Seed to Exit
Welcome to Seed to Exit, the ultimate podcast all about startups, scaling, and venture capital. Your host is Riece Keck: Startup veteran and recruitment entrepreneur.
Join us as we dive into the journeys of startup founders and venture capitalists who share their insights, successes, and lessons learned from seed stage to successful exit.
Each episode, we bring you candid conversations with startup founders, executives, and investors. Whether you're looking for inspiration, actionable advice, or a deeper understanding of the startup ecosystem, Seed to Exit offers invaluable knowledge and real-world experiences to help you on your entrepreneurial journey.
Tune in to Seed to Exit and get ready to be inspired, educated, and connected with the exciting and ever-changing world of startups and venture capital.
Seed to Exit
Jordan Nof, Managing Partner at Tusk Venture Partners | Investing in Regulated Markets | Compliance Strategies and Regulatory Insights for Startups
Unlock the secrets of navigating venture capital in highly regulated markets with Jordan Nof, co-founder and managing partner at Tusk Venture Partners. Discover how Tusk's innovative investment model targets transformative companies in sectors like healthcare and financial services, taking full advantage of regulatory lags. Jordan provides a behind-the-scenes look at their strategic focus on post-product or post-revenue seed and Series A stages, sharing unique insights into opportunistic capital allocation and the firm's competitive edge.
Join us as we dissect the complexities of early-stage compliance for startups, featuring real-world examples from industry disruptors like Uber, Lemonade, and FanDuel. Hear how these companies navigate varying legal landscapes, with Lemonade's unorthodox approach to securing carrier licenses and FanDuel's struggles with state definitions of skill-based gaming versus sports betting. Jordan also opens up about his career shift from Blackstone to venture capital, highlighting the adaptive mindset needed to thrive in this dynamic field.
Finally, we explore the impact of regulatory changes on investments, particularly in AI and healthcare, with Jordan sharing candid reflections on congressional misunderstandings of tech platforms. Gain valuable insights into the importance of founder-investor fit, the evolving stages of company growth, and the journey of establishing Tusk Venture Partners with Bradley Tusk. This episode is packed with strategic nuances and regulatory challenges that any aspiring investor or entrepreneur can't afford to miss.
All Links: linktr.ee/startup_recruiting
LinkedIn: www.linkedin.com/in/riecekeck/
Twitter/X: x.com/tech_headhunter
Recruitment: www.mindhire.ai
Youtube: https://www.youtube.com/@seedtoexitpod
You're not learning from mistakes and you know, then you're just not. You're not playing the game the way it's intended to be played. So it's you know just something I tell my five-year-old daughter all the time you know, if she's not falling, she's not playing hard enough. So you know, you feel like you should always be learning, and I do. I take this in earnest and I think that you know whenever I started. I've been in this industry for a long time now, so it's especially in the venture ecosystem.
Speaker 2:it's just, you know, we're like an old man at this point right.
Speaker 1:But I do think what's really important is that as I've gone through my career and I've invested in many more companies and I've been lucky to see many more outcomes, you do realize that that starts to impact your ability to kind of pattern match, which is really what you need to kind of focus on those biases that you have, because all you end up doing if you're not focusing on them is going out and just looking for companies that look and feel and smell like what worked several years ago.
Speaker 3:Hey everyone, thank you for listening to Seed to Exit. This week's episode is super interesting. I'm interviewing Jordan Knopf, who is the co-founder and managing partner at Tusk Venture Partners, which is an early stage venture capital firm focused on investing in technology companies operating in highly regulated markets like insurance, healthcare and even some industries that are gray areas of regulation, which we'll get into into the show. Jordan has led many of the firm's investments, including Lemonade, fanduel and Coinbase. He also serves on the board of directors at Alma Wheel, sunday and Elaborate, and he is an adjunct professor at the Columbia Business School. Now, prior to co-founding Tusk, jordan spent six years as a director at Blackstone, where he focused on the development of the firm's corporate venture capital portfolio, and there he focused on investing in early stage tech companies that could accelerate operations across Blackstone and the firm's underlying portfolio companies. So super excited for you guys to listen to this one and I hope you enjoy.
Speaker 2:You're listening to the Seed to Exit podcast, with your host Excited for you guys to listen to this one and more. Subscribe and listen in for new episodes and enjoy the show.
Speaker 3:Jordan, welcome on. Excited to have you. Thanks for having me, so I'm actually really excited to talk to you. Tusk has a really unique investment model and so, accordingly, I think this is going to make for a really unique conversation. You know, at surface level, tusk invests in highly regulated markets, but I'm just curious what does that actually mean in practice?
Speaker 1:Yeah, so you know, as you mentioned, our focus is to invest in companies that are operating in highly regulated markets that includes companies that are so, if you think, more traditionally, kind of healthcare, financial services, transportation, energy. Those are our core regulated industries. Our thesis goes a little bit beyond that and that is, you know, those are really interesting for us to invest in those areas. If you look at our portfolio, we're quite heavily invested in those spaces. Perhaps, more importantly, you know, the thesis is built around, you know, kind of a core theme and that's that regulation always lags innovation and so that the most transformative companies that are going to be built and have been built, ultimately, once they become relevant, they become regulated. That's what regulators do. They exist to protect consumers and to protect people that are impacting consumers. So, in essence, companies like your Uber, your Airbnb, your Coinbases of the world, they were in a regulatory grade, and that's what makes those areas really exciting for us to invest in.
Speaker 1:So it's not just how they regulated existing markets, it's new and emerging verticals where there are no regulatory frameworks that currently exist.
Speaker 3:Interesting. Yeah Well, it's funny because, as you were saying that, my mind immediately went to crypto, which obviously Tosca invested in Coinbase back in the day, so that completely makes sense. In terms of stage, do you have a particular stage you specialize in?
Speaker 1:Every venture fund is going to have an opportunistic bucket which is kind of a catch-all for companies that you may have missed a little bit earlier, or maybe a Series A co-invest, but our core focus tends to be at post-product or post-revenue seed and Series A. So those are typically the areas that we make an initial investment in. We'll either lead or co-invest into those stages and obviously we reserve capital to participate and follow on grounds of financing to continue and support those portfolio companies.
Speaker 1:But I'd say that those two areas are kind of the bucket. And then we obviously have some opportunistic dollars that we will allocate a small percentage of every fund to kind of outside that core range. You know, a small percentage of every fund to kind of outside that core range.
Speaker 3:Where did the investment thesis come from in terms of?
Speaker 1:investing in these industries that are somewhat gray areas. So my business partner, Bradley Tusk his background is very different than mine. You know I've been a professional investor my entire career. Bradley's was very different.
Speaker 1:He started out as a political and regulatory strategist, helped Uber get licensed in New York City and the other largest markets across the US, and so that's been an area that he's been helping to support businesses in general, and then later on, startups specifically, in helping navigate those types of regulatory challenges and whenever I was introduced to him the concept around this was over 10 years ago, and the idea of launching a new fund that didn't have a differentiated factor did not seem that compelling to either of us, and so we kind of built this around a platform team that can help founders execute against regulatory risks that no other firm should have the capabilities that we do and that no other firm should have the capabilities that we do and that was our kind of vision at the onset, and we've been at it for about 10 years now.
Speaker 3:I love that, because the general concept of VC at this point is really you have to value out to your portfolio companies in some way and most funds are doing that in either helping introduce to customers strategic guidance, helping hire but yours is, I think, customers strategic guidance, helping hire but yours is, I think, the first that has this sort of unique value add to it. So that's super interesting. When you mentioned the platform team, typically, what does that look like in terms of the support that you give to founders?
Speaker 1:Yeah. So some of the kind of concepts that you just rattle off, those are kind of table stakes in our mind. Those are value add, that's just being a good board member, that's being a good investor. That's just areas that you're always going to be looking to.
Speaker 1:As, on the investing team side, whether that's the guidance specifically at the board level or just basically continued support for the founder, the platform is a dedicated, separate team, and this is similar in structure to a lot of platform teams that are out there. I think the biggest difference is around what areas they can jump in and help with, but also the size of the team. So our platform team is about six professionals that have a focus on either specific sectors of interest, or we also have a dedicated communications support person as well, so somebody who provides strategic guidance to portfolio companies on all things communications, in addition to somebody who focuses directly on healthcare, somebody who focuses specifically on fintechs and then somebody who's a much broader generalist. Those are typically non-practicing lawyers that have been in the world of political and regulatory either consulting or strategy or both for quite some time. So these are kind of seasoned professionals that some of which are, I'd say half of which at least have worked in government or politics at some point in their careers.
Speaker 3:I love that model and when you're making investment decisions, of course the whole value add of Tusk is helping navigate the regulatory environment. Do you also have some sort of expectation, or is it a decision point in investment decisions on how familiar the founders or existing team already is with the regulatory environment, or does that not matter at all?
Speaker 1:Absolutely so. It's a really good point Basically if you think about it. So the way that we view our kind of value proposition is for limited partners, so people who invest in our funds, and then also the founders that we invest in so much more forward to a limited partner is that we believe that we have the ability to underwrite regulatory risk better than any other venture firm out there.
Speaker 1:We just that's not necessarily it's a bigger deal. We just can hone in on what the real risks and likelihood of those happening are versus what we believe in that. We believe that gives us a strategic advantage from an investment acumen perspective, but perhaps more importantly, it's, you know, helping founders execute against that risk. We also believe that we're picking companies that have amazing teams just like everyone else, and part of that is understanding the risks that are in front of you.
Speaker 1:So we don't believe that we're. If the founder doesn't believe that they are, that regulatory is not a concern for them, and then we don't believe we really have a competitive advantage there. The idea is that we'll be able to come in and win deals because of our specific value proposition. So if the founder is not really aware of it, that's something that you know typically is not going to.
Speaker 1:It's not going to bode well for what we call the Tusk Edge right, which is here's this deal, and we're going to underwrite this just like if you were, you know at a generalist firm.
Speaker 1:So we're looking at everything the market size, the business model, the team, the traction, everything that you'd be looking at to underwrite a company as an early stage investor. And then we have a section that is called the Tusk Edge and that is what do we think that we can do directly that will help this company be successful and what is the level of edge that we think we have? Are there competitive dynamics within the round? Why do we think that we're best positioned to help this company be successful and win this competitive round of financing? And that's something that we document in every memo that we generate. Pre-investment and then look, I mean you know where the platform team can help out typically changes over kind of the life cycle of a startup. So, yeah, a lot of times it's kind of proactive at the beginning. But once a company becomes successful and gains enough traction and you know our hope is that we can help develop proactively with those founders and the regulatory agencies that are relevant you know a moat around that business using regulation.
Speaker 3:So you mentioned how the founders are thinking about regulation, and so I'm really interested because obviously Bradley, as you mentioned, helped Uber get regulated and in the beginning Uber it was sort of a free-for-all right. There wasn't any regulation. They were just sort of moving into new markets or new cities and just more or less setting up shop Anecdotally, I mean, in these specific gray area companies. How do founders usually think about regulation? Is it something they're very concerned about? Oftentimes? Is it? You know, we just want to sidestep as much as we can. What is the general mindset of a founder?
Speaker 1:It's really it's hard to say that. You know to bucket everybody into a certain category. I will say that over the last 10 years it has become pretty common for founders to at least be thinking about it it's definitely not something that is not top of mind and typically look for them to get into our deal flow and our fund like either an existing investor or we are hoping that, either another founder or that founder or a current investor or somebody who has looked at the deal is saying you know what this looks and feels, and smells like a deal that Tusk would do.
Speaker 1:You know that's that because of because of these potential challenges down the road, and so I think that also. Look, the companies that we've invested in already are kind of pretty obvious in terms of the regulatory challenges or opportunities that have been laid out for them. And I think that a lot of times, founders will, you know, they'll look and they'll hear about a company and they'll look up who the investors are and they'll kind of become aware of what we're doing through that. But yeah, look, I think that it's a it really matters kind of the stage of the company as well. So there are times whenever you know if it's an early stage business and they know they're getting you know a lot of questions around like what do regulations look like? You know that's going to be a flag for them.
Speaker 1:But I do want to hit back on kind of the comment they made about, you know, market expansion strategy with Uber specifically, because it's not necessarily just Uber In the world of just tech investing the vast majority of the regulations.
Speaker 1:You know, crypto aside, some of the crypto regulations do happen here, but you know, the vast focus is definitely at the state and local level, which is just kind of not necessarily where investors or founders tend to think that, where a lot of the risk is. So if you think in healthcare, you know every single state has a different framework of which they regulate you know regulate medical professionals and business models in those states. We saw a tremendous amount of movement and risk and opportunity generated there during COVID. Whenever cross-state licensures for different types of medical professionals were lifted temporarily, the ability to have conversations over telemedicine and behavioral health on Zoom, just like we're having a chat right now, became the primary mode of communication or those sessions, particularly on the behavioral health side. We saw a lot of changes in business model delivery that have occurred over the last few years and a lot of that is navigating in a different level of.
Speaker 1:I guess, you're not going to necessarily behave the same way in one state as you will with another let's say a much more tech friendly state versus California, for example. You're definitely going to move much more cautiously whenever you're launching a business in.
Speaker 2:San Francisco than you are if you're, let's say, in Texas.
Speaker 1:So I do think there are some examples, but that tends to change over time as well. So market expansion is a big part of where we can drive value in the early stages, particularly around the go-to-market.
Speaker 3:That's really interesting. I hadn't considered the complexities of each state, so I can imagine that for we can go back to the Uber example again one probably has to work with legal counsel in each and every state in order to ensure their compliance, or what does that look like in practice?
Speaker 1:I mean early days compliance. No one knew what compliance was, so it was like you know that was, that was. You know the cities and the states were trying to figure out what this new business model meant, what the risks were to, obviously, the riders, but you know also if there's unions involved. So the complexity does scale up and down based on the type of city that you're trying to launch in. But there's other really obvious examples as well.
Speaker 1:Obviously it may not be for your listeners, so let's I'm just thinking of two other portfolio companies that are in different sectors. So Lemonade, which started out as renter's insurance, is now all property casualty insurance. So we were investors in Lemonade at the early stage and continue to invest into that company and help them secure their first New York. So they wanted to change the business model they wanted to launch, which was not to be an MGA but to be an actual carrier, and so they had to convince New York Department of Financial Services to grant them a carrier license without meeting any sort of seasoning requirements like being cash flow positive for three to five years.
Speaker 1:And then, had to do that across every state. They wanted to be operational in convincing those departments of financial services to grant them that license. So that's one aspect. And then FanDuel is another great example. You remember that the definition of being a game of skill every single state had to pass it. Does that the bill for them or do they want to? You know, continue to challenge it and say that no, we're going to take the position that this is sports betting. Um, this is pre pre-legalization of sports betting across the. You know many states that are out there today. Um, this is so. This is before that, the repeal of papsa. Um, but you know, similar in kind of the 50 state map and and kind of where you're going to launch, uh, next being kind of the 50 state map and kind of where you're going to launch next being kind of more strategic in terms of thinking that through from a business model perspective and a business opportunity set married with the regulatory risk of launching there.
Speaker 3:Super interesting. I want to go back a little bit to the beginning of your career. So, as you mentioned, you've been an investor essentially your whole career and originally you were in institutional investment management over at Blackstone on the venture portfolio. I'm just curious, what was the transition like from moving from a traditional investment management, where you can model returns and you generally have some degree of certainty, but then moving to venture, where it's much more of a not to say a dice roll, but call it an educated investment or an educated guess?
Speaker 1:Yeah, so I started out way before then. Educated investment or an educated guess yeah, so you know I started out. You know, way before then. You know, in investment banking like many people did you know I'm working in Stanley and then moved to the buy side in. Alliance Bernstein where I was in institutional sales and trading. And as you're mentioning there. That's a very different type of investment strategy.
Speaker 1:It's one where you know that shop is quite large at this point. So there's, you know it's, but it's public market, everything. So you're dying right. No public equities. And you're talking about fixed income as well. So you know there, but it is as you're, as you're saying, it's a much more that is a a very different investment strategy, a lot more dollars behind it.
Speaker 1:Um, you know, and I'd say like I mean not to call out the obvious, but there are a lot of great investors. Let's just make make the comparison between a hedge fund and working in PE or venture. But venture capital is, let's just say, one of the last capacity-constrained asset classes. I can't just hit a buy button and just buy up shares because I think it's a great idea. I have to go convince a founder to let me lead their Series A. There's only one Series A lead. There always is only one, unless it's a co-leading scenario.
Speaker 2:So it's a.
Speaker 1:You know we need to go and we're getting pitched by a number of companies, but the companies that we're looking to invest in. You know that turns into a kind of a reverse. You know, as we go and progress in further and further meetings and a round starts to come together, you start competing with other venture funds and you need to convince that founder why you're best positioned to help them achieve success.
Speaker 3:Yeah, and it's interesting that mindset, because so oftentimes people think of venture as the prize, like we need to raise money. Oh my God, this is a huge milestone. We've raised this amount of money which it is but then, at the same time, it's also very much, particularly for great businesses that have lots of people looking to invest in them. It's also very much, then, almost a turning of the tables, right.
Speaker 1:Yeah, no, that's exactly right. So it's, you know, once a company and this tends to happen sometimes earlier, it doesn't really tend to happen at the same stage of a company there are companies that come out of the gates, really really real, that have really exciting founding teams, that have really exciting concepts. That everyone you know that it is still a very as much as the industry has grown. It is still rather tight knit. It is, and so people do hear about the you know, really exciting rounds of financing that are coming together. More obviously, you know, if longer the company has been around and they have the ability to kind of get into hyper growth and you start to see that. You know, when the later stage investors start to get really excited, let's call that at the series B and later. You know those companies have been around and they're starting to get. You know they're, you're, they're definitely starting to get traction. They appear to have product market fit by the time that B rolls around.
Speaker 1:They should definitely have it and it becomes, you know, a little bit in the value that the sell that that those firms have. They're just different to what an early stage investors can be providing. You know we, as I mentioned earlier, you know we specifically look for post product, post revenue businesses and that's because we don't think that our value proposition is materially better than than some of these. Really like pre-seed and core seed funds that have a lot of product people that that work there. You know founders that have since become investors that have taken many, many products and taken them from an idea to something that's alive in the market that's generating revenue.
Speaker 1:We believe that our value proposition is much more tangible and realistic and achievable. Post-product meaning there is a line of sight to how these regulations are going to pan out. It is not just an idea at that point. So it's a it's something that you know, I think that great investors have the ability to know where they're best at and that's where they really focus.
Speaker 3:Well, right, and you? You really can't even navigate the regulatory world for your product If you don't have a set product that you're actually working on building.
Speaker 1:Exactly, and so that's something that you know. I feel like sometimes, whenever founders are out there raising money, they kind of are just going through the motions, and I think this is part of a concept that a lot of people do talk about, and that is, you know, founder VC fit right, is this the right investor to come in and with the right platform to drive material value for your company at that moment in time?
Speaker 3:Absolutely. Yeah. I mean, it's a seven to 10 year relationship. It's not just, you know, taking money and running. Speaking of which, you and Bradley, your co-founder, you are coming up on 10 years of the fund. I'm just curious how did you two meet? What made you decide to form the partnership?
Speaker 1:Yeah, sure so.
Speaker 1:uh, so Bradley and I met um, so I was at Blackstone at the time, uh, doing early stage investment, investing off the firm's balance sheet invested in in a New York city based uh, a mess with Mayor de Blasio and it's become kind of an infamous story in the city. And I had been investing at Blackstone for several years and it was not in my mind the idea was never that I was going to stay there to do that. It's something that, look, there are amazing investors on the buyout side and they've launched a growth strategy. It's just early stage investing, just not something that's in that firm's DNA and, regardless, even if it was, I had the itch and I wanted to go start something for myself, but it wasn't lost on me. I'll tell Blackstone that I probably get a bunch of people answering my emails because I'm emailing them from blackstonecom. That wasn't lost on me and, at that point in time, obvious to both Bradley and I that if you wanted to launch a new fund.
Speaker 2:You need to really be differentiating.
Speaker 1:You need to have a different strategy.
Speaker 1:Just coming out there and trying to compete as a generalist firm is not compelling.
Speaker 1:It was something that and we've started this after that, not to say we're the first ones to go in and specialize but at that point there were firms, know, investing exclusively in fintech or exclusively in real estate technology or cybersecurity or health care. So there were sector focused funds, no-transcript wanted to de-risk their businesses from on the regulatory side as well. So our first fund was really a proof of concept fund that we raised in 2016, where we just wanted to go and you know, see if we could get into. You know we saw that. We thought it made total sense and you know our LP base at the time thought that made total sense. But we wanted to prove that out, and so I do view it as a proof of concept fund that it was really really hard to raise, but we were able to go out there and, you know, invest in, you know some of the most transformative companies that really came out of those vintages, so 2016 to 20, you know, let's say 2016 into 2018.
Speaker 1:So you know that portfolio includes companies like Lemonade, fanduel, coinbase, roman. Some companies have really gone on to really kind of transform the industries that they're in and so, yeah, that was enough for us to go out and raise a second fund that was, you know, materially larger, where we started leaving deals out of that vehicle and you know, we've raised four funds since.
Speaker 3:Yeah, I mean you've you've clearly hit quite a few home runs, so that's been. That's fantastic. I'm curious I did not see anything when I was doing my research in terms of your portfolio companies for AI, and AI particularly in the coming years, I think is going to have a huge amount of regulation associated with it.
Speaker 1:What are your thoughts on that space, specifically from a regulatory perspective? Yeah, absolutely so. This is an area that we've been very prudent and methodical about deploying capital into. So it's one, like I mentioned before, around the Tusk edge, Whenever the generative AI buzz started to come on originally, you know that everybody's scratching their head. Who's going to regulate this? It needs to be regulated. Do we have any faith or conviction that this is going to be figured out?
Speaker 2:you know, at the federal level anytime soon.
Speaker 1:And then we just watch this kind of unfold and you know there are hundreds of current bills that are active right now across pretty much every single state that all that don't have one clear line of thinking. There are some common threads, but it's you know, and so waiting for that to take a little bit more shape was something that we wanted to do to inform our investment strategy.
Speaker 1:I think the second important part to hit on is that you know we're also look, I mean, we make our edge is on the regulatory side, but we, you know it has to be a great business that we understand and we can underwrite. So a lot of those like very early on those very early on businesses that were focused let's call them infrastructure, ai infrastructure, whether it's the LLMs or not we didn't feel like we had an advantage in in diligencing those businesses or, you know, in being pitched those businesses.
Speaker 1:Those are very technology forward. They were typically being funded by the technical teams at various different firms and we just didn't feel like we had an information or a deal flow advantage at that point. Now we're getting a little bit further on and so every business, let's just say, is tech enabled. I think that that is kind of where we are. All of our portfolio companies are leveraging AI in some form of their business operations, whether it is a core part of their product, are they selling AI to somebody?
Speaker 1:And there are a few areas that we've been scratching and sniffing there that we're very interested in that meet certain changing demands from highly regulated markets that are very concerned about data being sent back to, whether it's open AI or another model for training, if it's coming from healthcare, you know there's a tremendous concern that personal health information is going to be. You know that there is no appetite for people to send for hospital systems to send that information back to these models. So we are seeing some pretty interesting, whether that's on the small language model or edge computing space. That's an area that we have been scratching and sniffing around on the technical side.
Speaker 1:But otherwise it's much more around looking at businesses that are either leveraging AI if that is their core service offering, it's going to look more like a compliance platform or data integrity, data security things that are much more tangible from regulatory compliance perspective if that is an AI-first business, which is just less interesting to us. So, look, I think that there are quite a few portfolio companies that definitely leverage AI as part of their core product and their core offering. We're definitely investing in those, but it's much more specific to the vertical use case.
Speaker 3:That's fascinating. This is not obviously a politics show, but I think it's impossible not to talk about politics when we're talking about the regulatory environment, and you've even alluded to it a couple of times In the immediate. I mean, how are you thinking about the upcoming election and what strategies do you have depending on who ultimately comes out on top?
Speaker 1:Our strategies should be battle tested, regardless of who's in office, and so I think that that's something that you know we really take very. You know that's an important part of the strategy. You know, look at the end of the day, there were implications that we were a little bit concerned about. When you know we're looking at the original ticket and some of the implications that would have had would have potentially happened, if there was a continued decrease in excitement around Biden and people just didn't show up to vote.
Speaker 1:That would have impacted some down ticket, really important decisions around. That would impact the state, specifically as a byproduct of that general election. You know here look at the end of the day I don't think that as it comes down to impacting us and our investment strategy, don't really think that it's also hard to handicap what somebody that said, what they say they're going to do whenever they get an office and what they are going to do whenever they're in office.
Speaker 1:And so I think, net, net, if you take it into consideration, who's best at the top of the ticket? And you know, let's say what happens at the state and local level as well. You know, net-net, it doesn't really matter to us, we just need to understand what's coming and kind of how to help the companies navigate that From the macro level look you know interest rates are driving.
Speaker 1:You know a tremendous amount of the macro in terms of the IPO window being reopening and exits happening again. However, I'd say probably the biggest implication of the election at one point was around. You know the likelihood of the chair of the FTC. You know changing hands. That would obviously happen if Donald Trump was elected. You know now, the consensus thinking is that that will still happen regardless, even if Harris wins the election. So those are kind of the two bigger, bigger factors that we would think about at the presidential.
Speaker 3:And then to build on that. You know, and obviously, as you mentioned, when different parties come into power, changes are made in terms of who's in the particular seats, also just in terms of the level of regulation. Obviously, I'm going to paint with a broad brush here, but Democrats typically equal more, while Republicans equal less. So when you think about outcomes for Tusk in the general investing environment, do you find that quote unquote better in terms of your business advantage if there's more regulation at the state, local, federal level, or less? Just because if there's more it creates a bit of a moat, so to speak, but it's just harder to operate. What are your thoughts on that?
Speaker 1:Yeah, I would say that for us, specifically, where we become the most relevant is not necessarily more or less, it's just change. Changing regulatory schemes require like a reanalysis of what your strategy is and kind of how you want that to play out over the next few years, and it's something that is changing all the time as industries mature, as new politicians come into power and leave power, and I think that that so radical change that does happen is something that that is where we believe that we are the most relevant in terms of our ability to underwrite deals in a way that other firms aren't, and also in helping founders kind of change their regulatory strategy and deal with either heightened or reduced regulatory scrutiny.
Speaker 1:So, as you mentioned, you know in times of increased regulatory scrutiny, there's a huge opportunity to take a proactive approach and work with regulators to help kind of craft that regulatory mode Obviously on, you know, in a decreasing regulatory environment you know how fast do you run and are these short-term or temporary restrictions that are being lifted that probably will come back into effect, like during COVID and the example I used earlier around healthcare? You know you need to take a position on this is you know what's the catalyst to remove this regulation around prostate? You know, prescription of controlled substances Is that. Is this going to be temporary or is the DEA going to just going to reinstate this after, after the exemption runs with is over, and you need to have an opinion on those. So I do think it's much more about the change than it is about you know if there's more or less at that moment in time.
Speaker 3:I mean, change is the only constant right. Obviously, we all love to talk about our wins and you've, of course, had a lot of them with Lemonade, FanDuel, Coinbase but obviously there are some things that you know cannot be considered wins. So I'm just curious, what? So I'm just curious, what is the biggest learning lesson you've had, either you know, just in founding or building tasks, or from a particular investment?
Speaker 1:Yeah, look, I think that if you're not learning from mistakes and you know, then you're just not you're not playing the game the way it's intended to be played.
Speaker 2:So it's just something.
Speaker 1:I tell, I tell my five year old daughter all the time, you know, if she's not, if she's not falling, she's not playing hard enough. So it's something that, uh, you know, you feel like you should always be learning and I and I do. I take this in earnest and I think that you know whenever I started. I've been in this industry for for a long time now, you know, so it's especially in the venture ecosystem. It just seems.
Speaker 2:You know we're like an old man at this point Right.
Speaker 1:But I do think what's really important is that as I've gone through my career and I've invested in many more companies and I've been lucky to see many more outcomes, you do realize that that starts to impact your ability to kind of pattern match, which is really what you need to kind of focus on those biases that you have, because all you end up doing if you're not focusing on them is going out and just looking for companies that look and feel and smell like what worked several years ago. And timing is a huge deal. Sometimes an idea just wasn't the right time then. It's the right time now. There are core lessons learned that you should never do again. That's separate from constantly going back and reevaluating your investment strategy for the appropriate. Is this going to work in this environment? And I think that's something that is a constant lesson learned that we're not doing our job right unless we're constantly going back and reevaluating our strategy and our approach and how we're staying competitive to win deals.
Speaker 3:Love that perspective. Final question for you what's the best piece of advice you would give to a founder that's operating in the environment that you specialize in?
Speaker 1:It's hard to say, you know, to give a founder specific advice with regards to this sector or this, if they're going after a highly regulated market.
Speaker 2:Um, you know, I do think that there's just a tremendous amount of opportunity there.
Speaker 1:Um, these are really hard business models to execute on for a reason.
Speaker 1:But the pie at the end of the race, you know it's a much larger prize that you're going after um, and I do think that um, while it can be really, really difficult, and there's a lot of people that are going to say this is not possible, that is, unfortunately, the fact that you know regulators aren't necessarily as the smartest people in the room about what they're regulating, and so a lot of times that a lot of these founders don't realize that they are the subject matter experts and they should really take the bull by the horns and use that as an opportunity to educate those regulators and become a thought leader in the space.
Speaker 3:Love that. Yeah, it's. It's funny that you say that because you know, I think we've probably all seen the videos of like Zuckerberg getting questioned in Congress from people that clearly have no idea even about how the the basics of Facebook advertising works, and people are saying like these are the folks who are supposed to regulate.
Speaker 1:AI and they're on TV. Think about the decisions that they're making. Whatever that's not, Yep, all right.
Speaker 3:Well, jordan, you've dropped a ton of knowledge, thank you so much for coming on the show.
Speaker 2:I really appreciate it.
Speaker 1:Thanks for having me.
Speaker 2:Thanks for listening to See to Exit. If you enjoyed the episode, don't forget to subscribe and we'll see you next time.