How to Launch a $100M Venture Capital Fund

Hey, welcome to another episode of Making Billions. I'm your host, Ryan Miller and today I have my dear friend James Wang.

James is a general partner at Creative Ventures, it's a deep tech venture firm investing in early stage companies solving critical global scale challenges like rising healthcare costs, labor shortages, and the causes and effects of climate change. Previously, James, he served on the core investment team at Bridgewater as well as a Google X Insider  and he's been featured in Forbes, as well as a guest lecturer at Berkeley.

So what all this means is that James understands how to launch venture capital funds, make accurate calls on emerging trends and he's come to tell us all about it in our pursuit of Making Billions.

Subscribe on YouTube:
https://www.youtube.com/channel/UCTOe79EXLDsROQ0z3YLnu1QQ

Connect with Ryan Miller:
Linkedin: https://www.linkedin.com/in/rcmiller1/
Instagram: https://www.instagram.com/makingbillionspodcast/
Twitter: https://twitter.com/_MakingBillons
Website: https://making-billions.com/

[THE GUEST]: James is a general partner at Creative Ventures, it's a deep tech venture firm investing in early stage companies solving critical global scale challenges like rising healthcare costs, labor shortages, and the causes and effects of climate change. Previously, James, he served on the core investment team at Bridgewater as well as a Google X Insider  and he's been featured in Forbes, as well as a guest lecturer at Berkeley.

[THE HOST]: Ryan is a Vent

Transcript

Ryan Miller  0:00  

My name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds, and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers, so that you too can enjoy your pursuit of Making Billions. Let's get into it.

Ryan Miller  0:22  

Picture this, you've just launched your venture capital fund and close $100 million funding round, how did you get there? What went horribly right for you to achieve this level of success? Well, my next guest is a genius in this area, he's about to give you his top advice on how to launch, scale, and leverage the power of venture capital, all this and more coming right now. Let's get into it. 

Ryan Miller  0:42  

Hey, welcome to another episode of Making Billions. I'm your host, Ryan Miller and today I have my dear friend James Wang. James is a general partner at Creative Ventures, it's a deep tech venture firm investing in early stage companies solving critical global scale challenges like rising healthcare costs, labor shortages, and the causes and effects of climate change. Previously, James, he served on the core investment team at Bridgewater as well as a Google X Insider  and he's been featured in Forbes, as well as a guest lecturer at Berkeley. 

Ryan Miller  1:14  

So what all this means is that James understands how to launch venture capital funds, make accurate calls on emerging trends and he's come to tell us all about it in our pursuit of Making Billions. So James, welcome to the show, man. 

James Wang  1:26  

Awesome, thanks, Ryan. Love the show, love the community built and, you know, I wish when I was starting out, I had this kind of resource, I think you've built a great platform here for emerging managers, and really looking forward to talking.

Ryan Miller  1:37  

Yeah, man, it's so good to have you, you know, we've been fortunate we've grown into the top 2% in the world. And it's all because of amazing guests, just like you. So before we get into all of this stuff, launching a venture fund, and really just flushing out good investment deals, because venture's good at seeing trends coming from a mile away. So this is one of the skills that you have harnessed, but before we get into that, maybe you just tell us a little bit about what you do at your firm and just 30 seconds just brings up speed. 

James Wang  2:01  

Sure. So a general partner at the firm, basically one of the partners in charge of investment decisions and our big thing is we invest in lots of deep, deep tech companies, which we see as different than traditional software. Basically, it's stuff that tends to not be able to have the same nice little sort of trend in terms of SAAS model, and really has a big tech barrier. So you really have to know what you're doing both on the market side, because you can't really make things move around that fast and can't pivot as much as traditional software and you have to actually know the tech really well. So that's kind of big, high level background in terms of what I do and the kind of things that we invest in. 

Ryan Miller 2:34  

Yeah and you're good at making some pretty impressive calls, but before we get into all that advanced stuff, and folks, you're gonna want to stay all the way to the end where we open this up, but before we do, let's address the beginners. In the early days for emerging fund managers, a lot of emerging fund managers that listen to this show along with entrepreneurs, but that's starting a business, if you're launching a fund in the early days of launching a venture capital fund, what advice would you give to people on A how to win, and B how not to lose when launching your first fund?

James Wang  3:02  

Yeah, I mean, in terms of launching the fund, the real question that you have to ask yourself, even though it sounds obvious, is where is your actual edge? Again, it sounds obvious, but especially within venture lots of people talk about, hey, I got my network, I got the ability to see things coming up and especially if you're just emerging, if it's your first fund, if it's just a few first calls that you've had. It's hard to actually say, oh, like I actually believe you and I actually think that that's the case. You have to really think, what is a hard edge that I really have and if I don't have all of the edges that I need to in terms of deep tech, being able to have both these technical backgrounds and understand these markets, what do I need, and on my team to actually build that out. So for example, on my side, I have a background in terms of AI, but there's a lot more interesting areas in deep tech than just that. So we also have a PhD in microbiology, a PhD in material science who also have investment backgrounds on our team and that was a deliberate choice as we were building up the firm for the kind of stuff that we need and this is the kind of stuff that you really have to be able to build out. So a big part of it is that differentiation, because otherwise everyone kind of looks the same. And everyone says the same thing. So you really need to be able to stand out and be able to tell people, this is my specific story and this is how I go about it. I think a lot of people doing funds, but a lot of smart people doing funds. If they were doing a company, they would not, they would not forget that just in terms of what's my competitive advantage. But I think when people switch to funds, a lot of times I kind of forget that point.

Ryan Miller  4:25  

Brilliant. So really understanding what is your edge of build out that edge if, in yourself, but if not, then find that team. As you mentioned, you alluded to a PhD and pretty much all the cool investing things that we like in venture capital, so build that team around you. And now what about the early days is the time you can make silly mistakes, you don't realize it at the time. How, what advice can you give to emerging venture capitalists out there, who maybe they had a startup maybe they jumped right into industry either way? What would you say as far as you looking back over all of your expense rinse, what would you tell him to say, look, avoid this, this can really knock you out of the game. What would you say? 

James Wang  5:04  

Yeah, totally, this is kind of funny because it's easily misinterpreted. But, I would say the thing to think about is what is the most important goal in having a first fund? It's, and lots of people will tell you, it's like, well, it's like making sure you have the right choices, making sure to build up your infrastructure, like a lot of different things that have to do with the investment side. But the real thing that I would say is keep your eye laser focused on what the real goal is, which is if your fund one, the real goal is raise fund two. And I know that sounds self-serving, in the sense of oh, you're just trying to cheat your way to fund two or something, but that's not actually the case. What I mean is that if you have a fund one that looks nothing like what you're planning to do for fund two, you have not built up a track record. All you've really done is you've just played around with money, less money than you were hoping for, because usually you're hoping for a larger fund two your playing with less money than you're hoping for and you've done nothing to actually build up people's confidence that you can do what you're supposed to do. So this is like folks that I see going out and basically saying, look, my fund one, I'm just going to invest in friends and people I know really well and I'm going to just squeeze into rounds. But you know, for my fund too, what I'm going to do is I'm going to get way broader deal flow and I'm going to now like lead rounds, and do all these things that fund one couldn't. But realize what you're then saying is like fund one has nothing to do with fund two and you can prove nothing with fund one going to fund two. This might be okay with people who know you really well, so like friends, family, people who are really close within your network. But you're never gonna be able to actually take that pitch and go out to either institutional investors or just folks that don't know you as well, just in terms of family offices, or other folks who need to be able to look at what you've done, and believe in what you're doing going forward.

Ryan Miller  6:45  

Brilliant. So it sounds like, there's a saying going around this is the riches are in the niches so, niching down or niching down, whatever you want to call it, that seems to help. So for example, folks, and James, keep me honest on this. So if you started fund one on let's say clean energy, right? Clean Tech, sometimes they call it and yeah, friends, family, a triple F and then fund two is on AI and fund three is on, I don't know, manufacturing or advanced materials, whatever it is. And so I think James is what you're saying here and what James is saying, folks is saying, you know, that's actually that can come back and bite you in the butt a little bit. Is it's probably better to build your initial thesis and just keep expanding that actual expertise as well as the perceived expertise on the outside, rather than just dabbling in a bunch of different investment thesis on a bunch of different funds that can actually come back and possibly hurt you in the eyes of potential investors, as did I get that right away.

James Wang  7:41  

It's the issue is, and I see a lot of people who do that kind of thing and then ex post, try to, you know, paper over it and say, well, I was trying to do this all along. Sometimes that works, sometimes it doesn't. The big thing is if you're trying to build an institute, if you're just trying to invest money and just like play around with it, that's fine. Like you can basically just go about it and build your own reputation as an investor, tell them, you're investing in me nothing else. But if you're looking to build an institution, especially one that can raise more money that can actually build up beyond just you, you're going to need to do more than just that. And you're going to need to explain what is my investment methodology? And how do I actually go about it? 

James Wang  8:16  

I mean, this is actually one of the things I learned quite a bit at Bridgewater, it's like, if you can't write it down, you don't understand it. And in, for terms of institutions and making these big pools of money believe you, a big part of it is, look, I'm doing exactly what I said I was going to do and I'm continuing to do that. That track record, that's the only track record, that's going to be believable, is, it's actually kind of funny, because a lot of like emerging managers told me, it's like, look, my track record from this one Angel investment is amazing, like you wouldn't believe how much money I made on this one thing. And as it turns out, it's like the one of the other things that I've mentioned to them is like, look, your track record is actually how well you've executed your strategy, how closely you've gone by it and how well it's done versus what your predictions are. It is not how well you've actually done in terms of returns. Because the funny thing is, if your fund one blows it out of the water, I mean, the thing is, it's super easy to just say that's just a fluke. Like sure you had 100% IRR, but your fund was way smaller than your fund two what you're trying to do and blah, blah, blah, it's like, it doesn't count. If you'd get okay, it's like, well, the argument is I still have the credibility in terms of me and my team and I also still have my strategy, then in a way that doesn't actually hurt you as much. It's always nice, obviously, to have high returns, but it'll help you a lot less than you would think, as an emerging manager. 

Ryan Miller 9:34  

Brilliant and like that fund one, we have a saying in our home and as well as in my fund is, consistency beats intensity. There's many applications for that, but in the context of what you're talking about, you can say you have this really intense return on fund one, you 100xd and everyone's like, oh my gosh, you're the VC God or whatever it is, can you consistently pull it off? If you're consistent, more than intense, I would argue there's a premium to someone who could pull it off. And Bridgewater is a testament to that along with many others, Google X and Google in itself, these things that can consistently produce on its mission, and for its shareholders and investors, I think really starts to carry the weight in the long run. So yeah, I agree, track record matters, consistency matters, those tend to go together. As we, as we kind of round second base on this thing, let's talk about the market, right, as though there's a market, right? Well, we'll pretend there's a VC market, but what are you seeing collectively early stage businesses, emerging trends? I mean, where's the market at and maybe we can get into where you see it's going and some of the opportunities that are out there? 

James Wang  10:33  

Yeah, absolutely. It's really interesting, there's, this is actually a pretty significant inflection point that we're seeing in VC, this year and last year, in particular, since the downturn, but it was happening already, even before it, which is, there's two big things happening. The first one, is that there's a consolidation, so money managers investment management, they tend to, you tend to see similar things in similar markets over time. So for example, PE market, hedge fund market, a lot of those areas ended up consolidating towards a couple of big managers and multi manager kind of platforms, or multi strategy kind of platforms. And having that be dominant in terms of the market, and some niche funds that have more specific strategies and are way smaller. That same thing is happening in VC, for the longest time, he basically had the VC market look like, we are, we are industry agnostic, stage agnostic, and we just invest in good founders, right. It's like it's the ultimate general list in terms of we do everything in terms of VC and for a long time, everyone got to get away with it, because VC was still relatively immature. 

James Wang  11:38  

Since the odds and then the 2010s, and especially rolling into say, like 2015, etc, the market got way more mature. Big money in terms of institutional money, even PE funds started to dip into VC and it became just a much more popular asset class in general. You, when I was at Bridgewater in the early 2010s, there was, say 2%, PE VC allocation for a lot of these endowments, and pensions. Nowadays, you go to you can go to like a bunch of university endowments and stuffing and just download their investment strategy allocations and reports, and you'll see, a lot of them have actually gotten to the point where there's 20%, PE, but that's just PE, they have another 20 or 30%, VC. So you have many of these endowments, pensions, etc, going as much as 50%, into PE VC in terms of private markets, and just flooding the zone with cash. 

James Wang  12:29  

So with all of that the industry started professionalizing, way more, it started consolidating way more, because a lot of these big VC funds are the best poised to be able to gather the assets from these big institutions. So what you've seen actually is like Sequoia itself is basically a multi manager platform or multi strategy platform, right? It's not really that different than, say, Millennium and the hedge fund market. At this point, you can't choose what in what strategies you invest in, it's in Sequoia, you just give Sequoia the money, they distribute it for you, and you kind of get the money back later in terms of it. It's a multi manager platform pretty much not just in like practice in name in terms of it. And many of the other managers, if you actually have invested in them, they'll tell you, it's like you don't get to invest in the flagship fund unless you invest in all these sub strategies or whatever. So they're not in name multi manager platforms, but they are in practice. 

James Wang  13:21  

So that's where the industry really has consolidated towards you have these big, big platforms that are going to have trouble being nimble, like let's just be honest, in terms of like it happened in the hedge fund and PE world too. Once you become big enough, it's really hard to move around and get that much alpha because you're  a large enough player that you are starting to become the market along with your other, of the other players that are big alongside you. That leaves an opportunity for a bunch of niche funds at that point to come up, but are pursuing different strategies or areas that are too small or too illiquid, in hedge fund markets for these big players to actually pursue. 

James Wang  13:57  

So we saw this pretty early on, which is why we had from the beginning said we are a deep tech fund. In the 2014, 2015 era when we were first starting out, it was still pretty popular to be like we are agnostic to everything. So in terms of checkboxes, what do you invest in, you check all of them, but we were really, really deliberate early on to specify what we're actually looking for because the thing I said before, look for your edge, right? So we saw an edge in terms of investing in these emerging technologies, these deep tech areas, that if you tried to use software techniques to invest in them, you completely fail. So that was a big reason for thinking about that because we knew that the industry would eventually consolidate, it was pretty clear. Pretty much every single financial services, money management institution always goes this direction, and VC is starting to do it and VC is really getting there, especially at this time point. 

James Wang  14:47  

And the second thing is actually a big crunch and crisis which is helping drive that as well, which I can get into as well. 

Ryan Miller  14:54  

Yeah, please. 

James Wang  14:54  

So, the second big point, since I talked everyone's ear off in terms of this big one, in terms of consolidation. Second big point is actually an interesting trend in valuations. So I think a lot of folks have noticed it's like okay, late stage valuations on them have dropped quite a bit. There's been big write downs, Tiger and some of these other folks like Famously, had really big write downs, especially early on in 20, late 2022. But the thing is, it's like, I've been talking to a lot of different LPs, I've been talking to a lot of different GPs at these big funds and if you talk to some of the LPs who've done look throughs on their portfolio. Not just like, oh, I am invested in Lightspeed or Sequoia or whoever it is, like fund this, this and this. If you actually look through and see the overlap, in what companies are invested in, I had one particular LP tell me that we looked through and we realized that a couple of vintages that we hold, and we basically invest in every one, they have, like 40 to 60% overlap in the holdings of the companies like 40 to 60. That means vintage, after vintage, you put in more money, and what you actually get is mostly the same thing and then after that, you get mostly the same thing. 

James Wang  15:58  

So what does that actually mean, right? That means that a lot of these companies over COVID period, essentially, in terms of 2020, 2022-23. Like through this period, a lot of funds, not actually cutting out 23, but a lot of funds actually were, raised big funds every single year of COVID. A lot of these funds that got raised, got put into the same companies over and over and over again during the COVID period. That means a lot of these companies were basically just sailing on cheap cash, which made sense in terms of interest rates, basically going to zero. Sailing on cheap cash expanding just on that, and being willing to just burn money just going out there, so that was a big trend that we're seeing throughout this entire time. Essentially, ultimately, what we ended up getting is these companies now that are flush, that were flush on cash, are now trying to desperately lay people off. And if you've seen layoffs, in terms of big tech and whatnot, that's actually less significant than what we're seeing within the big ish, but not as big tech, just in terms of the software companies. We're seeing huge layoffs, and we're not really seeing the kind of, we're still not seeing them actually get cash burned down enough that they can sustain if these big VC funds don't get a big re-up in terms of cash again and going in. So that's been a really interesting area and I'd say that you're actually probably going to see a big dip, especially in software at that point. 

James Wang  17:18  

And that actually, I guess there is a third trend that I've said only two but there's a big third trend as well, that I'm seeing and this one's a little self serving, but just getting into it. I was talking all about software in terms of this right. A lot of the big funds, a lot of the big, different PE firms are now focused on software. Back in the day, when you looked at Thoma Bravo, Insight, etc. they were niche PE funds, right? They invested in software PE, which used to be a weird kind of niche thing versus real industry in terms of say like tire companies or like accounting firms or some of these other things that made up the real economy. Over time, though, software basically took over the index indices, like the S&P like 75% of it.  75% of the gains of the S&P last year were basically driven by a couple of big tech companies, like a lot of these indices have basically been taken over by software. 

James Wang  18:08  

So by this point, software has actually become the market itself and after you got to that point, you actually don't really have as much marginal gain within the software industry. Early, you know, late 90s, early aughts, etc. we saw an enormous growth within software in the software industry and software companies. That was really driven by the fact that look, in terms of these different companies, they're growing so fast, they're like taking market share from traditional industries and they're also just creating new markets. At this point, if you think about what software companies have come up recently, for the most part, they're kind of all trading off and taking market share from software companies that already are in existence and then they get M&A'd or IPO or whatever, but a lot of the M&A is or by existing software companies as well. It's kind of just trading cash between the same hands, and basically just trading market share that in a pie that's not growing as much. 

James Wang  18:58  

Given that, I would say that software has actually reached a point where VC has only somewhat marginal gains, because VC is supposed to go after frontier markets that are growing rapidly. So again, a little self serving to say this, but I would say that software's age has kind of diminished and at this point, there's a lot more interesting emerging technologies. AI as part of that, synthetic biology, advanced materials, genetic engineering, a lot of interesting areas here are starting to take the forefront, because those are really the expanding markets that are growing rapidly. But at the same time, the traditional way of doing software investing doesn't really apply to them.

Ryan Miller 19:32  

Brilliant and with AI, advanced materials, synthetic biology, genetic engineering, is there any specific areas because AI, for example, that's very broad, and that's also a strength and a weakness when it comes to being an investor in that area if you're interested, are there any bright spots if you can maybe unpack that a little bit deeper? Where do you see the opportunities and any or all of those? Like specifically AI, is it generative, like, walk us through a little bit deeper on what you're seeing out there? 

James Wang  20:00  

Yeah, so generative AI was already around when I was doing grad work some years ago, I would say that the world is not divided between pre chat chat GPT and post chat, GBT. people just kind of realized that AI has a ton of potential, right and the thing is, it's like investing in these areas is not the same as investing in software. I keep saying this over and over again. But I think some software investors are actually falling into the trap of thinking that it's software, looking at some of these AI companies, and basically going, these things are going to the moon, just look at the kind of revenue that they're generating, this must be an amazing business. But AI doesn't work like software, like in a most trivial sense, yes, it's software, but this is where understanding the underlying aspects of the technology come into play. 

James Wang  20:44  

In terms of AI, it takes a ton of money to go out and get the data for it, it takes a ton of money to go out and then train it. By the time you serve a single customer with your AI, you have spent a ton of money. But even worse, like even worse, not only that, every time you serve the customer, you have to do inference, right? Like this is what like all these, like this is what all these AI companies are actually having trouble with. It's less actually the training part, which is painfully expensive already. It's actually the inference part because every time some kid types something into chat GBT, that's actually real money that goes out the door for open AI. Software companies are supposed to have low upfront costs and zero marginal costs. They suck in, like their black holes for money, because of their marketing and customer acquisition costs later, the actual technology and serving the customers are supposed to be zero marginal cost. That's why you're able to pour everything into winning the market and having network effects and whatever. Like, that's the real like, killer in terms of software, and why software works so well. 

James Wang  21:46  

AI just doesn't work at all like that, right? So if you look at this, it's like it actually looks like a like, if you look at the economic model, and just like played with it in Excel, it looks more like a fabulous semiconductor company of the early like 2000s, or whatever, much more so than a software company. So this is part of the insight in terms of if you're investing in these different areas, you have to actually have, know something about the technology and know something about the markets that you're going after. So actually getting really specific about this, everyone is chasing foundational models right now, like all of the different companies, Anthropic, Open AI, everyone who's getting tons and tons of attention and tons of tons of money tend to be foundational models. These are the ones sure, generative AI in terms of oil lamps, etc. but they're foundational models in the sense that they're supposed to be general purpose. 

James Wang  22:32  

We're, we as an investment fund in terms of creative are actually interested in the applications, because we know what the economics of this thing are. We know that the problem with a lot of these generative AI places, you have the same model, in essence, you have the same data. So same ol, same sort of underlying model in terms of transformers and all lands, same data in terms of data that you've scraped from the internet, maybe sometimes, legally, or illegally in terms of Terms of Service, whatever, but you have the same things on both of these sides. And you're basically coming out with same-ish answers, that means that you're never really going to have that much market power. And the thing that everyone keeps telling me in terms of these foundational model companies, how they're going to compete, is they're going to take this oodles of money that they're getting, buy a ton of GPs from Nvidia, like, you know, shovel the money to Nvidia, which is helping their stock price, obviously. And then basically, now we have our compute costs lower because we built all this infrastructure, yeah, but guess who already has the infrastructure? Right? Google, Microsoft, Amazon, I mean, it's why Open AI kind of belongs to Microsoft. That's why Anthropic kind of belongs to Amazon and AWS, it's like they already built the compute infrastructures. 

James Wang  23:42  

Like if all you're doing in terms of competition and sucking in all this VC money is to just get to parity with where the big tech companies already are, that's an ever winning model. Again, like even though it gets looked down upon right now, in terms of it's not the foundational model that's underneath everything, we're more interested in applications. Everyone's model is kind of going to be the same. It actually looks the same way to me that semiconductors did for in terms of like the early 90s, the 2000s, etc. If you were a software company, during that time, guess what you didn't care what CPU or whatever it ran on, what you cared about was that every year the thing would get faster and magically, with no, with no fault of your own, you will get twice as fast or whatever your product improves, despite you every single year. It's going to be the same thing with AI each year, our models are actually getting much, much better, our representation and everything are getting much, much better. So if you have the same data, you're actually going to have better performance. 

James Wang  24:39  

So what's your only differentiator at that point? It's going to be your data, essentially, it's like, okay, my data is better. My data is proprietary and because of that, we're going to be able to actually have a defensible barrier. So there's some companies that I've like we've invested in, we've looked at etcetera, that have this characteristic and like one company I'll just call out we're not In the investor in it, we actually worked on it and passed and in a way, I wonder whether or not it was a mistake. One company, for example, is DeepScribe,  a Berkeley company, they, what they do is they essentially do voice transcription, like transcription for like the doctor visits or whatever. And specifically do that because their data set is really around these clinicians. With these clinicians who have super technical, super specific words or whatever, are they going to be willing to pay two or three, or four or five, or 10 times the price of a traditional model that just does voice transcription in terms of AI? Probably, because it's probably worth all of that, you know, you've got all the drug names and the disease names, correct, right and that's going to be a proprietary data set for them, that gets better and better in and of itself as the AI gets better. So we're looking for businesses like that, more so than say, foundational models, but that all comes from our insights, specifically with both understanding the technical side, as well as really what markets are going after. 

Ryan Miller  25:56  

Brilliant. So AI is good and it's always hard when you look back, and I love the Shark Tank episodes where they bring people in that got passed on and they're like billionaires, and they're like, what's up now? So it's always fun, I guess, to watch, but not so fun if you're an investor that took a pass on a unicorn, so appreciate that. So wow, what a discourse on advanced materials, AI, all of those things in some of those trends that you're seeing out there. 

Ryan Miller  26:25  

So as we round third base on on our time together, I'm just curious if you had to leave behind some advice for people, some fund managers, I mean, you've already delivered a ton of advice and insights on the market, where it's going, everything that you're up to, but I'm just curious if I can get a little bit more. So maybe if there's two or three things that you could leave behind to give someone a competitive advantage, so they're looking at you, they're looking at James, they're looking at Creative Ventures, the firm that you work for, and they're like, what a career. That's what I'm seeing right now and they're just saying, man, if I could just get some advice from this guy, I would love to be a VC one day, what would you tell? 

James Wang  26:58  

Yeah, I think that's a really interesting question. I mean, I do actually get a lot of folks asking for mentorship or advice in terms of like, how should I get into VC or startups as they kind of go together, but some of these different things. What I really think is like, I should get to this, or this first, or what, and I think the first core of what I would say is don't wait. So if you're trying to get specifically into VC, or you're trying to get specifically into startups, don't wait and try to do X thing first. I know a ton of people who have said, you know, I want to do VC, but I don't think I have enough financial background, so I want to get this degree first, or I want to do this kind of certification first. Or be like a look, I don't know this thing well enough so I'm gonna go do this career or get to this level first. And the thing is, in terms of VC, it is, the VC on startups is very much a people business, so ultimately, going into it and building your reputation. Being in the industry matters way more than whatever like degree or certification thing you would have got and also just the experience you would have built over, say, the two years or something, if you're doing an MBA. Those two years will be much more valuable having put your boots on the ground, and going out and doing the thing, than whatever learning class or certification thing you'll get. That's not to say that these things aren't useful and it's not to say that they have no value or something, it's more that if you already know specifically what you want to do and what you specifically want to do is say get into VC. You shouldn't like take a detour and wait for however many years to first get into it, so that's the first thing that I would say. 

James Wang  28:30  

The second thing that I probably say is actually something that I already started to allude to, which is venture is very much a people business. I worked at Bridgewater, that was a global macro hedge fund. Guess what you get to abstract away a lot of the messiness and annoyingness in terms of people, yes, but in terms of VC, you will never get rid of the people side of it. Even in our case, where are things like you have to go beyond just investing in teams, you have to really understand what you're doing and deep tech, you still need really good teams, your reputation as an investor in terms of why people will take your money still matters. And if you are just starting out, the reason why someone is actually going to bring you on is going to be because they know you and think you are sharp and great and all these different things. I've known folks who were before in, were investment bank analysts in technology who ended up joining as a partner at VC firms. I've known people who've done weird, super weird stuff, or just done startups or whatever, gotten like, whatever, it's small exit or something and then joined a VC firm. The reason why they got picked to do so was not because it's like, it's part of it sure is the right place, right time, but the other part of it is they built up a reputation. These other partners that VC firms, the startups, these other people all could say, I really know this person, and I think this person is good. And I think this person really would be like an asset to the firm or somebody would be someone I want to work with. And that's the thing that you really want to build and that's part of it is just getting out there too. It's like it's both don't wait in terms of getting started and also make sure to put yourself out there so you have the ability to build a lot of those touch points. I know certain folks get like, because I want one of the things here, it's like I know certain folks get like, shy in terms of going out to like conferences or going out to these other things. The reality is, if you're first starting out, especially if you're transitioning careers, you got to just go do it. So it's jumping in and basically getting your feet wet. And eventually you'll start having your network generate those leads, and those people that you talk to for you. 

James Wang  30:23  

And then sort of as a final thing, maybe more towards investment, since I talked a little bit about sort of getting your feet wet and jumping into the industry. I would say just for investment and thinking about as you're starting out, don't just celebrate the wins. I know different people like do after action reports or post mortems or whatever, when things go wrong, but I would say do it even when things go right. And do it, especially if something goes right for a reason that you didn't expect. This is another lesson I actually took from Bridgewater, for us our investments we didn't like obviously, we do post mortems and look deeply at it if it went really wrong. But on the other side, if it went really right, in a way that way exceeded our expectations in ways that we didn't expect, we'd still look at it. The way the analogy that I use is, let's imagine you're a drunk driver, hopefully you aren't, but you are a drunk driver, you somehow swerved and missed every single mailbox, person, like granny crossing the street or whatever, and then got parked into your garage perfectly, but you swerved all over the place, etc. is that a good outcome? Well, the outcome is good, the process is terrible and you should not repeat. Just because you got lucky and had the outcome be okay, doesn't mean that it was a good process at all and that's not something that you should repeat. So there are two there, especially in venture there are too few data points for you to really give up any valuable one. So even when things go well don't just pat yourself on the back, actually look at and go this one in a way that I didn't expect. I should incorporate that have that as a lesson for next time, even if it turned out in my favor. 

Ryan Miller  31:56  

Brilliant. So as we wrap things up, so that's really good advice and we'll do a summary. But before I do, I'm just curious, like, is there anything else you'd like to share? Anything, any way people can reach out to you or your firm? Where can they find you to learn more? 

James Wang  32:11  

Sure, I mean, we have an open forum for us on creative ventures.vc. If you have a venture or a thing that's particularly relevant in terms of our area, we're really specific, so we actually lay it out pretty openly. But in terms of reaching out to me, I'm on you know, X, formerly known as Twitter as A. James Wang, because my name is actually kind of common. So I actually find that often at conferences or things, I'm one of the name tags in terms of James Wang. So I've taken that to heart and I am A. James Wang. So that's me on Twitter, so I'm on there, but I also have a subs tack at this point where I actually publish a lot of my thoughts it's called Weighty Thoughts, so like weight as in AI weights, it's anyone very technical, nerdy, weird joke anyway, weight, and then Y, weightythoughts.com and people can comment there. I also somewhat regular, somewhat, probably regularly at this point, hold office hours, so people can sign up there to have a short chat if they're interested.

Ryan Miller  33:07  

Brilliant. So I can just to summarize everything that James and I spoke about, if you're thinking about jumping in to be a venture capitalist, or in a startup, like you said, you and I agree those are pretty close to the same thing, or at least the same reason. Don't wait, just do it and as they say, jump off the cliff, build your wings on the way down. The second thing that he mentioned is venture capital and I would say all fund management for that matter is a people business. So make sure that you're always about the process of building your reputation and your relationships. Those of you who follow the show know that those are the two most valuable assets in your possession and I'm glad James that you echoed it. So I don't sound like a crazy person, so thank you for adding your match to this fire. And the third one is just pay attention to the non obvious lessons. Often when we have a loss or a business doesn't work out or anything, we tend to reflect a lot. But what James is saying is don't just wait for a painful moment to reflect also, reflect on every moment and pay attention to the non obvious lessons much like the drunk driving analogy. And of course, we're not advocating that, but just an analogy is to say, sure, you may have gotten the outcome you were after, but the process stinks, it was highly risky and maybe we need to examine that, so we don't repeat that in the same way. You do these things and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller  33:07  

Wow, what a show, I hope you enjoyed this episode as much as I did. Now if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guest even better. And make sure to come back for our next episode where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.