Let’s dive in.

Earnest Sweat 00:13
West is so great to have you on. Thanks for being on.

Wes Panek 00:17
You’re welcome. It’s nice to be here.

Earnest Sweat 00:20
I always like to start with just hearing about people’s journey, and I’ve known you for a little while, but if you could share with the audience, kind of how you even got from the world of consulting and international development to becoming an allocator,

Wes Panek 00:35
absolutely, I feel like it’s common in venture, whether on the allocator side, the investor side, that everyone has a quirky and maybe non repeatable path in, I think mine, I have reflected on my family dynamics growing up a lot as a huge driver of my path in to venture and particularly to LPC. My father is from rural Utah. He grew up in sort of a conservative family that instilled in him, like on a farm, values of thrift hard work, kind of a market oriented mindset. Think like Mitt Romney vibes. My mom’s family is very different. They are a family of immigrants from New Zealand. They’re Maori, with a strong connection to the land and indigenous tradition. They instilled in me, kind of more of a progressive, if you will, orientation view of the world, a sense and view that markets don’t always work for everyone. So I always, when I started my career, had this deep interest in trying to make markets work for everyone. And started my career in consulting as just like the first place where I could see a bunch of businesses, see a bunch of things in action, figure out where to go and how to find the places where I could maybe be part of trying to make them work more for everyone. So I went from consulting to international development to venture to the LP seat, and the through line was really about trying to get closer and closer to the people that were really building things. So as a consultant, I spent a lot of time with large companies, and then at tail end, did a couple of projects with small nonprofits and a couple of startups, and was like, that’s where I need to go, international development. Then it kind of put me closer to small companies and startups that were building a range of things in tons of different sectors, like healthcare, AG, et cetera, and the sort of philanthropic at the time bent on that work really felt stymieing and slowing at times. And so I got interested in venture and moved to the Bay Area to work in 2016 at this small, impact oriented venture fund called New Media ventures, where I was really spending a lot of time backing seed stage and some pre seed stage companies in these very niche spaces. So civic tech investing, ed tech at the time, some media companies before media was not logical for venture, and I loved that work, but I found myself most of all really loving the people and the other components of what was required to be good in venture. I just felt I wasn’t as good at or didn’t have as much passion for. And so some of the GPS that I had met in that seat while I was at immediate ventures, I caught wind that they were staring at the screen door, this fund of funds, and it encouraged me, like this was a more kind of narrow version of looking for people that were building things. The thesis was kind of under represented or misunderstood GPS, but that the way you look at a GP compared to businesses writ large, was much more people focused, and much more about building conviction, and whether or not I really believed a GPU or any individual person could really execute a strategy and that they were right for that, and that felt like a light bulb moment was like, that’s what I’ve been looking for.

Earnest Sweat 04:17
what assumptions that you have about these, this idea of, like emerging managers and people building their own firms, and then kind of, once you’re in it which assumptions kind of were validated and which were kind of like, Oh, I definitely don’t. Didn’t know anything about this.

Wes Panek 04:49
I think coming in, I had really not seen the traditional LP side at all, or thought about that side. So I had just this tremendous blind spot. Around what LPs are, how that shapes like a GP strategy, and the type of things they may spend more or less time on, and the fact that GPS really have, you know, in a way, two customers, LPs, as well as founders. And so a lot of it was an exercise in assuming that so much of my diligence and focus would be kind of one playbook, like you are a SaaS fund and you do this type of thing, but within the universe of any type of funds, thematically, there’s a whole LP side that I really had to learn. And so I think what I found going into screen door was that there’s not one playbook to win in venture, and that as a GP, it’s such a bespoke per fund mix of ability to speak to founders, charisma to raise long term vision coupled with like short term execution and like sort of markers that convince everyone in that whole universe that, like, you’re worth backing and supporting, and that was like a very different motion than do. I think the business model of this company is in a big enough market with the right product. So those are some thoughts that come to mind.

Alexa Binns 06:19
You talked about being motivated to find how capitalism can work for everyone, is that at all related to where you found yourself today?

Wes Panek 06:30
Yeah, it’s a good question, because it definitely is. So today I find myself at the astera Institute. We are a multi billion dollar Foundation. We have a mission to steer science and technology towards an abundant future for humans. Our view is, AI is accelerating, it’s coming, and this will present a variety of futures for humans. And so we have an urgency to back deeply technological and frontier science driven projects that really help humans flourish and thrive. And so I think to your question, when I learned about that, both that mission as well as the way that the foundation intends to operate, which is kind of a mix of the flexibility of philanthropic dollars and being able to structurally and thematically, invest in a lot of different things, but with the kind of the urgency and the speed of a venture fund, it felt like this is the type of place where I can do that type of work.

Alexa Binns 07:34
And you’ve recently, with the addition of you to the team, added fund investing to the next there’s you said, the grant making, the research. How does that sort of screen door Fund of Funds approach fit in? What’s it doing at the foundation?

Wes Panek 07:54
Let me give a little bit of context about some of the things I saw at the screen door that kind of led me, and then how I got to Estera, because I think that’ll frame up a clear answer to your question. Screen door was a wild experience, because I joined as the first hire. And for those who may not know, screen door is a fund of funds that was started. I joined in 2021, so was started, then by 10, GPS, that came together, who had all built their own firms, were very known, Satya, homebrew Kirsten at for green folks like that, they had this thesis of, we can uniquely back, know and support new GPS in building their firms. And the set of LPs that we had at the time were deeply institutional, some of the top endowments, foundations, and so it was this unique coalition of people that crowded in, like on day one GPs who wanted to talk to us. And so when I joined my job for the first couple of years at screen door, I was basically just talking to every single GP all the time. And so I think I remember showing up my first week at the screen door, and the team had put a boilerplate intake form on the website. Hey, if you’re interested in pitching us, send us an application. Send us a deck, without knowing really, how many, how much inbound we would have. And I think on my first day, we had like, hundreds of applications. And the GP is like, can you just sort through this, which was a daunting and exciting process. And I was like, Sure. So all this just set the context of, like, I just saw such a flood of GP decks, pitches, approaches, some of this informed my mental model quickly around, like, okay, there’s really not one way to win. One thing that I saw at the time was I thought there was like the sliver of deep tech funds that were raising in 2021 that just personally felt more interesting. Again, kind of not. It’s not a knock on SaaS or anyone that truly loves it. I just always think of that as the example where I remember seeing decks for GPS, wanting to invest in neuro technology or fusion and geothermal, and just. I thought that was interesting, but it wasn’t really a space we were looking at at the screen door, which made sense at the time. Some of the models were like match people that have built firms with up and coming GPS that are building firms where that experience makes sense, and we just didn’t have as many deep tech GPS around the table. Fast forward a few years, and as I was just thinking about and continuing to talk to hundreds of GPS every year at the screen door, I just noticed there was a steady trickle, but it was noticeable of more and more quality technical GPS, and they all had like shared characteristics. Many were scientists. Many had academic networks or theses that didn’t translate well, or weren’t easily understood by larger institutional LPs, because they didn’t spend their time there. And I started to feel like there were kind of missing things. And I remember at one point towards the end of my time at screen door, making, like, my own list of here’s like the five to 10 funds I love the most that like we just haven’t spent any time on them all kind of clustered around deep tech. So all this to say, I met Astera and realized that like this, it is the type of institution that has the flexibility, the capital and the network to understand and make these GPS legible, give them early commitments and really help them. So there was an automatic click in my mind around the type of capital and the GPS that I was seeing in space. And then as I learned more about a star as mission and about some of the structural benefits of investing in funds, it seemed like a no brainer.

Earnest Sweat 13:11
late last week, I spoke to a very well known multi family office that is starting to incubate funds. And so it made me think of this question, when you do have that opportunity, you’re coming together, you’re meeting a Sarah like, how do you convince one, convince and then implement a blank slate? What kind of incubation or allocation strategy?

Wes Panek 14:22
I like and appreciate thinking about this, because it’s all I’ve thought about for the last year. And so there’s a lot of there’s a lot of pieces, maybe at the high level, I would say, you know, the thing that I’ve tried to do is really think about this as a trust building exercise, and the kind of structural components of building that trust for me, have been first painting a long term picture of, should this succeed? What can this really unlock in the same way that GPS often pitches to LPS like by fund, 234, like this is what you will see. And what you will have, but couple that with like a very narrow right now, here’s exactly the contours of that and what I will do. So to maybe be more specific about that, I’ll just tell you, when I first met Astera, I had left the screen door. I had been looking for my next role, which was a long and intentionally picky process for me. I wanted to find the right fit. And Esther, at the time, was looking for what is now my colleague, Eli Dorado’s job, which was the head of strategic investments. So sort of, he’s point on startup investing, grant making. I do funds. We kind of collaborate on both. And I interviewed for that job having done grant making in SARP investing in the past, Estera told me, Hey, we think that someone else is better qualified for this. And they were right, but we like you, and there’s something interesting. And you keep talking about funds, like, what is this? So the way tactically that I started at this was I told them, what if you just contracted me to build almost like a research paper, in the mode that a scientist would because this was kind of the currency and the language internally, where I’ll go out and scan the landscape and really give you proof points, qualitatively and quantitatively around how many of these funds exist, what they’re doing, the profile of these, if we were to back them, what this would mean for our network, and understanding of different nodes of research going on that we might not have purview into now, different types of company that might be mission aligned, investments that we would want to make, et cetera, et cetera. And so I spent a few months at the end of 2024 just as a contractor, like building that thesis out and saying, here’s like the rough contours of what an internal process or program build would look like. And the first step was just getting the buy in that they thought this was like a worthwhile experiment to run. And it was more about, like, shaping the experiment. One of the operating principles at Masters is, think big, look for underserved ideas, and like, do the experiment. So a big part of that, to your point, earnest, was like, there is emotion in the field of like, people incubating these things. And I see it less. I remember talking about this. I see at least in this space, and I see us as uniquely positioned to do it. And at the time, as steer had only been around a couple of years, we’re kind of under the radar relative to our ambition and also how much capital we have, you know, we have, like, multiple billions of dollars. So that was step one, and then that painted both the value of doing an experiment and the macro possibility here and then in the micro. Because I imagine many listeners might imagine this kind of nerdy thing, I really tried to back into if I was starting my own deep tech fund of funds right now, what is the sort of max amount of capital I would feel comfortable raising and deploying, and what would year one look like? And so I thought about it like a normal portfolio construction, very much like a traditional allocator, and kind of map that out. So year one, I’ll deploy somewhere between 10 and $15 million I’ll back four to six funds. I’ll sit in the ELPAC for a few of them. I’ll do this type of check size. So all those mechanics were there. And then year one became about really just executing that and, like, overly community communicating, I think, compared to now I will start to do everything I was doing.

Earnest Sweat 24:13
making sure that you’re already ahead, and you’re starting to utilize all that expertise and that knowledge that you’ve had from prior places, that’s a good reminder, was there anything you know going from a fund to fund to a foundation? Lots of differences, but I was curious if there was any kind of like because of the goal and mission of the foundation. Has it changed anything with, like, the risk appetite or time horizons for you with your investments?

Wes Panek 24:58
The Distilled answer is. We’re just much more flexible, which personally makes me energized, and also, particularly in the early days, makes it really challenging. I think I joined within a month of my colleague Eli joining, and we’re the two person investment team and the backdrop of Masters this first year, because I guess I’ve, I mean, I’ve not even been here a year. I guess March will be about a year. So the backdrop these first 10 months has been building and reshaping the team very quickly. That includes a much broader set of researchers, and then figuring out within or figuring out from this, this broad mission of deep tech and frontier tech. What are some of the key areas we really wanted to focus on? So I think there were a lot of, what about this? What about that? What about this? What about that motion early, where I was trying to just figure out, thematically, like, where to hunt. Once I started, once we started to call us around some things, then to more specifically answer your question. I think the biggest difference is anytime I start to really get to know a fund now, I feel like I am needing to, in a bespoke way, paint for myself, what the potential value of backing this fund is from like, a first principles perspective, whereas a screen door, it was so much more like, I know what we’re looking for, and it’s more about like, can this person do it uniquely like we are looking for, maximizing return returns and at Easter, if I think about the for maybe soon, five funds I’ve backed so far, and the host of CO investments and startups that I’ve also like worked with Eli on, I can like the story for every single investment is very different. Some are so that we can just see a lot of deal flow. And CO invests with a fund, which we’ve done some, because I think we can be the most valuable LP, and that will get us into different research networks in a way that we couldn’t on the startup side. Last year we did like a pre seed or seed company in a couple of contexts, and then we led the Series C of a small modular reactor nuclear company. So it’s really opened the aperture of what we can do. And I love it. And the challenge is, for me, it has made it less straightforward for where to spend my time and what networks to build, who to pay attention to, and I think I’m still working through that, but we’re shockingly flexible in terms of what we can do and what we can invest in. I never want to throw good money into bad things, so I don’t have any funds. I back like I have to make sure I feel real conviction that at least it will return a 3x or something.

Alexa Binns 28:13
You mentioned networks. Are you finding Are there any things you can mention that you feel like are deep tech or frontier tech, great LPS that you’re sharing deals with, or great communities, if other LPs listening are interested in kind of joining you in this space, maybe it’s You know, for SaaS, it’s like the Waterloo graduates. Or, you know, is there, is it all just x space, x people?

Wes Panek 28:49
Yeah. It’s, it’s, yeah, this is a good question, because my take on this is like, it’s, you’re starting to see that, but it’s not as obvious or kind of coalesced yet, not to, not to beat the dead horse with, with some of the screen door comparisons. But I remember a screen door. For example, there’s a very clear kind of place where people looking to back underrepresented GPS, for example, at the time would kind of gather, like the equity Summit, for example, which was one of my favorite events. And I kind of knew a lot of who those LPS were. I think on the deep tech side, like I’m on group chats, or constantly in touch with certain family offices, fund of funds, institutions that are focused there. And often we’re going to some of the same events, some of the deep tech climate weeks, things like that. AGMs for larger funds, or kind of known emerging managers that are getting closer to being established, but I don’t think it’s coalesced quite as well, a number of kind of, to your point, a number of sub $50 million even sub $25 million funds that I liked and spent time within my so far, here to stay. Era where folks have spun out of Palantir or SpaceX and drill, so like you’re starting to see those talent outflows mirror things like exoduses from stripe or mag seven before that. But I don’t think like the LPs are coalescing kind of concretely around deep tech nodes in the same way yet, which is part of, for me, a positive signal around the value of doing this and the alpha here to be had where I can kind of help create some of those spaces and some of those conversations. And there is a real benefit of me going to many LPs and being like, look, here’s what I’m seeing. Because it’s not as clear where you can just go find the latest and greatest pulse on that. Or it’s not as easy as some other sectors.

Earnest Sweat 30:50
Wes, do you think that LPs, who are interested in deep tech, Frontier tech, have to be technical to underwrite these opportunities? This first question, and if, if not, what are best practices for them to get up to speed and kind of not have negative selection bias?

Wes Panek 31:10
You and I have talked about this before, and I’ve thought about this one because in the binary No, because I’m not technical or not traditionally trained that way. I think I flirted with neuroscience in undergrad for like, a month, and so I Yeah, fair. So I’ll just say quickly, I went to Johns Hopkins for undergrad with aspirations to be a doctor. I thought of myself as maybe a technical person, and I was also studying music, and so I wanted to understand how the brain would function in jazz music and improvisation. Because I was a saxophone player and piano player growing up, I had a neuroscience professor that walked up to the board and mapped out a timeline of how long it takes to get to med school, what you have to do. And I was like, Absolutely not, just absolutely

Alexa Binns 32:02
not that professor is the most valuable, like that was the best three minutes of your life, the most impactful.

Wes Panek 32:34
And you’re like, You’re a doctor. Ma’am. That’s exactly the validation I needed today. Thank you.

Alexa Binns 32:40
They say, is there a startup I could go work for? And I’m like, Well, sure. Like, they’re gonna, they’re asking, like, Would you like to do customer retention?

Earnest Sweat 32:52
Like, not gonna get paid, what you’re paid? Yeah, yeah, better shot at being a consultant for the pit.

Wes Panek 32:59
Yeah, that’s right. So, to answer your question, earnestly, I don’t think you need to be technical, but I certainly think it helps. And I think if you are technical, and your aim is to be a meaningful investor into a fund and also help catalyze a fundraise and crowd in other LPs. Like, you can really like there is probably meaningful time left in the market for people to be playing from the LPC or the allocator seat, that type of translation role. And one of the reasons I felt confident starting from zero with this narrow and specialized thesis was because there are so many technical scientists here at astera. Some of my tips if you’re less technical and interested in this space, I in this space, would be two fold. One, one of my colleagues at astera has taught me to really embrace low status, so you have to be comfortable just asking what made me feel like uncomfortable, obvious or dumb questions I find myself at asterisk, sitting in a room at any given day of 30 to 40 scientists who are experts in their field, in energy, nuclear, AI, safety, mechanic, like all kinds of things. And every day at lunch, when we all sit, I’m just sitting in the corner being like, what does that mean? What does that mean? What does that mean? But I had to be honest, like, I don’t think a lot of people are comfortable doing that. And for me, like being coming in, where I had clear expertise and confidence in being an allocator. And I had done it for years, it was like a foreign motion to go back to, I know absolutely nothing, and probably back to my consulting days. So that would be tip one, and then tip two, which probably sounds obvious, but I will say, has become invaluable to me, is to take relentless notes and then talk to AI all the time. So my and however, like, through whatever medium for me that has been admittedly, like voice, like, I will go home and I’ll be working out, and I will be like, coming off a conversation with the founder or scientist at Estera, working on, let’s say, fusion again, and be in my own gym. Like, okay, how many protons and neutrons are in boron, and how, what role does that play in a nuclear reactor core? Again, like, I can’t remember, and just iterating and having the conversation. So it is the type of thing that I think if you want to be a good technical Lia enough, savvy investor in this space, you really have to cultivate an ability to ask shameless questions and like, pursue understanding and probably have requisite confidence before that in the allocator side of the job, at least enough that you can, kind of, like, eventually, over time, marry those things together. That’s the bet I’m taking here and on myself. We’ll see how it goes. But that would be my advice.

So somebody who maybe does have a PhD is very academic, but also is also very charismatic, and can be a good teacher, and can explain things in a really simple manner, especially when they’re in front of a generalist or somebody they’re trying to sell to. Do you feel like the same thing is needed with deep tech fund managers?

Wes Panek 37:37
I think I have biases towards those qualities, and the ideal for me would be similar to what you just outlined, someone that has deep that is deeply technically trained, often a PhD, and also has the charisma or the depth of experience to explain those concepts simply and modulate those explanations to different types of groups in an effective way. The reality is, those are pretty rare profiles. And I bet if I tagged the few 100 GPS I talked to at an asterisk so far by whether I think they have one or or the other or both, it would probably bifurcate towards one or the other. And so a lot of the value for me of meeting people in person over like, extended amounts of times, or meeting people in person over extended amount of time, is to try to suss out like, which one of those do I think they’re stronger or weaker on and do I think there is some path that they’re seeking to close the gap enough on the part that’s weaker, and it tends to be more finding the technical people that have enough of the seed of kind of charisma and understanding Adventure. I think that’s like, easier to learn, or I probably bias towards people starting with a technical advantage, because it just crowds in better networks, steel flow, and then the rest you can learn. But I don’t want to minimize that it’s like easy to learn the venture or the charisma side, like it’s not, but that would be my personal bias, but I’ll say, I’ll leave you with one example on this question, which is the first fund I backed. Was a GP who spun out a Google deep mine, but within the Deep Mind universe, He was not kind of as technical as some of the lead engineers. He led a safety team there. And a lot of what I liked is, once he left, he just put his head down and kind of wrote about this on a series of sub stack posts online about really educating himself on like, the true technical parts of machine learning and llms and has, like all these posts you. Can follow over this, like one year of Deep Dive. So that’s like an example where I was like, Oh, he just inherently wants to learn this stuff and is self aware enough to know here’s the moment that I need to level up in whatever area. So I think you can compensate. But my bias would be like, probably technical, technical people first for

Alexa Binns 40:24
GPS, who are listening, who are thinking, maybe I’m a match. Maybe I should try to get an intro to Wes from any other qualifiers that are just basics, like you should speak to us in these cases. Otherwise, knock on other doors.

Wes Panek 40:41
Yeah, I’ll say maybe, just like the straight ahead parameters right now, I’m preferring smaller funds. So usually funds $100 million or lower. So far, I’ve really only backed funds at like $50 million or lower, because, I think for many reasons. So that would be one, usually a fund one through three. Ultimately, we are very flexible, but that tends to be the sweet spot for fund investing. I like to talk to GPS earlier in their fundraisers, and right now I’m preferring specialized funds, particularly in the following areas: AI, infrastructure, energy, neuro, tech. Those are the main ones, but I’ll talk to most people at least once.