Private Equity, Venture Capital, and the Future of Money Management, with Brent Beshore – [Invest Like the Best, EP.22]

Brent Beshore and I spoke for 10 hours about all things investing and business and decided to record a 2-hour chunk of our conversation. We start by discussing private equity, venture capital, and the importance of brand. We then explore the difference between public and private company valuation, and the potent idea of peer mentorship.  The conversation wraps up with Brent’s recent experience with one of the greatest investors and thinkers of all time.  Above all, this is a conversation about what is right and wrong in the world of money management and investing, and where the business is heading.

Please enjoy!

Books Referenced

Drive: The Surprising Truth About What Motivates Us

The Fish That Ate the Whale: The Life and Times of America’s Banana King

Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, a Man Who Would Cure the World

Links Referenced

Lessons from Twenty Years of the Kauffman Foundation’s Investments in Venture Capital Funds and The Triumph of Hope over Experience: Kauffman Foundation

Eric Maddox podcast episode

Show Notes

2:18  – (first question) – Brent is asked to paint a picture of the private company market and what are some key features of it

4:50 – What does the diligence look like when you get down to examining companies that could be a potential investment target

9:50 – Exploring whether certain moats are more attractive to Brent vs others

12:28 – Can moats be developed ahead of time or do you stumble into them

14:53 – How do you turn around a company and develop huge growth, like a 90% growth rate.

17:14 – It’s hard to run a company

18:40 – Cleaning out the entrenched aspects of a business

22:36 – Drive: The Surprising Truth About What Motivates Us

23:25 – What is good and what makes no sense about the way private equity operates

31:29   – What about venture capital, from the perspective that run venture funds, want to start a venture fund, and from entrepreneurs seeking venture capital.

39:13 – Why being skilled in relationships is such an important trait, in venture capital, and almost anything

40:13 – Wrong and right reasons to get into venture capital

40:50 – Shift to personal brand and the right time to focus on developing it.

47:04 – How branding impacts our expectations from a company

52:30 – When people are pursuing personal brand at the wrong time or for the wrong reason

55:03 – Monetization of and worth of a brand

57:20 – The discovery of Warren Buffet’s brand.

58:46 – Circle back to the top LP investors in venture capital funds

1:01:01 – Lessons from Twenty Years of the Kauffman Foundation’s Investments in Venture Capital Funds and The Triumph of Hope over Experience: Kauffman Foundation

1:04:47 – Looking at some of Brent’s results and how they compare to the alternative options in investing today

1:19:24 – The impact of companies being acquired at what could be exaggerated multiples of their value

1:22:50 – Looking at Brent’s process of learning outside of books and acquiring businesses

1:24:50 – The Fish That Ate the Whale: The Life and Times of America’s Banana King

1:25:18 – An example of an adjustment that Brent has made based on a lesson he’s learned in the past year

1:29:45 – Understanding the importance of empathy and really listening to people

1:30:03 – Eric Maddox podcast episode

1:31:05 – Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, a Man Who Would Cure the World

1:33:45 – Looking at other notable experiences for Brent over the last year

1:36:00 – Brent is asked whether his growth strategy would be better if he looked to outward at landing more deals, or if he should go upward and focus on larger deals

1:39:24 – Companies are just messy people and it’s about finding the least messy people at the top

1:42:58 – Two keys to finding the right deals, ability to scale and ability to withstand lumpiness

1:46:02 – Exploring the problems within the capital raising system

1:51:23 – Brent is asked about his recent experience with Charlie Munger

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag