On the 6th episode of Invested, Michael hosts Kathryn Mayne – “the mother of Aleph.” Kathryn is a managing director at Horsley Bridge. She joined the firm in 2003 and manages their London office. Prior to HBP, Kathryn was Senior Vice President of Investments with Claridge Inc., where she was involved with investments in media, technology, consumer, and industrial companies as well as private equity fund investments. Kathryn started her professional career in asset management with Jarislowsky, Fraser in Montreal. She has a BA in History from the University of Calgary and an MBA from the University of Western Ontario.
You can learn more about Horsley Bridge at www.horsleybridge.com and follow Kathryn on LinkedIn.
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Kathryn Mayne
Hi, my name is Kathryn Mayne. Michael has asked me to come and join him on this podcast. I've never done one of these before, so I hope it's okay. I know Michael because I'm a managing director at Horsley Bridge Partners, which is an investor in venture capital. We've known each other for a very long time. So hopefully this will be fun. And I've been asked to name what my core value is, and I think in life, the thing that matters to me most is the relationships with the people that matter in my life.
Michael Eisenberg
Amazing. So, Kathryn, it's so good to have you here. I'm excited to welcome Kathryn Mayne, the quote unquote “mother of Aleph”. We'll talk about that some more. Onto our invested podcast. Kathryn joined Horsley Bridge in 2003. I can't believe it's that long already.
Kathryn Mayne
I know it's crazy.
Michael Eisenberg
It is crazy. Kathryn manages the London office of Horsley Bridge and prior to Horsley Bridge Partners, Kathryn was Senior Vice President of Investments with Claridge Inc, which had many investments in Israel and is no stranger to Israel. And she was involved in investments in media, technology, consumer, and industrial companies, including the unique Israeli snack, Bamba, which maybe we'll talk a bit about soon. Kathryn started her professional career in asset management with Jarislowsky - I'm saying that wrong.
Kathryn Mayne
Jarislowsky.
Michael Eisenberg
Jarislowsky Fraser in Montreal. She has a BA in history from the University of Calgary and an MBA from the University of Western Ontario. Is a Canadian expat living in London. You can find more about Horsley Bridge at www.horsleybridge.com. That is h-o-r-s-l-e-y-b-r-i-d-g-e.com. And follow Kathryn on LinkedIn. Kathryn, great to have you here on the show. We can get started. So here's the first question. I don't think I remember the answer. How do we know each other originally?
Kathryn Mayne
So prior to my joining Horsley Bridge, Horsley Bridge invested in a very early stage venture fund in Israel called Israel Seed-
Michael Eisenberg
Correct.
Kathryn Mayne
Which is where you started your venture investing career. And so I don't- I think I met you at Israel Seed, but at some point, well, there's a story that goes from there if you want me to take that story forward-
Michael Eisenberg
I don't remember what it is. Is it the 18 month one?
Kathryn Mayne
Well, I think the story was that it was kind of clear that that partnership might not go forward. And, we sort of- we liked Michael. I just met you, but my partners had known you for some time. And, we thought you had an interesting future in venture investing. So I think it was Phil Horsley that made an introduction, which led you to your next role with Benchmark.
Michael Eisenberg
Correct. Correct. You know, someone just messaged me, on the way in, that he went skiing in Austria. I was really conflicted what to do with that benchmark offer, apropos values. I felt very loyal to the people at Israel Seed Partners. But Benchmark Capital was Benchmark Capital. And, I didn't know what to do. And, I needed to kind of clear my head. So I took three of my children skiing, thinking that that's the way to clear my head. And from there, I called Phil Horsley and asked him what to do. He's the nameplate on Horsley Bridge, he passed away, unfortunately, a couple years ago, an incredible human being. And I called him and I said, “Phil, I'm really not sure what to do here. I know you're an investor of mine in Israel Seed, I never invested in Benchmark”. He said, “Who do you think sent your name over to Benchmark Capital?” I said, “Okay, I get it”. So, great to have you here. And maybe we'll start with how you became the mother of Aleph. On some level. You want to tell one story? Do you want me to tell?
Kathryn Mayne
I think it's kind of a fun story. I think you went to Benchmark and we stayed in touch. And, you made some great investments there. And, I was back in Israel, I think it was 2012. And, we organized to meet up and we were sitting outside on the terrace on a lovely Tel Aviv evening-
Michael Eisenberg
One floor up from here.
Kathryn Mayne
One floor up from here. And, at the time, I don't think the rest of the world had figured out, you know, that venture capital was actually working in a lot of places outside of the U.S. And, we'd seen that happening, and we'd seen some interesting companies start to really scale here in Israel. So I think Wix, which was what you invested in, Waze, Fiverr. Things in the consumer space, which, up ‘til then, wasn't necessarily Israel's domain. But there were a lot of really positive trends happening in tech. And, I remember sitting down with you and asking you- because it just felt like maybe now was the time for things to really start taking off in Israel. And, maybe there was room for a new kind of venture firm. And, I remember sitting there with you saying, you know, “What a great place to refine your craft as an investor with Benchmark, they’re such great people, but, is that? Are you gonna do anything else? You're a young guy, you've got this big future ahead of you”.
Michael Eisenberg
Thanks for calling me young.
Kathryn Mayne
You're still young. Shouldn't there be more? And, we just sort of chatted, I think, about what a new venture fund might look like here. And, something that was super ambitious and capable of building these truly global businesses. And then we started playing fantasy football, which was kind of fun-
Michael Eisenberg
It was fun.
Kathryn Mayne
-and talked about all the young talents in the industry, some of whom were with funds that had a lot of partners at the top. And, you know, was there a way to build something new and different? And, so that was the conversation, I thought, well, that's really fun. And then I went back home. And, a couple months later, I got the call that said, “Guess what? I teamed up Eden, we're starting Aleph”.
Michael Eisenberg
Yeah.
Kathryn Mayne
And so I shared that with my partners, and we were excited about it, and wanted to lean in right away. And, we did lean in right away-
Michael Eisenberg
You did.
Kathryn Mayne
We did lots of- we didn't know Eden, as well. So we did lots of referencing and learned a lot about him and got pretty excited about it, and what you were planning to do. And we said, you know, we'd like to be part of that in a pretty meaningful way.
Michael Eisenberg
And thank you. I hope we've made you proud, somewhat, since then. So, thank you, because we especially value the relationship with you. But, I want to actually ask you a question based on what you said. Are you an investor or a psychologist? I said, seriously, it's a serious question.
Kathryn Mayne
Well, I think we're investors, but we invest in people. So, people ask us, you know, what is the core skill of the team of you at Horsley Bridge? And, I think it's really understanding people, partnerships, organizations, their motivations, their ambitions, how they conduct themselves, how they work together. I think that is our job, is really to understand people and kind of assess their ability as investors, a lot of which comes down to judgment. And I guess, you know, judgment could be judgment on people, judgment around investment situations. So yeah, most of what we do is really about backing people.
Michael Eisenberg
You said at the beginning that your core value is: relationships with people that you like, admire, or feel close to. Do you have to actually like people to do the job you're doing? Or, can you kind of be cynical or an introvert or- introverts the wrong word. Can you be cynical, and, you know, a little bit of a misanthropic? Or do you have to really like people?
Kathryn Mayne
If you think of where we sit in the stack, I think it does help to like people. I think as a firm, we think it's really important to do a good job as a partner to the people that we invest in. So, that means, you know, we share insights, we share things that we've learned in our almost 40 years in the industry. And, you have to be willing to be kind of open, honest, transparent about that, if you're going to be a good partner. So I think it really helps if you do like people. And if you're, you know, we are always kind of 100% in the camp of the people that we support. Like, we're the biggest cheerleaders. I think that means- maybe I shouldn't use the word cheerleader, because that always means you're jumping up and down and backflips. Biggest supporters and 100% in your camp means, we have to be able to, you know, interact with you and share: Jeez, we think you're doing this super well, but also, hmm, this one's got us scratching our head, you know, help us explain this, or help us understand this so that we're sharing, you know, feedback, both positive and negative. Let's not call it negative, positive and constructive, in a really transparent way. And I think that's hard to do if you don't really value people and the relationships that you have with them. You'll stop yourself. You won't be as, I think, honest and truthful about the things that you need to share.
Michael Eisenberg
So, you’re a meaningful, limited partner investor in many venture funds, including Aleph, anchor investor in many. Kind of, Horsley Bridge is considered the leading light, or, among the leading lights of the fund-to-funds businesses that invest in venture capital. And, you like people, and, what you said before about me and my previous firm, and I'm sure it happens other times as well, that you kind of sense that maybe something may be amiss. May not persist. How do you deliver a message to a group of partners that either says, somebody here doesn't fit the mix and you ought to be thinking about this? Or alternatively, because there's something you see in the team dynamic, we're out of here, and we're no longer going to support this fund? That's got to be pretty dramatic.
Kathryn Mayne
I'd say it's the one of the hardest parts of our job. I don't think it has to be dramatic. It's always difficult. But ,I think the way we try to manage that is with everybody that we invest in, we've got lots of frequent touch points, so, you know, you tell me. We probably drive you crazy with-
Michael Eisenberg
No-
Kathryn Mayne
Hey I’m coming to Israel, I want to catch up. Let's jump on the phone. Let's talk about this. Can you tell me what's going on with this? So, there's lots of touch points so that we can kind of- we call it, it's almost like our monitoring is constant diligence, right? So, when it comes time, you've raised a fund that sort of like- we kind of know where we stand, because we've been in touch. So that should mean, we're seeing things develop. And, we're seeing them as they occur. Or we're seeing them before they occur, right? Because we're- our job is to sort of see these patterns and almost read the tea leaves, if you will. And so, as we see these things happen, it's our job to be responsible about how you communicate that. So, we should really never be at a place where a fund that we've been an investor with comes back and says, “We're coming back to market and we're raising a new fund”. And we go through our diligence process. And at the very end of the diligence process, we say, “No, we're not coming in”. And they're shocked. That shouldn't happen, because it's our job to socialize, as part of those constant updates, the positives and the constructive feedback. So, if we see issues happening, it's our job to put those on the table to have the discussion. Because, remember, we want everybody that we back to be massively successful. So, we are in that camp. So, it's like, if we see something that we think may impair the ability to do that, it's like, let's talk about this, and let's see how we can- and maybe we're completely wrong, right? It's just one point of view, others might have a different perspective on it. But, that's our job is to be really transparent and constructive along the way. It is not easy, but, we think that's part of being a good partner.
Michael Eisenberg
What's the number one reason that venture capital partnerships come apart? Or, don't work out?
Kathryn Mayne
Yeah, I'm not sure I have a- I don't know if there's a number one answer. I think-
Michael Eisenberg
You can do the top three, too.
Kathryn Mayne
I think there's lots of answers. You know, we get asked often- it's interesting, because we meet lots of new funds, right? And they come in, and they've got: here's my track record, and here's what I've done, and we've got this great partnership, and we've known each other for 10 years, and we're going to be the best partners ever because we really get along. And she asked the question, well, “How have you constituted yourself? Like, what kind of arrangements have you made as a general partner? How will you make decisions? How will you decide how you will be accountable to each other? How will you address an issue if something's not going well? How will you even know what it is like? How are you going to make each other- make yourselves accountable to each other?” So, I guess that's one bit of advice we would give new funds, is make sure you do that in a really thoughtful way. It's not enough to say, “Yeah, we're always going to like touch base, and it's all going to be fine”. Because the reality is, it's really hard to make one of these things work. So, I'd say it's often that people have just not put enough thought into it. They team up, they're super excited about it. And then, a couple years down the line, they're like, actually, this person isn't pulling their weight, or I don't like their investment choices. And, because they haven't constituted themselves well, they don't have a mechanism to deal with it.
Michael Eisenberg
But is it investment choices that breaks them apart? Or is it values? Is it bad contracting, because they don't have a mechanism?
Kathryn Mayne
Bad cont- the contract is just what you refer to when it's not working? It's the thought and the process, and the discussion before that, that really matters? Agreeing on that, like, how are we going to work together? And, I think that's where people often don't put enough thought.
Michael Eisenberg
Is that investment judgment? Is it values? Is it culture? Like, which category does it fit into?
Kathryn Mayne
I think it's culture. I think it's integrity. I think it's-
Michael Eisenberg
That’s interesting, integrity. I think a lot of these things come apart on integrity.
Kathryn Mayne
Do what I say, say what I do. You know, I think it's holding true to, you know, what you've set out to, you know, accomplish as a team.
Michael Eisenberg
Have you seen partnerships come across a lack of- come apart or people leave on lack of truthfulness, to that the integrity point?
Kathryn Mayne
I think sometimes that happens.
Michael Eisenberg
It's interesting, you know, when we went out to raise Aleph, I met a person was a longtime friend of mine, and he said, “I really shouldn't be an LP. We're not going to do a first time fund though, you know me 15 years.” And he said, “Yeah, but we don't know your partner that well. And, first time partnerships come apart 50% of the time”. And I said, ‘Wow, that's a big number”. And I said, “Why is that?” And he said, “A combination of ego in a first time partnership, and a simple lack of chemistry”. And when I drill down, and asked what was a lack of chemistry, we're at the bar at the Four Seasons in Palo Alto.
He said, “I can't put my finger on it. We just know it happens. And it's a risk we're not willing to take”. Why do you take that risk?
Kathryn Mayne
Because I think to be successful in our business, we have to take risk. So, we know that, in venture, most of the companies that venture capitalists invest in, will fail.
Michael Eisenberg
Yep. People forgot that in the last decade.
Kathryn Mayne
They absolutely forgot it. And, you know, success is driven by a handful of outliers, right? So, it's about creating something truly extraordinary. It's the same when we build a portfolio of venture partnerships, not everything is going to knock it out of the park. But, we have to- everything that we back, we have to truly believe that it can generate extraordinary returns. Otherwise, why are we not doing it? So, you know, that's kind of part of the way we think about portfolio construction. We can take risk, we should take risk. If we don't take risk, we are going to miss the best new thing. If all you did was, say, invest in the established brand names, you would miss the best of the next generation. And I think, the thing that we've learned about backing new managers is, when we do it, we try to evaluate things to the same bar as everything else in our portfolio. So, it's not like, “Hey, we've got this farm club. Let's go back a bunch of rookies and see how they do.” It's, could this team of people perform the same way as the best in the industry? So that's what we're trying to pick. And, if they turn out to be that, when they come back to raise funds too? If they're doing the right things and keeping their font sizes reasonable, there's probably not going to be that much room. So, you know, when we do these things, we like to get in and do it in a meaningful way. Like with Aleph. It's like, let's take as big a stake as we can so, if it works, we've, you know, put ourselves in a very good position to continue as a meaningful investor going forward.
Michael Eisenberg
Do you- how often does it happen that there's like a truism in the venture business that when you sign up to back a venture fund, you really back two funds. How often does it happen that you don't back the second fund?
Kathryn Mayne
Yeah, it's pretty rare.
Michael Eisenberg
Pretty rare.
Kathryn Mayne
It's pretty rare. Because, I think when you get, if you assume everybody takes two to three years- not in 2021- but, to, you know, to build the portfolio, when you come back to market, there's not going to be a lot to show, right? You’ve built a portfolio. Hopefully the companys sound like they can be extraordinary and not nichey. Hopefully, you've got top tier, tier one follow on investors. Hopefully, those people are following what you're doing and caring about it. Hopefully, the companies are scaling. The fund model looks the way it should, there hasn't been any kind of weird partnership dynamic or blow up. If you see that, you'll generally do-
Michael Eisenberg
Do you like most of the GPs you invest in, like as people?
Kathryn Mayne
I like a lot of them, yeah, I really do.
Michael Eisenberg
But not all of them.
Kathryn Mayne
I like people.
Michael Eisenberg
Do they like each other, you think?
Kathryn Mayne
I don't think everybody likes each other, no.
Michael Eisenberg
But they stay together because, it's like, a marriage of convenience? It's like, you know, they still have admiration and respect, but don't really like them.
Kathryn Mayne
You have to have mutual respect-
Michael Eisenberg
Mutual respect, but you don't have to like the person.
Kathryn Mayne
You know, if I look at the partnerships that I- I think most of the folks I work closely with, they do really like each other. You can sense that. You can sense that in the culture of certain venture firms. There's just a- there's just a different dynamic. And, it makes it really fun and energizing to be around those people. So, you can you can feel it, you can sense it in the way people interact with each other.
Michael Eisenberg
If you had to encapsulate your wisdom of the last 20 years, or so years, at this, as to what makes a great venture capitalist, what it is? On an individual basis, before the firm.
Kathryn Mayne
Yeah, so we tried to correlate this once. Which is like a- this is like a standard Horsley Bridge story. What makes a great venture capitalist? So, is it that they were a founder? That they worked in tech? That they studied computer science? That they went to certain university? That they were tall? You know, because that was kind of a benchmark thing. And what came out of it was, there was one thing that correlated with the best returns, and that was what we define as risk tolerance. Which means the people that had the best lifetime, you know, track records also had failures.
Michael Eisenberg
Spectacular ones.
Kathryn Mayne
Well, you can only lose what you put in. So, it's, you know, less than 1x we would describe as a failure and they had spectacular outcomes, which was what drove those returns. But yeah, they lost companies. So, it's the ability to take risk and invest in something that may not exist yet. That may be capturing a market at the point where it's about- you know, we call it- there's just an ability to kind of see around the corners, and be comfortable taking that risk. Which is why, you know, we should say- we haven't said this in any of the discussions so far, we really focus on managers that invest, early stage. So seed and Series A, I think, you know, people that invest later stage, is a slightly different breed. There's a lot more information to look at. You can run numbers, you can do things differently, but I think when you're talking about early stage venture capitalists, at some, just ability to be comfortable with ambiguity and see into the future a little bit.
Michael Eisenberg
Yeah, I think ambiguity and uncertainty is almost a better framing then risk tolerance. I'm not sure about that, I keep thinking about that question. Is it ambiguity and uncertainty? Or is it risk tolerance?
Kathryn Mayne
Maybe. But it's just, if you know that, because I think the risk tolerance bit also matters because when you do have something that is not working- because I think the other thing with venture capital is your scarcest resource is your time. So, you have to allocate your resource to the situations that have the potential to be explosive. And, if something looks like it's not going to get there, you should be, you know, in the right way possible, diverting your energies in the other direction, and being okay with that. You know, being okay, letting something go, making sure that the talent gets redeployed in a better place, and not spending, you know, two years struggling with it. So there's an element of tolerance in that as well, I think.
Michael Eisenberg
So is being a good venture capitalist a set of personality traits? Is it IQ? Is it investment acumen? Is it an EQ?
Kathryn Mayne
I think it's all of those things.
Michael Eisenberg
All those things?
Kathryn Mayne
Yeah. I think it's a very rare specimen that can, you know, consistently do it exceptionally well. And that translates into how returns have looked in venture, which I think is something people have forgotten about in the near term. Because, you know-
Michael Eisenberg
In the near term you mean the last decade.
Kathryn Mayne
Well, I would say, yeah, maybe last decade, or call it, you know, 2019 to, sort of, 2022, everybody that came in the door, had a fantastic TVPI and great- IRRs actually. Everyone's marketing, 100% IRR.
Michael Eisenberg
Those are non distributed gains, meaning, no cash went back to investors. It's the total value of the portfolio, or the investments in the portfolio, as mark to market, or mark to their own market which is something we're going to come to in a second. And you kind of tout this, even though you have actually distributed no cash to your investors.
Kathryn Mayne
Which is- that's how everybody, you know, presents their numbers. But, I think we were in an environment where everything got follow on capital.
Michael Eisenberg
Yeah, we’re gonna talk about that.
Kathryn Mayne
You know, everything looked great. It was The Lego Movie.
Michael Eisenberg
I didn't see it, but I’m not sure of what you're referring to.
Kathryn Mayne
So there's a song called “Everything is Awesome”.
Michael Eisenberg
Oh, but optimism is important, I think, in the venture business.
Kathryn Mayne
Of course it is, yeah. You can't be in this business if you're not optimistic.
Michael Eisenberg
Yeah everyone's killing it and crushing it. It’s awesome.
Kathryn Mayne
Yeah. But the reality is, I think our firm has been in the business for 40 years, you realize that, you know, there's cycles. And that, venture is a business that's really tough. It's tough to take an idea and turn it into a multibillion dollar company. That, it's happening faster today than it ever has, but it doesn't happen overnight. And, along the way, some of those that look super promising will fail.
Michael Eisenberg
So, before I get back to this notion of marks and kind of venture inside baseball. Do you care, or even question, or- Before I come back to how we marked the portfolios, or which I'll come back to the venture capital inside baseball, do you care about the values of the investors themself? Does that matter to you? Do you probe that?
Kathryn Mayne
Well, we spend an awful lot of time with them, asking them about themselves, their journey, their motivations, their ambitions, how they work together. So yeah, we get a sense of that. But it's not like there's a sheet that says tick the box. If you see this value, in general, it's sort of a-
Michael Eisenberg
You don't have sheets in general that tick the box, you have copious notes. Anyone who's ever sat with Horsley Bridge people, copious notes. It's like a firm culture.
Kathryn Mayne
Yeah.
Michael Eisenberg
I'm afraid, actually, to say things in meetings with you. Because, I'm sure that somebody's going to trot out a notebook from like 10 years ago. Like, first year freedom once did that to me.
Kathryn Mayne
Sometimes, Lance, one of my partners, puts a joke in the middle of one of his memos about Canada to see if I actually read it.
Michael Eisenberg
The copious notes thing is- And, do you care about the values of the underlying portfolio companies?
Kathryn Mayne
That's something that we really have no say over. What we do is we back partnerships, and we trust the investment judgment of those people. I think we invest in venture capital, which is about backing ideas and innovation that are going to make the world better. And, I think great founders tend to be mission-driven. And so, if they're successful, then that translates into returns. I think what we really care about from a- like one thing that, I think, for us, really matters is when we can deliver great returns to our limited partners. You know, if you look at them by count, the largest constituents would be foundations and endowments, so they're giving money back. It would be pension funds. So, you know, helping improve the returns of, you know, people's retirement income. So, that's-
Michael Eisenberg
Super important today, inflation.
Kathryn Mayne
That's actually something that we can have some influence over.
Michael Eisenberg
Yeah.
Kathryn Mayne
But when we invest in a partnership, we trust those folks to make the best investments.
Michael Eisenberg
Is mission driven a cliche?
Kathryn Mayne
Possibly.
Michael Eisenberg
Okay, I was just wanting to know. Actually I’ll go back to the inside baseball venture before moving on. So, hopefully, I'll make you laugh. So, we had an Aleph annual meeting some years ago, in what I call the gogo days of the teens, in the late teens in particular, and into 2020. And, we have what we refer to here as a realistic view of portfolio values. And, there was a fair amount of pressure on us to actually show what the last round value is. So, for those who don't know you value venture capital portfolios, by the way, no one knows, how to value venture capital portfolios. But there are kind of rules that you try to follow, even though they're not real. You'll excuse me for saying that. And so, there's two basic methodologies. One is to create some sort of algorithm that tries to find what is the actual book value of these businesses. And, the other is to mark them to the last round of funding, which during the teens and up to 2021, was often way higher than what you'd call a book value. And, to the point you made earlier, people marked their IRRs or TVPIs to the last round valuations, as you know, we didn’t, and I think, there’s a couple other firms that didn't.
Kathryn Mayne
Actually, there are quite a few firms that did not.
Michael Eisenberg
Oh, great.
Kathryn Mayne
Yeah, I would say, if you look at year end, 2022. Or, you know, kind of June 2022. Markets went in the other direction. And people started looking at this, I think, many investors that have been in venture for some time, we're actually much more cautious about taking last round valuation marks. And, I would say, newer firms that had less of that history and experience of things.
Michael Eisenberg
2000 and ‘08-
Kathryn Mayne
Things go up and things can go down, would mark things at LRV.
Michael Eisenberg
LRV- Last Round Valuation
Kathryn Mayne
Last Round Valuation. Part of it is level of sophistication and experience. I also think there are firms that have, you know, lon, successful track records, that, you know, they have supportive LP bases that kind of understand what's in the mix there. I think sometimes that's a little bit different to new fund that's trying to prove, you know, we can deliver returns like the big guys.
Michael Eisenberg
A question I'm interested in around this is, do you find there's a difference between when you start in this business now, in short term versus longer term outlook? Right? Because, the longer term view would be to kind of keep things muted. Whereas, the short term was, I gotta get back to market and get after this. Or, is it just kind of, always first time funds, to your point, try to market a little higher, and people more, experienced less so?
Kathryn Mayne
So I don't know, I think it might be a bit of the latter, but I think it goes with the cycle. You know, when I started with Horsley Bridge, we were preparing our information for our annual meeting, Phil Horsley would say, you know, “Quarter to quarter, it's like watching the grass grow, there's not much that happens and venture, you're not going to see much movement and the numbers”. So, you try to think of creative ways to show to your limited partners, there's this amazing stuff happening with these early stage technology companies that nobody had heard of. And then, the last couple years, it was just like, yeah, every quarter, it was like, “Look at the change in the numbers”. So part of that is cycle. But, it's also partly, stuffs just growing much, much faster. Like, we spending a lot of time talking about macro. What drives this industry, from the very beginning to today, is what's going on with the underlying technology trends. And, we're now living in a world where, you know, we fundamentally believe this is a multi-decade shift towards things becoming more and more digital. The entire world is connected through these little phones that are like, power your lives.
Michael Eisenberg
You're driving yourself crazy a bit.
Kathryn Mayne
You drive you crazy, now you try to figure out how to spend less time on it, but nobody can figure out how to live without it. Workforces are declining, we need, you know, ways to improve productivity. Like, the way that these things are gonna happen at the big problems that the world is facing around climate, and health and education, software technology, it's just growing much, much faster. So, that's part of the reason why, you know, you can see those numbers move in such a positive trajectory as well.
Michael Eisenberg
Is this a micro, micro business, in which a tiny number of companies, even at the level of view, which above us delivers the majority of the returns. And, by the way, I'd imagine a tiny number of partnerships also delivers the majority of the returns in the whole venture landscape.
Kathryn Mayne
We have a stat in our intro book, I think, that says we've backed 5% of the venture industry, globally, and bidded about 80% of the billion dollar plus outcome. So, that would suggest yes, that it is a fairly- there's always room for new, and there's lots of great people that aren't in our portfolio that have delivered great performance. But yeah, it's fairly concentrated.
Michael Eisenberg
Every time I turn up to see you, or you turn up to see me, you asked me, “Okay, what's the key value driver of this fund?” And, you drill us on that, appropriately. Because it's one company in a portfolio that needs to deliver 25x, or so, even better in order for this business to work.
Kathryn Mayne
Or multiple in the same fund, that works really well too. That works even better.
Michael Eisenberg
But I want to get back to the human dynamic of this. Have you identified, in the entrepreneurs, kind of a level below, what makes those 25xers or 50xers come?
Kathryn Mayne
Yeah, I think that's probably more a question for you. Because, you're at the coalface dealing with these folks every day and seeing those dynamics. You hear different stories on what makes them unique. I think we've heard from venture capitalists that sometimes it's a team. It's people that can hire better than themselves. They know their strengths. They know their weaknesses. They know how to add fantastic people. So, when you hear about some of these really amazing companies that comes around to, here's who they were able to add and how they've been able to work together. So, you'd know much more about that than I would. But, I think there's probably a pretty special quality around the ability to build fantastic teams.
Michael Eisenberg
I want to shift gears for a second. You spent decades coming to Israel, now. You worked for an Israeli company, before. Take me back to your first trip here. What you saw, what it was like.
Kathryn Mayne
Oh, that's fun. It's changed a lot. I would say. It's changed a lot. It's much more international than it was when I first came. The number of high rises on the way in from the airport is staggering. When I first came here, I think the only, we always used to stay at the Hilton Hotel, because it was the, you know, one sort of international hotel in Israel. And-
Michael Eisenberg
In Tel Aviv.
Kathryn Mayne
In Tel Aviv, some of the-
Michael Eisenberg
Jerusalem had the King David.
Kathryn Mayne
Jerusalem had nice hotels. And they were just like, so- the service was so terrible. They were so- Am I not allowed to say that?
Michael Eisenberg
No you can say that! You know, I moved to Israel from Manhattan, from New York City, and then went to Tel Aviv, and I looked around and- they called it the city that didn't sleep. But that was New York. And this was not the city that didn't sleep, on the same level. There were no high rises.
Kathryn Mayne
Yeah. But it always had the same, it just had amazing energy. Like, I remember going and visiting companies in these, you know, shabby old buildings in Ramat Aviv, and they'd be doing the most incredible things with computers. So, there was that energy, and it was just young and vibrant. And you know that hasn't changed.
Michael Eisenberg
What has changed? And, maybe I should ask it this way, you invest in many places around the world. What do you think makes Israel unique in that regard?
Kathryn Mayne
Well, look, there's always been, you know, just a very strong base of technical talent. You know, operational talent, teams that know how to work through projects and build software and build companies, like I think that's very core to Israel, because of the experience that people go through in the military. I think the biggest change in Israel venture is really the ability to deliver big outcomes. So, we came here for many years, and people would celebrate, “We sold a company for 100 million dollars”. And we'd be like, “Well, great, your fund is 150 million, and you own 10% of that company. So, that's 15 million return on 100. That's fine. But that is not going to turn you into a venture firm that the whole world wants to invest in”. And, I think sometimes it's hard to believe unless you've lived the journey. But once the venture industry here started seeing some of those really big outcomes. I think the confidence grew and, you know, the number of companies that have, you know, been able to be fund returners has developed and changed, and that's been a big difference.
Michael Eisenberg
So much of this is iconographies, like, who can I look up to?
Kathryn Mayne
Sorry, I have to cough.
Michael Eisenberg
It's okay. It's very human. That's part of this podcast. It's very human. Y'all want to cough, go ahead, everyone cough. Let's go, get it out.
Kathryn Mayne
Hey, you have to edit that out.
Michael Eisenberg
All right. I think it's a fun moment. But either way, someone says iconography, right? Who can I look up to in this business? And I know for me, by the way, the time I spent at Benchmark Capital-
Kathryn Mayne
Yeah, some pretty amazing people there.
Michael Eisenberg
Amazing people, you know, Bruce, Bill, Kevin, Bob, Peter. This team was amazing. And for me, that was just aspirational learning experience, you know, how much can I suck in, you know, while I'm around this table. And, I think the same thing is true of Israel, right? You know, it's like the Wix guys, and the Monday guys, and the Fiverr guys have created an aspiration in that in the next generation.
Kathryn Mayne
That's super important.
Michael Eisenberg
How much do you think that happens in the venture capital ecosystem in Israel?
Kathryn Mayne
Oh, you can answer that question better than I can.
Michael Eisenberg
I'm not sure I can. I got my experience of one in my little-
Kathryn Mayne
You've been in a couple different firms. You've been here for a long time.
Michael Eisenberg
Yeah, but you're seeing it from the outside, your perspective’s better.
Kathryn Mayne
You mean, do you think a young person in Israel can say “I want to be like that venture capitalist-”
Michael Eisenberg
Yeah or he can learn from or aspirem etcetera. Or is it harder because it's just a smaller pond and no- hits haven't come to the same level they have, you know, as in Uber?
Kathryn Mayne
Look, I think the industry here has evolved. I think there was a period of time where generational transition wasn't something I would describe Israel as being great at. And making sure that there was a great crop of next generation investors, that the reality of technology is that people that are 20 years old, have grown up with it, and they understand it in ways much better than us old folks do. So, I think Israel is improved on that front in terms of being able to, you know, recognize young talent and giving them the opportunity to grow. But there was a point in time where that was not so much the focus, I'd say.
Michael Eisenberg
How do you- you know, I think about the cycles that you mentioned before, and valuation fluctuations, and there's a lot kinda not seen in the venture world because it's like, it's not mark to market, there's not a stock market, you say. You said before, Phil Horsley said, it’s like you're watching the grass grow, you don't see it and you kind of try to explain, “Oh, this is really interesting over here”. How do you develop trust in a manager, that you're actually getting the real scoop on what's going on? A real look at- how you develop that trust?
Kathryn Mayne
We ask- we have a lot of touch points. We ask a lot of questions. I tell my kids, that's basically what my job is. I just ask questions all day long. Probably really annoy people in doing it.
Michael Eisenberg
Kids always ask why all the time.
Kathryn Mayne
Yeah. So we do a lot of that. And I think- and we listen.
Michael Eisenberg
Yeah. And? Then you develop trust? And why do you trust us?
Kathryn Mayne
Why do we trust you?
Michael Eisenberg
You do?
Kathryn Mayne
Yes.
Michael Eisenberg
Okay. So, why do you trust us?
Kathryn Mayne
Because I think you give us the goods. We ask the questions, you give us the answers.
Michael Eisenberg
Okay. You trust me?
Kathryn Mayne
Yes.
Michael Eisenberg
Okay.
Kathryn Mayne
Well, we wouldn't be here if didn’t.
Michael Eisenberg
Ok good, good. I’m feeling better. So when I first ended up at Horsley Bridge, there were no women, that I can remember. Elizabeth came later. She came after you, right?
Kathryn Mayne
Kate Murphy, our COO, and myself, joined at the same time.
Michael Eisenberg
Okay.
Kathryn Mayne
And then Elizabeth Obershaw- so we joined in 2003, and Elizabeth joined in 2007.
Michael Eisenberg
It was a pretty male dominated room. And even this world was, you know, there was Kelly and Christie and not at Horsley Bridge. Kelly at Adams Street and Christie at Hewlett Foundation. But there were a lot of guys around. How did that feel, when you first joined, and you were in a remote office here in London?
Kathryn Mayne
Yes. Yeah. Look, I decided to join Horsley Bridge because I thought they were an amazing team of people.
Michael Eisenberg
Was it hard?
Kathryn Mayne
What, joining Horsley Bridge?
Michael Eisenberg
Yeah, I think they're amazing people too but-
Kathryn Mayne
No, no. They were very, very thoughtful in the whole “get to know you” interview process. And, it was like nothing I'd experienced before. So, the first time I met with them, I met with Phil and Fred Giuffrida and Lance Cottrill in the London office, and I think I was there for seven hours. And, I was like, what was that? And I sort of had asked- I’d met them through a headhunter and I'd asked him, I said, “Should I like, kind of sell what I've done?” And he said, “No, just listen to answer their questions, have a conversation”. And so, they were really trying to get to know me as a person, as an individual. And, I think what was most important to them was, is this somebody that can carry the flag for our firm and do it in a way that we would be happy with? Is this somebody that would be a great team player and work well within our construct? Is somebody that we can trust? Is this somebody that we like and can have fun with? You know, so the spec was- it was about cultural fit. I think everybody that came in the door could do the job. But, it was- well not do- you know what I mean. Like had the CVs look great. I'm sure most of the CVs that they saw were, you know, exceptional, but it was really about, they were spending a lot of time on the cultural fit.
Michael Eisenberg
Tell me about the cultural fit, what were they looking for? What's the culture of Horsley Bridge that makes it work?
Kathryn Mayne
Well, curiosity is a really big part of it. So, you have to be able to ask questions, that's what we do all day long. So, that is important. Really, a love of learning, because, this is a business where you're always learning because you're never gonna get it right all the time. So, I think being comfortable with that. Look, if I look at my partners, they are just super smart, thoughtful, you know, human beings that I think are also just incredibly good people. They do a fantastic job, managing relationships, as you say, like, are you an investor or psychologist? I think they've got those qualities of investment judgment, people judgment, in spades.
Michael Eisenberg
How do you stay curious over long periods of time?
Kathryn Mayne
Oh, how could you not, in this business? How could you not stay curious, when you're interacting with people, all the time? People will always surprise you. And in an industry, which is all about innovation and change.
Michael Eisenberg
What are you curious about outside of this industry and outside of work?
Kathryn Mayne
If I had time to read, I'm kind of curious about everything. To be honest. I'm curious about, you know, I've got young kids, I'm curious about how their brains work, how they learn what's going on in their worlds, you know.
Michael Eisenberg
When you figure it out, tell me. My kid are older than yours but I still haven’t figured it out I think.
Kathryn Mayne
I know, it's such a different environment to grow up in. Yeah, I think, you know, if you- there's just so much.
Michael Eisenberg
What do you do to spark your kids curiosity?
Kathryn Mayne
Ask them questions.
Michael Eisenberg
You just ask the kids a lot of questions? Mine ask me a lot of questions, I try to ask them questions.
Kathryn Mayne
Yeah, I think it drives them crazy. But yeah, I love to know what they're thinking. I love to know what's going on with them. I love to know what, you know, what was the highlight of your day? What was the thing that drove you crazy? Who made you laugh? Like, what was fun?
Michael Eisenberg
You don't have teenagers yet? Right?
Kathryn Mayne
No.
Michael Eisenberg
Okay. Call me back.
Kathryn Mayne
I'll keep asking them, but they just ignore me.
Michael Eisenberg
Call me back. What do you love to learn about outside of work? Again, if you have time, what's like the thing that interests you most?
Kathryn Mayne
I don't know if there's something that interests me most. But, I'm interested in other cultures. You know, love to travel. I like sport, I'm always fascinated, you know, it goes kind of goes back to people, you know, when you're watching a sport. And you know, sometimes it's just about who's winning, it’s almost like, what's their story? You know, what's their journey? How did they get there? How- what did they do? I just find that really fascinating. I remember when the iPad came out. And my husband bought me an iPad, I said, “Why do I need an iPad?” And he said, “Because you when you watch television, you drive me crazy asking all these questions about these athletes”. He said, “If you have an iPad, at least you can look it up on the internet. And so I can just watch the sport and you can understand who this person is. You can do it quietly and not drive me nuts”.
Michael Eisenberg
I have this interview question. My interviews start like this. I say tell me about you. They always inevitably start from like, you know, their current job or their first job. I said “No, tell me from the womb, I want to know from the womb”. And I find people tell their stories. It's interesting, right? You learn a lot about them by the way they tell their stories from. I have to ask you, two questions that are kind of related. Do you care if your daughters kind of follow in your footsteps? You have three daughters. If they kind of become an investor and executive?
Kathryn Mayne
No, I want them to find their own path.
Michael Eisenberg
Their own path.
Kathryn Mayne
Yeah, I'd love for them to find something that they are truly passionate about and they love doing. They ask me, you know, when I travel or when I'm doing these, what they call “blah blahs zoom calls” at night. They say, “Mommy, why do you have to do that? Why do you work?” And I say, you know, “I really truly love what I do”. I find it so interesting. It kind of energizes me and I'd love for them to find something to do that makes them feel the same way.
Michael Eisenberg
By the way, a true story about my daughter. When she was in elementary school, she was called in by the principal. And asked has to tell about her family. And I'm translating from the Hebrew. And the principal asked her, you know, what do your parents do? What does your father do? And my daughter said, “He sits in totally boring meetings all day”.
Kathryn Mayne
So we have the same job.
Michael Eisenberg
So, you founded an organization at the end of 2015, to inspire women to join European private equity.
Kathryn Mayne
I was one of 12 co-founders.
Michael Eisenberg
It's called Level 20, right? Why did you do this? Like, who cares?
Kathryn Mayne
Well, we cared. There's 12 of us who were all women working in different capacities in private equity and venture capital in Europe, most of us based in London. And we used to just get together and catch up, we'd have lunch, it was great. They're unbelievable women, super successful in their careers. And, they were just great peers, like, it was a really nice network, really supportive of each other. And, you know, we kind of just helped each other when people were having children, it was like, what's the maternity policy at your firm? We just shared perspectives, and it was really valuable. And, one day, someone said, you know, I've sort of looked around and realized that the industry hasn't changed that much since we started. The percentage of women in senior roles wasn't massively different. And, we thought, well, maybe we should invest some of our energy into trying to change that. And so, that's really where Level 20 came from. It came from a group of women who had bonded together working in the same industry and had really benefited from having the support of each other, saying, could we sort of pay it forward, in some way?
Michael Eisenberg
And how's it going?
Kathryn Mayne
I'm not actively involved anymore, but I am blown away by how big it has become.
Michael Eisenberg
What changed? What was the key change, you think?
Kathryn Mayne
Well, I mean, just what Level 20 has turned into is fantastic. It's now a Pan-European network with 1000s of members. And, you know, some very valuable programs, including, I think, one of the most important programs that was set up was a mentoring program, where senior men and women in private equity and venture would mentor the next generation. And, some of those early mentees have then started doing it for the next generation. So, it really has become a means of paying it forward with the mission of, you know, sort of once you manage to recruit people into the industry, you work really hard to promote, and retain them. And I think we're seeing that happen. So, the mission was to have 20% of decision making roles in private equity, be women by 2020. We didn't get there. But I think we've made fantastic progress in the percentage of senior women today, as well as the pipeline that is growing for that percentage to increase.
Michael Eisenberg
So I have to ask a controversial question, because I think it gets to the heart of, kind of, values and outcomes. And your job is to pay the pensioners in the foundations with significant returns. There's been a big push in the venture industry broadly, you've seen it everywhere, for what I would call- what they call diversity. And inclusion. It's not clear yet, I think it's fair to say that, that improves returns, we don't know. It's a bet. It's a thesis, that's a values thesis, that has no real basis in reality. It's you know, there are plenty of people are not doing it. There's some people are talented investors. It could be male, female, or anything else. But the kind of, for lack of a better term, aspiration to get to a certain level of diversity, may be at odds with returns. How do you think about that?
Michael Eisenberg
There's been a big push for diversity in the venture capital business. It takes a lot of time and money to train a venture capitalist and it can be expensive. One could argue that there's a tension between returns and diversity by now or a values based judgment around diversity versus the need to deliver returns to pensioners to foundations to people doing good things with the money as you did. How do you think about that? In the current environment we're in?
Kathryn Mayne
Yeah, that's a really good question. And it's one that's got answers probably on a couple of different dimensions. So when I look at the diversity question, as a mother of three young girls, I 100%, want my girls to have the opportunity to go out and do anything they want in this world and do any job that they set their minds to. And that was actually something that when, you know, the cofounders, of Level 20, when we came up with this idea of starting this initiative, that was something that was at the back of my mind, I've spent, you know, many years in an industry that has been predominantly male, not much has changed. I've loved being part of this industry, wouldn't it be great for them to experience something as fun and rewarding, exciting as this? So I want that opportunity to be available to women.
When you ask the question, as a limited partner, our first job as Horsley Bridge, is to deliver the very best returns to our investors to the people that support us, and, you know, put us in business. And we know that venture capital is a really, really hard business to get right. So it's very hard for us to even say, okay, these are, you know, we're going to make mistakes all the time. But we're going to pick these managers, because we think they've got the best shot of giving our limited partners the very best returns that we can't.
So predominantly, that is our job. I think there's other entities that can invest purely from a values basis and say, Okay, we're gonna go out, and experiment and back teams that are diverse for the purpose of them being diverse.
When I look at our portfolio, I can see considerable change in the diversity of the partnerships that we backed, because people have been making a very conscious effort to improve the diversity in their partnerships, because they believe it is going to improve their returns, they're conscious that the founder, founders today are much more diverse than they were, let's say 20 years ago, it's much easier to attract young female founders if you have great female talent within your firm.
So the smart firms understand that and they have been building diversity in their partnerships, such that they are able to work with the very best founders today who've come from a much more diverse set, they also appreciate that diversity of opinion and experience around the table should make for better investment returns, we've seen that I think there's data that shows this is the case in the public markets. It's too early to see it in venture because the change is still happening. I have this thesis that values create economic value.
Michael Eisenberg
Something I've written about my books, et cetera, I tend to agree with you. This is tricky, this venture business and it's hard. And it's specifically hard, I think, from your perch, where you are to tell the funds the GPs, us in this case who to hire, that's yeah, we would we would we would never tell a GP who they should hire, we would never tell them, you know, can you imagine telling somebody who you should go into partnership with, you know, we would never tell a GP, what they should invest in. Our job is to meet those people and try to understand the dynamics of those teams, those strategies, the way they operate, and see if that's a fit for what we do. But it's not our job to tell them what to do. And ultimately, it needs to deliver the economic value to your LPs who are doing good work with that money and people's pensions need to be paid. And it feels like what you're saying is you can't sacrifice. You have to choose the very best partnerships to invest in because you got to deliver those returns to people. You're not an impact funds to say that or a government fund that has diversity goals, irrespective of returns the key driver for Horsley Bridge because you compete every day returns. And you believe that the diversity services entrepreneurs better so you can get in the next generation of founders better, but the guiding light has to be the returns at the end of the day. And there is this underlying belief that improve diversity will show up in the return. Yeah, so values, we hope will create value in the venture capital business. Also, I think it's the same as a mission driven founder. If I think when you say it's all about returns, the returns only happen if exceptional things happen. So
The mission driven founder, if they solve a massive problem, generates returns, they don't start by saying, I'm just gonna go make a lot of money. I think it's the same thing in our business. If we back exceptional people that think the right way about the trends that are shaping the world today, they will be capable of finding and working with the best founders, who, you know, build those companies, and hence, the returns follow. There's so the returns are the outcome of the this, you know, amazing recipe of great people and ideas, working together. To solve problems. This comes back to the notion that the venture capital business is a deeply human business that requires human connection between an investor and a founder, as the case may be a belief in the mission, and then your belief in those partnerships. And it's the ability to create those deeply human connections with the diversity of humanity that actually, we think we drive through, or do we think that matters a lot, we have met some new managers that are doing this with a lot of data and trying to come up with algorithms that spit out the answer.
We're a bit skeptical of that. I think that makes me feel better, because you're very good at that. No, I think data can help. But again, as we've mentioned before, this is a really ambiguous business what we do so I think you have to make you have to be capable of making judgments around people and I'm not sure look, I think the software is amazing, and maybe it will be doing that in a few years time. Hopefully not. But I don't think it's there yet.
Michael Eisenberg
That's a very thoughtful answer. Thank you. So, what motivates you to get out of bed every morning?
Kathryn Mayne
Well, my kids wake- no- I have to get up and make them breakfast.
Michael Eisenberg
Oh, come on. Making them breakfast motivates you every morning?
Kathryn Mayne
No.
Michael Eisenberg
Okay. What do they eat for breakfast every morning?
Kathryn Mayne
My husband likes to make them pancakes. He's actually pretty good with breakfast.
Michael Eisenberg
Okay. You make breakfast in the morning?
Kathryn Mayne
Yeah, sometimes. It’s a mix.
Michael Eisenberg
What do you make?
Kathryn Mayne
Just the regular stuff.
Michael Eisenberg
Regular stuff. Okay. But what motivates you get out of bed every morning.
Kathryn Mayne
That's a great question. I can't- I have never actually even thought of that, because there's just so much to do.
Michael Eisenberg
What's the problem the world you most want to fix? This kind of a rapid round of questions.
Kathryn Mayne
That I most want to fix. I think I would like to know that my children will get to experience the natural world in the way that we grew up with.
Michael Eisenberg
What does that mean?
Kathryn Mayne
I just worry a little bit about, you know, their ability to access nature on a planet that is, you know, consuming as much as it consumes.
Michael Eisenberg
Is that a climate change comment? Is it a consumerism comment? Or is it like-
Kathryn Mayne
It's probably a combination.
Michael Eisenberg
-hiding behind an iPhone comment?
Kathryn Mayne
No, I think it's probably a climate question. I just want to know that that natural world exists for them.
Michael Eisenberg
How old are your kids now?
Kathryn Mayne
Eight and 10.
Michael Eisenberg
Do they have smartphones?
Kathryn Mayne
No.
Michael Eisenberg
No. You limit their time on devices?
Kathryn Mayne
Yes.
Michael Eisenberg
Do they an iPad?
Kathryn Mayne
They have one to do their schoolwork.
Michael Eisenberg
Computer?
Kathryn Mayne
No.
Michael Eisenberg
Do they read books?
Kathryn Mayne
They read like crazy.
Michael Eisenberg
Amazing. Do you incentivize them, by the way, to read books?
Kathryn Mayne
No, they just love to read.
Michael Eisenberg
They love to read. What’d you do to make them love to read?
Kathryn Mayne
We read to them when they are children. There were always lots of books around. No, but they truly do love to read. It's a wonderful thing to see.
Michael Eisenberg
Do they like Zoom? Because Mommy likes Zoom.
Kathryn Mayne
No, the only thing they like to do on Zoom is put silly hats on me when I'm on a Zoom call.
Michael Eisenberg
Do you like zoom?
Kathryn Mayne
No, I'm so sick of it. No, I- look, I think it enabled us all to run our businesses in a really efficient way when we were all locked up at home. So, again, it was pretty impressive that the world did continue to operate for the two years that most of us weren't actually able to get out and meet with people. But, I'm very glad that we are back in the real world connecting with humans in person again.
Michael Eisenberg
I'm glad you're here.
Kathryn Mayne
Thank you.
Michael Eisenberg
If you were to write a book, what would it be about?
Kathryn Mayne
That's a really good question, too. I don't know. What would I write a book about?
Michael Eisenberg
I'm in the venture business. They pay me to ask good questions. You pay me to ask good questions, actually.
Kathryn Mayne
What would I write a book about? Yeah, I don't know the answer to that yet.
Michael Eisenberg
All right.
Kathryn Mayne
I haven't thought about it.
Michael Eisenberg
Maybe I’ll refer to Fred Giuffrida, your partner?
Kathryn Mayne
Well, Fred's got loads of ideas. He's already written a book his book’s about art.
Michael Eisenberg
Oh, is it okay? What makes you human? Makes you vulnerable.
Kathryn Mayne
Just living I think.
Michael Eisenberg
What does that mean?
Kathryn Mayne
Living, feeling, experiencing.
Michael Eisenberg
What’ll get you emotional?
Kathryn Mayne
Sad movies.
Michael Eisenberg
What's a sad movie you've seen?
Kathryn Mayne
Well, I haven't watched a movie in a long time. I tend to fall asleep in them.
Michael Eisenberg
Me too, by the way. We started watching, my wife and I, The Fablemans, because she wanted to and I'm not exactly sure where we're up to. Because-
Kathryn Mayne
You fall asleep. Yeah, I think when you are kind of high energy. Go, go, go. Things like passive, you know, watching television, I can actually fall asleep in the movie theater as well.
Michael Eisenberg
Wow.
Kathryn Mayne
Yeah. That's a real skill, it's a real skill.
Michael Eisenberg
I haven't in a while either-
Kathryn Mayne
Yeah because there's kind of no point going if you're just going to fall asleep.
Michael Eisenberg
I get on a plane to go to sleep by the way.
Kathryn Mayne
Yeah, that works too.
Michael Eisenberg
Yeah. How do you want to be remembered at the end of your life? Other than as the mother of Aleph.
Kathryn Mayne
Yeah, I think as a person that was a great friend, mom, wife. You know, again, I said what really matters is the relationships in life. I think when you strip it all away, that is what it comes down to. So somebody that was there as a, you know, true friend, partner.
Michael Eisenberg
In 100 years, they’re gonna write the biography of Kathryn Mayne.
Kathryn Mayne
Oh my gosh, I can't think of anything more boring. Who would do that?
Michael Eisenberg
What's the title?
Kathryn Mayne
She lived, she loved, she laughed.
Michael Eisenberg
Okay. I need to wrap back before we wrap up to wind back to one question. This is a- your business and mine - is filled with uncertainty. It has long valleys, troughs, and then an exhilarating peak moment where something big happens. And, on that, I want to ask two questions. One is how do you maintain kind of equanimity, for lack of a better word, in these long down-ish or flatline periods before something good happens? And, kind of, the optimism that something good will happen. And then- you know what? Why don’t you answer that question then I’ll ask the second part of the question.
Kathryn Mayne
Yeah, I think, part of it comes from having seen it happen in environments where people believed nothing was happening. So, if you spend all your time focused on the macro, big picture, you won't actually, you know- and this is the benefit of what we do, is we see these things happening every day, you're interacting with the people, you're interacting with the companies that are making this change. But, go back to 2008, 2009, we had the, you know, global financial crisis, credit had disappeared, nobody was ever going to raise any money again.
Michael Eisenberg
Yeah, I remember.
Kathryn Mayne
There was that rest in peace Sandhill Road, ventures completely broken. So, I remember speaking to some of our venture capitalists in that timeframe, and they said, “Yeah, we've really had to scale back spend, we've cut back on marketing, you know, we're just being really careful with our cash, because we don't know how things are going to play out”. Fair enough. You'd go see them six months later, and they'd say, “Wow, we're a little bit surprised. We scaled back. But a lot of this stuff is, maybe it's not growing 100%, but it's growing 50%, it's growing virally.” Like these businesses are actually continuing to grow in an environment where everything else was going backwards. And, that is the power of the technology trends. You know, think back to the innovations that were happening at that point in time. iPhone shift to the cloud. These underlying trends are massive and monumental, and they are continuing to grow and change our world. So I think it is a- once you've seen that, you know, and it was probably back in 2013, maybe 2014. People were like, wow, look, this venture stuff works. That's because you're sitting up here looking at what's going on at the macro level. So, I think once you've seen that, and you've lived through it, and you understand the power of technology, digital software. I think that's what helps you stay the course. As well as a belief that we have, you know, in our little firm, that if you back the very best venture firms in the world who are capable of working with the very best founders, they're going to give you a stake in those great ideas and innovation that's going to be at the forefront of that trend. So, once you've lived through it, I think it becomes pretty unshakable.
Michael Eisenberg
So, I want to bring it back to finish to your kids. So, you said you're want your kids to be able to experience this world in a experiential way. And, you look at technology, and, on some of the parts of technology in companies we've all backed-
Kathryn Mayne
Sure.
Michael Eisenberg
-have perhaps had a negative influence on the world, some positive, some negative? How do you think about that? In the business that we're in, in the world we're in, of investing in these companies, and sometimes you lose your money, sometimes you make your money. But, in kind of the long term impact on our society and our environment on the world that your kids will experience. Do you ever cringe? And, how do you think about that?
Kathryn Mayne
Look, I think you have to believe that some of this, you know, again, it comes down to the founders and the problems that they want to solve. And, I'm hopeful that some of that comes up with solutions or improvements in some of the issues the world is facing. There's actually a very significant increase in the number of companies we see entering our portfolio, that have some way of trying to address climate issues. So, people are investing their energies in those things. I have far more confidence in, you know, entrepreneurs and founders in the innovation, being able to change those things that I do and big central governments, you know, putting some regulation in place and saying, “Okay, by this date, it must look like this”. Well, how does it look like this? It has to come from innovation. So, I think that is one reason why I think we have to keep backing the very best, you know, ideas, the very best minds, the very best thinkers. They're going to come up with ways to improve the world. So I've got-
Michael Eisenberg
Is innovation values neutral?
Kathryn Mayne
Is innovation values neutral? To me, innovation is about positive change.
Michael Eisenberg
positive.
Kathryn Mayne
Absolutely.
Michael Eisenberg
Sometimes there are negative consequences, but it's generally positive.
Kathryn Mayne
Absolutely. Yeah. We wouldn't be doing this if we didn't believe in it.
Michael Eisenberg
I think so too. I'm just checking. Yeah. Kathryn, thanks for joining us. If you've enjoyed this podcast, please rate us five stars on Spotify, Apple Podcasts, wherever you listen to it. And, you can follow Kathryn on LinkedIn, and Twitter every once in a while.
Kathryn Mayne
Haven't really-
Michael Eisenberg
She's a consumer of Twitter, but not a tweeter.
Kathryn Mayne
That's right.
Michael Eisenberg
If you want her wisdom, encourage her to tweet on Twitter, as well. Thanks for joining us. Thank you, Kathryn. Thanks for being the mother of Aleph.
Kathryn Mayne
Thanks.
Executive Producer: Erica Marom
Producer: Andrew Jacobson
Video and Editing: Ron Baranov
Music and Art Direction: Uri Ar
Design: Rony Karadi
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