01:26:28 · Hunter Somerville, John Coogan
It's created a weird dichotomy where it actually made sense for crossovers to dip down and be more aggressive. And you've not seen the same level of new fund formation in biotech as you've seen in all of these other categories that we've discussed today. [01:26:44] S0: It. Wait. Wait. [01:26:44] S3: So really quickly, crossover, you [01:26:49] S0: you mean public markets hedge funds doing private placements early stage biotechnology companies that are going through FDA approval and will ultimately IPO, not a software VC crossing over into biotech, which is also going to happen, but separate things. [01:27:08] S3: Got it. You nailed that. Exactly. It's that type, even mutual funds Yeah. That I was alluding to. But to your second point, we are now seeing sort of the formation of dedicated specialists in tech bio Yeah. That are more typically coming from the tech side probably rightfully so. Although any good cap table that does tech bio probably needs to mix the two together where you have more of the traditional old school biotech managers and then also the very forward thinking, more tech focused groups on top of that, doing it together in a syndicate variety. And then the last thing I was saying is you also just don't have as many new funds that are coming into existence in pure biotech. Tech bio will probably increase at a much higher clip than we've seen in biotech over the past three to five years.
01:27:08 · Hunter Somerville, Jordi Hays
[01:27:08] S3: Got it. You nailed that. Exactly. It's that type, even mutual funds Yeah. That I was alluding to. But to your second point, we are now seeing sort of the formation of dedicated specialists in tech bio Yeah. That are more typically coming from the tech side probably rightfully so. Although any good cap table that does tech bio probably needs to mix the two together where you have more of the traditional old school biotech managers and then also the very forward thinking, more tech focused groups on top of that, doing it together in a syndicate variety. And then the last thing I was saying is you also just don't have as many new funds that are coming into existence in pure biotech. Tech bio will probably increase at a much higher clip than we've seen in biotech over the past three to five years. [01:27:57] S1: Sure. How do you handle breaking up with with managers as an LP? Feels like really like I mean, it's tough on the direct side too. If you back a founder, they come back for more money and you say like, you know, you have to sit it out for whatever reason, it's not great. But on the fun side, it's like you've been with them through basically multiple, almost multiple companies in some way, and maybe they had a bad sort of period, but they came back from it, and then it's bad again or whatever it is. But, like, what is that actual process like having, I'm sure, had to do it on a number of occasions?
01:28:32 · Hunter Somerville
[01:28:32] S3: It's like what every person I dated before I got married said to me, it's it's not you. It's me. You know, in this scenario, there's always the ability to to stop backing a manager based on your pacing and how quickly funds have come back to market and your lack of available capital. If you're a fund of funds, you're raising your own money. If you're an endowment, you have a denominator effect to consider. And you are also all suffering from the fact you're not getting enough money back from a DPI standpoint. And so, it's more of a realize results, return money, we'll have more money to deploy and consider you or others when that happens as an easy out. But we tend to be much more transparent and objective. I just think that's the type of people we are. We try to benchmark it against other managers. We've backed. I mentioned we work with over 300 or so groups. We have a very robust dataset where we can actually show people in vintages how they would compare on a generalized anonymized basis against other people both in terms of TVPI and then also what they've returned back. We recognize that TVPI or total value over paid in capital is subjective. It's based on valuation practices, so we pierce through down to the underlying asset level and try to create a real apples to apples comparison where we know how five managers are carrying the same company and we come to our own conclusion on what that valuation should be. But if you give people objective kind of criteria on how they compare against others that you work with, it's hard to debate that. Ultimately, they get, like, two or three funds to prove it anyway because you're not going to come into one fund lily pad hop out of it and be done immediately unless they have some kind of catastrophic situation at the team level or organizationally where they've really screwed something up or have lost your trust as a counterparty. Otherwise, you're going to get a few funds if you raise them every two years to prove it. Then, ultimately, like, the results will tell the story. And we love our partners, and there are deep friendships on top of of everything else. But as an allocator and as a fiduciary for other people's money, you ultimately need to let the results point the way.
01:30:51 · Jordi Hays, John Coogan, Hunter Somerville, Ken Ono, Bar Winkler
[01:30:51] S1: You're like, help me help you have a number of liquidity events and then I'll maybe give you some of that money back. That makes sense. I know. Good great great explanation. [01:31:01] S0: Well, thank you so much for taking the time to come chat with us. This is fantastic. Let's do it again soon. [01:31:05] S3: My pleasure. [01:31:06] S1: Yeah. This was really Thank you so much guys. [01:31:07] S3: Appreciate you having me on. [01:31:08] S0: Have a great weekend. [01:31:09] S3: Have a great [01:31:09] S0: Have a great day. We'll talk to you soon. Goodbye. [01:31:12] S1: You too. [01:31:13] S4: You got [01:31:13] S1: a bunch of Hunter fans. You got a bunch of Hunter fans in the chat. [01:31:16] S0: Business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. Yeah. Huge huge fans in the chat. Thank you to everyone who was hanging around and chatting, giving us feedback. We appreciate it. Our next guest is Var Winkler from Wonderful, co founder and CEO, and first appearance on TBPN. How are you doing, [01:31:37] S1: Bar? [01:31:38] S0: Mister Wonderful. Mister Wonderful. What's up? Are you doing? Welcome to the show. Congratulations on the news. We'll get to that. But first, let's start with an introduction on yourself and the company. [01:31:50] S2: Great. Thanks for having me. Yeah. I'm Bar. Just moved into New York a few weeks ago. Nice. And landed from Delhi about two hours ago from a sixteen and a half hour flight, so [01:31:59] S0: Wow. [01:32:00] S2: Still working from my living room and [01:32:01] S1: Branding. Yeah.
01:32:01 · Jordi Hays, Bar Winkler, John Coogan
[01:32:01] S1: Branding. Yeah. [01:32:04] S2: So CoolWonderful is an AI operating system coupled with deployment teams around the world. We are, I believe, one of the fastest growing applied AI companies today. We are operating in 33 markets with local offices in all of them, And that gets me on the frequent flyer on every airline pretty consistently. Yeah. Great. [01:32:25] S0: What is the smallest company that you hop on an airline for? [01:32:30] S2: To be completely honest, I don't really open airlines for stand alone customer meetings very often. [01:32:36] S0: Okay. [01:32:37] S2: It's almost always it's almost always hiring and and team building. Sure. [01:32:42] S0: It's just [01:32:42] S2: much higher leverage. [01:32:43] S0: Yeah. I imagine the the the forward deployed nature of your business. That becomes valuable once a company is post 50 employees, like they're past any self serve tools, they need deep integrations? Or is the most value going to the really big companies? We were talking about Campbell Soup earlier. I'm sure they have thousands of employees. Like, who is the ripest type of corporation that needs help transforming? [01:33:16] S2: In general, we bucket companies into over $750,000,000 and under. And at this moment, we are focusing all of our efforts on the first. We don't work with companies that are under $750,000,000 in revenue. Sure. With a few exceptions, right? The only exception would be if we have a customer in which we have CEO engagement, so like an absolute top down mandate. [01:33:40] S0: Sure.
01:33:40 · John Coogan, Bar Winkler, Jordi Hays
[01:33:40] S0: Sure. [01:33:41] S2: And we know that we are like the prime Applied AI partner. Yes, that would be and also we try to, I mean, least until now, this might change down the line, but we try to avoid working with VC backed tech companies. We really try to work in, We try to work in what we call critical industries. [01:33:58] S0: Yeah. [01:33:58] S2: We we think the alpha is much bigger there. [01:34:01] S0: Sure. [01:34:02] S2: The proficiency of tools is usually much bigger there. There is just like [01:34:06] S0: Yeah. VC backed companies, they already have a board member that's asking them every quarter, like, what are you doing with AI? So they already have that person in their ear. [01:34:13] S1: Yeah. What what what kind of what [01:34:17] S2: kind [01:34:17] S1: of advantage are are you getting customers? Like, where is AI actually having an impact outside of the obvious places? Making it easier to make a a slide deck, making it easier to review things like loan application or or obviously coding agents. But, like, where are some areas that your team is applying AI, getting, finding finding alpha in that that companies broadly don't maybe fully appreciate yet?