Invest Like the Best with Patrick O'Shaughnessy
00:27:13 · Patrick O'Shaughnessy, Sarah Guo
[00:27:13] S0: Wow. [00:27:14] S2: Now I feel more calibration where I just have much more confidence I can tell. The balance of my time, I am doing a combination of help one of my partners look at something, meet people that might teach me something about the world. And that could be a researcher. Or if you are purely early stage in a larger firm, you can be very myopic because your ecosystem is big enough. And we are a very small firm. We're ecosystem oriented. And so I've learned so much from just getting to know investors who think differently than I do, including different asset classes. Well, I never spent that much time with public markets people before, and it is very educational how they think about the world. I spend time with other investors of all skills and asset classes. I spend time with companies. Right now with a pharma company who is thinking about how AI is gonna transform their business. This is very interesting to me because I've learned a lot about what they believe about the future. Doing a lot, but I'm like leaving room in my calendar for learning, feeding curiosity. And then there are pieces that are other parts of bridges to DC, external communication. [00:28:21] S0: Where you going about raising money?
00:28:23 · Sarah Guo
[00:28:23] S2: I stand with the belief that I advise entrepreneurs with, which is you should understand people's objections to what you are doing and their questions, but you should not tell them what they want to hear. When I started the fundraise for Fund One, I knew a lot of LPs over a long period of time already. So it was not very complicated. But I had one of my friends who is a private equity investor who stated you have to have like a very differentiated story for LPs. Every part of the funnel should be the specific thing you're gonna do. And I'm like, let's be honest, I don't know yet, but I need to raise some money so I can go experiment and figure it out. So I never made slides and told a specific story about all the things that we attempt to do now. I think you don't know until you make contact with reality and think about it and you're in the market. There were definitely LPs who did not like that. I gave people a two pager on my background and investing history and claimed that I was good at identifying extraordinary people, being useful to that set of people and being genuine supporters. If you combine that with investment judgment and ability to recruit, you got a starting point. Mostly some things I imagine about firm culture, and then we'll go execute like hell and figure it out. I can see how this is tough from an LP perspective. And I deeply value the people who bet on us early because they go write a memo for their investment committee. And they're like, she's going to execute like hell. We'll find out. Sometimes the cleanliness of the story is what people are looking for. I can't advise other managers on this because people have different outcomes. If you tell people what you are going to do, life is much simpler and what you actually believe life is much simpler. And for me as an ambassador, when somebody can convince me that the world works differently than I thought, I'm, like, immediately incredibly excited. Maybe I can convince people that this is just how it actually works. I've met a lot more investment managers for the last four years. I knew a lot of VCs, but people who are doing creative things.
00:30:27 · Sarah Guo, Patrick O'Shaughnessy
I really like entrepreneurial investment managers as you, I think, do and as you might imagine, where I'm like, I don't want to build the firms that they've built, but the creativity with which Philippe and Thomas go to or that Josh at Thrive approach their business and the encouragement they have for others to approach their business. Well, you can do new things, and you should go express your opinions in the form of your investment management firm, I think is amazing. [00:30:55] S0: What was imprinted on you watching your parents who are both entrepreneurs? [00:30:59] S2: I think this is very helpful to me because there was no moment of my childhood or being a teenager where I felt like they were not there for me even though they worked [00:31:10] S0: all the time. Stopped it.
00:31:10 · Patrick O'Shaughnessy, Sarah Guo
[00:31:10] S0: all the time. Stopped it. [00:31:11] S2: Both of them. If you try to resolve these things, I was pretty independent kid. That helps me. I don't know where I was in the distribution, but I feel like I was pretty independent. It helps me to think your family can make you feel like you are the center of their world, but they're whole people with other interests and they wanna spend time doing other things too. Even just recognize my own importance from the perspective, like, what it's like to be 10 years old. I liked my mom. I love my mom and dad. And it was so cool. Our family values are very similar to theirs. Integrity, thinking for yourself, independence of thought, and then there's, like, focus on family, team spirit and family. The independence of thought is probably, like, the least generic one of those. I think a lot of people, like, wanna be good and kind and work hard and whatever else. For both my parents, it was a moral issue. You cannot ever worry about what other people think. I'm like far to that side of the spectrum, but I do think about it sometimes. [00:32:10] S0: You do sometimes worry what other people think? [00:32:12] S2: Yeah. [00:32:13] S0: What do you want them to think that you worry that they don't? [00:32:16] S2: I worry about raising people's competitive hackles in the ecosystem. [00:32:22] S0: Why?
00:32:22 · Patrick O'Shaughnessy, Sarah Guo
[00:32:22] S0: Why? [00:32:23] S2: Because I'm a friendly person. I wanna be friends with everybody. I don't mind competition, but the sometimes pure zero sum competition stance of traditional series a firms, series a, series b firms that says, I'm gonna own 18 to 25% of this company and take the board, and you're going to own none of it. It's not conducive to like a lot of collaboration. There are issues with that from an incentives perspective. But the public markets orientation, people are loved to tell you about their best ideas pile in after them. This is an extraordinary situation. I would love to talk about why gaming and entertainment is gonna be totally different and people are super under indexed on it. There's part of that orientation that just appeals to me as a very positive some person. [00:33:08] S0: I'm always interested in sources of inspiration. I'm curious in two ways. Overall in your life, who has inspired you the most? And also right now in this very moment, who is inspiring you the most and why?
00:33:19 · Sarah Guo
[00:33:19] S2: I saw my parents build a company. I was like, this is so cool. It's us against the man. The man is very big companies. The man is trying to kill us. We can still do it just because the technology is better. The product is better, and the customer will want it. My, like, love and ethos goes to entrepreneurs. You can make something out of nothing because you see a better future and you can do it really fast. These things appeal to me in terms of what I want to try. There's so much courage in that and optimism. There is something poisonous that bothers me today where I think especially like the post gen z entrepreneurial crowd think it's like all... Marketing and brand is real. Building a network is totally real. No one denies that. But when folks are very cynical about how the world works, how entrepreneurship works, that it's just nepotism and Twitter is useful. I think that's nonsense. If you focus on value and treating people well and you work with extraordinary people and the vision is worthwhile, that works more times than you'd think. There's so much criticism about playing the game, be it marketing or fundraising. And I hate that. Pat is like this. I find him very inspiring. And Tuhin is like this. I find him very inspiring where he's just like, if we just do the right thing by the customer, we will win. Feels a lot more complicated than that. I think he's right. That seems to be working.