YouSaid · the spoken record

Jamie Montgomery

lines on the record: 57
first: 2021-12-30
most recent: 2021-12-30
sittings or episodes: 1
sources: podcast

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“As I said earlier, common sense and decency and everything that you do. And then if you're lucky enough to find a good company every couple years, like a crowdstrike and you really figure that out and you got to back up the bus because you're not those don't come along every month. I don't think there's that many great opportunities. So if you can find one, I think you really have to put your ego aside and concentrate because you're probably not going to find another one like it. Thank you, Jamie. It's always great to spend time. Thank you. I appreciate your time.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to stay the course, and I think I've been very fortunate to have some terrific mentors or coaches in my lifetime. I think I'd certainly put Mr. Munger at the top of the list. I've learned more in the last seven years from time to gathered than I knew about investing when I started. He's incredibly clear thinking. But I think first and foremost, he just says high standards for personal and professional conduct. And what makes for a great business. And then after you get through those two, the discipline of investing, I think those old stories need to be told and retold. And it's been very fortunate to be on the receiving end of a lot of coaching there. I think it's my job is to help coach others here in terms of that discipline. And there's some great investors in the world. And I just think you've just got to operate with”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“We left billions of dollars on the table by errors of emission. So you say, all right, what are the errors I've made? Another error of emission, I believe, is what you're talking about, Eric, which is about not staying in the life cycle as a partner. I think you want to own these companies forever. I mean, I think they're great companies and you sell them and you pay tax. Could we have a more of a life cycle? Yeah, I think that's a lesson learned that we probably could stay in these companies longer and we probably need a vehicle to allow us to do that where our investors can opt to interact.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think we all learn lessons as we go through life and through funds. And I think we took some strong lessons from Fun, a very successful fun that we needed to be more concentrated, do fewer things better, simplify our strategy. And we really come in in years two to five of a company and help them scale up. What have been our lessons learned? Our biggest mistakes have probably been errors of mission where we had lots of good opportunities that we could have done that we didn't do and I can think of dozens of home run companies that we had the opportunity to invest at that we didn't invest in because we didn't have the team or the resources to do it. So we built that up. Errors of a mission. Do we go after some hard markets like industrial software that didn't work out yet? Do we make some investments in early stage consumer and fun one that didn't work out? Yeah, those cost you maybe millions of dollars or maybe tens of millions at a minimum.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“The last round valuation, we may buy some and buy some secondary or give it warrant coverage for investing. We're not trying to put billions of dollars. We're not trying to put 10 pounds of sugar in a 5 pound sack. It doesn't work. We're finding our seams. We're getting in. Companies like us, we're double down at a same valuation a year later. I mean, we're just very disciplined about going in. So if you can maintain that discipline, we have a great view of where it's going. You're coming in with some margin of error and you're very disciplined how you get in. I think we should be fine, but you really got to have your eye on the ball. That strategy works for us. There's other funds that are much bigger than ours and are putting out an investment a day. They're betting on the market. And they may do just great. They may not. That's not what the business we're in. We're very disciplined investor and there's only so much capital we'll deploy in that model, but we think that will continue to deliver those really good returns as a result.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“So occasionally we don't. And we might regret it on those. All right, let's be honest. But 90% of the time we do. We have this margin of error. We say, all right, we're resting here. And this is what the current market is. And this is what two years ago market is. We're below that. So the market drops 30-50%. We're still money good. And we keep doing that over and over again. We should have a margin of error. Now, how are we able to do that, which is the third part of the question? The private market is not 100% efficient. There are always seams in the market. There's secondaries. There's smaller investments. And we're not a huge fund. Our third fund was $450 million will grow about 2022 investment. So you look at it and say it's not a perfect market, so there are seams in the market where people will invite us into investment.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Only accelerating, but you've got to look at valuations within that context. So let's take about valuations. Now, 2017, 2019, valuations are about 30 to 50% lower than they are now, probably 50%. And we think, and that's measured as a multiple of revenue to revenue growth. So there's a real R square between revenue growth and multiples. And the high end would be, I don't know. Snowflake or CrowdStrike. So you look at that R squared and you say, okay, what was it two and a half years ago? What was it now? We underwrite our investments to valuations that are 30 to 50% lower in the current marketplace. So we basically say, look, if we can't underwrite, we want a margin of error when we do a deal. Now, we always get that, we hope.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then payments for their supply chains, warehousing, local, all this had to be reimagined. And we think that's just the start. Now the next wave will probably come from the application of 5G and edge networks, and that's really enhances this whole distributed compute framework, which is underlying the cryptocurrency craze and NFTs. But if you take all that crap out and look underneath it, there's a whole new parody of computing, which will be a massive opportunity. I will collapse virtual real worlds for virtualization of, so we're building one company that we think will be the AWS of the edge. We think we build a company that's worth $40, $50 billion in 10 years. CrowdStrike rung the ball at NASDAQ 10-year anniversaries worth $60 billion. How do you grow a 60 billion dollar company in 10 years, right? I say extraordinary. We think we can do that over and over again in our portfolio because of these trends. So if that's what you're thinking about and you don't see the pace of innovation slowing down,”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's unprecedented growth in enterprises, at the end of the day, the companies also had to do more with less resources people couldn't get to work. So AI-driven technology became much more important for automation. So this is a long-term cycle trend. People had no choice but to change their behavior, so e-commerce and digitization of money, electronic payments. We had the largest electronics payment company in India. We did one 70% of the payments for one-fifth of the world's population. Think of the scale on that. We just sold it for about $5 billion. Now, I mean, it's enormous. One out of ten people in the world is an Indian under the age of 25. And they're all using it. I mean, this is like not a couple hundred thousand users. It's like hundreds of millions.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“They're off by a factor too. We do our own report without any company information every quarter on CrowdStrike, and we were more accurate than every investment bank. And I just kind of wondered, why are they so off on this? Don't they get it quarter after quarter, 27 banks can't figure it out? So I would just like to throw out everything you hear about Wall Street and the crap you hear.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“And these high growth private companies or companies that will go public, Databricks, Snowflakes, CrowdStrike. So as enterprise workloads shifted because people were forced to work from home, their original applications were in cloud-enabled. And the home environment has also changed the cyber footprint. It used to be a firewall-based business with primer defense. Now it's a much bigger footprint that has to be protected. And so net, net, all this cloud native companies are winning big. And it's unprecedented, their growth. CrowdStrike is the fastest growing cloud software company ever. It's early in its growth, and it's got to continue to exceed everybody's expectations for growth. People always say it's going to go 40%, it grows 75%.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“The 80% cloud in five years. So you have $800 billion worth of stuff moving from one to the other. So you have big losers, right? No one wants to talk about them, mostly public companies, but some private ones too that have been taken private by some of these big firms and high multiples with a lot of debt. So there'll be some train wrecks there.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Entrepreneur. First question is whether or not what's happening is real and sustainable. The second happen is What about valuations? And the third is how do you navigate those valuations? Let's talk about those three things. First one, will the new technological and behavioral shifts that from the last year from COVID, will they outlast the pandemic? That's the first assumption you have to make. Or these temporary shifts are permanent ships. And I would argue that we were on a long wave of innovation and changes in behavioral trend and the changes are here to stay. They were just accelerated by the pandemic. People have changed the way they engage with the economy and businesses have changed the way they do business. Companies have migrated from large on-premise software development to working on the cloud. Now, this is like a trillion dollar industry that went 20% cloud.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“We want them volunteering, we want them on the boards, but we also want them feeding the homeless, a Thanksgiving meal coming up very soon. Veterans Day will do something for the homeless. And you want them engaged in that. The after school tutoring they do, the debate league they do downtown where boys and girls club right next door when that starts up here after COVID will be engaged there You want everybody involved in it, not just Jamie writing checks and providing leadership everyone, everyone kind of feels like this is what we do here right this is important this is who we are and it's great I mean look people talk about there's a lot of ESG talk and there's a lot of consultants and you have a choice you hire a consultant to do a bunch of surveys or actually go out do something in the community we've chosen to actually go out and do something in the community there's so much more we learn from doing that and there's so many deep rooted societal issues if we can just change a few live set of time”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“And just managing it, but It really is remarkable, and I so deeply respect and admire what you've done, and it really is where a lot of this positive social impact ESG is moving, which is from negative screening or overweighting good companies to really doing things that have a demonstrable positive human impact that you can point to. And it's really interesting to see how the young generation, how deep and real this is where they're.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“God, you know, we're fortunate to be in this position to be able to do this. And I think it's important if you're going to be a leader in the community. People always want to say, all right, what's it like being you? And I want to be a big VC and I tell them what I actually do. They're going to go back and have a day job and have to be responsible for feeding the homeless and doing this and that.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then so in 2020, we formalized that March Capital, the March Capital Foundation, which we were informal before. So we get 1% of our profits to the community, to the foundation for the community. So we give away hundreds of thousands of dollars there. This week, I mean, there's always something on, you know, you met Annabelle last night again, and it's like, we're trying to bring some woman from Afghanistan out through the refugee program into having a STEM education in Southern California. And I think that would be great and close. I funded five women to come from Afghanistan who had gone back there as civil rights activists to come back to California and get back on their feet. But now I'm focused on the undergraduates to bring them out of really these refugee camps around Western Europe and the Middle East and the United States and you get them out and get them in an undergraduate program to study STEM. So there's always something new. The need never ends, but only by the grace.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“A chapman, USC, UCLA, and particularly out of Claremont College is a really young woman here, Adele who serves on the board of the Center for Innovation and Entrepreneurship that we provided the seed funding for. Now, I say 40% of the women graduates in Claremont McKenna go on the innovation economy 10 years ago was 5%. Now, obviously, the jobs have changed, but we changed everybody's framework. It's the most popular program on college. We have the Montgomery Fellows there. Half of them have to be women. I said, look, I don't care how you do this. But if you want to check every year, half of them have to be women. Half of them are women every year. Maybe it should be 60% women, all right? But maybe we're holding the woman back. But it was very clear.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, what do you need? All right, 48 hours had that to him. Cash, equipment. And they needed that encouragement as well as the capital. And for me, it's like a drop in the bucket, but for them you're changing lives. And I think that was important. And it was a message to others that, hey, we care about our community. Everyone step up, shop locally. I don't know thousands of dollars in gift certificates I have in my drawer for all these businesses. I'll never see the light of day. But we went in there and gave cash grants to get these businesses back up on their feet. And, you know, yeah, okay, great. But we also extended our programs in the inner city of Los Angeles to fund after school programs and programs are trained and transition youth from troubled backgrounds in the workforce. We got more leaning in in the inner city. I think we probably should have done more earlier. But we continue to support programs to widen the envelope for inclusion in the innovation economy at local universities.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in perspective. But my own beliefs then affect how we've been active in the community. And there's a lot of talk about ESG. I mean, we're old fashioned when we started march capital. We had a simple policy that all decisions should be made by applying common sense and decency, right? You want everyone to be treated respectfully. What's the smart thing to do? Stop and say, take the long view, what's the right thing to do? Our focus has been since we started eight years ago, we've always supported at March Capital Community Initiatives in Santa Monica for homelessness, hunger, and health. We stepped up those programs in 2020 during COVID. We set up at March Capital grant program with the Chamber of Commerce that funded dozens more, but it was that first initiative looking at an entrepreneur in the eye that you've known for years, maybe decades, and say, all right, Joe, do you want to rebuild your Photoshop?”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“To come to work at March Capitol, they can be all they can be, whatever their age, race, gender, politics. And that for me, helping everyone reach their full potential is really the secret to inclusion. We have a professional coach that works across the entire organization, works on individual development plans for every member from the admin assistant up and down the organization, say, what's going to take it for you to accomplish those goals to be all you can be. And that kind of all you can ask for? My view on inclusion is someone is, for me, faith is very important, but I don't wear that on my sleeve at the office, but I think it's important for people to think about something bigger than them in life, whether it's nature, whether it's religion, or whether it's some faith or some other organization that is important to them. So we look for balances.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Team you have, the more diverse set of companies you're going to be talking to as well. I mean, so it will feed on itself and we just have to be always thinking about that. Anytime we do a hire, we want to see at least one of the three finalists be diverse. And we just say, look, we're not going to make this higher until we have some more diverse candidates and people get mad at me or frustrated or I know the rules. Diversity is really important. It's not just saying that. It's really important. Now inclusion, we want everyone to be able to...”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“A smart eye of attracted about 25 team members here. We have two partners who are former operating execs, and that resonates well with our entrepreneurs. Then we have four younger partners who are in the early 30s time frame who are in a position to lead investments. Then we're supported by an investment team and a team that does investor relations fundraising or co-investment programs. We have marketing and platform. We have a summit team and finance and operations. It's a good sized team. Again, it's important to be diverse. It's a real priority for us. And that sponsorship has to start at the top of the firm.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, let's talk about how you've built the team now with three funds preparing for fund four and now starting to have significant board positions and assets under management. Critical to have a A great segment.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Completely. I mean, and there's other areas. You walk around today and we do have a diverse team. And that's very important to us.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have 400 women, 500 women at that, some of the top women execs in the country. And there we're trying to accelerate and really support the next generation of women entrepreneurs. And so we'll put this conference on. We'll provide them capital they needed, any support that they need. And that's worked out incredible being a while.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sovereign wealth funds, and we have about 8,000 people or so. And it's an incredible opportunity, a lot of big keynotes you saw last year with Darius from Honeywell and the CEO of ServiceNow, the CEO Qualcomm, the CEO of Zoom. Every year we got a number of big CEOs, great private companies primarily interesting speakers, usually from government or military and research or other areas important to society and exploration or discovery or arts and creativity. People have a lot of fun for 48 hours, but builds relationships leading up to it and afterwards. And a lot of good stuff happens there and that sort of environment. You get that many people together. But five or six years ago, we put together, seven years ago now, a program for woman entrepreneurs. We had some great women come through there. We host that for another half day.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, this year this spring will be our 19th summit. And so there's been a number of just incredible companies that have performed there. We invite and host 140 companies or so in Santa Monica for a couple of days. They come in and they present, we'll speak on a panel. They'll do one-on-one meetings. They'll have dinner with us, drinks. Fantastic. And we get to know them. Now, maybe 20 of those companies are companies that we've invested in already. So thousands have presented. This was where Facebook first presented. Venture VCs love it. We probably have 400 venture investors come. As I say, this takes a community. And so each of them, we host them. They show us their best companies. I mean, it's an incredible marketplace, right? I mean, so like, come out, bring your best companies out, have them present or attend. We bring all the large corporations in who are partners. They go to market partners for them, institutional investors.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's talk a little bit about the history of the Montgomery Summit, what it is today, and what an interesting event that brings all these interesting companies, startups to Santa Monica, unique to Southern California, for you to spend time with and get to know better.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah, and they do as well. It's not a zero sum game in the venture business. Usually it's four, five, six investors in a company and it takes $200 million to grow a great company. And we're one of those investors. But we also want to be top of their list when they talk. The other investors say, gosh, march capital was great to work with. We're going to be supportive. And look, times are great right now. So people take a lot for granted. But it's not always going to be like this. You know that. We've been through multiple cycles. And we just want to be people that they remember. And we're just building up our balance sheet of goodwill across the industry.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Were you surprised, particularly the quality of companies you backed and invested with that you're often having to compete to give them your capital and these very factors you mentioned about partnering and really mentoring and having that experience being valuable, but it is interesting that I would assume most of the companies, if not all, Could have taken capital from a whole range of”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Over Fridays and Saturdays. And we coach them, and it's always about the long game and not compromising. It could be talent, it could be who they're doing business with, go to market partnerships. And just try and add value. If you work with a great entrepreneur, it's just a real delight and treasure. I just love it. And we go out of our way to do things to help them be successful personally and professionally. And also their family. I mean, whatever it takes to have someone be successful, we're there 100% for them. And that's an example that we said and other firms are just stunned by the stuff we'll do for an entrepreneur. Their commitment to the company is existential and we've got to do our bit to help them be healthy and well and successful and all aspects of life. In the day, our goal is if someone calls one of the CEOs we work with, say, who's the best investor you work with? They say march capital”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“When we think about our successes and failures and what we've learned from them, the common factor is the quality of the entrepreneur team, their ability to articulate a vision, execute on it, attract capital, attract talent customers. And most of them are 20 years, 30 years younger than me now. They look for some counsel and insights. Typically we lead rounds, we serve on the board, we don't serve on the board. It might be a board observer, but then usually they ask us to go on the board at some point and there's ever an issue or we double down, we end up on the board. I never have a problem with a CEO returning a call whether I'm on the board or not. I mean, they want to talk to us. And so we talked to them a lot several times a week. And it's interesting what they're looking for checking without all them on Friday or Saturday and during the week there may be something in motion they want to talk about and more.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd love to hear a little more about this amorphous concept of pattern recognition because in a world where we celebrate youth and as you get older it's easier to be cast aside. This really seemed like a field where on the technology really valuable to be young and really understand both the zeitgeist and what people are doing and the technology. But to look at a business and a management team. Sure, seems like someone that's had 10,000 pitches can read the baseball better.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“You go in there, and there's such NB, and you could cut the NB with a butter knife so tight, you know, and we're just like, okay, we're collaborative when we invest, we invest as a team, let's be measured, let's be humble, grateful for what we've been able to accomplish, but we realize it's on the back of the entrepreneurs, they deserve the credit, they're the ones who we talk about. We don't do a lot of press. This is really unusual for us to talk about it. It's been good. I just love what I do every day”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Years of, I spent build up Montgomery Code. People asked me about what I did. Well, we buys 500 companies on strategic alternatives. We financed 200 companies, took 40 or 50 companies public. I founded 10 companies. I must have learned something along the way. If I can remember it. And Samont's got 25 years of experience investing. And we bring that to bear and we build a team of 25 people here. And we haven't tried to overexpand. I think we've got to be measured. have offered us a lot more money and we're like, you know, because our culture is so important to us to work as a team and some of these other firms that are very, you know, you've talked about you could.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because we love working with entrepreneurs and being at the intersection of creativity and innovation. And we work with great entrepreneurs. We help them grow the business. I can't think of something more fun for Sama and I to do every day. We give our investors exposure to the innovation economy. They have goals. They might be financial. They might be developmental goals for a sovereign wealth fund. They may be philanthropic goals for an endowment. And we help them reach their goals. We just work on making sure we're that world aligned every day with our investors and with our entrepreneurs. And it's just, there's a playbook and a process. You just keep repeating that. And it's very disciplined. It's pretty simple, Eric. I mean, but it's hard, right? You get up at five. You just, you know, you work till you drop and you're on weekends. You're doing the creative work. And we're building on years and years.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a very competitive area and venture attracts a lot of really incredibly talented, competitive, creative individuals. Unfortunately, we've been able to recruit them here as well, perhaps tone down the competitive ed bit. Our investment approach has been to trying to identify the best companies early on. We're very relationship driven and we invest a lot in our personal and professional networks and we really back a team and we'll again spend a lot of time before we invest with that team. And then if we're able to double down on your best companies on a risk adjusted basis, you can really knock it out in the park. And then we also have offered a lot of co-investments to our LPs. And I just think it's a privilege to do what we do. We started off”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“And very hard to know which turtle is going to make it to the ocean. And you really did. And so it'd be really interesting to hear about the philosophy you employed to identify these companies and to partner with these companies after looking at thousands.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it'd be great to hear about your investment of philosophy and approach to building march capital because A, there are some extraordinary firms in venture, just extraordinary. There's a very high persistence in venture. So often the great stay great. And it's very hard to enter the space. Number two, venture is such a unique asset class, arguably the highest dispersion of returns, meaning the difference between the average and the very best is about as big a cone or dispersion as there is. And so from the allocator side, it's all about picking the best firms. And the old guard are relatively easy to identify, but almost impossible to access. And then come all these new firms, whether they're spinouts or new entrants. And it is a little bit like those turtles on the beach scrambling to the ocean shore with the seagulls and crabs in the way.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Everyone likes to think they are, you know, the largest correlation sometimes for a fund's return is usually vintage. And our second fund was invested from 2017 to 2019. We made a series of investments in cybersecurity e-commerce enabled men IT infrastructure, automation, emission critical functions. And then we doubled down on those investments. We stress tested 2019 because we thought we might have a recession. Then COVID hits. We didn't know what to think for the first couple weeks, but then the company started really accelerating. And all of a sudden, we had five years of innovation adoption in six months. But it's not likely to be repeated in our lifetime. And people look at that and say, oh my God, you guys are the smartest people in the world. I said, no, I was in the right place at the right time.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is one of the great dynamics of the American economy is the churn. When you look at any decade and the S&P 500, the Dow or the NASDAQ, just the changes in the elites or the top companies decade by decade and sometimes even shorter periods.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Working together, teams win championships. Investment venture capital United States topped $150 billion last year. It's well ahead of that this year. People say, well, venture is risky, and well, yes and no. I mean, I think if you look at the loss ratio in the Russell 2000 over the last 20 years, about 70% of the companies went away. And if you bought the top 10 companies in the Dow 20 years ago, you'd be holding 20 cents on the dollar right now. I mean, so you have to be in the innovation economy to get the returns.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we are living in an extraordinary time marked by unprecedented innovation disruption, liquidity, and wealth creation. And it's a challenging time for an investor or investor in us to determine what to do next, but you have to start looking into the future. And that's what we do in venture and growth investing. We look to the future. I feel as if we have a very good call on areas such as application of artificial intelligence and next generation software for the enterprise, the next generation of cloud infrastructure, cybersecurity, payment systems, and e-commerce enablement. And by focusing on those five areas, we're able to build on that expertise. So the secret to us is to have the knowledge of those areas, the relationships, the pattern recognition, as you described it, and then have a team.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“It seems that you were early in specializing and identifying areas with a real intent on developing deeper expertise and pattern recognition in fewer areas because Two questions. First, do you agree that venture is really currently innovating and potentially disrupting every industry, every sector? And second, that you need to specialize and if specialized, how did you come to the areas that you are special and really focused on and what are some of the drivers and excitement in the areas you're focusing on?”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our philosophy of looking for the best companies and the most promising sectors with an IT and then to build concentrated positions on those and then double down on the companies that we thought were the real winners. And by doing a fewer number of companies that had a lot of benefit to us in terms of how we spent our time, we could work more closely with the management teams. And then we gained their trust and respect. And they would give us more access to the companies. The success of built on itself. And by being focused, it allowed us to build on our industry knowledge and contacts and be more helpful and expand those. And I learned a lot along the way. And we've really just been fortunate to have the opportunity to apply it at March Capital.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“Navy's a starting point, but just great to hear how did the idea to come into venture capital extraordinarily competitive area and really a very rigorous pursuit. It is one where you are in constant motion. How did the thoughts coalesce to form March? Some aunt Mandel and I had a view or perspective that eight years ago we were at the early innings of an incredible series of innovations to come around what would drive the way people live, work, and play in terms of the technology underlying that, particularly in software. And we had a view to build a company that could invest along the way, whether it was in Series A, B, C, D, up to the pre-IPO. I think that vision was prescient and was just important for us to be incredibly disciplined and sick.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“The area of focus that they have and they have done an extraordinary number of successful co-invests and their performance has been across the portfolio as opposed to one grand slam home run. So it fits in that early entrance, highly focused, strong partner to co-invest. And now moving from a first time fund into this adolescent stage in Fund 4.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“you want to be there early so you can gain greater capacity and you're more actively involved early and you're capturing some of that early funds one through three kind of extremely high return and the last piece is around co-investments and really looking for firms where you can partner and they are a source of deal flow with the idea that you're really rather have 40 to 50 venture names in your portfolio than 600. So in the world of where does March fit is that A, you have a first-time fund now they're on fund four but their first couple funds are really looking to be top decile not just top quartile and that is quite striking and now that it looks like their third fund is entering into that top quartile realm as well it's still early but very encouraging and promising and then secondly”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source
“complement other players around that. Secondly, you are looking for spinouts where it looks like a first time fund, but these are highly experienced investors. You know their track record. You know who they are. You've known them a long time. You know their wiring. So where you have that edge, third, you're looking for earlier stage funds because you often see much higher performance when life is simple. Fund size is smaller and you have the singular mission of just investing. Things get really complicated by fund eight, nine. Firms are big. You're on dozens of boards. And I think a big change from the old days when I was in the endowment world, you often were looking for the great names that brought great credibility to your decision because every other great endowment was there. Today, you're seeing the real great CIOs are looking for first-time funds, spin outs, where you've really identified talent.”
2021-12-30 · Capital Allocators · Jamie Montgomery – March Capital (Manager Meetings, EP.26) · IDENTIFIED FROM THE TRANSCRIPT · source