Earnest Sweat 00:03
Welcome to swimming with alligators. I’m Earnest sweat and each episode Alexa bans and I give you a VC podcast from the LP perspective. Are you ready? Let’s dive in.

Alexa Binns 00:13
Today we are thrilled to have Christian, an entrepreneur allocator and lawyer with an extensive experience in private investments and family offices, both in the US Greater China and Asia. While Chris is co-founder and CEO of Revere, we’ve asked him today to share his LP perspectiveOriginally from Texas, Chris has lived in Asia from 2006 to 2019. He’s a voice in cross cultural dialogue. Today we’ll hear from Shen about US China, geopolitics, history and macroeconomics. And his work with the Asian American Foundation, and the Committee of 100. Welcome, Chris.

Chris Shen 00:57
Thank you, Alexa, Earnest. Great to be here.

Alexa Binns 01:02
Thank you so much. We’d love to hear your LP career journey.

Chris Shen 01:07
A lot of folks, you know, don’t have linear careers in investments, I certainly did not. I’m from Houston, as you mentioned, went to UT, they went to law school. And I was just gonna be a lawyer writing practice law for a while with Baker, McKenzie overseas. And then one of my best friends growing up, co-founded a family office and wanted me to be a part of that founding and getting that up and running. So I thought at the time getting promoted at my law firm, I was pretty happy being a lawyer. But the work and the hours were very, the hours were tough, right. And I jumped at the chance. So we co founded West 22nd Capital Advisors, FYI, that’s not a street in Chelsea, that’s actually West Campus, where we went to UT. So it’s 22nd 909, West 22nd Street, where we live in college, you know, fraternity house go story for another time. Essentially, public equities, fixed income, public public markets, in general did some private and fund investing. And given my background, I ran most of the fund investing in some of the early stage stuff. So my journey there was pretty, I would say, kind of random, you know, going from sort of being a lawyer, and looking at the door to things micro trying to understand sort of the macro and the bigger picture and doing portfolio allocation. Construction was literally drinking from the firehose, jumping into the deep end, that type of thing. Fortunately, I had two partners who were very good and very patient and taught me different things. And I think very much like them, you know, sort of from just osmosis, and getting my hands dirty, so to speak, stepped down from the family office, the strategy changed a little bit in 2019. And we’ll get to sort of some of that, and then co-founded reverse based on my experiences as an allocator. overseas in Asia. Namely, revere does two things. We are, I guess, you can say, influencing capital through data and software. On the data side, we have the world’s largest collection, or you know, sort of collective of emerging managers starting with VC 550. Plus, we have their data, we help people connect to their startups. And on the portfolio management side, we’ve worked with LPS of large, all different shapes and sizes, institutional to family offices, managing their portfolios through automated AI, data ingestion, custom reporting and dashboard. So my insights and sort of my experiences are from my time in Asia, in addition to working with GPS and LPS now at review. Chris,

Earnest Sweat 03:33
Given your experience, internationally, in China, obviously, if anybody is listening in understanding the macro environment, there’s a lot going on. What’s your current take for allocators on both sides? Whether they’re in China or here in the US, what’s going on? And what’s going to be in the next 10 years? And has that? Is that going to impact the private markets?

Chris Shen 04:05
Come November? There’s gonna be a lot on the line. But I think I, you know, ironically, no matter who’s elected president, I think there’s a sort of bipartisan sort of across the spectrum view on sort of China, unfortunately, in ways, a lot of that is misunderstanding and kind of, you know, some things are true, but some things are misunderstanding. And if you take off sort of your politics or whatever hat, you know, all that and you look at it from an investment standpoint, it’s still pretty interesting. I think before we started, there were the q1 q2 numbers from last year 2023, there was only like $5 Billion US of activity, private equity activity in all of China, right, given there’s 1.4 billion people, lots of sort of mergers, a lot of acquisitions, a lot of movement, a lot of companies coming up and stuff like that. So I find that pretty fascinating, to be honest, I think on the LP side overseas, there’s never been sort of a healthier appetite demand for United States US based startups, mainly AI and sort of things like that. That’s not going to end anytime soon. I think it is a fever pitch. I would compare it to like a couple of years ago, people were all looking for SpaceX secondaries, some people still are. And then before that, it was like all these other different companies that were coming out the big font coming out of the big funds. So that appetite has not waned in any way. I think when you flip over to the the companies themselves and the fund managers, there is a bit of resistance to capital, you know, originating from certain countries, for the optics reasons for KYC for all these different reasons, some are overblown, but some are more just, you know, they don’t want to deal with the headaches that entail taking capital from certain countries. So that’s one on the US side, I would say from an LP perspective. Appetite has gone down, I think when you look at venture capital, in general private equity, strategies have been shifting, people have been divesting, renaming their funds, we saw things like ggV, and Sequoia, etc. A lot of other funds that are not sort of making the news so to speak. That is a function largely of LP demand, their biggest endowments, the foundation’s insurance companies are trying to take that risk off the table. Some of that is investment risk, some of that’s optics, some of that is just you know, policies internally rightfully or wrongfully, it’s their policies. But I would say demand on the LP side in the United States or Western countries, most Western countries going to China has waned a bit, there’s a bit of overhang and VC, obviously not enough exits, in addition to perceived regulatory risk, with government policies, etc. I would add, you know, as a disclaimer that the government’s on both sides are not fairly intelligent, they are nimble, nimble is probably the wrong word. They’re fairly intelligent, they will do what’s best to unlock sort of flows eventually. So I’m thinking that the government’s will do the right things, eventually, through sort of negotiations, and then figure out what kind of policy goes to support allocations to private equity and venture capital, both countries. Yeah.

Earnest Sweat 07:10
You. You brought up a point in the beginning of that last answer, Chris, about just the demand for interest in US companies, and exposure to US ventures is at a fever pitch, especially from Asian countries. That’s been consistent with what I’ve been hearing from large and small fund managers. Here, while all that is going on with us in China, it’s been pretty cold with life, as far as fundraising and so now people are looking for new allocators. And so there’s a lot of flights going out to Asia. Any advice for, you know, our audience of established managers, as well as emerging managers on how to really tap in and develop those relationships? Because, you know, I have assumptions that if there’s a language barrier, you’re at a disadvantage, but I could be wrong. Yeah,

Chris Shen 08:08
they’re, you know, artists, that’s, you know, it’s a very, it’s a very good question. When you think about relationship building, I would say that, you know, with exceptions on both sides, right there, there’s always been the proverbial kind of the family office that looks at your fun one, and then doesn’t come back for two years. And when raising fun, too, they suddenly show up at the check. Right? Yeah. So there’s always these stories from everywhere. But I would say that, you know, in terms of advice, I we revere right now, my co founder, Eric is actually in Tokyo, taking you to attend GPS with him in the US from the US and other places on revere roadshow, and we’re doing our emerging horizons branded event in Tokyo this week. And then he’s going to Seoul, the GPS. I was pleasantly surprised at 10 GPS from New York, Florida and LA and SF, and suddenly wanted to go right. I mean, it’s nice to vacation in Japan, great food, awesome culture, awesome things to see. But you know, a lot of times we can’t even get 10 GPS to fly out from SF to LA, right? Like I’m gonna deal with the traffic. So I like to get them to go to that I think GPS and to an extent LPs, as well who have joined us know that this is a relationship game even more so in foreign countries where Earnest correctly sort of pointed out a language barrier right. Now most folks in the business will speak some form of English and I think some countries are better than others at that. But it’s not so much a comment on sort of English speaking, but more as you showing up, right? So say for instance, you have a very nice strategy like, I don’t know, all proteins, synthetic biology, supply chain logistics, what have you, right, these are all sample managers in the Revere network. When you go out there, you know, you’ve had the car and you kind of do the pleasantries and everyone’s kind of talking around in circles. But what I found is that a lot of the GP have other investors out there. alligators will remember you because you made that trip, right? So when they’re thinking about, Oh, that person that visited me, who was not Japanese, or Chinese, or Korean, or whatever, they’ll remember. And when they’re looking for that strategy, they’ll only think of you because no one else from those strategies, or doing that strategy has visited them. And you’re the first port of call, so to speak, right. So that’s one, I think, to the timing does take longer, I think, by nature, the majority of investors out there are a little more conservative, they’re looking at funds, versus sort of trying to go direct on the cap table with exceptions. So that relationship with that fund manager, you’re going to be that person’s, you know, you know, horse in the race, so to speak, right? Your, your guy or gal or so to speak, covering that, and they’re hiring you to basically bring intelligence, you know, look at companies etc, together, because they don’t know how to do it most parts, right, we’re trying to amplify the programs. So it’s pretty interesting, interesting, we’ve seen big names, like Andreessen has been out there. I know, 500 startups, TechStars have been doing events all through Asia, with their sort of local chapters. On the LP side, we’ve seen LPS actually come out from the states out there to kind of get a lay of the land they’re under, they have no exposure to Asia or not enough. They want to build that. So we find that to be interesting, but it is one very much, much more. So a relationship game, when you have a language barrier. And two, it takes time. Right? All this takes time.

Alexa Binns 11:24
Is there a flavor of GP that you see, do really well, in terms of meeting meeting X, required criteria, etc? Yeah,

Chris Shen 11:37
it’s, it’s a pretty wide, it’s a pretty interesting split. I think with a lot of investors, and this is not just a comment on Asia based allocators. Even with me, right? When I started out in the business, I knew what Andreessen and Sequoia were, but I had no idea that my $5 million check wasn’t going to get me to get into these funds, right? Like, we just didn’t know. So there are a lot of people like me, who didn’t have the benefit of, you know, being born and raised in the US, who grew up with us at the school that simply just don’t know the rules of the game, right? There is another group of investors who are big enough, the corporates that are probably already in the established managers. But for whatever reason, you know, sometimes it’s performance, sometimes it’s coverage, sometimes it’s like looking for CO investments, those established managers have not met the criteria that they originally invested in, the right reason why they invested in. So when I like to say a lot of these investors are already in the big funds or can’t get in, this leads them down the path to emerging managers. And I think emerging managers that are again, willing to play the long game in terms of being patient, putting the effort in, and going through warm introductions through, you know, friends, you know, our network, our friends, etc, have a better chance at getting to those conversations that really matter and get sort of capital hopefully exchanged on table. I think what doesn’t work out there is, you know, we’ve all met sort of the typical arrogant, maybe, you know, Silicon Valley in New York, where have you maybe even London type of manager that, you know, shows up with a pitch decK and says, I’m the greatest thing since sliced bread, you know, take it or leave it, you know, that type of thing. That’s never going to doesn’t work in most places. It definitely doesn’t work in a place where relationship building is a premium. They have to see you in personnel that so they are evaluating your track record, but also how you will get along, you know, when, when I come to you with my team, and we need advice on this, we want to meet people, are we going to be able to play ball together, so to speak.

Alexa Binns 13:34
A follow up to that, I guess family offices are notoriously hard to navigate. Any advice on? I think it’s something like 10% of family offices are based in Asia, on navigating those relationships in particular.

Chris Shen 13:50
Yeah, you know, there are new family offices sprouting up and I think the interesting thing about Asia based family offices, and, you know, I don’t have enough experience to talk about the Middle East with Europe, but just the Americas and in Asia will take those to larger jurisdictions. They’re larger areas. The family offices there, there are groups out there that are purely service based, like if you think about counting estates, running the private jet, all that right, so that is over here. The vast majority of Asia based family offices are not that they are investment vehicles for the next generation, or attached to an operating company that the family is still running, whether it’s manufacturing technology, logistics, blah, blah, blah, blah, blah, right? Once you figure out what kind of arm, because of the entrepreneurial nature, these are not multi generation family offices. They don’t have like 70 members like the ones we work with the United States. It’s usually a principal family member, maybe a person that worked for the family in like, you know, admin, right? They are understaffed, they are over broke. They have this pressure to go and perform and like to get instant results. It’s simply because the families have done very well. And they’re used to seeing things at a faster clip. So, when you kind of identify or diagnose what type of family you’re working with, you know, the longer term, are they following an endowment model? Are they just buying secondaries? Are they into funds, it’s for you to peel back that onion and figure out kind of what they’re doing. Because most of these groups are unfailingly polite. I think it’s like a Confucian ideal, or, and all this other stuff, right? They’re not going to tell you no straight up. If you’re, again, if you’re polite and sort of do the, so there’s a lot of long maybes. So it’s your job to kind of pull back the onion, and figure out sort of what’s going on. I would say that going back to warm introductions, if you can find someone that you know, classmate or someone you’ve invested with, you know, someone, you backed all that, and then take you there and kind of go into those networks. That is huge. I think if you find one, there’s that, again, that over-brokered, under-covered, and like, sorry, over-broker and sort of very busy, but once they invest in you or your company, they’re like, Oh, I’ve invested in this, and you should take a look. Because in the families, as you know, Alexa all talk to each other. There’s a currency of trust, so to speak, they go back multiple generations, they’re always really ready to invest together as a group. If the strategy is right, and sort of the, you know, it’s a warm intro, so to speak.

Earnest Sweet 16:22
Chris, what you’re getting at is, and what I’ve been able to, like, observe throughout my own venture career, as well as doing this podcast is, yes, it’s a relationships business. But how can a fund manager quickly understand the motivations of an LP, right? And what and what gets them going? So I was curious, if you like, have a take on that on how or if you even have an anecdote on genuine ways, a fund manager has got to understand your motivations better? Okay.

Chris Shen 16:58
No, that’s a great question. So I’ll flip it around. I think, you know, if you’re a fund manager observing this sort of listen to this podcast, I would say that it is imperative to figure out who you’re selling to, right. It’s like product market fit, right? The basics, like we’ve talked about, like, I’m sure you’ve had like endowments, and sort of those types on your show, they’re not going to look at a $50 million fund outside of an emerging manager program, because their minimum check size is this right, is 50 million, right? It’s just not going to work. I would say for the family offices, it’s sometimes like that they’re not. Most family offices do not have a 50 million or, you know, requirement. But it goes back to my point, what is the motivation of that family, right? If that family is coming from financial services, chance, chances are, they’re probably going to build an asset management asset gathering entity, disguised as a family office, right, they’re gonna come out the family office, they’re going to bring their friends because they can do things that their friends can now they’ll invest together. And then from there, they’ll become asset gatherers, as opposed to a pure family office that’s doing like an endowment style, investing in preserving for the next generation, they’re gonna take more risk. And they’re gonna go after certain things right. Now, from there that split is essentially, are they looking to become direct investors? Are they setting up a hedge fund? Do they want to be a VC fund themselves? Are they whatever right over here, and then there’s others that are kind of just okay, we’ll set up an MFO. And we’ll become sort of, you know, asset management firm, but not sort of, you know, a fund per se, in terms of the GP LP construct, right? So when you figure that out, you can kind of fit, you can kind of decide, like, who’s wasting your time, right? Because the ones that are seeking purely alpha, they’re probably not going to look at funds, and they’re just going to be like, trying to get your co investments, right. That’s the only thing you know, without being an LP, and you’re kind of like, what is this person trying to do? Right, on the asset management side, if they’re willing funds. You know, I think a lot of investors out there because they’ve gone through different shocks like the Asian currency crisis, 97 SARS, and oh, two or three GFC you know, taper tantrum, and, you know, sort of COVID and everything. There’s an overemphasis on liquidity, simply because the regulatory and sort of the banking systems are very different there. So they put in a premium liquidity and guess what a 10 to 1215 year fund, or worse, a 1618 year fund of funds is not going to sort of, they’re not going to like it right, depending on their goals and sort of what the environment around them. So I think, not to sort of throw water on, you know, sort of rain on anyone’s parade that’s looking to raise out there. It goes back to again, Product Market Fit and figuring out, you know, who was that allocator? Who was going to make that warm intro, and then kind of what their goals are right. And you can have these conversations pretty candidly, once you get to know them.

Earnest Sweat 19:43
Chris, what about the stain and that kind of international market? What about the rise of corporates out there that are looking for a combination of strategic kinds of insights, and maybe more modest returns?

Chris Shen 20:00
Yeah, corporate investors out there. You know, they’re split with sort of the cvcs, which we say like they’re either investing in a balance sheet or they’ve got their own separate vehicle and they’ve taken outside capital sometimes, right? Or there’s the corporate as a solo lp. And you have the financial investors who are purely investing off of their balance sheet. And they can have like 100 funds on their system, and they’re just basically putting money to use right. Yeah, I think we’ve spent a lot of time with Japanese, Korean and Singaporean corporates, excuse me Thai corporates. So there’s four main countries, in terms of that’s been the split, right? A lot of times, these are listed companies, they’re trying to figure out, again, what’s around the corner, when they show up, it’s like, they don’t have the connectivity to again, it was blockchain AI, some FinTech, it’d be consumer with a different kind of company retail. But when they show up, they realize that, like, they’re just kind of, they don’t fit in, right. It’s kinda like us going into a country where we don’t speak the native language. And we’ve kind of stood out for our own reasons, right. So when you think about those corporate investors, and we work with a lot of these investors, they’re different programs that have spun up to help us see VCs and all that. But I think when when you’re when you’re a GP and emerging manager, talk to these corporates, it’s even more important to figure out again, are they a financial investor or strategic, if they’re strategic, they are good for your companies and going to them and say, Hey, I know you’re looking for this, this series, a company is about to you know, go to the moon, you should take a look at that, right. And then you can help them raise capital and all that, they’ll remember you, they’re likely not going to invest in your fund. But as a fund manager, you’re at least doing that part of the job and portfolio and asset management. On the flip side, there are financial investors. That is interesting, right? Because if you’ve got great pedigree, you’ve got a great track record. A lot of people are already in Andreessen, Sequoia benchmark, they probably are happy with the results, but they’re trying to do other things, then that’s an interesting conversation where I think as you work the channels in sort of go through their diligence might take a long time, they’ll look at your fund, as opposed to just trying to take your cherry pick your investments,

Alexa Binns 22:05
and extending from sort of the fundraising conversation to the actual nuts and bolts ongoing relationship when you are working with some of these corporate venture capital groups. Any suggestions on how to make that work?

Chris Shen 22:21
Yeah, it’s so interesting with these groups, I mean, everyone talks about how family offices are so different. They are the corporates, when you think about it, like the large Japanese conglomerates who kind of do a little bit of everything like retail, heavy industry leasing, and all this other stuff under a brand. The larger corporations, I would say that you got to figure out sort of your target? I think it is. There’s a joke that in some of these countries, if they show up with a compliance officer risk management, that means you’re on the right track right there. What you’re doing, how you’re doing it and kind of filling you out, right. So that’s, that’s, that’s one job for a couple of countries in North Asia. It is all over the place, I would say that the vast majority of them. You know, everyone right now is looking at some form of AI deep tech, because their businesses are robotics, manufacturing, advanced manufacturing, safer biotech for specialist companies. And you can largely lump them in this deep tech category, so to speak, with apologies to our specialist investors out there who are listening to this. That is, that is essentially sort of what they’re trying to figure out. Because they know that a lot of these folks were early on mobile, and they knew, obviously, the internet and stuff, it’s sort of accelerate their businesses where there are now, but they also are smart enough to figure that AI could completely rupture disrupt, make things extinct, you know, and all that for certain parts of their business lines. Right. So everyone’s clamoring and looking for those types of things and trying to find an edge. I would go back to the thing that a lot of these folks have difficulty sourcing, difficulty sourcing, they have to rely on emerging managers, because emerging managers again, they’re doing their job, right. They’ll refer to ideas, they’re going to build it around, we’re going to look at that. So I think there’s a nice synergy that’s coming together around that. But then it goes back to again, which managers are you looking at? You know, a lot of people have been burned by sort of manager programs in the past that have not panned out. So again, it’s it’s sort of meeting meeting in the middle so to speak, on sort of targeting who you’re talking to

Alexa Binns 24:34
Do I have the right kind of concept that even if they are interested in sourcing, it might be a company’s got to be like series D or above before they actually have a working relationship?

Chris Shen 24:50
They’re good questions. When we take a look at and we have data, because we work with a few corporates, we know what they’re investing in on the portfolio manager Inside, we sort of ingest their data and eventually want to suggest ideas as part of our business model going forward. Right? There are, I think there will be, in the recent past in the past couple of years, I think that derisking, you know, the, the, the perception of a derisk company at Series C, D, and beyond. It was a perception, right? Like, they can go public, everyone gets their, you know, sort of, you know, everyone has the sort of returns on that, and they recycle that. I think everyone’s talked about Uber for about 10 years when they stayed private for so long. And that was because it was by choice, right? I think now, only the best companies can go public, given the market sort of sentiment, we saw Reddit, we saw already go this and then go like this right. And sort of Databricks has been in talks and all these other companies, etc. But when you think about the stripes of the world, I don’t feel like they’re any, in any kind of rush. So the derisking, where corporates invest at a certain stage, late stage, they’re still sort of value that they are trapped in that company that they need to recycle, because they’re doing sort of forecasting, guidance and all that right. And it’s a, it’s a big balance sheet item, they need to figure that out for transparency for disclosure reasons. So with that, if you think about going earlier, depending on the type of investor, especially if it’s like a strategic investor, if they pinpoint that, and they have an incubator accelerator program around that, they will likely go earlier, right? Because the markets are very different now than there were five to seven years ago. And then the onus on, we can go in early and be patient when these markets are closed, and everyone knows their zombie companies and m&a activities, kind of muted. The corporates, I remember attending an event with a bunch of fintechs, I believe it was like, all the big FinTech arms were there. And they were having their moment in the sun, right? This is like early 2012, between 23 They’re like, Yeah, I can invest in your seed stage company. And I’ll follow it till my analysts cover you and you’re a 15 year old, you’re stuck, right. And they said that, like, almost verbatim. And I found that really interesting. Because, you know, that’s nice to have that partner for so long, without them sort of banging on the table and saying you have to exit because my fun term is up, right? So I think it’s kind of slanted back or tilted back in that direction at an early stage. But it’s a function of market dynamics. And if things change post November, if the interest rates are getting really hacked, you know, sort of just risk it again, because things change. You can see the pendulum swing back to the other side.

Alexa Binns 27:36
Now I think thanks for unpacking, I’ve definitely experienced some founders who are saying, Man, I keep getting these corporate VC requests, or these, you know, strategic pitches, and they don’t go anywhere. So sort of when is it worth your founders time to be teeing them up for this capital?

Chris Shen 27:57
It is, I would say that as a founder, and by extension, the GP, you should take a look. I think it’s not that you have to fly somewhere and do that. But I think hopping on a zoom, just talking about those things and understanding that, and then doing your due diligence and sort of homework, you don’t want to you know, there’s always the rule of thumb is that you don’t want to bet your company on one POC, or sort of all that. But I think within that, these corporations are very competitive, right? Like they’re all looking for different things. I’m sorry, they’re all looking at the same things, but different lenses and everything. You know, once you find one, you have a reference customer and then you can basically go in and sort of talk to others and kind of land and expand. So we find that interesting. We’ve done that ourselves. So

Earnest Sweat 28:41
Now we’re gonna take a quick break to speak with our sponsor. Next

Alexa Binns 28:46
up, we have our industry expert and sponsor Brian Huber, fun partner at Gunderson Dettmer, PitchBook has named Gundersen, the number one law firm globally for investors 10 years in a row. Our guest Brian’s practice focuses specifically on structuring, forming and operating VC funds. I have used Gundersen in my own fund formation, and I can highly recommend them. Thank you, Brian, so much for your advice and expertise. Absolutely. It’s

Brian Huber 29:14
great to be here.

Alexa Binns 29:14
Thank you. Thank you. So can you tell us a bit about your firm? Gunderson Dettmer.

Brian Huber 29:21
Absolutely. So, we’re a relatively young firm . We were founded just under 30 years ago, in Silicon Valley. And, you know, we distinguish ourselves in a sense in that unlike a lot of our competitor law firms where we have an exclusive focus on what we call the innovation economy. We represent market leading venture capital and growth equity investors, which is sort of the area that I’m in. We represent companies from their founding and inception through their growth, maturity, and ultimately, we represent groundbreaking public companies as well, all within the global venture ecosystem.

Alexa Binns 30:01
And what’s your role in particular? Sure.

Brian Huber 30:04
So I’m a partner in our fund formation group resident in the Boston office. My focus is primarily on venture and growth equity funds to invest in both tech and or life sciences companies. My client roster ranges from new first time emerging managers with very small funds to mature managers who have done a number of funds and in anything in between pretty much and so it’s a broad range of exciting stuff that I get to deal with.

Alexa Binns 30:38
Given that you are working with some of these more established managers, and also some of the smaller newer funds, is there anything about the state of VC that you find yourself with a counter opinion to kind of common? I don’t know if it’s DC, Twitter, Buzz?

Brian Huber 30:58
I’m more nuanced. Yeah, it was interesting. And I think, I don’t know if it’s a counter opinion, or it’s it’s a sort of a response to what I think, folks that are maybe not necessarily in the industry, but have opinions on the industry think and I think, you know, historically, it’s been, you know, venture is viewed as sort of a an exclusive club that is conducted in very specific geographic locations. And I think, with all that’s happened in the past five years, even if that were true, historically, I think it’s just broadened in scope and location, I think there’s been a greater sharing of information. And I think that’s led to a more open and widespread ecosystem, not not necessarily tethered to a specific, you know, one or two or three locations. And I think the benefit of that, and the result of that is that there’s a great diversity of managers, and ultimately ideas. And I think that that leads to a very robust ecosystem that I’m glad to be working in. And

Alexa Binns 32:00
and you’re based out of Boston, what is that VC ecosystem and tech ecosystem like

Brian Huber 32:06
Today was great. You know, I think Boston as a city has always been a great place, I think there’s been a focus in both tech and life sciences, very heavy in, in life sciences. And I think that’s a function of great, you know, well regarded universities in the city. It’s an international culture, I think, just generally speaking, the city is growing exponentially, it seems like we’re located in the seaport District, which 10 years ago was basically parking lots. And now it seems like there’s a new building that goes up every other week. And it seems to have some sort of tech company or lab attached to it. And it’s great to see. And I think the other thing in the ecosystem that that sort of reinforces or buttresses it coming back from the downturn in the economy is folks are going to conferences more now in person. And I think that leads to more networking. And Boston’s got a number of great conference centers that really cater to some pretty good industry groups. And we see it all the time just out and about people from all over the place. They’re usually wearing badges and so you know, that they’re from a conference, and it’s great. And I think, you know, I think I think I’m excited to be in the city. It’s, you know, aside from the traffic that comes along with more people being in person, I think it’s ultimately a great thing to be part of.

Alexa Binns 33:31
Yeah, it’s, it’s fascinating. Certainly, I always thought of healthcare, you know, you’ve got like the queue EDS, there’s, there’s a lot of sort of money in fintech. But it’s interesting to think about what are some of the new things that are popping up in Boston to Maven, who use Gundersen as fund formation? When I worked there, we only invested in founders who were willing to move to San Francisco. I think that’s kind of the way the dodo?

Brian Huber 33:59
I think that’s right. I think that’s I mean, I think that’s changing. And I think that’s a good thing. And I think part of that is because a lot of people who were in San Francisco have relocated to other places that are maybe more tax-friendly, or, or just, you know, a different environment. And I think that’s, I think that all it all reinforces that sort of broader scope, ecosystem, which I think is ultimately a good thing.

Alexa Binns 34:23
Brian, it’s been a pleasure to get in touch with Brian or any of the other lawyers at Gunderson Dettmer, please visit pendo.com d u n, d e r, DOT c o m. And now back to our

Earnest Sweat 34:35
LP. Chris, you’ve been in the business for a while and around it for a while and so much has changed. What do you think are the biggest challenges for allocators no matter if they’re new to the you know, the asset class or establish today that’s been different from like the past decade.

Chris Shen 34:57
Let’s see. For the past decade, if we go back to 1314. If we just focus on venture capital, you can see kind of venture capital just completely, not just like a bunch of angels and like pre IPO kind of companies, but it’s literally broken down into like separate sub asset classes, different risk return profiles, investment horizon sort of dynamics, the players, between sort of early stage, you know, precede seed, the series, a kind of, you know, anomaly where it’s, you know, 1 million arr. And these things, but has the goalposts have been pushed out. And then obviously, you know, growth equity in the pre IPO stage. I think it was either Charles Hudson or someone wrote about a really interesting sort of disconnect between the precede seed investors. And what series A investors I think this one made the rounds on LinkedIn, because he came out and said it right, everyone was thinking about it, but no one wanted to say, right, I think it’s great that he did, it’s like the alignment of interests, you know, back 1314 15 was like, let’s just get this company to an exit IPO. And like, you know, pass the hat and kind of go, I think, right now, because of the proliferation of emerging managers, because the market dynamics, windows opening, closing, the companies that are going through these kind of, like, you know, it’s very clear, this is Series A, this is going to be Series B, it’s going to go, that’s not as clear anymore, right? And the fun dynamics of like, the pressures of fund managers to return x find X amount of fun in these companies, means that they want to hold these companies for longer and or sort of work with them in a different way. And then like their return dynamics, when they’re ready to exit and or sort of pass or move on, have also sort of changed, right? It’s not a single pane of glass anymore, so to speak. So I find that pretty interesting. I would say, we covered kind of companies staying private longer. That’s, you know, if they can they’re gonna do that, you know, it is what it is, I think the spec craze is kind of like moving away, sort of dissipated in some ways. Who knows, could come back. Right. So that’s been kind of interesting. I think, just in VC. I think what’s also been interesting is the proliferation of data like 2013 14. I remember in 2017, I came back to the States once a quarter to visit family and to look at sort of investments. I remember I invested in amplifying law in Los Angeles, right? When I was like, I went to New York, I Google New York VCs and I got like Fred Wilson’s, like, you know, it’s like, Fred Wilson was, but like, I was a newbie, obviously, no response, right? So I went to amplify and ask those guys like, Hey, I emailed these guys. And they looked at me, like, I was like, crazy, like, Okay, well, we’ll introduce you to some people we call investing. Right has no idea what he’s doing, right. But I think right now with like, different platforms, obviously, revere is building the largest collection of emerging managers around the world 550 and counting, if you want to meet any of these managers, and hopefully, when your funds are sort of fully up and running, well, you know, connect people to call. There’s so much data now. Right? So the ability to do your homework and connect with people. And again, peel back the onion, you know, got to do the work, right? Like you shouldn’t be talking to investors or GPS that you have no idea what they’re doing and not invest and vice versa. For LPS too. There’s a proliferation, proliferation of data and sources and platforms, letting you express your view in the market, which is very, very different. I would say just from you know, five to seven, maybe definitely 10 years ago.

Alexa Binns 38:29
Your AMPLIFi story is so real. Are there any other favorite stories, sort of learning the ropes of venture capital?

Chris Shen 38:38
Yeah. So when we went to Venice to visit them there, right off Venice Beach, we had a camp. My two partners and I came from Sentry city. We were meeting a hedge fund, right? And then we had a meeting with someone else and we were in suits. So we showed up to Venice parked on, like, near that area where the coffee shop is, where surfers and the Vagabond looked at us. Right? It’s like, three Asian guys are definitely narcs. Right? I don’t know what agency. They definitely are. We look at them, like this weird look like why are they staring at us? We go to the office. Paul recalls the crispy order, and we’re like, what do you do? They are polite because they’re the GP, but they’re like, oh, did you guys just come from somewhere? And we explained to them like, okay, that’s why you got the funny stares. Right? That was just, you know, I think, you know, dressed apart, right? Dressed the part if you go where we go, I think we go when you go to Asia and sort of, you know, meet investors dressed, dressed up a little, like usually it’s, you know, at least at least a suit jacket, you know, that type of thing. So that was pretty funny. I think the anecdote is like, you know, just calling friends who worked at the big funds but they didn’t have the heart to tell you that like now that $2 million is not gonna cut it. I think I think you know, I’m brave enough to you know, humble enough to say on you know, on recording, but I’m sure you know, if people are watching, you know, get up to check sizes you want. Talk to the bigger funds. Simple as that. Thank you.

40:03
We appreciate you getting it. Yeah. People need to know what the landscape actually looks like out there. So thank you. Yeah,

Chris Shen 40:09
it’s, no one tells you right? Like, I mean, you know, they’ve got platforms now who like democratize access, right? And they cut the minimums. But like, if you’re a 100 million $500 million family office, you’re not going to those platforms. So show up, like, just do your own work? Don’t you know, there’ll be polite, they’ll laugh at you off camera and ask, but not during the me to

Earnest Sweat 40:30
that point. You know, when people are starting out their venture practice, whether they’re a family office, or let’s say someone, you know, right out of college starts to work for an endowment? What are the first three things? What was the first kind of like, six months? What do you think they should be doing to absorb as much? Great

Chris Shen 40:50
question. I mean, my experience is I came into this pretty late in my career, I mean, not late, I was 3534 or so when I started failing. 35. You know, I remember, I took as many meetings as I could, right. And in retrospect, you know, it wasn’t, I’m not proud of that, you know, sometimes we wasted other people’s time, but it was a learning experience for me, right. So like we I looked at, because I covered not just venture capital, but general private equity, I looked at hedge funds out there credit, not so much real estate, and then sort of almost everything in between, I’ve seen litigation financing. I’ve seen like, you know, first last sort of weird stuff, and like all this, like everything, right. So, drinking from that firehose, and taking like, six to seven meetings or calls a day, really sort of was a, you know, sort of helped me sort of understand, like, what was going off, right? And really caught up, so to speak. So I think if you’re a junior person starting, you know, you’ll, you’ll have your defined roles, but I would say take as many meetings as you can use your perch, so to speak as an LP, don’t abuse it, don’t be a jerk. Don’t be mean, don’t be like, whatever, don’t waste people’s time. But if your job is to meet funds and meet companies, go meet as many as you can. Right? I was having a talk with one of my 20 Somethings sort of analysts on the data side yesterday. Yeah, I feel like you know, I was like, you use your perch, right? Revere knows all these emerging managers know, LPs? Yes, we’re selling software and data. But you don’t have to just go sell stuff them, you could talk to them about what they’re doing and all that. And you know, you’re living by yourself, you don’t have to deal with kids or a dog or whatever. Just go go out there and meet people, right? That’s really important. So that would be number two, just be you know, because I think what’s really crazy, you hear these stories of these meetups and all sorts of stuff. And yes, some are good, some are not great. But people do if you follow up and you’re sincere, and you’re not a jerk, there are opportunities that that could be your next co founder, right? That could be the next person that hires you. It could be someone you work with, you know, et cetera, et cetera. So that is really, really interesting. Right? That’s, that’s something that I think, in this day and age when you know, it’s not a common on younger folks, I know, we’re all like, we’re all elder millennials, right? Yes, yeah. younger folks tend to know with the phone and sort of all that it’s been sort of very easy for them to kind of connect and do stuff, all that. But I still think post COVID There’s no substitute for inperson things. To be honest, there’s just no substitute for that no matter what you’re doing. Right. I think the third thing is work hard. I think it’s like, that’s part part and parcel of that. I have been quoted saying publicly, it’s like, when you’re in your 20s, it’s like, if you can move somewhere else, from where you grew up, your country, your hometown, whatever, and live love work with, you know, be among people that are completely different from you. That’s really awesome, right, hopefully have a good job, and you’re doing it and all that stuff. Right. But that’s really cool. Because, you know, I think work hard and being out of your comfort zone. For younger investors, you will see immense growth when you’re kind of not, you know, sort of living at home and sort of relying on this. And that, that is really interesting. I think myself, just to sort of personal side. After I finished law school, I moved from Houston, Texas, to Beijing, China. I had never seen snow before. Like I’ve never, ever seen snow, sleet doesn’t count. In China. There’s like 1.1 billion people then I do for people in all of China, for people, right? And like, my friends are like, What the hell are you doing? Right? You? Are you something wrong? Are you running up? You know, I’m like, No, I just want to give this a shot for a year, two years. I can always come back right? Texas is awesome. The weather, it’s gonna stay the same, you know, blah, blah, blah, blah, blah, right. And it set me on a path where I just kind of wanted to try something different for a year. I ended up staying 13 years in Asia, right. And like the family office experience, being a lawyer, my family, all these different things emanated from that decision right and not to get To like butterfly effect, or Hokey Pokey, it is really like we’re having this conversation. Partially because of that, you know, that experience, because first I met Howard after we talked about Scott. And like, he was covering me at a hedge fund, the hedge fund has been in the news recently with Disney, right? And I’ve looked at hedge funds. And that’s like he introduced me to you when I moved back, right? chsr, we might have connected but without that, it’s kind of crazy to see how these things intersect. So I tell these younger folks and investors we’re not, you know, try that right? You have nothing to lose, you know, the present situation may be different for everyone, but you have nothing to lose.

Alexa Binns 45:38
And you’ve been very gracious to be sort of a cross border translator for us. Can you also share a little bit about your interest in the image, Asian American Foundation and the Committee of 100, we sheepishly probably hear more about the black experience or the female experience. So thank you. Thank you for sort of being a token on our podcast. No,

Chris Shen 46:03
no, absolutely. It’s No, I, it’s my pleasure to talk about this. And it’s very important, right? I think it’s not so much like everyone, every group has their own struggles, right? I think, you know, it’s never to turn anything to like an oppression Olympics where we want to like, we need to highlight the differences in sort of what our collective groups have been through, and then respect those who learn from it and not make those mistakes in the future. Right. Yeah. So that’s what we were in the past.

46:31
Should somebody be hiring for a Disney finance reality show? Here’s your cast right here.

Chris Shen 46:39
Are you right? Or just it reminds me of that joke. We will talk about

Earnest Sweat 46:44
it offline, but that’s

Chris Shen 46:47
also my number, right? Yeah. But for me, like, I grew up in Texas, so I was always around people very different from me. Right. You know, depending on the sport, it was pretty much the type of folks I played sports with. And in Houston, you know, black population, Asian population, white population, Hispanic population, right. So it’s great, like as a melting pot. So from there, I remember growing up, like, you know, a little different, but growing up pretty American, and just having fun playing sports and pretty suburban life, right. I moved to Asia, 13 years. And when I came back for investing in meeting people, I had these looks on these people’s faces were like, they’re like, Oh, you speak English this way? I’m like, Yeah, I’m a lawyer. I like SATs scores and all that my English is probably better than 99.9% the population just from a testing basis, right? Like just objective, right? Standardized metrics. So I found that kind of weird right now I have two children, seven and two. And like, I know that now that with like, with us, China and sort of deterioration, the relationship and all that there’s right wrongs on both sides. We are Asian Americans are perceived different, right? Like, if you have black hair and our skin, you don’t know they’re Korean, Chinese, American, Chinese, whatever, right? People don’t know, right? Sometimes I don’t even know. So like, for me, when I moved back, I’ve never been an activist like I’ve pure capitalist lawyer, just, you know, there’s no activism in Asia, per se. It’s more philanthropy and all that stuff. I wanted to sort of join organizations that could, you know, very plainly said, to changing the world is great, but it’s just that to make sure my daughter and my son have the same kind of, or if not better upbringing, than like, what me and my white black Hispanic friends and other friends had in Texas, right? Like very simple, like, we’re all kind of playing sports together. We acknowledge our differences. But you know, sometimes you say inappropriate things, but we don’t have malice or intent with that. Right. So TAF is really interesting, the Asian American foundation, shout out to Norman Chen, the CEO. It was founded by or started by Jerry Yang, Joseph Bae KKR points out Citadel, Joe’s Joe tie, Alibaba, you know, sort of luminaries in others, Asian Americans sort of business, politics, technology, etc. But it’s one thing I found interesting were groups like the NAACP, the ADL, if anything happens to one of their members, they mobilize in you know, that person and I think that’s not okay, right. Yeah. Most Asian Americans did not have this umbrella entity, because our groups are so splintered, and very different, socio economically, politically and all that. But I found that, you know, with the NAACP with sort of the ADL, and sort of other rights organizations, you have very right wing people doing their thing and very progressive people doing their thing. But you know, they can all kind of get along to get along, right. I think about the Adelson family and sort of what they’ve done in Las Vegas to like the Soros is, you know, common family backgrounds and stuff, but pretty incredible that they all sort of stand up for each other. Right. So the TAF will be convening their annual summit next month in New York. You know, and I’m just so happy to be a volunteer for that. organization, C 100 is a little more specialized in terms of it was founded by im Pei, architect Henry Kissinger that helped normalize relations with China. So for me, because I’m, you know, Chinese American, but I’m kind of weird. And I spent 13 years in Asia, most folks have not. See 100 tries to promote dialogue more grassroots between the two groups, because the two groups are kind of going out with each other right, Americans and the Chinese. So that organization has been very interesting. It’s much more specialized. But these are all things that I would like just to do, and be involved and give my time. And my efforts to help again, you know, selfishly, for my children to have a good upbringing, the same as mine, but also for people just to kind of understand that, you know, we are Americans and we’re Americans through and through. Yeah.

Earnest Sweat 50:48
Well, Chris, I want to thank you for just, you know, staying to share your story, your perspective of your illustrious career so far, and yeah, how can people get connected with you?

Chris Shen 51:02
Shoot me an email, I read every email. It’s Chris at Revere, vc.com or less than Earnest. I’ve exchanged a lot of emails, we’re in San Francisco, I read every email and yeah, I just, we’re here to help. I think at the end of day, LPs, or GPS, where we have this distinct benefit of distinct pleasure and like, it’s great sort of fun working with both sides of the market. It just kind of understands the headaches that both of y’all have idiosyncrasies of this market and sort of how capital is connected. So we’re here to help reach out anytime. Let us know.

Earnest Sweat 51:40
Chris, thanks so much for being on the pot. We’ll have to catch up again in a couple years or a year or so if things change especially after the election. So yeah, well,

Chris Shen 51:49
let’s do it. Yeah, it’s tough to do a part of your arrest anytime you’re in town, let us know if you come in the office. Yeah, Alexa, if you free up with the move and everything. We’ve got events in Austin next week on the 11th and 12th. So hope to see you in person.

Alexa Binns 52:04
Thank you guys.

Alexa Binns 52:06
See you later, Allocator!

Earnest Sweat 52:09
After portfolio tile, investing with a smile.