Yeah, I mean, I reviewed our podcast we did five years ago. You were actually talking about Frontier Tech five years ago when you came on the podcast the first time.

I'm glad to hear that, I mean, again, we've said it all along. We've been terrible at marketing ourselves, right? Like we've never made an effort to market Crosscut. I think we were known as three good guys that did right by the community and tried to connect dots and help people and played some small role in the success of SoCal tech, but it was never about us taking credit for it That's just not our DNA, so yeah, I've been doing Frontier Tech investing since 2017, 2018.The first check we wrote here was in a satellite company in Santa Barbara called Umbra Space.

I want to ask you more about it, , but let's stick with the getting out of bed and getting motivated. are Rick and Brett and the team, are you guys all doing the same thing or doing different things?

We're all doing the same thing, maybe playing slightly different roles. Rick's really interested in more climate related solutions, and Brett does what Brett does. He's fantastic in building the network and getting people excited about our story. So. there will certainly be some changes coming, uh, as referenced in the article, we'll be announcing a new partner pretty soon who's got growth and infrastructure background. With a focus around energy and power generation, you know, we define Frontier Tech as Energy power, advanced manufacturing, advanced materials, and space defense and security, right?

So, nearshoring of our supply chain, thinking about the kind of stuff that's happening in what we're calling the techno manufacturing revolution of Southern California,

And how much of that would you say is Space X?

I will give credit to SpaceX, but I would also say it's Tesla, it's Hyperloop, it's the prime contractors and their 70 plus year history here it really tends to be more of what I described as like a mechanical engineering orientation or systems engineering orientation versus a computer science orientation.

Right. And not that LA was ever, like, the deep computer science hub, obviously Silicon Valley is that, and the evolution of AI and all that stuff, I give that to SF. But down here, we've been designing and building hard shit for a very long time. And that's the DNA of the founders that I am spending time with and that I find to be, really lofty in their ambitions and very much a principle spurs orientation to solving big problems. And that's why I get out of bed every day.

And given that software and hardware companies are just very different to build. Does that mean that your fund construction is changing a lot?
Um, uh, we, we have basically launched a new, growth practice. And, you know, the idea there is, we want to come in and be able to do what we've been doing for 16 years and me for 23 years, writing seed and series A checks in the 500 K to 3 million range, part of two to 6 million rounds. And really working to help the entrepreneur achieve the next milestones, right? That's our history.

But what's unique about Frontier Tech is that there isn't a lot of capital sitting in that growth stage, and there's even less capital sitting at what we call the project infrastructure and project finance bucket.

And so we're looking to be able to grow and scale the platform of Crosscut to provide a full stack solution to these companies. And we can do it in a couple of ways. We can invest in Seed. If we miss you at Seed, we can still come in at a call it a B or C round. And we're going to do that through an SPV practice with a broad set of family offices that are mission aligned in solving humanity's biggest problems.

We fight hard by doing market maps and thesis generation, and, you know, we've done that now in advanced nuclear fission. And so we've, we've looked at 35 companies in advanced nuclear fission, not fusion, and we have identified four that we think are going to outperform and win. And we're starting to syndicate opportunities in those companies, right? So that gives us a chance to pull in capital on some higher profile deals that are maybe a little further along in their development.

And do you worry that your Seed stage investments, then get very diluted?

So, there are certainly risks there, but I think you can de risk that through a couple things. The first is non-dilutive grants, which there's never been more momentum behind the dollars coming from our three letter organizations across our government. we also have a ton of bipartisan momentum around any alternative energy source, you know, given the passing of the IRA. And so those dollars are now being made available. we have a company that we haven't announced, but three weeks after our funding, got an 80 million DOE grant to build out their factory.

Wow. How did they get 80 million?

Yeah, it's, it's understanding how things scale from what I call, you know, the ARPA and DARPA grants to the Sibbers, to the Afworks, to the DOE, DOD, and the loan program office, and every single one needs an end customer that is saying, please spend money on this because it's important to me and we've spent the last three and a half years mapping those sources of capital to make sure we have relationships at the right places. It's also really critical, not just for non dilutive equity, but it's also about this regulatory environment around nuclear, right? Understanding which emerging advanced micro reactors are better positioned to get approved faster.

Yeah. okay, well, keep going on that then. So you've been looking at fission?

Correct. Yeah.

Tell me your thesis around fission, nuclear?

Yeah. So my new partner has done most of the work there, the net of it is you either are betting on fusion companies like Commonwealth Fusion Systems. They're already sitting at an eight, 10-billion-dollar valuation, and they are, in my opinion, a binary bet that if they get it right, they're going to be one of the most valuable companies that we've ever seen, right? But that's fusion technology and that's new and it's a bunch of people with theories around how to bring it to commercial scale around lab related stuff. Yeah. and they tend to be more related to large scale magnets and the ability to run fusion in a reactor at scale.

Fission is a proven technology, right? We've been using nuclear fission since the 50s, 60s. but what's happening in vision is there's not only, all the news these days, right, are about Microsoft and Google and Amazon turning back on old multi gigawatt reactors like Three Mile Island. and that's great. We need that. We need clean baseload energy. Those are proven systems. They haven't aged out. But what's coming that I think is super interesting. Are these, Gen 3 Gen 4 advanced micro reactors, right? And these are much smaller in scale, call it one to 50, and they tend to have a greater portability, greater manufacturability, different fuel sources, different cooling systems, and different economies around them. And I think they're going to open up markets that haven't even existed before. So they will replace fossil fuel based systems like diesel generators all over the globe that require huge supply chains and a very large cost of fuel.

These will be renewable, portable, put them on a plane, drop them in, power up small little villages, power up army bases. And then when they're out of fuel, pull them out, fly them back, refuel, bring them back in, slot them in like a Lego block. And certainly, they'll be solving aspects of the hyperscale data center energy consumption problem, but they tend to be more augmentative or auxiliary power sources versus Fully behind the meter solutions that a lot of people are trying to build the reason we like that is because we think it's going to come to market a lot faster.
Wow. I mean, do you like this? Yes, it's leaving the world a cleaner place for your children, but you like it because you just get to nerd out and learn about the fueling and magnets and energy production. Like, is that just intellectually fun for you?

It is, I mean that's honestly wake up at 50 and you've been doing this for 23 years and you're kind of like, can I get excited about another X, Y, Z, or me, you know, probably. The most interesting deal that I've done in a long time was my satellite deal, Umbra, right? That was a 900k check written in January of 2018, right after we raised fund four. And I went and met the CEO, David, and he told me a story of, you know, how this antenna was going to unfold and take better pictures of anything that exists up there built by our government and our prime contractors. And I was like, Ooh, that's what can be. And that's what makes venture fun, right? It's what can be, And then as you start to nerd out on technically how you can do this stuff. Yeah. I go deep into the white papers. I love learning. That's always been kind of my secret trick and venture.

I'm just a voracious reader of stuff

And how much does supporting a company building a nuclear reactor feel the same or totally different as supporting a more typical B2B SAS company.

Yeah, I would say that company building is company building right and as I mentioned when we started right setting milestones and properly capitalizing a business to get there. It doesn't matter what category you're in even D2C, right? It's how many subscribers do we need? Whereas in this case, it's how much money do you need to build a prototype reactor? And when you do, where there'll be capital behind it, ready to fund to get you to NRC approval. And then once you get to NRC approval, will there be capital there to build out the factory that's going to allow you to produce 100 of these a year? And so, company building's the same.

There are certainly nuances. culture of an engineering organization very different. Understanding the responsibilities around setting timelines and hitting those timelines versus missing them because of XYZ. You deal with much more complicated supply chains and getting some of the componentry that you have less control over. There's a whole bunch of things. But if you remember, my background is industrial engineering. And so I'm a system and process geek. I always have been. There is nothing I like more than walking into a manufacturing floor and being like, tell me how you did this.

So energy's really exciting. What about space? Sometimes I'm into it. And sometimes I don't understand why everyone's excited about populating Mars.

Yeah. So I'm not the guy that's betting on, mining stuff off of Mars. That's not Crosscut. I would say that everything we do in Frontier Tech and climate for that matter is pragmatic. It's just give me a reasonable timeframe where I'm still going to be alive that this is going to happen, I've been looking a lot of what I would call the picks and shovels that facilitate the commercialization of space. I'm intrigued by manufacturing things in space. I'm intrigued by reentry technologies. I'm intrigued by the idea of space logistics, being able to put stuff up there and , hit a button and have it come down and drop on a dime where it's needed. That kind of stuff fascinating to me because the biggest hurdle in space has been the time to launch.
Design to launch used to be 5 10 years. Now, we have a company that's spinning up a brand-new satellite design and has already locked in their rideshare and will launch this thing in nine months, start to finish.

Let me ask you about all those things because they were all interesting. So. tell me about the design to launch like for your antenna company, which was, you know, you've been with a long time. Do they get their antennas onto someone else's payload? How do you, like, right now, if I want to put something on a payload, I need to get it launched. I need to get it up there. What are the steps you go through?

Well, it's changed, right? So, Umbra designed their entire system from scratch. That was David's background. And really his thesis at the time was, the government pays for these synthetic aperture radar satellite constellations. The prime contractors bid on them and they're going to bid the highest number they can get out of the government because they make 30 points of margin. There's no motivation to innovate.
So for them, it was getting launched. I mean, they had to build their satellite and everything, but it was, they really did everything but the launch piece of things.

Correct. And they own it. They're fully verticalized in terms of owning their constellation. Now, what's changed is if you just want to put a sensor up there, you can buy space on someone else's satellite Right. you can buy a standard, bus from a company like Apex now and put your payload on top. You know, we have all these companies that are looking at the inefficiencies of satellite design to launch and saying, well, no innovative new company needs to build this piece from scratch. I'll build it as a standard and we create these standard frameworks.

So you're just seeing a massive evolution. again. The reason it's so exciting is everything is principles. First, wipe slate clean. Don't think about how it was done the last 40 years. If you had everything at your disposal with all this new innovation, how would you get this done? Right?
But it seems sort of to me, like the analogy is sort of like now you've got AWS and you've got, Shopify. And so all those pieces, like, I don't need to build the satellite. I don't need to launch, I don't need to do the reentry or whatever it is.

We're not quite there yet. We're not quite at the level of AWS does everything except run my application, right? We're getting there. That is what I call the commercialization space is unfolding. People are looking at every layer of the stack. I mean, we have, we have companies doing debris tracking to make sure the debris doesn't hit satellites. We have companies doing tug boating, which means. You know, SpaceX takes you up and just drops you off. They don't put you where you want to be. Well, you can burn your own fuel to get where you want to be, or you can join on to a tugboat service and get pulled where you want to be. You pay a lot for that, but you stay on mission a lot longer because you didn't burn your fuel. Every single element's being thought about. gas stations in space being able to refuel your, your satellites, like every single thing has been thought of, the question will be, do we get to enough scale where there could be viable businesses behind a lot of these things, right? So the issue with picks and shovels is generally possibly TAM. You know, the majority of satellites going up are Starlink and then eventually Amazon Kuiper. We need to have a lot more micro satellites being launched by independent groups to make a difference.

What is the skill of all the stuff that's going into space right now? and who does it belong to?

I don't know the volume, but I know that probably 80 percent are Starlink satellites.

Wow. Sorry we have like a funky internet connection sometimes. so, I think it was Rafe who came on my podcast, you know, Rafe from Canaan. He's been doing a lot of space and frontier investing. I think he was saying he feels like space infrastructure is at the point where they're moving to focus more on what can be done with all the data and imagery that is coming back from space. And I think what you're saying is, you’re still excited about the picks and shovels, like sort of the infrastructure building piece of things.

I'm interested in both. I think what he's referring to would end up looking more like software and analytics and then there's issues around downlink. obviously like Umbra produces very large datasets. And a lot of them are not useful, yet we're still paying to get them down. Wouldn't it be cool to do GPU compute on the edge up in orbit and process it there to send it down? Well, that's AWS as a service up in orbit, basically. That's very cool. there have been a lot of analytics companies, some of those have worked. Most of them not.

One other interesting thing you said was worrying about the TAM when you're doing picks and shovels. And, I think again, it was Rafe who was just talking about like, one of the things he's trying to think is, will there be other primes, right? Or are we always betting on, you know, smaller plays because no one's going to disrupt the North or Lockheed or fill in your favorite prime.

Yeah, I have that same fear. And so I tend to not be excited about, what looks like a supplier of something innovative that ultimately can't win without the help of Boeing or a Northrop. I think their lobbying power is too strong to upend. The only example that people seem to point to, and I don't have a strong opinion on this, but Anduril seems to have really invested in their own lobbying capabilities, and they continue to win several programs of record in the autonomous space because none of the primes can do it, right?

They just don't it. But ultimately, for a really big program of record, I'm not so sure the big primes are going to let Anduril walk in there and snatch it. So right now they're all relatively smaller dollar amounts and they're not a big threat to the, the core contracts that the primes care about. So that seems to be the debate.

So you wouldn't invest in a company that relies on a prime, like the companies you're investing in get their dollars without reliance on a prime?
Yes. most of the stuff that I'm enthusiastic about is, direct source, meaning the end customer is buying from them, not multiple, you know, a multi-tier supplier system like automotive, right? I don't want to invest in the nut provider that. Screws the nut on to a SpaceX rocket. that doesn't seem interesting to me. It doesn't seem to be big equity outcomes. I'm not saying I have it perfect by any means,

And to be honest, nobody in the, in the space investing ecosystem really has an exit yet that they can be like, see, I told you. So, we're all kind of waiting around for it. I mean, I remember when I wrote that check in 18, I was looking at the five firms at Silicon Valley that had bet on launch and constellations. And they're still waiting around for their liquidity events. It's gonna take time, but ultimately what I see is incredible legislative momentum behind reassuring our supply chains. Reestablishing our dominance in engineering and manufacturing and builds and new approaches to how to bring speed and scale behind some of these alternative energy systems that we all know we need.
I like what you just said. Like, I feel like, yes, that seems inevitable that our country is going to prioritize these things. It's just that we're by, you know, maybe by design, a slow-moving bureaucracy.

Well that we for sure are, right? but I think we look at this simply as You know, everyone loves consumer. They don't love consumer anymore. Then we all went enterprise SAS and now enterprise SAS multiples have been dropped out. Now it's all about AI. Well, I don't think SoCal is the heartbeat of AI. That's a Silicon Valley thing. So, all of these, these sectors had their moment. and I feel like, you know, the frontier tech and deep tech buckets are going to have their moment. And so I want to ride those tailwinds. I also think it's the one thing that Crosscut's more uniquely positioned to do, right? Like, should I be running up to Silicon Valley and trying to elbow my way into hot LLM deals? I don't think that's a good use of Crosscut's time.
Yeah I called it crosscut V2. Do you think of it just as natural like firms should evolve over the course of, you know, the years, if not the decades in your case. Do you think like, try to it just so you become more known as frontier tech, or is this just a natural evolution?

We debated rebranding. and this is honestly where I just, I get a little uncomfortable, cause I talk about us. Right. But I, feel. Like our brand means something in Southern California. I feel like we have played a role here and I would never take credit, but you know, we've done a lot of deals, we've backed a lot of entrepreneurs, we've thrown a lot of events. I think the Crosscut brand stands for something. And so the playbook doesn't change. It really doesn't. Right? Like, show up, be present, do-good work, be helpful, don't be a dick, and help companies scale that's Crosscut's playbook.
Were there other decision points?

Decision points. You know, you've got to look at your team like we need young, next gen, super plugged in, connected people that are running in the social circles where these ex SpaceXers are, right? fun as Rick, Brett and I might be, not every 30 year old wants to hang out with us, just being honest, right?

Yeah, I'm always interested in how, how to build those sourcing engines and where to, you know, give a, going to the tech talks, giving tech talks, you know, being in those circles what that looks like for different people.

yeah, that's the other I'll be honest the other struggle is I said, we're terrible marketers, right? We're not content producers. We're not thought leaders. We got to change that. as uncomfortable as it is for me, I have to be more public. I have to put more stuff out, right? So, you our why nuclear, why now white paper will be something that we put out to the broader community as opposed to saying, Hey, this is core IP and we're gonna hunt around this idea. we're gonna put some of this stuff out there for the world to see because it puts a stake in the ground, right?
And so that's new, that's the new way of playing venture. As I said, you have to keep fine tuning your products. Mhm. and so we're doing that right now.

Although I do think it has to be offended. Like I, you know, it's like I talked to Suster and he's like, don't start a blog if you don't like writing. so, this is, we're talking about crosscut six. Are you still investing on a crosscut five? Or are you starting crosscut six now?
We, are wiring our last check on Crosscut five, probably tomorrow.

Congratulations.

Thank you. Yeah. You know, it was a weird one because of, uh, the pandemic. And, I think we would say when everyone was raw, raw forward, we were a little bit hesitant. I think , when we started seeing C deals get done in the, you know, mid-teens, our gut instincts were like, ah, this is not a great time for the crosscut to be deploying, right?

We pulled back, and then kind of sat on our hands, not finding anything we liked for almost like a year and a half, if I'm really honest, And at the tail end of 23 and all the way through this year, we've been deploying
when was five starting?

Five was technically a late 20 vintage.

so, is there anything else? Otherwise, I would shift gears and ask you things about your teaching other new stuff on your list.

No, I mean, that's the bulk of the story. As I said, the game is still the same and CrossFit still doing what we do. And we're thrilled to be a part of the ecosystem and still want to be collaborative with everybody. We have found that the climate and energy investor community is super collaborative with everybody . We have found that the climate communities are very collaborative. We love working with other groups.

That's great. And it's like two thirds of your investments are in LA? And is, that, you know, still the hope for going forward?

What I say to that is we have to take advantage of our brand and reputation. And so, we should be extremely active inside of the SoCal ecosystem. But for us, this techno manufacturing revolution is not just a SoCal thing. It's Michigan, it's outside of Denver, it's Seattle. You know, there's a lot of space infrastructure in these markets and manufacturing infrastructure in places like Michigan. Basically, I would say non Silicon Valley emerging ecosystems are still our bread and butter.

Yeah. very cool. And fairly recently you started teaching at USC?

I did. I completed my first semester I guess, technically on Monday. I submitted my final grades for the quarter.

Congrats. And what were the highlights and low lights of this semester?

The saddest thing, honestly, was I did a check in. So these are full time, fully employed master's program students. And, you know, we pack a lot into eight weeks. And I did a check in at the beginning of a class, and like, 25 percent of my class was in tears about the stress of their life and the stuff on their plate. and said that no professor had ever asked them how they're doing. And all of my reviews, etcetera, were like, I can't believe you did that. And I was like, man, the, the human side of even teaching is gone. Like I know, I know venture gets transactional, but the human side of, even if we're connecting over zoom, like that can't go. That has to be part of the human experience. And I just felt terrible for these 20 something year old kids that feel alone and feel overwhelmed and, have nowhere to turn.

Do you have a good way asking people how they're doing? It's a stupid sounding question, but that's what I mean.

No, I guess you know, the big shift I made with my entrepreneurs was to actually specifically call out the fact that I am not asking you how the company is doing, I'm asking you how you are doing first. and if you trust me, then we're going to have a much better relationship to get to the hard stuff around how the company is doing.

I mean, I've heard you talk a few times and like one of the messages that I heard was something like remember that none of this actually matters, am I misquoting?

No, you're not. But did I say that at a party recently where you caught that versus an interview?
Something like that.

Yeah, I mean, think about it. We're like small little specks in this massive universe. And we think everything that's happening matters, but it really doesn't. And, you know, nobody cares about our problems. Like, we're really irrelevant. way I got comfortable with my own drama and everything was to realize that I'm actually irrelevant. That nobody actually gives a shit about Brian Garrett. And it just makes And easier to let things kind of like roll off your back, and hard because we're all in it.

And so what I try to say from that is like, connect from your heart, not your head. you know, love deeply care about the experience of this small little finite time we have on earth. And make the most of the days you got. Because stressing about it isn't going to make it any easier.
I love all of that. Means I don't have to stress about my crappy tennis playing this morning. Brian, I'm super excited for you to be building crossheads six.

It feels like a great fit for you and you're building something important and it's getting you excited.

Yeah, honestly, same thing, like, why keep fighting the fight if I don't have that kind of energy, right? Like, I don't need to be a venture capitalist to be a venture capitalist. I need to be a venture capitalist because I have a burning desire to have an impact and to put some companies out there that actually have a meaningful impact on these problems, and that was my wake up call. where I was like, If I'm going to keep fighting this fight and work as hard as I do, it better be meaningful. Because I can do things. I can chase tequila. I can teach. I can travel. I can do all these things.
You know, I'm going to be an empty nester in like a year and a half when my little one goes off. And if I'm going to keep working, I better love every single minute of it.

Yeah, but loving it is different than doing something meaningful. And I feel like you have this real drive to do something meaningful.

Yeah. Thank you. I do. I do. I don't know why. Like, I really want to have impact only, I would just teach. I would try to teach at broad scale, but. I don't know if I can have like global impact, right? If one of these nuclear companies works, you know, it's a massive impact on decarbonization.

Yeah. I'm excited to see how crosscut six evolves.

Thank you, Minnie. Thanks for making time for me.