The Distribution by Juniper Square
00:05:54 · Nick Shalek
But then I, you know, importantly, I got to work on venture a lot. And so I got to see what a lot of the best venture managers of of the past few decades look like and read all the old memos about different funds and investments they'd made and and meet a bunch of them. So it was really... It was a great a great way to start. After a couple years there, you know, I wanted to get on to starting a company and learning how to do that. That was still in my mind. And I ended up going to one of our venture managers, General Catalyst, when they were in Boston, and they were they were incubating companies. And one of the partners, David Fialk, who, you know, was a was a mentor and and someone I I looked up to and loved spending time with, he wanted to start a data center company in Iceland. And so that's what I did for a couple years. Worked with with him and a team on starting a data center business. You know, it's it's funny because it's come full circle at Ribbit. We're investors in Crusoe and have spent a lot of time the last couple years on the data center space. I... I'm sure you and, you know, several listeners have, it's... This becomes such a big thing. But we were we were, you know, running the same play twenty years ago. And And it was interesting that it... You know, it's about a thousand times more interesting now in terms of the supply demand dynamics and the amount of power that's needed. And, you know, so I spent a couple years on that company, and then I was ready to go. I really wanted to go start my my own company. I wanna do an education. I came out to the West Coast to go to business school thinking, you know, that that that would be a good a good platform from what you have placed from which I could start my company. And I bumped into, you know, sort of serendipitously into my now partner, Micky Malka, who was a a veteran entrepreneur in financial services, had started five companies in four different continents and... Which just is an incredible person. And I got introduced to him to help me with... You know, as as kind of a mentor to help me with the the startup idea I was working on. And through a couple conversations, we became friends, and he told me that my startup idea was probably not gonna work. And he started describing, you know, the fund that he wanted to start.
00:08:01 · Nick Shalek, Brandon Sedloff
And I told him that I thought his fund, you know, idea wasn't really gonna work. And we, we became friends, and he he convinced me to do this instead. And then thirteen years later, here I am. So that was a very long background, but that's the that's the full story. [00:08:16] S1: That's that's amazing. I I guess, like, if we just go back to those dinner table conversations with your dad is a patent attorney and your mom is an entrepreneur. By the way, what what type of entrepreneur was your mother, if you don't mind me asking? What what did she do? [00:08:27] S0: She did a few different things, but primarily in media and retail. So, know, one thing, she she, for a period of time, ran a company, maybe some people will know, called Lovesac, which is a furniture maker. But funny thing to tell people that your mom runs a company called Lovesac. They, they had a tagline at the time. It was, not a dirty website, But they make... They actually make great great furniture. We have some, you know, started with foam filled beanbags, but became sectionals and just, you know, great great flexible furniture for for your house. She ran that for a number of years and kinda turned it around. And it's now now a public company and doing well, I think.
00:08:27 · Nick Shalek, Brandon Sedloff
[00:08:27] S0: She did a few different things, but primarily in media and retail. So, know, one thing, she she, for a period of time, ran a company, maybe some people will know, called Lovesac, which is a furniture maker. But funny thing to tell people that your mom runs a company called Lovesac. They, they had a tagline at the time. It was, not a dirty website, But they make... They actually make great great furniture. We have some, you know, started with foam filled beanbags, but became sectionals and just, you know, great great flexible furniture for for your house. She ran that for a number of years and kinda turned it around. And it's now now a public company and doing well, I think. [00:09:04] S1: That's awesome. Well, what what did you what did you think? I mean, you said you always wanted to be an entrepreneur, and I have young kids, and and I know many of our listeners do. And I just... I'm always wondering, like, you know, how do people take the conversations around the dinner table around the house and kind of internalize those? Like, What did that mean to you when you were an adolescent or a youth growing up, being around these conversations?
00:09:25 · Nick Shalek
[00:09:25] S0: I don't know that it's that rational. We lived in Los Angeles. My mom ran an advertising agency. And I just remember being a young kid and going to her office, and they had a pool table and a great vibe, and they produced really interesting media and commercials. And we got to go to the studio and just this feeling of the community and shared sense of purpose. I, yeah, played a lot of sports growing up. I was a hockey player for many, many years. And I think that team orientation, that, like, desire, you know, that having a goal and going out and doing it, I think combined with this belief, and this probably comes from my parents and something that, you know, I internalized over the years or intellectualized or whatever, but just that there's nothing better in the world than changing the world in a positive way, delivering value to customers, and in the meantime, employing people, you know, giving people a fulfilling, enriching way to live their lives. So I always had that idea in my mind that what what my mom was doing was a special thing, you know, building companies, employing people, making them happy, building a community around a shared goal.
00:10:34 · Brandon Sedloff
[00:10:34] S1: That's awesome. So fast forward, you're off to Yale, and then you're working in at Yale University in in the endowment and and under David Swenson. I guess, you know, a lot of our listeners will know, you know, know of David and know the Yale model for kind of transforming how endowment... You know, endowments invested into alternatives. But I guess what what was it like during the period of time that you were there and kind of where were we... You know, where where was the... Where was Yale in relation to kind of this idea that, you know, alternatives needed to be a, you know, a a, you know, a higher percentage of a portfolio's allocation in order to drive best in class investment outcomes.
00:11:12 · Nick Shalek
[00:11:12] S0: Yeah. I I mean, Dave, this really amazing person was a really inspirational leader, and and Dean and Tim Sullivan and Al Foreman and other people who were there for a long time built a a really amazing investment portfolio and and organization. But it was it was great. You know, you walked into the office, and the office was lined with investment committee books going back, you know, to basically when Dave and Dean had taken over, which I I think was 1986. So you could go and look at every investment decision and every, you know, memo about each manager, and it was just an incredible place to to learn. There was so much data about the practice of investing. You know, there's a lot you could say. I mean, re... Reading Dave's book is... His first book about institutional investing is really worth it. His second book, actually, he was finishing when I started. And that book is interesting too because, you know, Dave talks a lot in that about, you know, how individual investors are different than institutional investors. And, actually, he didn't recommend that individual investors go and invest in alternatives. I think he would have pretty strong views about some of the alternatives that are being marketed today. You know, rightly or wrongly, that was, you know, where where where he netted out on on things he didn't think that alternative investments were were necessarily for everybody. But there were a bunch of, you know, bunch of general principles and and things I absorbed from that period. Mean, the most obvious is just they always thought for themselves. You know, there are some... The the endowment model was, you know, famously kinda sixty forty equities, fixed income. And Dave and Dean, when they started, I think, just asked some really basic questions or started some from... You know, now people talk about first principles a lot in Silicon Valley or or maybe more broadly. That was a term I first heard from them. And one of their first principles was, for example, like, liquidity has a price. And, you know, if you should match, you should think deeply about the structure of your liabilities. And most people, even if they had very, very long term liabilities or they had funds that were meant to live in per...