Angel Invest Boston

Through the Angel Invest Boston Podcast we seek to learn more about the creation of world-changing startups. Boston’s unique concentration of academic talent and entrepreneurial culture offer bountiful opportunities for conversations with people who have funded and built innovative companies. By recounting engaging stories, angels and founders convey lessons they have learned. These narratives illustrate the rewards of helping founders commercialize transformative technologies. We hope you too will find our dialogues entertaining and instructive. I’m Sal Daher, host of the Angel Invest Boston Podcast. After immigrating to Boston as a child and attending Belmont High School, I studied engineering at MIT and Stanford. Decades of work in international finance followed. During that time, I invested in a handful of ventures founded by friends and acquaintances. Now, I’m a member of Walnut Ventures and MIT Angels and spend most of my time as an angel investor taking stakes in about a dozen startups per year.
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Aug 15, 2018

Few are as well positioned to see the huge opportunities that exist for small and medium businesses in digital marketing as the founder of Constant Contact. In his new company, Brevi, Randy Parker is using software to allow mom & pop businesses to access those opportunities in ways that pay.

I had loads of fun talking to this most clever and affable guest; and I learned a lot.

Here’s what we touched on:

  • Randy Parker Introduction
  • How Randy Parker Discovered He Wanted to Build Software
  • What Took Randy Parker from Florida to MIT
  • “So, I was third generation entrepreneur. My kids now I say are fourth generation entrepreneurs when they're doing things.”
  • “…in a consultant practice it's always, essentially, you're usually being hired to solve something that other people haven't figured it out.”
  • “I grew up in a family thinking about A/B tests, and marketing…”
  • Roving Software / Constant Contact Started as an Information Agent for Business
  • Constant Contact Was Essentially a SaaS Business by Another Name
  • Sal Daher Thanks Listener JaySingh1022 for an iTunes Review – Asks for Your Review
  • What Brevi, Randy Parker’s Current Startup, Does
  • “The way we can do that [allow the local coffee shop to compete with Starbucks] is, to actually tap into their data.”
  • Brevi Ties into the Small Business’ Operating Software to Learn About Opportunities for Growth
  • “…there is no substitute for the integrity and the commitment to the small business.”
  • Intuit’s Scott Cook as the Model of Attention to All Customers
  • For 2019, Randy Parker Hopes to Give Users a Tangible ROI on Their Ad Spend
  • Thriving on the Abundance of Data, Machine Learning Can See Patterns Humans Can’t
  • Randy Parker and the Proto-Kindle
  • Alice’s Table
  • Outseta
  • “…startups are like a family. And so, like families, there are some great things about them and there may be more challenging things about them.”
Aug 1, 2018

Invest Alongside Boston's Top Angel in Our Syndicates: Link to Syndicates Page

Angel investors Catherine Friend White and Ben Littauer answered questions about investing in startups in front of an audience at Babson College. Then the audience got to ask questions. The conversation ranged from the optimal portfolio size to the usefulness of the blockchain.

Here are some highlights:

  • Sal Introduces Live Event - Thanks Nina Block & Margaret Jone from Babson for Making it Possible
  • Sal Introduces Angel Catherine Friend White
  • Sal Introduces Angel Ben Littauer
  • How Catherine Became an Angel Investor
  • How Ben Became an Angel Investor
  • “…there are about 32 [angel groups] here in New England…”
  • “…I have so many soft values that I get from doing this [angel investing]…”
  • KnipBio & UltraCell
  • Cognition Therapeutics – Susan Catalano
  • “Having run my own company for 27 years, I have also my own list of what not to do…”
  • “If you have 25 [investments], you can probably diversify away a fair amount of the risk.”
  • “One of the biggest mistakes that early investors make is, they have a good outcome on their first bet and then they think they can pick winners.”
  • “…angel deals are chronically underfunded in the Boston area…”
  • “…when you're providing growth capital you need to keep providing more.”
  • NextShift Robotics
  • ICOs
  • “…I think that there is a lot of value in blockchain, but there's a lot of swamp around the blockchain ecosystem…”
  • “The other thing to know about blockchain is that the NSA has cracked it.”
  • Potential of Using the Blockchain for Storing Medical Records
  • Maybe This Is a Situation Where an ICO Makes Sense
  • Coachability Is Crucial for Founders
  • "I am going to be the forever CEO."
  • “…come to us and ask for advice, you might get money.”
  • Golden Seed Office Hours & The Capital Network, TCN, as Great Resources
  • Q&A: Joel Francois of Helius Power
  • Q&A: Ankit Soni of Cricket++
  • Q&A: Bob Goodof of Walnut Ventures
  • Q&A: Brett Wagner of Waec LLC
Jul 18, 2018

Zipcar’s first investor, Jean Hammond, is Boston’s indispensable angel. Her hands-on approach has been pivotal to the success of her startup and several others. She co-founded the leading accelerator for educational technology startups, LearnLaunch. The interview was great fun and hugely instructive to me. Don’t miss it!

Here are some highlights:

  • Sal Introduces Jean Hammond
  • From Studying Biology at Boston University to Running a Food Warehouse
  • Jean Decides She Needs a Rigorous MBA – Goes to MIT Sloan
  • Moved to Edinburgh & Worked at Fast-Growing Computer Networking Startup
  • “By the time I left there [Spyder], I felt like I'd done all the different functions in a little startup and done it while growth was going on.”
  • Jean Hammond Founds AXON
  • “AXON was four years old when 3Com acquired it and had grown quite rapidly to a pretty good business, and we got a pretty good price.”
  • Jean Hammond’s Second Startup, Quarry, Suffered from Bottlenecks in Telecom Infrastructure
  • “We live in a magic world of technology today that just things you wouldn't have imagined could happen are happening every day.”
  • “First, I wish to thank listener Phillip L. 36 for this great review on iTunes”
  • Jean Hammond Becomes Zipcar’s First Investor
  • “By coming back into town and talking to everybody, I found out that I was an angel investor. I didn't even know that all of that time.”
  • This Is Why We Call Her the Indispensable Angel
  • Jean Hammond Invests Widely with Boston’s Angel Community
  • Golden Seeds & Teaching Angel Investing
  • Jean Hammond Starts the Activity that Would Lead to the Founding of LearnLaunch, the Ed Tech Accelerator
  • “Education is a really interesting industry. It's the last of the giant industries, well over five trillion globally, maybe six, to digitize.”
  • “Qstream is based on technology that actually understands how memories are fixed.”
  • “…learning science is quite clear that we need to be striving, taking a little bit harder than you took the last time.”
  • “…some of our most excited investors in the LearnLaunch accelerator are coming in from India and China and Japan because they want to be a part of these changes.”
  • Jean Hammond’s Thoughts on the Importance of Boards to Startups
  • “Being a board member for a startup is actually quite a challenging job…”
  • Jean Hammond’s Parting Thoughts
Jul 4, 2018

Timeless values of loyalty and integrity have helped Phillips Kuhl build a thriving company at the heart of one of the economy’s most innovative sectors: biotechnology. Holding more than 250 conferences per year, Cambridge Healthtech Institute or CHI, helps participants discover new perspectives on the problems they are addressing. This impressive feat requires the concerted effort of 150 talented employees whose encouragement and guidance are Phillips Kuhl’s constant concern. I really enjoyed discovering how my friend of long standing built his remarkable company.

Here are some highlights:

  • Sal Introduces Phillips Kuhl
  • “…consorting with biotech royalty…”
  • Russian Studies & Economics at Haverford
  • Reading Russian Novels to Stay Awake on the Night Shift
  • “I always knew that I wanted to work for myself. I didn't work particularly well for someone else. I'm not great at following someone else's direction…”
  • Grandmother Provided Phillips with a Model for Entrepreneurship
  • Fast Growth Got the Attention of Vidar Jorgensen Who Was Already in the Conference Business
  • The Easiest Decision: Become an Entrepreneur
  • “…one of the key lessons was figuring out who were the people that represent the buy side of that topic, who are the people that represent the sell side…”
  • “…critically valuable to have several different perspectives that are brought together…”
  • “You're going to hear perspectives that you otherwise might not be aware of…”
  • Listener BPaul2 says: "Great content. Very informative podcast for entrepreneurs to get inspired and start working in their ideas."
  • Company Crisis Number One
  • Company Crisis Number Two
  • Company Crisis Number Three
  • The Heartbreak of Having to Fire Good Employees
  • A Culture of Openness Sets CHI Apart
  • Angel Investing: SQZ Biotech
  • Savran Tech
  • Angel Investing: Glycosyn
  • What Phillips Most Appreciates About Boston
Jun 20, 2018

The possibility of transcending the limits of human intelligence in scientific discovery has led this young British scientist to leave academia and found a startup. Founder & CEO James Field and LabGenius are engineering the evolutionary process to create novel proteins that have remarkable qualities. I caught up with James at TEDMED and had a most revealing interview.

Topics covered include:

  • Sal Pitches the Syndicate
  • Sal Introduces James Field, CEO & Founder of LabGenius
  • James Field Was Inspired to Become a Scientist by Science Fiction
  • Discovered Synthetic Biology by Participating in iGEM
  • James Field Is the Second PhD from Imperial College on the Podcast, Beth Marcus Was the First
  • “…the big flaw in my approach was that I was trying to apply rational engineering principles to nano-scale highly complex biological systems. And in my opinion, that's the wrong way to go about it.”
  • “…if you start testing many designs in parallel and then selecting for the ones that work, you don't have to be smart.”
  • “…LabGenius is a vehicle through which we can explore and harness evolution to develop new products.”
  • Founding a Company Was the Best Way to Accelerate the Work that Excited Him
  • Harnessing Evolution, but Doing it Better than the Natural Process
  • “…in the case of natural evolution, the process doesn't get any smarter. But the beauty of our process is every single time we conduct one of these evolutionary cycles, we gain information that then enables us to be more intelligent about how we design these biological systems.”
  • Concrete Applications
  • “…because we're so mission-driven, we're gonna continue this mission until either we succeed or conclusively fail.”
  • “…I was really banging my head against a brick wall until I found a group of investors who understand this to be an important part of the development of humanity…”
  • Transcending Human Intelligence by Designing Evolutionary Processes for Scientific Discovery Is Astonishingly Promising
  • James Field’s Parting Words
Jun 6, 2018

Invest Alongside Boston's Top Angels:

Click Here to Join Our Syndicates List


Aki Balogh had a project to apply machine learning to help content creators. Suddenly it looked like a business when Jeff Coyle, the VP of Search at an established company, joined him as co-founder. MarketMuse is now a fast-growing startup helping hundreds of companies figure out what content to create.

Aki, Jeff and VP of Engineering at MarketMuse, Noah Davis, were in studio for an engaging interview.

Some highlights:

  • Sal Talks about Angel Invest Boston’s Syndicate
  • Aki Balogh Talks about Going to Community College at age 15
  • Jeff Coyle Goes from Computer Science at Georgia Tech to Content Marketing
  • A “Take Your Kid to Work” Day Gets 12-Year Old Noah Davis Interested in Software Engineering
  • “I like computer science, but I was not going to be the best engineer. I wanted to do something with people.”
  • Jeff Coyle’s First Job Out of College Gave Him Exposure to Entrepreneurship
  • “So, I'd been trying to solve the problem that MarketMuse solves by hand, manually, for ten years.”
  • “And she asked me if I wanted to see something cool. Of course, I did. So, she slung a few lines of code … and made something happen and appear on a screen that had previously had nothing on it. From that moment, I was hooked-“
  • “And some of the things we use APIs for at MarketMuse allow us to move very fast as an organization.”
  • MarketMuse’s Founding Story
  • “I think you should be at a startup, either running your own or working on somebody else's. And that operational experience would make you a better investor down the line.”
  • “So, I started thinking, I wonder if there's a way we can use machine learning to actually help with this content creation problem and help us figure out what to write about and how to write about it…”
  • “…oh my gosh, the Vice President of Search from TechTarget is interested in what we do, I nearly fell out of my chair.”
  • “If you have that culture of content internally, you can really take this quickly and integrate it in your workflows to be more successful at the planning side, and then even in the execution side.”
  • “The search-engine industry has changed in the meantime here to really start caring about content quality too.”
  • “…basically we have a software as a service solution that allows you to evaluate the quality and comprehensiveness of any page on any topic.”
  • “Processes that would take tens, twenties of hours in the past, the research elements, we're doing in minutes.”
  • Aki Balogh’s Advice to Startups in Finding Their First Use Case
  • “…we were fully remote because I would just work with wherever I found talent…”
  • MarketMuse Uses Slack and Confluence to Keep Remote Staff on the Same Page
  • “I wanted to avoid venture until as late as possible because it creates a couple of bad behaviors.”
  • Sal Brings Up Wistia as Fantastic Bootstrappers
  • “The more data you crunch, the more cases you see, the more knowledgeable you are and therefore the farther ahead you are of your competitors who haven't crunched those particular numbers. This is an interesting-“
  • “…your quality of life basically just falls, continually falls as the company grows, because you have less personal freedoms and so on. But it's a very meaningful process…”
  • “…40% of a startup is articulating what the software does…”
  • Creating an Environment in your Startup for People who Are not Entrepreneurs
May 23, 2018

Invest Alongside Boston's Leading Angels in Our Syndicates: OPT IN HERE

In this interview, repeat founder Jo Schneier addresses the problem of providing effective training to the 64 percent of the population that does not have a college degree. Drawing on Jo’s experiences and prior startups, Cognotion’s opening gambit is a training platform for Certified Nursing Assistants (CNAs) an occupation with stratospheric job turnover. Cognotion seems to be succeeding in improving retention of its client’s CNAs.

Here are some of the topics addressed:

  • Sal’s Pitch for the Angel Invest Boston Syndicate
  • Sal’s Intro of Jo Schneier
  • How Jo Schneier Became an Entrepreneur
  • Jo Schneier Is Pulled into Cognotion
  • “We looked at all of the 64 percent of Americans that don't get a college degree, a four-year college degree. And we were asking ourselves, where did they land in the workforce? And were there opportunities for them where they can move from a minimum wage job up the ladder a little bit, so they start on the pathway up for economic mobility.”
  • “Right, so instead of paying an agency three to six thousand dollars to place somebody, they essentially become the school for this new employee.”
  • “Yeah, the turnover rate for CNAs and at skilled nursing facilities is 147 percent in the first month…So, if we can get somebody to four months, the likelihood they're gonna stay for four years is significantly higher.”
  • How Cognotion Built Its Team
  • Features that Make Cognotion’s Learning Platform for CNAs Effective
  • “…we formed channel partnerships with some larger institutions that are already selling into this space.”
  • “So, our biggest competitors are in-person schools.”
  • Qstream as a Possible Model?
  • Cognotion’s Funding Trajectory
  • $5.5 Million Angel Round
  • Advice to Founders & CEOs – Absorb the Stress & Hire People Smarter than You
  • “This is a complex time in America's history. And I think it's a unique opportunity, also, for people who are smart and dedicated entrepreneurs to look at how can we participate in improving the economy today.”
  • Jo Schneier on AI & Employment


May 9, 2018

Invest Alongside Boston's Leading Angels Via Syndicates: Opt In Here

Cambridge-based Wistia has taken the road less-traveled to success. They did not raise a lot of money but now compete with richly-funded startups. What’s their secret? Listen to the interview with the delightful founders of this popular video platform, Brendan Schwartz and Chris Savage, as they discuss the unique culture and vision that make the startup remarkable.

During the interview I pondered naming the episode “They Did It Their Way”; an echo of the song made famous by Frank Sinatra. I decided against this title because Chris and Brendan are nothing like the self-absorbed crooner. Actually, they are two friends from college who built a business together and still enjoy working and socializing with each other. The beautiful story of their friendship is only one of the attractions in this bravura interview.

Highlights include:

  • Brendan Schwartz and Chris Savage Bio
  • Wistia’s Founders Lived and Worked in a 10-Person House in Cambridge Keeping Costs Low
  • “When we started Wistia, we were both 23 years old. I think really the thing that was the most attractive to me was that it was an adventure, and that no two days would be the same.”
  • Wistia’s Founders Tried a Lot of Ideas Before They Found Their First Use Case
  • How Wistia Found its First Use Case
  • Startups Tend to Undercharge for Their Services; Wistia Was No Different in This
  • $400 per Month from the First Corporate Client Was a Lot Compared to a Burn Rate of $1600 per Month
  • “Today, Wistia is a video platform.” “It’s really trying to make it easy for you to get value from your videos.”
  • “There's no way Wistia would be what it is today if we weren't crazy scrappy for many, many years.”
  • Sal Asks for Your Review – He Points at Chris & Brendan Significantly!
  • Great Advice on Finding Your First Use Case
  • The Savage Rule: “If you're not embarrassed by the stuff you're putting out in the world, you probably have taken too long in protecting it or trying to make it perfect…”
  • On Being Friends and then Co-Founders – Dos & Don’ts
  • Chris Savage & Brendan Schwartz, Like Bettina Hein of the Founder of Pixability, Are Very Wise About their Schedule
  • Chris Savage’s Brilliant Responses to the “Sleep When You’re Dead” Idea
  • Wistia Has Been Massively Capital Efficient Compared to Brightcove & HubSpot – Their Investors Are Elated!!
  • Over-Funded Competitors Undone by the Video Market’s Slower-Than-Expected Growth
  • Wistia Is Has Put in Place a Financing Structure Unusual for a Startup
  • “We hit on this idea of raising debt so we could do right by the investors, and we could really take a bet on ourselves…”
  • Startups Chris Savage & Brendan Schwartz Admire
  • Parting Thoughts from the Founders of Wistia
  • “I wish everyone could just think longer term.”
Apr 25, 2018

Join Sal's Investment Syndicate. Opt In Here: Syndicates Page

At age 32 Molly Lindquist was diagnosed with breast cancer. Other women in her family had also endured this terrible ordeal. She survived it and is fighting back. Consano, the crowdfunding platform she founded, funds more than 65 medical research projects at leading academic centers such as Dana-Farber and Memorial/Sloan Kettering. Her work is getting serious attention because she’s figured out how to help disease survivors channel their energies towards defeating the illnesses that beset them. I had the opportunity of interviewing this energetic and engaging founder at TEDMED.

Here are some of the topics covered in this brief conversation:

  • Sal’s Pitch for his Investment Syndicate
  • Molly Lindquist Bio
  • Molly Lindquist Is Diagnosed with Breast Cancer, as Both Her Grandmothers Had Been
  • Molly Lindquist Tells Consano’s Founding Story
  • “I mean, over 50% of their time [researcher’s time] is spent fundraising. I'm naively thinking, shouldn't you be in the lab coming up with treatments. We need some cures here.”
  • Molly Lindquist Explains How Consano Works
  • “But people have now been calling this [Consano], this Kickstarter / hybrid. I was like, did not see the coming.”
  • “So, our biggest differentiator from many of the other crowdfunding platforms is that we vet each project.”
  • “We've listed about 65 projects from 25 academic centers from West Coast, East Coast, Dana-Farber, Sloan Kettering…”
  • “I think the biggest piece of advice I usually give when people ask me is really, be ready to jump on to an emotional roller coaster.”
  • Molly Lindquist on Work/Life Balance
  • “I think you know my whole premise now is leaving this world, as we all will at some point, having left a mark and having made it a better place.”
Apr 11, 2018

Invest Alongside Angels Like Bob Goodof. To Join our Syndicate List Opt In Here: Link to Syndicate Sign Up

Growing up in humble circumstances in Ohio, Bob Goodof discovered he had a head for numbers from playing with his baseball cards. At MIT he excelled in material science. After stints in the chemical industry and an MBA from Harvard, Bob became an investment analyst on Wall Street specializing in the oil and gas industry. He now invests as an angel with Walnut Ventures and teaches at Babson. He’s a sought-after advisor to startups and a valued colleague to other angels.

Here are the highlights form this fun and engaging conversation:

  • Sal’s Pitch for Angel Invest Boston Syndicates
  • Bob Goodof Bio
  • How Bob Goodof Dodged a Career in Journalism and Ended Up in Engineering
  • Bob Goodof Is a Guy Who Does His Numbers
  • Bob Goodof Dodges a Career in Aero & Astro, Ends Up in Material Science aka Metallurgy
  • Bob Goodof Gets an “Industrial MBA” from Dow Chemicals in His First Job
  • Bob Goodof Was Very Relaxed at Job Interviews, Perhaps Too Much So
  • Why Bob Goodof Decided to Get a Real MBA – The Real Value of a Harvard MBA
  • An Intro to the World of Investment Analysts
  • Bob Goodof Tries to Drag HBS Kicking & Screaming into Entrepreneurship Projects
  • Bob Goodof Gets Fired from His First Job after HBS; 18% Mortgage + an Attempt to Create a Software Newsletter
  • Bob Goodof Makes a Connection Playing Hockey & Gets a Job at Eaton Vance
  • Being an Analyst Was the Perfect Job; Bob Goodof Got to Ask Questions Companies Had to Answer
  • The Origin of Bob Goodof’s Entrepreneurial Urge + Breeding Lobsters in the Brine
  • Bob Goodof’s Rule: “Beware Wisconsin CEOs with Deep Tans” – What He Looks for in Management
  • How the Investment Business Changed during Bob Goodof’s Career
  • Bob Goodof’s Take on Why Fund Managers Buy and Sell Shares So Frequently
  • Sal Reads Helldoc88’s iTunes Review and Urges Listeners to Leave Their Own Reviews
  • How Bob Goodof Started Angel Investing
  • Bob Goodof’s Take on the Associative Nature of Creativity
  • What Bob Goodof Likes to Tell Founders
  • Is there a Danger in Investing Only in Areas You Know?
  • Why Bob Goodof was Intrigued by Fortified Bike
  • Bob Invests in a Nutraceutical Company
  • Startups Bob Goodof Is Excited About: UltraCell, DropWise & Poly6
  • UltraCell
  • DropWise
  • How Did Poly6 Avoid the Distraction of Too Many Possibilities?
  • A CFO That Can Say No
  • How Bob Goodof Stated the Off Wall Street Conference for Oil & Gas Bigs
Mar 28, 2018




Joe Meyer founded ExecThread,, to solve a pain point he felt acutely himself. Joe had sold his company to Apple and, after the obligatory stint at the acquirer, was looking for a senior executive position. He was astonished when he revealed all sorts of important things about his career profile to a recruiter and the recruiter did not take notes. That’s when it hit him that the recruiting industry was totally broken and he decided to build a solution for the problem. Two and half years later he has $7MM in VC funding and 25,000 highly selected and engaged users helping him map where the “hidden jobs” are. Among his backers is a co-founder of LinkedIn who was astonished that ExecThread could be aware of the “passive job seeker”, execs who would entertain an offer but who are not seeking a new position actively. Listen to this interview with a founder building a company that promises to be very big and very profitable.

Some of the topics addressed:

  • Sal Daher’s Pitch for Angel Invest Boston Syndicates
  • Introduction of the Guest
  • “Absolutely. I also experienced the pain point when I hired executive recruiters as a hiring manager at my last two companies as well, so I've seen it both from the candidate-facing perspective now, as well as from the client or hiring-company perspective.”
  • How ExecThread Works – Accessing the “Hidden Job Market” for High-Level Execs
  • “I quickly realized, though, that this walled-garden approach in the executive search industry actually benefits executive recruiters much more than it does hiring companies, and far more than it does candidates.”
  • “…we've created the largest aggregator of non-listed and non-published jobs in the world, that you won't find on any other job platform out there.”
  • How ExecThread Got VC Funding
  • LinkedIn Co-Founder Lee Hower about Execthread: “"Wow, you guys have access to the passive job-seeker."
  • Joe Meyer Speaking of Executive Recruiters: “…I gave them everything that wasn't on my LinkedIn profile, and the thing that amazed me was, they didn't write it down.”
  • “For an incredibly manual process that we think can be largely automated. And there's a lot of inefficiency in this industry, but there's also a large appetite to pay for solutions.”
Mar 28, 2018

Invest with Boston's Leading Angels.

Join Our Syndicates: Opt In to Syndicates List

Roboticist Keenan Wyrobek’s first career was founding Willow Garage which created ROS (Robot Operating System) that now makes robotic components inter-operable. After creating a foundation to sustain this vital piece of open source software, Keenan went in search of new engineering challenges. He became intrigued with the idea of helping developing countries deliver crucial medical supplies to areas that are poorly served by roads. He co-founded Zipline, the VC funded venture that is improving the lives of people in rural Rwanda. Zipline is now poised for profitable growth. Listen to this inspiring and brilliant engineer speak passionately about solving major problems while building a business.

Topics covered:

  • Sal’s Pitch for Angel Invest Boston Syndicates
  • Sal’s Introduction of Keenan Wyrobek
  • How Keenan Wyrobek Became an Engineer
  • Keenan Wyrobek Starts Willow Garage & Creates ROS (Robot Operating Systems) the Ubiquitous Open Source Software that Makes Robot Components Inter-Operable
  • Robotics: 90% Software & 10% Hardware?
  • Keenan Wyrobek Stumbles upon the Idea of Zipline
  • “And I think the reason we got that traction in our conversations is that this was a really visceral problem. Everybody's one degree away from it. It's either your grandmother or you or your sister has gone to the hospital and the doctor says, "I could have helped you, but I don't have X."”
  • It Took Two and a Half Years to Refine the Solution for Delivering Perishable Medical Supplies with Drones
  • “Our first plane had a wingspan that was probably about four feet and what we operate now is 10 feet. So it's went from a plane you could carry under your arm with no problem to a thing that's a beast.”
  • VCs Saw a Huge Opportunity
  • In the Midst of the Drone Craze in 2014 & 2015, Zipline Was Quietly Making Progress
  • New Version of the Drone Is Built to Scale
  • Keenan Wyrobek’s Advice to Young People Interested in Drones
  • Parting Words
Mar 14, 2018

Invest with Boston's Leading Angels. Click here to Opt In to Our Syndicates List => Syndicates Page

In college, Diane Stokes juggled caring for a sick mother, working full-time, doing ROTC and even had time to be on U Mass Lowell’s cheer leading squad. This energy and focus served her well as she progressed in her career of helping build startup after startup. Eventually, Diane founded a startup of her own. It succeeded beyond her greatest expectations. She invested as an angel for a while but is now back at another startup, helping them grow. My conversation with her revealed a personality of impressive determination and stamina leavened by good humor and genuine caring. I really enjoyed this interview, I think you will too.

Topics covered include:

  • Diane Stokes Bio
  • While in College, Diane Stokes Cared for Her Sick Mother, Worked Full-time, Did ROTC and Still Found Time to Be on the Cheerleading Squad
  • How Diane Stokes Found Her Path in Work Life
  • How Diane Stokes Juggled Her Transition from Engineering to Sales While Being a Mom and Getting Her MBA
  • Diane Stokes Left a Poorly Managed Startup and Went to a Second One that Got Acquired by Chipcom, a Particularly Well-run Company at Chipcom Diane Learned a Lot
  • Diane Stokes Realizes She Wants the Startup Life
  • Diane Stokes, Tri-Athlete
  • Sal Daher Reads an iTunes Review by TDN7 – Insightful Review
  • How Diane Stokes Founded her First Startup – Spoiler Alert: Moonlighting Involved
  • In Many Ways, ORP Was the Perfect Startup for Diane Stokes to Co-Found
  • What Diane Stokes Thought She Knew About Startups but Didn’t
  • The Most Useful Things Diane Stokes Learned from Co-Founding ORP – Number of Founders Is Critical
  • The Most Important Thing Sal Daher Learned at The Venture Café 😉
  • Why Diane Stokes Is Going Back to the Startup Life
  • Important Disclosure About Diane Stokes
  • Diane Stokes Has Joined Wireless Startup Wyebot Heading Up Marketing
  • Diane Stokes Gets Sal to Reveal the Exact Reason He Started the Podcast
  • Parting Thoughts from Diane Stokes
Feb 28, 2018

When Sid Satish saw his first surgery he was struck by the contrast between the advanced technologies in use side by side with ancient practices such as the negotiation over how much patient blood has been lost. He saw an opportunity to apply technology to create an informed calculation of blood loss. This was in 2011, now this technology runs on iPad Pros and is in use at 30 hospitals.


Here are some highlights from this eye-opening interview:


  • Siddarth Satish’s Bio
  • Got Hooked on Entrepreneurship from Business Plan Competitions at UC Berkeley
  • Gauss’ Device & Software Scans the Operating Room to Estimate Blood Loss – Too Cool!

[The Product Is Called Triton and Has Been Adopted at 30 Hospitals and Used on 100,000 patients Already]

  • How Gauss Got Started
  • “…we've had a few of our health systems study the delivery of the system and find that it has clinically impacted blood transfusions, made them more efficient, it has led to a significant increase in the recognition of hemorrhage, which is the problem we're trying to solve….by almost 400 percent.”
  • “When you're trying to change an entire field and trying to change the way that medicine is ultimately practiced with a completely new perspective, it takes re-imagination both on the technical front, but also on the clinical front, on the customer-facing front.”
Feb 28, 2018

Since its publication in 2011, “The Lean Startup” by Eric Ries has determined how startups are built. The idea is that little can be known up front about what customers really want, thus a series of cheap and quick experiments are in order. Minimally viable products (MVPs) are slapped together and put in front of trial audiences with the goal of having them “fail fast”. This rapid experimentation may lead the startup to change directions repeatedly. These changes in business direction have come to be called pivots.

Now a team of experienced product people are challenging some aspect of the Lean Startup Method. Among those voices are Geordie Kaytes, Radhika Dutt and Nidhi Aggarwal. They have seen the problems that blind adherence to the Lean Startup Method can bring, such as aimless and unproductive pivoting. They propose a rebalancing towards a more deliberate approach. In our interview Nidhi, Geordie and Radhika tell us what drove them to fashion this new approach to product creation.

Radical Product can be found at: Radical Product Website

Feb 14, 2018

Invest Alongside Boston's Leading Angels in Our Syndicates

Learn More Here: Angel Invest Boston Syndicates

Shiva Kashalkar of Green Piñata Toys

The toy industry is hard for new comers. Building a subscription business in the toy industry is doubly hard. Despite the obstacles, Shiva Kashalkar and her company, Green Piñata Toys, are starting to get traction. They report 50% organic growth month over month with 90% monthly retention. The secret of their growth has been the creation of an algorithm to predict from the first delivery, what toys will be of most interest to their customer’s children. Listen to this engaging conversation with a dynamic young founder who is beginning to see green shoots in her startup.

Feb 14, 2018

Invest Alongside Boston's Leading Angels in Our Syndicates

Learn More Here: Angel Invest Boston Syndicates

Shiva Kashalkar of Green Piñata Toys

The toy industry is hard for new comers. Building a subscription business in the toy industry is doubly hard. Despite the obstacles, Shiva Kashalkar and her company, Green Piñata Toys, are starting to get traction. They report 50% organic growth month over month with 90% monthly retention. The secret of their growth has been the creation of an algorithm to predict from the first delivery, what toys will be of most interest to their customer’s children. Listen to this engaging conversation with a dynamic young founder who is beginning to see green shoots in her startup.

Feb 14, 2018

Invest Alongside Boston's Leading Angels in Our Syndicates

Learn More Here: Angel Invest Boston Syndicates

Guest: Semyon Dukach, Super Angel, Founder & VC - "The Energizer"

When Semyon Dukach’s family came to America as refugees from the Soviet Union, they had a hundred dollars to their name. Semyon is now one of Boston’s most consequential super angels. Along the way he founded a couple of startups himself and made some remarkable angel investments that put him in a position to be helping founders with money and time. He has a knack for encouraging founders during the tough times. He’s done some fascinating stuff, like being a member of MIT’s fabled blackjack team, more recently he headed up Techstars in Boston. Now he’s raised a venture fund, One Way Ventures, focused on working with immigrant founders.

Don’t miss this inspiring interview. Topics covered include:

  • Sal’s Announcement of the Angel Invest Boston Syndicate
  • Sal’s Intro of Semyon Dukach
  • Semyon Dukach Bio
  • The Moment Semyon Dukach Figured Out What He wanted to Do in Life
  • Semyon Dukach’s Immigrant Story
  • One of Semyon Dukach’s Adventures on MIT’s Fabled Blackjack Team
  • The Satisfaction of Helping Out Customers in Significant Ways
  • Semyon Dukach’s Tremendous Pivot Story
  • Semyon Dukach’s First Angel Investment
  • Some of Semyon Dukach’s Favorite Startups – Wanderu, Quanergy & Lovepop Cards
  • Semyon Dukach’s Leadership at Techstars Boston
  • Semyon Dukach’s Advice to Startups Applying to Techstars
  • Why Are Immigrants So Over-Represented Among Founders
  • How One Way Ventures Came About
  • About Eveline Buchatskiv, Semyon’s Partner in One Way Ventures
  • Semyon Dukach’s Advice to Angels & Founders
Jan 31, 2018

Jay Singh co-founded ViralGains which is on Deloitte’s Fast 500 list of North America’s fastest growing tech companies. Still working on the marketing technology space, he has founded Clear Coin, a company hoping to apply distributed ledger technology to making digital advertising more accountable. He chose a token sale as a way of acquiring the resources needed to build his new company and seems to be off to a great start.

Jay Singh’s is the first Founder Focus interview on Angel Invest Boston. This new format is a response to the growing demand from founders to be on the podcast. The interviews are shorter and done via VOIP, allowing for more immediacy while still maintaining good sound quality. These Founder Focus episodes will launch concurrent with our regular podcast to offer listeners a broader choice. I hope you enjoy them.

Jan 31, 2018

The best measure of a founder is how much she can get done with limited resources. By this metric, Bryanne Leeming is outstanding.

A couple of years ago she had a paper prototype and vague hopes for a Kickstarter program. Now she has a sleek physical product that works and is likely to get built. She has the software to make it valuable and she’s completed a successful Kickstarter campaign. 3000 kids have played with Splat, the device and software Bryanne has built to encourage physically active and social play focused on STEM learning.

The interview with Bryanne Leeming left me inspired.

Here’s some of what we talked about:

  • Bryanne Leeming Bio
  • How Bryanne Leeming Decided She Wanted to Be a Founder
  • What Bryanne Leeming Got from Her Babson MBA
  • Balancing Time Between Consulting Gigs & Working on Her Startup
  • How Being an Athlete Affects the Work Bryanne Leeming Does
  • Bryanne Leeming Tells the Unruly Studio Story
  • How Bryanne Leeming Overcame Not Being a Technical Founder
  • Sal Reads a Listener Review – Asks Listeners to Review the Podcast on iTunes
  • Bryanne Leeming Tells About Her Kickstarter Experience
  • Bryanne Leeming’s Tips for Founders on Fundraising
  • How Unruly Studios Is Doing a Lot with Few Resources
  • Unruly Studio’s Go to Market Plans
  • Product Roadmap for Unruly Studios
  • Bryanne Leeming on Taking Advice as a Founder
Jan 17, 2018

The way cancer is treated is about to change.

Close monitoring during treatment will become possible, telling us within days with much greater precision if a treatment is working or not. Long-term monitoring of patients in remission will also be revolutionized by making fewer biopsies necessary and detecting relapses much earlier. All these promises come from the technology developed in the lab of Çağrı [Cha-ree] Savran at Purdue University that is being commercialized in Savran Technologies.

The brilliant and charming Professor Savran was my guest in this laugh-filled episode. He told how he went from a childhood in Turkey to studying in some of America’s most prominent universities. He opened my eyes to the startup-friendly climate at Purdue University and he explained how his invention came about. Don’t miss this accessible and fun report from the most consequential frontier of innovation.

Read the full transcript and see the video at:

Çağrı Savran Episode Page

Here is a list of the topics discussed:

  • Çağrı Savran Bio (Çağrı Is Pronounced Cha-ree)
  • Accident that Took Çağrı Savran from Turkey to Indiana
  • Purdue University’s Remarkable Support for the Commercialization of Faculty Inventions
  • Çağrı Savran: “So, when I say "extremely rare," I mean one-in-a-billion rare.”
  • Çağrı Savran: “Our technology can find those five or six or ten cells that are, among about a billion.“
  • “…from a blood sample, you have a glimpse into the tumor without cutting into the person.”
  • The Promise of Monitoring Cancer Treatment with a Blood Draw
  • “The advantage is if you can do this with a blood sample, it gives you a chance to do this test frequently, right?”
  • Applicable to the Prenatal Monitoring of the Fetus
  • Savran’s Tech Is Simple, Fast and Results in High Purity and Yield – 1000 Times Faster than Typical Microfluidic Systems
  • Like Alexander with the Gordian Knot, Savran Has Loosened One Constraint to Great Effect
  • Bigger Scale and Faster Flow Allows the Fast Separation of Rare Cells
  • Device Seems Amenable to Large Scale Usage – Handling Many Patients at the Same Time
  • How the Invention Came About
  • Why Çağrı Savran Founded a Company
  • Purdue’s New Commercialization Policy Played a Big Role in the Decision to Found the Company
  • Why Turbocharging Cell Separation Is So Important
  • Other Use Cases: People Are Always Suggesting New Ones but Need to Concentrate
  • Savran’s Tech Is a Game Changer because of Throughput and Parallelization
  • Other Techniques Look at Pieces of DNA – Savran’s Tech Is Capable of Finding the Entire Genome
  • Sal Daher Reads the Review by Spizzy Spong on iTunes and Asks for Your Review
  • How Savran Landed Bigwig Advisor Ken Morse
  • How Savran Found Its CEO – Patrick Rivelli
  • "Oh, you have no idea how I wish that somebody would say that about me, that I'm 'quietly competent.'”
  • Savran’s Choice of the Right Patent Attorney Was Crucial – Peter Fasse Helped Way Beyond Patents
  • Patrick Rivelli, CEO Proposed a New Go to Market Approach
  • What Makes the Savran Lab at Purdue so Productive
  • Çağrı Savran Urges Fellow Academics to Bring Their Inventions to Market
Jan 3, 2018

My colleague at Walnut Ventures, Adam de Sola Pool connected me with four promising startups from Poland participating in the MIT Enterprise Forum Poland contest in Cambridge. This created an opportunity to interview four really promising young founders.

Being a founder of a startup in a place like Poland where the infrastructure to support new companies is just starting is really challenging. The four young founders have all demonstrated impressive determination to bring their startup’s products to remarkably advanced stages.

In this inspiring chat you will meet Sergejs (Sergey) who studied economics but is making the oil patch greener, Tomasz who trained in robotics but helped invent a new way to train cardiologists, Rafal whose marketing platform has been adopted by Citibank and brilliant Katarzyna (Kate) who invented a way to make counterfeiting of products nearly impossible.

  • Sergejs Jakimous (pronounced Sergey Yakimov) CEO & Co-founder of Vortex Oil Engineering
  • Tomasz Dziwinski, Ph.D., Co-Founder of Medical Simulation Technologies
  • Rafal Kosno, Co-Founder & CEO of Waywer, a Marketing Platform Using Text with Video & Audio
  • Katarzyna Sawicz, Ph.D., Founder of InnovaLab, a New Way to Make Branded Products Hard to Counterfeit
Dec 20, 2017

A curious but orderly mind prepared to take advantage of serendipity has taken Adam de Sola Pool on a remarkable journey during his career.

His father, Ithiel de Sola Pool, the brilliant political scientist (look up Six Degrees of Separation or Convergence) took young Adam to many different countries. These travels sparked in Adam an interest in geography which led to a job on Wall Street. From Salomon Brothers he went to the EBRD to restructure companies emerging from communism. This grew into setting up Central Europe’s first cleantech fund which produced excellent results. Now Adam is an investor and advisor in the Boston area; much respected for his fresh approach to building young companies.

Topics covered in this charming interview include:

  • Adam de Sola Pool Bio
  • From Geography Major at University of Chicago to Wall Street
  • From Salomon Brothers to the EBRD
  • Adam Poole Has a Chance Encounter in the Bathroom & Gets a New Job
  • Overheated Factories in Poland
  • Adam Pool Discovers that Local Businesses Can Be Extremely Profitable
  • How Adam de Sola Pool Got into Angel Investing
  • Adam Pool Compares & Contrasts Angel Groups in Boston
  • Adam Pool Talks About Squadle, a Promising Startup Just Added to His Portfolio
  • Adam Pool Looks for a Defensible Market Position in the Startups in Which He Invests
  • Adam Pool’s Favorite Pivot
  • Adam Pool’s Approach to “Inoculating” Startups Against Risk
  • Adam Pool’s Poetic Statement of the Need for Founders to Give Way to Managers as the Company Grows
Dec 6, 2017

iTunes Podcast Page for Review & Subscribing

If you want to get rich and to pass money to your kids, listen closely to Howard Stevenson. Here’s condensed wisdom from the heart of the investing world delivered with dry humor and charm. Professor Stevenson was a co-founder of storied Baupost Group and helped hire its legendary manager Seth Klarman. He began the study of entrepreneurship at Harvard Business School and eventually became HBS’ biggest fundraiser.

His book “Wealth & Families” gives invaluable advice on how to make money and keep enough of it to hand down to the generations. My personal favorite is illustrated by this quote from the interview:

“Whereas, some of my colleagues were going off consulting ... They were making a lot of money every day, and they go their XKE (Jaguar XKE, a coveted sports car of the era) quite quickly. I went off to places like Lima, Ohio, and I was paid $300 a day, but I got 1% of the company.”

Howard Stevenson was forgoing high current income, and consumption, for the ability to own promising assets that would build his wealth in the long term. This approach contributed to Professor Stevenson becoming rich enough to need a family office to manage his money.

Podcast Page on iTunes Where You Can Review & Subscribe

This dynamic conversation includes:

  • Howard Stevenson Bio
  • How Howard Stevenson Started His Career
  • Fear of the “Velvet Rut” Causes Howard Stevenson to Leave a Tenured Position at Harvard Business School
  • Howard Stevenson: “A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.”
  • After a Sojourn in Entrepreneurship & Real Estate, Howard Stevenson Was Lured back to HBS
  • Sal Daher: “There are not a lot of people that would turn down tenured positions at The Harvard Business School…” Howard Stevenson replies: “That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.”
  • Howard Stevenson on Building Wealth: “I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.”
  • Howard Stevenson’s 400x Investment in a Company with a “Stupid Business Plan”
  • Howard Stevenson’s Four Criteria for Investing
  • Howard Stevenson’s Portfolio Returns; Warren Buffett-Like
  • Howard Stevenson on whether Entrepreneurship Can Be Taught
  • Howard Stevenson’s Definition of Entrepreneurship
  • The Best Due Diligence Is Time
  • How Baupost Got Started and How Investing Wizard Seth Klarman Was Hired
  • How Howard Stevenson Shops for Cars
  • Howard Stevenson’s Advice for How Young People Can Build Wealth
  • Mitt Romney & a Young Colleague on Spending
  • Why You Should Review this Podcast on iTunes – It Really Helps Us iTunes Podcast Page Where You May Review & Subscribe
  • "Most of the wealthy people I know, are better at making money than managing it."
  • Howard Stevenson’s Journey in Investing Began by Reading Graham, Dodd & Cottle in 1961
  • "I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."
  • Talking to Your Kids About Money


Sal Daher: Welcome to Angel Invest Boston. Conversations with Boston's most interesting angel investors and founders. I'm Sal Daher, and my goal for this Podcast, is to learn more about building successful new companies. The best way I can think of doing this is by talking to people who have done it. People such as entrepreneur, angel investor, and scholar of entrepreneurship, Howard Stevenson.

Professor Stevenson, Howard, I'm elated for the opportunity to interview you on this the 29th episode of our podcast. Thanks for hosting us at your offices. In this recording session outside our usual studio. This is what's normally called a remote.

H. Stevenson: Well it's not so remote, it's right in Harvard Square.

Sal Daher: That's right. Not too far away.

Howard Stevenson Bio

Howard Stevenson founded the storied Baupost Group, and is the father of entrepreneurial management, at the Harvard Business School. Howard has served on many boards, and his advice is prized by so many wealthy people. He has written extensively on business and social ventures. He has been generous with his time and treasure, towards philanthropic causes in which he believes. It is said that he has raised more money for Harvard Business School than anyone else. There is now a chair professorship named after him at HBS, in recognition of his outsized achievements.

Starting out as a math major, Howard has had a methodical approach to wealth during his entire career. While he measured assiduously the growth of his net worth, he also paid close attention to choosing work that was satisfying to him, and valuable to others. Informed by fear of the “Velvet Rut” that can trap tenured academics. Howard found his own career trail in several industries. By taking astute long-term bets, he has become wealthy enough to need his own family office, though he does not like the term.

In preparing for this interview, I read his latest book, Wealth and Families: Lessons from My Life Journey. Written with his longtime collaborator Shirley Spence. The book is a remarkable document, in that it grew out of another book. A book that he had written for his family, titled: Howard's Journey: Lessons from the Game of Life. This other book was written to impart his hard-earned lessons to his family. The family book was shared with a few close friends, who urged creation of a public version, which became Wealth and Families. Which, is the book we'll refer to in this conversation.

In concluding my introduction, I'd like to read a beautiful blurb of the book by Howard's colleague, Kenneth A. Fruit of Harvard Business School. "It is hard to fathom, even once you've read it. The compactness of the wisdom and insight Howard Stevenson provides in this short book. His perspective is practical, yet enormously synthetic. Don't be confused by the direct "Oh shucks" tone. The simple folksy-sounding analysis of the complex problem of intergenerational wealth, belies Howard's incorporation, and absorption of much more of the magic of mathematically rigorous laws of compounding and diversification. Sprinkling in a foundational knowledge of the tax code and the law. It's that he has in his own mental frame incorporated a sense of people's humanity, their strengths and weaknesses, their goals and actual accomplishments. Based on successfully watching and doing for all these years. The wisest teachers have all along been life's best and most observant students. Howard and this integrative little book that you and your progeny should share, are just that."

That's really beautifully written.

H. Stevenson: Yes, and I didn't even pay him.

Sal Daher: I know. I know those things are tremendous.

How Howard Stevenson Started His Career

As a service to our younger listeners Howard, I'd like to ask a question about how my massively successful guests got started in their careers. Tell us about the choice that confronted you when you completed your undergraduate in mathematics at Stanford, and what you chose.

H. Stevenson: Well it was fairly easy. I discovered when I was at Stanford, there were people who were smarter than I am, love math more, and worked harder. I decided I didn't want to compete with them.

I had looked at both law school, and business school, and in my great wisdom I discovered law school was three years long. Business school was two, and I chose business school.

Sal Daher: A math major, you could count.

H. Stevenson: I could count. Even on one hand. And, then I discovered that in fact Harvard gave me a bigger scholarship than Stanford for my continuation. End of story on the career that got me into Harvard Business School. Staying on to teach was another decision, which I think is, I've always loved learning, and what better way to learn than to teach. So, I did that for a couple of years, and then played investment banker with a friend on doing deals for small companies. Then I came back to the business school to do ... Well I came back to tell them I wasn't coming back, and they said, "What are you going to do?" And, I said, "Well I'm going to be a VP of Finance of a real estate company."

That meant that they thought that I knew something about real estate. I'd never read a book on the subject. I never had done anything in the field, and they said, "Do you want to teach the course?" And thought, "What better way to learn?" So, I came back to the business school, started a real estate course, or took over one that was sort of moribund. And, did that for five years. I came up for tenure, and I got tenure, and the Dean told me to do something important. So, I left again.

Fear of the “Velvet Rut” Causes Howard Stevenson to Leave a Tenured Position at Harvard Business School

But, part of the motivation of leaving was that I saw a lot of people in this “Velvet-lined Rut’. That it's very easy when you're successful, to keep doing what you're already doing. But, in fact the only way you can get from doing the wrong thing to the right thing, is probably doing the right thing poorly. And, so you have to learn, and I watch people who run the top of little hill, who didn't want to go down in the valley to try something new.

Sal Daher: This is very interesting. Very, very interesting. I wanted to elucidate a little bit, what was meant by the Velvet Rut. You think that academics tend to perhaps specialize a great deal? Become the most knowledgeable in a field, but are afraid to venture out, where they're not as knowledgeable?

H. Stevenson: Or where there're people who won't think they're as knowledgeable. But, I don't think that's restricted to academics.

Sal Daher: Mm-hmm (affirmative)

Howard Stevenson: “A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.”

H. Stevenson: A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.

Sal Daher: Ah, yes. The optionality that comes in change.

H. Stevenson: And, we can never predict the results of change.

Sal Daher: No. No.

H. Stevenson: So, for me I said, "Look, I can always get a job." I think the dean, at that point was not interested in what I was doing, which was entrepreneurship and real estate. And I said, "Why do I want to work at some place where they don't value what I'm doing?"

Sal Daher: Mm-hmm (affirmative)

After a Sojourn in Entrepreneurship & Real Estate, Howard Stevenson Was Lured back to HBS

H. Stevenson: That led me to work with a private company. Became VP of Finance of a private company. Helped them raise money. Got some control systems in place. A whole bunch of things. So, I had a lot of learning, but after five years the learning went away and I ... The dean had heard that I was dissatisfied, and came and said, "You want to do something in entrepreneurship?" And this was a new dean, and he was a person I knew and trusted, and so I said, "Yes".

Sal Daher: It's a new direction and a new discipline that challenged you at the time. So, you felt that that did not have the risks of constraining you within this rut.

H. Stevenson: Absolutely not, and beyond that I knew that I could leave again.

Sal Daher: There are not a lot of people that would turn down tenured positions at The Harvard Business School. No, that is impressive.

Sal Daher: “There are not a lot of people that would turn down tenured positions at The Harvard Business School…” Howard Stevenson replies: “That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.”

H. Stevenson: That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.

Sal Daher: Yes, yes. That is a remarkable organization.

We're going to talk a little bit now about building wealth. What type of early stage investments have you made, and how have they turned out over time?

Howard Stevenson on Building Wealth: “I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.”

H. Stevenson: I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.

Sal Daher: That's right.

H. Stevenson: We've always tried to invest in places where, in the early stage, I prefer to invest when people have some revenue. Because, it points to the fact that there is somebody that's willing to have a cash-ectomy performed on their wallet.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: We like to be broadly diversified. I'm not trying to guess what's going to be in the next public market.

Sal Daher: You prefer companies that are post-revenue? That are ...

H. Stevenson: Post revenue.

Sal Daher: Earning, okay.

H. Stevenson: And ...

Sal Daher: In a growth stage?

H. Stevenson: In a growth stage, where they need the money to ... If it's in biotech, I prefer something where the scientific risk is out.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: But the market risk is still there. The best investment I ever made was in a company that had a really stupid business plan. But, the people were fantastic.

Sal Daher: Yes.

Howard Stevenson’s 400x Investment in a Company with a “Stupid Business Plan”

H. Stevenson: They were in an industry that I thought was very interesting. I thought that what they were doing in that industry made no sense. Over a couple of years, they morphed, and that's probably returned 400 to 1.

Sal Daher: Oh, the 400 to 1 return that everybody's looking for, to pay for the rest of the portfolio.

H. Stevenson: Yes. But ...

Sal Daher: Which company was that?

H. Stevenson: It's a company called Asurion.

Sal Daher: Asurion.

H. Stevenson: And, they are very quiet, I'm still invested.

Sal Daher: Yes.

H. Stevenson: They're doing very well. One of my friends, who's a noted venture capitalist, turned them down because the business plan was too stupid. That's been one of the worst decisions he ever made. Whereas, one of the other venture capitalists that put a little money in, it's the best decision he's made in his life.

Sal Daher: I know, those kinds of investments are few and far between, and when you turn one of those down, it's hard to live it down.

H. Stevenson: You have to live life forward, you can't live with regrets.

Sal Daher: True, true, true, but I think there is some room for learning.

Howard Stevenson’s Four Criteria for Investing

H. Stevenson: I think the thing that I've learned is. I have four criteria for investing in companies I know and love. Is the person honest? Because, if they're not honest they'll screw you some way.

Sal Daher: Oh yeah, that goes without saying.

H. Stevenson: Now how do you figure out if they're honest? Well, there're two ways: 1. You know them. Or, 2. One of my favorite questions is, "Tell me about the sharpest deal you ever did?"

And, it's amazing what people will tell you. One guy told me how he cheated the IRS. And you say, "Well if they can send you to jail, and I can't, and you're still willing to do it, I think I know something about your value system."

Sal Daher: That is remarkable, that is remarkable.

H. Stevenson: The second criteria, that I like to use in investing is: Are they nice? By that I mean, are they looking out for somebody other than themselves?

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: I've had experience in start-up or early stage investments, where the entrepreneur takes care of themselves really well, and the early stage investors not so much.

Sal Daher: Left hold the proverbial bag.

H. Stevenson: Well, or holding nothing.

We have one that just went public, and I think compared to my investments, I'll make 10 cents on the dollar, even though the company was successful. And, I went through three or four rounds, and I discovered what the person was.

But, trying to figure out are they nice, that means talking to people that know them. Looking at past decisions. I've had investors ... Or, I've had companies where we lost all the money, and they gave me stock in the next venture they did. Which is a good sign that they are nice people.

Sal Daher: Yeah, that is a nice sign, yeah.

H. Stevenson: The third element is: Are they curious?

Because if you believe that the future is impossible to predict, then anybody who thinks they know the future absolutely, is not looking around the corner. I go back to my example of the best one we ever did. They had a bad plan, but they were curious, and they said, "Where can we serve this group of customers, with a very profitable notion?" And, they found it.

Howard Stevenson’s Portfolio Returns; Warren Buffett-Like

And the last is: Are they smart? Because, this is a very complicated field. Now you ask how we've done. We've been doing it for about 25 years, since I sold down some of my position at Baupost, and left active management. I was the president for the first eight years. We probably return 17% or 18%. Probably 12% without the real big winner.

Sal Daher: Mm-hmm (affirmative). So, a little bit ahead of what Baupost has done in the same time?

H. Stevenson: Yes. I guess I look at it, and I say, when I've done the analysis ...

Sal Daher: Probably a lot higher beta.

H. Stevenson: Yeah. It's actually interesting, I've divided things into five categories. Stuff happened, I don't use the word stuff when I'm talking about this.

Sal Daher: Yes. I understand.

H. Stevenson: That was a ... The guy got a pancreatic cancer soon after we invested. The Tanzanian government it over, because it was too profitable, and they wanted their cousin to own it. And, you can go through some, but there weren't a lot of those.

There was the wrong on the bet category.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: It was a good bet, but it didn't work. And, I think in a lot of what we're doing, you've got to differentiate between, is it a good bet, and did it work?

Sal Daher: Yes.

H. Stevenson: Because, on a high variance bet, it's not going to work out all the time. But, one of the things we always try to do is say, "What are we betting on? What are the three or four conditions we're betting on?" And, then sometimes they're not going to work.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: Then there is, we made it safely through. Then there was a few good things happened. If you take the bottom three categories, I think we got about 7% out of that total pool because ...

Sal Daher: Wow! Well that's not bad, yeah.

H. Stevenson: When you're post revenue, in some ways you don't ... You're not going to lost everything.

Sal Daher: No, no.

H. Stevenson: But one of the interesting ...

Sal Daher: I've had at least one post revenue company that lost everything, because they were so highly leveraged. That's the thing, if they have revenue, there's a temptation to borrow.

H. Stevenson: Yeah, but I think that one of the things about it is, that if you're working with the right people, they are ready to say, "It's not working". Then they turn their task to getting something for the company. Instead of, as some people are, they'll just throw the dice, until they run out of money. Somebody who's nice and curious, is probably going to spend some time saying, "It really isn't working, is there some way we can salvage something for us, and the investors?"

Sal Daher: Yeah, that really is remarkable wisdom.

H. Stevenson: Then some good things happened. Largely that was when somebody else wanted it worse than we did.

Then there's the wows, and there are probably five wows. The one I told you about is by far the biggest one, but there were quite a few that returned 30 to 1.

Sal Daher: Wow.

H. Stevenson: And you say, "What field were you in?" They were all over the lot.

Sal Daher: Wow, so no specialization?

H. Stevenson: No specialization.

Sal Daher: Interesting. I was having a conversation with a young venture capitalist yesterday, who is a part of MIT angels. He says, "I'm very specialized in biotech. Everyone, of these deals I can see all the problems with them, and solve them and so on." And he said, "I don't understand how you can make money, without that level of specialization." The answer for me at least, is that I'm investing much earlier than he is. So, my judgment isn't really based on knowing exactly what the industry is, and so forth. It's much more based on character, and so forth. The sort of thing that you're talking about. That is what makes it possible for you to be investing. If, you're investing early enough. The remarkable thing is that you're investing in post revenue, and you're still making those judgment calls based on character, and making money. Which is tremendous.

H. Stevenson: I think that part of it is that nobody knows the future, no matter how many PhDs you have.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: In the biology field, I've had people present things to me. They say, "This is absolutely unique." And, I walk back to my office, and I get a business plan, that if I just crossed out the names, it would be the same.

Sal Daher: It would be the same, yes.

H. Stevenson: So, my belief that you have a unique upside. Just think, even Uber. How many examples are there of Uber?

Sal Daher: That's right. The ones that failed, there were many of them, and Lyft, which is still extant. But the reality is that, ideas are a dime a dozen, and execution is very, very hard.

H. Stevenson: One of my favorite stories about this is, in 1993 and the personal computer is coming out. We said, "There's got to be a role for this in home accounting."

Sal Daher: Ah.

H. Stevenson: We found a guy from Procter and Gamble, because we knew you'd need marketing.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: They'd written a software. It was good software. It worked fine on the apple. Unfortunately, not on the PC. And, it started literally within a week of Quicken.

Sal Daher: Ah!

H. Stevenson: So, you look and you say if I took two business plans, look at the resumes of the people, I couldn't tell the difference.

Sal Daher: No.

H. Stevenson: One is wallpaper, and the other is a fortune.

Sal Daher: Quicken, they managed to establish a process for developing a product. Which was really, tremendously impressive.

H. Stevenson: That, but I think they may have gotten into Staples slightly before we did.

Sal Daher: That's all part of the product development process.

H. Stevenson: Yep.

Sal Daher: The product is developed enough, that Staples can distribute it. As a matter of fact, I'm trying to think of who it is that I interviewed recently who has the founder of Quicken as his ...

H. Stevenson: Scott Cook?

Sal Daher: Scott Cook, yes is his idol.

H. Stevenson: Mm-hmm (affirmative)

Sal Daher: I think it came out in the podcast.

H. Stevenson: Yeah, a P&G guy. He's not a technology guru.

Sal Daher: Well, he's another P&G guy, because you guys were backing a P&G guy as well.

H. Stevenson: Yes.

Sal Daher: Well I'm in the process of writing ...

H. Stevenson: HBS guy too.

Sal Daher: HBS guy. Well I'm in the process of writing a check right now to P&G, J&J, HBS guy. So, I hope it's going to work out.

H. Stevenson: I can guarantee you won't know until it does.

Sal Daher: I know. That is absolutely true. That is absolutely true.

Howard Stevenson on whether Entrepreneurship Can Be Taught

You've done a lot of research, and given all your business experience. This is a tough question. Do you believe there are certain personality types that are more conducive to entrepreneurship, or can it just be taught to anyone? Bill Aulet, thinks it can be taught.

H. Stevenson: Can I answer no, to both questions?

Sal Daher: Absolutely.

H. Stevenson: Well, in the old days before I started to work in entrepreneurship, there were people who said, "Well, they've studied it carefully and you need ... Being a first born helps, because 44% of the entrepreneurs are first born." Failing to notice that 44% of the population is first born.

There were other deep studies of locusts of control, and other things. It turns out to be nonsense. I don't think that there's a personality type. Because, if you're going to run a cable television company, you could be the wallflower at the accounting convention.

Sal Daher: Right, right.

H. Stevenson: If you're going to run a promotion based ... Look at Steve Jobs’ personality. I mean ...

Sal Daher: Absolutely.

H. Stevenson: I can go through Ken Olsen.

Sal Daher: Mm-hmm (affirmative)

Howard Stevenson’s Definition of Entrepreneurship

H. Stevenson: You look at the great entrepreneurs, and if you can find a single personality type, I think you've got a flawed test. So, I would reject that. On the other hand, I don't think that you can teach entrepreneurship to anybody. What I always thought we're doing when we're trying to teach entrepreneurship. Is if you take the students who come to Harvard Business School, they're opportunity driven. And, as you may know, I tried to define entrepreneurship as the opportunity beyond the resources you currently control.

Sal Daher: Yes.

  1. Stevenson: Almost any kid, who walks into Harvard Business School, Sloan School. They didn't get there because they were shy, retiring ...

Sal Daher: No.

  1. Stevenson: Just hoping to make it to the first level of the company, and then they'll stop.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: What we tried to do is, to show them that somebody like them could accomplish it. So, you had the cases on women, you had cases on African Americans, you had cases on people who started late, people who started immediately. Although, I tried to discourage people from starting early. Because there's a lot of research that shows, you got to know something about your customer in your market place.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: You ought to be known. Because you're going to go out to raise resources, and the more that other people know you and trust you, the better off you are. But, I think what you have to do is have the self-knowledge to say ... Probably politically incorrect say, "I know there's a lot of money to be made in China, but it won't be made by people that look like me."

Sal Daher: Mm-hmm (affirmative)

No, really the problem of information, and the fact that it's broadly disseminated, and people who have local information have an advantage, over someone coming from the outside. That is broadly recognized. I see the point that you're making, that you think that what the academic experience can do, is inspire people with models.

  1. Stevenson: Mm-hmm (affirmative)

Sal Daher: That have, through cases and so forth. They can get people thinking, "I can do that." Which is a little bit of what I hope to do through this program, with angel investing. Is, to get people saying, "I don't have to be Mark Zuckerberg, to invest as an angel. I can be a guy who has built a business, who's got some experience and so forth. And, I can probably help some young person who's building a business."

  1. Stevenson: Well, what I said about ... There were two things that I was trying to do, accomplish. One was planting time bombs in people's mind, that exploded when they stepped on the opportunity.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: The second thing that I think you try and do, is keep them from doing really stupid things.

Sal Daher: Ah, okay.

  1. Stevenson: I have a sign in my office at home that says, "It's great to learn from other people's mistakes, and you've been a real blessing to me."

Sal Daher: Yeah. The ability to learn from other people's experience. It's a lot cheaper than learning from your own experience.

  1. Stevenson: That's what you try and do as a teacher is ... But, you also have to say there is no one right way. The business plan, no I've never had a business plan that worked out the way it was written.

Sal Daher: My first interview with Michael Mark, who's founded several companies as a technology founder. And, he said he had invested in more than 200 startups, and he could think of one business plan that went according to plan, Progress Software. All the other ones necessitated pivots.

  1. Stevenson: The first thing I would say is, the fact that writing a business plan can be helpful, because you have to express the bets that you're making. So, you actually know what you're shooting at.

Sal Daher: Absolutely.

  1. Stevenson: But, if you think that the business plan has foreseen all possible combinations ... Even just timing is at best, a random event in some ways.

Sal Daher: That's right.

In your book I think you quote Eisenhower saying, "Planning is everything. Plans are nothing."

  1. Stevenson: That was my doctoral dissertation. Had a lot to the defining strengths and weaknesses. Didn't matter what you wrote down at the end. It was, you were asking the question, "How do we compare to the other people trying to accomplish the same thing we are?"

Sal Daher: So, going through the process of planning, you develop understanding. Even though things don't work out as you expect, at least you know a little bit about the lay of the land. So that when things change, you can regroup and do an informed approach.

  1. Stevenson: I would also say that one of the things that I look for in a business plan, is have they looked honestly at the competition.

Sal Daher: Ah.

  1. Stevenson: I can't tell you how many business plans and software I've read that says, "We've done this for $300,000, and it would take everyone else 2 million."

Sal Daher: I've seen a lot of those, yeah.

  1. Stevenson: There's a lot of competition out there, and you need to have some humility on the part of the entrepreneur and the investor to say, "We're going to be out there in a tough market. How are we going to win? Where do we have a competitive advantage?"

Sal Daher: In those situations, one trick that I've learned from some of my colleagues in Walnut Ventures is, give them a little time. If they're at the beginning of the race, don't tell them that you're going to invest with them. Give them three months, and then see where they are, in those three months. See how much progress they've made during that time. They've told you everything about where they are now. If, in three months they're still telling you the same things, and they have competition, so that they're not very good at implementation. So, they're not going to get anywhere.

The Best Due Diligence Is Time

  1. Stevenson: We always say the best due diligence is time. In fact, I was talking to one of the famous venture capitalists, who was a former student, and a good friend. And I said, "Isn't due diligence highly overrated?" And he says, "Yeah, I need to make five calls." He said, "I just need to know, which five people I talk to." I think that's true in most of this area for us as investors is, do you know somebody that knows the field? Do you know somebody that knows the person? Do you know somebody that knows the state of the financial markets for that particular fashion element? There's a lot of stuff ...

Sal Daher: Absolutely.

  1. Stevenson: That, you don't need to talk to everybody in the world. And, getting a 2000-page report from Bain and Company, or McKinsey, is not going to help you understand where the world is going.

Sal Daher: No, no it's not. It's not.

How Baupost Got Started and How Investing Wizard Seth Klarman Was Hired

Howard, I'm very curious to hear the story of the founding of Baupost. Hiring of Seth Klarman. For those listeners who do not know of Seth Klarman, think Warren Buffett a quarter century younger.

  1. Stevenson: I'll start with a recent search that I was working on for a not for profit. The people said, "We need to hire somebody like, X." And I said, "No you're going to be hiring someone like X was 30 years ago."

Sal Daher: Yeah.

  1. Stevenson: That was true of Seth. Here you had an extremely bright young man, who loved two things.
  2. He liked stocks.
  3. He liked betting.

Baupost was founded because, Bill Poorvu had sold WCVB, or was selling CVB, and I had worked with him quite a bit. And, Jordan Baruch ...

Sal Daher: Bill Poorvu, fellow professor at the Harvard Business School.

  1. Stevenson: Yes.

Sal Daher: Who had been owner of the television station, WCVB channel 5, here in Boston.

  1. Stevenson: A part of it, yes.

Sal Daher: A part of it, yeah.

  1. Stevenson: And, Jordan Baruch was a professor at MIT.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Who, was one of the early ... I think he was employee number four, Bolt, Beranek & Newman.

Sal Daher: Okay, okay.

  1. Stevenson: And Isaac Auerbach was one of the early employees of UNIVAC.

Sal Daher: Okay.

  1. Stevenson: And, he was a good friend of Jordan's.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, as Bill was about to receive some money he said, "Help me how to figure out how we get the money managed." So, the first hire was an administrator. Deloitte's going to come in, you better make sure you can account for it.

Sal Daher: You can put it in somewhere.

  1. Stevenson: Well, make sure you can account for it first.

Sal Daher: At least cash the checks.

  1. Stevenson: Yes.

Sal Daher: Right.

  1. Stevenson: Then Seth was a student of Bill's, and he said, "This is an unusual guy. What are we going to do with him?" And I said, "Who knows?" We started out looking at, how do we select money managers?

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: This was 1982. After you talk to a number of money managers, you say, "We can do better than that."

Sal Daher: The industry was not highly developed at that time.

  1. Stevenson: The industry, it was ... White shoe, everybody was into recreational vehicles.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It was a screwy industry, and always has been.

Sal Daher: Right, right.

  1. Stevenson: We hired Seth. We looked at ...

Sal Daher: But what is it that you saw in Seth, that set him apart?

  1. Stevenson: The same things that I talked about earlier. He was honest. He'd worked for honest people.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I wouldn't hire somebody from, you can name the firm.

Sal Daher: Absolutely, yeah.

  1. Stevenson: He doesn't even need to work there, I don't want to work for me. He certainly understood the charitable notions that I think the other founders had. I think they were all deeply committed to other people, and that was attractive to him.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It wasn't, they were trying to make the most money, and so you saw the niceness come through there. Clearly curious, you don't work the pink sheets, if you're not curious.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Because, nobody else was covering them.

Sal Daher: No, no. Mm-hmm (affirmative)

  1. Stevenson: That was one of the things I liked about him is, he was willing to do original research. Rather than call up Goldman and say, "What's hot today?"

Sal Daher: Yeah.

  1. Stevenson: And their answer is, "Whatever I got a lot to sell off."

Sal Daher: Exactly, exactly.

  1. Stevenson: And, he's clearly smart. He's a Baker Scholar. So, we saw that and ...

Sal Daher: But the idea of patient investing, of buying things that are deeply underpriced, and holding them until they are, not fully valued, I know you always sold early. But, until other people begin to have an interest in them, that is something that's attracted me to him. Because, it's a lot similar to what my partner and I did in emerging markets. We were always early, buying stuff at incredibly cheap, and selling into the market as it began. People made a lot of money buying stuff off of us. And, the same thing with Seth Klarman. So, how did you detect that? That quality in him.

  1. Stevenson: I like to think I even taught him some of that. The expression we gave was, "Feed the birdies, when they're hungry."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: And, he transitioned into being the president after about six years. Because, people don't want to give a 26-year-old all of their money. And, we had all of the money, of all of the clients.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, there was concern. This is a different approach. I think one of the things that also Seth has been brilliant at, and I like to think I had something to do with it. Is, not ... Because we had all the money, you didn't get stuck on we're buying big cap stocks. It was ...

Sal Daher: Ah, okay.

  1. Stevenson: So, a lot of the success was, you moved from sector to sector. So, you bought real estate, when real estate was dead cheap. You bought busted bonds. I can go through the history and ...

Sal Daher: And, given the composition of the investors, the original investors. They were a small number of people, who had a long-term outlook. They had a much healthier attitude towards the market, than a lot of people have today. Because if you're a young, rising fund manager, you live or die by your last results. In your ...

  1. Stevenson: No. And, frankly as we're building the business, we turned down a lot of those people.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: We didn't think the acquisition of assets was important as the acquisition of good clients.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Also, we were interested in who the family was. Not, do they have a name.

Sal Daher: Right, right.

  1. Stevenson: But, how they dealt with each other.

Sal Daher: Right.

  1. Stevenson: Because, you were trying to create something, and I think Baupost still has that feeling that it's everybody's in it together. So, it was, everybody participated in the performance fee, down to the secretary. Everybody ate from the same pizza box.

Sal Daher: That is wonderful. That's something Warren Buffett complains says his secretary pays a higher tax rate than he does.

  1. Stevenson: Yes.

Sal Daher: In this case, even the secretary is paying a high tax rate.

  1. Stevenson: Yep.

Sal Daher: A low tax rate, I should say.

  1. Stevenson: Yes.

Sal Daher: Because, she is benefiting on the ... Or he, in the ...

  1. Stevenson: Right. That was certainly the case then, and they tried to spread through.

Sal Daher: That's really laudable. I have great admiration for the firm that you helped put together, and its outcome is really impressive.

  1. Stevenson: Well it's Baruch, Auerbach, Poorvu and Stevenson, is where the name came from.

Sal Daher: So it's Baruch.

  1. Stevenson: Baruch, Auerbach.

Sal Daher: Auerbach.

  1. Stevenson: A U B A

Sal Daher: B A

  1. Stevenson: A U

Sal Daher: A U

  1. Stevenson: P O and S T

Sal Daher: And, S T of Stevenson.

  1. Stevenson: Yes.

I think it happened with a piña colada somewhere on the Caribbean.

How Howard Stevenson Shops for Cars

Sal Daher: Howard, I find the way you shop for cars, particularly instructive. Please elaborate.

  1. Stevenson: I don't shop for cars. When my oldest child turned 16, I handed him a signed check and said, "Go buy me a car." And, people look at me like I'm crazy. But, in fact what I was trying to say to him is, "I trust you. I believe you'll do good research, and I respect your judgment." Because part of the process of educating kids is not saying, "I'm smarter, better, faster than you are." It's saying, "I am asking for your help in important things." I look at buying a car ... First, I hate dealing with car dealers, so I look at it as a pain. I was reasonably sure my sons, who love cars ...

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Would spend more time harassing car dealers. Which, made me feel like I was getting even with these guys. But, in fact they really do the research thing. So, they come back with a great knowledge of the packages that are available. What you want, what you don't want, and what was my risk? A couple thousand dollars, at worst?

Sal Daher: Yeah, you might overpay a little bit for a car, but your kid will learn.

  1. Stevenson: But, I don't think I ever overpaid. I am absolutely sure that they got better deals than I would. Because, I'd walk in and say, "Oh, I like that car. How much it cost?" Because, I want to get out as fast as I can.

Sal Daher: That's interesting, my father-in-law used to do that with his children. He used to give them, when they went to college, the money for the whole year. Give them one check and say, "Here, you've got to pay tuition, your cost of living, everything." Of course, he was overseas in Argentina, and they all came here, and it all worked out. But, sometimes it goes wrong. My dad had a cousin, who when he was away at a university, his family sent him money for the year, and he took the money, and he gambled.

  1. Stevenson: Yeah.

Sal Daher: So, he didn't have any money for tuition, or anything like that, and then he was afraid to go back home, when everybody else graduated, because he still hadn't studied.

  1. Stevenson: Well, but again a car is a different thing.

Sal Daher: Absolutely.

  1. Stevenson: I would know whether they bought the car or not.

Sal Daher: There are guardrails, yeah.

  1. Stevenson: And, they probably do have fraud and collusion among the dealers. There's lots of reasons why that's, trust but verify in some ways.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: But it leads to a lot of trust in the judgment. But, it's also a sign of respect for their work, and their ability to think, and their ability to plan. And, I think they figured out that they would get the used car. So, they bought cars they wanted on the next round.

Sal Daher: Yeah, so they're highly incented to do that. And, it's consonant also with your idea of having the children be brought in early on wealth, brought in early on responsibility for money, and so forth. Which unfortunately nowadays, children really don't have much of a sense of that, of responsibility with money, and so forth. They don't work, they don't make their own money. At least in my experience, children in America work a lot less, than they used to 20, 30 years ago.

  1. Stevenson: The rules are harder to comply with, if you're a company.

Sal Daher: Yes, absolutely.

  1. Stevenson: We have a friend who owns a car dealership and he got an OSHA citation because he had his 15-year-old son sweeping the floor. So, to me the question of how do you teach responsibility?

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: How do you teach trust?

Sal Daher: Yes.

  1. Stevenson: How do you live by example? Are the critical things in Wealth and Families.

Sal Daher: That is really beautifully said.

 Now what advice would you give a young person about building his or her own wealth?

Howard Stevenson’s Advice for How Young People Can Build Wealth

  1. Stevenson: I think the most important thing you can start at is, assets are more important than income. At least for me I can speak only in the things I tried to teach the kids. But, if you have a high income, you usually have high expenditures. Whereas, some of my colleagues were going off consulting their ... Consulting was a euphemism for teaching in outside courses at GE. They were making a lot of money every day, and they go their XKE (Jaguar XKE, a coveted sports car of the era) quite quickly. I went off to places like Lima, Ohio, and I was paid $300 a day, but I got 1% of the company.

Sal Daher: Ah.

  1. Stevenson: I always tried to look at the assets side, because I couldn't spend it.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Which meant, if I was right, I was saving it.

Sal Daher: So, you looked towards building assets?

  1. Stevenson: Yes.

Sal Daher: Instead of building income, necessarily?

  1. Stevenson: Yes.

Sal Daher: And in time these assets will generate income, but you weren't looking about income today.

  1. Stevenson: I wasn't looking for income today, and I was always trying to say, "How do I use my current income to pay the taxes?" So, I could compound after tax, rather than pre-tax.

Sal Daher: Yes. And, another thing that is mentioned in your book. You emphasize very clearly that a house, is not an asset.

  1. Stevenson: No, and a mortgage is ... I think of a mortgage as a funny beast.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Because when I didn't have any money, as I said, "I was a scholarship student."

Sal Daher: Right.

  1. Stevenson: Then a mortgage was a functional equivalent of rent.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I still have mortgages, even though I don't need one. But I think of it as the cheapest way to lever my investment portfolio.

Sal Daher: Well yes, if you have been reliably producing 16%, 17% returns every year, it makes sense to borrow at 3% or 4%. That is remarkable. So, I really like that advice. Concentrate on building assets, and think about high income leads to high expenditures. That reminds me of a story of Mitt Romney.

  1. Stevenson: Mm-hmm (affirmative)

Mitt Romney & a Young Colleague on Spending

Sal Daher: This is after he had had his initial success. He was with Bain Capital already. A young associate got his first bonus check and he went out and he bought a fancy sports car, and he gave Mitt a ride. Mitt was famous for beat up station wagons. Are you familiar with this story?

  1. Stevenson: No, no. I know Mitt well, he was a student of mine. Same class as George Bush, by the way.

Sal Daher: I'm not going to ask, who got the higher grade.

  1. Stevenson: You don't need to.

Sal Daher: I know, no. But, anyway ... So, the young partner said ... Is driving Mitt around, and Mitt was very impressed, he says "Geez, I wish I could afford a car like this." And the young associate said, "Well, Mitt you're worth hundreds of millions of dollars. You can afford this." And the kid didn't get the sense that Mitt didn't think he could afford the fancy sports car. This young kid with his first bonus check goes out and blows it on a fancy car.

  1. Stevenson: Well, I think the other thing Mitt would probably say if you got him under sodium pentothal. He doesn't drink so ...

Sal Daher: Yeah, I know. That's the darned thing with Mormons, you can't get them drunk.

  1. Stevenson: I was raised in Holladay Utah, so I understand it.

But I think it's also what behavior you're modeling for your kids.

Sal Daher: Right.

  1. Stevenson: Because, as my grandmother would say, "Your actions speak so loudly, I cannot hear a word you say."

Sal Daher: That is very wise, very wise.

Why You Should Review this Podcast on iTunes – It Really Helps Us iTunes Page for the Podcast Where You Can Review and Subscribe

Coming up next, we will be shifting to managing your wealth. A matter about which Professor Stevenson has deep experience. However, before we do that, I'd like to take the opportunity to thank listener, SewNow, who left this review on iTunes. "Definitely worth a listen. The series is full of very useful information. It is clear to me that Sal has put a lot of effort into it." SewNow, you have done your part to support the podcast. We bring stellar guests like Professor Howard Stevenson. We come to you free, with no schlocky ads, and professional sound, and you can help by following the example of SewNow, and leaving a review on iTunes. The listenership is growing with every episode, breaking records. It's something like 10% or 15% every month, that they're growing now. That growth combined with more reviews, will eventually cause the iTunes algorithm to start featuring the show. Thus, your review is critical to us. Thanks

"Most of the wealthy people I know, are better at making money than managing it."

Howard, in your book Wealth and Families you state, "Most of the wealthy people I know, are better at making money than managing it." Please take this opportunity to elaborate on taking on the responsibility of managing your wealth.

  1. Stevenson: Well I believe firmly that, you're accountable for your own actions. And, not everybody takes that to the management of their wealth. They think they can outsource it, and the results are often what you'd expect. But, I think it's also, you have to know your own objectives. Why am I interested in wealth? Is there an amount beyond that, it's for charity, or for my kids? I think that thinking through clearly, what your objectives are, and when I use the word your, I mean your spouse, and you probably. Because, if you start early enough, the kids don't have major voice.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: But it's also a subject that's quite un-discussable. I don't know how wealthy many of my friends are, because we never discuss the subject.

Sal Daher: Right.

  1. Stevenson: It seems to me that at least within the family, you've got to say, "Here's where we are. Here's where we're going. Here's how we're going to get there."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: That involves a lot of decisions that are complicated. That's before you get to what you do with it, when you have it.

Sal Daher: Right, right.

Howard Stevenson’s Journey in Investing Began by Reading Graham, Dodd & Cottle in 1961

  1. Stevenson: I guess for me, the question is ... Most people would rather talk to their kids about sex than money. So, you don't learn it at home, in most cases. So, you have to in fact reach out to say, "what do I need to know, to be successful?" So, I started by reading Graham, Dodd, and Cottle in 1961.

Sal Daher: Not a bad start.

  1. Stevenson: It's probably as good a start as you can have if you want to be a value investor.

Sal Daher: Absolutely, absolutely, yeah.

  1. Stevenson: That probably is one of the things that made Seth appeal to me. But, all along I felt like, I had to take ownership of my own results. That didn't mean you didn't use brokers. That didn't mean you didn't hire a financial planner occasionally, but you had to take responsibility for your own results.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: But that's humbling.

Sal Daher: It is, it is.

  1. Stevenson: Because, you'll never know all you need to know.

Sal Daher: And, taxing because you will inevitably have reverses.

  1. Stevenson: Yes.

Sal Daher: And people have the attitude that if they ever lose any money, they've failed. But the goal is not to never lose money. The goal is to grow over time.

  1. Stevenson: Well, and anytime you lose money ...

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It helps to say, "Why?"

Sal Daher: Right.

  1. Stevenson: And you go back to my five categories. Stuff happened, there's nothing you can do.

Sal Daher: Right.

  1. Stevenson: I was wrong on the bet. I knew the bet, but something happened that was different than I was betting on.

Sal Daher: Right.

  1. Stevenson: Also, the humility on the other side to say, "I wasn't a genius because I invested in X."

Sal Daher: Mm-hmm (affirmative)

"I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."

  1. Stevenson: "I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."

Sal Daher: Right, right.

  1. Stevenson: Whereas, I can assure you, if you listen to many of the professional investors they will say, "I knew it all along."

Sal Daher: Right.

  1. Stevenson: And, in fact many of the 100% losses I had were done when I was investing side by side with professional venture capitalists.

Sal Daher: Right.

  1. Stevenson: Because, their motive is to shoot for the moon.

Sal Daher: Right, right. That is pretty deep. Very good.

I guess we talked about this a little bit, but could you go a little bit more into hiring the professional help you need, beyond the financial planner and CPA. When someone starts to accumulate significant wealth. Give us some hints. This is well explained in your book, but maybe give some teasers, that will lead people to look in your book for a really well-developed approach to it.

  1. Stevenson: Again, like most things, I'm somewhat humble about giving the absolute rules. But, there are people you know and trust. The first thing is, I don't require a lot of due diligence if Bill Poorvu calls and says, "I want to do this."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: You say, "How much can I come in for?"

Sal Daher: Right, right, right.

  1. Stevenson: After working with him for 43 years, I have a great deal of faith in his judgment.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: And, they're not all going to win, but when you know and trust people you can get by with little due diligence, and you can ... Also, it's going to be low cost. I don't pay him a fee.

Sal Daher: Right, right. In contrast to the process that you went through when you're setting up your family foundation. The Stevenson Family ...

  1. Stevenson: Charitable Trust.

Sal Daher: Charitable ... No, no, not the trust but the one for managing the funds of the family and ...

  1. Stevenson: That we just did ourselves.

Sal Daher: Right, right, but you had quotes from ...

  1. Stevenson: We had quotes from ...

Sal Daher: From various people, and they were just absurdly high. So, you brought your son into it, and then you hire people to do particular chores, and so on and so forth. So, you don't have a lot of high overhead of a normal family office.

  1. Stevenson: Well you can see looking around, we don't have a lot of high overhead.

Sal Daher: No, no, there's not a lot of overhead.

  1. Stevenson: The mahogany furniture from IKEA is ... Shows through.

Sal Daher: It's extremely functional, very functional.

  1. Stevenson: But, then when you start to say, "The next level is things that come with recommendation." But, even with recommendation you have to actually go out and talk to people.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It depends on who recommends them. Because, there are people that are chasing the last hot deal, and I don't want to be in with them. So, I have to know not only if it's recommended, but who's recommending it.

Sal Daher: Who's recommending, that's right.

  1. Stevenson: And, why it is.

 Then if you're trying to go out to the rest of the world, it requires a lot of due diligence. It's probably going to be expensive.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, for me, I've tried to stay in those first two rings, of people I know and trust, and people that come recommended by people that I know and believe in. There you're going to pay more fees, but that's okay.

Sal Daher: Still you're probably much more involved in the management of your wealth, than most people who are comparably wealthy. Perhaps also, because you know so much more. I think that, that is certainly a great lesson here.

  1. Stevenson: Think about how hard it is to earn a million dollars.

Sal Daher: Yes.

  1. Stevenson: I'm not saying how much I have, but if you have a hundred million dollars, it's easy to lose a million dollars.

Sal Daher: It is.

  1. Stevenson: Or, to make it.

Sal Daher: That's right.

  1. Stevenson: What I say is, "the first million dollars is really hard, and the second million is a matter of time."

Sal Daher: Exactly, exactly.

  1. Stevenson: So, having the long-term perspective, and I could go through some fancy math to show you that in fact, having long term perspective actually is highly beneficial. Because, most of the world is interested in the first two or three years of return. Warren Buffett is the classic example where I think, if you look at his results, it's largely because he bought long duration cash flows.

Sal Daher: Ah. He's not buying the first three years, he's buying 15, 20 years out.

  1. Stevenson: He's buying the 3 to 15 year.

Sal Daher: Right.

  1. Stevenson: And, he's not competing against the ...

Sal Daher: Which most people are not interested ... Oh no, that's ...

  1. Stevenson: That's too uncertain.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, he spends a lot of time looking at how stable it is. He talks about building moats.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: All those kinds of things, and I think that's a ...

Sal Daher: Right, right.

  1. Stevenson: I didn't learn it from Warren Buffett, but when I started to examine his way of dealing. I think that's what we've always tried to do is say, "Look, I can't outguess the professionals that have better information, quicker execution, all that in the first three years."

Sal Daher: Yes. Mm-hmm (affirmative)

  1. Stevenson: But if I can find things, that have long duration cash flows.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I'll probably do quite well over time, because even if you buy something at 10 times earnings, and it’s got 5% growth, you've got a 15% yield.

Sal Daher: Right, right. Now that is a ...

  1. Stevenson: It's a pretty simple ... You don't need the higher math to ...

Sal Daher: No, you don't.

  1. Stevenson: Make small amounts of growth, and good profitability ...

Sal Daher: And, consistent growth over time.

  1. Stevenson: Consistent ...

Sal Daher: Yes.

  1. Stevenson: It doesn't mean you don't have down years, because one of the things ... My experience is like in one of my other wow investments, was yeah ... But, they were willing to make the investments when it mattered.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So many of the people would have done really well. See, the first thing we do is serve our customers. The second thing we do is we do it at a profit.

Sal Daher: Ha.

  1. Stevenson: But the first question is doing, are we serving our customers well?

Sal Daher: Mm-hmm (affirmative) because ...

  1. Stevenson: That goes back to what we talking about in terms of criteria.

Sal Daher: Because serving your customer well is what assures continued growth, continued profitability over the long term, and not just the short bursts in the first few years.

  1. Stevenson: The profit is absolutely critical, because whether you're not for profit, or for profit, if you don't have profit, you're out of business.

Sal Daher: Something's got to float the boat.

  1. Stevenson: Yes.

Talking to Your Kids About Money

Sal Daher: Yeah. I really like your approach to letting kids know about family wealth and bringing them up early, and so forth. As a matter of fact, I love that little exchange at the HBS that I attended. A gentleman of advanced years, after you explained that you have to let your children know early on said, during the question and answer session, "So how do you think I should tell my children?" And you looked at him and said, "Looking at you, I think it's a little too late."

  1. Stevenson: Well, I do get myself into trouble.

Sal Daher: I know, it's just ...

  1. Stevenson: It seems to me, that many people underestimate, particularly in this internet age, how much the kids know. They know how much your house is worth.

Sal Daher: Right.

  1. Stevenson: They can go on Zillow.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Or their friends will.

Sal Daher: Yes.

  1. Stevenson: They can find salaries. They can find the size of your private foundation, if you have one. There's no limit to the data they can have. And, by the way, there's no limit to the data they can make up, or their friends can make up too.

Sal Daher: The imagination.

  1. Stevenson: Imagination.

Sal Daher: Gallops way ahead of reality, yes.

  1. Stevenson: they can look at the prices of your cars. But it seems to me, if you start talking to your kids at 10, 12 about, "Well aren't we fortunate. We've been very lucky. We have to work hard at making sure that it's there, and we're working with honest ..." You start talking about what the criteria are to work with people. You start denigrating the get rich quick schemes.

Sal Daher: Yes, yes.

  1. Stevenson: you start to in fact have them start thinking about, their own financial planning. You also have to help them understand that if you want to be an investment banker, you'll have one life. And, if you want to be a social worker, you'll have another life.

Sal Daher: Yes, yes.

  1. Stevenson: You're not telling them that one is good and the other is bad, because at least to me, I never wanted the kids to think that having money was the measure of success. Having money is a measure of the options you have for the future. But, if you want to do something that doesn't make you money, you're going to use up some of your capital, and that's fine with me. I'm not going to measure my life on whether you've made money.

Sal Daher: So, your job is to explain the consequences of the choices they are making. So, that they make decisions in a way that makes sense. And, they can make the tradeoffs. There's nothing in life that's not a tradeoff.

  1. Stevenson: Yeah, well my sons said that I raised him by the case method. I said, "What do you mean?" He said, "if you really like something, you'd say if you'd thought it through, go do it."

Sal Daher: Right.

  1. Stevenson: If you've really hated something you'd say, "Have you thought it thorough carefully, because here are some things that you might want to think about."

Sal Daher: It's a case study method.

Now please explain your thinking behind tracking of your family's total wealth, rather than your own net worth. I found that quite valuable.

  1. Stevenson: Part of it is, when you start to think about giving away money. You probably start thinking when the kids are young with some charity. As the kids get older, when do I transfer wealth to them? As you have more money, you start to say, "Okay, my assistant needs help with the mortgage." Or something.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Now if you only track only your net worth, you feel poorer every time you do that.

Sal Daher: Yes, right, right.

  1. Stevenson: If you start to say, "Okay, I want to include the wealth of transfer to other people." And, even the taxes you can say, "I'll feel very good, even though my net worth, as reported on gap basis, may be 15% of the money I've made." But, I'm measuring my contribution to the economic wellbeing of people I care about, except for my Uncle Sam.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, I try to minimize that.

Sal Daher: Yes. You care about your whole family, except your Uncle Sam.

  1. Stevenson: As I say, "I like my kids, or I love my kids. I can stand my grandkids. I hate my uncle."

Sal Daher: Oh! Listeners, I forgot to tell you. Howard's book has cartoons. Here's one. Dogbert is sitting behind a desk talking to Pointy Hair Boss under the caption, "Dogbert Financial Advisor"

Dogbert: You should invest all your money in diseased livestock.

Dogbert continues: It would be unwise to invest in just one sick cow, but if you aggregate a bunch of them together, the risk goes away.

Dogbert concludes: It's math.

 Pointy Hair Boss replies: Suddenly I feel all savvy.

 Kindly distinguish between a herd of diseased cows and real diversification.

  1. Stevenson: I think that one has to ask the question, "What are the drivers?" And obviously diseased cows are diseased mortgage backed securities, have a single driver.

Sal Daher: Right.

  1. Stevenson: In spite of the fact that somebody from your alma mater might say these are diversified portfolios, because they are uncorrelated having real estate in Miami, Las Vegas.

Sal Daher: Yes, yes.

  1. Stevenson: Phoenix.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: And Boston.

Sal Daher: Right, right, right.

All under written very poorly to a certain sector of the economy. Likely to lose their job and certainly ...

  1. Stevenson: All at once.

Sal Daher: All at once.

  1. Stevenson: In our investing, as I said earlier, as somebody said, "What are your guidelines?" And the answer is, "We have no guidelines."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: You look at some things and you say, "I think this is a fairly stable way of investing. I don't like to put into funds that lock me up for 10 years. Not because I need the liquidity, but because I want to be able to change my mind."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I just looked at a fund today that had a 20-year time frame.

Sal Daher: Oh, wow.

  1. Stevenson: Now that's fine for me.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: If I control when to sell.

Sal Daher: Right.

  1. Stevenson: It's less fine for me, if they control when to sell.

Sal Daher: Yes.

  1. Stevenson: I won't get into some statistics I've done on the leverage buyout groups. But, I think I could prove to you that their average holding period is under three years.

Sal Daher: Oh, yeah.

  1. Stevenson: In spite of the fact that they try to tell you they've done a great job with managing, but lever it up.

Sal Daher: Yeah ...

  1. Stevenson: Take a bit out, and get out of there. So true diversification to me is, look for the underlying drivers. And, if they look the same ...

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: That's not diversification. Let's take the example that everybody thinks Spider is diversified.

Sal Daher: Right.

  1. Stevenson: Let's see, what percentage of the Spider is high technology unicorns? It's like 25%?

Sal Daher: That's right.

  1. Stevenson: The top 10 stocks?

Sal Daher: Yeah, yeah. They're swinging the index now.

  1. Stevenson: Yeah. And, is that diversification, just because you have 500 stocks, if it's all dependent on this one group of ...

Sal Daher: At one point, I remember Apple was 3% of the market cap…

  1. Stevenson: Well it ...

Sal Daher: Of the S&P.

  1. Stevenson: In 2001, I think ... I'm getting old and senile, but as I believe, technology represented well over 50% of the S&P in 2001.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, anybody who thought they were diversified, was smoking stuff that smelled funny.

Sal Daher: So, that sets up our last question here.

In your HBS talk, you mentioned starting your professional career when blue chip stocks like, Nabisco sold at four times earnings. Today, cyclically adjusted price earning rations of the S&P 500, is closing in on 30. How does one manage one's money when all investments, not just the S&P 500, but all investments are priced to perfection?

  1. Stevenson: I think it was Bernard Baruch who most of your young listeners, won't know who he was.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: He was one of the great investors of the '30s and '40s.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: He said, "Sometimes the best investment is going to the beach." As you might know from Baupost's history.

Sal Daher: Yes.

  1. Stevenson: Many times, we have 45% cash.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: 30% cash. In our case, now we do things that structure deals. I'm not expecting to shoot the moon. We've structured some preferred stocks like Warren Buffett does. He just did a deal with an 8% preferred.

Sal Daher: Right.

  1. Stevenson: And a big chunk of equity in the company.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, trying to figure out how preferences, and structure protect you is probably the thing you have to do right now.

Sal Daher: Right.

  1. Stevenson: That's very different from when stocks were selling at four times earnings you say, but I started investing for other people in probably '62. Then stocks yielded more than bonds, because bonds were more secure. Now, stocks yield more than bonds, because bonds yield nothing.

Sal Daher: Yeah, exactly.

  1. Stevenson: By the way, anybody that says bonds are secure now, doesn't understand, A: What's underlying a lot of those. And, B: That interest rate changes can have a devastating effect of a bond price.

Sal Daher: Everything has duration, not just bond, but stock.

  1. Stevenson: To me the answer to your question which is not a good answer is, you got to look to structure.

Sal Daher: Okay, so cash and structure.

  1. Stevenson: Mm-hmm (affirmative)

Sal Daher: Howard Stevenson you've been most gracious to have us to your office, and to answer our questions. I'm sure our audience will find your deeply considered advice as valuable as I do.

  1. Stevenson: Well thank you for the opportunity. I tried to give you answers, and sometimes I believed them.

Sal Daher: It's been great fun, it's been great fun.

I thank our listeners for tuning in, and remind them to please go to iTunes, and leave a review. Listeners with critiques, or suggestions, are welcome to write me at I should also mention that we also hold in person events. If, you want to be made aware of those events, please go to Angel Invest Boston, and press the Sign Up button.

 This is Angel Invest Boston. Conversation with Boston's most interesting angel investors and founders.

I'm Sal Daher.

I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our Graphic design is by Catherine Woodman-Maynard. Our host is coached by Grace Daher.



Nov 29, 2017

At the TEDMED Conference in Palm Springs, CA I had the chance to interview people from interesting startups. These brief interviews will appear in the coming months interspersed with our regular episodes.

Chee-Yeun Chung, a neuroscientist from Korea, was captivated by the idea that cures for neurodegenerative diseases, such as Alzheimer’s, Parkinson’s and ALS, could be found by doing experiments on yeast cells. Conventional approaches to neurodegenerative diseases had proved problematic. However, an MIT professor, the late Dr. Susan Lindquist, saw a remarkable connection between yeast cells and the human neuron that could offer a solution. This evolutionary conservation, the scientific name for the unlikely connection, might lead to a platform for finding human cures. The promise of quickly evaluating compounds on simple yeast cells opened up the possibility of testing large numbers of potential treatments. Such massive experimentation could not be done with the much more complex human neuron. Chee was thus inspired to become a scientific co-founder of Yumanity Therapeutics, the corporate embodiment of Dr. Lindquist’s passionate vision.

With $47 million is Series A money, Yumanity has developed ultra-high throughput methods for testing the ability of large numbers of compounds to improve the functioning of yeast cells purposely afflicted with a certain defect. The defect, protein misfolding, is implicated as a cause of neurodegenerative diseases. Compounds found promising in treating yeast cells are then evaluated in human neurons in which protein misfolding is present. Yumanity has also developed methods to figure out the mechanism of action of these compounds based on yeast genetics and protein network analyses.

The result has been the discovery of promising compounds that might become cures. Yumanity believes that its progress over the past two years will justify a Series B raise.  The new money is expected to take the existing compounds to clinical trials.

For more details see annotated transcript at: [link to episode page to be added here]

Topics covered include:

  • Chee-Yeun Chung Bio
  • Yeast Cells as a Model for Human Neurons – The Simplest Cells Used to Model the Most Complex
  • Induce Protein Misfolding in Yeast – Test for Compounds that Alleviate Symptoms – Find Candidates to Treat Protein Misfolding in Human Neurons – Protein Misfolding Cause of Alzheimer’s Etc.
  • Take Skin Cells from a Parkinson’s Patients, turn them into Stem Cells, Make the Stem Cells into Human Neurons with Misfolded Proteins – Neurons Then Used to Validate “Treatments” Found in Yeast Tests
  • “There [were] a lot of evolutionary conservation between yeast and human neurons. And the compound worked in yeast and also worked in human neurons. So, this to us presented an amazing opportunity where we can create a drug discovery platform using yeast and human patient derived neurons.”
  • New Approaches Sorely Needed, Previous Approaches by Pharma to Find Treatments for Neurodegenerative Diseases Failed
  • Tony Coles, Yumanity CEO Raised $47 Million Series A to Maximize Freedom of Action & Long-term Support – Sanofi & Biogen Participating
  • Two Years into Series A – Promising Results Justify Series B Raise
  • The Biggest Obstacle Has Been the Chemistry – How to Make the Compounds Soluble, Stable Etc. without Compromising Efficacy
  • What Led Chee to Give Up a Safe Position in a Leading Lab to Risk Being is a Startup
  • Yumanity Hopes to Be in Clinical Trials Within 2 Years – Promising Compounds Have Already Been Identified
  • Working in Yumanity Chee Has Gained a Greater Appreciation of Focus and Team Work
  • Flexibility and Intense Communication Within the Team Have Proved Essential to Success
  • Sought Advice from Others Experienced with Startup Culture – Listened to Advice
  • Chee on Her Late Mentor Dr. Susan Lindquist
  • The Late Susan Lindquist found Her Work on the Evolutionary Conservation between Yeast and Human Neurons No Accepted by the Scientific Community, Yet She Persevered
  • Due to the Grit of Susan Lindquist, the Yeast-to-Human Neuron Platform for Drug Discovery Is Becoming a Reality
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