"[Music] hello I'm Ted sides and this is capital allocators this show is an open exploration of the people and process behind Capital allocation through conversations with leaders in the money game we ..."

"[Music] my guest on today's show is Josh Wolf the co-founder of Lux capital a billion and a half dollar Venture Capital firm that targets cutting-edge solutions to the most vexing puzzles of our time ..."

"passion for Science and finance building a competitive advantage in venture capital from scratch the full-blown investment process at Lux including sourcing ideas conducting due diligence making inves..."

"please enjoy this wide-ranging conversation with Josh Wolf Josh great to see you great to see you Ted look I always love starting with so much background and I know yours is as interesting as anyone s..."

"basically sculpt you into a somewhat cynical squinty-eyed distrustful person of you know somebody trying to scheme over you which I think in my business where you never really know if somebody is goin..."

"but they're taking the easy way out and so you have this amalgam of ethics and morality and ambition and it just makes for this awesome hodgepodge but if you get mugged at an early age or you get conn..."

"started it's all started at Coney Island and what was your like early form of Education like Mom a school teacher uh school teacher should push me to be a nerd you know I love playing basketball I lov..."

"uh you know I was probably 13 years old there's no way that they're gonna let some 13 year old work in a lab and I just want to take no for an answer this guy Dominic Goss he was a PhD scientist he to..."

"see all these people particularly you know there are a few people at Cornell that started I think was called theglobe.com and all of a sudden there were these young millionaires on campus you know tha..."

"it starts with I think looking where other people are not looking so if you are looking where everybody is looking as Buffett has said very famously you pay a high price virtuary consensus so that mea..."

"you know mobile stuff that I think has very little relevance but like real hard technology it's provable it's real it's verifiable it's not you know the things that are sort of prone to fraud so you o..."

"the parachute he looks for he looks for the best in people he looks for the best in outcomes of our companies I on the downstroke I'm thinking okay what could go wrong let's kill all the things that c..."

"it's good that one of them have both and your friends have or family have money we had a lot of friends we had a lot of family none of them had any money and we got very lucky and threw a guy that I k..."

"will be your Competitive Edge what's going to be your really durable Advantage competitively when you're looking at these amazing people at Sequoia and Benchmark and axel and Kleiner why would an LP p..."

"financing risk for a company that we might invest in was going to be very high right because we had no signaling value like if sequoia or Benchmark is investing in a series a company 10 years ago the ..."

"who happened to work in the Clinton Administration he had seen me give a talk about nanotech and Advanced Materials he saw in his own self-interest There's an opportunity here to form some in public p..."

"a partnership with Forbes which was a great brand we were able to have a megaphone we had a soapbox and always fully disclosed which was one of Bill Conway's great admonitions is 10 years to build a r..."

"most importantly we can get you access to all the key decision makers who are going to be customers Partners investors acquirers licensers and that became real and that was really the foundational thi..."

"companies to invest in exactly we're in the sequences okay we now have some proposition that allow us to go raise money or did you just try to raise money and then build this as you went on putting ou..."

"of fun one and then was that when did fun one hit that was uh 2003 for time frame or 2004-2005 and then fund two which was really our First Institutional phone was about 11 years ago and that was 100 ..."

"talking about it and then when you scratched the surface double click in and say okay what is the biggest problem the answer is and I always like to ask this sophisticated two-word question I joke whi..."

"so that's under development they start they work on pigs because pigs are the biggest proxy for our own skin it'll probably launch internationally first and then come to the US but sometimes you find ..."

"particular case the thesis around half-life of Technology intimacy was 50 years ago this is all about the way that we interact with our machines and vice versa 50 years ago you had a giant eniac compu..."

"as voice assistants you already have gesture in the form of cameras like connect for Microsoft Xbox or leap motion and we felt that the next logical thing would be not visually detecting what you were..."

"retires then goes and founds another company joins open wave gets sold to phone.com they basically invented the mobile browser and then really retires and now he's wealthy and he's retired and he's in..."

"described it felt like magic you're sitting there with these two things on your wrists that are sort of like sweat bands or wristbands that are detecting the nerve signals from your hand and as I thin..."

"yes yes well the two words that you just used are the most important thing it works you know I remember I had a friend at Morgan Stanley who um was making some big large private Investments and he wen..."

"recruit it's about psychology it's ultimately about whether the technology Works which is scientifically verifiable but all the other risk you're taking is you know sort of a function of the price tha..."

"recruit people just while as in obscurity so it's really about great people now sometimes you have a great inventor but you don't have the great operator or you don't have the great promoter that can ..."

"entrepreneur and opportunity they get one of those in a fund and the reason that we do that is number one we want to avoid a situation where we made an error of omission that this person accurately sa..."

"when you think about the other layers of portfolio construction other than sort of time and size aside from timing and sizing different sectors at various times can have counter cyclicality you even s..."

"times when you think about a contrarian stance in the public markets there's a vector of time and sometimes their trades or their longer term strategic plays how do you think about that kind of contra..."

"many of our companies get bought not sold usually the companies that we are trying to sell are companies that may be struggling maybe they struggle to raise money and we're looking and saying okay how..."

"a missed opportunity conversely there are companies where we funded a company called Crystal is this was a spin out of Rensselaer they were making UV LEDs and the basic thesis was get rid of mercury t..."

"shouldn't take a step back and think about the private Equity environment you know there's a lot of capital how does that affect how you're going about your business so the way that I'm thinking about..."

"going to amount to something and so they're able to raise 25 50 7 500 million dollars and as a single GP that's a pretty good deal there's hundreds of those people and so we look at that and we say yo..."

"rounds to give to these later stage guys you also have KKR Apollo Carlisle tpg that are actively doing investments in much earlier stage things in part they're doing it because it's opportunistic to b..."

"yeah you do a lot of interesting tweeting yes do you have a strategy or thought process that leads to what you put on Twitter first of all you're kind uh to euphemistically call it interesting uh look..."

"specifically as it relates to Tesla as a publicly traded company you don't really see me doing that about SpaceX and the last thing that I really against also which I think is utter BS is IBM Watson a..."

"there's there's interesting analogies I think if you can find interesting analogies I love tweeting about that kind of stuff too I know you recently did one about parallels in biology yes and markets ..."

"same words over and over and over time that sort of becomes you okay well what's the parallel if you look at that chart if you substitute the number of neurons or the synaptic connections between them..."

"be able to do in that space second analogy which I talked about was the slime mold and the slime mold is the single cellular organism which in the presence of abundant resources in the environment jus..."

"and you saw that by the way in the late 90s or early 2000s with the Regis in the workspace Guys these guys got crushed and so I think the same thing will happen there so then you have this Recon deali..."

"of my imperfect sample size on a weekly basis when we are I think that's when things turn because it's gonna then there's nothing left in people there's just you have a diversity breakdown to use a pr..."

"two-legged mammals these humans that we bet on it's you never know you're going to leave here and you're going to have a conversation with somebody else and if I've planted in your mind an idea or a n..."

"fundamentally selfish thing okay yeah I think most people you interact with probably disagree with you on that all right let's turn to some closing questions what was your favorite extracurricular ach..."

"you know I I would say growing up it was the Westinghouse you know science stuff but but later and outside of work it was Coney Island prep I mean this was to me sort of taking the best things I learn..."

"producers and I don't mean of music but of content of Science of intellect of writing to be producers in the world I think you could skew the odds because there are enormous number of people in Coney ..."

"people there that did not have the nepotism they don't have the access they don't even have the role models and so I think anybody in the inner city that just is you know has basketball players and Hi..."

"kids in the projects in fifth grade and we stopped calling them kids that first year and we started calling them Scholars and we set expectations for them it's so critical of like you are going to col..."

"validating of our Market or something like that I pull my hair out because I don't want you to find competition validating I want you to find it infuriating and that is me you know that's psychoticall..."

"validating what's the riskiest thing you've ever done there's physical risk there's emotional risk you know I mean physically whether it was surfing or snowboarding or rock climbing like there's thing..."

"like that you know I would say probably the biggest emotional risk was related to my growing up and my father and my parents split when I was a very young and the open raw reconciliation with him and ..."

"better of super high expectations it's what we do in our family that you know you can do better no matter what it is that you're doing I think it carries over into our school at Coney Island prep sett..."