Thanasis Delistathis (00:15):

Sean, thank you for joining us today, and you are the first guest in our new format, which includes video, so we're very excited to test this with you. We'll run into a couple of issues as we're getting started, but hopefully over time we'll work these out. Appreciate you taking the time. You and I have known each other for a while. You have been an angel investor, you have been an entrepreneur, and you're now back into being a VC, so we'd love for our audience to get to know you a little better. So do you want to quickly go through your background and what you're excited about?

Sean Glass (00:53):

Yeah, sure. So one, I always love being first. Usually that's a good thing, so thanks so much for having me. I was born in South Africa and we came over to the United States when I was a couple years old. I'm an immigrant. My father's a physician. He took a job at Duke University as an anesthesiologist, and so I grew up there and my parents growing up kept telling me how lucky I was to be in this country that provided so much opportunity and I think this common refrain for immigrant, you can do so much here and there's so much opportunity out of you. I was always interested in math, science, technology, innovation, so went to Yale as an undergrad and in 20 years it's changed a lot since then. You get to Yale's campus and it's like, well, are you going to do the Goldman Sachs route or are you going to go to McKinsey or Bain or one of the other consulting firms, or are you going to follow a medicine or an academic sort of path? I'm like, I don't want to do any of that. I'm interested in entrepreneurship. Yale as a university has produced a lot of great entrepreneurs. Fred Smith who founded FedEx, Donna Dubinsky founded Palm and Handspring in the venture capital community, bill Draper, who kind of helped create the venture industry as a Yale alum. And so first entrepreneurial act was there should be an organization at Yale that knits together. Yale entrepreneurs alumni talks to faculty members who are breakthrough innovations that could be turned into new companies and Yale didn't even have a business plan competition.

Thanasis Delistathis (02:24):

When was this? When would this have been?

Sean Glass (02:26):

This was 1999, 2000. So it was also there and it was, I'm a student and the dotcom boom is happening.

Thanasis Delistathis (02:34):

So that was the beginning.

Sean Glass (02:37):

Oh yeah. But it was interesting because, so we started the Entrepreneurial Society created a business plan competition. An anonymous alum donated $50,000. I actually got to know him later.

Jenny Schretter (02:50):

So no longer anonymous.

Sean Glass  (02:51):

No longer anonymous to me. We'll keep him anonymous because I think that's what he wanted,

Jenny Schretter (02:56):

I would imagine,

Sean Glass  (02:57):

and I did tell him later, this actually was formative for me in my career. I was like, you donating this money that led us put this business plan competition that led me to meeting the folks who I founded my first company with business had this whole knock on effect that maybe you wouldn't have imagined when you agreed to give 50K to Yale to give away to students. So we did that and it's been amazing Now, I mean, Yale, they just had a Yale Innovation conference on campus the other week. Unfortunately I couldn't make it up there. They had 2000 people on campus and they have this huge biotech community. They're really interesting startups that have come out of Yale.

Jenny Schretter (03:36):

So are you still really involved with that?

Sean Glass  (03:38):

Yeah, yeah. There's actually a side thing that I do. So to the extent there are any Yale alums, students, anyone listening to this, we have this thing called the Y Startup Index now that we created, which is a fund that invests $25,000 in any startup that's created by a Yale affiliated person. Could be a faculty member, could be a current student, could be an alumnus, and it doesn't matter what the idea is. We're literally an index. So a company that's a venture type business. So it can't be a small restaurant or a small business. If they've raised 450 K, we invest 25K and they have to have a full-time, CEO. That's kind of the other thing, and at least one Yale founder with a meaningful stake. So we still do that. I do that with a bunch of Yale alums. It is a not-for-profit endeavor for us. We donate all the carry to support the entrepreneurial community at Yale. So yeah, still pretty involved there.

Thanasis Delistathis (04:32):

Quick question, when you were there, what do you think the most common major that people had was

Sean Glass (04:38):

Back then?

Thanasis Delistathis (04:40):

I'll tell you why I'm asking.

Sean Glass (04:42):

It was kind like PolySci or history or, econ probably. Econ was probably very common. Certainly not computer science. I was electrical engineering. I think there were 20 to 30 of us who were electrical engineering and maybe 20 to 30 computer science.

Thanasis Delistathis (05:05):

And who do you think, what do you think the most common major is now?

Sean Glass (05:08):

I should know that I don't, but I mean I know I've been mentoring a recent Yale grad who was a data science major. That wasn't even possible when I was there. I would think that the engineering sciences are a much higher proportion of majors than they were 20 years ago.

Thanasis Delistathis (05:26):

I'm asking because I was recently at my 30th reunion at Princeton, which is very similar in makeup to Yale. And so when I was there, the most common major was history. I think 10, 15 years later is economics, and right now it's computer science and they now have, if you said entrepreneurship, people would be like, what are you talking about back then? And now they have at least I think six courses that I know of that are all about entrepreneurship. So the world has changed in this direction, which is amazing.

Sean Glass (05:59):

It is amazing. I've always pushed the boundaries, everything I've done. So we created what we call the Yale Entrepreneurial Society. We registered as a student organization. Technically they wanted us to call it the Yale College Entrepreneurial Society, but we didn't want to just be for Yale College. We wanted to be Pan University and include a lot. We had this bigger. So that created a little bit of controversy and the dean of Yale College, this guy Dick Broadhead, who then became the president of Duke University later and just phenomenal guy. So I get this email, I'm a student, I guess, email, can you please come to the dean's office? It's like, we need to talk to you about what you're doing with this. And I remember I pulled an all nighter writing code for a CS class and I got to go that morning to go meet the dean of students who was notorious for being pretty harsh, and then the dean of Yale College.

And we walk in there and he says, so tell me about this business entrepreneurial. And we had thought about how do we position what we're doing because Yale was not necessarily supportive of what they thought as professional education. They're a liberal arts, it's a liberal arts education. So we said, look, we're trying to create this entrepreneurial community and entrepreneurship is about creation. And he was an English professor, and so we were like the person who creates an author of a book is an entrepreneur. You create something from nothing and you want to bring it into the world. And so we happen to think that the liberal arts education is the perfect way to educate entrepreneurs and look, here's this history of all these alums who've done this stuff and he 15 minutes into this, he's kind of like, you're absolutely right. This is great. I want to be supportive however I can be, what can I do for you? So he ended up giving out that being the presenter of the business plan competition award. So he gave and introduced us to a bunch of loves. It was fantastic. It was interesting how I think the university started to realize that in the future, it is entrepreneurs who are affecting the world as much so as politicians or people in finance. And so they shifted in that. I think they also started to realize that the alums who could give the money to power the universities were also the ones who were starting businesses.

Thanasis Delistathis (08:18):

For sure, for sure. And that is changing too. Okay, so you finished, finished Yale and then what's next?

Sean Glass (08:26):

So I actually started my first company while I was at Yale. So after we got the entrepreneurial society together, all the alumni were meeting kept saying, you seem like it was three guys, so you seem like smart guys. When are you going to start a company? And so in March of 2000, we launched a FinTech business called Hire One. The difference between we were starting the Entrepreneurial Society in October of 99 and March of 2000 was like the NASDAQ had crashed and the bubble had burst. And so we're running around. Entrepreneurs might say right now that the fundraising environment is not great. We had 200 meetings to raise $600,000 of seed capital for that business. It was kind of toxic, like three college students trying to start a FinTech business after the bubble had burst. It was not easy, but persistence paid off. We got the money together, launched that business, and 10 years later that company went public. So super lucky that worked out.

Jenny Schretter (09:22):

What are the biggest lessons you learned from that first company?

Sean Glass (09:26):

There are lots of lessons. I mean, one thing that someone had told me was a successful entrepreneur that I first was like, oh, it's probably not like that, and he turned out to be absolutely right is it tends to take twice as much money and twice as long as you think. So now in the VC world, I'm sure you see that you're both nodding. It's like whatever projections the company puts out there, you're always overly optimistic. Things take longer, things take more money. So when we were going public, I actually found our original financial projections and it literally took us twice as long and twice as much money, but it didn't matter, right? We got there and we made money. Our investors, our seed investors made over a hundred times their money. So that definitely is one thing.

The other I had, the other thing is to be very, at the start of a business with co-founders sit down and have a conversation about how are you going to make decisions? What are you going to do when you disagree? Who's going to have responsibility for what? So we stuck together as co-founders with three of us and still collaborate quite a bit, even 20 odd years later, we were very different. We approached things differently, but we had had that discussion of when we disagree, how are we going to go about resolving that? Who's going to have responsibility for what? How do we work together? That is something that's super important. And I mean, you see again, as an investor, I've seen teams completely blow up and they didn't even, they were like, oh, I need a technical, here's a great technical, I have domain expertise. And it's like, well, I functionally need that, but they never discussed it. What do they do if they disagree about something?

Jenny Schretter (11:09):

Were you and your co-founders very good friends?

Sean Glass (11:12):

We weren't friends when we started working together and we started working together on entrepreneurial society stuff. So it was the same kind of group, but we weren't friendly before that. And then you just spend so much time together, you naturally become friends, right?

Jenny Schretter (11:27):

I mean that's better. I think when you build a company with some of your best friends historically, sometimes that doesn't work out well.

Sean Glass (11:37):

There are other aspects of the relationship. Yeah, yeah, for sure. Yeah, so was lucky that worked out. I left just before the IPO, right? So for me, I looked at it as kind of like I've learned a lot here. That's been interesting. So I ran marketing sales in the beginning, everyone's involved with everything. I was raising money, figuring out the product, but over time I was marketing sales, worked on product a bit, miles ran operations and technology and Mark ran finance and then we early on hired a CEO and part of what Dean did really well was like don't get in the way. In many ways, there was certain communication and working with clients and stuff he would do, and then he just kind of coordinated and make sure that everything worked.

Thanasis Delistathis (12:28):

And is that when you started making, because I know you were making a bunch of seed early stage investments after that, right after that

Sean Glass (12:35):

Period I started even before I left. When you're young, you don't have to earn that much money to have excess when you're living at small apartment and you don't have any other obligations. So my first angel investment was probably 16 or 17 years ago in a biopharma company called Marius Pharmaceuticals, and it is my only biopharma investment. It went public and I lost money, so I invested $10,000.

When I was able to, it went public, but it was a small bio. Remember there's this period of time where there were all these biotech IPOs and many of 'em were very small. They were in that group. They sent the notice to an old address, they didn't even get the paperwork. So it took a while to actually get the stock into an account. They did one of these things and I eventually was able to sell it and get $7,000 back and there was a dilution and there were all these lessons even in that deal of how these things can work out but still not make you money.

Thanasis Delistathis (13:43):

How many total personal investments have you made in terms of Seed?

Sean Glass (13:48):

So I've written a hundred different checks and it's about 80 companies. So I know all of this because I'm raising a fund right now called evidenced, and part of what I put together in our data room was the full track record about the thing that surprised me was only about 25% of the checks I've written have gone to zero, which I've been investing in call it pre-seed, seed a, right? I'm generally not writing another bigger check later, sort later rounds, but $10,000 to a couple hundred thousand dollars personally. And I was surprised that the data out there is typically about 50% will go to zero of your investing at that stage. And even though I now have this track record that spans almost 50 years of investing, it's less than 25%.

Jenny Schretter (14:44):

Have you been investing across multiple sectors or just specializing in a few? How have you thought about that historically, moving forward?

Sean Glass (14:51):

So in the beginning it was a bit all over the map as I was learning and then sort of realized you have to have kind of a circle of competence the way Warren Buffet might talk to about in the value world. I think in venture you can be a generalist in some sense, but a lot of generalists are actually software investors across multiple segments. They're not. They would say they're generalists because they might do enterprise software and they might do healthcare or something else, but it's still software. So over time I focused in on enterprise software and health related, so technology driven services and health tech, and I started to look at in those segments also, as I did the analysis, my returns were better before starting evidence. My personal angel investing was enterprise software, health tech, technology driven services and healthcare and Yale people in my network. There was just this bucket of I know you, you're smart. I always said if you started something in the segment a lot about, I would write you a check.

Jenny Schretter (15:50):

Right? What's the background with healthcare? Like the health tech? Sorry.

Sean Glass (15:54):

The story from there to healthcare, I started a company that failed. I started a consumer. We were a fantasy sports betting before fantasy sports betting and started the company actually had great investors first round capital and loved the team there and got to do that through that Virgin Richard Branson's group. We started that business. I moved to London, we launched a platform. So we had this idea for creating something where you could create your own pool bet with other people and you would predict certain things. The system would adjudicate the outcomes and then pay out based on who guessed most accurately across a series of predictions. It wasn't clear that online betting was legal or not. It was very gray area. So we launched it in the uk. We got a gambling license in the Channel Islands. It was super interesting. It really, really, but we were too early.

The market wasn't ready for something like that. I came back to the us, I launched a firm called Excel Price. Excel was one of the first accelerators focused on enterprise software. This was around 2010 and had two young partners. We raised a very small fund, and over time that's worked really well. That fund has performed really, really well. And it was like, okay, do I expand this or do I start something else? So my dad called me, my dad's a physician, anesthesiologist, the time he was riding the physician group at Scudi Brook in Long Island, and he was early sixties and he told me he is like, I'm not ready to retire, but I don't want to keep doing what I'm doing. And I think there's a lot of opportunities in healthcare. You have all this experience with technology and you've been an entrepreneur. Why don't we start a company together?

My dad and I have always had a wonderful relationship. I just thought in life we think about allocating capital as investors. The other thing in life is we allocate our time. And so this opportunity to all this time with my father in that context, I was like, I should do that. And I think there's a good opportunity generally, and I'll learn another market second, which should be really interesting. So we started a company called Advanta Health, and he was chief medical officer. I was CEO. We had that conversation. We said, well, we have an existing relationship. We think we'll work together. Well, what happens when we disagree? We don't want to ruin our relationship father son relationship by having a disagreement here. So let's try to work all those things out ahead of time. And in terms of working together, we're great. We built a business that business, tons of interesting lessons, but mostly I learned from on the ground level how healthcare does and doesn't work.

So we were hiring doctors, building out new clinics, buying software for a multi-site services business in healthcare. It was super, super interesting. So we built the business to about a hundred million dollars of revenue over 10 years. We acquired a technology company that we started to try and integrate into the service offering. My dad retired in 2018. And so for me, I kind of picked my head up at that point and realized I love being at the early stage, putting the team together, figuring out the concept, understanding the investment opportunity, but I'm not a middle market healthcare services, CEO, there are few who are really good at that. I wanted to go back to investing. I continue to write individual checks and love working with entrepreneurs and found myself gravitating toward, that's the work I want to do on a daily basis. So it was just before Covid, I went to the board and said, Hey, and actually it was funny, I went to the board and there was definitely some surprise.

There was this view of which entrepreneur would ever voluntarily be like, I want to hire someone in to come and take the CEO role role. But I was like, look, we're in a decent position at this point in time. I want to go focus on investing. Let's work together on transition. Covid hit and it took 18 months then for me to, and I did actually when I finally stepped out, I was pretty burned out. And in healthcare services, you don't have super high margins. And so imagine a 20% margin business at the unit level that 50% of your revenue goes away that has a hundred million dollars runway rate. So all of a sudden you're burning massive amounts of cash. And so you have to furlough people. You have to ask people to pay cuts. I didn't pay myself for six months. How do you get through this to make sure that the business survives and you're working the first month or two of covid, it was probably 18 hours a day on Zoom calls all into the evening trying to keep people motivated, trying to keep people safe. Where do we source personal protective equipment for our physicians? It was very

Jenny Schretter (20:44):

Intense. That must have been incredibly challenging. Entrepreneur burnout is very real. I think it's been openly discussed that it's not something that's openly discussed in our ecosystem, but certainly should be and it needs to be. For you personally, what resources did you utilize in order to navigate that? So

Sean Glass (21:02):

I have a master's in applied positive psychology from Penn. So I had a therapist. Part of it was like for me to have a therapist to talk to about here are the challenges, here's where my mental state is, how do I get through that? I think meditation is great physical exercise. So there's some studies that show that a certain dose seed of cardio is more effective than the best antidepressants. So it's in these very stressful periods, making sure that some people are super active, but even if you just go for a regular walk in periods of high stress, it's very beneficial. And meditation, I'm a terrible meditator. It's something I will do for a while and then fall out of practice and then start to pick up. But it's something that can be very helpful. I think the other thing, and I talk to the entrepreneurs I work with in my portfolio about this a lot.

When you're in the weeds and you're the leader of an organization, the good never makes its way up to you. So in the beginning as an entrepreneur, when there are three people in the company or five people, you see the bad and you see the good. And so you can celebrate the good and you feel good about it when you're a 400 person organization and you're the CEO EO, and you have a C-level team, and then you have SVPs and you have the so blow it, what makes its way up to you. It's the problem that nobody could solve as it went all the way up the chain. And so you start to feel like everything's bad. So I'll tell people, look, you got to walk around the company. You even try to create a culture, not just you. Your C team exec has this problem, meaning not to the same extent and what's happening.

That's good. And make sure that you're getting that as well. Because one way to prevent burnout is to know that you have some control over what's going on and that good things aren't happening as well. So try to do that too. It's like, okay, well for me during that type period, it's like wow, our doctors, the nurses and staff, they're doing things that are heroic. And we didn't know in the beginning it was they're actually putting their lives at risk to make sure, because obviously if you're in the women's health business, it wasn't like babies stopped coming because of covid.

Thanasis Delistathis (23:19):

Right. I know a little bit about this through my wife who's a doctor, but any consumer facing basic medical services business is very challenging environment. The margin is a really tight, especially if you take insurance. I'm curious, how did that, so obviously going through that you saw that, how did that impact your thinking about where to invest in healthcare? Because coming to evidence, which you have started, you're investing in healthcare, talk to us a little bit about that and about your thesis and strategy around investments.

Sean Glass (23:58):

So Brian and I, we think we have a pretty differentiated thesis as we're approaching investing in early stage.

Thanasis Delistathis (24:04):

And Brian is your partner, right?

Sean Glass (24:06):

Yeah. So Brian's a longtime friend of mine. He was chief technology officer at Health and Human Services, was a managing director at Kaiser's Venture Fund, and for a period was essentially chief digital officer at sent team. He was the fourth largest insurer in the us and then I spent this time in healthcare services and he started an enterprise software company in the beginning of his career that they sold to Oracle. So we kind of feel like we're a little unique. And then we have big exit IPO, government experience, payer provider experience, payer experience, and then I have this services experience. We are investing in companies in the healthcare market that are playing in places where government actions are creating strong tailwinds for those seconds of the market. So part of what we do this all unique is we have this lens of, look, healthcare is this massive industry, $4 trillion in the US government plays a really important role in it.

And there are big challenges and government has certain levers that government's using to try and solve those challenges. Legislation, regulation, policy enforcement, financial incentives, sorry, but kind of big what, right? And so you can get excited about what a company's doing to try and solve a problem. And I'll give you a really good example of this, that a company using novel technology that's trying to solve problems in the market, but if that's not necessarily aligned with kind of where government is in how it's using its levers, you could be way too early or if you time it, you can get dramatic leverage from the fact that government pushes alongside what the company's trying to do. So an example of the first one. So we actually at the moment are pretty very bullish on digital therapeutics. We are contrarian in that regard. So it's like pair just file for bankruptcy, its assets were sold for next to nothing in a bankruptcy argument.

Thanasis Delistathis (25:59):

So just for the audience, what is digital therapeutics?

Sean Glass (26:03):

So digital therapeutic is essentially a software as a prescription for software. So it's usually an app. And so this is where if I have a traditional therapeutic, I would get a pill and that pill is going to help me address a certain condition. So a digital therapeutic, I get prescribed an app and use of that app. Often it relates to cognitive behavioral therapy. Now there are apps that are related to physical therapy. And again, there's a strong research, research-based evidence that this affects a certain condition. And so this could be around diabetics, it could be substance abuse, it can be obviously behavioral health is a very straightforward case. And the fascinating thing, I mean we were talking to potential LP about this earlier today. There are a lot more things that you could affect than you would think, but just think about the placebo effect. The placebo effect is real.

So if you could affect our brains, our brains are a powerful driver of biology in our bodies. And so apps essentially cause our biological system to do something that creates a positive outcome. Really fascinating area, very good evidence that it works. But the companies that got funded 10 years ago, VCs got really interested in this and excited about it. A lot of money poured into the spades. But the problem was the government hadn't realized this could have a powerful effect. And so the structure for reimbursement doesn't exist yet, but this is changing and it's actually changing outside the US first and the US is kind of a fast follower. So Germans created the first regulatory framework for this. There's a legislation called DGA or referred to as dga that coupled a approval process with reimbursement. And so if you go through this approval process, same way you might for something with a biological therapeutic and it's approved now any provider and journey can prescribe an app and the app company gets paid for it.

So it paired the approvals with the reimbursement. France just passed similar legislation, they call it pecan like the NUT UK is in the process of passing legislation. And last year there's a bipartisan bill in the US Congress that was introduced to essentially do the same thing. If you think about it, in five years time, it is very likely that in the US market will have some framework like this, and now reimbursement can flow more easily to companies that are providing these solutions. And so you could ramp revenue faster. And so being aligned, the technology is super interesting. There's huge need, big market, but the reimbursement wasn't there yet. But now the government's using its lever, in this case legislation to support this market, and it is a lower cost way to address a lot of conditions. It is a better tie to invest into that space. Another kind of interesting example for you, so 15 years ago, EMR penetration in the US was less than 20% government decided that now shelter use

Thanasis Delistathis (29:07):

E-M-R- is electronic medical records, right?

Sean Glass (29:09):

Electronic medical records, yes.

Sean Glass (29:12):

That ended up being a mechanism for more than 30 billion of incentives for hospitals and physicians to adapt to electronic medical records. And today we're well north of 80% adoption. If you had seen this as an investor in the late two thousands, I mean some of the biggest exits recently in healthcare tech, Cerner, epic, those are obvious. Those are the first derivative. These are the immediate, oh, we should invest in anymore. But then there's second and third order effects of the fact that you have EMRs. Now you have other things that plug into that. And the current trend that's super interesting is government's now starting to enforce interoperability. So this is by setting standards, but then it's also starting to enforce the requirements that the companies that produce electronic medical records or produce those systems, make them interoperable in certain ways. And that's recent to the last two years that we're going to lean into enforcement to make sure that there's interoperability.

Thanasis Delistathis (30:13):

It's interesting because as you kind of mentioned this, but government either reimbursement or other activity around legislation really impacts the areas that you're looking at, right?

Sean Glass (30:27):

Yeah. It's not arbitrage, so it's not, some senator put something to Bill. There was one little company all of a sudden can make a bunch of money because of the one nuance thing in legislation. These are related to the bigger trend. In the US you have Medicare, which is for 65 plus, and you have Medicaid, which is for individuals who of a certain economic status there have a certain amount of earnings. And so huge dollars in both of those programs, particularly Medicare as we have an aging population. And so CMS has pretty much stated by 2030, they want every beneficiary to be in a value-based care program. So the number, the dollars that will shift because of that and then the need for technology solutions and new companies to enable that is massive.

Jenny Schretter (31:19):

What other trends, either within enterprise or obviously just mentioned a couple in health tech are really interesting to you right now and having had the experience that you've had as a successful founder and working with a lot of different management teams to date, what are some core characteristics and attributes that you look for in a founder and or management team that are really important to you?

Sean Glass (31:42):

One thing for me in particular is how thoughtful and direct they are. I guess I have this negative reaction to hype E founders, one energy won't you excited about what you're doing, believing it's going to change the world. But if you don't know something, say you don't know, right? Don't oversell because this is the last two, three years when you were in this, it was a little bit of a bubble where you could create value, but it was real by convincing successive folks to invest in a company at a higher valuation regardless of what the underlying value creation cycle that was happening within the company, right? So for me, part of meeting the teams, how intellectually, how honest are you about where you are and where the business is, what progress you have to make,

Jenny Schretter (32:32):

Even just letting those facts and those metrics speak for themselves. I think to your point, obviously you want management team to be really enthusiastic and passionate about what they're doing. If they're not, that's a massive red flag. But you also, I think unfortunately it can come across as phony even when it shouldn't. If you're not letting, just let the metrics and the facts speak for themselves and show enthusiasm. But yeah, I hear you on that

Sean Glass (33:00):

And I think being thoughtful is thinking things through in terms of here's where the business is, here are the next five things we're going to do to create value that's going to then open up these next opportunities. Here's how much money we need and why. Here's what's going to happen when we're successful and here's how. When we're successful, we keep competitors from usurping our position or keep our market from breaking. So you can have a billion dollar market that if it fragments into 50 pieces, that's not a great market to play in because you might get 50% of one of those fragmented markets. You're a 10 billion revenue company.

That's not going to be a venture return guy came in from outside of healthcare. So it doesn't mean you have to be someone with deep healthcare experience for, but if you don't have that experience, try to who does in your team? What resources are you surrounding yourself with? But my experience in enterprise software investing was the best investments were people who they knew their domain cold. In fact, there was an investment we made in a company that called Divvycloud that ended up with a really successful exit, and the two founders were in the DevOps team for Bethesda Gaming Systems. When I met them, they were like, cloud is the future, but actually hybrid cloud is going to be really important for these reasons. And we know because we're being asked to figure this out and there are no tools for people like us to manage a hybrid cloud environment, so we want to build that. And it was like, okay, this is pretty easy check to write. You have deep domain expertise, you're technical, you're passionate about it, and that worked really well.

Thanasis Delistathis (34:41):

What's it like to raise money in this climate?

Sean Glass (34:44):

It's so much fun, so much fun. One, haven't really, obviously this is the first larger fund I'm raising Excel Rise. We raised a fund when it was small and I was the largest LP in the fund. I'm not going to be the largest LP in this fund. I wish I could be, but it's interesting. Everyone told us it would be terrible, but we've got a really good reception. We've had a hundred plus conversations so far. People are spending doing second meetings, digging in the data room. I think every GP has told me it's going to be slower than you expect. It's almost twice as long, twice as much money. This is just twice as long as you would hope. My observation is that the engagement and excitement level has got up in the last month. I think the first part of the year, my sense was there's a lot of, for the psychology was that there's a lot of, I don't know, and if you don't know, people are not do the same as just do nothing or go very, very slowly.

It seems like things are picking up and that in talking to some large institutional LPs, the comments were kind of like, normally we'd be done by now. So they had their strategy, they've now executed and halfway through the year, the vast majority of allocations would've happened. And then this year it feels like there's a lot more activity happening perhaps in Q3 than would, but I don't know. Again, I don't have a great data set. This is the first time what's been great is all the gps that we're friends with who have opened doors for us. I mean, that has been really amazing how many introductions we've gotten, people being willing to say nice things about us. I mean, Brian and I are a bit unique in that it's our first time fund in a sense. I mean, it's not our first fund, it's our first fund together and it's new effort, but we've worked with a lot of folks in the community and we're getting a lot of, we want you guys to get the fun. We want you as co-investor, love to look at deals that you've done later on all of that, and that's been really nice to see.

Jenny Schretter (36:48):

Yeah, I mean that says a lot.

Sean Glass (36:50):

It keeps us going after our 22nd Zoom call of the week where we're telling the same story and going, okay, we're excited for that first big institution to step up and say we're going to anchor your first close.

Jenny Schretter (37:05):

So now we're going to get into our four standard question segment. We're looking forward to hearing your answers. Question one is our national Venture capital Association question, the NBCA advocates for public policy that supports the venture ecosystem and the community. If there is one thing that you would change about the VC industry and or policy that you would advocate for, what would it be?

Sean Glass (37:26):

Yeah, so one thing would be to make it, I think is to make this more accessible and understandable to the general public. On the one side, I think even over the last couple of years, I mean this is kind of like a Twitter who's famous adventurer sort of question. They're certainly personalities and people that the public knows and it's like, oh, VCs are evil, evil billionaires, right? Look, it's a great business again that you can make decent money, but on the other side, you're powering innovation and jobs and there are plenty of people in BC who aren't billionaires. And then accessibility. It's like, yes, with the jobs act whose jobs or startup act, I think we've made it a little bit more accessible with crowdfunding. But honestly, if you're a company and you're crowdfunding, there's probably some negative selection. So are there other interesting ways to make venture accessible to more of the population in a way where they're educated? It is, look, there's a lot of risk. You're going to do a top decile fund, great, but your money's locked up for a long time. Maybe people don't understand that, but those areas would be interesting.

Jenny Schretter (38:36):

Yep, hear you on that. Number two, and our favorite question is, if you were not a VC investor and money was not a concern, what career would you have?

Sean Glass (38:44):

The easy out on this is I wasn't a vc, I was doing other things. I'd made some money and then I decided to do this full time. But the alternative to this career answer would be I started learning how to surf about four or five years ago and love it. And if I had enough skill, I'd be a surf instructor somewhere and it's meditative and it's great exercise and you'd be cool for the most part, cool people value outdoor in the environment, so maybe be a surf instructor in a beautiful place would be fun.

Jenny Schretter (39:12):

That would be awesome. So no fear of sharks.

Sean Glass (39:14):

Every time you get in the ocean, there's sharks. I'm very quantitative. What are the odds, right? It's pretty low. If anything bad's going to happen,

Jenny Schretter (39:21):

Not as of lately, but maybe it's just because we've been glorified by the media. No, but I hear you, but that's a great answer.

Sean Glass (39:27):

It's just recency bias, right? It is like when we hear about it, we remember it, but it doesn't actually happen that often

Jenny Schretter (39:33):

Yep. Number three is who is someone that you look up to and why?

Sean Glass (39:39):

Everyone might say their father, but for me, my dad getting to work with him, just seeing he in his early sixties decided he was going to be an entrepreneurial alongside me and try something completely different and went through, I was like, dad, there are going to these ups and downs. It's not like being a doctor and getting a steady paycheck and doing your routine. And he adapted and did it and loved it and was kind to me. And so Mary was like, would I love what's going to be most important? Yes, I'd love to be a great investor and all of that, but I'd love my kids 30 years from now to want to work with me and then value their relationship with.

Jenny Schretter (40:18):

I know we don't have time to get into it now, but I am so curious what in your view, where the keys to that success? I mean, everyone talks about the hardship of working with family and friends because there is a inherent dynamic involved in that, and obviously that worked out really well for you guys and I'm sure strengthened your relationship and obviously made the business successful. So commend you for that and I'm sure people do want to know, so maybe we get into that the next podcast. But number four is what is the best piece of advice you've ever received?

Sean Glass (40:51):

So this would be very relevant for entrepreneurs and I kind be specific and then you can expand upon it. But when Dick Foster, who was an advisor, we had Pania and I convinced Dick to join as an independent board member, and I had another independent board spot and I said, any entrepreneur? I'm like, what do I need? And I thought I needed, I didn't have experience in negotiating with insurance companies, payers as they're referred to in the healthcare world. I need someone with deep payer experience. So Dick looks at me as like they're consultants you can hire who have deep expertise in that. He's like, what you need in an independent board member is somewhat of high character. And he's like, you need someone who will hold you. You have someone who can address the other board members, but you need someone who's like, when it push comes to shove, they'll do the right thing and you might not even agree with it.

You don't want someone in your pocket. A lot of times it's like, oh, who's going to be my person on the board as a ceo? He's like, get someone with high character. And I was like, okay. I know exactly who that is. It's guy named Paul Dows, who's been a very successful executive advice tech company. Paul's just, and Paul chaired my comp committee. He was just wonderful for almost seven years he on the board. So I think that advice is, and then you just generalize that to in your life, work with people of high character. I think that oftentimes like, oh, who does this person know or do I like them? But in business, this question of character is really important, and if you could find high character people to work with, then it'll solve for a lot of, you don't have to worry about them screwing you, so you don't have to be as protective. You could be open. I think that's really important.

Jenny Schretter (42:31):

Yeah, I think we would definitely both underline that. Yeah, for sure.

Thanasis Delistathis (42:34):

Thank you very much, Sean, for joining us. Really appreciate your time and hopefully we'll have a chance to talk again to just delve into more topics. But thank you for joining today.

Sean Glass (42:46):

Thanks so much for having me.