BRV Fund Manager & Interviewer: Jonathan Cervantes
Jonathan: Nick, thank you so much for your time this morning and I’m excited to speak with you about your career in venture capital.
Nick: Of course, always happy to connect with Cornell and give back however I can.
Jonathan: Tell me about your time at Cornell and interest in VC?
Nick: I was a graduate of the human ecology school and in the 90’s Wall Street was a hot place to work so I got my start as an institutional sales trader executing cash money equity transactions mainly for mutual funds and hedge funds. Then at the turn of the century (2000) tech evolved, there was the advent of the internet, quantitative asset managers came into play and there was a devaluation of research transactions which led to compressed margins so I needed to pivot and find a new career.
Jonathan: So where did you go from there?
Nick: One of the foreign institutional investors I worked with gave me a tip in 2005 that if I had the chance to invest in Facebook, which at the time was still a young private company, I needed to do so and to let him know if the opportunity arose. About a year later one of my securities attorneys called me and said his son and several of his friends had just left FB and were heading to Google. They were all looking to sell a couple hundred thousand shares and my attorney was able to set up a private FB fund to allow for the transaction to take place. This is now what we call a secondary direct transfer, which is commonplace today but at the time was a novel idea. Once I knew we could facilitate this I called my foreign investor and let them know I had 1MN shares of FB valued at $5/share and they decided to move forward with the investment. My investors made an enormous sum of money when FB ultimately went public at $50/share, and as a result of this success I did the same thing with Linkedin, Twitter, Tesla, and more companies.
Jonathan: After the success you saw in dealing with secondary direct transfers what did you do next?
Nick: I set up my own company to deal with these types of transactions specifically and I also create and publish research that focuses on building thought leadership & brand reputation. My firm currently handles over $1BN in assets under management and has facilitated over $1BN in agency broker transaction funds.
Jonathan: What is your investment thesis?
Nick: Identify a specific technology vertical that will change the world and achieve sustainable value. Identify the number 1 or 2 players that are still private and have the best VC’s backing them as early investors, and who have the most experienced and best founders. I want to see who has raised the most money so they can create a moat for their model & strategy. We also focus on the later stage (stage D and beyond and want companies that will go public in the next 3 years). We also have a strict policy and mandate and must deliver public securities to investors as soon as they are eligible for distribution – once the lockout period ends we are required to deliver the shares to our investors
Jonathan: Pivoting to advice for the next generation of students who are now confronting fear about the impact AI will have on their job prospects similar to the challenge you faced during the dot com boom, what advice would you give to students starting their careers?
Nick: Focus on relationship building abilities, build human relationships with clients, customers, etc., in whatever you decide to pursue. You’ll need to specialize in your chosen field whether it’s law, medicine, finance, etc., choose something as refined and focused as humanly possible.
Jonathan: Lastly, what advice would you give to students looking to start their career in VC?
Nick: Read and learn as much as you can about the VC world, there are dozens of publicly available websites, some are subscription based TechCrunch, Pitchbook, VentureBeat, etc. There are plenty of opportunities to be an analyst and produce investment models, underwriting models, exit models, or even fundamental research. You can also be a banker that goes out and finds large shareholders to cut deals to purchase large blocks of securities, and raise money for deals and funds. You ultimately have to determine what you’re passionate about and craft the path to attain your desired outcome.
Jonathan: Nick, it’s been a pleasure and thank you so much for your time.
Nick: Jonathan, happy to do it and happy to work with Cornell and BRV in the future.