interesting and very unique and hard to seek out deal flow. And ultimately, having joined Divesh first at Goldman and then us moving to Morgan Stanley together, we realized, one, to truly be independent and objective, you can't be at a big bank. And second of all, our client base through a lot of luck and coincidence and timing had become so significant that they all wanted to be in... On an independent platform as well. They did not wanna be at a big bank. And so in 2011, we set out to create ICONIQ. But truth be told, Divesh and I have known each other for over twenty years and had started building this business even in the confines of a big bank platform.
00:09:37 · Sarah Chen-Spellings
[00:09:37] S1: You really were ahead of the curve compared to... I mean, Lightspeed is now RIA, General Catalyst stopped calling themselves a venture firm and even bought a hospital. You almost did what they are now doing, where you've built the family office relationships, managed the money, built the growth firm, Impact. I mean, now you have the data centers, all of that. Talk to us a little bit about the strategy, the through line here. Did you see it then 2011, you know, the writing on the wall that this is the direction that wealth is going to dictate in some way?
00:10:08 · Michael Anders
[00:10:08] S0: I don't think we could have started ICONIQ in any other geography in the world, and I'm not sure we could have started it at any other time in the world. I think there was something in kind of the mid two thousand where collaboration, social, partnership were emerging themes that actually meant something. Silos were a bad thing, and community was a good thing. And obviously, Facebook was kind of a pillar of promoting community. And so there was something about the timing and the location that allowed ICONIQ to become ICONIQ. And I think there was something humble in the earliest of days about ICONIQ that understood collectively a group is gonna be smarter than any one individual. And if we can get a collective group of exceptional founders and CEOs, and not just Silicon Valley, but consumer, energy, transportation, US, non US, old, young, that diversity of thought was gonna help us become smarter as long as we were better listeners than we were talkers. And so, that DNA, I think, is what ultimately drove ICONIQ. And then, of course, who would have thought the Facebook would become Facebook? Who would have thought that, you know, we would have just been at the epicenter of these businesses starting from one day and then the next there, tens of billions of dollars of value, hundreds of billions of dollars of market cap. So the relevancy of the ICONIQ ecosystem just became more and more of a juggernaut in driving interesting deal flow and also helping us build internally the team to source and vet that deal flow in a really intelligent way. And then I think too, as you start listening more and more and that becomes core to who you are, you start picking up patterns, you start picking up themes. So one of the early themes that we picked up on was we had done a few one off consumer direct investments, Alibaba, JD dot com. There was a number of these. And one, we realized that as our clients became public company CEOs, they were no longer allowed to opt in to a direct investment that they wanted to do whether ICONIQ sourced it or someone else in the ecosystem sourced it. And so we raised the fund, and we brought in my partner Will Griffith to drive that... The building of that fund. And that now is... We're in our seventh vintage. There's a 100 people at ICONIQ dedicated just to our, you know, venture growth equity, tech investing.
00:12:54 · Michael Anders, Sarah Chen-Spellings
But we saw early on from the consumer that it was a a very interesting opportunity to migrate to sort of enterprise software. And so that was a really interesting shift in 2013 where the vast majority of our investing over the last ten years has not been in consumer where we had done a few deals, but now is in enterprise software. Yeah. And that just was, again, really great timing. It allowed us to find companies like Adyen, ServiceTitan, Procore, Snowflake, Datadog. The list goes on and on and on. And so, again, it was sort of listening to the ecosystem, listening to the client base, seeing these patterns, and in this case, making a pretty bold and deliberate move into investing in enterprise software. And as we began investing more capital into enterprise software, we began seeing the migration of the cloud, and we were living this every day. [00:13:54] S1: Yeah.
00:13:54 · Sarah Chen-Spellings, Michael Anders
[00:13:54] S1: Yeah. [00:13:55] S0: And so as we began spending time again with more of our clients, for example, a couple of the CEOs of the hyperscale players, we saw the migration of the cloud, and we were hearing from them that there was no way they could keep up with the demand on storage. And so as innovative, thoughtful, sort of business creators and allocators, our first impulse was who do we allocate capital to that's investing heavily in the data center space? And there wasn't anyone at the time. There was large, you know, infrastructure funds where a percentage of the fund was dedicated to data centers and the rest was toll roads. But there wasn't anyone dedicated to investing just in data centers. And we saw this again from this client base and from the investing we had done in enterprise software that the cloud was going to be a huge place to invest and that data centers would be those railroads. And so we began building data centers, and we raised our first fund dedicated just to the building of data centers. And we really decided early on that we were gonna focus almost entirely on the hyperscalers. [00:15:09] S1: You've seen the mobile wave. You've seen also the different crashes, 2016 high of, SaaS enterprise and more. Now we're on to the next wave of AI. What are your thoughts?