How Creator-Investor Garry Tan Leveled Up His Fund From $7M AUM to $770M AUM

Leveling Up with Eric Siu

Today’s guest is Garry Tan from Initialized, a company that focuses on investing in high potential software startups at the seed stage and earlier. From starting with $7 million in assets under management, his company has grown to the point where it currently has over $770 million, and they're starting to create over $100 billion in market value. He's invested in companies such as Coinbase, Opendoor, Flexport, Rippling, Patreon, Ro, and more. Even though Garry has established a name for himself as one of the world’s best venture capitalists, today on Leveling Up, he explains why he still thinks of himself as an engineer and designer first. As an investor and partner at Y Combinator, he discusses the influence of Paul Graham on his career and how he learned to be a founder. Tuning in, you’ll find out what questions Garry asks before he invests, how people who want to grow venture capital funds find him, and why angel investors should have a portfolio of at least 20 to 30 companies. Hear about how he chooses which companies to invest in, how he helps those companies level up, what the greatest achievements and failures of his career have been, and the importance of taking chances on things that are not ‘hot’!

TIME-STAMPED SHOW NOTES:

• [00:15] An introduction to Garry Tan and his background in investing.
• [01:10] Why Garry sees himself as a creator first, not an investor.
• [02:45] Garry explains how he gets deal flow: Go after communities of people who are builders.
• [04:25] The influence of Paul Graham and Y Combinator on Garry and how he learned to be a founder.
• [07:21] What the typical breakdown is of the exits of Initialized’s standard funds.
• [09:58] How Garry chooses which companies to invest in: taking chances on things that are not ‘hot’.
• [12:28] Garry talks about one of Initialized’s biggest wins.
• [13:25] The top questions Garry asks when deciding which companies to invest in.
• [14:22] How the company progressed from a fund of $7 million to a fund of $230 million.
• [15:47] Garry explains how people who want to grow venture capital funds find him.
• [18:33] How he looks at high valuations and why angel investors should have a portfolio of at least 20 - 30 companies.
• [23:14] What his job as an investor looks like and how he helps the companies he’s invested in get to the next stage.
• [25:12] How he creates content for his youtube channel.
• [27:26] Eric talks about his YouTube video creation process.
• [28:07] How Garry gained 30,000 YouTube subscribers in November.
• [29:06] How he structures his content and how often he posts.
• [30:00] How much time he spends on Clubhouse.
• [30:59] Insight into how his brand team works.
• [32:04] What Garry is currently reading and his favorite business book: Paul Graham: Hackers & Painters.
• [33:40] Garry’s favorite business tool: Frame and Around

Resources From The Interview:

• Initialized
• Y Combinator
• Paul Graham
• Brian Armstrong on LinkedIn
• Ro
• Garry Tan on YouTube
• Clubhouse

• A Few Lessons for Investors and Managers From Warren Buffett

• Seeking Wisdom: From Darwin to Munger

• Must read book: Hackers & Painters

• Zero to One

• Founders at Work

• Frame
• Around
• Garry Tan on Instagram
• Garry Tan on Twitter

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Connect with Eric Siu:

• Growth Everywhere

• Single Grain

• Leveling Up

• Eric Siu on Twitter

• Eric Siu on Instagram

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