Transcript
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People will raise good results on 10, 15,
$20,000,000 of lending into these nicher
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strategies.
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And then scaling that strategy to a 100, 200,
$300,000,000 is harder.
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It's hard to scale a team.
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It's hard to scale the infrastructure.
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It's also hard to get quality deal flow you had
when you're a smaller fund.
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And once again, you run into the problem of
scaling strategy.
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So I think over time, there's gonna be a
washout.
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I think the returns are gonna be diluted on
some of these private credit strategies.
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So much of what we do at 3 I is understanding
where our members are expert, tagging them in
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an internal database, and then spending time
with them.
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1 of our members spent a lifetime in aviation
finance, buying and selling engines off of
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plates.
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And in typical 3 I fashion, after getting to
know him, he just called us one day and said
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he's personally investing into the teardown of,
particular engines of CF 6 80, which is used on
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Boeing 747s and 767s.
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We funded our first deal alongside that member
in the space, and members made their money back
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in less than 12 months and one and a half times
their money in 18 months.
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After getting to know the sponsor, we funded
our second deal with them, which was acquiring
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3 engines from AerCap for a total of
$14,000,000 to them to lease one of them to
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tear down.
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So what is 3i?
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3i is an investment network.
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We're not a fund or a bank, but a community in
its truest sense.
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Our members are all exited founders,
traditional family offices, and fund managers
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who leverage this network to source and co
invest in private equity deals and private
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credit deals, find experts, and ultimately, and
we hope learn from each other.
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The insight that launched 3i in October 21 came
from my cofounder Mark Erson, who previously
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founded the expert network, GLG.
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And you know Mark, and from his own experience,
and I think inside of what I would call a very
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entrepreneurial family office, Mark faced this
frustrating reality that sourcing high quality
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investment ideas, and these are the types of
things that can yield in the twenties on IRR
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with limited downside, was achievable, but
entirely random.
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Right?
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This is just a function of who you happen to
meet at whatever random reason for at whatever
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random time, or who you happen to see that
week.
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So like you did with GLG, where they put a very
valuable process vetting method and system in
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place, in that case, sourcing experts and
tapping the unused inventory in people's
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brains, We follow a similar suit here at 3i and
leverage the untapped potential on our members'
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balance sheets, in their email inboxes, and in
their portfolios to find the interesting deals
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that can create a community and system, which
is purpose built for really surfacing great
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capacity constraint deals, applying the
expertise of the network for better diligence
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and v brakes, and ultimately compounding all of
what I think are the hard earned sort of life
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hacks and wisdom from a career of success in
investing in business.
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How many members are you at, and how much have
you guys deployed?
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Since launching in October of 21, we've grown
to 550 members and deployed a little over
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$500,000,000 And if you, I think, rewind the
clock to the early days of 3i in 21, it was a
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unique time for a couple of reasons.
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Right?
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The pandemic is starting to tail off.
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There's this exuberance in tech and crypto.
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The family office world is booming.
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So McKinsey says the number of family offices
is up from just doubles between 2018 and 2021,
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and the private markets are exploding.
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Right?
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So you go from $5,000,000,000,000 of private
market value in 2013 to 11,000,000,000,000 by
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2022.
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So I think in that time in 2021, we're at the
start of what I saw and Mark saw as a real
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revolution in how investors find deals.
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I think we're moving away from traditional
banks and brokers and starting to rely more on
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personal networks.
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And it's a shift from trusting institutions to
trusting peers.
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Edelman does this great annual trust survey,
which tracks trust levels in everything from
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scientists to media, and recently found that
peers are the only group where trust is
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continually on the rise for the last 5 years in
a row.
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Now overlay this onto investors, especially
family offices investing in sort of diving into
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private deals for the first time.
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This means they're increasingly comfortable
sourcing deals from their own networks,
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bypassing sort of the traditional wealth
manager or RIA or bank.
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But there's this real challenge where you lack
the resources and structure.
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How do you know that you're not being adversely
selected in the deal flow?
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I think it all comes down to our filtration
mechanism.
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And what we aim to become is an easy place for
a member to send a deal that they've been sent
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or a friend might be looking at, but they don't
know what to do with.
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By sending it into 3i, you can get a sort of
quick look from another member expert within
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the network.
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And a quick yes, no of, is this an interesting
deal to be looking at?
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So I think if you were going to be looking at a
deal alone, you can now bring the institutional
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back of 3i and the 550 members expertise in, I
think, sourcing not only sourcing deal, but
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doing diligence on is this interesting to be
looking at.
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And is there a value add component to that?
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I know a lot of opportunities may not want to
have a lot of LPs.
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Is there an upside to having so many members in
one deal?
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So it's the process we run that makes life easy
for either the company or fund that we're
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investing into.
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So we'll streamline in our investing process,
the sourcing of the deal.
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So we'll host very structured intake calls to
understand what the company or fund does.
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And those are usually shepherded by the member
who's putting forth the deal and planning to
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invest in it.
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2, the diligence is very structured.
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So we will open a centralized data room,
centralize all q and a.
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And then for the deals that we're investing in,
we'll be very again, we put a strong structure
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against the amount of calls and the way that
we're tracking information.
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So from the LP for the GP side or the fund
manager side, it feels like they're dealing
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with 1 institution.
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But on our side, can help shepherd and
coordinate between all the members who
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invested.
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And the reviews we get from GPs are very
strong.
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We can raise, at this point, between
$35,050,000,000 on average into a deal, and the
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process takes somewhere between 2 to 3 weeks.
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What are you able to raise more for, and what
are you able to not raise as much for?
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Twice a year, we'll survey the membership on
what are the types of deals and asset classes
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they're interested in.
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And like I mentioned, early 24, that was
private credit and specialty finance.
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Later 24, that's venture and private equity
secondaries.
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Most of what we've done on the platform is 60%
of the deals on the platform.
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We've done a 50 deals now.
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60% of them have been into funds, and 40% of
them have been in direct deal opportunities.
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What has turned out to be the sweet spot of 3i
is an emerging manager who is willing to part
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with early GP or seed economics to gain the
backing of our network, which can provide early
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business development for a fund or a deal
advisory, and ultimately be the anchor or seed
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in, for example, a fund one that's lending
against government contractor receivables,
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who's on path to raise a 100,000,000.
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We can be the first $30,000,000 in, And then
that fund will go on to raise, you know,
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additional $200,000,000 on top of that, and to
go on to success.
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So you're able to solve for 1st check, 1st
fund.
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What are you guys looking for in 1st time fund
managers?
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We're unique in that we're not an institution,
and we're not a fund.
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So we don't have a dedicated mandate as defined
in in an LP agreement.
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What members are looking for is the ability to
gain, like all investors are, outsize economics
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for taking limited risk.
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When it comes to emerging managers in specific,
what's been attractive about the value
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proposition for emerging managers is by working
with our community to gain access to early
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business development help by leveraging our
network, and also an advisory board that they
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can build out of our network.
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And they can go through a lot of the early fund
raising process and by building infrastructure
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with the members who have been through the
process before and can act as an advisory board
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for them.
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I'm curious.
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Do you have ways to derisk your investment and
being the 1st first check into first time fund?
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Do you have structures in place?
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We're not always the first checks into first
time funds.
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But the way that we derisk the deals that we're
working on is through an asset management
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process that I think is unique for family
office investors.
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So if you overlay what a good fund does well,
it's 3 things.
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They source well, they do diligence well, and
they asset manage well.
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The family office or ultra high net wealth
individual can source well because they all
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have individual networks, but really they have
no structure or framework for the latter 2, for
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for doing diligence and for asset managing.
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By clubbing up the community as a group and by
acting as a single funding source, even though
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our members are investing individually, we can
apply leverage and we can apply the collective
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pressure of a 30 or 40 or $50,000,000 check
onto the GP or CEO of the company we're
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investing into.
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And one of the things we started in 2024 is an
asset management process, where we get regular
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updates into the fund or company we've invested
in twice a year, and we'll use those calls to
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make sure that we are using the calls to make
sure that we are using the network we can to
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the best of our ability, we're using the
network to help stack the deck for success in
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the fund or company we've invested into.
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Today's episode is brought to you by Reed
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You mentioned a breakdown of trust in large
institutions, like large investment banks.
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What is the cause of that?
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All of our members are traditional family
offices, large fund managers, or exited
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entrepreneurs who know how the game is played.
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And our members are extremely fee sensitive in
the fact that they know what that there's a lot
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of extra juice in the traditional 2 and 20.
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And they're skeptical of, first of all, anyone
charging that full rate fee, and second of all,
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anyone who's charging above and beyond.
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Mainly because all of our members have either
been in those shoes of playing the role of
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asset manager, have worked with asset managers,
or have sold companies using banks and
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intermediaries that I think understand how the
game is played.
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So because our investors are sophisticated,
they're unwilling to part with the traditional
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economics that I think have made the asset
management industry as a large generalization
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over bloated.
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So what our members are looking for is direct
access onto cap tables, if it's a direct
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company, by bypassing the venture manager who's
charging SPV, or access to a fund on preferred
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economics, if they're willing to take risk
while the fund is still small.
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Our members will consistently say, I'm tired of
seeing the same old product for my RIA or
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wealth manager.
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I'm interested in seeing the early stage fund
that has a compelling business opportunity, has
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found an interesting arbitrage, but needs their
first slug of institutional capital to take a
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real swing at it, or a company that is willing
to be creative in their financing that doesn't
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wanna work with an institution that's gonna be
overly burdensome on either the diligence
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process or the terms they're gonna take.
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You mentioned that your members know how the
game is played.
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Talk to me about how the game is played when it
comes to institutional investing.
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I mean, I think it's well reported and you've
talked about it on this podcast with some of
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your guests is that great fund managers often
become asset collectors and often turn into
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asset managers where, you know, the 2 and 20 is
a really lucrative model when you're collecting
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1,000,000,000 of dollars and you're you can
live a luxurious lifestyle, you know, have a
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great office, hire a successful and
sophisticated team on, you know, tens, if not
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100 of 1,000,000 of dollars of management fee.
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And I think that there's a real conflict of
interest there, where funds have to grow.
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They have a mandate to continue growing their
fund size over time.
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And that, I think accrues negatively to the
benefit of the investor.
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And you've seen over time, the private markets
over perform the public markets.
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But if you really break down that data, it
tends to be in the earliest funds.
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Right?
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Funds 1 through 4 do much better than funds 5
through 10.
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And the problem with investing early is Morgan
Stanley or Goldman Sachs or UBS has too much
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demand from their investors to be the 1st check
into a $100,000,000 interesting credit fund.
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There's a scale problem.
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So where our members can be opportunistic and
flexible is by gaining access into and willing
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to roll up their sleeves on a subscale, 2
$150,000,000, for example, private credit
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strategy that's run by a promising, spin out of
Apollo or Blackstone, who understands the rules
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of the road, who understands a niche or
vertical very well, and can earn you an 18%
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unlevered without taking the sort of onerous
fees and onerous, you know, netted out returns
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of a larger institution.
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Yeah.
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I think there's a couple aspects that hurt
performance.
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One, you highlighted AUM.
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Some strategies should not grow.
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Some strategies are scalable.
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You've looked at what Blackstone has done, and
they've scaled several strategies and continued
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returns for far beyond what many people
expected.
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But other strategies like venture capital are
not inherently scalable because there's only so
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many great seed and series a opportunities.
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I think the issue is not actually on the fees.
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I think it's on the AUM side.
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Some of the best performing funds that you
would kill to get into in venture capital are
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actually 2a half and twenty or 2a half and 25.
219
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They're just impossible to access.
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I think the other issue you highlighted with
the large banks is that is this kind of
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principal agent problem.
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And what do I mean by that?
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Large banks make their money by not losing
clients' money.
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They're not optimizing on gaining alpha for
their clients.
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And if there's even a 10% chance that that
client might lose money, even if there's a 90%
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chance they might make a lot of money, they
don't wanna take that risk, which is why they
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go with the KKR fund 15 versus the spin out
that you've mentioned.
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00:12:33,490 --> 00:12:36,950
So those are the kind of things, kind of the
principal agent problem in the AUM gathering.
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I actually have a contrarian thesis.
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I was speaking to one of my mentors, long time
mentors who's starting a family office, and I
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advised him to go to the top venture capital
funds and side letter higher fees to get into
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them.
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I actually believe in paying fees for the best
products.
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But to your point, if you are coming in early,
you should get a fee break, and you should
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really avoid the large AUM players.
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Yeah.
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And I I think particularly on some of the we
went deep in mid 23 and early 24 on specialty
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finance and private credit funds.
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And we're not the only group to get interested
in this asset class.
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But on a, for example, on a 12% bridge lending
fund, and there was one that was particularly
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attractive we put on the platform, a reduction
in management fee and a reduction in
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performance fee can get you from, call it, 12%
net on a, you know, very safe and a safe bridge
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lending fund.
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00:13:26,919 --> 00:13:32,200
You can go from 12% with a reduction in fees
that you become 14, 15% on a bridge lending
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fund by taking very little risk.
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00:13:33,559 --> 00:13:35,639
And that kind of fee reduction is very
material.
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Now, on venture, I'd argue that it's a
different story, and you should be willing to
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pay fees to get into the best deals, and you
shouldn't be fee sensitive.
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But on a reliable and underwritable private
credit deal, a reduction in fees is a material
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00:13:47,174 --> 00:13:50,634
difference, particularly for a family office
that's thinking about either cash alternatives
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or income streams and netting using some of
these investments as as income.
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00:13:55,389 --> 00:14:00,909
So I think while some of our members are not
fee sensitive, I think the vast majority of
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them increasingly are, particularly on products
that are are promising returns in the teens,
254
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where a point or 2 or 3 on an annualized return
can make a huge difference.
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00:14:10,424 --> 00:14:14,264
You mentioned you really double clicked on
specialty finance and private credit.
256
00:14:14,264 --> 00:14:16,504
What were some of your learnings from that
asset class?
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I think there was an exuberance in private
credit when the banks tightened on the backs of
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Silicon Valley and Signature and First
Republic.
259
00:14:24,879 --> 00:14:26,480
There was an exuberance in private credit.
260
00:14:26,480 --> 00:14:31,279
A lot of the local lenders and there's a very
well known and documented constriction of
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00:14:31,279 --> 00:14:35,305
lending from some of the regional banks that
were underwater in some of the commercial real
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estate lending that they had done.
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00:14:36,665 --> 00:14:41,225
So in this opportunity popped up, you know,
this is where Wall Street works well and
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00:14:41,225 --> 00:14:48,009
capitalism works well, is that in a drought of
capital, early managers will go into when to
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00:14:48,009 --> 00:14:54,409
government contractors or beneficiaries of USDA
bridge loans or, you know, small businesses
266
00:14:54,409 --> 00:14:55,529
that need access to capital.
267
00:14:55,529 --> 00:15:00,089
And you can make an attractive risk adjusted
return by investing in some of these niche
268
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asset class that were previously served by
regional banks.
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00:15:02,534 --> 00:15:05,174
There's a lot of guys that promise really
interesting returns on some of these
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strategies.
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00:15:05,574 --> 00:15:08,694
The problem is some of these strategies are
less scalable than they promised to be.
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00:15:08,694 --> 00:15:13,574
So people will raise, you know, have good
results on 10, 15, $20,000,000 of lending into
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these nicher strategies.
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00:15:15,259 --> 00:15:18,779
And then scaling that strategy to a 100, 200,
$300,000,000 is harder.
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It's hard to scale a team.
276
00:15:19,740 --> 00:15:20,860
It's hard to scale the infrastructure.
277
00:15:20,860 --> 00:15:23,820
It's also hard to get the quality deal flow you
had when you're a smaller fund.
278
00:15:23,820 --> 00:15:25,980
And once again, you run into the problem of
scaling strategy.
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00:15:25,980 --> 00:15:28,379
So I think over time, there's gonna be a
washout.
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I think the returns are gonna be diluted on
some of these private credit strategies.
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00:15:32,204 --> 00:15:35,324
But some of that's still to come and and,
honestly, very dependent on where rates are.
282
00:15:35,324 --> 00:15:38,204
We were chatting last time about 3i buying an
aircraft engine.
283
00:15:38,204 --> 00:15:39,644
Break down that deal for me.
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00:15:39,644 --> 00:15:46,419
So this is a great example of how our members
source together due diligence together and then
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00:15:46,419 --> 00:15:47,559
ultimately invest together.
286
00:15:47,620 --> 00:15:52,259
1 of our members spent a lifetime in aviation
finance, buying and selling engines off of
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00:15:52,259 --> 00:15:52,759
plates.
288
00:15:52,980 --> 00:15:57,875
And in typical 3i fashion, after getting to
know him, he told us and and just called us one
289
00:15:57,875 --> 00:16:03,235
day and said he's personally investing into the
tear down of a the particular engines of CF 6
290
00:16:03,235 --> 00:16:06,134
80, which is used on Boeing 747s and 767s.
291
00:16:07,154 --> 00:16:12,529
We funded our first deal alongside that member
in the space, and members made their money back
292
00:16:12,529 --> 00:16:15,990
in less than 12 months and one and a half times
their money in 18 months.
293
00:16:16,049 --> 00:16:19,990
After getting to know the sponsor, we funded
our second deal with them, which was acquiring
294
00:16:20,210 --> 00:16:25,169
3 engines from AerCap for a total of
$14,000,000, 2 of them to lease 1
295
00:16:25,169 --> 00:16:26,129
of them to tear down.
296
00:16:26,129 --> 00:16:27,375
And this
297
00:16:27,375 --> 00:16:32,415
is just a good illustration of what the 3i
membership is best at, which is, you know, we
298
00:16:32,415 --> 00:16:37,054
tag and understand our members' expertise very
well, and we try to stay close as possible to
299
00:16:37,054 --> 00:16:37,774
their deal flow.
300
00:16:37,774 --> 00:16:41,990
And when we get signal from one of our members
that they are investing heavily alongside the
301
00:16:41,990 --> 00:16:45,529
same terms available to everyone else into a
deal that they know and understand and love,
302
00:16:45,750 --> 00:16:47,590
our antenna go up, we activate the membership.
303
00:16:47,590 --> 00:16:51,110
And in the case of the second deal with the
same sponsor, we mobilized a little less than
304
00:16:51,110 --> 00:16:56,554
$14,000,000 in 48 hours, which for us was the
big first proof of concept that the 3 I
305
00:16:56,554 --> 00:17:01,115
membership, though it's in in aggregate 550
members, can actually act like a fast and
306
00:17:01,115 --> 00:17:05,674
nimble institution by streamlining some of the
diligence processes and streamlining some of
307
00:17:05,674 --> 00:17:08,930
the feedback processes with a sponsor to very
quickly fund deals.
308
00:17:08,930 --> 00:17:11,850
And we're now establishing a great relationship
with the sponsor on the other side of this, and
309
00:17:11,850 --> 00:17:15,890
we have a first look at any aircraft engine
teardown or lease deal that comes their way
310
00:17:15,890 --> 00:17:17,650
that fits within a certain buy box for us.
311
00:17:17,650 --> 00:17:22,210
So I think these aircraft engine teardown deals
are a perfect example of the 3 I process.
312
00:17:22,210 --> 00:17:27,585
And in aggregate, we've done 55 deals now, not
all aircraft engine teardowns, but some of
313
00:17:27,585 --> 00:17:30,244
them, and for a little over $500,000,000 in
aggregate.
314
00:17:30,305 --> 00:17:32,144
You see 100 of deals every month.
315
00:17:32,144 --> 00:17:36,359
And do you see the cyclicality of supply and
demand of capital into deals, meaning certain
316
00:17:36,359 --> 00:17:40,519
spaces are very interesting, like aircraft
engines, and then everybody piles into them,
317
00:17:40,519 --> 00:17:42,200
and then in a couple of years, the trade is
gone?
318
00:17:42,200 --> 00:17:44,619
Do you see that happening across asset
management?
319
00:17:45,079 --> 00:17:45,579
Absolutely.
320
00:17:46,119 --> 00:17:51,214
It's a true adage as ever about particularly
investing into these opportunities.
321
00:17:51,214 --> 00:17:52,095
There's an arbitrage.
322
00:17:52,095 --> 00:17:56,174
For whatever random reason, an arbitrage exists
in the market, and there's a significant yield
323
00:17:56,174 --> 00:18:00,355
to be earned by being the first money into an
asset class like aircraft engine tear downs.
324
00:18:00,414 --> 00:18:02,490
Bigger money always listens and finds it.
325
00:18:02,730 --> 00:18:04,970
And as people pile on, they drive down their
returns.
326
00:18:04,970 --> 00:18:09,450
So while we were excited about aircraft engine
investing 2 years ago and last year, I think
327
00:18:09,450 --> 00:18:11,849
you're starting to see some bigger capital
flood back into the space.
328
00:18:11,849 --> 00:18:14,009
And as such, the returns will be driven down.
329
00:18:14,009 --> 00:18:18,634
And where we always wanna be listening to and
why we design our biannual asset interest
330
00:18:18,634 --> 00:18:22,875
survey, the way we do is we wanna understand
where members we wanna skate to where the puck
331
00:18:22,875 --> 00:18:25,054
is headed, and we wanna understand where
members are going.
332
00:18:25,194 --> 00:18:28,554
So a year ago, that was, hey, we are starting
to get interested in venture and private equity
333
00:18:28,554 --> 00:18:31,970
secondaries, which is why we've done a couple
of deals there at the beginning of this year.
334
00:18:32,029 --> 00:18:33,950
Now, we're seeing a renewed interest in real
estate.
335
00:18:33,950 --> 00:18:36,829
And I think we're gonna start, you know there's
some really interesting opportunities in
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00:18:36,829 --> 00:18:39,390
distressed real estate, in office in New York
City, for example.
337
00:18:39,390 --> 00:18:42,509
You know, some of the themes that you've heard
about, we're always trying to stay ahead of the
338
00:18:42,509 --> 00:18:46,475
trend by surveying our members of what's the
asset class that is, what's the sparkle in your
339
00:18:46,475 --> 00:18:49,995
eye that we can go and source for you in and
leverage some of the expertise in the
340
00:18:49,995 --> 00:18:50,495
membership
341
00:18:50,555 --> 00:18:51,934
to get an advantage on.
342
00:18:52,075 --> 00:18:53,355
Double click on your surveys.
343
00:18:53,355 --> 00:18:55,055
Are you looking for where there's consensus?
344
00:18:55,115 --> 00:18:58,715
Are you looking for where there's a 15, 20%
member interest rate?
345
00:18:58,715 --> 00:19:01,710
How do you know where the puck is going?
346
00:19:01,710 --> 00:19:06,430
So much of what we do at 3i is understanding
where our members are expert, tagging them in
347
00:19:06,430 --> 00:19:09,789
an internal database, and then spending time
with them and covering them.
348
00:19:09,789 --> 00:19:11,984
I think investing is a contact sport.
349
00:19:11,984 --> 00:19:15,424
It's just a matter of, you know, spending time,
getting to understand our members,
350
00:19:15,424 --> 00:19:19,744
understanding where their expertise lies, and
listening closely for the moment that they gain
351
00:19:19,744 --> 00:19:23,285
signal only when it's in a place that they have
legitimate expertise.
352
00:19:23,744 --> 00:19:27,700
So in the example of the aircraft engine
teardown, the member who brought us that deal,
353
00:19:27,700 --> 00:19:32,420
which has performed both of them have performed
very well, this is someone who has true
354
00:19:32,420 --> 00:19:34,519
vertical expertise in aviation finance.
355
00:19:34,580 --> 00:19:38,259
If that member came to us and said, I have a
distressed commercial real estate opportunity,
356
00:19:38,259 --> 00:19:39,460
we wouldn't listen as closely.
357
00:19:39,460 --> 00:19:42,804
So in that survey, it's our job to find the
signal.
358
00:19:43,504 --> 00:19:47,585
When a member who has deep expertise in an
industry says, hey, I think there's an
359
00:19:47,585 --> 00:19:50,964
opportunity emerging here, that's when we perk
up and that's when we listen.
360
00:19:51,024 --> 00:19:55,044
If you're successful, where will 3i be in 5
years or 10 years from now?
361
00:19:55,210 --> 00:19:58,350
In membership networks, value accrues to scale.
362
00:19:58,809 --> 00:20:04,009
And the value of a network increases with every
incremental valuable node.
363
00:20:04,009 --> 00:20:09,825
So we have really one job at 3i, which is to
continue adding extremely high quality members.
364
00:20:09,825 --> 00:20:12,804
Everyone is either a family office, a fund
manager, an executive founder.
365
00:20:13,105 --> 00:20:15,365
Everyone has been referred by an existing
member.
366
00:20:15,825 --> 00:20:20,625
And as we grow, it's our job to maintain and
actually increase the quality bar as we go.
367
00:20:20,625 --> 00:20:23,904
So one of my goals is to build density in our
main hubs.
368
00:20:23,904 --> 00:20:29,240
That's New York, Miami, San Francisco, Los
Angeles, Chicago, London, and Toronto.
369
00:20:29,539 --> 00:20:33,220
We have on the ground presence in all of those
major cities, and we want to create a vibrant
370
00:20:33,220 --> 00:20:36,440
enough ecosystem where we have regular event
programming.
371
00:20:36,820 --> 00:20:40,954
So the goal over the next 3 5 years is build
density in our main cities, add super high
372
00:20:40,954 --> 00:20:45,355
quality members, and ultimately grow the
network with people who can be additive to and
373
00:20:45,355 --> 00:20:46,875
accretive to the network at large.
374
00:20:46,875 --> 00:20:49,454
What are some early mistakes that you made as
CEO of 3i?
375
00:20:49,755 --> 00:20:55,349
I believe that investing and relationship
building and fostering and creating network are
376
00:20:55,349 --> 00:20:56,809
both their contact sports.
377
00:20:57,190 --> 00:21:01,609
And I think there's a misconception in startups
that everything you have to do is scalable.
378
00:21:02,070 --> 00:21:07,244
And in the beginning days, I was really deeply
focused on, did we have the data infrastructure
379
00:21:07,244 --> 00:21:08,444
that could scale with our membership?
380
00:21:08,444 --> 00:21:10,605
Did we have the event programming that could
scale with our membership?
381
00:21:10,605 --> 00:21:12,924
Did we have the deal intake methods that could
scale with our membership?
382
00:21:12,924 --> 00:21:15,644
Did we have the technology and people and
processes that could scale?
383
00:21:15,644 --> 00:21:19,244
But what I sacrificed in the earliest days was
the relationships with our earliest members,
384
00:21:19,244 --> 00:21:21,004
which are ultimately the most important thing
we have.
385
00:21:21,004 --> 00:21:25,779
So when I corrected the team's mentality
towards and my own mentality towards, which it
386
00:21:25,779 --> 00:21:28,740
is, there's nothing scalable about what we're
doing, and that's actually the beauty and the
387
00:21:28,740 --> 00:21:29,700
value of what we're doing.
388
00:21:29,700 --> 00:21:31,380
And every relationship is important to us.
389
00:21:31,380 --> 00:21:33,000
Every member is important to us.
390
00:21:33,140 --> 00:21:36,974
There's so much value in the handwritten note,
and the personal thank you, and the call, and
391
00:21:36,974 --> 00:21:39,134
the individual lunch and those small group
dinners.
392
00:21:39,134 --> 00:21:41,134
And over time, this value compounds.
393
00:21:41,134 --> 00:21:44,494
And we should proudly say there's nothing
scalable about what we're doing, but that is
394
00:21:44,494 --> 00:21:46,255
ultimately the secret sauce of building a
network.
395
00:21:46,255 --> 00:21:50,940
I remember when we went to the Berkshire
meeting, I think it was, Charlie Munger's last
396
00:21:50,940 --> 00:21:54,619
meeting with, with Warren Buffett to their
annual meeting, and that that was an amazing
397
00:21:54,619 --> 00:21:56,559
experience that I'll always remember.
398
00:21:56,940 --> 00:21:59,179
What would you like our listeners to know about
you?
399
00:21:59,179 --> 00:22:02,720
And how can listeners reach out if they're
interested in learning more about 3i?
400
00:22:02,940 --> 00:22:05,599
Well, first of all, thank you, David, for
having me on.
401
00:22:05,974 --> 00:22:09,174
3i is this incredible community of investors,
and we're growing.
402
00:22:09,174 --> 00:22:14,375
And we're adding exited tech entrepreneurs,
real estate entrepreneurs, family offices, fund
403
00:22:14,375 --> 00:22:18,480
managers, people who are interested in
deploying significant dollars into the private
404
00:22:18,480 --> 00:22:22,960
markets, networking with their peers, and, and
ultimately just enriching their personal
405
00:22:22,960 --> 00:22:24,160
business and investing lives.
406
00:22:24,160 --> 00:22:27,920
And look, if you're a listener of this podcast
and someone who's interested in the types of
407
00:22:27,920 --> 00:22:30,720
things we're talking about today, I'd be
delighted to have a conversation with you.
408
00:22:30,720 --> 00:22:32,559
You can reach out to me personally to learn
more.
409
00:22:32,559 --> 00:22:34,144
It's teddy at 3imembers.com.
410
00:22:35,244 --> 00:22:38,845
And what is interesting and and where we want
to take the network is, you know, adding high
411
00:22:38,845 --> 00:22:39,644
quality membership.
412
00:22:39,644 --> 00:22:41,085
And I'd be delighted to chat with you
413
00:22:41,085 --> 00:22:42,285
if you're interested in learning more.
414
00:22:42,285 --> 00:22:44,924
Well, Teddy, I appreciate you jumping on the
podcast.
415
00:22:44,924 --> 00:22:46,865
Look forward to sitting down soon.
416
00:22:47,085 --> 00:22:47,805
Thanks, David.
417
00:22:47,805 --> 00:22:48,445
Talk to you soon.
418
00:22:48,445 --> 00:22:49,008
Thank you.
