In an interview during FIS Digital 2021 Joe Lonsdale, founder and general partner, 8VC talks about his unique approach to venture investment with Todd Ruppert, chair, INSEAD endowment.
Venture capital investment involves working with the most talented individuals to build companies, which in turn hold the seeds of future companies, said veteran venture investor Joe Lonsdale. Success depends on moving with top talent and being across key trends and their wider ripple impact – like, for example, how smart phones triggered ride sharing.
Successful investment involves finding out what is newly possible that wasn’t five years ago, said Lonsdale.
“It is all about the talent you are with and the big, conceptual gaps in the world. What is it possible to do now that wasn’t possible five years ago?”
At 8VC investment in the biotech sector involves getting to know the technology and how it is driving innovation around key themes like cheap sequencing, gene editing, cell manipulation and therapy.
“We are doing a lot here,” he said, adding that biotech investment has the potential to be both profitable and good for the world. Most notably on the eve of the pandemic, when supply chain issues in the US pharmaceutical sector threatened the US response.
Seeing the challenge, Lonsdale was involved in establishing a first-of-its-kind manufacturing and technology company dedicated to broadening access to medicines and protecting the supply chain against disruption. Set up after two rounds of funding raised $800 million, Resilience Bio is both a good investment and good for the world.
Lonsdale is also at the forefront of investing in financial services, increasingly transformed by data, the cloud and APIs.
“There is a new demand as to how this stuff should work,” he said. One-8VC backed firm operating in this cutting-edge space is Addepar. The leading private wealth management technology company is an increasingly important investment platform in the family office space.
Indeed, it is this kind of investment services technology he wants to harness to allow more people to invest in alternatives where he says top talent and expertise overwhelming flows.
“The smartest people are all going to build private companies. This is where your money should go.”
He predicts capital will increasingly flow into private alternative investment yet notes how lots of people are confused about how to access the space.
“My vision is help more people access the alternative world, providing the content and technology,” he said.
In a final note, Lonsdale urged institutional investors to come together to create a prize to help finance and develop cutting edge carbon capture technology.
“It could be a key to incentivising the market and harnessing the best minds to solve one of the world’s biggest problems,” he said.
His suggestion sees pension funds back a prize to help fund carbon capture solutions, awarded to the company that develops the best technology. The investors would retain intellectual property rights and if the winning company captures carbon at a low enough cost with sufficient scalability, pension funds would then work to lobby governments to adopt the technology.