AV: Can you tell us a bit about your experience before Cornell?
Aaron Holiday: I grew up in New Orleans, Louisiana and went to Morehouse College to study computer science. In my junior year, I saw the impact of software in corporate applications and later worked at Goldman Sachs on equities HFT algorithms. I built software for GFI Group’s derivatives team, including a system to move voice brokerage FX options trading by phone to an API system. I went to business school to explore how finance and software could overlap, and I wanted to shape the direction for organizations’ adoption of technology.
AV: How was your experience at Cornell and with BRV when you were an MBA Student?
Aaron Holiday: At Cornell, I ran BR Venture Fund and was the head fund manager. BRV was a unique experience as Pacific Bio Sciences went public while leading the fund. The prior team had made the investment, and I had the benefit of making sure it could be monetized and liquidated with the adequate diligence of the docs and corporate actions so that the fund could transact to get liquidity. After graduating, I joined DFJ Gotham Ventures and started working in Venture Capital.
AV: What was it like working with Greg Pass and how did that come about?
Aaron Holiday: Greg is a good friend. We created the studio program at Cornell Tech. Greg was the Chief Entrepreneurship Officer and brought me in as Managing Entrepreneurial Officer to create the core tenets of CT to differentiate it from other institutions. The Studio was one portion that we envisioned would represent 1/3 of the curriculum to interact with students across disciplines. The Startup Awards, Spin-Out Clinics, Startup Studio, and Product Studio were also created from our initiatives. I was a student at Cornell’s Johnson School before Cornell Tech existed and was involved in the entrepreneurial ecosystem at Cornell. I led the eLab’s second cohort to build out the accelerator, , and was running the eLab and BRV at the same time. Cathy Dove became the Vice Provost of CT after the RFP, and she reached out to me to understand the landscape at Cornell. I had a mobile app called Cornell Connect to find Cornellians through proximity and had built a positive reputation in the Cornell community. She introduced me to Greg Pass.
AV: There was no Cornell Tech at Roosevelt Island at that point?
Aaron Holiday: Yes, I graduated from Cornell in 2012 and was in a venture fund. I got connected to Greg through Cathy, after putting Greg in touch with A16z via Cathy. Greg and I got together and started talking, and I was recruited to Cornell Tech. I was influenced to leave the VC firm I was at and build out Cornell Tech Campus and pursue building my own VC firm. Greg approached me about building an institution (Cornell Tech) that would be around for centuries. And he also believed in the idea of me building a new type of VC Fund. I started building my current VC firm, 645 Ventures, as well. I heard his vision and couldn’t say no to what sounded like an opportunity of a lifetime; I took the risk to do something unconventional.
AV: What’s in the name of 645 Ventures? What does it mean and what are some of the core tenets?
Aaron Holiday: 645 is the exchange code in the middle of a phone number for Chillmar Martha’s Vineyard. My co-founder, Nnamdi Okike, grew up as a child and would go there, and it represented family and happiness. When we joined forces, I liked the idea of having a numbered name at the top of any list when sorted alphanumerically. We liked the idea of Martha’s Vineyard and its meaning to the family and community. We started 645 because of several structural inefficiencies in how VC funds worked, and we saw an opportunity to create a generational firm.
We envisioned the idea of using software as a core part of the operating model when many VCs were working off of spreadsheets/notebooks. Because of the several changing phenomena in the industry, unicorns were being started everywhere which broke down the idea of network-driven deal sourcing. Deals used to be a function of network and were geographically/socially constrained so there needed to be a mechanism to find opportunities anywhere.
How do you actually build and grow a portfolio in order of magnitude? Is the probability of getting lucky higher now, and or is it better to be concentrated? 645 tries to keep a small portfolio to make sure we have the highest likelihood to succeed based on data and digitizing historical memory. We apply the insight and outbound deal sourcing mentality from early to growth stage, applying institutional style insights to the seed stage.
AV: What were some challenges you faced starting and raising your own fund?
Aaron Holiday: We raised a small Proof of Concept fund on our journey to $500mm AUM with one IPO and ten exits. Of course, not everyone understood it. People said that it was ridiculous, and that venture is an art, not a science. However, we saw that there was an opportunity to apply the scientific method to human/network-driven problems in venture capital. We want to build one of the premier institutions of this generation – where people see Seed investing as they see institutional growth equity investing – a very mature asset class.
AV: What advice do you have for students looking to break into VC? / Grad Students
Aaron Holiday: The language “breaking into VC” was prevalent nomenclature when I was trying to get in, and it implies that it’s a niche field with few firms and positions. Back in the day it used to be like that when it came to recruiting, there were very few positions, and it was like the wild west. It wasn’t a real industry back then. But now the popularity of entrepreneurship and VC has gone through a massive change. There’s more opportunity and lower barriers to entry, like crowdsourcing and small checks. Everybody who wants to can start. Accelerators, fellowships, all these things that we didn’t have back then are now prevalent. So, the language that has carried over hasn’t evolved. It gave me PTSD when you said it. It’s different now. It’s not about breaking into VC as much as finding an opportunity to get exposure to the space.
As for advice for grad students, I would say pursue mastery. It’s important to pursue mastery, especially in investing and VC, because it takes time. Think of the 10-year horizons for investing. We’re just now seeing M&A and IPOs after nearly a decade into building 645, and we’re getting better at it. To do this well, whatever you do, pursue mastery.
AV: What was your biggest personal lesson as an MBA?
Aaron Holiday: Be entrepreneurial and make a reputation for yourself. Leverage networks and connections to find and create opportunities.
AV: How do you think AI will impact businesses, new and old?
Aaron Holiday: AI goes back to the original hypothesis from 9-10 years ago. There are two sides to it. One is buying into the hype. The other is startup experimentation versus formation. As the complexity of code becomes easier, there’s more startup experimentation. We need better mechanisms to see what evolves from an experiment to a company. App tracking volume and Crunchbase volumes are increasing, and the demographics of founders are changing. There’s a gulf of startup experimentation. The seed and 2x funnels are getting bigger, and adjacent to the series A seed funnel is experimenting. The experimentation pool is getting bigger, and if it’s true that more data is coming online, you will be able to allow software to play a role in the investing practice.
AV: So a Startup Experiment evolves into a Startup business. What is the role of institutional investors in supporting entrepreneurs on that journey from seed to growth?
Aaron Holiday: The role of institutional investors is to provide capital, network, and expertise. They can also help entrepreneurs navigate the different stages of growth and provide guidance on strategic decisions. As the company grows, they can help with follow-on funding and introductions to potential acquirers or partners. Ultimately, the institutional investor is there to support the entrepreneur on their journey to building a successful business.