Investing in Private vs. Public Markets (w/ David Blumberg)

David Blumberg, founder and managing partner of Blumberg Capital, joins Tyler Neville to compare investing in venture capital and public markets. Blumberg notes the degrees of control, levels of risk tolerance, and incentives that differentiate the two types of investments. This video is excerpted from a piece published on Real Vision on May 17, 2019 entitled “Public vs. Private Capital: Taking Advantage of Misaligned Incentives.”

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Investing in Private vs. Public Markets (w/ David Blumberg)
   / realvisiontelevision  

Transcript:
For the full transcript visit: https://rvtv.io/31lgM1z
DAVID BLUMBERG: Entrepreneurs thrive. So I'll just say one of our guiding principles is that the
entrepreneur comes first. And basically the idea is that some venture capitalists, I think, get the
mistaken impression that they're in charge. They're the puppet master, and the entrepreneurs are
little marionettes that dance on strings.
We see it as the NASCAR model. And the NASCAR model, the founder is really able to call on us
for resources. So we're there to change the oil and fill the gas and bring fans into the stands. And,
well, we've been around this track 1,000 times, so we have some experience that can sometimes
be helpful to say, hey, maybe slow down around that curve. You might crash. And we would take
it at 100 miles an hour instead of 150. So some of that advice comes in handy.
And then this network, over the years, builds up and builds up. We specifically have something
that's a nice value add called our CIO Council. And that CIO Council meets with our teams about
four times a year in New York and in San Francisco. We bring in our portfolio companies. They
can get feedback from the market, from real practitioners. And we'll see CIOs, chief information
officers, some CSOs, some chief marketing officers, because they today are spending a lot on IT
and services.
So again, it takes a village. You could say it that way. There's a whole ecosystem of people that
need to support entrepreneurs. And we try and find the most innovative ones building the greatest
companies and help them scale. So from seed to A is where we like to start. And then we follow
on.
TYLER NEVILLE: Could you give us a little background of how it-- so generally our viewers are
stuck in public markets a lot. Could you tell us--
DAVID BLUMBERG: Stuck.
TYLER NEVILLE: Yeah. Could you tell us how the seed round and the Series A round, and where
are you guys primarily like to play in, and how your process works.
DAVID BLUMBERG: Well, it's so funny because that brings me back to my days at T. Rowe Price
because even when I was there, right out of college, I knew that I caught a salmon. I knew that
the big salmon were caught in the bay. But I wanted to go upstream and find the minnows that
were going to become the big salmon, and understand what are the right requirements to grow
them fast, healthy, and strong, because I thought that at early stage, we in the venture fund could
have the most impact.