EP 5: When Being an Outsider Is Good for VC


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You don't have to be an expert in a field to know how to make good investment decisions around it. Bruce Cahan shares how successfully funding any pioneer economy often requires knowledge from other fields. (Listen) Episode Summary: Though Bruce Cahan has been involved in a wide range of activities throughout his career, he says that one of the most unlikely pivots he’s made is to look at how we're going to bank and finance space exploration. Given that space is a 70-year-old industry, you might be wondering why this has to be considered at all. Aren’t we already funding space? Bruce explains that the government invested in space for defense and other activities during the Cold War, but budgets dedicated to space agencies flatlined after that. Recently, however, smartphone technology (the ability to carry a supercomputer in your pocket) has inspired innovators to take a different look at how we build space assets like satellites, robotics, imagery, and so forth. Though the engineering has advanced, thinking about how to pay for the next level has not. Without a consistent way of financing the space economy (whether government or private market), missions that should be in design, development, and testing will be put on hold due to the uncertainty of funding. Bruce is applying his knowledge of how markets work and how to successfully fund them to effect change in the space economy while using that same expertise to review potential deals for Chestnut Street Ventures (CSV) as an Investment Committee member. Subscribe to Founders and Funders on iTunes, Stitcher and Android Podcast Players. Introducing Bruce Cahan, Investment Committee Member for CSV Bruce Cahan has advised Fortune 1000 corporations and federal technology investors, negotiated billions in transactions, innovated investment strategies for sharing smarter open data, and is now redesigning banking. He co-founded Urban Logic, a nonprofit that harnesses finance and technology to improve sustainability decisions in real time, and is a frequent mentor for startups in Silicon Valley. Bruce graduated from Wharton and Temple Law School. He's also on the Investment Committee for Chestnut Street Ventures, a Penn alumni venture fund that invests in Penn alum-led companies. The fund is one of many alumni venture capital funds under the Alumni Ventures Group (AVG) umbrella. Bruce works with Managing Partner Gail Gilbert Ball, who is also a graduate of Wharton. In Bruce’s words, "I'm a recovering Wall Street lawyer, Hong Kong merchant banker, geospatial technology finance pioneer for the government, 9-11 responder, Ashoka Fellow, and now at Stanford in the engineering school trying to innovate banking and finance and insurance." Three Takeaways from This Podcast As you listen to this interview with Bruce Cahan, remember that he confesses he did not understand the space economy all that well when he first got involved. But he applied his knowledge of how to fund innovation and businesses and markets to the needs of this industry in order to effect change. That’s the skillset he also brings to Chestnut Street Ventures as part of the Investment Committee. Below are a few of the insights you’ll gain by listening to this interview and what Bruce wants potential investors to know about this unique opportunity to invest with classmates: 1. We are ambassadors Chestnut Street Ventures is a community of Penn alums with a connection to UPenn or its graduate schools. Although the CSV fund is not affiliated with the university, Bruce says the connection cannot be ignored. So in listening to proposals, he feels a responsibility to ensure that investments are made in companies that Penn would be proud to be associated with. 2. We are responsible Along those same lines, Bruce feels responsibility to the entrepreneurs that the fund works with both in terms of how the Investment Committee treats the founders and how they foster the relationships--whether or not inve...

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