The OG Defense Check, with Ross Fubini (Managing Partner of XYZ VC)

**Ross Fubini** (0:00)
The secret of certain early stage venture funds, the one thing you have to do to convince people to give you money is that you know something on a network that nobody else knows about. Palantir has lots of things to lots of people. What it actually worked at is CART, the CEO would open the door at some large company, and what you do is you chuck in a bunch of technologists and basically be like, hey, go find a $50 million, $100 million problem worth solving. And so it was this unbelievable crucible that was unknown at the time. It was super vivid if you were on the inside. It just ended up being correct because those people were exceptional and they went on to choose a bunch of really interesting businesses to go.

**Mo Islam** (0:46)
Ross, thanks so much for being with us.

**Ross Fubini** (0:48)
Thanks Mo, thanks for having me. I really appreciate it.

**Mo Islam** (0:50)
So, congratulations on the Midas List again.

**Ross Fubini** (0:55)
Thanks, thanks. It's funny Mo, I was on the List a few years. I was on the List last year and I sent a note to my mom about it. And my mom immediately replied. And she basically said like, yeah, you should think about contacting everybody ahead of you on the List, and finding out what they do that made them more successful, so you could figure out how to improve.
Which is good pressure. We improved a little bit this year, but the funny phenomena of being on again is really, you end up just realizing how exciting it is to keep working with the founders you got, and then the long journey of venture is just venture and press.

**Mo Islam** (1:44)
Well, hey, look, regardless on what specific number you're on every year, the fact that you've been on it multiple times says a lot about your experience, your background, what you've achieved. So for sure, congratulations on that.
But yeah, maybe we can just talk a little bit about how you got there. You're an engineer by background, you went to Carnegie Mellon. How did you end up in the investing world and what do you owe your success to?

**Ross Fubini** (2:12)
Yeah. So really it's two points of dumb luck to make XYZ as a firm and then as successful as it is.
The first part of dumb luck is, as you said, so I'm an engineer by training, I work for Netscape and Telmy, running division of Symantec on the product side. So I started some companies and sold them. The first lucky thing I did was a guy named Mitch Kepoor. Mitch was the founder of Lotus 123, the visual spreadsheet company, gave me my first venture job. Being able to go do an early stage venture in companies like, you know, Mitch had an Uber, Twilio, Optimizing Clever and Form Labs. That was just incredibly fortunate as a entrepreneur engineer that moves over into venture, just getting an opportunity and getting to learn, you know, in the last 15 plus years.
All stems from that moment in that person and learning in the mentorship structure there. The second thing, ironically, about the same time, I was, I introduced a friend of mine to a guy that used to work for me. I introduced Sham Sankar to Aki. These were two of the people that ended up being the founding executive team along with Bob McGrew at Palantir.
This matters because I'll tell you then years later in 2017, when I was starting XYZ.
Mo, the secret of starting early stage venture funds, the one thing you have to do to convince people to give you foolishly, to give you money, is that you know something on a network that nobody else knows about. In 2017, Palantir was a company that was only known for hogging up all the real estate in Palo Alto. It was otherwise, it was not public, it was not visible, it did not matter. It was hard to convince people to join at that particular moment in time. But it was full of these incredibly talented folks. So I raised XYZ's original fund on the premise of backing people out of Palantir. We backed 40 of 130 plus companies now, ex-Palantir founders. So it's a big part of our view. In a noted way, it's been a big part of some of the successes we've done. Anduril, Hex, Apex Space, Cape, among them, many other businesses, including Paragon, Chapter, et cetera, came out of that lineage. And so those two things in combination, the opportunity to learn and the opportunity to start with that network, have really propelled a lot of our successes here.