Good to see you Minnie, great to be here.
Yeah. Thanks for coming by Venice.
it was a ittle snafu getting in, but we're here now.
No, no, it wasn't a snafu at all because it was expert, like world class parallel parking like, like a glove.
Yeah. Yeah. Josh had to climb out like pretty much like the window of the passenger side, something like that. Anyways, I thought for you, it's kind of interesting to get your full background and how you got to First Look Partners.
We were investors together at a family office fund called Reimagined Ventures for a number of years. And this is kind of where we came up with the strategy that we're doing now at First Look, which is to invest in a portfolio of what we call micro emerging managers.
So, on fund one, two or three, 50 million fund size and below and kind of use that portfolio of managers as a deal sourcing engine to invest with the other kind of two thirds of our capital into direct deals, breakout companies out of those portfolios.
Yeah. So, why do they have to be the smaller funds? Just asking. Just curious.
Lots of reasons. So, you know. I can share some data points with you, but we kind of feel that one there's alpha in smaller funds.
We took a look at pitch book data from 1996 to 2001, and across all of the asset classes, right across venture funds, big and small, what do you think the top decile DPI is across that time period.
3x.
3x. Oh, 3 DPI is top decile. Top quartile for the asset class is 2.39x, right? And just to kind of give you a barometer, right? The private equity counterparts for the same time period is 2.51x, right? For top decile.
And 2. 07x for top quartile, right? So, I think the point here is, It's really hard to get in a 3X fund, right? And I think like, over the course of the last cycle you know, you saw managers fund X and it was like everyone was kind of underwriting to a, you know, 3X or 4X or 5X TVPI, right.
And LPs, I think, started expecting that as the norm. And the reality is it's really, really hard. you know, 90 percent of funds don't do that. And so when we took a look at the data at. You know the funds that do deliver those kind of 3x net returns They tend to be smaller funds and they tend to be newer managers, right?
Okay, I understand smaller funds. Can I just ask about newer managers? Sure, yeah.
I I think there's I think there's a lot of reasons and I think that it's probably hard to pinpoint the exact reason But I think yeah, you nailed it. I think it's you know, when a manager is newer, right? they're hungry. But I think more importantly, they don't have kind of the legacy portfolio of stuff to deal with,
And so, you know, I think that inevitably tempers returns a little bit
but I interrupted you okay, so these fund one two three funds under fifty million they're gonna have higher alpha bigger returns, that's where you can, there's some real alpha opportunities where you can get a 5X or a 7x or an 8x fund. And we know that because we invested in some of those, you know, in our journey. At Reimagined, who are some of the funds you've invested in? Can you name them?
Can I name them? I, I think so. Yeah. I mean, you can sort of, this public information, you can look on the website, but, um. Dustin Rosen's Wonder Ventures, uh, was his Wonder 2 was a, phenomenal fund both from a TVPI and DPI perspective.
Was he in Honey?
He was in Honey.
and then we were in 1 has done phenomenally well.
was FIKA 1 in?
one was in, um, Policy Genius. They were in what was the big winner in FIKA one?
Was it Service Titan?
Yep. So that's done phenomenally well, uh, fund up in the Bay Area called Refactor Refactor 1 we were in uh, which was Zal Bilimoria, and at the time David Lee was,
Yeah, that's what I thought it was David Lee, who's now at Samsung
who's now at Samsung but their big winner in fund 1 was Solugen and so Refactor's now, Refactor 1 is now marked at close to a 5X TVPI on a 50 million fund You know, these are all top decile managers.
And you know, at the time they were, I mean, now these folks have kind of gone and, you know, raised opportunity funds and larger funds and but yeah, at the time they were, you know, 50 and below and they were all on their, you know, fund one or two.
so is the top decile pretty different or the median or whatever between small funds and big funds?
Yep. So, good question. The answer is yes. The dispersion in the asset class, you know, the difference in, in being in a, top quartile fund and a bottom quartile fund is, more dramatic in venture than it is in private equity or hedge funds or equities or anything else.
And that's why, it requires a lot of work to kind of, canvas the landscape and meet everyone out there that's raising and start to kind of pattern recognition and pattern match good from great and great from exceptional.
We kind of started getting in market with first look and call it April, May of this year. We've looked at 175 managers in our strike zone in what, six, seven, eight months. and those are folks on fund one, two or three, 50 and below primarily US only.
So it's 175 in the past, whatever you just said, 9 months or something.
Yeah. And, are there a lot of things that just dequeue someone right off the bat? Like, will you look in their data room and just be like, this doesn't look good?
I would say like, we don't, you know, um, for a first meeting we'll meet with almost anybody, right? Like if we get a deck and it's, the metrics are kind of in our strike zone, we'll, we'll take a meeting. yes, there are some kind of things that, for us make it an easy pass after our first meeting.
And that's, I mean, I don't know if they're necessarily red flags, it's just like, it doesn't necessarily fit our model. Right. Because like , we want to be investing in a manager that has a bit of a portfolio of companies that we may be able to invest in directly as they kind of matriculate to the kind of place, their stage we feel comfortable investing at.
And so if it's a first time manager where, you know, let's say they're spinning out of a larger fund, but like. you know, the relationships that they have in the deals they did at that fund probably won't, transport over , to kind of their new fund. Right. So that's sort of makes it a little more challenging for us.
Or maybe they had an angel portfolio that was, kind of invested in the last 18 months. And so it's just, too hard for us to kind of get a handle on, on their track record or things like that.
a handle on, on their track record or like that.
Uh, yeah, if it comes in through a trusted source where it's, you know, someone in our networks, you know, suggested that we meet with them, then yeah, of course, for sure.
Yeah, but we want to know what's out there, you know, like if, especially if someone's, if someone's raised LP capital, right? most likely something there, right? And so we want to, we want to know what's going on and we want to, you know, as you know, right? Like it's no different than direct investing, right?
You have to see the market and you have to know what's out there and who's raising and who's doing what. I Would say the, the one thing that we lately have been thinking about a lot is you know, if a manager out to raise, I don't know, 20 million, right. And we're seeing this kind of lot lately where they've raised three or four, And you know, capital markets are tough. People don't want to invest in first time managers. But they did a first close because they got excited and they want, they had a deal they really wanted to do that to us is a bit of a red flag in the sense that you know, you're not, I question whether you're acting as a good fiduciary, right?
if you decided to close on, call it three, right? With the hope that you're going to get to 20, it's like, well, what size checks are you writing with that three, and how is that going to translate? Like, what if the capital markets are frozen and you can't raise another dollar? And now you've put your existing LP's capital at risk because you can't really build a portfolio approach.
Hmm. So, I'm interested in this dynamic. I haven't come across it. So do a lot of your, the funds that you're looking at or that you will invest in, will they do multiple close or will they do one close?
I mean, almost all of them will do multiple closes. but I think that, but I think for your first close, I think you have to be honest with yourself about kind of minimum viable fund strategy,
Okay. So, but can you close with a third or a half your fund?
It just depends on what the strategy is. Right, I think everybody when they, go out to raise a fund, right, you have the number that you really would love to have. But there is a number that it's like, I could do this with X dollars. Right.
But not below that. And so I think if you close below that, it's pretty risky.
And when you're talking to these managers, like what do people say? What is a good answer on like IRR targets or DPI targets?
I mean, look, everybody has the same kind of decks end up looking very similar, right? Yeah.
Everyone kind of underwrites to a, you know, three to four X net multiple to LPs. Everyone's in the, you know, call it high twenties IRR to low thirties to mid thirties. But you know like so much of this is kind of garbage in garbage out and like, you Projections are what they are, you know, for us.
It's kind of like we'd rather see You know, what's the thesis? Why are you the right manager to execute on this thesis? You know, how are you gonna see? differentiated deal flow why our founders going to work with you, right? This is a super, super competitive market, right?
Yeah. Have you seen some good there? Can you talk about what you've invested in so far?
Yeah, I think so. use, we, we use Cooley, so I'll, plug them right now.
Yeah, Uh, yes. So we, we did our first close. We made two commitments to funds.
One to a fund called Rackhouse in Menlo Park. GPA is a guy named Kevin Novak. He's brilliant mind. He was employee number 21 at Uber. He was the chief data scientist there from 2000 and I want to say or 13 through 2017.
That's amazing that Uber only started started in 2012 or something.
And there was And just maybe a little more backstory on him. After he left Uber, he went to Tala. Another L. A. success story.
He went to Thales, the chief data scientist there for about a year kind of realized his heart was, not in operating as much as he thought it was, so, left and started angel investing with, his own capital did 33 angel investments had a, really, good track record with that and then raised his fund one in 2020.
And so we're investing, uh, in his second fund, 50 million fund too. And he's investing kind of at the intersection of what I think the way that they put it is, where data meets the real world.
And so yeah, really excited about that one
Okay, so, Kevin was based in, is based in Menlo Park. How do you feel
But comes to LA frequently actually. his in laws, his wife's folks live here. So,
Great. We can hang out with him. Okay, good. And, but how do you feel about the Bay Area ecosystem? So versus LA and other places.
it is interesting and I don't, I don't know what, so Uh, again, we've looked at about 175 managers.
so far two out of three are Bay area which. For me as a, you know,
In LA you're, you're long career here in am, I am long LA for sure. I've been here for 12 years and you know, selfishly, I, I really want to back in LA Manager but you know, it is what it is so far, right.
So the but I think you told me you just aren't seeing as much in LA right?
So honestly, like we, we just went through this exercise and of the, you know, of the 175 funds, like there just hasn't been that there, there's a small handful that I can name that are kind of exclusively based in L. A.
And I, thought a lot about it, you know, and I do think that part of that is kind of the market demanding, you
When we were kind of coming up, right, there weren't that many seed funds. And so there were folks like Dustin and, TX and Eva and that were kind of emerging right now they've emerged.
And, and I think the there's more capital now in L. A., I feel like forming around later stage, Series B, growth equity,
Yeah, it people have matured, but I still think I'm I think you're gonna get a lot of interest I'm telling you like my last podcast were Kitty Hawk really interesting executive director at singularity FTW
I mean, everywhere. Symphonic. I'm telling you, there's some good ones. There's some good ones. Okay, so you just hadn't seen as much in L. A. Not yet.
But you're still bullish on the ecosystem.
I think, I don't know, I mean, anecdotally it feels to me like, the game changed a little bit from kind of 2017, 18, 19 to now to kind of post pandemic in the sense that I think a lot more people are just comfortable doing meetings on zoom, you know, where like so much of the stuff used to be a contact sport and you had to kind of be out at the coffee shops and park there all day and you'd, there'd be this serendipity of running into people.
I think that, and maybe I'm, maybe I'm just older or I don't know what, but like it just feels like that happens. Less frequently now, and I feel like people are just more willing to stack meetings on Zoom.
on L. A. as an ecosystem?
Yeah, I mean, I just think, I think that the archetype of founder that builds here is so different than it was a decade ago. You know, I think like, L. A. used to be the place for, commerce brands or, new media businesses or gaming. And I think now it's, kind of runs the gamut, like it's, I think it's really kind of grown up mature tech ecosystem that can compete with the Bay Area in the sense that you have founders here building enterprise software and AI and aerospace and defense and you know, there's just lots of different stuff.
And yet it kind of feels a little full circle, which is, I feel like Hollywood has actually gotten more interested in venture
Totally have. and all of a sudden now like Hollywood wants to do techie deals.
and so funds invest in it. So, consumer side, we, we,
Are there I, I guess we're generalists within the framework of kind of software tech enabled businesses, right? And so funds that invest in those categories and so we on the consumer side we shy away from you know CPG stuff or DTC e commerce businesses. On the consumer side, we'll look at funds that are kind of investing in consumer enablement tools or platforms, marketplaces, that kind of stuff.
We are more interested B2B stuff.
Didn't you say, like, you kind of don't like deep tech? Did you tell me that?
It's not that we don't like it. So, again, part of our model, right? Is invest as an LP into a portfolio of managers, right? And then use that as a deal sourcing engine so that we can invest Directly kind of at the inflection point of call it somewhere between series A, B, maybe as high as like low C but we're looking to invest kind of post product market fit post call it four or 5 million revenue.
And one of the kind of things we're looking for on the direct investment side is we've got to feel comfortable that those companies don't need another six or seven funding rounds and a billion dollars of capital. And so that sort of knocks out a bunch of CapEx heavy sectors, right?
And so we go back and forth on this about whether or not deep tech and aerospace and defense are that CapEx heavy. I think we don't know if it's, if that's the myth of the space, or if we're, we're kind of open to the idea of, Dipping our toe in, uh, we're, we're actually looking at a manager right now who just wrote a research piece on why the common misconception about deep tech investing is that it's CapEx heavy, where he looked at CapEx relative to other pure software sectors, and he actually concluded that it's not so yeah, we're, open to it, looking at it.
Yeah, but I gotcha.
So yeah. Tell me more about that model. So you're a direct check. So you, you're sourcing from your managers, it's not like an SPV, like they're not getting
So no, I would say more often than not, they are.
And so this was kind of one thing that, we thought we could solve in the ecosystem and again, this is something we saw every imagined which was we would invest In an emerging manager, right and these are kind of by nature smaller funds, they would invest call it at the pre seed round of a company.
They did get eight to ten percent ownership They were the first check in, so they had the best relationship with the founder. Things start cranking at the company. Company raises, you know, let's say a Series A. manager has, you know, reserves for follow on, so they protect their, you know, uh, investment from dilution in that round.
And then it gets to the Series B. Tier one VC comes in with a, you know, 30, 40 million term sheet for a big round. And the manager wants to, again, protect their investment, but they've got no follow on reserves left, right? So they go out to their LPs, all who begged them for co invest opportunities when they made the investment.
And, you know, manager puts together a five page teaser deck. The round is moving very quickly. They call up their LPs and no one's around or, you know, a handful are, and, you know, they want to do 10 reference checks, certain talk to the CEO and kind of don't understand the dynamics of a, of around moving quickly.
And so what ends up happening is that manager. Kind of takes a week away from their day job to do this SPV. They burned social capital with the founder who burned social capital with the lead investor of that round. And the whole thing kind of wasted everyone's time because it was, you know, the, the GP ends up raising 350 grand in their SPV.
And so, this was again, this was sort of part of the problem we felt like we could solve, which is, when we make that investment in a manager, we want to build a relationship, we want to have monthly check ins, we want to understand the portfolio that they're building as they're building it, and if there's things that we're interested in, as a potential direct investment, we want an introduction to that founder and we want to get conviction long before that Series B term sheet gets dropped, so that we can look the manager in the eye and say, you know what, we're in for a million, you know, pending valuation or, you know, whatever else.
And we're happy to do that through an SPV you create. We're happy to, you know, kind of structure it however you want. But giving that GP the, confidence that there's kind of an anchor in that SPV.
Got it. So in this case, maybe they preserve 10 percent ownership.
It's a 40 million dollar Series B. So there might be 4 million dollars of
allocation.
Sure.
And you'd be an anchor in that, that SPV. And then we would, you know, work with them on the terms of that SPV in the sense that, maybe we don't want to pay 2 and 20, but like, maybe we'll pay 1 and 10 or, you know, cost plus whatever, you know, whatever the market will bear.
I think it'll be, you know, deal by deal dependent. Yeah.
I mean it seems like the fees are less of a thing. It seems like, at least for us, like, we're okay waiving the fees, but keeping some carry on the SPVs.
Totally. Yeah. And I mean, SPVs can get pricey, right, if you're doing them. So it's like, we're happy to bear the cost. But yeah, I don't think you know, taking a management fee is necessarily appropriate.
Yeah.
okay, then, that is an interesting model. I have a couple questions. One is, so, when you're talking to LPs of First Look,
do people like this model? and also are most, of your direct investments going, are all of them going to come from existing managers?
Yeah, so, I mean, it's fairly loosely written into our LPA.
So I would say, you know, a majority of the time our direct deals will come either, you know, not necessarily out of the funds that we're investing in, but out of those firms, right? So whether it was a prior fund or maybe it could be someone that, you know, a deal they passed on, but, you know, have since wished they got into right.
we, we actually went back and did an analysis of, the best deals, best performing deals that we did at our last shop and reimagined I reimagined.
and the data just kind of proved out that, you know, the better performing deals came when we paid SPV fees and they were, the result of prorata from those managers.
Yeah, I also think that in this environment where a lot of these, I'm guessing a lot of these seed funds aren't immediately oversubscribed in their raises, like they want to maintain very good relationships with their LPs and send you good
deals.
Exactly. Exactly. Interesting. and, you know, I think in the, in our model and kind of our strategy, we're, we don't have a ton of competition.
There's a lot of LPs that invest that say they want to see co invest. But. they want to write, you know, five or ten million dollar checks, it's not worth their time to, do the work to write a half a million dollar check into a series A or series B company, like that's our whole model.
Yeah, no, I mean, I think I told you like we will throw away the opportunity to do a 500k SPV because it's too much final funds.
Yep, but we have like industry ventures fund of funds, but they want to lead the series
Yep. Yeah, interesting
Do you want to like talk about just how you got here into First Look because I mean we talked a little bit about Reimagined. It's a family office.
Family office. Yeah. Yeah. I'll give you my kind of story. Grew up in Boston started my career at Goldman Sachs 20 years ago. I was covering hedge funds, and then ended up going to work for 72 sat on the capital markets desk, which was the team of investors that looked at every IPO and secondary equity offering coming down in the public markets which kind of
got me excited.
was my first foray into even knowing what venture capital was, right?
Like seeing the venture investors and some of these IPOs that were coming.
0. 72 they started as a hedge fund or it's Stephen Cohen, right?
Hedge fund, but I see them now in early stage venture.
Yeah, I mean, you know, Steve's obviously done a phenomenal job growing the firm. Yeah, when I joined back in 2004 it was a long time ago. Um, It was kind of purely long, short equity. And then as the firm has grown over time and gone through a lot of different kind of transformations now, now they do I think a little bit of everything.
It looks a lot more like kind of just a large asset manager and so they do, you know, private equity and I think they've got a private credit team and they've got, you know, venture and early stage venture.
They've got a, early stage venture and I think they're a fund of they have a fund of funds. Yep. Yep. They have an emerging manager fund of funds.
Yeah, so they've kind of, it's really been impressive what they've done. Did that and left to get my MBA to Columbia. And then that's when I kind of decided I wanted to get into venture. Came out to LA in 2011. Joined a firm that, No one listening to this, I would imagine, will remember, but it was called WPS Challenger.
It was a London based fund that had just opened an office in Beverly Hills. I knew one of the principals there really well from a prior relationship. kind of learned the game and cut my teeth and, got into some, some interesting deals. We're in thrive market. We're in, company actually with TX, uh, called Previty when he was at Carlin. And anyway, yeah, so did that for a couple years and then, um, and then that's when the family office was kind of starting to get built out at Reimagined and they brought me on and ended up having a six year run there.
and forth to
You don't come from a family office.
I didn't,
no, you came from like a
Yeah, yeah, yeah, very regular.
I mean, a regular
Yeah, no family office, the Porter family, correct.
But you become, I feel like I see you in a lot of the family office network type stuff, probably because of Reimagined,
Yeah, I think like once you're at a family office and it is kind of funny because no two family offices are like at all. But once you're sort of in that world, you, I think you get, labeled as a family office person.

Sure. But now you're in, like, I feel like you're in that mix and you, I don't know, go to the family office.
Conventions. Conventions.
I was going to say whiskey Wednesdays, but yes, conventions, whiskey Wednesday, whatever the family offices
Yep, yep.
It's a little opaque to me sometimes.
Yeah, there's like all these like family you know, conventions and, conferences and they just sort of, uh they look very different than the the venture conferences, right?
Everyone's got a blazer on.
I was going to say there, that's how I was gonna say pearls.
Exactly
But you know, I think it's the challenges at family offices and sometimes the investment mandate is just different because whether it's time horizon or liquidity needs, or, sometimes venture is not a great asset for a family if it's, you know, they're, they're kind of thinking about transitioning wealth from one generation to the next, right?
Because these are illiquid investments. So yeah, you gotta really understand the family before diving into the family office world.
So lemme go back to your history. so you did reimagine for a number of years and then what?
And then, so then I, I sort of always had this itch to be in an operating role.
It's funny how the grass can be greener.
I've been an operator for a long time. I've no, be greener.
I'm here to, confirm.
Um, yeah, so I left, uh, reimagined and through the L. A. actual ecosystem met a venture studio that was building the kind of software back end platform for a live streaming music company called no cap.
And so I met Cisco AdlerCisco grew up in LA was a career recording artist, producer, Grammy nominated. His father was a legendary rock and roll producer named Lou Adler. And they owned, the family owned the Roxy they owned the Roxy up on Sunset.
And so pandemic hits early March and the Roxy goes dark for the first time in 40 years. And Cisco has this idea to live stream some shows out of there and You know, broadcast it anywhere he can and see if anyone would be interested in buying a ticket. Did one show and they sold 700 tickets online.
And said, huh, there might be something here. And so that's when I met Cisco. He kind of said, you know, look, I can open any door in the music world if you can help me stand up a business. I have no idea. You know, the first thing about that. So I got excited and it was a blast. Like we had, it was maybe one of the most fun professional experiences I've ever had.
You know, we, over the course of, I think, 18 months, we threw something like 200 shows worked with some incredible artists. We worked with the Foo Fighters and we did a show with Weezer Disney Hall and we did Taiko up in the woods in the Sierras. Uh, on New Year's Day, we did Cypress Hill, and then it was kind of fall of 2021 when like, that was sort of, it's hard to remember the timeline of COVID, but like, that was when like, you could start to leave your house and the restrictions kind of started lifting and you could go to concerts and like, once that happened demand just it didn't fall off a cliff, but it just stopped growing.
And so that was that. Then I went to I still kind of had the operating bug ended up going to a blockchain Bitcoin mining company called Northern Data. And did that. I mean, it was, it was very funny that, situation.
I got hired as the chief operating officer in North America, and I think at the time we had a billion and a half dollar market cap.
And Bitcoin was at 60,000 and in between the day I was offered the position and the day I started three months later, because in that time my wife and I had our first kid, and I took a little time off the stock dropped 60%, Bitcoin was down 70%, and it was just a, a really challenging market. Oh, but you were COO of a billion and a half dollar market cap, like that's,
Sorry, I didn't mean to interrupt, but I think it's always interesting, the VC to COO type cause you have a lot of sort of theoretical knowledge of how to build these businesses.
very different when you're in the seat. Uh, and I, for me, it totally gave me a like a, really a true appreciation for people that are, excellent operators.
Because it is so hard. Yeah. And, I mean, you know, in my kind of brief time doing it, right, we were dealing with a market, dislocation and it was a, it was just a very tumultuous time, but I actually think that's kind of that's sort of most of the time when you're building a company right there.
It's always yeah there's always something and like something's always on fire. And so yeah, I mean I've a ton of respect for people that can kind of navigate that and inspire a team and continue growing and it's really not easy
And yeah, I mean, you know, ultimately I kind of decided I was better suited.
I think on this side of the table
One little guy he turns two in March.
Yep. He's the best Ramsey
So fun. So how do your friends describe you?
I don't like
I really like it as a question. You can roll your eyes.
They don't. How do they, I think they describe me uh, being loyal. I'm kind of, uh, you know.
You're an East Coaster?
I'm an East Coaster, yeah, yeah. 12 years here.
You know, I'm, I'm kind of, always there for him, I guess. I don't know, it's a weird question.
I like it as a question. I feel like it's a little, I mean, sometimes that's what you like in high school, if you prefer that question.
I was voted done most for the class.
Wait, wow, you did the most for the class,
You were like the,
I was like the student council president. I was like that guy, yeah.
That's like, you're just sort of a
citizen. Yeah, Yeah, likewise.

Great. Well,
it's been really fun to get to know you and I feel like there's a lot of people who are gonna really be excited To know that first look exists and to know about what you're
exists. I've got notes for you. Um, thanks so much for coming on the pod. Yeah, it was
I've got some notes for you. Thanks so much for
covered everything.