The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:00:00 · Scott Wilson
[00:00:00] S0: We had 36, 37 hedge funds in the portfolio. And when we got rid of them all, you know, 80, 90% of our time is just out meeting individual companies. And, and that's very different than probably how most of your LPs spend their time. You know, at one point north of 20% of the portfolio is in SpaceX Half of our portfolio is in our top 50 look through positions. Our model doesn't really work with mega funds. They don't need our capital. We hardly ever talk about like fund performance. We we only really talk about the underlying exposures in the portfolio. Price is what you pay. Value is what you get.
00:00:34 · Harry Stebbings
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00:03:02 · Harry Stebbings
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00:04:40 · Scott Wilson, Harry Stebbings
[00:04:40] S0: Yeah. Well, thanks for having me. [00:04:42] S1: Not at all, but I'd love to start with a couple of lessons from the past. You obviously had roots with Grinnell, spent several years there building out an incredible book. What are some lessons for you from Grinnell that really stuck with you and you took with you to WashU and impacted how you think about building out your book with WashU? [00:04:58] S0: Yeah. I I think we ran a similar strategy at Grinnell. So I I was fortunate to to work for this guy, David Clay, who hired me at Grinnell. Grinnell had a long history of kind of a a mix of direct co investments and, external partners that managed the portfolio. It was pretty concentrated portfolio. Think it was super concentrated relative to the peer group. And we do a lot of the same things, but David was a great guy to learn from because when I first landed at Grinnell, I, I really had no idea what an endowment actually did, you know, on a day to day basis. And I I think our strategies evolved over time, but we we still fundamentally do the exact same things we were doing at Grinnell here at WashU. [00:05:36] S1: Which is concentrated managers, concentrated positions in diarize as well. [00:05:40] S0: Yeah. I mean, if you if you really wanna dumb it down, it's... There's nothing particularly clever about it. You know, we try and find really good external partners. When they find something that we think is really unique, we try and double, triple, quadruple down on it, and then hopefully let that compound over long periods of time. That's it.
00:05:40 · Scott Wilson, Harry Stebbings
[00:05:40] S0: Yeah. I mean, if you if you really wanna dumb it down, it's... There's nothing particularly clever about it. You know, we try and find really good external partners. When they find something that we think is really unique, we try and double, triple, quadruple down on it, and then hopefully let that compound over long periods of time. That's it. [00:05:57] S1: If we go forward to WashU, I heard... And this was... I can't I can't remember who told me, but they said that the first week in the job, most people have a bit of time, get used to the new environment. Nope. Scott did a fire sale, sold 75% plus of the WashU portfolio. [00:06:14] S0: Yeah. I saw that stat. I'm not sure that it was 75%, but it... We put in redemptions for over half the portfolio in the first week. But I also had the portfolio for a couple months before I actually landed in the seat, so there was a lot of preliminary work that went into those decisions. It wasn't, it wasn't a complete... Like, we're just fire sailing everything. [00:06:34] S1: Were you worried about doing too much too soon? That is a very large shift.
00:06:34 · Harry Stebbings, Scott Wilson
[00:06:34] S1: Were you worried about doing too much too soon? That is a very large shift. [00:06:38] S0: Yeah. I mean, it was a mix. There was this kinda obvious tension that performance hadn't been great for for quite some time, and the the board, you know, wanted to see results quickly. And and they had kinda given me and the team three years to really make performance show some real pro performance improvements. And to do that, you know, we had to really restructure the portfolio relatively quickly, you know, and changing around an endowment portfolio is more like turning around an aircraft carrier than a speedboat. So we knew that was gonna take a decent amount of time. And then the private side... Luckily, private side was in better shape, I think, than the public side of the portfolio. But we, we had 36, 37 hedge funds in the portfolio and then we got rid of them all. So we certainly weren't popular in certain parts of Manhattan. Ultimately, we we turned over more than 75% of the portfolio through secondary sales on the private side. [00:07:30] S1: That is a fire sale. That would constitute... Yeah. I'll I'll tell you that. And you just [00:07:34] S0: over eighteen months. [00:07:36] S1: Oh, fine. And just don't go to Manhattan for a while. He won't be the most popular dude on Wall Street. Okay. And the endowment then is $8,000,000,000? [00:07:44] S0: Yeah. It was just under 8,000,000,000 when I started. [00:07:46] S1: Okay. And it... Today is how much? [00:07:48] S0: The total managed pool is probably just under $20,000,000,000 today.