From eye surgeon to venture capitalist at 53: Sam Goldeberger - Ambit Health Ventures

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Hi everyone, I'm really excited to bring you this conversation with Sam Goldberger.

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Sam is a managing partner and co-founder of Ambit Ventures, an early stage digital health

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venture firm.

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He is also on the board of multiple startups, including Soap Health, in which we are co-investors

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and that is how I met Sam.

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At the age of 53, he decided to pursue an MBA and transition from clinical practice

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to private equity, in which he stayed for two years before launching his venture fund

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with his co-founder.

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We talk about his childhood, launching a venture fund, decision making, life, what he looks

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for in founders and startups.

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I hope you guys enjoy this conversation as much as I did.

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Hi Sam, thanks so much for joining me today.

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I'm really excited for this conversation.

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I think our childhood has a significant impact in our life.

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I want you to talk about how do you think your childhood has shaped you into who you

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are today?

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And perhaps we can talk a bit about what are some things you had to unlearn from your childhood

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to make you the person you are today?

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It's great to be here as well and thank you for inviting me.

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So it's a great question.

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So a little bit about my childhood.

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I grew up to two parents who came from foreign countries.

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My father was born on the border of Hungary and Romania.

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The borders kept changing during those times.

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He went through the Holocaust.

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He actually worked in the underground.

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He has a really fascinating story.

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He ended up going through Israel where he fought in the palmach back to America where

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he had an uncle and that's where he met my mom who was born in Belgium who also went

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through the Holocaust and was hidden during that time.

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So I have European parents and they both have thick accents.

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As an aside, one kid once said to me, I don't understand your parents so much with their

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accents and I said what accent?

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But then I realized they had an accent.

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I was probably 12 at the time and then I began to realize that that's not what everybody's

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like.

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So but anyway, I grew up in Beverly Hills and I went to a public, I went to a private

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Jewish day school up until eighth grade and then I went to Beverly Hills High School afterwards.

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And I guess I saw a lot of affluence just because of where I came from.

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My dad was in business.

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My mom always worked with my dad.

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So I had a lot of business influence on me when I was a kid.

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I used to run my dad's business during the summers in high school.

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He would go on buying trips and he would put me in charge and I was pretty young for that

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but I guess that's a lot of the European way to do it.

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And it was actually a lot of fun, a lot of responsibility.

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I guess those are things that really, there was a strong work ethic from my parents.

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You have to strive, you have to do good, you have to do good for the community.

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A lot of my parents don't need a lot of their time for communal events.

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I guess those are things that shaped me that you work hard, you do a lot of things and

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you do good for the world.

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Thanks for that answer, Sam.

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Let's go deeper into your dad's business.

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If you could tell me a bit about what was the business and was the expectation that

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you continue on with the business?

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And that would be my assumption when you're telling me that story.

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And if so, how did you break from that expectation?

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Yeah.

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So the truth is my dad is a diamond importer.

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He used to go to Europe and Israel, Belgium particularly, every summer and actually in

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the winter too, twice a year, he'd buy stuff, he'd bring it back, he'd sell it as a wholesaler.

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And my mom always worked with him.

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My mom's from Belgium, that was kind of a connection.

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And I did work summers and my dad wanted, I have one brother and he's also a doctor,

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he's chief of cardiology at the University of Miami.

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So he's also well entrenched in medicine.

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And my dad wanted us to go into his business, but he always said, you know, you got to do

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what you want to do.

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And gave us the freedom to go whatever college we wanted to, medical school, et cetera, et

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cetera.

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He's still around, he's 95, my mom's 88, they still work.

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And boy, would they love it for me to go and take over their business now.

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But you know, there was a realism that people have to do what they want to do.

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And yeah, I mean, you're right.

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It was some subliminal pressure that we should do it.

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But I think my dad accepted the fact that we did what we wanted to do.

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And given that we were successful, he had no real complaints about it.

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I'm happy to hear that, Sam.

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And I hope moving forward that others from your cultural background and mine have similar

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experiences.

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And I know too many people who don't.

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Let's go a little bit forward to you're in your 50s.

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As he said, you're well entrenched in medicine, you have a thriving practice, I imagine.

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You're well on your way or you're already reached financial freedom.

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And you make a decision to pursue an MBA.

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There are a lot of physicians currently burning out, wanting out of clinical medicine.

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Take me back to what you were thinking then, why the decision to go for an MBA?

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And is that something you would recommend to physicians?

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And if so, which persona of physicians would you recommend it to?

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So a little background.

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When I was about 45, I remember driving to work and saying, wow, I've accomplished everything

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I wanted to.

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You know, I had multiple practices.

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They were going well.

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And thinking, okay, you know, can I keep doing this?

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Right?

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And I kept doing it.

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Then one day I said, you know what?

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Surgery is really hard on a person's body.

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You know, I was doing 10 to 20 cases a week.

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It's a lot of bending over and, you know, a lot of stuff going on.

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And I said, can I keep doing this when I'm late 60s, 70s, whatever?

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My dad's 95, still works.

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My mom's 88.

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It's like, I don't want to retire, so can I keep doing this?

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And I said, probably not.

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And I said, I always loved business.

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Right?

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And math was always my first love.

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You know, growing up, there was not much you could do with math except become, you know,

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maybe an accountant or do something professionally in a university or something like that.

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But there are very few careers in math, in actuary maybe.

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So you know, I love medicine and I did it.

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But I said, what can I do that can let me also change my career path, but use some of

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the other things I love to do?

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My wife was extremely positive about it, supportive and said, do what you want to do.

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You know, that's the most important.

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Again, you know, she was the one that bore the most stress regarding moving and with

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the kids.

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I have six kids, so it's not so easy.

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And so she was extremely supportive and positive.

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And I knew MIT where I had gone undergraduate had a one-year MBA program.

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So I said, you know what?

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People think doctors are really smart, but they're horrible businessmen.

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That's the word on the street.

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So I said, you know, how am I going to change that?

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Right?

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How can I change that perception?

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So if I get an MBA from a top cure program, you know, people will then look at me maybe

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as an MBA and not as a doctor.

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Right?

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So I said, okay, MIT has a one-year program.

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I got their undergraduate.

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I knew the area really well.

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It would be very comfortable and convenient and, you know, just would feel like I'm right

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at home.

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And it wouldn't be strange.

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So I said, okay, let me apply to that program, see what happens, see if I get in.

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And if it does, then, you know, maybe I'll take that route.

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And it was in Boston.

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We were living in LA.

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My wife was extremely supportive.

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She was, you know, happy to move out of LA.

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We technically were moving for a year and ended up being longer.

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We've been in Boston since.

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This was in 2015.

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So at the age of 53, I went and sold my practice and got the MBA.

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Okay.

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Thanks for sharing that.

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Let's go back to your math brain.

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And I'm someone who loves math as well.

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It tends well to structured decision making, but it almost disallows intuitive decision

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making.

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Let's talk about structure versus intuition and decision making.

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And I've talked previously about Danny Kahneman's framework about low and high validity environments

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and how investing from his framework would be a structured decision making process with

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little room for intuition.

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Let's focus solely on evaluating founders, evaluating humility, grit, stick-to-itiveness,

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founder problem fit.

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How to structure an intuition factor in evaluating founders for you in a startup.

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It's probably mostly intuition, to be honest with you.

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It's hard to structure looking at a person, right?

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I mean, you do have a structure.

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You say, is this person reliable?

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Is this person honest?

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Is this person a hard worker?

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Is this person willing to be malleable when decisions aren't easy and they have to shift?

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Right?

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So you talk to them, you kind of get an understanding.

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And I guess that's the structure, but it's really more of a feel.

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Do I think this person has it or not?

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And again, there's no way to be right or wrong about it.

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The only way to know is to see what happens in the future.

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So nobody has a crystal ball.

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But that probably I would say is more an intuition-based decision than a structured-based decision.

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Okay.

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And how do you refine that intuition?

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Do you always go with your intuition?

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And if your intuition is wrong, you refine it that way?

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Or do you ever go against your intuition?

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Which is when your intuition is saying, no, this person is not trustworthy.

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You say, maybe my intuition is wrong and let me take a chance.

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I have done that and it's very painful to go against your intuition.

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I was just wondering what your thoughts were.

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Is it better to always go with your intuition when evaluating people and be wrong sometimes?

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Or maybe I'll use the phrasing, push yourself more.

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Maybe it's not the right phrasing to use.

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Go against your intuition at times.

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I would follow my intuition on these things.

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As someone once said to me, I've never regretted a deal that I've not gone into, but I've regretted

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deals that I have gone into.

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So if there's a deal that I was wrong, the person was the best CEO for that position

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and took the company to wherever it needed to go and there was a great exit and I didn't

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invest in it, I'm okay.

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I mean, I didn't think it was right, so you have to make decisions.

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But if I thought somebody was great and then they weren't, I'm saying, what did I do wrong?

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How can I improve my own decision making so that that doesn't happen again?

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Okay.

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Yeah, I agree with that.

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It's too painful to go against your intuition.

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Yeah.

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Especially in some of that.

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The other thing is it's not my decision right now and that's the main thing.

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It's like I'm responsible for other people's money.

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I have a fund.

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So I can't say Sam Goldberger is willing to do it, right?

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I might be willing to do something that's just Sam Goldberger, but I'm not willing to

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do it if it's my fund's money.

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And I also have a partner and thank God I have a great partner and she's got great intuition

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as well.

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And I take her feedback.

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The truth is my wife has amazing feedback on people too and often she'll see people,

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meet people and I use her intuition as well because she can pick up on a lot of things.

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Yeah.

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I would say the same things about my wife.

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Let's talk about your fund.

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Let's talk about the decision to start the fund and the decision to decide what to focus

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on in investing.

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Just give me a bit of background about your post MBA career to where you are now.

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So right after I got my MBA, I was recruited by a private equity fund to do a large ophthalmology

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rollup.

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It was extremely successful and I did that for two years and then I said, okay, what

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am I going to do next?

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So I looked around, I looked at the market, I looked at my skillset, I looked at what

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I wanted to do and between all that I said early stage healthcare investing is really

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the place for me to be.

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I mean, I want to use my medical knowledge.

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I thought early stage was the best place for me to be able to understand what products

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are going to be out there in the market that are useful for doctors, for patients, insurances

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will support them, pay for them, things like that.

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So I love experience in that.

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So that's where I decided to go.

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I formed my own investing company that was just private to get enough infrastructure

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and experience and I did several deals myself and then after a couple of years I said, you

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know what, it's time.

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I found my partner who is somebody that I've known for many years.

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Our both of our eldest sons were roommates in college.

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They that's still when we were in LA and they were here in Boston.

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Turns out when we moved to Boston, we became friends as well.

240
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And it was a really good fit.

241
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She's an expert in digital health and that's what we said.

242
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We're going to really focus most of our efforts.

243
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Okay.

244
00:15:22,420 --> 00:15:24,880
Is that something you look for in founders?

245
00:15:24,880 --> 00:15:30,760
How long have they known each other and have they gone through hard times and arguments

246
00:15:30,760 --> 00:15:36,560
and debates together or are you open to invest in founders who just met?

247
00:15:36,560 --> 00:15:42,920
That's a great question.

248
00:15:42,920 --> 00:15:51,720
I don't structure things that way because I think each case is individual.

249
00:15:51,720 --> 00:15:57,720
I do look at how they interact and how they know each other because people can know each

250
00:15:57,720 --> 00:16:03,800
other for a long time, but never done business together and then it's not a great match.

251
00:16:03,800 --> 00:16:04,800
Right.

252
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So people who wouldn't be friends normally, but business-wise, they're a great match.

253
00:16:11,560 --> 00:16:16,040
So I kind of like look at them individually.

254
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I talk to them.

255
00:16:19,320 --> 00:16:20,640
I see where they're at.

256
00:16:20,640 --> 00:16:27,360
A lot of times when I'm investing, it's actually past the founders stage.

257
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In other words, they've hired a CEO.

258
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Now, founders are still important there, right?

259
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But then it's a different team dynamic and I look at the CEO and I look at the board

260
00:16:36,840 --> 00:16:38,200
and things like that.

261
00:16:38,200 --> 00:16:39,200
Okay.

262
00:16:39,200 --> 00:16:46,240
But I wouldn't say that it's important how they know each other and why they're together

263
00:16:46,240 --> 00:16:48,560
and what their goals are, right?

264
00:16:48,560 --> 00:16:52,880
And if they're aligned, but whether they knew each other for lots of years is not necessarily

265
00:16:52,880 --> 00:16:55,920
the most important thing.

266
00:16:55,920 --> 00:17:02,080
And are you having them take personality tests or is it more based on intuition as you said

267
00:17:02,080 --> 00:17:03,080
previously?

268
00:17:03,080 --> 00:17:04,080
Intuition.

269
00:17:04,080 --> 00:17:06,320
I've not done the personality testing.

270
00:17:06,320 --> 00:17:07,320
Okay.

271
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A lot of people believe in it and the truth is I would have to do more research about

272
00:17:11,640 --> 00:17:12,880
it to figure it out.

273
00:17:12,880 --> 00:17:19,960
I've had to take some myself, but I'd have to do honestly more research about it to see

274
00:17:19,960 --> 00:17:22,680
is this something that's really useful for me?

275
00:17:22,680 --> 00:17:23,680
Okay.

276
00:17:23,680 --> 00:17:26,000
That makes sense, Sam.

277
00:17:26,000 --> 00:17:29,360
Let's go into your PE background.

278
00:17:29,360 --> 00:17:35,520
You have learned deeply about organizational structure, how to make an organization more

279
00:17:35,520 --> 00:17:37,720
productive, more aligned.

280
00:17:37,720 --> 00:17:43,800
What advice do you have for founders in the idea or the very early on stage?

281
00:17:43,800 --> 00:17:48,200
When should they start thinking about structure, hierarchies, decision making, how big their

282
00:17:48,200 --> 00:17:50,800
board should be?

283
00:17:50,800 --> 00:17:57,080
And this is a very open-ended question, so you may answer it as you choose.

284
00:17:57,080 --> 00:18:03,560
What is the ideal organizational structure for a startup pitching to you?

285
00:18:03,560 --> 00:18:09,640
I care less about the organizational structure when they pitched me early stage because I

286
00:18:09,640 --> 00:18:13,520
can dictate that.

287
00:18:13,520 --> 00:18:18,480
Most early stage founders or companies just don't know how to do it.

288
00:18:18,480 --> 00:18:19,480
Right?

289
00:18:19,480 --> 00:18:24,080
I mean, they've never done it before.

290
00:18:24,080 --> 00:18:33,160
So I like seeing a product that has at least a minimal viable product, something that I

291
00:18:33,160 --> 00:18:36,720
can look at, touch, feel.

292
00:18:36,720 --> 00:18:44,120
I like to see that it has applicability in the market.

293
00:18:44,120 --> 00:18:46,440
Patients will like it.

294
00:18:46,440 --> 00:18:47,440
Physicians will like it.

295
00:18:47,440 --> 00:18:50,680
Insurance will pay for it.

296
00:18:50,680 --> 00:18:55,120
I like them to think a little bit about what their business model is.

297
00:18:55,120 --> 00:19:02,640
I like them to think a little bit about what their exit is.

298
00:19:02,640 --> 00:19:09,840
And there are so many companies out there right now that even if you have all of that,

299
00:19:09,840 --> 00:19:14,520
it doesn't mean I'm going to invest in them right now because there's a limit.

300
00:19:14,520 --> 00:19:21,480
So then it has to be something that honestly I feel that I can help the company with because

301
00:19:21,480 --> 00:19:33,440
as a VC, my main advantage is that I know that I can help these companies.

302
00:19:33,440 --> 00:19:35,840
And so I'm going to make the company better.

303
00:19:35,840 --> 00:19:36,840
That's going to bring value.

304
00:19:36,840 --> 00:19:41,740
I'm about bringing value to these companies and to my investments.

305
00:19:41,740 --> 00:19:45,040
So I'm not going to invest in something that I can't bring value to.

306
00:19:45,040 --> 00:19:53,660
So it could be an amazing product, but if I'm superfluous, I'm not giving that little

307
00:19:53,660 --> 00:19:58,460
extra sauce that's going to make the investment better.

308
00:19:58,460 --> 00:20:01,120
So those are the things that I look at.

309
00:20:01,120 --> 00:20:10,360
Organization structure in early stage is too hard to really have something set out.

310
00:20:10,360 --> 00:20:15,840
And usually I will talk to the founders and say, okay, so we're going to do this round.

311
00:20:15,840 --> 00:20:18,280
I always either take a board seat or a board observer role.

312
00:20:18,280 --> 00:20:19,280
How is that going to work?

313
00:20:19,280 --> 00:20:23,560
How are we going to get the people that we want, et cetera, et cetera, et cetera?

314
00:20:23,560 --> 00:20:24,560
And then we work it out.

315
00:20:24,560 --> 00:20:30,360
And if they're not amenable to working it out, then it's probably not for me.

316
00:20:30,360 --> 00:20:35,820
What advice do you have for yourself when you were 30 if you could go back in time and

317
00:20:35,820 --> 00:20:39,200
tell yourself one thing?

318
00:20:39,200 --> 00:20:47,960
I'm going to go back in time and tell myself one thing.

319
00:20:47,960 --> 00:20:53,840
So I have six kids and this is what I tell them.

320
00:20:53,840 --> 00:20:56,600
Do what you like and what you're good at.

321
00:20:56,600 --> 00:20:57,600
Right?

322
00:20:57,600 --> 00:21:03,000
If you play to your strengths, you always do that.

323
00:21:03,000 --> 00:21:04,000
You'll usually like it.

324
00:21:04,000 --> 00:21:07,000
You'll be good at it.

325
00:21:07,000 --> 00:21:09,440
And you'll be successful.

326
00:21:09,440 --> 00:21:10,440
I like that.

327
00:21:10,440 --> 00:21:13,080
Well, it's important to work in your weaknesses.

328
00:21:13,080 --> 00:21:18,360
The focus should be on enhancing your strengths, as I think that's how you stand out in the

329
00:21:18,360 --> 00:21:19,360
world.

330
00:21:19,360 --> 00:21:20,360
Exactly.

331
00:21:20,360 --> 00:21:21,360
No, I'm not saying, right.

332
00:21:21,360 --> 00:21:22,360
It's a good point.

333
00:21:22,360 --> 00:21:24,140
I'm not saying you should avoid your weaknesses.

334
00:21:24,140 --> 00:21:27,480
You have to actually challenge yourself.

335
00:21:27,480 --> 00:21:28,560
Right?

336
00:21:28,560 --> 00:21:30,960
You have to do things that are uncomfortable.

337
00:21:30,960 --> 00:21:38,240
I mean, that's one thing I learned really well in business school, challenge yourself,

338
00:21:38,240 --> 00:21:41,480
do the uncomfortable things, have the uncomfortable conversation.

339
00:21:41,480 --> 00:21:43,000
I never did before.

340
00:21:43,000 --> 00:21:44,000
Right.

341
00:21:44,000 --> 00:21:46,520
But I do now a lot.

342
00:21:46,520 --> 00:21:50,640
And as long as you're doing it for the right reason, it's okay.

343
00:21:50,640 --> 00:21:54,560
Let's go deeper into the business model.

344
00:21:54,560 --> 00:22:01,720
A lot of founders say, as we grow, we will be profitable, economies of scale will make

345
00:22:01,720 --> 00:22:02,720
us profitable.

346
00:22:02,720 --> 00:22:04,880
What does that actually mean?

347
00:22:04,880 --> 00:22:09,640
Does it mean customer acquisition costs will go down, cost of goods will go down?

348
00:22:09,640 --> 00:22:16,420
And do you find that in practice, the cap actually goes down as companies scale?

349
00:22:16,420 --> 00:22:20,920
Looking at the companies recently, like, and I pick on these two companies too much in

350
00:22:20,920 --> 00:22:23,880
my podcast, For Hems and Romans.

351
00:22:23,880 --> 00:22:26,200
It seems like their tech is not going down.

352
00:22:26,200 --> 00:22:29,160
If anything, it's going up.

353
00:22:29,160 --> 00:22:36,120
Give me your feedback on metrics you look at business models and the drive to profitability.

354
00:22:36,120 --> 00:22:39,400
And if that, how important is that for you?

355
00:22:39,400 --> 00:22:43,760
So if someone tells me as we grow, we will be profitable.

356
00:22:43,760 --> 00:22:45,640
I asked to see their projections.

357
00:22:45,640 --> 00:22:46,640
Right?

358
00:22:46,640 --> 00:22:48,640
I mean, that's where my numbers died.

359
00:22:48,640 --> 00:22:50,400
You think that's the case?

360
00:22:50,400 --> 00:22:51,400
Great.

361
00:22:51,400 --> 00:22:53,640
Now let's see what you're talking about.

362
00:22:53,640 --> 00:22:57,280
Are your cogs going down?

363
00:22:57,280 --> 00:22:59,880
Are you being more efficient?

364
00:22:59,880 --> 00:23:04,000
Now you need a huge sales force, your prices, your overheads gone way up.

365
00:23:04,000 --> 00:23:08,080
Are you going to be able to meet that?

366
00:23:08,080 --> 00:23:09,080
It's a numbers game.

367
00:23:09,080 --> 00:23:12,520
If they can show me the numbers and the numbers make sense, because I have to make sense of

368
00:23:12,520 --> 00:23:13,520
the numbers.

369
00:23:13,520 --> 00:23:18,920
Someone tells me that they're going to be a United States distributor but have two salespeople.

370
00:23:18,920 --> 00:23:24,880
Okay, that's just not going to work, right?

371
00:23:24,880 --> 00:23:27,080
I asked them, show me the numbers to support it.

372
00:23:27,080 --> 00:23:31,600
I don't believe in blanket statements like that.

373
00:23:31,600 --> 00:23:35,120
As we grow, we will become profitable because that's not necessarily true.

374
00:23:35,120 --> 00:23:38,800
I can grow a company and grow expenses too.

375
00:23:38,800 --> 00:23:44,680
And my revenue goes way up and my expenses go up and I'm not profitable.

376
00:23:44,680 --> 00:23:49,360
What question do you ask founders that they don't answer well, that they get stumped at

377
00:23:49,360 --> 00:23:52,080
and you wish founders did more research or answered it better?

378
00:23:52,080 --> 00:23:54,600
I don't know if I have one.

379
00:23:54,600 --> 00:23:59,400
To be honest with you, every founder is different.

380
00:23:59,400 --> 00:24:01,040
So I don't know if anyone's stumped.

381
00:24:01,040 --> 00:24:07,880
People get stumped sometimes, but I don't know that people get stumped on the same question.

382
00:24:07,880 --> 00:24:09,440
That makes sense.

383
00:24:09,440 --> 00:24:14,120
Let's talk about what excites you in healthcare?

384
00:24:14,120 --> 00:24:19,960
What is a problem do you think more people should be working on?

385
00:24:19,960 --> 00:24:31,080
So the problem is people don't have access to healthcare as much as they would want,

386
00:24:31,080 --> 00:24:37,560
and there's no reason that really should be that way.

387
00:24:37,560 --> 00:24:47,920
Especially now with telehealth, AI, all these things.

388
00:24:47,920 --> 00:24:53,480
I remember one of my attendings was telling me 95% of your diagnosis is from a history.

389
00:24:53,480 --> 00:24:57,440
Now I don't know if that's true right now, not sure, whatever, but I know as a practicing

390
00:24:57,440 --> 00:25:04,000
physician, sometimes I can tell what people had just by them telling me what's going on.

391
00:25:04,000 --> 00:25:11,040
You don't need everyone to go and make doctor's appointments and take days off of work.

392
00:25:11,040 --> 00:25:12,840
That's one of the main reasons people don't go to the doctor.

393
00:25:12,840 --> 00:25:17,960
They have to take time off of work, they have to travel, they have problems with, let's

394
00:25:17,960 --> 00:25:21,640
say children or whatever.

395
00:25:21,640 --> 00:25:24,920
The appointments are during the daytime and they're working.

396
00:25:24,920 --> 00:25:29,760
There's a lot of reasons why people don't get care and those reasons don't have to be

397
00:25:29,760 --> 00:25:31,400
there in today's world.

398
00:25:31,400 --> 00:25:41,960
So I think we should try to figure out how we can provide care to people that is appropriate

399
00:25:41,960 --> 00:25:47,400
and everyone be able to have good solid care.

400
00:25:47,400 --> 00:25:49,480
I think that's the biggest problem in medicine right now.

401
00:25:49,480 --> 00:25:56,000
That's not an easy answer because a lot of it is not necessarily the system's fault.

402
00:25:56,000 --> 00:26:00,720
Some of it is patients don't know what to do and even if you changed it, they still

403
00:26:00,720 --> 00:26:02,240
wouldn't know what to do.

404
00:26:02,240 --> 00:26:06,320
So we have to figure that out.

405
00:26:06,320 --> 00:26:15,120
I think the digital revolution is a way to get there but it's going to take time because

406
00:26:15,120 --> 00:26:20,640
people need to learn how to use it properly as well.

407
00:26:20,640 --> 00:26:26,680
As someone who's trying to make his life more efficient, I have found you cannot make fatherhood

408
00:26:26,680 --> 00:26:27,680
more efficient.

409
00:26:27,680 --> 00:26:35,800
What my children want is my time and there's no way to play faster or in a more productive

410
00:26:35,800 --> 00:26:38,160
or efficient manner.

411
00:26:38,160 --> 00:26:45,480
What advice do you have for me and for people in my shoes and how to balance fatherhood

412
00:26:45,480 --> 00:26:54,280
being a good husband and working on my ambitions?

413
00:26:54,280 --> 00:27:02,640
So always try to be there for your family.

414
00:27:02,640 --> 00:27:05,880
Whenever there's an important event, you got to be there.

415
00:27:05,880 --> 00:27:11,240
Whenever a child has a question, don't shrug it off.

416
00:27:11,240 --> 00:27:13,720
Try to deal with it.

417
00:27:13,720 --> 00:27:19,040
When your wife needs something, even if you can't do it at the time, say, I'll get to

418
00:27:19,040 --> 00:27:24,080
it but make sure you do.

419
00:27:24,080 --> 00:27:30,120
Try to be around.

420
00:27:30,120 --> 00:27:31,120
You're right.

421
00:27:31,120 --> 00:27:34,960
It's a relationship that you have to give and you have to just be around and you have

422
00:27:34,960 --> 00:27:42,680
to put time into it and you have to think about what they want necessarily and not what

423
00:27:42,680 --> 00:27:45,680
you want.

424
00:27:45,680 --> 00:27:48,160
What is your biggest failure in life so far, Sam?

425
00:27:48,160 --> 00:27:51,360
And how did you move past it?

426
00:27:51,360 --> 00:27:56,560
So I don't look at experiences as failures.

427
00:27:56,560 --> 00:27:57,560
Everything's an experience.

428
00:27:57,560 --> 00:27:59,420
You learn from your failures.

429
00:27:59,420 --> 00:28:05,520
So I look at everything as a learning experience.

430
00:28:05,520 --> 00:28:10,840
And I don't know what my biggest failure is, but I've had lots of learning experiences.

431
00:28:10,840 --> 00:28:23,040
I think I look at things in a positive way that things happen for a reason.

432
00:28:23,040 --> 00:28:27,680
And if you learn from it, you will become a better person.

433
00:28:27,680 --> 00:28:32,280
If you put your head down to the ground and don't want to see what happened, then you

434
00:28:32,280 --> 00:28:35,760
won't learn from it and things won't change.

435
00:28:35,760 --> 00:28:42,200
So I don't look at things as failures really because even in the startup world, everyone

436
00:28:42,200 --> 00:28:48,800
says the most successful people are the ones that had failed startups previously.

437
00:28:48,800 --> 00:28:51,560
And was that really a failed startup or was it a positive experience?

438
00:28:51,560 --> 00:28:54,480
I think it's a positive experience.

439
00:28:54,480 --> 00:29:00,280
That's a beautiful way to look at life, to look at things as learning experiences.

440
00:29:00,280 --> 00:29:10,960
Would you rather have a life full of many successes or big, massive learning experiences

441
00:29:10,960 --> 00:29:12,960
chasing audacious goals?

442
00:29:12,960 --> 00:29:15,120
That's a tough question.

443
00:29:15,120 --> 00:29:27,580
So I think everybody's life should be about what's important to them and it's not selfish

444
00:29:27,580 --> 00:29:28,580
to them.

445
00:29:28,580 --> 00:29:32,760
For instance, I'm very involved in my community and I give a lot back into my community.

446
00:29:32,760 --> 00:29:36,320
When I was in LA, I was very involved here in Boston.

447
00:29:36,320 --> 00:29:45,720
I'm very involved in the community, in my temple, in schools, and whatever, and time

448
00:29:45,720 --> 00:29:49,480
and charity, whatever.

449
00:29:49,480 --> 00:29:56,760
But I also want to be successful and I want to provide for my family and I want to help

450
00:29:56,760 --> 00:30:02,680
the world, both as a doctor, I want to help people and I want to help new medical technology

451
00:30:02,680 --> 00:30:06,040
come out and help the world in that way.

452
00:30:06,040 --> 00:30:16,600
So audacious goals are good if they're for a purpose, right?

453
00:30:16,600 --> 00:30:21,920
But just to have audacious goals is not really useful as far as I'm concerned to say that

454
00:30:21,920 --> 00:30:24,880
I'm the best person in the world, I'm the richest person in the world.

455
00:30:24,880 --> 00:30:32,240
It doesn't really matter.

456
00:30:32,240 --> 00:30:36,520
And lots of experiences, lots of experiences are good because you learn from each one.

457
00:30:36,520 --> 00:30:42,640
Are you someone who are you goal-oriented?

458
00:30:42,640 --> 00:30:48,440
Do you think happiness is, I'll use the word chasing and it may not be the right word again,

459
00:30:48,440 --> 00:30:55,200
chasing new goals as you conquer them, or is it more learning to be in the moment and

460
00:30:55,200 --> 00:31:00,320
more along the lines, the journey is the destination?

461
00:31:00,320 --> 00:31:02,240
I'm more into the moment.

462
00:31:02,240 --> 00:31:06,440
I have goals, but I'll pivot, right?

463
00:31:06,440 --> 00:31:11,760
And it doesn't matter that my original goal wasn't where I wanted to be, right?

464
00:31:11,760 --> 00:31:19,800
If I'm happy with what I'm doing, right, then that's the right thing because situations

465
00:31:19,800 --> 00:31:20,800
change.

466
00:31:20,800 --> 00:31:30,880
What's your biggest tip from early stage VCs or people thinking of starting a fund in terms

467
00:31:30,880 --> 00:31:39,680
of how to raise capital from LPs and how to best manage LP expectations in terms of cadence

468
00:31:39,680 --> 00:31:45,200
of communication and depth of communication?

469
00:31:45,200 --> 00:31:55,680
So someone were to start a fund, I would tell them, think carefully on how big of a fund

470
00:31:55,680 --> 00:32:04,540
you want and what is your strategy in fundraising because people aren't giving you money for

471
00:32:04,540 --> 00:32:05,540
a first fund.

472
00:32:05,540 --> 00:32:08,480
It's very, very hard.

473
00:32:08,480 --> 00:32:14,280
I think I was able to raise my first fund because I was 53 years old at the time.

474
00:32:14,280 --> 00:32:17,120
Actually, no, I was probably 57 at the time.

475
00:32:17,120 --> 00:32:20,840
53 was when I stopped practicing medicine.

476
00:32:20,840 --> 00:32:24,400
And I had a whole lot of life experiences.

477
00:32:24,400 --> 00:32:26,400
Many were positive, many were successful.

478
00:32:26,400 --> 00:32:31,720
So the people that knew me that invested, invested in me, right, because they figured

479
00:32:31,720 --> 00:32:38,000
I knew how to figure things out.

480
00:32:38,000 --> 00:32:43,560
Make sure that the people that you want to go to raise a fund know that that's who you

481
00:32:43,560 --> 00:32:45,640
are.

482
00:32:45,640 --> 00:32:48,960
Institutions aren't interested in investing in a new person.

483
00:32:48,960 --> 00:32:49,960
Extremely unlikely, right?

484
00:32:49,960 --> 00:32:52,040
Family offices, it's too risky.

485
00:32:52,040 --> 00:32:58,600
They have a lot to lose, but people will invest in people.

486
00:32:58,600 --> 00:32:59,600
So that's what I found.

487
00:32:59,600 --> 00:33:04,960
I'd say go to the people you know that really believe in you and trust in you and would

488
00:33:04,960 --> 00:33:09,520
lose some money for that, for a potential gain, obviously.

489
00:33:09,520 --> 00:33:13,920
In terms of communication, you have to let people know every time you do investments,

490
00:33:13,920 --> 00:33:19,320
you should update them, speak to whatever else he wants to talk to you, speak to them,

491
00:33:19,320 --> 00:33:23,840
don't ever ghost anybody.

492
00:33:23,840 --> 00:33:31,360
If it has an issue, you deal with it.

493
00:33:31,360 --> 00:33:32,680
Just regular stuff like that.

494
00:33:32,680 --> 00:33:37,240
You know, quarterly reports.

495
00:33:37,240 --> 00:33:42,440
Which verticals in healthcare do you think will bring the highest return of investment

496
00:33:42,440 --> 00:33:44,480
over the next five to 10 years?

497
00:33:44,480 --> 00:33:52,640
Is it pharma, biotech, digital health, remote patient monitoring, med tech?

498
00:33:52,640 --> 00:33:54,280
I can't predict that.

499
00:33:54,280 --> 00:33:58,520
I just think digital health is ripe right now.

500
00:33:58,520 --> 00:34:02,480
I think traditionally pharma has been great, but no reason to think it's not going to

501
00:34:02,480 --> 00:34:03,480
continue.

502
00:34:03,480 --> 00:34:12,400
So I don't know which is going to be the biggest, but I know for myself, I bring the most value

503
00:34:12,400 --> 00:34:14,400
in what I'm doing right now.

504
00:34:14,400 --> 00:34:17,880
So I want to do what I'm going to bring the most value.

505
00:34:17,880 --> 00:34:21,240
And I think I'll do the best because of that.

506
00:34:21,240 --> 00:34:23,200
That's a good way to look at things.

507
00:34:23,200 --> 00:34:26,720
How has your investment strategy changed given the recession?

508
00:34:26,720 --> 00:34:32,440
The last recession saw the birth of multiple unicorns like Uber, WhatsApp, Fitbit to give

509
00:34:32,440 --> 00:34:34,760
a few examples.

510
00:34:34,760 --> 00:34:41,000
Are you more aggressive, less aggressive, or has your strategy changed at all over the

511
00:34:41,000 --> 00:34:43,760
next few years?

512
00:34:43,760 --> 00:34:46,520
So my strategy really hasn't changed because I'm early stage.

513
00:34:46,520 --> 00:34:49,280
I'm looking at things three, four years from now.

514
00:34:49,280 --> 00:34:54,660
At best two years if it's extremely lucky, let's say.

515
00:34:54,660 --> 00:34:58,280
So the economy will be completely different.

516
00:34:58,280 --> 00:35:00,000
Now valuations are much lower now.

517
00:35:00,000 --> 00:35:07,800
So if someone is coming with a valuation from a year ago, even if I like the product for

518
00:35:07,800 --> 00:35:09,200
my investors, I can't invest in it.

519
00:35:09,200 --> 00:35:10,200
It's just not a good deal.

520
00:35:10,200 --> 00:35:11,200
You know what I'm saying?

521
00:35:11,200 --> 00:35:14,420
So I have to look at what things are right now.

522
00:35:14,420 --> 00:35:24,400
So as investments, I can enter at lower valuations because that's what the market's saying.

523
00:35:24,400 --> 00:35:27,640
My strategy really hasn't changed because I'm still looking for the same types of companies.

524
00:35:27,640 --> 00:35:33,880
I'm not a big believer in looking for unicorns because who knows?

525
00:35:33,880 --> 00:35:38,680
Did Uber know there would be Uber?

526
00:35:38,680 --> 00:35:40,680
Nobody knew any of these things.

527
00:35:40,680 --> 00:35:48,200
There's a lot of being at the right place at the right time.

528
00:35:48,200 --> 00:35:53,440
How much importance do you put into market tailwinds and headwinds when looking at startups

529
00:35:53,440 --> 00:35:55,320
right now?

530
00:35:55,320 --> 00:35:59,600
And I would describe what tailwind, COVID was a good tailwind for remote patient monitoring,

531
00:35:59,600 --> 00:36:00,600
digital health.

532
00:36:00,600 --> 00:36:04,760
What are some tailwinds you're banking on right now?

533
00:36:04,760 --> 00:36:13,360
And the common headwinds would be just regulatory changes, reimbursement structures in startups.

534
00:36:13,360 --> 00:36:19,160
What is the biggest headwind that startups have to keep in mind when trying to form a

535
00:36:19,160 --> 00:36:24,720
digital health company in this environment?

536
00:36:24,720 --> 00:36:31,360
So to me, the biggest headwind is that don't think COVID is there forever.

537
00:36:31,360 --> 00:36:37,040
When I see startups with COVID on every other slide, I'm just not interested.

538
00:36:37,040 --> 00:36:42,200
I mean, two years ago, that might have been something that people were interested in.

539
00:36:42,200 --> 00:36:43,840
Now, it's just not.

540
00:36:43,840 --> 00:36:58,160
So the biggest headwind is that people try to rely on the past too much.

541
00:36:58,160 --> 00:37:00,600
Look at a problem that's been around for a long time.

542
00:37:00,600 --> 00:37:02,560
Try to solve it.

543
00:37:02,560 --> 00:37:04,440
That problem is still going to be there.

544
00:37:04,440 --> 00:37:13,000
Don't look for the new thing that just came out because new things come and go.

545
00:37:13,000 --> 00:37:19,240
You can always rely on, unfortunately, diabetes being there.

546
00:37:19,240 --> 00:37:22,440
You can always rely on glaucoma being there.

547
00:37:22,440 --> 00:37:26,840
You can always rely on a lot of these diseases that are out there.

548
00:37:26,840 --> 00:37:29,640
Osteoporosis will always be there.

549
00:37:29,640 --> 00:37:31,600
Try to solve a problem with that.

550
00:37:31,600 --> 00:37:36,520
Don't worry about COVID affecting, and I'm going to get into this niche because when

551
00:37:36,520 --> 00:37:42,560
you're doing it, so are 50 other people, and as soon as it's over, there's nothing.

552
00:37:42,560 --> 00:37:49,760
Some of these companies have created new markets as they have grown.

553
00:37:49,760 --> 00:37:55,520
How much importance are you putting on the market slide, the time?

554
00:37:55,520 --> 00:37:59,160
And if a startup sees on their slide, we will create our own market.

555
00:37:59,160 --> 00:38:01,960
What is your response to that?

556
00:38:01,960 --> 00:38:04,360
That's a great question.

557
00:38:04,360 --> 00:38:08,280
So I'm going to answer a little bit roundabout.

558
00:38:08,280 --> 00:38:17,280
I like technologies that are new, never been developed, and are very useful.

559
00:38:17,280 --> 00:38:23,640
Now, sometimes those are completely new markets.

560
00:38:23,640 --> 00:38:33,560
You can't possibly look at a previous device, a previous therapy and say, oh, wow, we'll

561
00:38:33,560 --> 00:38:34,560
just do this.

562
00:38:34,560 --> 00:38:35,560
It's completely new.

563
00:38:35,560 --> 00:38:37,360
So you're going to have to teach people how to deal with it.

564
00:38:37,360 --> 00:38:43,200
For instance, there's one company that I invested in bone health technology that has a belt

565
00:38:43,200 --> 00:38:47,080
that treats osteopenia and osteoporosis.

566
00:38:47,080 --> 00:38:53,280
What happens is it increases bone density through vibrations with research from NASA,

567
00:38:53,280 --> 00:38:55,280
et cetera, et cetera.

568
00:38:55,280 --> 00:38:58,800
Now, people are dying for something like that because a lot of people don't want the medicines

569
00:38:58,800 --> 00:39:01,520
that are very toxic, and there's no other medicine for it.

570
00:39:01,520 --> 00:39:03,520
So we're creating a new market.

571
00:39:03,520 --> 00:39:05,960
So I'm not against creating a new market, right?

572
00:39:05,960 --> 00:39:10,120
Because that's the only way you do it in this type of field.

573
00:39:10,120 --> 00:39:14,680
I think it's actually something real interesting and positive.

574
00:39:14,680 --> 00:39:18,520
So when someone says, I'll create a new market, that's okay, as long as there's a pathway

575
00:39:18,520 --> 00:39:19,520
to it.

576
00:39:19,520 --> 00:39:22,560
It may not work, and that's the risk in everything.

577
00:39:22,560 --> 00:39:25,560
But the reward is huge.

578
00:39:25,560 --> 00:39:27,280
I think that it's something reasonable.

579
00:39:27,280 --> 00:39:31,360
I would certainly support it.

580
00:39:31,360 --> 00:39:32,360
Thanks for that answer.

581
00:39:32,360 --> 00:39:40,400
That is truly insightful, and too many investors run away when founders say that, and I think

582
00:39:40,400 --> 00:39:42,360
that's too bad.

583
00:39:42,360 --> 00:39:52,040
If founders are creating a new market in healthcare, would you recommend they focus their business

584
00:39:52,040 --> 00:39:56,200
model on B2C or B2B?

585
00:39:56,200 --> 00:39:59,880
I'm not a big B2C fan for startups.

586
00:39:59,880 --> 00:40:00,880
Okay?

587
00:40:00,880 --> 00:40:01,880
Yeah.

588
00:40:01,880 --> 00:40:06,080
That's just a general rule.

589
00:40:06,080 --> 00:40:07,080
It's hard.

590
00:40:07,080 --> 00:40:08,080
Possibly.

591
00:40:08,080 --> 00:40:12,040
How are you going to get the money?

592
00:40:12,040 --> 00:40:19,040
So I'm a bigger B2B fan, but new markets can occur in so many ways that you can focus on

593
00:40:19,040 --> 00:40:22,800
a B2B plan and get there too.

594
00:40:22,800 --> 00:40:29,240
There's two different schools of thought when hiring people and how to incentivize or motivate

595
00:40:29,240 --> 00:40:30,240
them.

596
00:40:30,240 --> 00:40:36,440
I'll name two big-name VC firms, Andreessen and Sequoia.

597
00:40:36,440 --> 00:40:42,240
I may be getting this wrong, but I believe Andreessen just gives titles to everyone because

598
00:40:42,240 --> 00:40:48,680
they feel if your name says vice president, you will work harder, whereas Sequoia makes

599
00:40:48,680 --> 00:40:55,120
people work more to get their partner title, and it's a more structured, hierarchical path

600
00:40:55,120 --> 00:40:57,400
to it.

601
00:40:57,400 --> 00:41:04,320
Which structure do you think is better for startups, is to give everyone a C-suite title

602
00:41:04,320 --> 00:41:11,040
or to not give titles out easily and make people work hard for them?

603
00:41:11,040 --> 00:41:25,000
So when I was in business school, I took a class that really focused on startups.

604
00:41:25,000 --> 00:41:32,440
It was based on, I think, a class that Noam Wasserman, who was then at Harvard, but now

605
00:41:32,440 --> 00:41:37,760
he's the chief head of business school at Yeshiva University, that he created.

606
00:41:37,760 --> 00:41:44,160
One of the things that the professor then taught me, it was a different one, it was

607
00:41:44,160 --> 00:41:55,120
a C-suite title, but I think it was from there, is that when you give a C-suite title to one

608
00:41:55,120 --> 00:42:07,400
person, you can never take it away without causing a lot of disharmony in the company.

609
00:42:07,400 --> 00:42:14,640
So if somebody is the CTO and now you want to replace them, because really they were

610
00:42:14,640 --> 00:42:20,560
fine early on, but they're not fine when it's getting bigger, that person is going to be

611
00:42:20,560 --> 00:42:24,880
mad, there's going to be less strife.

612
00:42:24,880 --> 00:42:31,120
So I don't believe in giving everybody the maximum title, but I believe in giving them

613
00:42:31,120 --> 00:42:32,600
a real good title.

614
00:42:32,600 --> 00:42:39,160
So give them head of technology title, give them something like that.

615
00:42:39,160 --> 00:42:44,920
But I think C-suite titles are very difficult because once you give them, it's hard to take

616
00:42:44,920 --> 00:42:46,080
away.

617
00:42:46,080 --> 00:42:50,000
And I see that in practice a lot too, that once someone gets a title, they don't ever

618
00:42:50,000 --> 00:42:53,040
want to have that taken away.

619
00:42:53,040 --> 00:42:58,480
A good friend of mine who's a founder was glad to take the CEO title away and give it

620
00:42:58,480 --> 00:43:01,720
to somebody else because he knew it was better for the company.

621
00:43:01,720 --> 00:43:06,560
And he said, at the end of the day, that's what I care about.

622
00:43:06,560 --> 00:43:10,080
He's right, but not most people think of it that way.

623
00:43:10,080 --> 00:43:14,480
This is an incredibly difficult problem most founders face.

624
00:43:14,480 --> 00:43:17,720
Adam Grant talks about this in his book, Originals.

625
00:43:17,720 --> 00:43:21,840
Early on, you should hire for commitment, not the star candidate, not the exceptional

626
00:43:21,840 --> 00:43:23,120
talent.

627
00:43:23,120 --> 00:43:30,760
But as your startup grows, you need talented, exceptional experts to take it to the next

628
00:43:30,760 --> 00:43:32,560
step.

629
00:43:32,560 --> 00:43:35,840
How far ahead are you thinking in your startups?

630
00:43:35,840 --> 00:43:40,240
This person might need to be replaced as we grow.

631
00:43:40,240 --> 00:43:47,160
And if so, how do you balance hiring for commitment, rewarding people who helped you get to where

632
00:43:47,160 --> 00:43:53,240
you were, and they were incredibly important in that journey, but also letting them go

633
00:43:53,240 --> 00:43:56,800
because they might not be the right people?

634
00:43:56,800 --> 00:44:00,520
What advice do you have, I guess, for yourself?

635
00:44:00,520 --> 00:44:06,800
And for founders, when you meet them early on, and you can tell this person is not suited

636
00:44:06,800 --> 00:44:11,360
for an executive role five years from now or three years from now, but you need them

637
00:44:11,360 --> 00:44:16,080
right now because they're so committed to the mission.

638
00:44:16,080 --> 00:44:19,920
So no, I'm very loyal.

639
00:44:19,920 --> 00:44:23,960
Someone helped me bring the company to a certain place.

640
00:44:23,960 --> 00:44:25,640
I'm going to be loyal to them.

641
00:44:25,640 --> 00:44:32,440
I don't believe in being disloyal because I think, first of all, it's not right.

642
00:44:32,440 --> 00:44:37,840
Secondly, it's a bad message for your culture.

643
00:44:37,840 --> 00:44:41,080
And I think the culture of the company is extremely important.

644
00:44:41,080 --> 00:44:47,600
Having said that, I've had discussions with current CEOs of companies I was about to invest

645
00:44:47,600 --> 00:44:52,880
in or potentially invest in and said to them, you're great at taking this technology and

646
00:44:52,880 --> 00:44:54,440
getting it FTA approved, I said.

647
00:44:54,440 --> 00:44:58,240
When it needs to be commercialized, I don't know that you're the right person.

648
00:44:58,240 --> 00:45:00,840
Would you be willing to step aside?

649
00:45:00,840 --> 00:45:02,440
And I have that conversation ahead of time.

650
00:45:02,440 --> 00:45:06,880
Those are the hard conversations that I told you that I never would have had 20 years ago,

651
00:45:06,880 --> 00:45:10,200
but in business school, they taught me you have to have those hard conversations.

652
00:45:10,200 --> 00:45:11,200
And it's right.

653
00:45:11,200 --> 00:45:15,120
So if I have that conversation with someone and someone says, no, I think I can do it,

654
00:45:15,120 --> 00:45:18,720
I'll be CEO, then it tells me I don't really want to invest in that company because I don't

655
00:45:18,720 --> 00:45:19,720
think that person will do it.

656
00:45:19,720 --> 00:45:22,160
And I think it's going to be harmful company.

657
00:45:22,160 --> 00:45:23,920
The person says, I'm willing to step aside.

658
00:45:23,920 --> 00:45:25,240
I want what's best for the company.

659
00:45:25,240 --> 00:45:26,600
I own a big chocolate company.

660
00:45:26,600 --> 00:45:28,600
I will make more money.

661
00:45:28,600 --> 00:45:31,440
Then, hey, that's a great answer.

662
00:45:31,440 --> 00:45:37,360
Doesn't mean it will be easy when it comes time, but at least I'll have the ability to

663
00:45:37,360 --> 00:45:39,320
say, remember, we had this conversation.

664
00:45:39,320 --> 00:45:42,360
Remember you said you would do that?

665
00:45:42,360 --> 00:45:50,160
So that just having that conversation, I think is very helpful.

666
00:45:50,160 --> 00:45:52,960
But I think it's extremely important to have that conversation.

667
00:45:52,960 --> 00:45:57,800
And if you never have that conversation, you shouldn't invest because I think that can

668
00:45:57,800 --> 00:45:59,880
kill a company.

669
00:45:59,880 --> 00:46:04,720
Is it better to be an excellent visionary or an excellent operator?

670
00:46:04,720 --> 00:46:07,200
And which one is more rare?

671
00:46:07,200 --> 00:46:14,000
I go with the operator over the visionary anytime, but the visionary is the one that's going

672
00:46:14,000 --> 00:46:16,320
to have the unicorns.

673
00:46:16,320 --> 00:46:27,520
But I'd rather get a steady return than a huge return on one in a hundred.

674
00:46:27,520 --> 00:46:33,040
And I think operators know what to do to make things happen.

675
00:46:33,040 --> 00:46:46,880
Companies are sometimes too unfocused to run day-to-day operations.

676
00:46:46,880 --> 00:46:51,560
And I think that would be bad for the company.

677
00:46:51,560 --> 00:46:52,560
That's an interesting take.

678
00:46:52,560 --> 00:46:58,840
And it goes against other discussions I've had where people say 20% of your investments

679
00:46:58,840 --> 00:47:06,120
will be duds or you will lose out completely, 60 to 70% might bring you one to two X, maybe

680
00:47:06,120 --> 00:47:08,400
three X.

681
00:47:08,400 --> 00:47:12,480
And then it's a 10 to 20% that will bring you 10 to a hundred X.

682
00:47:12,480 --> 00:47:19,640
And essentially you focus all your energy as well as 80-20 principle on that 20%.

683
00:47:19,640 --> 00:47:25,640
Is that a principle you follow or are you looking for say two to three X on all your

684
00:47:25,640 --> 00:47:27,520
investments?

685
00:47:27,520 --> 00:47:33,960
And is that difference in strategy because of your PE background?

686
00:47:33,960 --> 00:47:38,440
And how did you reach that decision?

687
00:47:38,440 --> 00:47:43,760
My strategy is that any company I invest in, I want to see at least a 10 X.

688
00:47:43,760 --> 00:47:47,440
I want to see that has the ability to have a 10 X.

689
00:47:47,440 --> 00:47:55,040
If it ends up four X, I'm happy because not all will have 10 X.

690
00:47:55,040 --> 00:47:57,680
A hundred X is extremely unlikely.

691
00:47:57,680 --> 00:48:00,960
I'll be dancing if that happens, right?

692
00:48:00,960 --> 00:48:02,440
And extremely happy.

693
00:48:02,440 --> 00:48:09,800
But I don't know that you can rely that that will happen, especially in medical technologies

694
00:48:09,800 --> 00:48:10,800
and stuff.

695
00:48:10,800 --> 00:48:15,560
I mean, I think it's different than pure tech.

696
00:48:15,560 --> 00:48:26,640
So I like that all my companies have the potential to get 10 X and that almost all will be successful.

697
00:48:26,640 --> 00:48:31,720
Now having said that, for sure 20% will fail, right?

698
00:48:31,720 --> 00:48:45,160
And maybe another 60% will be between, let's say two and six X, average of four.

699
00:48:45,160 --> 00:48:54,800
And then the other 20% at 10 X and I'm going to do very well with that.

700
00:48:54,800 --> 00:49:03,120
If I can get a five X average for my investors, I think everybody would be very, very happy.

701
00:49:03,120 --> 00:49:06,000
How do you quantify that potential for 10 X?

702
00:49:06,000 --> 00:49:13,320
Are you looking at, can this start to reach this many million in ARR and what the path

703
00:49:13,320 --> 00:49:14,480
to that is?

704
00:49:14,480 --> 00:49:19,760
Or are you looking at the market as a whole and saying, okay, if they, it's not a popular

705
00:49:19,760 --> 00:49:25,320
way, but if they can get 0.1% of the market or 1% and that is enough for a 10 X, what

706
00:49:25,320 --> 00:49:30,080
metrics or what variables are you using to quantify that?

707
00:49:30,080 --> 00:49:39,280
So I look at exit potential in terms of usually acquisition.

708
00:49:39,280 --> 00:49:42,520
Most of my companies will not IPO.

709
00:49:42,520 --> 00:49:43,520
That's just realistic.

710
00:49:43,520 --> 00:49:50,360
For a company that IPO is extremely difficult.

711
00:49:50,360 --> 00:49:54,440
And actually in today's market, I'm really glad that I've not gone for companies that

712
00:49:54,440 --> 00:50:01,760
want to IPO because I think it's just a really bad market, especially now.

713
00:50:01,760 --> 00:50:03,520
So I look at equivalent acquisitions.

714
00:50:03,520 --> 00:50:09,800
I look at what type of revenue they're going to be able to have and what the exit will

715
00:50:09,800 --> 00:50:11,760
be at a certain point.

716
00:50:11,760 --> 00:50:15,360
What types of companies and come up with valuation that way.

717
00:50:15,360 --> 00:50:18,240
And then I look at future funding that will need and dilution that'll happen along the

718
00:50:18,240 --> 00:50:22,600
way and whether I'm going to continue funding along the way, et cetera, et cetera.

719
00:50:22,600 --> 00:50:30,840
And I come up with some mathematical analysis and then I say, if this meets that I'll make

720
00:50:30,840 --> 00:50:32,200
at least 10 X, that's great.

721
00:50:32,200 --> 00:50:35,940
I mean, sometimes it's way more than that.

722
00:50:35,940 --> 00:50:41,720
I have a million more questions, but in the interest of time, I'll ask one last question.

723
00:50:41,720 --> 00:50:42,720
Okay.

724
00:50:42,720 --> 00:50:45,160
What is the end goal for you, Sam?

725
00:50:45,160 --> 00:50:50,640
You said you will likely never retire in the past.

726
00:50:50,640 --> 00:50:54,480
And feel free to correct me if I'm misremembering that.

727
00:50:54,480 --> 00:50:57,200
What is the end goal?

728
00:50:57,200 --> 00:51:04,120
And talking to yourself when you are 95 or 90, looking back at your life, what would

729
00:51:04,120 --> 00:51:06,920
you be most proud of?

730
00:51:06,920 --> 00:51:12,840
So the end game, I mean that retired, but I don't want to keep working operationally

731
00:51:12,840 --> 00:51:15,280
as hard as I'm doing.

732
00:51:15,280 --> 00:51:21,320
So I want to create a structure so that I can make high level strategic decisions and

733
00:51:21,320 --> 00:51:22,320
be involved.

734
00:51:22,320 --> 00:51:29,840
But have people junior to me, partners who are doing the day to day operational things

735
00:51:29,840 --> 00:51:33,960
that I'm doing right now.

736
00:51:33,960 --> 00:51:42,640
I won't be able to, I mean, I have three grandkids right now, a couple more on the way.

737
00:51:42,640 --> 00:51:46,080
I love seeing my family, I'm involved with my family.

738
00:51:46,080 --> 00:51:48,480
So I want to be able to do all that.

739
00:51:48,480 --> 00:51:50,280
Great wife won't be able to travel with her.

740
00:51:50,280 --> 00:52:00,880
So although I won't retire, I want to be able to have freedom.

741
00:52:00,880 --> 00:52:04,920
Having said that, what am I going to be most proud of?

742
00:52:04,920 --> 00:52:08,200
Probably my family.

743
00:52:08,200 --> 00:52:16,080
It's like who they become, part of that is what they've seen at home from my wife and

744
00:52:16,080 --> 00:52:18,600
myself.

745
00:52:18,600 --> 00:52:23,560
Our values, and we see that in them.

746
00:52:23,560 --> 00:52:30,360
My portfolio companies are not a reflection of me.

747
00:52:30,360 --> 00:52:31,880
It turns out it helped the world.

748
00:52:31,880 --> 00:52:32,880
That's great.

749
00:52:32,880 --> 00:52:33,880
Right.

750
00:52:33,880 --> 00:52:34,880
But it wasn't necessarily me.

751
00:52:34,880 --> 00:52:37,600
I've made it helped a little bit.

752
00:52:37,600 --> 00:52:46,800
Everything I've done in life has had some type of effect on helping the world, whether

753
00:52:46,800 --> 00:52:54,480
it was a doctor right now in venture, even in PE, it was doing a lot of multi-practices.

754
00:52:54,480 --> 00:52:57,320
There's something on healthcare.

755
00:52:57,320 --> 00:53:06,480
So I can be proud of that, but I'd be most proud of seeing my family and what they've

756
00:53:06,480 --> 00:53:09,720
done and where they're at.

757
00:53:09,720 --> 00:53:10,720
I completely agree.

758
00:53:10,720 --> 00:53:13,720
I'm sorry about the grandkids.

759
00:53:13,720 --> 00:53:15,160
And grandkids.

760
00:53:15,160 --> 00:53:18,080
Helping others brings me the most joy as well.

761
00:53:18,080 --> 00:53:20,640
And I think it's a noble end goal to have.

762
00:53:20,640 --> 00:53:22,200
Thanks so much for coming on today, Sam.

763
00:53:22,200 --> 00:53:23,200
I learned so much.

764
00:53:23,200 --> 00:53:28,640
And I hope to talk again, maybe do a part two in a few months.

765
00:53:28,640 --> 00:53:29,640
Great.

766
00:53:29,640 --> 00:53:30,640
Thank you.

767
00:53:30,640 --> 00:53:31,640
Great being on.

768
00:53:31,640 --> 00:53:53,640
Thank you.