YouSaid · the spoken record

Eli Casdin

lines on the record: 67
first: 2021-07-15
most recent: 2021-07-15
sittings or episodes: 1
sources: podcast

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“That's a good one. I think that I was very stressed out in my younger self in how each of these pieces of my life decisions were going to come together. I think it's this optimism. I think, you know, understanding that you're on a journey and that you don't really know what the learnings of this particular piece in the journey is going to bring to the next stage. I think when you're younger, you have all the energy and none of the wisdom. And when you're old, you have all the wisdom and none of the energy. And I think that if I had known just to be patient, I guess it's patience. It's just going to take a while to come together. And when you're young, that's a really hard lesson.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“My mom is an artist and a florist and a very artistic person, and she taught me to squint. If you don't know if you like the color or how things look squint and things merge together and you can understand the composition much better. And I think that that's probably a good lesson is sometimes the forest through the trees you can't see it. If you squint, you can see the composition of a company. And then my father's biggest lesson that he lived by and I think is personal integrity. That's really at the end of the day. If you don't make someone money, that's fine. But as long as the worst thing they can say, that's the worst thing they can say about you. It's fine.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“I make mistakes all the time. The biggest investment mistake I've made in this firm, this fund, which because I've made a lot, my wife can tell you about, is that I calculated the potential of M&A into my valuation model and overly weighted it for a particular outcome, and it drove me to size up a position, which basically, to say differently, I took on a lot more risk than I really had calculated. And the reason is I'm not sitting on the board of the acquired or the acquirer. It's just an opaque thing. Maybe my valuation was right, but the probability I should have assigned to it was much smaller. So what the lesson was, is you really have to make sure that you're measuring things that can be measured and you're assigning the probabilities of things that you really appreciate. And if you mismeasure and assign to the wrong probability, you can lose a lot.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think my father indirectly just listening to him, another investor fellow by the name of Bob Birch, who was a longtime broker at Oppenheimer, but he really was just a very successful investor and he's an incredibly optimistic person and he never sells. And his lesson was I have many, many, many shares of stocks that are best placed as wallpaper in the bathroom. But for the ones that I have always a few that more than pay for all the wallpaper. And so it's this idea that you don't need to be trading around and moving through things. And sometimes these wonderful companies can, if you hold on to them, can compound. So I think Bob was probably my other. And he also said you can never have too many friends.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Waking up. I write a little note to myself if the year ended and if these things were accomplished in the world look like that what would it be that I would be happy and that sort of helps me orient the day”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“I've got to come up with one. Listen, I don't know if it's my favorite hobby, but I do find myself cooking for the kids a lot and cooking a lot. And then a good wind down for me. I run without headphones slowly now, slower and slower.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“And the technology that small molecules, gene therapy, these things are understood. And so you can not get enough drug to hit the target or you could have an unforeseen toxicity that didn't appear in the rat. Like there are the known unknowns and the unknown unknowns. But it's not that sort of shot in the dark. I hope this works. I always say there's this wonderful parable. It's called the drunkard's parable or the street lamp effect and a guy is drunk and he's looking under the street lamp for his car keys and a police officer comes over and starts looking with them and a couple minutes later the police officer says you sure you dropped your keys here he says no no i dropped them in the park but this is where the light is that was biotech for the first 25 years the lights are now on it's much more predictable and it's much more investable with volatility along the way”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you can invest it and not speculate. And I will say that back in the lottery ticket day, if you were a doctor, a practicing MD, and by the way, my wife is a doctor, and I always like to say just because you went to med school doesn't mean you're a doctor. I mean, it does, but it doesn't. If you were practicing doctor, you could say, even if that drug or device works, it's never going to make it into the system because it's sort of understanding the industry. So you could screen out a lot of things that just made no sense. If you were a PhD, you may not have been able to say reproducibly that's totally going to work. But you could have a better shot at screening out the things that absolutely weren't going to work. And so you increased your expected return. Today, it's very hard if you're sophisticated for bad science to get through the door. Things don't work. They fail, but it's well validated in my”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Voluble, and it's not going to happen in a straight line. But what you're describing is so much what you've described through this entire conversation is so much more predictability versus the old way it was, which was lottery tickets. And”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Semiconductor like and the Cisco's and the routers, the plumbing, if you will, of the space. And I still think very confidently that you can compound at a 20% tagger over the next decade while buckle up because it's going to be very volatile and it's not going to happen in a straight line”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“industry which is genetic information but electronical medical record information patient information how that information is used to diagnose yourself routinely and predict disease and it's not just it's a diagnostic but it's going to be more than the genetics it's going to be the combination and then like we said machine learning and ai and stuff to tell us oh all this information means that you are pre-diabetic and you didn't know we were invested in a company in one of their proof points is you go to the doctor and one day you aren't diabetic and the next day you are but obviously that's not the case you were trending in a way and so the third of our portfolio is going to be in that kind of stuff and by the way it's probably going to look more like consumer businesses than it does like clinical ones the other third ish of the business is going to be in the services and tools and technologies the sort of”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“In life sciences, and it was like 50 to 60 percent of the office of the audience. And I said, those that have exposure, is it 1 to 2%? And that was like 70 of the 50 that had. If you take that test today, it's probably 60, 70% have exposure. It's still relatively small. If I go to that conference in 10 years, everyone's going to have exposure and it's going to be 5 to 10%. That is a lot of capital coming into this market in a market that, if you believe my optimism is more predictable and more investable, it's just going to be a high returning space. And so for us, if you look at my portfolio and you say, what does your portfolio look in 10 years? We're about 55% therapeutics. I bet we're 30% therapeutics. The other piece is going to be split between industrial, biotech, new applications of this technology outside of human health, your food, your impossible burgers. These are all products of these technologies, especially chemical sustainable plastics and things like this. This is all biotech. A good chunk is going to be in the information.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Peace is, I don't know how my cell phone works, but I know it works and doesn't preclude me from investing in Apple. And the reason is, is I know that Apple can make it work consistently and predictably in each upgrade, it's going to be faster and better. Our industry over the next 10 years, and I can say that comfortably drugs are going to be higher chance of approval, higher chance of efficacy, probability of success is going to go up continually. And cost of that success is going to come down. And that's just technology driving it. And so I think the participation of the larger investment universe, I went to a conference of your peers, and you were probably there. It was called NMS. NMS. Maybe it was three, four years ago. And they asked me a couple questions with the little voter machine. And I said, how many people have 0% of their investments?”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“First, for all full disclosure, I'm an optimist. So I think that Just like tech is a big portion of everyone's portfolio today. Over the next decade, life sciences are going to be a big portion of people's portfolios because this is industry under secular growth growing in 20, 30, 40, 50% annually. There's a whole real business aspect. These aren't just promised drug companies in seven years. They're the diagnostic companies, the tool providers. There's probably 300 billion in annual expenditures going into life sciences outside of therapeutics. And they're growing like a weed and these are high margin, 70, 80% gross margin businesses. And so in 10 years, I think this is going to be a well appreciated, well understood growth sector, much like technology. I think you're going to see generalist growth investors investing in it because that esoteric science”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“We go through these adjustments on our model and every month we relive the month then every quarter. And so the process really is about engagement. And then the final piece that I learned from the management coach that I then hired a process person was super athletes, joint teams, and they want to be a star player. You have to tell them how you go from the bench to the field.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Really takes a concerted effort. And so we had to invest in a lot of technology. Turns out now we all know what I'm talking about in the last year. This decentralized model that people was hard to invest in can work when you have these tools. And we were there. So every morning, 745, we run through all the news. We do thousands of meetings a year, good companies, bad companies, key opinion leaders, as I said, the whole network, public-private, and we were realizing that we were having meetings. We weren't telling each other ahead of time. So in the morning, we got a news flow, and then we have the meetings. Then you say, oh, when you talk to so-and-so, mention this other thing. Then at the end of the day, we debrief and, oh, I met so-and-so today and they told me X, Y, and Z. So we have a debriefing. How do we keep that information fresh or touching base throughout the day? Then every Friday we have a research day. We just digest. Maybe we do a presentation on a company. We go through the port.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“anyone which was my way of saying i don't really know of anyone that does the work the way that i do the work deep expert you know the industry has evolved from my father's generation to this generation from the oppenheimer deep research become the expert to a much more trading mentality and so that's what i was experiencing and i said there is this one person who had worked for my father and she said well why don't you call her and so i did and she wanted to join the firm but there was one contingency she had moved out to san diego and wasn't moving back so i said oh well we can we can adjust for that and then another person joined from boston so we have three offices but it's actually that the decentralized model is a real process burden how do you share information how do you capture information how do you debate how do you create all this dynamic”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“with return. And Lo Catalyst actually was positive correlated. And it wasn't that we were getting the catalyst wrong, meaning that we were calling the quarter up 10 cents and it was really down five. It was that we were calling it right, but expectations had gotten there and 10 cents wasn't enough. Now it had to be 15 to beat, right? And so it was the expectation that the stock had run into expectation, which is a wonderful insight to your sort of feeling really good and you're like, they're going to nail the quarter, but actually everyone's already there. So we have those kind of factors that allow the team to debate and feel very comfortable. And they change, they're dynamic. So when I size a position down or when I step a position up, everybody knows why it's happening. And we've had a discussion about it. When I start my firm, I said to my wife, I don't think I can do this alone. And she said, well, why don't you hire someone to help you? And I said, well, I don't really like it.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“frame them and put them into a system that took these qualitative insights and turned them into quantitative factors so that we could debate. And that's taken 10 years to build. What's interesting is we did it in a systematic and digitized way. So now we have a data scientist in the firm and he can say, you know, you think so-and-so factors really important, but looking back at the data, it has no connection to returns. Meanwhile, this other thing that you didn't think, for instance, catalyst strength, we have a factor called catalyst strength, which is to say how impactful will the earnings be on the quarter, or this clinical trial out data point, or some element one to three months out, what will be the impact of it. It's not overly complex. It's high, medium, low, high catalyst strength. What we learned was that high catalysts were negatively correlated.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Trying to convince the portfolio manager of your good idea. And if you were very good communicator, maybe you were better at convincing, if the person understood what you were talking about, you'd have a better shot. And at the end of the day, the decision-making process felt very arbitrary, and you always left feeling like that person doesn't know what the hell they're talking about. And I know everything and I can't believe that they're not doing it. And so it just creates a lot of tension and leads to sort of bad investment decisions. So I wanted a process where we knew why we were investing, we knew why something was 1%, why something else was 5%. We knew where we were sizing. And so I wanted to break each investment down into its components. Management team, market opportunity, return profile, risks, all these sub-elements that built up into a good investment. And so the process needed to uncover those things.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“But the scale of the organization, you know, I can't be doing all the basic research. So our process was designed to be comprehensive, to be flexible, to be disciplined, and to present information back to me so that I'm informed and how to engage me early enough in something that looks investable so that I have conviction like the analyst does. I found at Alliance Bernstein, one of my big frustrations was that as an analyst, I was expert in the portfolio manager, as the structure, they were sort of organized typically, maybe by sector, but also by size, large cap, mid-cap, small cap, and the portfolio manager may have come out of a very different as an analyst, you know, been a consumer analyst or like payer if they were healthcare payer providers. And you would be less”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“That was really helpful and learned a lot about not just motivating people but creating structure and process and how to facilitate and enable people to make decisions. So the other thing that I knew going into this business was that often they fail not on the investment side, but they fail on the business side. There is the business of investing and then there's investing. And so I was very deliberate in building.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the first thing is I learned a lot from my father, but he was not a great manager. And so I learned that I didn't know how to be a manager. I also remember a business school professor saying in a management class that what gets you into the seat as a manager, all the skills that you use to get there are not applicable at all and don't teach you how to be a good manager. And so I hired a manager and coach. That's great. Yeah.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thinking about that machine learning that would benefit from it, pushing them to go out and inorganically organically bring that in. So I think you'll be at a disadvantage maybe a different way of saying if you don't have that capability.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“For example, an investment will come to us, AI for pathology. So it's an interesting entry point, but it comes down to the pathology part of the AI story. You know, like the business end of it. It's not AI for the sake of AI. AI is an interesting element of what makes this company better than its peer, but it still has to have a business around it. And I think that that's another investor's flag is technology is not going to cover up crappy businesses as much as you want them to. But I think similarly on another trend, that story of relay with the computer, they needed AI capability and they just did an acquisition to bring in that technology and capabilities in-house. So we are pushing our companies who aren't in the space or who aren't.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Looks like a cancer cell, malignant cell, and that's a benign one. It can start to make these calls that the human eye is less good at and really can flag disease early and maybe can start to add an empirical opinion on top of the genetic one to this and we can make it as a drug discovery engine. We're seeing AI pop up in reading radiology and MRI solutions like an accompanying invested thing called Imogen, we're seeing it being leveraged in the drug development world taking massive amounts of data, massive amounts of imaging data, genetic information, electronic medical records information and putting it all together and trying to spit out new targets, new sort of connections that may be a drug developer would necessarily come to and then allowing that drug developer to sort of hone in on it. So everybody is thinking of ways”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very accomplished drug developers, great chemists, great biologist, and he added the computer Now if people that knew how to direct the tool and use the tool, the company has multiple drugs in development. And so I think that that's something important for investors and people looking at the space to appreciate is AI is just AI until you give it a direction, until you give it good data, good input. If it has poor data, poor input, and is pointed in the wrong direction, it's not going to yield. But we're seeing it emerge all over the place. We're invested in a company called Page AI that is digitizing all 8 million pathology slides, little bits of tissue out of cancer patients. AI is most powerful as I've learned right now with images. That's what it works through the best. And so having all these digital pathology images, now the computer can say, oh, that's.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“To create models around protein interaction. Proteins are dynamic, they're folding. Form is function. And for the longest period of time, we studied proteins in a crystallized one formation state and tried to find little pockets to target drug. But they're moving and turning and flipping. And so molecular technologies evolve for us to look at proteins in motion, but then we needed computing power to capture that images and so we could turn it over. And this company got access to an Anton supercomputer, which is at the time one of the fastest that had been created by D Shaw guy. And he had wanted to use it in the absence of drug developers to create all these great drugs. And he tried and tried and tried, and it didn't produce anything. But so he, in partnership with Relay that brought in”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“The ATCs and G's amino acids of DNA are like zeros and ones. It's just, it's a four code, not a two code. It's infinitely more complex evolution has made all this backdoors and redundancies, and it's a really complex system, but it is a system. And as technology has advanced, both computing power and imaging power and processing power and all that, and this machine learning AI stuff, it's a tool that's helping companies understand and translate the biology and understand the disease. The thing I want to say is that it is like my financing tools, it is a tool. It is not like set and forget. Like we're going to turn this machine on and it's going to create great drugs and get rid of the people. A great example is we invested in a company called Relay. And what they do is they use supercomputers.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“That makes sense, better liquidity, more liquidity, and a better story. Just shifting a little bit to the AI and machine learning and how it ties in here. I learned from something I read that you wrote about Yodabytes, which was the first time I heard that. But we'll all be using that soon. It's got 24 zeros, by the way.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“combinations you can evolve the governance and the board, you can bring sponsorship to a story, you can help a company talk to public market investors about their future. The IPO process, most of these companies can only”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, he's got a lot of history and he's just a very thoughtful, really successful sort of capital markets guy. He said, congratulations how much money we make because he's an early investor. And I sort of ammo bemoaning my lot in life. It's sort of my way if I had more money. If I had better structure, I could do deals like this all the time. And he proposed to me that what I was talking about was really you could accomplish with a spec. Most people think about the spec as a backdoor into the public markets bypass the IPO process. But really what the spec is, if you think about, and this is what Keith taught me, he would say, you should do a spec. I said, what's a SPAC? That's where I was. And I sort of was being facetious, but it is a one-off private equity-like vehicle where you can take a large sum of money in an unstructured way and structure a transaction where you can do these inorganic.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“To this company. We introduced them to a private company. We wanted them to engage three years ago. A couple years later, they consummated that relationship into an acquisition. It was a large one. We participated in the pipe financing of that. It opened up. The market really liked the transaction. And it's one of these classics OnePlus One equals more than two kind of transactions. And the market really appreciated it. This was a diagnostic company buying another diagnostic company that opened their TAM into cancer, which was a higher multiple business. And stock opened up. And one of my early partners, who is my partner in the SPAC, a really successful investor named Keith Meister, who I happened to play Kiwi football with and go to high school with, and he introduced my wife. And it was one of my first investors. He called us up and said, you know.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“In the public market with just a little more liquidity, and so you can get venture like returns in the public markets. And so that's very attractive. And if you've been engaged in the company when it was private, you have a comfort and conviction in the company when it's public. When volatility hits in the public markets, I would say in my experience over the last decade in this fund, nine out of ten times it has been because of something unrelated to our industry. Inflation most recently. These macro factors. So when you get those dislocations in the market, but you know that your company is well financed and still has an innovative product, you can be a buyer there. And so you can generate great return profiles in the public market. The SCAC is a new tool in the toolbelt and came about through one of our public companies. I played matchmaker, rabbi, and marriage counsel.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“The privates are, as you would expect, series ABC round financings and early stage companies as they move towards clinical commercial. And we are coming in and syndicates, sometimes we're leading the syndicate, we're taking board seats or board observer roles. And it's a traditional private market experience. There is an IPO time to public market that has been far shorter than what the tech industry has experienced because unlike the tech industry, these companies, product development cycles are seven to ten years and they need capital and so the public markets are where they can get big chunks of capital. So similarly, the public markets have evolved in our space to appreciate early stage companies. And so they're willing investors in preclinical and early stage clinical companies. What that means is you're really making a venture-like investment in”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Calibrating around the best teams and really not doing a spray and prey sort of shotgun mentality, it typically yields high returns. The other thing is the industry is young enough that I always joke. It's like we're picking zebras, but it's a field of asses out there. So you're like, oh, that zebra, it looks, you know, it stands out. They jump out at you and they're pretty clear these exceptional management teams. So it's just easier. I would think that if I had been old enough and I was, you know, kind of a computery kid when I was growing up, if I'd gone to those software fairs in the late 70s, you might not have figured out Lotus or these other things, but you would be like, that's Steve Jobs and that Bill Gates, those guys are impressive. And so that was sort of the game.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Investors sort of buffet sins, less than one, don't lose money, lesson two. Don't forget lesson one. Saying the growth investing, like don't run out of money lesson one, lesson two, don't forget lesson one. So that reduces our failure rate. What typical venture investors try to get as much money in the first slug and then they fight dilution on the way down. What we're doing is scaling up over time because these companies are burning $100 to $150 million every 12 to 18 to 24 months. Voracious consumption of capital. And so what I appreciated was you don't have to be every dollar in in the beginning. You can scale up at de-risks substantially, but you can put larger and larger sums of money comfortably and you have a lot of conviction because you're in the company and you're seeing it. And so I think that that process while staying very thematic making sure that we're in where the puck is going and that we're”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or disposition. And I would also say, and I hope never to invest in a private company, I only want to invest in the public one, but occasionally you have to, 100 plus companies later, we do it a lot. But what I meant is I think the best venture capitalists are taking an idea and forming a team around, putting on the company t-shirt, pulling IP together, really sort of formulating this thing that sort of two people in a garage concept. And that is the riskiest period of time. Getting out of the front of the garage and getting to the front lawn is the important step. And so we rarely invest in the garage. We're usually coming in the front lawn. Once you're on the front lawn and these product cycles are relatively long, they should have a higher success rate. And then we are overcapitalizing these businesses so they're not going to run out of money, which is the equivalent of a growth in.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“When I started the firm Investment vehicle, it's funny, a prime broker who remained nameless. It was our first prime broker, very, very reputable firm said, you can't do privates. No one's going to want privates. This was after 2008 in the financial crisis and level three assets, everyone was stuck with all these level threes. And so they assumed no one would want any more level three assets. And they said, you know, if you do it, you're going to have to have an opt-in. You're going to have to be very, you know. Clients really have to know, okay? I said, listen, this is growth investing. This is, we're in a secular growth story. There's innovation always happening. If you're only investing in public companies and not talking to private companies, you're only earning half the story. If you're talking to them but not investing in them, they're only telling you half the story. And on occasion, the tip of the spear innovation is going to be happening in the private market. And that's where you're going to want to be. But I would always say, I'm not a venture capitalist by trade.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“People that they're not looking for quick returns. They appreciate duration. And so we know 330 clients, because there's a lot of volatility in what we do, we've been very transparent about that volatility and very careful. There is no pejorative way to make money. Some people do it quick through trading, others do it long term. But the way that we generate returns necessitates duration, and we want to make sure there's a client match. And so we've got these 330 LPs like yourself and others that are really long-duration capital. No one ever calls. I joke, like, I would love people to call and talk to me. I'm always having to call them, but it really allows us to focus in those moments when we need to focus for the rest of the world is anxious. We can kind of bear down what's going on and step in without worrying about client feeling anxious and nervous. And that's been one of the most powerful investments.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“ongoing engagement. And so that's the network. We have over the last 20 years built a network of talking to all sorts of different people, outreach, sharing information, seeing them at conferences, reaching out, constantly evolving the network, but making sure that we're not reaching out to people in the moment of need. There's a real healthy friendship and an unhealthy one. And for a fund manager, you have to be afforded that time. One of the biggest competitive advantages I think we have as a firm is duration of capital. And that was a very deliberate decision when I started. I raised capital from 12 people and they gave me very little of it, but I built into the fund structure long duration, committed, philosophically, and contractually and make it hard to come in and leave. Not because you want to make it hard for people to come or go, but you want.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Context as you always say he doesn't like something once in a while he says he likes it is that actually a shift from normal and so you need to calibrate all these interactions and you can only do that over time you can have good instincts but you really have to calibrate over time and so it's a big deal for us to continue conversations over time the other thing that I learned from my dad is I once said oh I want to go pick that person's brain and he said don't ever say that again that is the most disgusting comment I've ever heard and his thing was you're basically reaching in and taking information out it's one directional and you want to be having a dialogue I use the word dialogue because it's too directional and you're really a lot of people that we engage with are academics and teachers by profession and so you want to trigger the teaching mode you're exchanging information they're teaching you you're teaching them and you have this”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“We interview thousands of people a year. The important part of a network is the continuity of it, calibration. I remember I was in the value investing class at Columbia Business School and you got a ticket to go to Omaha and see Buffett for their annual meeting. And I went and it was Charlie Munger and Buffett up there eating the peanut brittle or whatever, drinking the cherry cooks or whatever they're doing. And he said it's all about calibration. Like for Charlie, if Charlie says he doesn't like something, then we're not that interested. If he says he hates something, we start to get interested in. And he says the worst idea he's ever heard of. Then we get as much money into it as possible. It's all about calibration. And it's the same for us and people in the network, which is meeting someone once and understand, like talking to a key opinion leader and then saying we don't like, I don't, the science, I don't like it or this technology, I don't like it. If you don't have any.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“But you were enamored by the tech or the market opportunity and they go on to prove you right that they were not capable. And so I think you have to have that discipline. And it sort of flows into FOMO, the fear of missing out, which is something that dominates growth investing and it's a hard psychological thing to overcome. And you just have to have some discipline processes to make you say, okay, this isn't the team you want to align with.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do it in a way that engages because people change, certain people leave. Maybe your good feelings were misplaced. The final piece, I think, is you have to as a growth investor investing in people. You have to accept that you're going to miss stuff in the sense that I feel like 70% of the time I will call a bad management team and they will turn out to be a bad management. Bad managements screw up amazing technology and fantastical ways. I can't even believe how they destroyed that business. 30% of the time I will call an incapable management team or something I don't feel comfortable about and they'll go off and do wonderful things and create incredible value and I will have missed it. But I'm comfortable missing the 30 so that I miss the 70. Because there's no worse way to lose money than giving it to someone who you knew wasn't going to be successful.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“Scientists, you need a great chemist, you need someone that does clinical trial design well for outcomes, right, to make the trial show significance that also has good regulatory engagement is a good finance year of all this endeavor and can bring all these people together and then ultimately commercial. Those are all different positions. Those are all different types of people. So you really got to get inside the rank and file of a company to really appreciate how strong.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“want to have that dialogue the other thing i think to appreciate is this is not a one-man band type of game i grew up playing football as a kid so my sport to relate it back to is football which is a sport that there are big guys and fast guys and people that can throw the football and people are good at tackling and for each role for the play to be successful everyone has to do their little position move in the play and if one of them stumbles the whole play falls apart and so when we interview companies we want to make sure that each of these roles is filled by the right player that knows their position and i think over indexing on any one position i think a lot of our peers are incredibly brilliant and built much of their brilliance as phds or mds and they over index on those skill sets whereas it's actually a whole you know if you need a great”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“That future, and that's going to be determined by people making decisions on the front lines. And so you do not want to be smarter than the person you're giving the money to. What we always say is we want to be smart enough to confirm that the management team we're giving the money to is still smarter than we are. And our job is to always be smart enough to confirm that they're still smarter than we are. You want to ask questions like, oh, we were meeting with other companies and people are bringing their manufacturing in-house. What are you doing with your manufacturing? And we think that you should scale your manufacturing internally. We never want to hear management say, oh, that's a good idea. Like, uh-oh, you know, that's a red flag. What we want them to say is, yes, we thought about that in six months ago, we instituted a program to do that. Or, you know, Eli, I know you're hearing that. And I know that for some companies, that's the right thing to do, but this is why we're not doing it. We're humble enough to know that we're wrong a lot, but we're informed.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot about this technology. So yeah, this is the soft science of this is what makes value investors look at growth investors and be like, you guys are just grabbing at straws over there. It's sort of trying to wrestle down fog. And I think it is you have to have a sense of people. It's an EQIQ game. And so I think that some people have higher EQ than others. Some people can relate. You have to be a good listener and you have to be a good communicator and getting people to talk to you. You have to know the questions to ask. Again, back to being the expert. The reason to be the expert is that to know the questions to ask to make sure that the person on the other side of the table is answering them in a logical way. I think that's something else to keep in mind is growth investors. We are identifying an expected future and then betting on a company to arrive at that expected future, but recognizing that there's a lot of pivots and shifts in the road to”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source
“The people side of this business, your name comes up everywhere. So talk about how you evaluate a company from the people, right? You've got the technology and the people. Talk about, we've talked a lot about the technology.”
2021-07-15 · Capital Allocators · Eli Casdin – Casdin Capital (Manager Meetings, EP.02) · IDENTIFIED FROM THE TRANSCRIPT · source