YouSaid · the spoken record

Michael Carmen

lines on the record: 68
first: 2023-10-27
most recent: 2023-10-27
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Exactly. If you do that, right? If you knew it's just going to be down into the right from 1982 to 2021, you would have been massively more aggressive in terms of your investments. I mean, I was in, I've been an aggressive investor. I've been a growth investor. That's not been bad. It wasn't because I knew interest rates were going to go down. But think about all the trends around buyout and everything in the investment universe that's been benefited from that, that it would have been great to know. Now, I think that that lesson was obviously two generations, but I don't think that that's going to help you over the next couple of decades because I think interest rates going to zero is probably a thing of the past.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So I was thinking about it from the context of over the last kind of two decades. And I think I wish I knew interest rates were going to stay low for as long as they did just for.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Luggable. They call them luggable. Luggable. You knew it was going to be the creation of a market, right? This was a totally new market. And you think about, you know, fast forward to today, I think most people have laptops versus desktop. Like at Wellington, we all have laptops now. We just plug it in when we go. We don't have any desktops in the entire, almost the entire organization. And so it was the beginning of a major, major trend, right? Just like the iPhone, when the iPhone was introduced, think about like nobody had a computer in their pocket. You had these blackberries or you had these flip phones, but you didn't have the internet in your hand at that moment in time. So seeing those develop and understanding that sometimes these trends are overestimated in the short term and underestimated in the long term and really trying to find those inflection points, that's what I always loved about investing is being ahead of the crowd and trying to figure out where the”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, part of the answer is what you just said. There's so much more variety of what you can do in the investment world than, say, when I got out of school close to 40 years ago, which was, you know, it was kind of one game. It was really public markets. But now with private credit and private equity and ETFs as well as the public markets, there's just a variety of things that you can do. And so the advice I would give somebody coming out of school is figure out where your passion is. Figure out what your investment style and what works for you. Do you want to be at a hedge fund and really be in the day by day and have to make basically a lot of decisions in short amount of time? Or do you want to have a much longer time frame? Are you more in the growth mindset versus the value mindset? So you need to think about all this and head towards a direction that really fits your personality. Like for me, I know early on I always tell the story that my moment was when I saw Rod Canyon of Compact unveil the first true lap.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he learns later in life that he didn't know that he was actually Jewish and his mother would never tell him anything and he finally got his mother to tell him his story. And so the story is like one chapter of his life, him telling his life, and then another chapter of his mom talking about her life, juxtaposition between their two lives. And so it's an incredibly fascinating book. And so that's what I'm reading right now.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“This is fiction. That's a fiction book. And then the other one that I read, which is an older book, I think it was written 20, 25 years ago, was The Human Stain by Philip Roth that was just also incredibly well written. Matter of fact, I was a part of something that everybody had to record, bring a book. You had to literally bring a book. And that was the book that I brought. And then the one I'm reading right now that I'm on my Kindle, supposedly 70% of the way through is a book called The Color of Water by James McBride, which was recommended to me. My favorite book recommender, which is my friend Susie. And it's a biography slash autobiography. And it's written by a black man who was brought up by his white mother who grew up as an Orthodox Jew.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So a couple of books that I really enjoyed over the last few years. One was The Silent Patient by Alex Michael Leites that just was kind of like a psycho thriller story and just had one of the most amazing twists towards the end that I that I've ever...”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I work with did as good a job as navigating the tech bubble back in 2000 as he did and having great performance in 1999 and then also having amazing performance in 2000. And he's just an amazing, amazing investor. So I say those would be two that were very important to my career.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So there's so many. I'm always afraid that I'm going to forget people, but two of the people at Wellington who I co-managed money with when I first got there and were just phenomenal investors. One was Bob Rands, who was, we always refer to him as the godfather of growth. He was really one of the first true growth investors at Wellington, just a phenomenal investor in keeping it super simple, having just a great feel for the markets, but just being able to meet with a management team and evaluate them and making decisions based on those evaluations. And then the other one was Saul Pinell, who ran the Hartford Capital Appreciation Fund from Inception to, I think, about 2015, had just phenomenal performance. But he was like an old school go anywhere capital appreciation manager. There were times where he could be positioned incredibly aggressively in growth companies. And then there were times that he could be very value-oriented. And so I don't think any.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think it was some of the best acting. Jamie Lee Curtis was just unbelievable in the acting and the whole situation. I mean, I'm sure many, many families can relate to the dysfunction and just incredibly well done.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“And season two, which I just finished recently, my wife and I finished, was phenomenal. In episode six might be one of the best.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Great because I'm slowly catching up. It's my treadmill entertainment. So I'm slowly catching up. And then the one that I watched recently that I absolutely loved was the bear.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I love it because there's so much about the UK that I don't know, particularly kind of pre-Charles and Diana. And so I'm now on season four. So the first three seasons were really early in Queen Elizabeth reign. And there's just a lot of information and just super well done. The acting is great. And then the one that I just finished.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And Gina and I have grown up in the firm. Gene's story she always talks about, that she started as an assistant out of Wellesley and worked her way up to being a global industry analyst and then managing partner. And then in 21, she took over as CEO of the firm. And so to your point, she is still in the minority, but an increasing percentage of the minority.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Consists of me and all women. I'm the only guy on our private team management team, which is just great that we've come to a point where we can really have that much talent on our team that could help us build the business.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, thank you for pointing that out. And it's something I'm actually very proud of because this was probably back in 2007 and 2008. And I believe that was our first internal business network. And a couple of the heads of that network came to me and asked if I would serve. And I was very honored. And I think it was a testament to my advocacy for women in the firm. And so they felt that I could be a really strong advocate for them as we were trying to elevate and get more women as a part on the investment side and the business side and really level the playing field over the longer term. And so I was super happy to do it. And so I served on that, I think for about six or so years. And then interestingly, today, as I mentioned earlier, Shadow O'Reilly, who's my co-head, obviously a woman. But our whole, our management team on the private side,”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Important proponents of having us be involved with the company that people believe that we can add value and that we're going to be additive to that company over the time that we invest because we bring a much different angle given that we have the public market expertise relative to earliest Asian investors and have had a lot of IPO outcomes and so we understand what it's going to take. But a lot of our sourcing comes from early stage seed series A and even series B investors who are part of our network.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, which is the most important part of what we do because the old adage is you don't see it, you can't do it. And so in our team, on my product, which is called Hadley Harbor, we have 11 investors on our team and they are out there every day sourcing. I always think of it as kind of 40, 40, 20, 40% of the scale is on sourcing, 40% is due diligence, and 20% is the ongoing support of the companies, but probably close to 75% of the time is really going out and looking for deals. Our biggest source of deals are from our network of early stage investors that we have cultivated over the last decade. Hundreds of investors who have invested in early stage companies that can help us get warm introductions to these companies. And by the time we get into our round, it's very common that we know the majority of the board that's in that company, which generally consists of early stage investors that are very”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And then generally there'll be other investors that invest alongside us. But importantly, we're not generally working alongside them because these are competitive deals and we want to get the maximum allocation that we need for our clients. And so we don't want to draw other people in during that process. We might help on the backside if we're leading the deal and there's other investors looking at it. But job one is figuring out for ourselves independently if we think this will be a good idea and making sure if we want, say, our average check size now and our funds is about 75 to 100 million, let's make sure that we can get that check. And we have co-investors that we work with that are clients of ours that we want to be able to offer them the opportunity to invest also. And so we kind of stay very stealth when we're in the due diligence process. And then generally, we'll see other investors come in to fill out around probably our average rounds are somewhere between two.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'd say that almost every deal we do has a variety of investors in the cap table. We're not exclusive, very rarely have we been, I don't know if we've ever been, the only investor in the cap table in our round. One is we love to see insider involvement. We want to see insiders taking a pro rata or a super pro radder of the round because there's a lot of information in that. If all the insiders aren't playing or an insider is selling, then we generally don't want to be a part of that.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's more in that camp that it's got to be a more obvious yes, but it's a lot, I always think about investing as matching the qualitative and the quantitative, right? Is that I've always said to analysts when I was on the public side that we could always make the numbers work. But we have to have a management team that can”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“No, we underwrite to a two to three X return on our investment. And when you look at the performance of our funds that are more mature, fund one and fund two, we're right in that camp about net 2x or so. But we're doing it over a shorter period of time in terms of how long it takes. We have a shallower J-curve because we're returning capital more quickly. And so that's how we're thinking about this category is that to your point, the range of outcomes are a little narrower. We're never going to have 100x, but it's going to be very rare when we get back zero.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And when you look at our portfolio over the last 10 years and all the outcomes we've had, we've gotten back our money or made money on about 80% of the deals that we've done. So it's a higher hit rate. I always think of this as a little bit more of a fat pitch portfolio is that we stay away from binary events. We're looking for the events that the outcomes could be less good or they can be really good.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“These are real businesses. And so we can really look at this in terms of having a little bit more confidence. I always like to say that these are not riskless, but they've been de-risked, right? You know it's a company. What we don't know is, will it scale from 100 million to 500 to a billion or is it going to be 100 and make its way to 200 to 300”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“It depends on the company, and every company we're going to use different metrics in healthcare versus tech versus consumer and fintech. Many of our companies are still burning cash when we get involved. And so a lot of times we're going to be thinking about normalized margins and those normalized margins are going to dictate how we think about that price to revenue multiple that we're willing to put on that company at the time we invest. If a company ultimately is going to have 10% margins, then that's going to be much lower relative to a company that can have 30, 40 percent margins. And what I've done is really ported what I used to do on the public side to the private side in terms of thinking about ranges. I always like to think about what's my downside risk and what's my upside potential. And we want to skew our investment to those that we believe we have a lot more upside relative to our downside.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“No, but you are talking about a product that I think is very interesting in terms of the hybrid space where you have public-private products. And so it's something that we have actually in our fintech product. We have a public-private product that can do just that. And we're thinking about additional ways that we can take advantage of our public and private market expertise to create products for our clients that can do exactly what you're saying is we can invest prior to the IPO and then we can hold for the long term subsequent to the IPO.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“We can't. It has to be, it always has to be arm's length, and so we cannot take what we've done in the private side. And that's in dedicated funds and transfer that to any of the other portfolios at Wellington. So everybody needs to make an independent decision. And we can't use our fund as a reservoir for the funds on the public.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I like that description. I think that's what we're doing is really helping them with finishing school. And importantly, we want them to be attractive to the public side of Wellington subsequent to their IPO. There's no guarantee we always tell our companies we can't tell our public side what to do, but we've had a lot of success. And in fact, when you look at the numbers over the first year, those companies have gone public, we have bought massively more on the public side than we originally bought out of our private portfolios. And so that to me suggests that our finishing school is working very effectively and creating companies that are attractive to not just the public side broadly, but to many of the investors on Wellington's public side.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And the value that we add is very different than an early stage company, right? When you're an early stage investor, you're going to help them hire their first cheap marketing officer, their first head of R&D, and many other positions. And you're going to work with that founding team on their product market fit. By the time we get involved, the company has been built. They've achieved escape velocity. And it's really about how well they can scale. And that's where we come in is really being able to help them, as I noted earlier, on that last mile. So for instance, we have an ESG team. And so we have a team led by Hillary Flynn that steps in and works with the company on what they're going to need to do from today to the time they go public to be at a level that's going to make them attractive to the most investors on the public side since as we know the public side, many investors care about issues around ESG.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Massively more efficient. We do have a couple of different directions we can take. Although the majority of the companies are still doing a direct IPO, right? You have direct listings that got a lot of play a few years ago. Obviously we saw a lot from the SPAC market a couple years ago. I think that trend is in the rearview mirror. I always felt SPACs make sense in very specific cases, but if you're a really solid company, you can go public through an IPO. You don't need to do a SPAC. So I don't see SPACs coming back. So a lot has not really changed in that regard other than the fact that companies now can do a lot more meetings in a lot more locations in the comfort of their offices or their home.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the biggest difference is it's now zoom, zoom, and zoom, right? It's just a lot of Zoom meetings, so they're not running all over the world anymore, which is probably really good for fish.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think generally what we're seeing is companies are going public later. So instead of being like four, five, six years into their existence, it's more like eight, nine, ten years into their existence. And so by definition, these companies tend to be more mature and tend to be larger than they were a decade ago, and particularly when I started in the business and was managing money back in the 1990s. And so these companies hopefully should have more sustainable performance and be a little bit less volatile, albeit in 21, we had a rush for a lot of companies to come public and that class has not performed well, which is probably a good cautionary tale, that you should be more mature when you hit the public market.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't look at the public markets quite as closely, but you had a cadre of companies come public several weeks ago with Clavio, which is in a very interesting space in kind of the ad tech area and Instacart, which obviously was a down round, but still has an $89 billion market cap. And of course, ARM, which was a much larger play and a spinout being respun out from Intel. And so to me, they've traded fine, which is like a nice little indication that the health of the IPO market is beginning to improve. And of course, I don't have a crystal ball, so I don't know if the markets are up or down, but let's assume that they're stable over the next couple of quarters or several quarters. I think that there's a reasonable backlog of companies that will start seeing being surfaced and starting to come to the IPO markets. We know we have companies in our portfolio that are beginning that preparation. So I think my guess right now is that 2024 begins.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So we're thawing. I think we're in the thawing Moment, right? We're starting to get there. And if you look historically, and we've looked at data from the last 40 years, generally the IPO market, when it shuts down, it shuts down for about a year. Occasionally it will shut down for two years plus. And as you're noting, we're kind of in the second year of this. And as you also noted, the markets are starting to recover. And as the markets recover, public investors start to get a little bit more comfortable looking at new ideas.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, that was a little bit more nuclear winter. And if you look at the innards of that, there were a lot of companies down 60, 70, and 80%. And so when that happens, portfolio managers, having been one, shut down. The last thing you want to do when you have 50 fires in your portfolio is to look at a new idea, right? You're still trying to figure out what you need to keep, what you need to jettison. And so that is why the IPO market shuts down in a bear market.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the IPO market always takes its cue from the public markets. And as you know, last year, 22, we had a bear market. It was a pretty harsh bear market and particularly in growth. It was a”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it always depends. I think when you look at what we're doing on the late stage space, that's probably the most correlated to the public markets. We're definitely taking the direction that we're going from and how our performance is, somewhat from what's going on on the public side. Obviously with our early stage fund, that's”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Not in yet, but something we're thinking about. We have a public re-team on the equity side. We have a public presence on the credit and fixed income side. And so we think that's an area that we can extend our expertise to also. And so we think about it through that lens in terms of where we believe the platform can enable us to be super strong. And what we've been very, I think, very successful at doing is attracting investors who buy into that.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So, some of it works together, and there's some synergies and some ability for us to really invest across the platform from early stage to late stage on the venture side. Investment great private credit is a totally new area for us. But I think the commonality of everything that we're doing is through the lens of where can Wellington have an edge? What have we done historically on the public side that would make sense to port over to the private side and leverage and scale that? So you think about credit, we have a multiple hundred billion, hundreds of billion dollars of asset business in credit. And so we have a lot of expertise. We have a lot of experts, whether it's portfolio managers, analysts, macroeconomists. And so there's a lot of things that we can do in that space that we think we can deliver very strong results. And similarly, as we think about real estate, which we're not.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct because you still need to have a really good story for the public markets because the public markets want to see a long-term trend that they can buy into. And if they believe that you've already seen your best days, your best days are now behind you, that's not going to be a really interesting public investment. And so we really need to think through what's the right timing, what are the right dynamics, and what do you need to do today to set yourself up for a really strong public show in.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. They did. They're public. Yeah, public on Nasdaq. And so they've now been public. I think they went public in 21. So they've been public two plus years now. And so they had a really good outcome. But those were two that were not, to your point going up until the right. There was a lot of sideways there and a lot of nail biting. And then they ended up having good outcomes. But then there's others that, to your point, will just continue to pound out 40, 50, 60% growth and go from unprofitable to eventually profitable. And then our job is just really to help them think through what do you need to do between now and when you go public to make sure that you remain a very attractive company in the public markets, right? Because there's always this risk, which I worry a lot about, is that companies stay private longer, but sometimes they can stay private too long.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the Korean company, South Korean company is called coupong, which is basically simply the Amazon of South Korea. And so they went through, and I remember going through this with Bomb, who was the CEO, is that they were going through a very similar thing that Amazon went through early in their existence, is they were going from multiple day delivery down to two-day delivery to one-day delivery to literally our delivery. And doing all the logistics behind that required a lot of infrastructure. And at one point, they had to really slow down growth to make sure they got that right. And once they got it right, they were able to reaccelerate. And they had a moment where they were getting very close to running out of capital, but they were able to put around together. And then they ended up having a really good outcome in the public markets.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I think every company is unique and their journey is very unique. And what I have found is that there have been a number of situations where we invested and things went off the rail early on and the companies needed to pivot or they had big headwinds. I always love to use the example of coupon, which is in the e-commerce space in South Korea whose growth rate, while we owned it, went from probably 100% down to 20% and then reaccelerated until you got their logistics strategy in order. And then DraftKings, which is kind of the poster child that was at one point sued by practically every attorney general in the country, questioning whether Daily Fantasy Sports was even legitimate and then eventually became a big player in sports betting and eye gaming. And so those went totally off the rails. We had marked them down probably close to 50% at one point and then ended up being two of our best outcomes is that every company just has a different journey.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I wouldn't think of it as a difference, but I think it gets to your point the part that we don't know is the future. Can this management team execute from here to the public markets? And we always believe that our value added in the space is that we can help them on that last mile from the private market to the public market.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, absolutely. And because I would not be a good early stage investor, I don't have any skill sets in evaluating three people in a garage with an idea. But when we're looking at companies and many of the companies in our portfolio, they all have usually $50 million plus in revenues. Many of them have $100, $200 plus in revenue.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of the bigger players out there, and they're also investing in this space. And so there has been more capital available for these companies, which is what has enabled them to stay private longer.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, no, that's a fair point because everything I just said would mean nothing if there wasn't capital to deploy into these businesses. And over the last, call it 20 plus years, which from early stage and seed to late stage, there has been more and more capital. I think in the earlier stage, it's much more dedicated funds. It's a traditional VCs that we all know that are in that market. And as you get to the later stage, it's a lot more eclectic. It's some dedicated funds like ours. There are more multi-stage funds where there are funds that were doing Series B's and C's and are now doing late stage, where generally our fund averaging a series D in terms of where we invest. There's crossover funds, there's hybrid funds, even hedge funds, and mutual funds have invested in this space. And so there are a lot of pockets, a lot of people like myself when I first started are taking public mutual funds.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. You can think longer term when you're still at a phase where you have 50, 7, 500 million dollars of revenues, you want to have a lot of latitude. You want to have the ability to say, you know what, we need to invest more money now. And as you know, you start making decisions like that in the public market and you release your earnings results and say like, hey, our earnings next quarter are going to be half of what we thought they were going to be. Your stock price generally doesn't go up. And then you go into the doghouse and you got to scratch your way out of it. Whereas when I'm in the boardroom, we probably spend 10% of the time maybe talking about the quarter and 90% of the time really thinking strategically about where we can take this business. How do we expand our product line? How do we expand geographically? How do we expand distribution? And so I think that for me, my thinking has evolved in that I believe that it could make companies stronger for longer if they have”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a really great question. And when we first started, we felt the thesis was that Sarbanes-Oxley that was put in place in the early 2000s made it a little bit more onerous and made it more expensive for smaller cap companies to go public because they raised the regulatory burden of doing that. And I think that was the genesis of this. As I sat in the boardroom and we have a lot of observation rights, board observation rights in terms of what we do, probably get them close to 75% of the time. What I've discovered is that I think it actually makes sense because when you're private, you can think more strategically. You're not trying to make the March quarter and the June quarter and the September. You think longer time?”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Enable us to have exposure to that set of companies. And so I think it is a fair characterization. In fact, when we look at performance, we use as our public market equivalent, we use the Russell 2000 growth index as our comparison of whether we're doing a good job or not doing a good job.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source