What we talked about
Ryan Baird joins Federico Ramallo on the PreVetted Podcast to explain how he operates across three business units and why each one starts with the same principle: focus on risk. Ryan leads Baird Augustine, a Silicon Valley cross border investment bank working with 33 family offices deploying about 20 billion dollars annually, and helps founders through “corporate development as a service,” from capital raises and M and A to advisors, board building, earned media, and executive recruiting.
Show notes
Ryan Baird spent years traveling to 19 countries looking for investment-worthy founders, and concluded he never needed to leave Silicon Valley in the first place. He argues that the 400 publicly traded companies headquartered there, worth a combined $22 trillion, create a talent concentration that no other geography on earth can match.
What we covered
- Ryan runs three business units simultaneously: Baird Augustine, an investment bank working with 33 family offices deploying $20 billion annually; Asymmetrical Alpha, which he says was the number one performing hedge fund of 2024 by focusing on space, robotics, web3, and AI; and Focus on Risk, a curated investor community he started in 2009 after realizing that most startup events are designed for founders, not for investors who want to hear from people actually worth their time.
- Focus on Risk events deliberately invert the typical format, investors are the primary attendees, and the only founders allowed in are breakout portfolio companies brought by their investors, who must explain on the record why this specific company is outperforming everything else in their portfolio.
- Ryan’s filter for fundable founders is straightforward: he looks for traction first, not pitches. He notes that pattern-matching founders who try to build “a slightly better Salesforce” are nearly always wrong because network effects make incremental improvement insufficient to get users to switch, the best founders are pattern breakers, not pattern copiers.
- He warned that founders underestimate how much their pitch reveals beyond the product. When a founder pitches poorly, investors conclude they won’t be able to pitch the next investor, pitch journalists for free media, or pitch top recruits, all of which compound into a structural cost disadvantage versus founders who can communicate clearly.
- On venture capital as an asset class, Ryan was blunt: the average VC does not beat the S&P 500. He recommends most investors stick to 20 to 30 publicly traded market leaders and let them compound over decades, and suggests that only people who have already sold a tech company have the pattern recognition to invest in early-stage startups responsibly.
- Laika, the platform Ryan led as CEO in the Philippines, was built on the premise that content creators should be paid for their data, giving 90% of advertising revenue to creators rather than keeping it. It grew to over 11 million community members and raised $35 million before running into issues with the Philippine government, a setback he views as a proof of concept rather than a failure.
About Ryan
Ryan Baird is the CEO of Baird Augustine, a Silicon Valley cross-border investment bank, founder of the Focus on Risk investor community, and GP at Asymmetrical Alpha hedge fund. He has operated across venture, family offices, and institutional capital, including serving as CEO of Laika in the Philippines.
- LinkedIn: https://www.linkedin.com/in/ryandbaird
- Website: https://bairdaugustine.com
Episode 113 of the PreVetted Podcast.
Full transcript
Federico Ramallo (00:01) Welcome back to the pre-Vered podcast, where we spotlight extraordinary people and remarkable talent reshaping our world. Today we are joined by Ryan Baird, his CEO of Baird Agostin, a Silicon Valley cross-border investment banker and capital strategist who helps entrepreneurs raise funding and grow with a strong focus on risk. Ryan has led and funded companies across venture,
family offices and institutional capital, including serving as CEO of Laika in the Philippines where he helped raise $35 million and grow the platform to more than 11 million community members. He’s also the founder of Focus on Risk and a GP at Asymmetrical Alpha, bringing a deep perspective from both operating and investing. Ryan, welcome to the show.
Ryan Baird (00:58) Thank you for having me, I’m glad to be here.
Federico Ramallo (01:02) Amazing, amazing. We are honored to have you here today. So for people meeting you for the first time, how do you explain what do you do today?
Ryan Baird (01:16) Yeah. So I actually run three business units. As you mentioned, the first is our investment bank, Baird Augustine. And we work with 33 family offices that are deploying $20 billion annually. So the vast majority of our time is spent there. And then we’ll also work with. On a retainer and success fee basis.
to help them raise capital. Typically these entrepreneurs have already sold their business for a hundred million plus working on their next venture. The second business unit, as you mentioned, is Asymmetrical Alpha. We were the number one performing hedge fund of 2024. Really excited about where we’re positioned going forward. We’re really just focused on about four different categories, space, robotics, web three and AI. And then the last business unit is called Focus on Risk.
This is our investor community and I started this group back in 2009. And what happened was, is we were looking for startups to invest in. So we went to the best events here in Silicon Valley. And what we realized is that these events are actually just for founders and that’s super important. Definitely needs to exist. It’s a critical part of our ecosystem, but as an investor.
I don’t want to go to an event and meet a hundred unfundable founders. And that’s what happens every single night of the week here happens every single week in all of the major ecosystems around the world. So in order to fix this, what we started doing is hosting events for investors and we would have angels and VCs there, but I think even more importantly, we would have family offices. We would have the head of corp dev or the head of and A from a publicly traded company.
We would have GPs across the alternative asset classes. And when we would go out to these investors and we would ask. Light their breakout portfolio company. We don’t care about the one that can’t raise. We don’t care about the one that can’t get any traction. We care about the one that’s working and we want to learn more about them. So with these breakout companies will allow these entrepreneurs to come to our events and present the opportunity.
so that everyone can understand it. And then more importantly to our group, we want to hear from the investor. Why now? Why this team? Why out of the millions of opportunities that are out there, why are you spending your time and money here? And by calling the group Focus on Risk and by asking tough questions, we were able to help a lot of investors and entrepreneurs reach their business objectives. These events got very popular. We’ve since done them across the country.
And then we did them around the world, 19 different countries. And the big lesson from doing them all around the world is that I was wrong. We really never had, we really never had to have left Silicon Valley in the first place. When we compare our Silicon Valley event to other Geos, the quality of founders at least 10 times stronger. The dry powder and the assets under management is easily over a hundred X. So because of that, we’ve stopped going to the world and we’re just hyper-focused on Silicon Valley.
And every month we host a handful of events for our community. We’ll do a regular poker game in Atherton. We do an early morning hike around Lake Fasona. We do sailing trips around the Bay and we do private dinners and private networking events. And we do all of this so that we can curate our annual events. And our annual event is now being called the Silicon Valley Economic Forum. We’ve partnered with the city of San Jose.
in the Silicon Valley Chamber of Commerce to do these events for the next few decades. And we follow the exact same formula that we’ve used all around the world. And that formula is we get institutional investors with a hundred billion AUM or greater. We get CEOs that have taken a company public. We get someone from the Mag-7’s investment team, think CorpDev, &A or venture. And then we get elected officials. Our family offices really like speaking to them.
And then of course we feature our clients. Again, many of these individuals have already sold a company for a hundred million plus, or they’ve already taken a company IPO. And this whole event is really just a giant showcase for investors. And that’s our last business unit called Focus on Risk.
Federico Ramallo (05:45) Wow, so much to unpack there.
Ryan Baird (05:48) It’s a lot. We got a big great team that get it all done.
Federico Ramallo (05:55) Right, right. So I think it’s an interesting story that ⁓ you start doing events with curated ⁓ people, right? Because ⁓ the level ⁓ of noise ratio signal.
become come. I’ve been to many events in Santa Clara Convention Center and San Jose. I remember the name of the others, but you many, many places like that with big venues that ⁓ they promise one thing and then they deliver other audience. Right. It doesn’t make sense to name names, but ⁓ I’ve seen that across across multiple events. And ⁓ it is disappointing. Yeah. So it’s refreshing to hear that you are
taking care of building a great experience for the audience.
Ryan Baird (06:48) Yeah, and the biggest problem is that there’s just too many startups. I mean, there’s too many bad startups. There’s too many average startups. And it’s really hard to get through the noise when you’re just talking to startup that’s out there. I think the biggest mistake that VCs make is that they try to find startups that fit their little box.
I think a better strategy is just to invest in phenomenal startups when you see them. It doesn’t matter what stage it doesn’t matter what geo none of that stuff really makes makes a difference. What matters is that the company is execute me well and you’re going to hopefully hundred extra money.
Federico Ramallo (07:38) Right, right. So in these events, you bring mostly investors, but you also bring some startups, right? Some founders.
Ryan Baird (07:48) Yeah,
it’s mostly family offices. And then we invite investors and we allow the investors to highlight one of their breakout portfolio companies.
Federico Ramallo (08:02) ⁓ I see, I see. So they can showcase their best startup and explain why that startup is working compared to others.
Ryan Baird (08:13) That’s correct.
Federico Ramallo (08:15) Wow, that’s a really high quality content out there.
Ryan Baird (08:21) You gotta set the bar high so that you know what you’re looking for and so that the whole team can go find what you’re looking for. And honestly, startups is the toughest asset class to invest in. So you need to be very selective on where you’re fishing. And that’s why we really like founders that have already sold a company for a hundred million plus.
but obviously that’s a high bar to pass, but we’re in Silicon Valley. So there’s plenty of people here that, that do pass the bar. And you know, we’ll also take in startups that get recommended to us through our network, you know, so there are some people in there that, ⁓ you know, haven’t already sold a company for a hundred million plus, but we have,
a very strong network and we rely on them to give us recommendations on what’s working in their portfolio.
Federico Ramallo (09:20) Right, right. Very interesting. ⁓ Can you tell us a little bit more, and I apologize if I mispronounce it, a little bit more about Bert Augustin?
Ryan Baird (09:35) Sure. Yeah, so Baird Augustine is our investment bank and we work with 33 family offices that are deploying $20 billion annually. A lot of that is in the private credit. A lot of it is in the crypto lending. The rest is into GP relationships and direct investments. We also work with entrepreneurs to help them with their corporate development. We call our services corporate development as a service.
will help them with whatever business they have. Sometimes it’s raising capital, sometimes it’s getting a data room and deck ready to raise capital. Sometimes they need better board members and better advisors to sell to the next investor. Sometimes they need to tighten their pitch up a little bit so that they sound like a CEO. Sometimes they need earned media. Sometimes they need to recruit C level executives. We don’t really know what our need beforehand, but
We figure that all of their business objectives are going to fall under the corporate development as a service bucket. And we’re just trying to help some of the best entrepreneurs in the world with some of their largest transactions.
Federico Ramallo (10:47) Right.
And what do you mean by ⁓ when you say that it’s a cross-border investment bank?
Ryan Baird (10:57) Yeah, so with family offices that are all around the world and we can work cross border or, you know, we can work across country lines to get capital raises done or an M &A done or some kind of liquidity event. So we don’t limit ourselves just to the United States.
Federico Ramallo (11:18) Right, right, interesting. ⁓ You also mentioned that you found that ⁓ when you try to do the ⁓ investment events worldwide, that you find that the quality of founders decreases in other parts of the world. ⁓ Can you tell us a little bit more about that?
Ryan Baird (11:38) Yes.
Yeah, absolutely. So there’s actually 400 publicly traded companies that are headquartered in Silicon Valley. And then you have every other tech company in the world typically has a large presence in Silicon Valley. So because of that, you have all of these companies recruiting top talent from around the world to Silicon Valley.
And then those individuals will eventually leave those startups, start their own startup. And by having that experience at a rockstar startup or a rockstar company, you can’t get that anywhere else. So the best people find their way to Silicon Valley. They either come here to start a business. They either come here to be around the best people in the world, or they come here because they want
the best talent from around the world. mean, there’s just so many reasons why Silicon Valley has an advantage over other Geos. And that doesn’t mean there’s not great entrepreneurs in other geographic areas. There is, there’s lots of great entrepreneurs around the world. But do you, if you’re starting a startup, do you want to be surrounded with the best people in the world? Or do you want to be around tier two people?
Most people decide to be around the best people and that’s why they come here to Silicon Valley. Again, these 400 companies that I mentioned that are publicly traded, they’re worth 22 trillion dollars. 22 trillion dollars is all headquartered here in Silicon Valley. So when it comes to opportunity to raise money, there’s really nowhere else in the world that even comes as a close second.
Federico Ramallo (13:24) Right.
Ryan Baird (13:34) Silicon Valley 1 2 3 and then you have other Geos popping in
Federico Ramallo (13:41) Right, right. Yeah, I’ve been going to the Bay Area for the last 10, 15 years and I’ve seen the quality of people, the culture that is there. I couldn’t find it anywhere else. I don’t know if this is the right word, but the energy, right? You feel it in the meetings that they are ahead of everyone else,
Ryan Baird (14:11) Yeah, yeah, no, absolutely. People say, you know, what would be the top five places to invest? And that I go, that’s easy. It’s Palo Alto, San Francisco, San Jose, Santa Clara, and Atherton. It’s cities in Silicon Valley. And it’s because there’s just a huge concentration of talent.
Federico Ramallo (14:29) Right.
you
Ryan Baird (14:38) again that you can’t find anywhere else in the world and I’ve looked for it.
Federico Ramallo (14:43) Right, One of the things that I do in one of my companies is ⁓ building teams in Mexico, right? For companies in the US, most of our clients are in Silicon Valley, right? ⁓ And we have to be very thorough on the people that we screen because… ⁓
Ryan Baird (15:00) Mm-hmm.
Federico Ramallo (15:09) Most of the software engineers that we find, have the technical capacity, but not the cultural knowledge to work in a startup or in a corporation. ⁓ And even though I try to teach them as much as possible, if the gap is too big, I have to disqualify them.
Ryan Baird (15:21) Mm-hmm.
Federico Ramallo (15:36) to be presented with a client, right? So I see what you’re talking about. The concentration of talent in San Francisco is much higher than everywhere else, How much do you think is about quality of talent and culture?
Ryan Baird (15:50) Yeah, the whole Bay Area.
I think it’s a combination. You gotta have both. You gotta have great talent and you have to have a great relationship based culture. That’s how Silicon Valley was birthed with Hila Packard. They invented the HP way, which was all about remembering people’s birthdays, remembering people’s wife’s names, remembering people’s wife’s birthdays, remembering how many people, kids, you know, how many kids do people have?
You know, what schools do they go to, right? You really knew the people that you were working with. And Steve Jobs interned at Hewlett Packard. Steve Wozniak worked at Hewlett Packard. Apple was very much a relationship-based culture when it first started. Amazon, Meta, Google, they all copied Hewlett Packard really. And.
Federico Ramallo (16:38) Interesting.
Ryan Baird (16:58) They were able to accomplish huge things because of this great relationship culture that they grew. But all of these companies have continued to keep, have kept getting bigger. Right? 30,000 people, 40,000 people, 50,000 people. Now you can’t remember everybody’s name. You can’t remember everyone’s birthday. You can’t remember if they’re married or not. You can’t remember how many kids they have. And you lose that relationship-based culture.
And, you know, got to make quarterly earnings once you’re a publicly traded company. And that really puts the company at a disadvantage because it’s not about the relationships anymore. It’s about beating those numbers. And, you know, I’ve said this before, but the average 10 year or the length of time that people stay at a company, used to be over 10 years. People were building careers at these companies.
Now the average 10 years under two years. Only NVIDIA have a 10 year longer than two years. And that’s a huge recruiting costs that Silicon Valley and the MAG-7 has incurred. And it’s because they’ve had to become more transactional as they’ve scaled into these huge corporations.
Federico Ramallo (18:24) it is impossible to know everybody in a company so big, right? And even if you do, you’re not going to be able to remember their names.
Ryan Baird (18:33) That’s
correct.
Federico Ramallo (18:35) How much do think the Hewlett-Packard way ⁓ transmitted to the current startups?
Ryan Baird (18:45) I don’t think it’s truly translated to the current startups. think current startups have become a lot more transactional. I think some angel investors got really lucky on some of their investments and then they start writing books and they tell startups to be more transactional. Where you’re working your clients through the funnel and if they’re not moving through your funnel then they’re dead to you. You got to focus on the next prospect. And you know it’s sad to see that because that’s not
at the heart of Silicon Valley. That’s not what made Silicon Valley great. But it’s easy to lose sight of these things when most of your investments as a VC go to zero and you you’d prefer your founders to be more financially smart versus, you know, spending that money on keeping the relationship based culture.
Federico Ramallo (19:41) Right.
Yeah, I’ve seen more transactional attitudes, I don’t know if that’s the right way to say it, in the Bay Area than I’ve seen everywhere else, right? Mexico is a lot more, the people are more family-oriented, so they look for this work-life balance, right? There is a lot more…
Ryan Baird (20:06) Mm-hmm. Yep.
Federico Ramallo (20:12) about who knows who ⁓ in terms of, ⁓ know, ⁓ maybe not on career opportunities because it’s about what can you do, but in order to build a reputation and you know, what we do is we use back channels to validate. ⁓
people reputation before we hired them, right? So somebody that knows somebody that knows somebody eventually we’ve, you know, the community is so small that we can, you know, we can know if somebody is going to be, you know, a great hire and asshole, right? Which is, you know, kind of what you’re talking about, right? ⁓ So, so yeah, and I haven’t seen that much in the Bay Area, right? They’ve seen more transactional behavior, right?
Ryan Baird (20:53) Yeah.
Yeah.
Federico Ramallo (21:09) which is, I don’t know, a sadness.
Ryan Baird (21:09) There’s definitely
companies that are focused on relationships, but as I said, I’ve seen a big shift from it being all relationship-focused culture to a lot more transactional.
Federico Ramallo (21:26) Right.
Ryan Baird (21:27) And I think what it is, is these companies have gotten bigger, so they’ve become more transactional. And then there’s just more companies in Silicon Valley that have gone public. They look at how the leaders are treating their employees and how they’re behaving and all that kind of stuff. And the transactional behavior spreads.
Federico Ramallo (21:50) Right.
That’s very interesting. I haven’t thought about it that way ⁓ until you mentioned the relation concept.
So if a founder is ⁓ early, what can they do to become fundable before they ever talk to investors?
Ryan Baird (22:18) Well, revenue solves all problems. The more revenue you can get, the easier it’s going to be for you to raise capital. At the end of the day, startup investors are taking huge risks. I think many of them don’t even understand how big of the risk they’re actually taking, but they need to be compensated for their risk.
So they’re only going to be investing in the absolute best startups with the best traction. And I think founders need to remember how competitive it is and that they need to bring their a game. Otherwise no one’s going to invest. The typical founder that goes out to raise capital raises exactly $0. So founders need to be smart about it. Traction is the most obvious answer.
I would say a less obvious answer that I see a lot of founders make this mistake is that they don’t work on their pitch enough.
They really need to make sure that they’re speaking like a CEO so that the investor feels comfortable in them. If every other word is ⁓ an ⁓ it’s a big problem. Founders should really practice not saying, ⁓ like, you know, right, hella, any kind of acronym, any kind of slang, and just practice speaking clearly.
and articulating themselves. And I can tell you right now, I’ve seen a lot of investors pass because the pitch was awful. And I think there’s often confusion. People think the pitch is just to get money. That’s not true. The pitch is also to prove to the investor that you could pitch. You could pitch the next investor.
that you could pitch to get media? Or do you need to pay someone to get media? Can you pitch to recruit? Or do you need to pay a recruiter?
The pitch comes up all the time, especially in sales. And I think a lot of founders are just not ready for the level of communication that they need to actually raise capital.
Federico Ramallo (24:50) wow.
I haven’t thought it that way. mean, I today was talking about how as an as a non-native English speaking person that I should, ⁓ that I, cannot use, ⁓ informal language, right? I mean, it could, it could fly with somebody that was born in the U S because of the way they talk, but
somebody can tell from my accent, even though I work hard on my accent, but somebody can tell from my accent that I’m not native English speaking, right? So ⁓ if I try to use informal language or say, as you mentioned, slang, then it lands really, really, really bad, right? You build, you lose trust by trying to play cool.
⁓ And assume.
Ryan Baird (25:52) Yeah, and you lose trust
if you can’t pitch your business. You know, I see founders, they pitch their business and they sound half asleep. You know, if the, your business doesn’t get you excited, why would the investor invest?
Federico Ramallo (25:57) Right.
Right. Right. And. ⁓
Ryan Baird (26:14) I think
think founders should spend a full weekend or an hour every night what for their schedule and practice their pitch and practice telling stories if you can get good at telling stories it is extraordinarily powerful and You know you’re telling the story of your company are people gonna believe you or are they not gonna believe you?
Federico Ramallo (26:47) So ⁓ the root of what you’re saying is you’re gauging the capacity of a founder to influence other people.
Ryan Baird (26:59) That’s part of it. Yup. You’re looking at influence. You’re looking at sales. You’re looking at a cost advantage, right? Founders that can’t pitch are at a huge cost advantage to founders that can pitch. Because as I said, founders that can pitch, they’re getting free media. They’re recruiting better people. They’re saving money by not going through recruiters.
Federico Ramallo (27:02) Right.
Ryan Baird (27:25) They’re able to pitch investors and close them. They don’t need to get help with raising capital. Right? These are the things that make super successful founders. Otherwise, if they can’t speak, there’s a limit to how successful they can get.
Federico Ramallo (27:48) And how much ⁓ does the accent influence in your funding decision?
Ryan Baird (27:56) I don’t think the accent plays a role at all. I’ve invested all around the world and have dealt with accents. I’ve invested in founders that I couldn’t even speak the same language as them. So I don’t think that’s it. I think what it is is how bad does the founder want it? You know, when you hear an average pitch, it just feels like the founder doesn’t really want it.
They only gave you an average pitch, but when you see people that really want it, it’s life or death. You can feel it in the, you can hear the passion. You can feel it. And that’s that undescribable quality that people are trying to describe about founders. It’s this art of storytelling.
It’s the art of, believe this person will be able to raise from all of the investors he talks to next versus this is going to be a really hard founder to work with because he can’t pitch. And I hear people working with these guys all the time and.
You know, they need help because they can’t pitch.
Federico Ramallo (29:18) Right.
How can you detect, maybe that is not the right question, but I’ve seen in the Bay Area, I’ve seen a lot of hype, a lot of people that are living these projected lives, right? I’m going to become the next whatever, whatever, right? And sometimes, when I read the stories of founders that made it,
They have that same ⁓ projected reality, right? ⁓ But how can you detect the hype from the real thing?
Ryan Baird (30:02) I always look for traction. If I don’t understand the product, don’t understand why anyone would ever use it, but I see lots of people using it, I don’t care what I think. I look at what people think. And if people love it and if people are using it, then I’m behind it. Despite whatever I think about it.
So traction is the biggest one. Most people start startups and all they do is make a deck and talk a lot, but they don’t actually get anything really done. I think another big problem that a lot of founders have is that their pattern recognizers, right? They see a problem.
In one area, they try to apply it to another area, or they see social networks are super successful, so they’re gonna go do a social network. When the best founders are actually pattern breakers, they’re not trying to do stuff that’s already been done. They’re looking to do something completely new, like Uber. Like a lot of these startups.
And I think that’s where a lot of founders go wrong. They see a SaaS company. They think they can build it a little better, have a few different features. The network effects are too strong with some of these companies for a couple better features for people to completely switch the software that they’re using.
Federico Ramallo (31:38) the differentiation has to be big enough to justify the resistance of the market to switch.
Ryan Baird (31:47) Yeah. Yeah.
Federico Ramallo (31:49) Right. Yeah, I remember when ⁓ there were interviews of Jeff Bezos on in the the nineties and 2000s, right, where he was saying our company is losing. don’t remember how many millions per month or year, whatever. Right. ⁓ And the ⁓ the interviewer was teasing him. You know, what is what is the point of a company that it’s, you know, not making money? But ⁓
At that point, nobody understood his vision. And now, you know, it became a multi-billion company, right? ⁓ So he was able to execute on that vision, even though, you know, the general audience didn’t see it.
Ryan Baird (32:40) The general audience usually doesn’t see it. And, you know, I see Ali companies invent stuff all the time and the general public attacks it. And, you know, it’s still a beta or it’s still being worked on. And people are acting like we can’t prove these things a little bit more until they get it right. So there’s early adopters, there’s late adopters.
Typically the late adopters are not happy with change and they’re never happy with Silicon Valley.
Federico Ramallo (33:18) Right, right. And I think this ties to ⁓ what we were talking about before about risk, right? Being able to ⁓ understand what vision is going to be able to perform, being able to gauge the founders and the executive team that is going to execute it. It becomes a critical part of managing that risk, right?
Ryan Baird (33:46) Absolutely. Absolutely. That’s why the team is so important. Without the team, nothing happens.
Federico Ramallo (33:54) Right, right. What advice would you give to an investor when they’re thinking on investing and, you know, and you can see that, you know, that they could be making a risky decision, right?
Ryan Baird (34:15) Yeah, I would tell investors to invest in stocks. They’re liquid. They’re some of the best companies in the world. And what you got to do is find 20 to 30 market leading companies. Don’t speculate on the number two or some company.
you know, starting to dominate a market unless you really, really, really know they’re going to, you should just always invest in the number one and let that company compound over decades. Investing in venture is extremely high risk and that typically means losing all of your money. And I wouldn’t recommend people investing in venture only people that
have maybe sold a tech company should invest and venture.
Federico Ramallo (35:15) Why do you think that? Is that because they know how those type of companies work?
Ryan Baird (35:20) Well, the average venture capitalist doesn’t even beat the S &P 500. So if they can’t beat the S &P 500, why would you want to try to play in that asset class? Sure, you can hit the lucky lotto ticket and have huge returns, but is that repeatable?
How often have you met an early stage founder when they’re raising?
Federico Ramallo (35:51) Right. Right.
So if the investors don’t beat the S &P, the average investor don’t beat the S &P, then why would investors invest in startups?
Ryan Baird (36:13) Well, I think a lot of investors in startups want to see what’s coming. And if you have enough money, you can make money in venture capital, but you need to be able to place enough bets to get one that’s a unicorn or one that goes IPO. A lot of people don’t have enough money to make enough bets. And, you know, they put all their money into the first
20 bets that they find and then they get into a lot of trouble. So there’s plenty of tech companies in the public markets that are making real revenue. would point investors to publicly traded markets because they’re just a lot safer than startups. If something happens, they’re liquid. can get out.
and you won’t suffer a complete loss. And I think there’s lots of tech hedge funds and those tech hedge funds typically do better than some of the best VC funds. The very, very, very best VC funds, nobody can do better. But those are extraordinarily rare and it’s not something you’re likely to get into.
Federico Ramallo (37:42) Right, right. So the distribution of risk and having a large volume of initial investment will allow you to leverage and make a better return than the S &P. Very interesting.
Ryan Baird (38:00) Yeah, I think if you invest in 20 tech market leaders, you’re going to crush the S &P, especially if you can recognize market leaders.
Federico Ramallo (38:15) Right, right. And I think that what you’re talking about of ⁓ analyzing the risk and understanding the risk, ⁓ with your help, they could be able to the SMP.
Ryan Baird (38:31) Yeah.
Federico Ramallo (38:33) Yes. I mean, I mean, I love startups and I work with many startups in all of my years, but ⁓
Ryan Baird (38:47) How many IPOs?
Federico Ramallo (38:49) So far, none. I I work ⁓ on series A, but no IPO yet. ⁓ Maybe, hopefully in the future. ⁓
Ryan Baird (39:01) Hopefully.
Federico Ramallo (39:04) But ⁓ the other thing I was looking at is that the average founder, they spend 10 years on their startup. And then the money they make throughout those years and the amount of work that they make, they work. It makes that the average hourly rate is below the minimum wage, right? ⁓
And I know I’m painting a dim picture of startups, right? ⁓ Don’t get me wrong, I love working in startups. I also work in corporations, right? And it’s a whole different game, you know, and I love both for different things, but, ⁓ you know, ⁓ but I think it’s interesting to talk about why would people ⁓ decide to both invest and also work on a startup, right?
because then there are lot of upsides that ⁓ sometimes they are given, right? So that’s kind of why I’m asking the question, why should a founder or an engineer ⁓ start a new company, right?
Ryan Baird (40:19) Well, if they really do think that there’s a huge problem that they’re going to be able to solve, then I think it’s fine for them to start a startup. But if they, you know, think they can build a better sales force or a better hub spot, you know, I think that space has already been figured out and those startups were just eventually fail. Startups are for disrupting companies.
That’s who raises venture capital disruptors. If it’s just a normal company, then it’s not venture backable. And there’s nothing wrong with that. You can build huge businesses and you don’t need to raise a penny of venture capital. Those are my favorite businesses.
Federico Ramallo (41:13) Right, they’re not disruptive enough to require external investment and they can, you know, ⁓ we can build a company that is a lifestyle company or scale it to series A, series B, right? ⁓ And that can be a bootstrap company without requiring external investment, right?
Very interesting. ⁓ Can you tell us a little bit more about asymmetrical alpha and what does asymmetrical mean to you?
Ryan Baird (41:51) Yeah, so Asymmetrical Alpha is our hedge fund. And we are basically taking small bets in the publicly traded markets, in market leaders, and we’re letting them compound for decades. We feel that by being in Silicon Valley, we’re able to recognize these companies a lot sooner than other people. And because of that,
we can find these 20 market leaders that are really, really growing and put capital behind it. And right now we’re really excited about what’s happening in space, what’s happening in robotics, everything that’s happening in web three. That was actually how we were able to be the number one hedge fund in 2024. And then of course, we’re really excited with everything in AI, AI infrastructure, energy.
and we’re invested the whole fund into those ideas.
Federico Ramallo (42:51) wow, that’s very interesting. I understand you’re ⁓ working with mature startups that already have a proven traction, a lot of potential and finding that sweet spot before they grow, right?
Amazing. You also mentioned that you have worked with multi-generational family offices, right? ⁓ What do they care about that most founders miss?
Ryan Baird (43:18) Mm-hmm.
Well, what most founders miss is that they’re already rich. They don’t need to invest in venture. Most family offices that I know don’t invest in venture.
Most of them just invest in stocks and bonds.
So I think a lot of founders reach out to all family offices thinking that they will invest in venture. it’s just nothing’s further from the truth. If this is venture much from stocks and bonds, it’s usually into real estate and by investing in real estate that keeps them plenty busy and gives them a little extra.
⁓ Return if they’re in the right funds and they understand real estate Once you start getting into hedge funds private equity and venture sometimes it’s harder for families to understand them and Honestly, most of the time you don’t need to invest in them. You can just stick with stocks
Federico Ramallo (44:40) Right, right. ⁓ I don’t remember the name of this person. He said, do not invest if you don’t understand. Right. ⁓ I’m going to remember it later anyway. ⁓ Warren Buffett said that. Interesting. Yeah, and it’s it’s it’s a it’s a sound advice, right? I mean, it sounds cool to become a venture investor, right?
Ryan Baird (44:54) Warbuffet.
Yeah.
Yeah.
Federico Ramallo (45:10) But the level of risk that involves, if an investor doesn’t quite understand that, then it’s a big mistake, right?
Ryan Baird (45:27) Most people think that VCs make a lot of money. Most VCs I know just go out of business.
Venture capital is the hardest asset class to invest in. It’s absolute hardest one. Because there’s no revenue for a lot of these investments. With private equity, much more predictable. With estate, much more predictable. Hedge funds, as long as they’re not speculating on the number two or worse, very predictable.
Federico Ramallo (45:46) Right.
⁓ How much of the component of emotion it’s involved on deciding to become a venture capitalist?
Ryan Baird (46:16) Well, the venture community is very invested to make venture capital sound really, really good. And I think a lot of people read about all the unicorns and the IPOs, but they don’t realize the tens of thousands or hundreds of thousands of startups that have failed for just one IPO. And
You know, you see it all the time. People come to Silicon Valley. make a bunch of angel investments. They think they’re changing the world. I mean, think about all the AI investors from 2016. Wasn’t even really AI. All of those companies have pretty much failed. And, you know, they were just too early.
Federico Ramallo (47:12) Right. Right.
Ryan Baird (47:14) The the VCs are usually right on the investment. They’re just wrong on the timing and Timing sometimes has more to do with the success than anything else
Federico Ramallo (47:22) Hahaha
Interesting. Right. Yes, I agree. ⁓ And as you said before, ⁓ traction proves that, you know, the demand and then proves that timing is right, right, and that there is potential in it.
Ryan Baird (47:46) Yep, my mentor says the dogs gotta eat the dog food. If they’re not eating the dog food, there’s nothing there.
Federico Ramallo (47:58) Right.
Ryan Baird (47:59) It’s really easy to make a pitch deck. It’s really hard to build a business.
Federico Ramallo (48:10) Yes, I completely agree. I built a few pitches and I built a few businesses and yes, it’s hard. And then the next thing, hard thing is to be able to detach yourself from the operation of the company. Because it’s your baby.
Yeah. And then the, you know, the struggle with your ego becomes, you know, an issue, right?
Ryan Baird (48:40) Yep.
Federico Ramallo (48:45) Can you tell us a little bit about Laika? ⁓ You mentioned that you raised $35 million. ⁓ Can you tell us that story?
Ryan Baird (48:56) Yeah, so…
Leica was the idea that content creators should get paid for their content, for their data. There was this idea when I was in college that we wouldn’t need to have a universal basic income because everyone would be monetizing their data and we’d be feeding our data into the AI.
And the AI would pay us for the data. Well, Facebook just came in and stole everybody’s data because they started a social network and everyone gave it up. And Facebook has built a trillion dollar business off of taking people’s data. And I felt that instead of us taking all the advertising dollars,
We would give 90 % of it to the content creators because it’s their data, because it’s their content. And we released this in the Philippines and it went super viral. And unfortunately, it didn’t work in the Philippines with the Filipino government. But I’m confident that
we’ll be able to launch this idea in other countries and hopefully we’ll be the ones that will help content creators get paid for their data.
Federico Ramallo (50:32) Amazing, amazing story. ⁓ I’m looking forward to see that happening in other countries. Yes, I think it’s important for people to recoup the revenue of their data. Yeah. And I think that even though, you know, people talk about failure as a negative, I think it’s ⁓ a great way to learn, you know, from that experience and be able to do it better the next time. Yeah.
Ryan Baird (50:44) Yeah. Yeah.
Yup. Yup.
Federico Ramallo (51:02) one of the startups that I founded was not destroyed but you know the whole project failed because of the bubble burst of the internet in 1999 that shows how old I am
So we’re running out of time. I’ll try to ask you one last question and then any final remarks that you may have. What are you hoping for the future for your work, ⁓ for the support ⁓ you’re giving to the investors and the founders?
Ryan Baird (51:33) Sure.
Yeah, so the future of our work is we’re going to be leveraging AI even more than we have so far. We’re currently as a firm working on
debt deals that are $25 million and above. And I still think those types of debt deals will need a human involved, a money. There’s some negotiation on certain terms that I think are still going to take place. But for debt deals, 25 million and under, we really think we can leverage AI agents to automate the debt process.
And we’ve already built the majority of the platform and we’re connecting lenders to it right now. So if you’re a lender and you want to be on our platform, please reach out. But we’re basically going to put thousands of lenders on this platform. And that way, when someone comes to our site,
They can just talk to our AI agent, tell it what kind of debt it wants or ask some questions to figure out what kind of debt it needs. And then we’ll ask it for all of the information that is required to do the debt. We’re going to take that information, send it to five or six different lenders. They’re going, they have 48 hours to give us a quote. Once they give us the quote over the next 48 hours, we take the best quote and give that to the client.
The consider rejects it we move on with our lives and I think that’s going to be Not only extremely helpful for us to service more clients But it’s going to help a lot of clients because they’re going to get access to all of the family offices that we have And the better rates that they’re giving mostly larger corporations
Federico Ramallo (53:36) Amazing, amazing. We’re going to put the links of the platform once it’s launched on the description of this episode so people can go and sign up. Right. Ryan, thank you very much for joining us today.
Ryan Baird (53:45) I appreciate it.
Thank you for having me.