Brian Singerman – Investing in the Best Founders

**SPEAKER_1** (0:24)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (0:49)
My guest this week is Brian Singerman, a partner at the venture capital firm Founder's Fund. Founder's Fund is widely considered one of the top VC firms and its partners are known to have diverse investment strategies.
Brian invests across industries and focuses on backing exceptional founders. You'll hear right off the bat that he cares about moat, market and strong execution. I love his point that the only way to become a good investor is to do a lot of investing. He describes himself as an investor who uses his gut a lot, which took me a while to get used to in our conversation. But I have to say that at the end of this episode, I felt refreshed and generally excited to keep putting in reps in my own way, both in the podcast and in quantum research settings. I hope you enjoy our conversation.
Brian, thank you for doing this with me. Your perspective is going to be a neat one because of the variety of different sectors or industries that you've been involved in. I know you are famously agnostic as to where you invest. Maybe that's a great excuse to begin by talking about what the kernels that you're looking for as part of your investment process, if it's not a top-down thesis in healthcare or something else, what are the things that you're looking for when evaluating a business at this stage?

**Brian Singerman** (1:52)
Moat market execution. It does not matter the sector. It does not matter the stage. We'll write checks anywhere from $100,000 to $300 million.
Totally stage agnostic with that, but always I'm looking for, okay, does the company have an existing moat? Not one of these, oh, if I do this and this and this and this and this, then I'll have a moat, but does it have an existing moat? Is it a big enough market to have an impact on a, our latest fund is about 1.4 billion or so. So it's got to be a big enough market to support a large return for that kind of fund. And does it have a founding team that can execute from moat to market? We only invest in founding teams, founding CEOs.
Are they good enough that on their own, they can take this from whatever moat they have to the big market?

**Patrick O'Shaughnessy** (2:39)
So moat is an interesting concept extended from 100K all the way up to such a big check size. At 100K, I guess it's this, maybe you think it's the same throughout. So maybe describe in more detail what a moat looks like.

**Brian Singerman** (2:49)
Totally open to any sort of unique definitions of, but maybe it's the team has certain inside insight, especially at the early stage, or this is the only team that could potentially pull this off, maybe an early stage moat to something as when we invested in Airbnb, it was kind of posted already having a huge international network effect, the likes of which we had never seen before. So that's a moat.

**Patrick O'Shaughnessy** (3:11)
What's the most memorable initial moat impression you've ever had?

**Brian Singerman** (3:14)
We made the decision to put 150 million into Airbnb in like less than a week, even though it was one of our largest x in history, because that was the clearest moat we had ever seen, maybe since Facebook, but pretty clear moat also. So other examples of moats are SpaceX. It's like, okay, good luck, go build a rocket factory yourself.
That's probably not getting cloned. I love things that aren't easily cloned by the talented software companies we have in Silicon Valley.

**Patrick O'Shaughnessy** (3:43)
What do you think about the requirement of capital? So SpaceX makes me think of obviously a mega capital intensive business. Do you care one way or the other about how capital intensive it is?

**Brian Singerman** (3:53)
We care, but some businesses require very little capital. Some businesses require a lot of capital. It doesn't really matter. The question for us is always, I mean, how much money can we make on this investment? So even if it requires a lot of capital, if it means we're going to make a lot of money off of it, then we'll consider it.

**Patrick O'Shaughnessy** (4:08)
The evaluation of the market, is that a science? Is it an art? How do you go about that?