Inside Goldman’s $22B Bet on Venture Capital | Hans Swildens, Industry Ventures

**Turner Novak** (0:02)
Hans, welcome to the show.

**Hans Swildens** (0:04)
Thanks Turner, thanks for having me.

**Turner Novak** (0:06)
So you started Industry Ventures over 20 years ago, I think 25 years ago, and you were recently acquired by Goldman Sachs. Can you just talk about what happened with the acquisition?

**Hans Swildens** (0:19)
Sure. Yeah, we've had a long relationship, about a 20 year relationship with Goldman, and it started as an LP and a co-investor back when the.com collapse happened, and there was a lot of corporate venture funds and hedge funds and mutual funds that held venture securities that were trying to liquidate them. So it's been a really long-term relationship. They started originally as a competitor, they were funding one of our competitors, and then they started becoming a partner, and then they invested in our funds as a limited partner. And that's kind of how the relationship started. I went to business school with the gentleman now that is the global CIO of alternatives and runs XIG. His name is Mike Brandmeier and he was in the class before me at Columbia.
And so we had worked together when he was in the vintage funds, which is our secondary funds, and Harold, who runs the secondary funds, today was there with Mike as well at that point. And so that's how it started. And then over the years, we started working on more things together. We co-developed a direct co-investment fund together after we launched and built a seed funding business of seeding venture funds and then co-investing with them and buying LPs in them.
That business here we call our early stage team. We have an early stage team, a secondary team, and then a co-investment team for buyout, tech buyout here. But then the co-development of our co-investment funds with them was in 2016
And then after that in 2019, they were keen on investing in our management company with their Petersville funds. And so we actually took an investment from the Petersville funds in XIG, the division that we're now in. And Ollie and Rob run those funds. And so they became a minority equity investor in our firm. I mean, we created a firm balance sheet at that point. That was seven years ago. So we've had a phase relationship with most of the different investment teams that are in our group. And we've been working with all the partners in the group, as well as all the folks managing all the funds for a really long time. So it wasn't something that... It was a progression rather than something that just showed up.

**Turner Novak** (2:53)
And why do it? Like, it seemed like things were going really well. Like, what's the point of getting acquired by someone and joining like a whole new firm?

**Hans Swildens** (3:00)
Yeah. I mean, everything here was a green light. So we didn't have any yellow or red lights last year in terms of market growth, you know, fund performance, team, execution, portfolio construction, relationships and all that stuff. But that's... I found as an entrepreneur, because this is the third company I've had, I had two software companies, my brother before starting Industry Ventures. And that when things are great is the best time to think about strategic options. So we were thinking about it. We were continuing to get inbound interest from large publicly traded asset managers. It's been happening now for six years.
We had a competitor get acquired by Steffestone.
And they were Green Spring. That was their name. And ever since then, we've been kind of on people's lists to try to target to see if they can take our team and our funds and plug it into their multi-asset, you know, alternatives firm. So we had we had we had we had to get an approach. We got approached again by another party that approached us five years ago. So we spent a good four months digging into everything. I would say they they knew us better than we knew them.
And so a lot of those two thirds about us getting to know them better and kind of how we can take what we built and add it to their business and then have it be a one plus one is three. But after, I mean, every week we dug in, every week we came back saying, wow, we didn't realize that that would be a huge benefit to us. And then by the end of the whole process, we both decided that it would be a great fit. So we went for us and issued a transaction.

**Turner Novak** (5:01)
And you've told me before that this combined kind of Industry Ventures, Goldman, I'm not sure. Actually, what is the name currently? What do people like Hans, he works at? What do you say?