Alexa Binns 00:02
Welcome to Swimming with Allocators. The VC podcast from the LP perspective, with your hosts, Alexa bins and Ernest Sweat. Are you ready? Let’s dive in on

Earnest Sweat 00:13
Today’s episode. We have Brian Brackeen, the managing partner at Lightship capital’s anchor fund. Today, he’ll share with us the vision behind the anchor fund and why now is the right time for this strategy, and also his view on the role of diversity in venture and how it contributes to strong financial outcomes. And so with that, I want to welcome Brian. Thanks for having me. Thanks for being on, sir. Long time coming. First and foremost, I always like to get into how people got into this world. So before we jump into the anchor phone, which I’m really excited to talk about, yeah, how did you come to this world of tech, and then, you know, being an investor and now an allocator,

Brian Brackeen 01:01
yeah? You know, some allocators go to the best schools, right, Yale and Harvard and, you know, and work the best firms, right? Yeah, and then learn their craft over years of studied and thoughtful financial analysis. That’s not me whatsoever. Kind of the opposite, where my whole life, my whole career, has been studying and learning while doing. I could, I could tell you from my childhood, which is where I grew up in, well, I was born in Ohio, adopted by a family in Philly. So, yep, Eagles fans. Go birds. Great year. This year, you know?

Earnest Sweat 01:50
Yeah, I like Jalen Hurts, but I’m my dad’s from Dallas, so we’ll talk about that later. But

Brian Brackeen 01:56
listen, we can all have you get everything. Um, but yeah, I grew up. My dad told me to code when I was eight years old. A lot of work at East Coast companies like Comcast and IBM and well, I thought that was gonna be like my whole career, right? I thought, you know, you gotta go watch work at IBM. I worked there for 30 years. That’s what people do. And I got a call from Apple just after they launched the iPhone, but before they launched the iPad. So that’s the period of like, kind of like crazy growth. I took the job, you know, after just one visit, packed all my things, moved to California, you know, and learned a ton Steve Jobs was still there. Tim was zero, and learned a lot about how technology in San Francisco was so different from what I had been doing at Comcast at IBM, right back east and throughout my whole career, that never really sat well for me. This idea that geography had some role in the type of technology, the way you solve problems, never sat well with me. And that’s kind of what I built my whole career on. Wow,

Earnest Sweat 03:11
there’s so many threads right there that you can pull first like, you know, kudos to you after, you know, being, you know, set on a certain path, and saying, taking a call out of the blue, and being like, Yeah, this is an opportunity, kind of risking it all right, that’s awesome. But then also, you being able to, like, have this thesis that, geography shouldn’t have that much of an impact on how you think and how you incorporate technology. It makes me kind of think of like, around that same time, it was around, kind of like the, you know, 2008 election and whatnot. For some reason I started, I just graduated college, but I started to think about, why is this whole system,, getting in a good job and go to good schools and all this is, why does it seem like it’s only made for at the time, I thought, like, seven or eight cities to benefit from it, right? And me coming from Little Rock and thinking like this brain drain is going to become a bigger, bigger issue, you know, fast forward now. We see a lot happening right on that. And so I’m curious about just that background, and then going into tech, you know, how did it shape what you wanted to get out of it? And then has it shaped you as an investor? Yeah?

Brian Brackeen 04:26
Yeah. Well, the biggest, I guess, shavu, of both my kind of theses and even the way I deal with founders or funders now, was about entrepreneurial experience, right? So I in San Francisco launched AI firm called Cairo facial recognition, moved it to Miami, before that was cool, 2012 it was before, oh, yeah,

Earnest Sweat 04:53
yeah, yeah.

Brian Brackeen 04:58
But I saw it. In it, all the things that we would want to see in a kind of burgeoning ecosystem, right? And just kind of fell in love with the place. So fast forward, I was able to exit that business in 2018 successfully, raised 13 million bucks, got into about $120 million valuation, but had a big fight with the board about privacy, which we see now, right? Ai ethics, right, which we see now, and it kind of all white male board seen me differently than its black founder, right? And so ultimately, we still come to a black owned private equity firm out of Turks and Caicos, which is great. It still exists, still doing well, still processing millions and millions and millions of faces, billions actually. So the ending was good, but the investors were terrible, and I’d promised myself that I would never be that kind of investor, that I would really, really truly be founder focused. They all say they are, but you know, so many of them are lying. And then even now, in this new work, I would only be backing fund managers that I thought lived the ethos of really caring for the mental health, well being and success of the company through the success of the founder.

Earnest Sweat 06:19
Love that. And so like, let’s kind of skip forward, but you kind of were getting to it. But what truly inspired you to, you know, start the anchor fund?

Brian Brackeen 06:30
Yeah, would. So when I started my first fund, it took us a couple years to raise the first 20 million bucks or so, right? And the experience was given the team’s background, the expertise, the access to markets. You know, the thesis was, in fact, no one even questioned the thesis, and no one really questioned the team, right? It was just so hard. We launched it pre George Floyd, and it obviously was different from the post George Floyd era. But even then, we were so focused on real results, and we found that some of those LPs, as we now know, we’re looking for a marketing dollar, right? You look at the walls, it’s completely abandoned the work, right? Yeah. And we just found that we didn’t jive very well with the marketing. LP,

Earnest Sweat 07:26
yeah, yeah, no, no, totally. I know for some reason my head is just what came to my head was easy at the White House. Like, I remember him saying it was the easiest. I don’t know how much it was, but for him to get there, he’s like the best marketing ever. And so, you know, in all seriousness, I think an issue that we saw in that period of George Floyd movement was a lot of tourist LPs, and we’re seeing kind of the aftermath of that, and during the kind of me too, movement of you know, it being very hard for emerging managers who are women or people of color to specifically black and brown folks to raise

Brian Brackeen 08:15
and geography as Yeah, exactly. So this is a problem we have in the Midwest. People in the Midwest will hire coastal allocators who bring coastal bias to their investments and then refuse to send money back to our own region. There’s a whole renaissance right now. And for those that don’t know, we’re based in Cincinnati, there’s a whole renaissance right now in the midwest of stop funding coastal you know, let’s use the word coastal elites to then crap on the very place. That you live, right? And yeah, we were. We suffered a lot in that manner. And so again, as an allocator, now we’re a global fund, we invest everywhere we’re looking, there’s a bar, the bar is high, right? But if you’re above it, you’re above it, you’re above the line, you’re above the line. And I don’t bring my Philly biases, right? And not invested in Dallas Cowboys fans?

Earnest Sweat 10:28
Yeah, I don’t know what has happened to me. I have so many likes, I must meet all the good Eagles fans, because they’re not the ones I see on TV. So no, that’s, I appreciate that, that candor. Have you, you know, with all your own experiences, have you shaped the investment strategy and kind of diligence process for an anchor fund?

Brian Brackeen 10:56
Yeah, with us, we’ve for all light shift funds, anchor included, there’s an open application process. You know, study after study shows that there is a human bias, called Network bias, right? You believe the people that you know are the best and smartest people on the whole planet, right? Yeah, and the reality is that they’re not. And if you only invest in your network, one that creates these kinds of inconsistencies around, you know, equitable investment, right? Because you may have gone to a great school, you may have lived in a certain area, all the cash is going to go to those places. But two, you’re missing out on the highest opportunities for alpha so anyone anywhere can apply for investment to any light shift fund, and people are on the other side of that form reviewing every single submission, right That in itself, you know, and then the world of venture, as you’re well aware, is not as common with LPS as you would like, have to like. And again, you covered this already. And you know some of you know your podcast, you have to, kind of like, sneak up on LPS sometimes, like, oh, who do I know? And we all need another thing. And I just that just can’t be the strategy, yeah.

Earnest Sweat 12:30
And what approach are you all taking, as far as you know, what percentage of the fund? Because,I found,this is a kind of 16 month interview journey of meeting a lot of LPs who have been on the podcast or not, and just talking off the record. But your fun size kind of determines your strategy, and as people said, it also determines your target audience a lot of times, right? And so have you all approached that knowing that there’s so many different types of fund managers around the world? What do you think about that?

Brian Brackeen 13:09
Yeah, we were. We decided what problem we wanted to solve, and then engineered the math to make sure that it fit what we’re going to do, right? And then, after you have that, okay, now, what LP class do I need for that fund size, right? And so we’re and we’re a $2 billion fund, which means we’re not competing with our GPS that we want to invest in, with who they’re going to, right? So that’s true. Most often we’re going to governments, pension funds, large endowments, super high net worth. And that may be a little bit of competition, but generally we’re talking to a completely different LP class. So that was, that was really kind of important to us. We’re writing 10 to $20 million checks. It’s called the anchor fund because we want to, we want to be, we want to anchor their funds, right? And for that, we try to also provide, like, real service, right? Like, what we’re seeing is people who are really good at finance sometimes are bad at design, right? That’s terrible. Sometimes they’re really bad at copyright. They’re really bad at whatever. So we have a whole team of folks on our side that also we can bring to bear to support the GP in a number of ways.

Earnest Sweat 14:37
What you mentioned is really high. Can you give some just like components of, like, your decision making process, and, you know, also kind of give the flavor of what you’re looking for out there?

Brian Brackeen 14:52
Yeah, yeah, I would say a couple of things. So we’re, we’re, we’re not our first close yet, and so we’re. Not meeting managers just shared because one of the problems we had is people were meeting with us and didn’t have any

Earnest Sweat 15:05
cash to deploy, right? That is something that people don’t talk about. Yes,

Brian Brackeen 15:09
yeah, complete waste of everyone’s time. So we’ve been like hell bent on just taking our own LP lead that we’re gonna close this quarter, our first closer. We’re excited about that, and so now we’ll start to have those kinds of more robust discussions. But to give a generalized view of the question as asked, the beauty of a fund to fund is that it’s so diversified across all the folks that you don’t have to, like, really drill down as hard as some of these people are drilling down on the only the five venture investors are gonna make, right? Yeah, right. Like, I’m all gonna do five. So I gotta have one in San Francisco, one in New York. I think only one can be in CPG, kind of doing this. So, you know, so clenched about it, yeah, we’ll make about 50 fund investments, right? Which is why we wanted to fund this size, which means we can have two funds in Chicago, both doing manufacturing, right, and, and that’s okay, right, right? So you’ll see more agnosticness from us, but not because people sometimes just say agnostic is easier. We’re a little more agnostic because the math supports that. we decided to do a regulation C fund so that we could talk openly about the fund and not be restricted by regulations like the reg B regulation, so that we can all learn, you know, from our experience. So yeah, there’s some, there’s just little, slight, little tweaks that we’ve done to kind of help the community.

Earnest Sweat 18:05
That’s interesting, and I think that definitely would be helpful in the I’m sure as you, as you went from like tech operator to, you know, you founder to then like a VC, now allocator, you’re seeing in the different worlds of like, how there’s kind of a miscommunication, or, better yet, how there are misaligned incentives. Right now, we’re going to take a quick break to speak with our sponsor.

Alexa Binns 18:34
What would you say is the benefit for GPS and LPS of working with a firm like Sidley versus maybe some of these platforms or trying to figure some of this stuff out yourself,

Speaker 1 18:47
sure. So

Idan Netser 18:48
Look, we’re a very big firm, you know, we have 2300 lawyers, and we’re spread across major jurisdictions and cities, you know, all over the world. And you never inevitably meet with a lot of those LPs, for example, just to pick up on a simple example. And you know, we recently had a case where a foreign LP from Australia reached out and said, Hey, we’re really interested in starting to make investments in Silicon Valley. VCs. Can you help us? Can you introduce us to VCs? Oh, by the way, we’re going to be visiting in about a month. Can you tee up a number of meetings for us? So we’re not bankers, but we’re happy to help, because that means helping our VC clients and helping our LP clients, and, of course, helping the, you know, the GPS, along the way, along the journey. So we can be very helpful. And I think again, not just the lawyers, but all of your advisors can be, and should be, your ambassadors. And can be, can be helpful in lining up, you know, whatever you need. If you need LPs, then reach out to your trusted advisor and say, Hey, can you introduce us to LPs? Like, who do you know that could be a potential LP and sort of make us think through this with you, right? I think that that’s one tremendous benefit. Another tremendous benefit as a GP is actually, you know, one access to this particular deal. So, hey. For example, we’re looking to not necessarily lead the transaction, but we can write, I don’t know, 500 to $5 million checks, and we really want to participate alongside a tier one, tier two, tier three. VC, whatever someone we think is reputable, to the extent you’re hearing in any room available in and around, please let us know. Well, that’s a good service to you as a GP, that’s a good service to our companies. That’s a good service to our lead investor, right again, sometimes those runs are going to be completely full and we might be able to squeeze you in, but a lot of times there’s like a deal coming together and there’s still room for an opportunity. If you just reach out, you know, to the company as and we do this as lawyers, we will reach out to the company and say, hey, you know, we noticed you have a couple million dollars available. Do you want us to reach to our network and help you fill that up? And then we turn around and we reach the GPS and we tell them, Hey, will you be interested in this type of deal? Again, confidentially first. And then, of course, all we do, we’ll do is we connect the right people and tell them, Hey, have a conversation. It’s up to you. Decisions are being made, you know, completely independent. So that’s sort of the second, the second element where we could be very the second point where we can be very helpful. The third. The third thing is, again, we do events, we bring our we try to bring our community and ecosystems to us in many instances. So that’s true to Boston and New York and LA and, of course, Silicon Valley, and sometimes internationally. You know, join us. You know, come and see, you know, come and meet with our network, and join the network. And you know, these types of people tend to meet each other, like in our events, in others events all the time. And you’ll start making, you know, new friends and new business acquaintances. And I think that’s very, very helpful, because there is a common thread of, like, we’re all like, involved somehow with siddly. Obviously, that’s what we’d like everything to look like. But there’s also like, oh, you’re a client. Oh, I didn’t know you’re a client. That’s great. Like, who do you work with? And who do you work with? And, you know, Jason joined us recently, and we immediately started to like, oh, you know, we know so many, we have so many mutual acquaintances. So now the networks start to collide, align, the merge, and being part of that ecosystem, I think, is very, very beneficial for GPS, looking for LPS, for GPS that are looking for, invest in invest, to invest in companies, and for companies that are looking for venture capital, private equity, you know, and buyers potentially. So take advantage of those networks. They’re meaningful and highly valuable.

Alexa Binns 22:24
I would absolutely trust the word of somebody who’s been sitting in the board meetings watching the sausage get made on whether a co-investment deal was worth making or not. Yeah, I also get the sense that lawyers can’t fib, so they’re gonna tell you what’s really, what’s what’s really going on, where you should really be making bets. You sit at the interesting intersection where you’re representing both founders and funds. I’d love to hear some of the terms, or some of the places where people are getting a little little more creative in how they’re drawing up terms VC investing in founders, what founders should look out for when VCs are requesting it, etc.

Idan Netser 23:08
Yeah. I mean, I think you know, capital is definitely available. It is taking a little bit longer to get to closing from term sheets, and it is more difficult for some companies to actually get those term sheets. But when those term sheets come across, we are both creating on the investor side and also negotiating on the company side some complexity. So we’re seeing a lot more tranche financing. We’re seeing a lot more sort of performance based investment economics, depending on the nature of the company and the industry and even geography can sometimes differ in the preference stack. What we’re seeing, though, is a lot more care around those terms, both when the investor is preparing the term sheet as well as when the company is sort of figuring out how to navigate those terms.

Alexa Binns 23:57
And similarly, on the LP to GP side. Are you seeing any kind of trendy requests, or are there anything that people are offering today from the GP side that you hadn’t seen in the past?

Idan Netser 24:15
So I can answer this question. Elisa, so we do see GPS becoming a little bit more involved, like in the VC, you know, in the companies that they invest in, we actually see more LPS getting more involved in the GP, which is also an interesting approach. I think people all across the industry or the ecosystem that we work in actually want to get closer to the companies and the founders and the entrepreneurs. And that’s a good thing in my opinion, you have an LP that actually voices some views regarding areas of interest. Ai, is a very obvious one, and they’re, they’re curious about it. And I think the GP will take this opportunity to educate their LPs about the kind of companies they invest in, in the trends in the ecosystem, where things actually stand. Yeah, that creates a very good dialog, you know, between, again, LPs, GPS and the companies themselves that sometimes present to the LPS. And we see this in quarterly, you know, GP or LP meetings with a fund that asks their company, the portfolio companies, to present to the LPS. And that communication, it seems very, very helpful. It’s especially helpful. If you’re thinking of a follow-on fund, an opportunity fund, an SPV to take advantage of Pirata rights, etc, you’re reaching out to your LPs and telling them, hey, you know, remember, you met with this company. They’re doing around. And there’s an opportunity to invest, either directly or indirectly or through a vehicle. We’ve seen that, you know, being very, very helpful and and a lot of LPs have jumped on the opportunity to do so. So I think what we’re seeing again, to summarize, is LPS trying to get closer to the companies, GPS in the middle, are actually facilitating great conversations. And, you know, we as lawyers try to facilitate and make sure everybody, you know, keep their fiduciary and stay out of trouble as part of the process, yeah, if that makes sense.

Alexa Binns 26:04
And now back to our LP interview

Earnest Sweat 26:08
with your perspective. How do you think LPS should approach, emerging managers overall, and then the caveat of, like, diverse emerging managers, how should they approach it?

Brian Brackeen 26:27
They shouldn’t. They should just come see me and let me, let me actually explain part of that. We are really, really proud to be peer investors, right? And so you and I’ve done each other like, this is not our first day knowing each other, right? So, like, you know, it’s a small group, right? The emerging management group is small, the Latino group is small, the black group is small, right? Like, we all the groups know each other, yeah. I know this person is amazing, but they don’t market themselves well enough. But I know you know, like you know, because I know from my peers, and because I’ve learned who they were before they were kind of, you know, thought I was gonna be an allocator, yeah, right. It allows me, I think, to be a little bit better at allocation. That’s number one, number two, because we have multiple funds in the market, and because we do have direct funds, our sister funds are on boards and things with the other allocators, right? And then we could just say to our sister funds, like, how’s that person on that board? And how do you know? How are they doing? Do you enjoy working with that GP, right? And that goes way further than what people present to you, right as themselves, yeah. And

Earnest Sweat 27:54
Since you have all that, the knowledge has shaped the kind of the traits you look for in fund managers. And I think a big discussion that we’ve had on this podcast a number of times from some of our guests is like this diligence commitment to point out, essentially, like, there should be other ways you look and evaluate fund managers in private markets that aren’t just kind of your traditional DDQ. What’s your track record? Where do you have attribution? You know, what traits and kind of markers do you look for today? This

Brian Brackeen 28:32
is another problem I see LPS making, and again, it should be, I think they should be looking for other folks to help them. There are, like, three levels. Is the LP, right? One that is like the DDQ only LP, you never mentioned that, right? Where, as long as you check the certain boxes, they don’t even ask for the deeper insights, right? How’s your family? Like?

Earnest Sweat 28:58
Which are real? Those things influence, you know, your decision making, right?

Brian Brackeen 29:03
Exactly, exactly. So I think that, I think that LP is always going to be clinically correct, right, but doesn’t really create, generate the amount of alpha they should, because they’re missing out on the fullness of someone’s person, right? Yeah. And then you have this next LP, which is what I would call they love the cool kids, right? So there are certain folks among us that are prolific fundraisers, and they’ve got everybody on the cap, all the hard ones to get right. It doesn’t necessarily mean that they’re going to be the best allocator of that capital. It does mean that they are in the right networks, pitch, well, whatever. It also doesn’t mean that they won’t be a good allocator, but I am just other people on the cap table alone. Right? The other LPs. Catch up the crew. Term the other LPs investing in that fund. Alert alone, doesn’t that beget success, right? And just like we would say to a founder, right? I don’t trust someone else’s diligence. I gotta perform on my own. Yeah, I think that there’s a category of LPs that are essentially trusting the other brands that have invested in a fund as some kind of signaling as to that fund’s opportunity for success. We don’t. We don’t fall into that trap. Yeah, and then the third, I think we kind of fall in this category. It’s more about the soft skills. It’s how you treat founders. It’s your standing, you know, as assigned by a community, not you assigning back down, right? Are you shoulder to shoulder, or are you a dictator? Right? Yeah, to us, these things are really, really important. I can teach you how to update your fund model. You know how to do a couple different formulas a little bit better, right? Yeah, but that’s not what it’s about. What it’s about is, when a founder has every option for capital, do they choose you, right? Or if a founder is absolutely brilliant and unfound, right, unseen even, can you see the invisible founder, right? And what gives you that magic, Superman, Superwoman gift, right? That to us, that is how you pick winners.

Earnest Sweat 31:43
That makes total sense.

Earnest Sweat 33:27

Earnest Sweat 34:18
I would assume, you know, once you all are doing kind of the fund investments and being a part of El Pax that, you know, what I would be looking for Brian, from Brian is, you know, how should I think about that AI stack? What are you kind of, your views on, kind of the AI stack for the next generation of fund managers. One

Brian Brackeen 34:43
of the things that we’ve been doing successfully in our kind of test runs as we could prepare to take these first calls, and one of the things that we’ve been doing with our LPs, and had LPS request us to teach them how to do is. It creates deal memos and fun memos with AI, so get access to a deal room. Kind of load those things and compare those up against, you know, our own model, like, how? Like, what do we need to get this model to be true, right? Our own ppm, with our own fund docs to say, Okay, we’ve put a lot of thought into these things about us. You know, here’s a rubric, here’s, you know, how do we feel about this set of documents? And it’s, it’s fit number one, yeah, inch mark against some public benchmarks yourself, right? Write the memo, distribute it to us, right? And then we come to these meetings. Ultimately, we, the humans, are the ones still doing what we would cause you and I would consider the standard process, but we’re doing it to come to a meeting with a full memo at every stage, right? Yeah, so in our current non AI world, I wouldn’t say our because we’re not and everyone else is current, not AI world, you could only afford to take so many firms to memo, because you only have so many analysts, so many associates, so many kind of part right, and so much time, right? But what if you could have memos at every stage in the process, you just be better informed, right? And also you can write a human memo at the end, but you had better data all across and so this is an example of no one can tell me that too far two firms, one that has fully completed memos at every stage, and one that doesn’t that, the one that’s not doing AI, is going to outperform the one just, I just find that very difficult to believe.

Earnest Sweat 36:51
I think also the ability to continuously learn and go back when you have more data on companies you passed on, or maybe companies you did invest in. whether you should do more follow on or not, then you can learn and get better, because what tI’m hearing from both allocators and placement agents is that, as venture as an asset class becomes a longer and longer kind of maturity date, right? It’s not 10 years anymore. It seems more like it’s closer to 1520 . The thing that LPS would like more of is just transparency. when will they come? When do you think there will be exits? What do you think? What do you think the true price of this is? Do you think we should do secondaries, all those things? I think with AI and more tools like that, you’ll be able to provide that transparency, but also data driven strategy as well.

Brian Brackeen 37:58
I totally agree.

Earnest Sweat 38:02
And just real quick, because I have you here. what’s your view on the next 10 years with AI and how it impacts our economy?

Brian Brackeen 38:14
You know, there’s a lot of people doing work in the agent space right now. Yeah, that’s gonna be transformational. You know, I see a world where you pick the human job that has the word agent in it, and that person will be replaced by AI, so, travel agent, insurance agent, you know, like, whatever, right? Because agent implies a repetition of tasks, right? That is AI’s bread and butter, right? So I think that there, if there are multi, multi, multi billion dollar multiple winners, right, in this AI space around agents, that’s, that’s number one, yeah, and number two, building up on that, I think you’re going to start to see, after the AI is doing the task as agents, it will start to say, how could I better do this task? So you innovation of itself? Yeah, right. There’s a great video of two AI agents talking, and of course, initially they don’t know it’s like, it’s someone’s phone and someone’s computer. And says, Hey, I’m trying to solve this problem. Yeah. I was like, Hey, are you an AI agent? Like, yes, I am. And, wow. Okay, let’s use basically the old modem sounds right to more efficiently communicate, right? It just changes to like, like the mode, right? And just it goes and does, and then the tap is complete, right? And so that’ll be the next kind of level of innovation in the latter. Part of this 10 year period. Wow,

Earnest Sweat 40:01
That is amazing and creepy at the same time. And so kind of going back to your thesis and why you’re not being so stringent on the GEOS, right, I could see how AI is going to have huge impacts on different parts of the country and world. What responsibility, or not even responsibility kind of like, what would you be looking for in the types of investments your fund managers make? Are you looking for them to, kind of like, make things that will equip these regions with more resilience, or be able to use the tools more? Or, you know, this is gonna happen anyway, so might as well be. You know, some people’s views have been like, you know, we’re gonna have a lot of layoffs, and it’s gonna be the need for benevolency, right? People being benevolent leaders, and then we’ll be a utopia and be the Jetsons. Well, what’s kind of your viewpoint on how things will play out? I’m looking

Brian Brackeen 41:13
forward to Jetson’s future. That’s very cool. No, i Anyone who says they know is lying, yeah, full stop, yeah. They probably have, like Nostradamus in their LinkedIn profile, you know, you know, but I can tell you what I want or what I think is necessary for the future. I think one. I historically have not been a fan of universal basic income, but it came around to it after starting to do my AI work, there are a number of really important roles in society that people should be able to find their way to, that might not offer a living wage in the more and more expensive world, but are still very important. And so we have to decide, as a society, what we want to do there. I think number two, this is already happening, but I see, I think people think that they have an option or a choice, and that choice and thinking that only holds them or anchors them in a past that is quickly disappearing, and they’re not preparing themselves for the future because they’re complaining about their lost past. I think we’ve got to find a way to kind of move people forward in the process of elevating the elevator operator. That kind of, yeah, yeah, I would say, And then third, doubling, tripling, quadrupling, down on a resurgence of making things innovating and things like manufacturing and doubling tripping down in a resurgence of areas that we thought we could just leave behind, like Ohio and Illinois and Arkansas, right? Yeah. And if you’re a person that cares about the plight of you know black people, they’re in many they live in many of these places like live across the south, up to Mississippi River. I mean, you can see like, where people kind of escaped slavery, and that’s where they live now. And so a lot of these places, if you’re a right leaning person, you should want investment in Mississippi and Alabama, because these are core red states, right? Yeah. If you are a left wing person, you’re worried about the plight of minorities and, like blacks, usually one investment in Mississippi and Alabama, yeah? So it shouldn’t be, it shouldn’t be controversial,

Earnest Sweat 43:54
exactly. Yeah, that’s a great point, and I think that it’s kind of like getting people to the, you know, to the future, and this is why I love being for where I’m from and also being someone who travels all over the country and seeing how we have more in common. But you know, there are times when I leave like a Waymo in San Francisco and then come back to Arkansas, or go somewhere else and see, oh, we don’t know. You guys don’t know what’s about to hit you. And so I think this world will also call for more translators, domestic translators, and so like being able to and that doesn’t mean people aren’t obviously strong immigrant community all over and we need it, but like being able to translate you working in manufacturing and the knowledge you’ve been able to acquire, how that’s going to help and work hand in hand with the advances of technology. You. Not to mention, if any venture capitalists are able to do that, they’re going to win every deal that they ever try to invest in, because that is going to lead to actual dollars.

Brian Brackeen 45:10
Yeah, I just want to agree with you to stop this idea of transferable skills for those of us that code know that musicians are the best careers. They have to write in code to write music. They sit at the piano for hours and hours and hours at a time, no different than sitting at a keyboard for hours. They’re creative problem solvers. Oh, that doesn’t sound right. Maybe I could do this right. It doesn’t look right. Maybe I should code it this way, right? The skills are one to one. Kairos, one of my lead engineers, had a Grammy. He was a drummer for the beaches, and he was a great Java developer. So I think to your point, we’ve got to help people to the musician in Little Rock right to say, hey, you could also be an engineer and

Earnest Sweat 46:03
full stop, yeah, not to mention, with all the how that role is, software engineering is vastly changing, and so the ability for a lot of people, through no code and low code, being able to build their own things is going to be an advantage for the labor market. You know, as this kind of final point, I wanted to, you know, we’ve been through, you know, you moving to Miami in 2012 and and just like me, joining this industry in 2015 it feels like we’ve seen four cycles already, especially as minorities. And so one question I have is, What do you think now, especially with your seat now as an allocator, but even for fund managers listening, what can we learn from that 2020, 2022, kind of blip. And how do we make it? Make things however you define better, right? Is that more? You know, black and brown fund managers, whatever, but like, how do we learn from that period to make things better?

Brian Brackeen 47:16
Yeah, a couple of key lessons in my mind. I’m a firm believer that dei may have been finally killed by the current administration, but it was put on his death bed and put in the ambulance by deli practitioners. Not to say all of them, but I would say the majority, above 50% were taking jobs writing reports quickly moved people through a supply chain, right and weren’t doing the work at a scale necessary to show the rest of the world that those efforts were worth the trouble, and on top of that, making all of us, including People of Color, sit through those ridiculous, ridiculous deli trainings, right, which are just painful and a waste of everybody, organizations hours and hours and hours that just tells people, oh, is this what this is what you do is, what is it like? Yeah, those mistakes are. Trump didn’t do that to you. You do that to you, right? And what I would love to see now, and this is something that we’re still fighting with, and I’ll give an example. You know, there’s a major allocator. We have a great firm. We want to go and tell our story. They keep routing us to the DEI team, which is a smaller bucket, or whatever. I don’t even need to talk to that team. Yeah, I want to talk degree, the main book. Yeah, exactly. Let’s talk. Let me show you my numbers, right? Judge me on that, right? And so, yeah, I think that there’s a lot I don’t like. The fact that some people who are racist are also anti Dei. And I. Don’t I’m not trying to stand next to that crew, and I’m well aware that that crew exists. But beyond that, fact that the DEI teams weren’t delivering for anyone,

Earnest Sweat 50:14
I feel that you know that that moment happened. I wouldn’t say so fast, but it happened, and people were not all, but some people, it seems like we’re kind of taking the easy route, and we knew it wouldn’t last forever. But if you, if you leave crumbs of kind of like, things to be questioned, things not to be the main thing, which is, like we are fund managers. But then making the main thing, the main thing, the financial returns, because we are fund managers, I think that kind of got lost. And so I guess I’ll leave with this last kind of question. You know, when it’s 15 years from now an anchor fund is on its fourth edition, fifth edition, whatever? What outcomes do you want to see?

Brian Brackeen 51:42
Yeah, yeah. I hope that returned a lot of capital back to our LPs. I think that’s keeping the mains in the main thing, yeah, right, when you make people money, yeah, people want people hear about it, yes. We wonder how you did that, right, and how they can replicate a similar thing. And then two, in doing that first piece, I think we can show people that Arkansas, Alabama, and Ohio played an outsized role in that success. Yeah, those are the two things I think would be really, really

Earnest Sweat 52:18
great. That’s awesome. Well, Brian, thanks so much for, you know, sharing your story, your opinions and your viewpoints, and, you know, I think a vision for a brighter world and country that has the potential and all the kinds of ingredients to be united. So I want to thank you for being on the podcast. Thank

Alexa Binns 52:42
you so much. See you later. Alligator

Earnest Sweat 52:46
after portfolio, tile investing with a smile.