YouSaid · the spoken record

Satya Patel

lines on the record: 64
first: 2021-11-04
most recent: 2021-11-04
sittings or episodes: 1
sources: podcast

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“It's important for people to have agency. No one is going to be your best advocate. People may give you opportunity or bet on you, but only if you ask and advocate for yourself first. I certainly made the mistake early on of assuming through hard work and good intention that that would be recognized and the reality of the world is you've got to advocate for yourself and no one's going to do that better than you.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think focusing early on in my career on the what and not considering the who, what I learned from that is when making career decisions for me and it's the advice I give to anybody at this point who asks me about it is like the only two things that matter are people in problem and don't try to overarchet your career it's easy to like think lots of things are important when making a career decision you can go down a rabbit hole but I think if you just focus on those two things both people and a problem then It's going to free you to do your best work and everything else is going to work itself out.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“I am the child of immigrants who came here with next to nothing and managed to raise a family and live the American dream and I think the thing that I took away from them and which they hammered into me is that there's just no substitute for hard work. Hard work can overcome a lot of deficiencies in a lot of different areas, but if you're willing outwork anyone, you're going to make it far. And so that's probably stuck with me for a very long time.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh my goodness, so many people. I just feel so lucky to have been surrounded by people who've given me support and advice and been advocates. But if I had to pick two, one was one of my bosses at Double Click, a gentleman by the name of Doug Knopper, who's now a very successful entrepreneur himself, and he was the person who first bet on me as a product manager and helped me build my career on the operating side in that role. And the second is another person who was a peer in Boston as well, gentleman by the name of Gokul Rogeram. Gokul is a longtime product executive at DoorDash and Square at Facebook, but he and I work together at Google and he gave me tremendous responsibility paired with tremendous support in the early days of Google. And both Doug and Gokol are still very good friends, both peers and mentors and people who I am forever indebted to.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Authenticity. When someone says one thing and does another, for me that's just something that is hard to tolerate both personally and professionally. And I just think life's too short to want to engage with folks like that and two to act that way. So that's a big personal pet peeve of mine.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“who recently have had a little bit of time to do more reading than usual, so it's been good. But the book that I just thought was gripping and horrifying in many ways was Empire of Pain, The Secret History of the Saklar Dynasty. It's about the Sackler family which changed the entire business of marketing pharmaceuticals and instigated the opioid crisis that we know today. So just a fascinating read and just shows what power and wealth not necessarily ill-intentioned, what impact that it can have if it kind of spirals out of control.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“One that I've been doing for as long as I can remember, which is both a source of sanity for me and a source of productivity, is that I end each day with creating a list of the three most important things that I need to get done the next day. And as long as I get those three things done, the days of success, and if I get anything else done on top of that, it is all gravy, but it allows me to go to bed and fall asleep as soon as my head hits the pillow and allows me to be very focused when I wake up in the morning around what's most important to get done that day.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm really working hard on my golf game. I am not a great golfer, but I am getting better. One of those sports where I feel like with the right amount of time I can continue to get better, which is always a nice feeling when you know that there's some upside in the time that you invest. And so I'm spending a little time there.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“And with the size vehicle that we have now, which is on the order of 55 million, that really means that it's really hard to do anything above 100 million in fund size. But we have already been introduced to managers who are raising more than that, and we think it would be a smart economic decision to be able to support some of those folks in a larger vehicle will allow us to take advantage of some of those opportunities as well.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“We believe that we are going to accept additional capital. We really wanted to walk before we run, but we've been overwhelmed by interest from prospective GPs since we started and announced Green Door. And so we think it makes sense to raise a little bit more capital. So we will increase the capital base here over the next few quarters, which gives us the opportunity to involve even more LPs who share our vision and mission and who also believe that there is a strong economic rationale for investing in these groups in this way. And we're excited to have those conversations and have more capital to deploy in support of some of these GPs. The other thing that's going to allow us to do is right now we're a little bit limited in terms of the fund sizes that we can support. We try to represent 10% of the funds that we back.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is a relationship that will extend well beyond the formal screen door relationship. Because again, in our careers, both on the operating side and on the venture capital side, those informal mentorships have been as valuable as any formal mentorship or formal boss employee relationships as any other. And so we really want to make sure that we're getting to know these GPs on a personal level and that our coalition of GPs have an ongoing relationship with these folks over the course of time.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think if we're as successful as we want to be, we will have additional screen door vehicles. So we hope to be a consistent source of capital to these GPs over some period of time. And most importantly, maybe we really want to be a liaison between these GPs and future sources of capital in the form of traditional institutional investors. So if we're successful, not only will they be raising additional capital from us, but they'll have graduated, so to speak, and develop enough of a track record in history and scale where they can attract capital from the James Irvine Institution in Harvard and Yale and Princeton and folks like that who are long-term investors in the asset class and the type of people that we've been fortunate to raise capital from and who we sought out when we were raising our first fund. The second thing, again, is we want to provide this kind of apprenticeship-like experience, and our hope is that”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hopefully, too distinct from the types of things you look for, with the exception of the track record. But we're really spending a lot of time getting to know the people because it's going to be very people-oriented given the lack of a traditional track record.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Backgrounds and experiences into that skill set. The second thing that we're trying to evaluate is, all right, it's one thing to know that you want to be a venture capitalist. It's another thing to answer the question, why does a world think you need you to be a venture capitalist? What's your reason for being? How are you going to distinguish yourself in the market? And so we really want a firm articulation of why. Why is our firm going to be chosen for cap tables in a market where capital is abundant? And then probably the last high-level criteria is we're really looking for people who are interested in building firms and not just building a fund. We're really thinking about what are the questions that we want to ask? What can they articulate around what the shape of their team organization funds firm will take over the course of time and are the intention about all of that? So those are some of the things that we're looking for. And I'm sure not.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“How are they going to source opportunities? Do they have a demonstrated network or work experience or volunteer experience or whatever might be that leads them to run into talent? Have they demonstrated the ability to look at the deals or opportunities that are sourced by them and pick intelligently? So whether it's having voted with their feet and worked at certain companies, whether it's volunteering their time, whether it's side projects that they're committed to, whatever it may be that suggests that they have a nose for identifying opportunity. And then lastly, for us, because we believe like the job of a venture capitalist is not just writing a check, but supporting companies, what have they done that demonstrates their ability and willingness to help? And again, that could manifest itself in many different forms. And so we're really trying to take what we think are the core skills of venture capital and identify ways of translating non-traditional”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so first and foremost is, again, historically in our industry, everything, especially fundraising, is based on referrals. And we want to run as open a process as possible because we realize that a lot of the GPs that we do end up supporting will not be well connected in the valley and amongst other venture capitalists and LPs. And so anybody can go to ScreenDorePartners.com and the contact page there and effectively apply for consideration for ScreenDoor. So that's really important to us that we run as open a process as possible. The second thing is we know, again, by virtue of the types of venture capitalists we are likely to back that most people are not going to have a traditional investing track record, probably not even an angel investing track record. And so what we're really looking for is a demonstration of the skills that most venture capitalists need to be successful.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“At a very high level, there's more that we're doing, but in the same way we kind of have an operating model for homebrew, we've created an operating model for ScreenDoor that will hopefully help us have the same kind of impact on these GPs as we try to have on founders.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of work that go into being a VC in today's world. And that curriculum will be delivered by the GPNLP coalition over the course of time. The second thing we're doing is that every GP we support is getting a pair of coalition GPs or mentor GPs from the group who are kind of their point people or their day-to-day context for any and all questions, issues related to the work that they're doing. And so we want to have kind of a formal engagement through the curriculum and a more ad hoc informal engagement via the GP mentors so that everyone feels like they're being supported and have resources by which to get the hair on fire problems that they're facing addressed readily. And the entire JP coalition will work across the portfolio, but there'll be point people who are the nodes in the network who are responsible for particular GPN relationships where we're backing those GPs. And so that's”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in addition to capital, which obviously is important in helping put people into business, the other thing that all these GPs have not been able to benefit from for the most part is the ability to apprentice in the industry. And we really do believe that venture capital is an apprenticeship business. There's no better way of learning the business than working with people who've been doing it for a long period of time. And so we're trying to approximate that via our coalition of GPs and LPs. And that's taking two specific forms. One is a structured curriculum that we want to offer over the course of two years to every GP that we support that covers all the issues that one might face as a portfolio in fund manager, everything from fundraising to portfolio construction to building the fund, the firm and hiring, you name it, all the different categories.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Underrepresented Czech riders in the industry. And like I said earlier, there are lots of efforts underway to get them hired into traditional firms and to increase the numbers that way. And that's a good way of doing things, but we just think that's slower and we'll take more time because the number of seats is small, how long it takes to prove yourself within those platforms is a really long time. And we think that we can put a large number of people into business and help them be successful at a scale that will hopefully be replicated by other institutions like ours over the course of time.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ultimately, the screen door were trying to find investors who are going to be successful without us, because they're going to be fantastic investors regardless, but where we can accelerate or catalyze their fundraising, where we can help them become even better investors, and help them build a track record. Because if we're successful, we will be a consistent source of capital for them, but they will also benefit from the apprenticeship, so to speak, that has been unavailable to them in the traditional venture capital industry so that they can raise capital down the road from institutions who share our vision and goals, the LPs who are investors in Screen Door and LPs outside of Screen Door who need structurally to see something a little bit different in order to write the check directly. So for us, whether these GPs go on to raise subsequent funds or join other funds is probably not a big distinction, we just want more successful.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“More likely to uncover opportunity that the traditional VC industry overlooks or doesn't understand. And so that, combined with the historical data around diverse teams and diverse organizations and the returns that they generate relative to less diverse teams and organizations, both of those things suggest to us this is an incredible way to generate economic returns that are as good if not better than what the industry has historically been able to generate by supporting venture capitalists. And so that's a belief that we have because of the data, that's a belief that we have from our work on the ground. And that's a belief that the other GPs who work with us as underrepresented GPs are living day to day. So I think we feel very strongly that there's opportunity to be uncovered and discovered that the industry historically just ignored.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things that we've seen while we've been building homebrew over the course of the last nine years is that startup activity is blossoming everywhere. And while it's been true that Silicon Valley has been kind of the epicenter and will continue to be for some period of time, it's also true that there has demonstrated success in markets all across the United States and all over the world now, especially in the technology industry. What's also true is that venture capitalists, either by design or because of unconscious bias, tend to back founders and back ideas that they relate to or that they can readily understand. And so our view is while startup activity is becoming more diversified, capital is not yet. And so we believe that there's an opportunity to generate incredible returns because these underrepresented GPs are”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's a bunch of other things in there. I want to drill down on these first, let's go back to returns. So you mentioned this is not concessionary capital, and this is a really important point. Obviously, you can have concessionary capital striving for the same type of outcomes. There's been a lot of capital that has tried to do that over time. But in my experience, it's generally not been as successful as you'd like it to be. And I know as an organization that's chosen to be an anti-racist organization, our team had a choice of whether to create concessionary capital in the endowment or do we try and do things that are actually return enhancing for the endowment. Opted for the latter, but we view that as a much harder challenge. But if done right with much better reward.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“If we'd like, and also we don't have to be registered with the SEC. So those two things were really important in terms of speed and flexibility. And again, coming from operating in product backgrounds, we thought long and hard about what allows us to move as quickly as possible to get this experiment off the ground and what allows us to have impact at scale. And so both of those things led us to this investment club structure.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“with them and a partnership with ten GPs create a fund to fund like vehicle, but not a fund to fund structurally. What we did is we created what's called an investment club. And the reason that we did that was one, we wanted to create a structure that made it easy for traditional LPs to invest. And as you know, funda funds have a double carry, double fee issue that makes it difficult for some institutions and some LPs to invest. And so the investment club allowed us to do two things. One, it allows us structurally to create a no carry, no fee vehicle. So all of us GPs who are involved are actually LPs in the fund, and that is our carried interest. There's no other carried interest or GP interest. And two, by virtue of having an investment club structure instead of a fund structure, we can continually add capital to our base.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our goal is pretty simple. We want to generate outsized returns for our limited partners by helping to put underrepresented check riders into business with capital and council. It's really to recreate that virtuous cycle that Hunter and I have benefited from for an entire segment of the population that hasn't been able to benefit from it in the same way we have. And so this is really important, I think, and something that's clear to us and clear to our LP is that this is not concessionary capital. We are trying to generate outstanding economic returns because that's what's going to create that generational wealth and that advice and that counsel that feeds back into the ecosystem. So structurally what that's meant is that like you, we were gratified by the incredible interest and commitment from the institutions that we approached. And we were able to, in partnership.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“This was the first time in my career where you kind of had us at Hello during our first conversation on this. I think it was literally a phone call and we hung up and we were like, wow, this is something we should be a part of. And from that point on, it was more about figuring out how and understanding what you were doing and how to be a part of it. There was so much unknown in our decision was more based on our belief in the team at homebrew and your commitment and desire to be successful. So with that, can you just talk about what is the objective specifically for Screen Door and tell us about its structure?”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was really building LP relationships with folks like you and being on the ground with all these people who are trying to raise funds and write checks and knowing intimately what it means to be successful in that segment of the market to put together screen door alongside a group of GPs who are underrepresented themselves and a group of LPs who share our belief that there's an opportunity to create this new virtuous cycle.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“That virtuous cycle. And so, as we thought about that, we asked the question, like, what would be the best way of trying to replicate that virtuous cycle? And to be able to do it quickly and at scale. And our view was that if we could put underrepresented check writers, venture capitalists into business, that was going to be the way to kickstart that virtuous cycle because it's empirically true that underrepresented venture capitalists are more likely to fund underrepresented founders who are more likely to hire underrepresented employees. And so that's the thesis behind our theory of change behind Screen Door and why we felt like we had an opportunity to leverage the work that we had done via homebrew.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“But we knew we couldn't do that via homebrew because we didn't have plans to grow our partnership or grow our assets under management in a way that was going to allow us to add to our team. At the same time, we saw lots of noble efforts for helping people enter the venture capital industry in the technology industries. But coming from product backgrounds, we always think about how do we do things faster and at more scale. And so we sat down to think about the history of our industries, VC and technology. And we saw that there's been this virtuous cycle that the entire set of industries have benefited from. Venture capitalist fund founders, founders and hiring employees. Some of those companies go on to be successful in that capital and that council feeds back into the ecosystem.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Starts almost with the founding of homebrew, honestly, the reason that we're called homebrew, in addition to some other things, is really that Hunter and I believe that all of us in the technology and venture capital industries are standing on the shoulders of giants and on those that came before us. And so the name homebrew is a throwback or a nod to the old homebrew computer club of the 70s that start in the valley. It's where Steve Jobs and Steve Wozniak met and started Apple Computer, along with a number of other reasons. That's why we decided to call the firm homebrew. And for us, it's clear we benefited from these relationships, these people that have come before us. But it's also very clear, and there's no debate, that there are entire segments of the population who haven't benefited or been part of the ecosystem in the same way. There's no debate around lack of representation in our industry for entire groups of the population. And we felt like homebrew had matured to a point where we wanted to do something about that.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“And a reason for why they're attacking that market opportunity. And then lastly is the product. And like we said, we expect the product's going to change. So what we really like to hear articulated is a product vision that starts with a very narrow near-term focus. One problem solved really well for one type of customer, but a broad long-term vision, a path for how you move from that wedge to something that takes larger shape over the course of time. And so that's really the three boxes we're trying to check. And for us, it's an and, it's not an or.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Relentlessness, because startups are nothing if a series of setbacks. And so you've got to be able to overcome those setbacks and keep your eye on the prize. And so we spend a lot of time with founders understanding them as people as much as understanding their idea. But the second part of that is the idea or the market opportunity that they're going after. And for us, it's most exciting when it's a market opportunity that can't be measured in the billions of dollars being spent today. What we're really trying to do is identify a market opportunity where there is an acute pain being felt by a large number of people or companies where the addressing of that pain can lead to the extracting of an economic rent that is meaningful. So we always talk about markets that are large, acute, and valuable. And that's really what we're trying to understand is, is there a market that meets those criteria? Do the founders have a particular point of view?”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“One that has success. So we really emphasize the team and the market opportunity. And when it comes to the team, really what we're thinking about is the why behind the founding team and why they've decided to pursue this particular opportunity. What makes them uniquely suited to solve this problem that they've identified and what's their vision for how they're going to do that in a way that is 10x better than it's ever been done before? So we're looking for people who are mission driven in that way, who have an insatiable curiosity and are interested in learning really quickly, have a firm set of hypotheses, but flexibility enough to react to data and change their hypotheses who are storytellers and can attract capital employees, partners, and customers via their ability to articulate what it is that they're doing and who have a relationship.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of investors debate whether it's the jockey or the horse. In our view, both is the answer, right? It's an and not an or. So we really think of ourselves as investors who value team team market and team 2x the market opportunity. And the third leg of the stool is product, but coming from product backgrounds, I think we're willing to take product risk. And we understand that what the initial product is is unlikely to be the product.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“The reason we started homebrew is because we wanted to work with early stage founders. And so for us, success is defined by the work we do with those founders on a day-to-day basis. If we can look back and say that we helped founders create companies that have both value and merit and who are able to look at our work with them and point to specific moments in time or specific things we did where we created value for them, that's success for us. If we do that, then the economic value will be there and we'll have generated great returns for our investors and for ourselves, but ultimately we want to be measured by what founders will say about their experience working with us.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we've really got to avoid trying to impose our point of view and our decisions on them. And so those are a couple of things coming from the operating side that I think all investors who choose the investing path from operating need to be aware of. And then the other thing is maybe the most challenging as an investor generally is just the long feedback cycles. As a product person on the operating side, we could launch something and have data on it the next day and iterate and improve really quickly. And as an investor, you really have to be committed to your strategy because the data takes a long time to get back. And the early data is mostly negative because your failures come before your successes. So it really takes a stick to be challenging for people who come from the operating side. And so those are a few of the things that come to mind with that question.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“and see what you might do with that opportunity as opposed to what the founder really has in mind. And so that's a real danger is thinking that you're in the founder seat in some ways or are going to be able to nudge them in a direction that you might feel better about than where they're starting. So that's one is just being aware that it really is the founder's company in their vision that you're backing and not what you imagine the vision might be. The second is as you work with founders after an investment, operators can have a tendency to grip too hard to say things like, well, this is how I would do it, which is the wrong approach for a couple of reasons. One is as you get further away from operating your experiences and kind of how you did things is less and less relevant to the founders that you work with. And two, our job as investors is not to dictate to founders. It's to be a sounding board and to provide counsel, but it's their company and they need to make the decisions and own those decisions.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Transition from operating to investing was something we talked about for quite a bit of time before going down this path. I had the benefit of having worked at a number of venture firms before and had been able to apprentice in the industry in a way that I think gave me visibility into how I would do things and how I might do things differently if I was building my own firm. And then Hunter, having worked strictly on the operating side, had done quite a bit of angel investing, but recognized that being a portfolio manager is different than being an investor. We talked about that explicitly as we were getting the fund off the ground. So the biggest changes in coming from the operating side, you have a tendency to do a couple of things as an investor. One is you tend to take the ideas that are in your head and kind of overlay them on the ideas of a founder. And so oftentimes you might be talking to a founder who's pitching their business”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Given that both of you came from a technologist background, can you talk about the evolution as a venture capitalist? What was it like early on as a venture capitalist when you were viewed more as a technologist? And maybe how has that shifted over time? One of our theses around new firms is that technologists are operators that are able to make the transition to being an effective investor, our view that they're really extraordinary and quite special. We believe you and Hunter have done that, but I think it's interesting to hear how that journey went and how it's evolved over time.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the focus on the seed stage. Seed stage companies have a very unique set of challenges relative to companies that are further along, and we believe that our mindset, our advice, our network are particularly well suited to that stage of company building.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Nothing more important than the foundry community that will speak on our behalf, the folks that we've worked with over the course of the last nine years. So I think reputation is really important. And that reputation is built upon the model that we've executed, which is really being that partner to a small number of early stage companies. When you are sitting alongside them, involved in the key day-to-day and strategic problem solving, that is a level of time commitment, reputation commitment, sweat commitment that extends well beyond the capital commitment. And that's a rare thing to get from investors even in today's market. Like we said, capital is abundantly available, but commitment and counsel we think is still a relatively scarce commodity. And so that's the thing I think that differentiates us. And also hand in hand with that willingness to work hard.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great. And I know you've touched on this a bit already. But what makes HomeVer distinctive to its entrepreneurs, given the plethora of capital in the industry? And there's no shortage of opportunities of capital. So it is highly competitive. So what is really distinctive about homebrew and appealing to entrepreneurs?”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“ownership hands-on model thesis driven and we're big believers that your fund size needs to reflect your strategy if you set your fund size and then try to create a strategy around it we think that's a recipe for failure and so we've always tried to make sure we have a well-defined strategy a strategy defined in pen so to speak and tactics defined in pencil and fun size is one of those things that is a tactic that should reflect the strategy and so that's how we've adjusted over the course of time if we were starting homebrew from scratch today it would probably look a little bit different than it does because the market has changed but we have the benefit of nine years of history and reputation in track record that allows us to compete effectively with the strategy that we have”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Market in venture capital is unlike anything that's been seen, certainly in recent history. I think in all history, and even in the last three years, it's completely changed relative to what it was. And the biggest change, of course, is that financing rounds have gotten larger and valuations have gotten higher. And as a result, it's meant for us, and I think for a lot of investors, that if you want to obtain the same ownership that you have historically and you want to have the same upside that you aim for in terms of the returns that you want to generate, your fund size needs to get larger to reflect that. And so we've gotten modestly larger over the course of time. Our first fund was $35 million. Our second fund was $65 million, and our third fund is $90 million. So we think that's kept up with inflation, but it doesn't change our strategy at all. It's still a similarly concentrated.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thank you. You cover my next question around fund size and how that links in. But given that venture is not stagnant and that it's dynamic, and when you think about your product market fit, now how that has evolved over time, how does that play out into fund size?”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“In place, the right people and processes to scale for the very long term, and so a very different set of conversations than we're having on a week-to-week basis, but equally important as we think of moving the company in the right direction. And so, again, that hands-on operating model wouldn't be possible if we had a very large portfolio. It wouldn't be economically viable if we didn't have real ownership and concentration in terms of the companies that we do invest in. And we don't think it would be as effective if we had a large team that didn't have visibility across the portfolio and understand the problems that each of these companies faced. And so that's how it all ties together, but all anchored in that initial strategy that we described.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hopefully, help them avoid some common pitfalls and challenges that we see startups in general face that they may not be thinking about. And so that tactical in the weeds operational conversation goes a long way towards helping founders as they're building their companies. And then the second formal interaction with them is the board meeting. We're big advocates for creating a board at the seed stage. We really use the board meeting as a working session to focus on the one or two strategic topics that are most important at that moment in time. And that is really based on this idea that you've got to take a step back from the day-to-day occasion to really make sure you're aligned against the North Star of the company. So those conversations focus on things like, do we know what the key risks in the business are and do we know how we plan to mitigate them? Do we know what milestones we need to achieve in order to raise the next round of capital or whatever the next economic milestone might be?”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you're familiar with agile development, we do the equivalent of a weekly or bi weekly stand up with every founding team. In that conversation, they walk us through what they've been working on, what's coming up, and lastly and most importantly, where they're stuck. And from that last part of the conversation, we ask them to sign us homework every week. And we say no job's too big or too small, anything that's a hair on fire problem for you is something that we should be focused on, and then we get to work. And the beauty of that is we think it creates a founder investor relationship that is truly based in trust and transparency. And that's a rare thing, I think, to have between investors and founders. But because we're in the weeds together, we really develop that trust and transparency in a powerful way. The other thing it does is because we know what the founders are focused on, we also by definition know what they're not focused on.”
2021-11-04 · Capital Allocators · Satya Patel – Homebrew (Manager Meetings, EP.18) · IDENTIFIED FROM THE TRANSCRIPT · source