Martín Escobari - Inside General Atlantic - [Invest Like the Best, EP.449]

0:03 Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus Review, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus Review along with all of our podcasts at Join Colossus.com Patrick O'Shaughnessy is the CEO of Positive Sun.

0:31 All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive some. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. My guest today is Martine Escabari.

0:59 Martin is co president and head of global growth equity at General Atlantic. We talk about General Atlantic's unique founding story and how its long term structure, including permanent capital, a single P L and partnership culture, allows it to invest differently than other growth equity firms. We discussed the firm's global perspective and particularly why the premium on US equities is creating compelling opportunities across international and emerging markets. Martine has spent his career investing through bubbles, market cycles, and technological shifts. He shares his investing framework for balancing intuition with analysis, his approach to spearfishing for once in a decade opportunities, and why he believes this is the best window for growth equity since two thousand nine. Martine also reflects on his incredible personal story.

1:39 He talks about growing up in turbulent Bolivia and the role of curiosity and optimism in sustaining a long investing career. Martine's infectious energy and genuine love for investing made this conversation both insightful and a lot of fun. Please enjoy my great conversation with Martin Escobari. Alex, who introduced us from 3G, told me this incredible story about you getting a job after him telling you no. And what you did to get it. Can you tell that story with it? I'd love when you told it.

2:07 Coming out of business school. I need to say where to live. 'Cause I'm from Bolivia. I believe it's too small. I was Finishing eight years in the US.

2:16 US felt too competitive. So I had to think somewhere else that had to be. Big, not too competitive. And have beautiful people because I was single at the time. So that was the criteria. So Brazil. Brazil. So I look at the most exciting jobs in Brazil.

2:34 And at the time. The three G founders had a private equity shop, which at the time Was the largest private equity shop. In the emerging markets. This is nineteen ninety seven.

2:45 And One of the partners has recently graduated from the same school was coming to town One person. So I was like this destiny.

2:57 This is for me. So I reached out to Alex Barry, who is now running three G and it's become a great friend. And I introduce myself as Bolivia, super smart. I really want to make it in Brazil. You're doing a dinner. I'd love to come by if you'll have me.

3:11 And Alex is super smart and tough. Is it Martine We're only hiring one person and it's not gonna be a guy from Bolivia that doesn't speak Portuguese. So no, you can't come to my dinner.

3:24 I was like bummer. So that night. I show up to the dinner. Introduce myself as Martine. And I say, Don't worry, I'm not even gonna eat. I just wanna listen to you because I find you interesting.

3:34 And I think he was taken back. By my boldness. They did interview me. And They did hire me, but they made one condition.

3:43 I had to take some Portuguese lessons before I showed up three months later. And I said I'm happy to do it as long as you pay for them. Yeah. And that's how I met my wife. She's your teacher. She was my teacher. I mean she was technically a teacher. Th the way it really worked is I call my Brazilian friends.

3:58 And I said, Can you find a very smart, very attractive Brazilian PhD master somewhere in the Boston area? And I have someone that will pay her to talk to me. So I've still married twenty five years later. What an amazing origin story. What have you learned from Alex? And from His team.

4:18 The uh founders of three G the original three founders are incredible people whom I worked with in the beginning of my career. I won't sort a book. This is Two thousand and three.

4:30 The company I have co founded was going through trouble. I do some time off. And I wanted to answer the question of how does one make money? In countries with so much turbulence. Brazil in the nineties.

4:42 And in the first decade of the century. Was incrediblant. Crisis after crisis after crisis. Very hard to make to create wealth. to build companies with sort of it's like navigating through the fog.

4:55 You move very slowly and there's things that can come at you from different ways. I partner with this professor, this mentor of mine from Harvard College. He was teaching at Harvard Business School Don't Soul. And what we did was uh paired company analysis. Look at ten

5:11 Very successful companies. In Brazil that had made Tremendous wealth creation in the crazy nineties. But Look at their actions in contrast to ten

5:21 Much less successful companies during the same period of time. And the test was these were pairs of companies that looked similar in size and value at the beginning of the nineties. But by the end of the nineties, one was at least five X. more valuable than the other. So that was the control group and that's how we studied it. When one of the companies is the beer company.

5:39 Obrahma. Giorgio Paolo Lemon and Marcel Telles and Betuscopia had bought. In nineteen eighty nine. that was competing against the other bean company called Antarctica that was owned by the Germans And a foundation.

5:51 Who in nineteen eighty nine was a better more profitable, more valuable company. But by a decade later when these two Murz. The Brahma shareholders kept ninety five percent of the equity value.

6:03 So it was ten X. By the creation relative to the comparison twin. How do they do it? They're great spear fishermen.

6:11 You don't chase the fish. You Wait. You decide where you're gonna anchor. You drop down

6:19 with no equipment other than the spear. And you hold your breath. For one minute. For two minutes. You let little fish.

6:29 Go by, because you're not there to hunt Little fish. You're waiting for the big fish. And then when you're almost running out of oxygen, you got two or three seconds To get the big fish and then go up. As you're both.

6:40 feeling the sort of lack of oxygen, he feeling a spear through his chest. But it's an exercise of waiting. Why do they say these are great spear fishermen? The step number one is spear fishing is deciding where you're gonna anchor. In looking to buy their beer company?

6:55 They started to think about it five years before. They were owners of the number one investment bank in Brazil, Banco Garantía. They were making tons of money out of volatility and inflation because in high inflation periods you can make a lot of money if you Are smart with math and finance. But they knew inflation would end one day.

7:14 And they said, We want to buy a company That will benefit. Promote low inflation. Rise in consumption. Beer is one such company, but they wait it.

7:24 Five years. For This cabri do come for sale. And it came for sale two weeks before an election. When the Swiss owners got scared that a socialist

7:34 Who's gonna become president? Lula first time in government and he was uh from the workers' party. And they called them and they says, Can you do a deal in a week? We'd like to get it. out of town.

7:45 We don't want to take the risk of a socialist president. And Georgia. I've been waiting for that big fish. Ever five years. Close the deal. In a week.

7:56 And then he waited ten years. So Antarctica was in trouble. When a big devaluation. And close the deal in three months. And then he waited another seven years to do a deal with Interbrug.

8:09 And then the biggest of all deals. Waited a following decade to do a deal with an Houser Bush. And basically Over this period. Eighty million dollars.

8:18 Initial investment In Brahma. Became if Sixty billion dollar Plus

8:25 Excluding dividends. But they're great. Fishermen. And they wait for the big fish. And as a concept.

8:33 That is something I've learned from them. Which is every four or five years. There's a once in a generation opportunity. That you have to be ready. and be willing to move quickly to capture.

8:46 And if you do, you can create this proportionate value for your company, for your investors, for your employees. Do you have a Story of your own that is the closest to a great spearfishing outing? As an entrepreneur. I wasn't an entrepreneur.

9:00 I was set out by these three guys to go and find great entrepreneurial companies and invest five hundred million dollars in twenty companies. You got eighteen months go. In month three of them. That was your mission. That was my mission that that mission number one out of business school. Now that I was speaking Portuguese. I could. I good going. And it by month.

9:19 Three. I remember talking to a buddy of mine because we were benchmarking different models in Body of mine had taken a job. In the US. company that were public in the dot com era.

9:30 Clearly a bubble. We invalue that. Twenty times revenue, which seems quaint by today's standards, by nineteen ninety eight standards. And I said Dennis

9:40 It's a bubble. How does it feel to be in a bubble? And he said to me, grab my hand, I said, Martine It feels better than being outside the bubble. And I was like, He's absolutely right. I have to go into this bubble. I'm on the wrong side of the table.

9:56 So very quickly. Left the fund and within I think three months we had raised eighty million dollars to launch Subarina.com. Which was the e commerce Amazon.com merged with Alibaba.

10:11 And that Happened very, very quickly. A second time. After we sold my business. During the GFC.

10:18 I was working for another fund. Briefly. And looking to buy the sort of a fixed income exchange in Brazil, it's a dominant platform, eighty percent even down margin business. Lot of competition, and then all of a sudden the GF C happened. And everyone dropped up.

10:33 Everyone. And I was like No. Double down. And we were able to buy a market dominant

10:39 high margin business that's six times deep at that. And we did it in two months. And people are like, Well, what do you mean you're doing something with the GFC? I said. If we're not willing to buy a dominant platform at six times Ibita

10:53 We should shut down. The world means the world is ending and we should the world's not ending. A dominant platform will always be both more than six times. He would die. And it's been you know, the every every three or four years there's one such

11:06 unique distortion that you have to move very quickly. That's perhaps one of the learnings of being an entrepreneur in the dot com. Like I'm a rare investor that has been an operator. It's not just I had been an operator. What

11:18 The dot com taught me. And I just realized this recently. You can do seven years of work in one year. Say more about What you mean?

11:26 Elon Musk says, you know, do your ten year plan and try to get it done in one year. Yeah. You're like he's crazy. Look what he's built. In the dark com it felt like the world was On steroids.

11:37 Insu Marina not only have we raised eighty million dollars within the first three months Within one year I was in charge of international. We opened submarino in six countries. With warehouses and customers and registrations and teams.

11:50 It was done in one year. If you had told me How long it would take a normal person to do that? I would say three to four years going fast. And we were like, No, we have to do it.

12:00 First mover will be incredibly valuable. We did it in one year. So it's this ability to Move very very fast to capture Opportunities which are fleeting. Which seem humanly

12:12 Impossible. Actually not. This seems like a moment. Of that as happening again, maybe on mega steroids. Think of a company like Cognition as a recent example that I know well Where the pace of growth of the business

12:24 Is this sort of hard to believe that it's possible? Serving developers. maybe previously a company like Stripe, which is one of the great companies in the US in the technology world. Is a certain size. It's grown that size over fifteen years. And these things are growing at a pace that is sort of hard to wrap one's head around.

12:40 And so I'm curious how you think about that. in the current moment right now. But also what lessons you learned about what it takes to go to put a ten year plan into one year. What is different about the behavior in that compressed one year period that Makes that possible.

12:55 So this is like my fourth or fifth bubble. And all bubbles are born out of a truly transformative Technology. Yeah. In all the previous bubbles. The promise was spectacular.

13:07 The short term was disappointing and the long term Delivered more than expected. But in that process a lot of fortunes were made and destroyed. So I think as a firm that John Fleck has been around for forty five years.

13:21 We try to make different mistakes. In each bubble. And I'm sure we're getting around this time, yeah. Our approach this time different from the internet. has been to be incredibly aggressive at deploying AI in the portfolio. The promise of AI is clear to everyone.

13:38 Let's see what's working in the real world. And that's Share brick practices and we gotta Incredible scale. Yeah, with over two hundred portfolio companies. We have a hundred people in our portfolio support.

13:49 This year we'll do five hundred projects with the portfolio. A third of them are AI projects. So We're seeing what worse in the front lines. And as soon

14:00 as we see a use case with real ROI. And real revenue to the provider of the service. And you can sort of model what the economics and the cost to serve and what the long term profitability maybe is of this exciting new market. Then we pounce. The first one where we felt that has happened is code generation.

14:21 Yeah. Right now, the last twelve months. It's crazy. I mean, based on public information, anthropic revenues and culture we're from two hundred million to four billion in twelve months. In B2B, that kind of growth has not happened.

14:35 Ever. And it's so exciting and it's working in real life and programmers are happy. And then all of a sudden you get this new reality where human programmers are hyper productive and they're working alongside a gentic programmers Who have no moral North Star and do not sleep. And how do you get them to work together to a common output which is super sensitive to you, the client who's running on the software?

14:58 Super exciting. That's one area. Marketing optimization. Obviously. It's machine learning on steroids. We're investors in lift off, which very much on this. We're investors in a software company called Insider. That does enterprise marketing optimization. Data.

15:13 companies turbocharge with AI. It's super exciting. It's super risky. We're probably gonna look back and say We weren't bold enough in going for the killer app soon enough.

15:26 But we've been bold enough before and it didn't pay to go very early. And I think What's Really interesting about GA. We've been around for forty five years. Through

15:36 all these technological cycles and we've been International for thirty years. Been in the in emerging markets for twenty five years. We take on a lot of risk. Mike Macro risk.

15:47 We take on a lot of technology risk. because we are investing across what we call eighteen power alleys that cut across five sectors. Guess what our loss ratio is? Tell me. Four percent.

15:59 On capital or on capital, on capital, capital. When venture and growth equity lost ratios of Twenty to forty percent are common. There's something about the way we deal with risk.

16:10 That allows us to capture what we think are reasonably good returns. Surprisingly. Low risk ratio. And it has to do, I think, with an appetite for risk. We don't take binary risk.

16:21 For us in when we do this sort of the scenario planning of three to One thousand scenarios on One does in mind in one mind like you do when you think of an investment. For us, a worst case scenario, a company grows into the valuation we paid for it.

16:36 And that limits what you do. It limits the timing of where you go into a new industry. You probably leave some money on the table. But you also leave a lot of risk. On the table.

16:47 And that product of reasonable returns with bold risk. It's a great pract. I have ninety five percent of my net worth in that product and I sleep well at night. I have a vastly undiversified portfolio of two assets. GA yeah and treasuries. The forty five years ago, the sort of origin story of GA itself is so interesting. Chuck Feeney's such an interesting character.

17:08 How does his spirit loom? in the business and in your personal consciousness. He's the accidental billionaire. got the idea of duty freeze by looking at naval bases where commerce was free. In the Pacific during the Korea War.

17:25 Starts building these duty free shops. Becomes a bit in herself to leave it on. And he's confronted with the question. What is the purpose of wealth? What do I do with

17:35 And his answer resonated really well with me. The purpose of wealth is to improve the human condition. No. Not tomorrow. No.

17:43 Because present value of Happier life. For more people now. It's very valuable. So he wants to give it all away.

17:51 Forget giving half away. He's like my dream is my last check will bounce. I want to die a poor man and I want to give it all. But before I give it all. I believe

18:02 you can create additional wealth by investing in innovation. By backing great entrepreneurs Globally. And he said, You a GA to the original founding team at GA.

18:14 Go back the world's best entrepreneurs. Be a good partner. And know that all the proceeds of our work. We'll go to great causes. And we've been doing that for forty five years. Backing great

18:25 Innovators. Everywhere. We've invested in over five hundred companies. Over the last forty five years. Half of our investments have been on outside of the United States.

18:35 And we see the power of innovation to create wealth. Global. This is not a privilege just of US. It's not a privilege just of for the European. And this concept of What

18:45 Is the purpose of wealth. It's also meaningful personally, right? I think When I think of the wealth I'm creating and the people that I work with are creating. We're all incredibly thought. of how we allocate our time and wealth to

18:58 Make the world better in the ways that are meaningful to us. And there's no right and wrong. But I find that accumulating wealth is It makes you gloated and slow. using your body and your life as a f channel of, you know, wealth that comes but goes to places that Can be made better, but

19:14 It's a beautiful way to approach life, and specifically if you're in the profession. of allocating other people's wealth into Great innovators. It it all makes Sense at all. fits in internally consistent.

19:27 And that's why we've been around for forty five years. There are not that many, you can count them. In both hands of the number of firms that are Investors in tech and innovation. That I've been around and been successful this long.

19:39 And I think it has to do with Internal and Consistent. Vision mission. And plan.

19:45 that Chuck Hud for GX. That's not a normal origin story for a firm like this. Usually it's really just purely commercial enterprise. Some young investors set off and build a firm. This was different. What else about that founding DNA makes the setup of the firm unique?

20:00 How does his original vision and setup allow you to act differently than others do today. There's this phrase written into our founding documents, which is we're good partners. To each other?

20:11 To our founders and to our clients. The partnership ethos is fundamental. And when you look at Forty five years of references of Five hundred people with

20:21 How many companies thousands of people we've partnered with. And you say, What do you think of G A? They're good partners. They're good guys. The good people. They do what they say they're going to do. They put the company's interests first.

20:32 Sometimes we're accused of being dolphins in a sea of sharks. I'd love to be a dolphin. Who wants to be a shark? Dolphins have much better life. I think that's A big part of the firm's DNA. So I'll give you an example. I I ran our Terror Atlantics.

20:45 Latin America program for The first seven eight years of my career at General Athentic. And in all the due diligence sessions they ask, How did you do it? How did you make money in the one neighborhood that no one makes money?

20:58 I say the reason we do well in Latin America is we don't have a Latin America fund. Because if we had a Latin America, we're gonna buy at the top and sell at the bottom. And you know what? If you want to make money, you do the opposite. Why the ball you say that? And they're like, Who interesting.

21:14 Why don't other people do it? It turns out it's really hard to do. to have a team in Latin America or in China or in India or in South East Asia. Compete. for attention and money through a one global I see.

21:28 It's so hard to do. Unless Your culture is about partnership. The culture. The men's

21:36 Good partnership. And the culture expels. Behavior that's not consistent. With being a good partner. We're structured.

21:44 In a way that first We are the largest investor in our own product. By design. Right now we have about the employees of General Athletic have Eight percent.

21:53 over the funds we administer it's over five billion dollars. Of our own capital. This doesn't fill. Like managing other people's money. These feels my day to day

22:04 I'm managing my family well, first and foremost. And I'm doing it with care. And with intention and purpose. The way we um Fundraise is different also. One of the problems with the industry is the fund the five year fundraising cycle.

22:18 To be able to raise your next fund. You have to deploy it at a certain speed and you need to return capital a certain caters, otherwise you don't get to the next fund. And if there's a winter of risk like we've had for the last three years. You're out of dry powder. Exactly at the time. But Things are on sale.

22:37 So the traditional fundraising five year cycle creates lots of distortions and pain. For our industry. We have an evergreen a hybrid evergreen fundraising cycle. Meaning yes, every two to three years we have a normal fund. So if you want a normal fund, come to GA every two or three years. Perfect.

22:52 But if you're a large institution and are willing to do a standard managed account You can come at any time. And the two structures invest that same portfolio from the here forward. There's never conflict of mind, the legacy. But the advantage of that is There's no fundraising cliffs. We're always fundraising. It's always steady.

23:11 There's no big jumps. There's no pressure to liquidate something to meet some artificial target. Yeah. Makes our life so much easier. And then the third component that I think is distinctive. Which I hated initially.

23:23 Because We have a communist system of compensation. Which is you all get a percent of the Total performance, not your individual performance. I was like, What are you kidding me? Oh I'm a I'm a spear fisherman. I'm a spear fisherman. I I I I got some big fish left in me.

23:38 I mean this communism didn't work in the Soviet Union. Why is that gonna And then I saw how it changed everything. In that the level of collaboration. It's fantastic. And the way you prevent the Soviet Union from happening

23:51 is if you're not pulling your weight, you're not on the boat. So it's a meritocracy in that. community where we all win together and lose together. We all have to be effective and bringing as much into the partners that we're taking away from it. And that's what keeps the health and meritocracy of the system.

24:08 But there isn't a hyper incentive to be hyper productive because if I'm hyper productive I'll make more wins than I give'em. No, it's it's much more about winning as a team. As opposed to Waiting.

24:19 as an individual. That dual structure, which is unusual, not common. What are the negatives or trade offs associated With that. There's two very serious trade offs.

24:30 First of all, it takes forever to explain. And they're like, why do you have to series which one is better, which one is worse? I can get it why this is good for you, but wh how is it good for me? So the the sort of the onboarding Experience is a painful experience. The other downside is fundraising is a perpetual activity. Whereas for a lot of my competitors

24:57 Every five years it's a six month sprint that all they do is fundraise and then they can not fundraise for another four and a half years. Yeah. It's kinda like binge uh dieting. You only do it once every six years and uh For us it's a no brainer. That's a structure that leads to more Productive. Deployment or cap.

25:15 My friend John Kim, who is a very well known fundraiser at General Catalyst. has this simple equation which is that persuasion equals desire minus fear. What have you learned about fundraising given that you've had To do it as a firm.

25:28 On a constant basis. I think most humans go from FOMO to fear. And one of the traps Of our industry. Is you can only fundraise when things are very expensive.

25:39 Because that's when everyone's on the formal. Have you been able to invert that fear to FOMO problem so that you can if you have been able to raise some money in the harder times. What is the key to doing that well? There's always someone in the world that has excess capital. Even in a time of fear.

25:57 And you go there. There's another You'd be surprised. I do this like in Brazil One other

26:03 Of our tricks or tricks or strategies to navigate global complexity. is in every geography we're in. We have the best families, the most entrepreneurial families become investors and we cultivate them not Necessarily for their money, but for their insights.

26:19 around the country and around the entrepreneurs with which we partner. And it takes a really long time. And and a lot of those families are typically entrepreneurial. They're like, No, no, I don't invest in funds. I invest directly because I created a business and I'm so good and I'm good at Carry the big fish. And I'm like I asked him a friend's very simple question. I say Hey, what percent of your net worth do you have in Brazil?

26:37 And they're like Like liquid net worth? No no no no. Toto. Not worth. And they're like, Mm.

26:44 The number's typically between and ninety five percent. So that's been interesting. And I said Close your eyes. Imagine you're not Brazilian.

26:53 You're a citizen of the world. What percent of your wealth would you put in Brazil? And they're like oh Three percent. How about I help you get a little closer to three than the ninety five you're in? So I find that argument to be generally

27:09 Effective. Because it's genuinely in their best interest. And I think people have a natural tendency to over invest In that in which they understand. Those families understand.

27:19 what it is to invest in Brazil. But in doing that They're massively undiversified. And the world has become really, really risky. And there's only one free lunch.

27:29 In finance. Remember that from diversification. Diversification is the only Free lunch. So thinking strategically over how to diversify With whom to diversify.

27:40 But super valuable if you want that free lunch. Speaking of diversification, maybe the most interesting dimension of that today is geographic. We were talking before we hit record about The incredibly wide gulf between

27:53 The pristine US equity assets and basically everywhere else in the world. There was a time when you saw this chart between like the S P five hundred and the Acquor, X US or something. And it was kind of back and forth and back and forth. And then the line has just gone like this for twenty years, where the US has just so completely dominated Everybody else in enterprise value creation or some measure like that.

28:14 How do you interpret that shift? Is it secular? Is it gonna be cyclical and go back towards the international markets. How do you think about that crazy bifurcation. The

28:25 Premium for US exceptionalism. As never. In higher. US public Equities are trading at twenty six times earnings.

28:34 For a four percent Forecast a growth. Which is at the ninety seventh percentile of the last twenty five years. And the US dollar despite a ten percent depreciation this year. Is pretty much

28:46 Two standard deviations. away from the neutral state. So the US has never been This expensive. I love the US. It's still the number one economy. I still have half my assets in the US.

28:57 But not ninety percent of my assets in the US. Not only is it very expensive, but Total debt to GDP is one hundred and twenty five percent of GDP. That is the highest. Of the O C D higher

29:07 than it was after World War Two, when America levered to defeat. The axis of evil. Current plans in place? Within five years we're gonna be at a hundred and forty five percent. Oh GDP?

29:18 Which is higher than Greece And Italy. And the US has not had a recession since two thousand and nine. Are you sure you want to have ninety five percent of your asses in the United States of America? I don't.

29:28 If you look at the rest of the world You can buy Europe at fourteen times earnings, you can buy Brazil at nine times earnings, you can buy Mexico at ten times earnings. We're finding forty, fifty percent growers at twelve times the bid out, fourteen times the bit that As many of them serving dollarized clients. So

29:44 The case for global diversification the Price. for global earnings. The case has never been strongest. The price has never been lower. On a relative basis.

29:55 So I do think then in the next ten years. Those who achieve some level of a diversification will be rewarded. Because I do think there's a little bit of froth in the US market. And the opposite in a lot of the emerging markets. What have you learned on any recent trips to China?

30:10 China's fascinating. I've been going to China for twenty five years. And I've seen the development. It's the fastest Change. In terms of per capita GDP.

30:20 In modern history at any Country. That's Kale. It's an incredibly complex Society.

30:27 Tremendous amount of innovation. And we were lucky. having been early in China as GA, we've been investing there from twenty five years. I am highly optimistic. Mm.

30:37 Tensions have stabilized. And that market conditions are improving and We've been underway China for the last five years. We just did two deals.

30:47 We're gonna pick it up a little bit. There's always binary risk around the geopolitics. There's just so much innovation, there's so much entrepreneurial zeal. The one thing I learned, I actually learned over drinks with a Chinese entrepreneur. So

31:00 I've done business in nineteen countries and I love to connect. on a human level with the entrepreneurs. So much, even at growth stage, so much of the assessment of the company and of the partnership is about chemistry. And

31:13 It was very hard for me. To build chemistry with the Chinese entrepreneurs. One night I'm having a long dinner with lots of good food and alcohol. With an entrepreneur who was an anthropology PhD if University of Arkansas. And I said if someone can explain me

31:29 The Chinese mentality. It's this man. He said to me. Like any oversimplification it's Unfair, but there's a grain of truth. And he said

31:38 What you have to understand. about the entrepreneurs you're dealing with. He said, These generation of entrepreneurs People who were in their thirties and forties. They're all children of the cultural revolution.

31:49 Everything was taken away. From this family. Everything. And they are scarred, and they have something to prove. Because they think something was stolen.

32:00 And they will get it back. So there's a level of drive and ethic. Work ethic. Yeah. probably matches the refugees of World War Two that came to the States and these great businesses of after World War Two.

32:12 Or other people that have had hardship in their life. But this applies to ninety eight percent of the entrepreneurs. They saw it with their parents. S That's the other condition you should

32:22 Take into account. How do your ancestors show up in your life and Nice. We're all

32:30 Products of our traumas. And our adventures and our dreams. This is my worldview. So what are my traumas? Some are personal and some are generational. Generational traumas.

32:40 On my mother's side Jewish family had to flee the Russian Empire through Romania, then Argentina, then Bolivia, so Fleeing, leaving everything behind. From my father's side. Very wealthy.

32:52 Landed oligarchy. Yeah. In nineteen fifty two. There's a revolution. They lose everything.

32:58 And their house and farms get burnt down and they almost die. When my father was a teenage. So on both sides. There's a sense of loss. And uh Scape.

33:10 That is very present and decide to become communists. And doctors. They're both doctors in public hospitals and A little town in Bulldog. Yeah. So that's their trauma, which I relate to the cultural revolution. Yeah, they're religious, not atheist.

33:27 In my personal life, the trauma comes from two places for me. One is I grew up in Bolivia in the eighties. And that was chaos. Bolivia in the eighties Seven presidents in ten years, including four coup d'etat. We had inflation. You got five percent inflation. Yeah. We have thirty-five thousand percent inflation. So tine. Thirty five thousand. Time value of money, I understand. Okay. Like like the only time my mom ever punished me.

33:52 was one time she sent me to exchange her salary For dollars when she got it. And I took a one hour break to visit a friend and it lost half its value in that hour. I was grounded for a year because of that one hour break of the exchange. So anyways. And there was also a lot of violence. Ethnic violence in Bolivia. So it was rough.

34:13 It felt unsafe. It felt turbulent. And then I I have a Genetic disorder. I bruise very easily. Very, very easy.

34:22 So getting out of bed, deciding what activity to do. Is a Risk. Reward trade off. Since the age of five.

34:29 And that is a way of seeing the world that's a very important thing. Like I know how to price risk. I'm like, uh, not worth it. My friends are like, Why are you always thinking of the downside? Well I have my reasons. So I find when trying to understand a person I do it with entrepreneurs Seen what their trauma was? Is super useful.

34:50 Because I find a lot of the most driven People. are driven because of foundational traumas. It doesn't need to be Rack the Richters it doesn't need to be a big disease. It could be What am I

35:01 Fiercest competitors. It was mowing the lawn of His buddies who were with the cute girls. And his entire life he wanted to show them. I don't judge. That's a real drama. Pain is pain. Yeah.

35:16 And if you understand them. And you're traumatized yourself. You can relate and empathize. But you also understand Intensity. That drives in.

35:24 And whether they can manage it. and channel it productively. But if you can It is such a wonderful engine, but Of transformation. And it's curative. It's healing.

35:35 To channel it in a positive way. How did you learn to harness it? Because the other end of the spectrum could be Unharnessed and just chaos. How do you learn to harness or channel it?

35:46 To something productive. Huh. I believe Managing one's emotions productive requires Either therapy.

35:54 Writing a journal or meditating. You should do two of the three. I do. Two of the three. Trying to do the third one was really hard. Meditation. Yes. Yeah. If I asked a bunch of people that knew you and the investments that you've made across your career,

36:11 What is a U investment? Like what are the characteristics where they see that company like Oh, you know He must have done that. How would they describe it? This is a funny story. When I got promoted to chairman of the investment committee. So elevated from a Latin America role out my life.

36:25 Two Head of the investment committee of General Atlantic this. Iconic global Who's lost? So I go to the two founders.

36:32 Steve Denning was a CEO for the first twenty years. Army man, McKinsey man, Stanford NBA, structured. I say Steve. How do I make decisions across so many Geography's and business models.

36:46 What's the framework you think I should apply to to add value to my partners? And he said, You should develop a checklist. That Captures the characteristics of a winning GA deal. Go back and look at our twenty five years or history.

37:00 Our best deals all share a couple of characteristics. I give you the three Ms, but they're probably five Ps as well. Create a checklist. And I was like Yeah. Checklist.

37:10 Same day. I go to the Co founder. Dave Hodson. He's just super glued, but just the smartest guy in the room always. And I asked him the same question.

37:20 And the first thing he says. Avoid the temptation to use a checklist. If it was as simple as a checklist, we wouldn't get paid millions of dollars to do what we do. And I was Check the notches. Okay. So whenever there's a paradox, there's an elegant Unparadoxing of the paradox. So

37:35 Danny Callum and think you fast, think you slow. Checklist manifesto. Built on work you did for the Israeli defense forces to create the checklist for the elite agents. Turns out. The checklist work, but in applying the idea of checklist There were these super

37:50 Interviewers. That got even better results. Consistently. than just the average interviewer. So there was something beyond the checklist.

37:59 That was the city certificate. And there's one interview of the super interviewer where she says I do the checklist because I have to But after I do the appraisal. I close it.

38:10 And I close my eyes. And see how I feel. And I go with my gut. And she Has perfect scores.

38:17 So The framework I use for what's the perfect my teen or GA deal. Is the combination of a checklist with my gut. Which I call the educated intuition. What's in the checklist of things we like?

38:29 Huge Tams. business models. That create economic value. And have moat. Teams with the right go forward capabilities.

38:38 situations where there's inorganic growth to get and there's tremendous amount of strategic value. meaning someone will overpay to have this capability if we are successful. So those are the things that the checklist of the Me personally In the deals I've led

38:52 They have to make the world better. I am so proud. that I invested in the number one investing platform in Brazil. when there were only eighty thousand people that owned stocks in Brazil. And now ten million people.

39:03 What's it called? XP It's publicly traded, ten billion dollar market cap. I invested when there were nothing. I am so proud. That I went against the Every convention.

39:13 And invested on an EdTech company. Ed tech was A dark alley. We have power alleys. There are some places we don't touch. And I was like, No, no, no, this is different. This is different. This little company in the northeast of Brazil which was creating K through twelve learning systems.

39:27 Instead of using textbooks, you package everything in a sort of Hybrid notebook with visual. Went from Eighty thousand students to eight million. Eight million kids every day today. Use this platform. And it's

39:40 World class. It's really good content. And it's an amazing entrepreneur, son of a teacher. And we made money. We have a platform that ninety seven percent of financial institutions use for

39:53 Digital onboarding. World capital of online fraud. And this is the one company that catches it? And I'm so proud that I started mentoring this kid when his company was nothing. And I did it through Endeavour and it took me eight years before I had like

40:07 became invested before J and then we invest it and now they're dominant and If it makes the world better, I see it's beyond money. It's energy. If the checklist is mine. And the instinct is gut. Have you met a great investor who's mostly heart?

40:23 No. I think Heart is super important. If you want to be a leader of a large organization. Because you have to move the hearts of hundreds, thousands of people to roll in the same direction with purpose

40:34 And with effectiveness. And that is crucial. And the heart is so powerful. It overrides God and brain. And to do it at scale. You see these people that are

40:43 Super good leaders. The energy is Captivating and they are wizards of the trade. It's really hard to do all three. And part of being a good investor.

40:54 is to not fall in love. Because at the end of the day you have a fiduciary duty. To produce returns. And you have to make some tough calls. Love is a treacherous, though.

41:04 Funny story. So the one time that I didn't follow the checklist. Was for love. So obviously I had a checklist for the woman I'm going to marry. And when I met Daniela, my Portuguese teacher, she didn't score very high on the checklists. Where was she deficient? I won't say. But there's things that are absolutely irrelevant to the task at hand. I had the wrong framework. And she was perfect in every way, and she's been perfect in every way.

41:29 So in matters the heart. Forget the checklist. But I don't think the three of them come together in the investment profession. You mentioned the two founders. What about Bill Ford? What have you learned from him? So much.

41:41 I've worked with Bill for fifteen years. Actually pitched. Bill my startup. This is nineteen ninety eight, came in from New York. And I had heard a lot about general authentic and how they're different and they think long term and they're good partners and Chuck Fini hard the meaning. We give them the meaning.

41:57 Bill and I really hit it off. I made the pitch. And he's like, uh, we're not ready for Brazil. I'm really sorry. I was heartbroken because I really wanted Jay. And Bill was an amazing guy.

42:09 Ten years later. After I sold my business was working at another fund. He called me and it's like, Remember me. I was like, Yeah, I remember you. He's like, Can we try this again? I said, Yeah, we can try this again. But just for you know, you would have made eighteen times your money if you had said yes. So, yeah, yeah, I know, I know, I know. So come. Bill.

42:27 has an incredible ability to see around corners. And be visionary. in making bets before they're obvious. So going into Europe, going to the emerging markets, going into consumer, going into life sciences, pushing me now to go into robotics and humanoids. He's an incredible ability to look around corners.

42:44 Here also In managing the partnership. And us. Has heart. Not for investment.

42:51 Decision making. But in keeping our culture. the meritocracy of the firm. Also with heart. Has helped me develop.

42:59 As a leader of G A. And letting you Speaking more a little bit from the heart. And is an incredible moneymaker. So his mind is just funny.

43:11 As you've progressed in your investing specific career. What changes the most as you become more senior? How does it feel the most different doing it today versus doing it when you're a lots to prove young analyst? The hardest thing when you're young is developing patience and the conviction that you can wait a little longer for the big fish. You're young. You wanna get gone. You wanna get gone. You wanna get deal experienced, you wanna get not just on your belt, and that's the completely wrong.

43:37 Wrong instinct. When you're older you have a lot more rains, you've seen a lot more, and you got patients. J Yeah. Nothing scares me. I know a big fish will come. Come back. No pressure. You are less on the front lines.

43:51 And more. As a coach player. Training young partners to do what you used to do. And initially that can be very demotivating. Because Tom Brady likes to be on the field, not coaching or

44:04 Until you reimagine the game. And you live vicariously through the people you're training and you enjoy their wins almost as much as you enjoyed your wins. That's been the mental flip that I had to do. To enjoy this face.

44:19 'Cause of course scoring goals is better. Then coaching. Unless You make the mental shift that the vicars do through them. The hard thing. And that's why there's not that many

44:30 Venture and growth equity investors. Over the age of fifty. It's not just a We call in rich or we get tired or we develop new interest. I think our brain ages and stops being plastic.

44:42 beautiful mind Dave Hodson, who's age beautifully, he's in his late sixties. And it's very sharp and very much on top of The new trends. He defies the convention, and I said what

44:55 What is the secret? And he said three things. The most important one is I refuse to think like an old man. My mind still Place.

45:04 I still wonder. I'm still in awe. And I don't fall into the trap of thinking I have the answer to everything. I'm always learning, experimenting and Play.

45:13 And that's the hardest part. Because we have this illusion as we get older that there's no room for play. It's no room for play. There's always room for play. How do you inject that into your life?

45:24 You just don't take yourself too seriously. I'm always laughing. But everything. Making fun of every Perfect storm where something happens.

45:34 I start laughing and I say, What are the odds so many bad things could happen all at once. This has never happened before. Seven things at the same time. Let's work through it. That attitude I think makes life full up. What do you make of this current bubble that were inside outside.

45:52 Depending on the person You mentioned humanoids, you mentioned bio a little bit, like there's All this exciting stuff happening. Probably all of which in the long run will be amazing for people. Be a lot of consumer surplus and all this.

46:05 You want to make money through this process for yourself and your partners. How does it feel to you? This is more meaningful. Because it will touch a higher percentage of GDP. The internet was the other very meaningful one, but it changes how we interact with each other.

46:19 This will change much more than that. Unambiguous recommendation. If you're in your twenties or early thirties Co work at Yeah. Because you're gonna live through dog years.

46:29 Meaning we're we're talking about dot com. Seven years of activity in one year. And regardless of whether the company does well or you make money. You're gonna have compressed learning. That only happens once every twenty years. So don't miss that opportunity. And when I say that age group

46:43 I mean that mental age group. You could be in your fifties and be that mental after would you really take risks? Just go do it. If you have a young mind today, go work in it. Because it's gonna be so much fun. I think investing is risky. Our approach which may

46:56 Proved to be too conservative. What's to take a slow? Because it's not Clear yet worth of value. is gonna be created.

47:05 It's not. Clear yet. how much more powerful the large language models are versus what is that are more Efficient. Or how much of the value will be captured?

47:14 By the models versus the applications. So It's exciting to watch. I know we're gonna have a moment where we're all gonna wake up and say we've invested too much. I don't know if it's three years away or eighteen months away. I don't think it's happening. For sure it hasn't happened yet. You don't think so? You don't think there's a chance that we're in that moment already? No. Why not?

47:33 It's not crazy enough. I was looking at some stats. Comparing The AI Wave. Let's not call it a bubble. Waves to the dot com and to the railroads.

47:44 And it's looking at the ratio of Capex to revenue. And what percent of GDP was involved in this And how was this Cupex funded? Capex to revenue still not crazy. New revenue streams are are are managing.

47:57 And the biggest difference relative to railroads and dot com Is the funds are coming from really rich companies. The magnificent six who are printing money out of their

48:09 Dominant positions. Are we investing a lot of this money? into the CapEx that's powering all this innovation. So it's very healthy. It's not junk bond speculators or thin margin telecom companies that are levering up the wazoo.

48:23 With retail money. To fund This wave of innovation. It's really profitable companies. So I think it's got more legs. Will it be bumpy? Yes.

48:32 But the thing about predicting the future is It's really hard. Explaining the past is a lot easier. So what do you think happens from here? In markets. Predicting the future is impossible, but fun.

48:43 I do think The IPO markets are opening up. corporate ME market is opening up. Emerging markets which were dead for the last four years are lighting up. So barring a black swan or a orange swan event.

48:56 Or some other Žiopolitical Surprise. I do think the next eighteen months will be constructive. And that's a much needed

49:04 shot of liquidity for our industry and a little more attention to the rest. Of the world. I'm generally optimistic. I do worry a little bit about the fiscal. situation in the US.

49:16 As the reserve currency of the world, you have so much time and So much permission to make mistakes. I think the real issue that we face That I think a lot about. I think politically, globally, we're kind of screwed because

49:29 Neoliberal and centrist ideology can't get elected. We missed The main concept that prosperity needed to be shared. For it to be electable. So now we're not just in the US, but across the globe.

49:42 Forced to choose between nationalist Leaders who are like We against the world. Or socialists. Which is oh, we're all together and we're gonna share and take away from the rich to give to the poor.

49:54 Both are very suboptimal. And we need to find ways to create a center position. That's neither socialist nor nationalist. But is one of shared prosperity. I worry that

50:05 There are not that many people that are focused on that or investing in that. But the world needs that, not just the US. We did it in Brazil. We did it in Mexico. We need it across Europe. I'm always interested in this. difference between Risk, which I think of as sometimes quantifiable or imaginable.

50:21 And pure uncertainty. We literally just don't know what's gonna happen. And if you think about it. Where you've made money. How much do you think came from the willingness to like embrace uncertainty versus taking really calculated risks?

50:35 You never Invest. A lot of money. without a visibility to what you're doing. There is fog and different layers of fog and what the fog does

50:45 is it slows you down. But if you look Pierce through. You see clarity, you see a monopolist that's six times the You see an opportunity to It's not a shot in the dark and hope for the best.

50:57 What you can't Two Is Just shut down. And say this is too rust too unpredictable.

51:03 You just have to engage with the unpredictability. Until you see something. Before others. And you strike for the fish. In an era like this when it's all changing so fast and understanding the core technologies is important.

51:16 How do you personally learn? What is your preferred method to stay abreast of what is going on and like stay in touch with reality. Talk to young people. Surf TikTok. Try different apps. Try crazy things.

51:30 Go to places where there are no old people. And you don't care. I don't care if someone calls me old. I I'm I'm I'm just playing. Keep it fresh. Value is in the new. Being the new

51:41 Always. Even if it turns out to be a dead end. Most of what we do is that ends. But it doesn't mean it wasn't valuable to try it. That's the hardest thing.

51:51 There's been this wild transformation of our industry in the time that you've been A professional, ain't it? What is a competitive Dynamic feel like.

52:00 The universe of amazing companies has expanded. The number of a hundred million dollar revenue business growing forty, fifty percent. has grown 10x. Because more technology More people taking risk.

52:10 In more places. Unfortunately We compete against nineteen thousand GPs. It was not very nice thing to say, but one of my competitors said there's more GPs than McDonalds in uh in the United States. Which you know, it's one of those GPs that are smaller and they didn't feel like when you compare to McDonald's but it's too many.

52:27 And the industry's consolidating. It's become incredibly competitive. You have to have more clarity what is your competitive edge. How have we thought about R edge.

52:36 Brand. We've built this brand about being good partners. This brand needs something. People get value from GA inside. Attracts helps them recruit talent, get clients, go public.

52:46 Scale to have muscles that small shops don't have. We have a hundred people in operations. They can help you with pricing, salesforce effectiveness, AI for what customer service. Whatever you need. We got a team. It's there. For free. We got an in house

53:00 human talent team that has taps into a database of fifteen thousand vetted executives. You need a CTO, we'll send you a list tomorrow of eight guys in the area who've we've worked with and I think Fit. That's an area.

53:13 And then you have to be a specialist. Can't be a generalist anymore. So we've chosen what we call the GA power alleys. There's sixteen power alleys, things like AI applications, value based care, digital Name is Sixte power, check the website. In those poweries.

53:26 We think we're among the best in the world. And we show up with thirty two Case studies. We've done this thirty two times. And yes, you can copy things that work, but guess what?

53:36 You don't know the things that didn't work that we tried that we're gonna prevent you from trying. It's made it harder to compete. But I do think scale and experience helps. Provided you are deliberate. Uh learning from the experience.

53:49 And focused on how you build capabilities with scale in areas that really matter. Not just look on a website. You're teaching a seminar about or for young investors who are only allowed to go invest in non US Companies. So everything about the US.

54:04 What are the most important things for that crew to know? About doing that well. That's distinct from what it would take to do well in the US. There's a lot more volatility. The frequency of

54:15 Surprises. Much higher. So agility. This is super important. We're also low trust cultures.

54:23 Even though most of them are religious. Doesn't mean So a higher percentage of the time you may find yourself with a crook. Across the table. So the value of referencing is much more important. And how to do a good reference is super important because

54:42 People don't say bad things about other people easily. So that's another one. The third one, which is a positive one, which is The one great advantage. Of being outside the US.

54:52 Is there so many things that don't work well? Lower hanging fruit. Lower hanging fruit. And if you provide a great service, you capture a lot of value for a really long time. How do you do a good reference?

55:05 For An investment You do it with the family that has given you money to make investments. And you say Zwaan.

55:12 We're about to invest two hundred million dollars. In this entrepreneur. You know his father, you know his grandfather. Do you think we should take this risk? And he's like oh no fucking way. We're not he's a Krug son of a Krug Because he has money with you, he tells you the truth.

55:29 If he didn't have money with you, he'd say that. For hiring There's another hack which I learned which so important. So much of life is getting the right people on the bus. And when you're gonna do a reference on a higher And you call the person.

55:47 And you say hey. We're considering David for this role. This role involves the following Five challenges. This is a very important

55:56 Decision from My company. Because we can't get this wrong. It's also a very big decision for David. Because he's happy at his job.

56:04 And if he gets this wrong, if we get this wrong We've wasted time and he's out of a job. Help me assess if this is a good risk for me and If you can have an honest discussion. If you don't feel comfortable engaging like this, let's not talk about it. But

56:16 That's what I need the reference for. You'd be surprised people are like Well, for that risk, David now leave him there, he's fine. But that is a genuine way to answer it because What I describe is actually true. If this is a bad fit.

56:29 David should not be taking this job. Reference calls are like are not. Tell me about David. Is he a good guy? That's a waste of time. People say yeah, he's a great guy.

56:38 He's a great guy, very competent. What have you learned about Managing help manage the career success of investors. Which is a very distinctive job from a career ladder in a company or something. Incentives matter a lot. I'm sure. I'm curious what you've learned about incentives.

56:53 What mistakes have you made? You think about you being responsible for other investors and you wanting them to thrive. What's the good, the bad, and the ugly that you've learned? It's an apprenticeship business. Pairing them up with different people with different skills, different styles is super important.

57:07 helping them from a very young age. To uh Make recommendations. Don't just do the task. Answer the S what.

57:16 And ultimately say what's my level of conviction in doing this investment. Don't rely just on There's more senior people. One of the tricks I used to do with it's I've been in three investment committees. in my career, the three G I've been in

57:29 I would try to understand the mind of each Investment committee member. And predict. What they're going to ask. So I would read the memo and say, Georgia Paulo's gonna ask this.

57:39 Bill Ford's gonna ask this, Juan Carlos Torres gonna ask this. And also predict their votes. By the end of a year of doing this, I was up to eighty, ninety percent. And what was really interesting was

57:51 Force me not only to have my own Opinion about a deal. But look at it from the perspective of someone who's really good at making. These kind of the sishes.

58:01 And my ambition was to one day be completely unpredictable. when someone tried to do this with me in when I became a senior person because I was Capturing learnings from thirty perspective. It's not true. I'm I'm actually pretty predictable by now.

58:14 It's learning vicariously. By forcing yourself to have opinions. And also putting yourselves in the minds of people who are proven investors. Is a way of The apprenticeship on steroids.

58:26 And one of the things that we do at GA, which I'm really proud of because it was culturally very hard to do. Our investment committees are open to everyone. The holfer. The holfer. Investment professions. So every Tuesday

58:37 A hundred and ninety people sign up. And there's no presenting. We come in. Directly to Shark Tang. Just questions. And it's

58:45 Beautiful. Talk me through how that meeting works. So one person like a sponsor is proposing a deal and the deal team. The deal team's typically a combination of a sector and a geo put together. They're standardized materials with the checklist. It gets distributed by Friday. We yeah. Tuesday we come in. There's no presenting. The deal lead is always a deal lead, the main sponsor.

59:05 Is there to answer questions. We have five investment committee members and the I C robe, which also opines. And we just ask you questions. We've been training the sixth member of the IC based on forty five years of data. So she votes on all her deals. We've been having her do this for the last three years.

59:23 Is Shinnie Gadget? So we've back tested her. And she's much better than humans. But it turns out someone who's been trained in the past is very good at the past. We only have three years of comparison. So we need to wait another four or five years.

59:36 I'm hoping that by the time we retire. I retired? Well, ten years should be better than himself. If I could somehow do that exercise with you where I could predict the sorts of questions that you tend to ask about companies. What are they? Like what are the big ones that you find yourself Constantly asking sponsors who are promoting a deal.

59:53 Giving the mind of the founder. His or her motivations, why this is So special. And the trajectory that got to this. I try to meet the founders. outside the investment community process as a sponsor.

1:00:03 Bases of competition. Competitive advantage and durability. Advantage. And then I try to push people on the tails.

1:00:12 Both positive and negative. Six bad things happen. How bad is it? And how likely is it? Or if this amazing development happens

1:00:21 Which could be amazing. Unlikely isn't who else would benefit. I always find the tales to be the most interesting because if you look at the distribution of our returns. Ten percent of our best deals. And we get lucky. And they produce fifty percent of the return.

1:00:34 So we lose money very little. And then ten percent we get five X plus. And these are really important. And these all of them. Are better than the upside case in our memos.

1:00:44 Because Good things happened that we did not see coming, but God bless and thank God. So I always find like where are the lottery tickets? How do you assess This seems like well, first of all, incredibly important, like all the data we know how important the right tail is for investing outcomes. Well worn truth at this point.

1:01:01 I just want to get better at assessing the option value embedded in a given business. That just seems to be a So crucial. There's no book about that. There's no podcast about that. You've got ten investments. How do you know which of the ten has more embedded

1:01:16 Right tail option value. Pattern recognition from having seen winning lottery tickets. Gives you Some help. Right, have you seen more of these

1:01:26 you begin to see what you how you can get lucky. as important In all those lucky scenarios There was a spear fisherman at the top. To capture.

1:01:36 An opportunity that was available to many. Yeah. They ceased it. So it's a lot more about Capital allocator at the top. The CEO.

1:01:44 Is he someone that And spearfish. And some people It takes one to do one. Some people are really good at it, some people

1:01:51 Right now, steer fisherman. My final investing question is To wonder how growth as a part of the complex feels relative to other styles today. I'm US centric investor, but curious globally.

1:02:06 I'm sure at different points in your history, growth versus say venture early stage or Pre IPO or public as file. Distinct they're cheaper, more expensive, whatever. More opportune, less opportune. How does growth specifically today feel versus the other segments? Best

1:02:20 Window into growth equity since two thousand and nine. And why? Everything's on sale. There's so much pressure on GPs to post DPI. That we're getting.

1:02:31 Forty percent grower is it? Fifteen times he did that? It's thirty to forty percent discount to the public comps. This is not normal. And it has to do with four years of no IPOs, it has to do with four years with no strategic exits.

1:02:43 So the engines of growth are undisturbed, the valuations are half or forty percent discount. It feels incredibly attractive. As attractive as the post GFC. What? What is your unfinished business?

1:02:56 Professionally. So does it not. I could not think of a better Activity than working. And growth equity at Janted for the next ten years.

1:03:05 Global growth equity in the middle of the air revolution. With the seniority that I have and the dry power. Pinch me. Pinch me because I hope I don't die on a plane crash because it's gonna be great. Yeah. After that. I think you have to start thinking. I've been active mentoring entrepreneurs through Endeavor, which is an offer profit I'm on the board and I've been doing this for twenty five years.

1:03:25 I actually started mentoring, which is an interesting tidbit. When my business was running out of cash. Dot com sounds exciting, but there was a death, you know, the dark valley of death. And uh Linda Rotenberg, the founder of Endeavor, she's like it is precisely at your darkest moment. That you mentor.

1:03:40 Because it's a sign of You have something to give. In the darkest moment of the night. Which is interesting caps, they hope. A A. Like I have friends who are in A.

1:03:49 The body system. Is so valuable because even at your darkest moment. You have enough light to have some And that gives you the strength. to make it through. So I'm huge believer in mentoring. That's something I will do for the rest of my life.

1:04:01 The unfinished business. I think As I get older I I wanna help in s higher education in the US. I think we've lost our way.

1:04:10 And I saw The impact's uh scholarship to Harvard. to a young kid from Bolivia. I love that institution. I love education. And I think it's in a moment that it's

1:04:20 Lost his way. Then we can find it back. Can you teach me mentoring? How does one mentor well? My strategy. There's many ways to do it. I don't have.

1:04:30 Time. To be someone's mentor for six years. Or to see them maybe That's part of them never all see them twice. So uh

1:04:39 I have to hurt them. For the mentoring to be impactful. I have to make it so obvious that it's so stupid they haven't yet Focused on this. That they're like show him.

1:04:50 And then they act on it. Sessions are very uncomfortable. I do it in a with a smile on my face. Yeah, of course. But It works.

1:04:59 It's like Crash therapy. Like three years of therapy, one hour, no time for bull. We're going to directly for the sensitive points. And I've learned to do it in a way that's not damaging or disrespectful in any way.

1:05:10 But it is. Verse Cathing is in This is clearly an opportunity. Come on, wake up, smell the coffee. And sure enough, and now I have a couple of billionaire friends are like, you really hurt me, but thank you.

1:05:25 I'm always curious about like literal process. If you're meeting someone for the first time. Is the format you ask them a bunch of questions and then you quickly do the aggressive, why aren't you doing this thing? I'm married to a shrink uh psychoanalyst. That's uh as a condition to our marriage, I have to do psychoanalysts. And it's a wonderful thing I re It's one of the three things we've ever therapy and meditation and

1:05:44 He's now diseased, but he was a philosopher, writer, an incredible Italian, Brazilian. Kai, very famous in Brazil. You would go to this one hour weekly session. And he would look at you in silence and if didn't say anything after a while, you just say in town.

1:06:00 And Town is translating So I let you take it. The most powerful way to start a conversation with someone you're trying to get to know is silence.

1:06:09 You tell me. What do you want to talk about? What do you want to talk about? Simple. I'll give you another one. I asked what's the most important question you need the answer to? From the universe.

1:06:20 The answer to that question It's so powerful. Because vocalizing that which you most want the answer to It's liberating. My traditional closing question for everyone is the same.

1:06:31 What is the kindest thing that anyone's ever done for you? Daniela? Taught me how to love. He says I as we established, my heart's not very developed. My gut and my brain are very developed and uh

1:06:43 She's such a loving Wonderful woman. Being loved by her. and learning from her how to love back. And then learning from her how to love our daughters and the way that they need to be loved.

1:06:56 And she's so smart. And loving me can sometimes be very hard. A beautiful place to close. Thank you for the reminder to laugh a lot in these conversations. Thanks for your time. If you enjoyed this episode, visit joincolossis.com where you'll find every episode of this podcast complete with hand edited transcripts.

1:07:17 You can also subscribe to Colossus Review, our quarterly print, digital, and private audio publication featuring in-depth profiles of the founders, investors, and companies that we admire most. Learn more at joincolossis dot com slash subscribe.

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