Investor Stories 490: Investors from Volition, Acadian Ventures, and Interplay Ventures on Building Competence, Operating Experience, and Investing with Purpose (Cheng, Black, Peter Davis)

0:00This episode is brought to you by Ramp, the spend management platform we use here at TFR. They're offering listeners$150 just to take a demo. We've never had an offer quite like this. Claim your$150 before this offer is gone at our partner link, ramp.com slash partners slash TFR. Now on to the episode. Welcome to the podcast about venture capital, where investors and founders alike can learn how VCs make decisions and reach conviction. Your host is Nick Moran, and this is The Full Ratchet.

0:39Welcome back to TFR. On today's special segment, we ask guests for the most important piece of advice that they'd share with folks early in their venture career. Here's the segment called Key

1:20advice. win a competitive world, the other people you're competing against like what they do more than you do. You just won't put in the time and energy and it won't be your passion. It won't come from the place inside you. I don't say like do something that you enjoy or find fun because I want you to be happy. Like that's not my driver, although I would. My driver is that's what's going to make you competitive and that's what's going to help you win. And so if you're going to pick a path that you're doing for some alternate reason, boy, it's hard to compete and win in that dynamic. And And so I do encourage that.

1:50I think a lot of folks coming out of school also, they're trying to build a resume, which I get, there's pressure around that. But what's more important than a resume is competence. And ultimately the world is not gonna care about your resume. They're gonna care about your capabilities and your competence. And some people never get off the resume track. Like you gotta settle in at some point and build something that's valuable in the economy. That usually takes sustained effort and time on building some competence. So those would be a couple of thoughts.

2:19On today's special segment, we have Ben Black, Managing Director of Acadian Ventures, CIO of PowerLaw Corp, and founder of Raise Global. Ben, if you could share one piece of advice with a young new investor, what would you tell them? Don't become an investor. My personal mistake, and I see it all the time out there, is like super high quality people going into venture without enough operating experience. You know, I think that I was that myself. Like I was only an operator for like three years and then I got swooped into venture and not by plan. I was like an accidental venture capitalist. I think that not having deep operating experience is why I ended up doing growth stage in that early stage over time.

3:01And I just think that like if you're going to be in VC, man, and you haven't spent 10 years building companies, as I think it's really hard to do without that experience.

3:14are you still managing expenses with outdated apps and spreadsheets if so it's time for ramp the leading u.s spend management platform covering corporate cards travel ap and more all built to save time and extend runway we use ramp at tfr and it's been a game changer as our preferred partner they're offering listeners 150 just to take a demo No need to sign up. Head to ramp.com slash partners slash TFR to claim your$150 before the offer expires. Now back to the interview. On today's special segment, we have Mark Peter Davis of Interplay Ventures. Mark, if you could share one piece of advice with a young new investor, what would you tell them?

3:58I think the thing that a lot of people in a lot of industries miss, I heard Howard Marks speak recently at a little event I was at. and what I found a bit magical and a bit validating was, for those who don't know, Howard Marks is one of the greatest, biggest, most successful public markets players in the game. His company, Oak Tree, I believe has$250 billion or so of assets under management. And in his storied career, I believe he has bought the bottom of the market five times, including putting$10 billion into the market in 2008. So if you're not thinking highly enough about the name I'm setting right now, stop, read about him, and then come back around.

4:41In my mind, a contemporary of Warren Buffett at that level. So I heard him talk, and what was very illuminating for me was he talked about the perspective on his role without even thinking about it, not in the context of the micro trade, in the context of the macro social impact. What he is doing is he's looking at some of his trades in the context of the social function of the market as like part of our broader society. He knew to buy because he believed one of the functions of the market is to actually keep charlatans out of the public ecosystem. And when charlatans are getting funded, the market's too rich and it's not performing its social function.

5:26That was a signal for him that we were at a peak and there was a trade to be made. I think there's a similar parallel to keep in mind with venture. Early stage investors are thinking about how to buy equity in companies and get a 10 or 20 or 30x on the deal. That's the trade, the micro trade we're thinking about. Having a perspective on deals, a lens to think about them in their ability to advance society. remembering that that is what we are. We are gatekeepers for innovation, not coming through, capitalism's a tool, not coming through for us to make money. In theory, we're all going to die, right?

6:03We're irrelevant. But what we're doing is we're supposedly allocating capital efficiently to make our descendants' lives better. And so is this company you're about to write a check into going to really improve society, make quality of life better, and therefore be paid and compensated and create a big market opportunity? Or is it a gimmick? There have been plenty of gimmick trades that are paid, but reframing it from a social role, taking on the social stewardship responsibility of what a VC is in society, I think it's a very powerful lens to keep you grounded on not just investing, but why we're doing this.

6:44That will conclude this installment of Investor Stories. If you're enjoying the program and would like to see it continue, take a moment and leave a five-star review in iTunes. Okay, that will wrap things up for today. Until next time, over-prepare, choose carefully, and invest confidently. Thanks for joining me.

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