A VC fund reviews 2,000 pitches a year and invests in 30, weighing financial returns against real-world impact. They ask founders about their motivations, sit on boards to catch risks, and sometimes fund engineering work to build safeguards into the technology itself.
You've got the core questions that any venture capitalist would ask about any company, such as product market fit as you described, such as is it the right time? All those things, market size, unit of whatever. And then it's all around can we make money? Are these the people that are going to make us the money? Those kinds of IRR stamped on our forehead questions. And then you have the aspects of the world positive aspects of impact. How do you balance and how do you think about whether you're going to make an investment? And how do you balance the aspects that are core to traditional venture and these aspects of world positive?
Well, I think we do three things. The first thing we do is seek to understand. So we try to ask a lot of questions. I think some investors show up with such a strong point of view that they're trying to convince the founders to maybe put their square peg in a round hole or go after a certain angle of the market. But we try to first listen and understand why are these founders doing this? Of all the things you could do for 10 years of your life, why this and what's their plan? So we try to understand that. And then internally we have a lot of discussion and debate as an investment team about whether an investment is world positive. Right. That's not a black and white answer to that question. So it's very nuanced and that's good. We have, I think, healthy debate because for a given obvious ventures fund, we can invest in 30 companies out of that fund. So unfortunately, most of what we do is say no. Right? We, you know, we'll look at 2,000 investment opportunities a year, will invest a fund over three years. So that's, you know, 6,000 to 30 is the funnel. So we have to be really, really choosy and we want to make sure that we do it with authenticity so that when we back a company, it has great financial opportunities to drive venture capital returns and it has world positive impact in the company. So we have a lot of investigation that we do around that. And then the third thing that we do, Jack, is we ask the question what could possibly go wrong? We look for what are the potential unintended side effects of this new technology that this company's building. And it doesn't mean we won't invest because of that. That's a question that we keep asking after we invest. And we have a governance role on a board of directors as well. We think it's such an important question because all technology is a double edged sword and has different applications and different uses. But we think we can help our founders stay true to the world positive intention that they have. And by asking that question, maybe we can uncover some edge cases where, hey, this is an unintended use that could be really bad. Well, maybe we should put 10% of our engineering resources on building a safeguard against that to help prevent that. And if we do that, it's good for shareholder value. If we can help prevent a disastrous, you know, side effect or application of a new synthetic biology technology that's good for shareholders, it's good for business, but we look at it from that angle as well.
So just to put a finer point about it though, is there a minimum requirement on the world positive side and a minimum requirement on the financial side or do you make trade offs? If it's. The more it is on the world positive, the more you'll give them leeway. You know, how, how do you think? Give us a little bit of a window into the back room after you dismiss the entrepreneurs and how you talk about these things.
I would say, look, we don't trade values for value. So we're, you know, we're not going to say, wow, this, this fracking company just has got explosive revenue. Why don't we just justify it as, you know, less greenhouse gases than, than coal and maybe we should invest in fracking, right? To, to, to, to use an extreme example so we don't make that trade off. Instead we're looking for, and these are hard to find, but we have demonstrated we can find them. The companies where it's inherently an and not an or that there's actually a flywheel that turns that says, hey, you know, Samiyankonen, who was a venture partner with us early on, he said, I want to build a company that will reverse type 2 diabetes in 100 million people by the year 2025. That was literally the cocktail napkin mission statement. And we were his first check. We said, you know, if you do that, diabetes is, it's a, you know, top four healthcare spend. It's such a massive problem. And when Sami was starting Virta Health, diabetes could only be treated, the idea of reversing it was actually laughed at by mainstream medicine. Roll the clock forward. His company is now valued over $2 billion. They've got three year peer reviewed studies where they are successfully reversing diabetes. They are now finding positive side effects. Their new, their doctor supervised nutritional system is also reversing other. I don't want to make claims that I can't back up, but let's just say there's a roadmap of other conditions that they think their system is going to work for. So those are the kinds of companies we want to invest in where there's no trade off. It's the. The world positive benefit is baked into the disruptive solution.
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