20VC Chris Sacca on Coming Out of Retirement To Unfk The Planet with Lowercarbon, How Chris Evaluates His Relationship To Money Today, Why We Have Bred a Generation of Ass Kids, Do VCs Provide Any Real Value and The True Unfiltered Opinion on Faceb

Summary Notes


In this episode of 20 VC, Harry Stebbings interviews Chris Sacca, founder and chairman at Lowercase Capital, renowned for his early investments in tech giants such as Uber, Twitter, and Instagram. Sacca discusses his shift from day-to-day investing to focus on democracy, climate, and diversity initiatives, including the launch of Lower Carbon Capital with $800 million AUM aimed at slashing CO2 emissions. He reflects on his investment philosophy, the importance of genuine passion, and the necessity of companies making a real-world impact. Sacca emphasizes the need for radical candor in management, the significance of diverse teams, and his critical views on companies like Facebook and SoftBank. He also touches on his philanthropic efforts, particularly towards HBCUs, and his belief in the profitability of climate-focused investments.

Summary Notes

Introduction to the Show and Guest

  • Harry Stebbings expresses his excitement about having Chris Sacca on the show.
  • Chris Sacca is the founder and chairman of Lowercase Capital.
  • Lowercase Capital is one of the best-performing funds in venture capital history.
  • Chris Sacca has invested in companies such as Uber, Stripe, Twitter, Instagram, Twilio, Docker, and more.
  • In 2017, Chris and his wife Crystal stepped back from day-to-day investing to focus on democracy, environmental, and diversity efforts.
  • They launched Lower Carbon Capital with $800 million to invest in companies reducing CO2 emissions.
  • Chris Sacca has appeared on Shark Tank and an episode of Billions.
  • Harry Stebbings thanks Shaq for helping him prepare for the episode.
  • Harry Stebbings also promotes Mercury banking, Terminal tech teams, and Angelist fund admin platform.

"Our guest is one of the OGs of the investing world and also one of the most awesome and genuine people."

This quote highlights the high regard Harry Stebbings has for Chris Sacca and sets the tone for the interview.

Chris Sacca's First Move into Investing

  • Chris Sacca's first investment was in Photobucket, which he funded with credit card checks.
  • He was previously involved in deals at Google and as a lawyer.
  • His second investment was in Twitter, where he invested $25,000 that was significant for him at the time.
  • Chris Sacca was motivated to be helpful to companies, which often meant being very involved in their operations.

"The very first one I did on my own was a company called Photobucket, which we ultimately sold for $330,000,000."

This quote signifies Chris Sacca's early success as an investor and the scale of the return on his first independent investment.

Learning from Past Financial Mistakes

  • Chris Sacca discusses his past experience with day trading and the lessons learned from losing money.
  • He emphasizes the importance of attributing success to luck and failures to a lack of talent, which he inverted after his experiences.
  • This mindset helped him when he transitioned into venture capital.

"I very famously took my student loan checks for law school, told the school they hadn't shown up, cash them, and use them to day trade in the market."

Chris Sacca candidly shares a risky financial decision from his past, illustrating the learning curve he experienced on his way to success in investing.

Ego Management and Internal Direction

  • Chris Sacca discusses the challenge of becoming internally directed and not taking oneself too seriously.
  • He shares his personal motto: "It may be lucky, but it's not an accident," which balances recognizing the role of luck and the impact of hard work.

"So much of the challenge of this business is becoming internally directed instead of externally directed."

This quote highlights the importance of self-motivation and personal growth in the investment business.

Reflections on Success and Money

  • Chris Sacca reflects on how his relationship with money has changed over time.
  • He explains that he does not feel competitive with other investors or wealthy individuals.
  • Chris and his wife focus on what they can do with their money and prioritize experiences over material possessions.

"We sat down with a bunch of people who had been through that process... we were like, those people look like money fucked them up."

This quote reveals how Chris Sacca proactively sought advice to avoid the pitfalls of wealth that he observed in others.

Parenthood and Raising Balanced Children

  • Chris Sacca talks about the importance of growth for both partners in a relationship.
  • He discusses the challenges of parenthood and the pressure to push children into certain educational paths or activities.
  • Chris emphasizes the importance of allowing children to have fun and not over-specializing them at a young age.

"The less formal education some of my friends have, the more obsessed they seem to be about getting their kids into the right schools and the right enrichment programs."

This quote sheds light on the paradox that those with less formal education may place more pressure on their children to follow a traditional educational path.

Upbringing and Parenting Philosophy

  • Chris Sacca discusses the importance of instilling gratitude and service in children, especially those born into privilege.
  • He describes how his children are involved in hands-on work and philanthropy to understand fairness and inequality.
  • Chris emphasizes the importance of raising well-rounded individuals who care about others, not just academic or professional achievement.

"And so we've overclocked raising them with a sense of gratitude and service."

This quote highlights Chris's intentional parenting approach to counterbalance the privileges his children have by emphasizing gratitude and service.

"Because kids understand fairness. They may not understand the economy and how dollars work, particularly, but they get fairness and they get inequity."

Chris believes that children have an innate sense of fairness and can understand the concept of inequality, which is why he involves them in philanthropy.

The Impact of Technology and Knowledge Access

  • Chris Sacca discusses the increased access to knowledge and learning opportunities, especially in the tech sector.
  • He notes the positive aspects of this, such as the ability to learn from experts and accelerate personal knowledge.
  • However, he also expresses concern that the focus on personal achievement can lead to a lack of empathy and understanding of others.

"There's never been more available to read, to listen to from talks that are available online."

This quote reflects the abundance of learning resources available in the digital age, which Chris acknowledges as a positive development.

"We've stopped giving a shit about other people along the way."

Despite the benefits of increased knowledge, Chris worries that this has come at the cost of empathy and concern for others.

The Culture of Achievement and Monoculture

  • Chris Sacca criticizes the monoculture in tech, where many young professionals have not experienced diverse or challenging work environments.
  • He believes this lack of exposure leads to products and services that do not consider a wider range of human experiences.
  • Chris emphasizes the importance of hiring individuals who have had "shitty jobs" and understand hard work and service.

"And so as a result, they're completely out of touch of the human condition."

Chris explains that a lack of diverse experiences can result in a disconnect from the realities of different people's lives.

"Our organization will only hire people who have had shitty jobs, who've worked extremely hard for some point in their life, and who appreciate that the worst day of being a VC doesn't begin to compare to the worst day of working in a kitchen of a restaurant."

This hiring philosophy is rooted in the belief that experiencing tough work conditions builds character and perspective.

The Crisis of Entitlement and Lack of Empathy in Youth

  • Chris Sacca expresses concern about the rising generation's sense of entitlement and lack of empathy.
  • He references a crisis of character, where young individuals do not exhibit basic manners or concern for others.
  • Chris advocates for parenting and educational approaches that do not shield children from failure and instead teach them resilience and empathy.

"There's a crisis. I think we have this surplus of assholes coming down the pike right now."

Chris bluntly states his concern about the character flaws he observes in the upcoming generation.

"I think we have this surplus of assholes coming down the pike right now."

This quote reinforces Chris's view that there is a character crisis among the younger generation, with too many exhibiting selfish and entitled behavior.

The Role of Venture Capitalists and the Power Dynamics with Founders

  • Chris Sacca discusses the reluctance of venture capitalists (VCs) to provide critical feedback to founders due to fear of damaging their reputation.
  • He acknowledges that VCs often have less power than perceived and that the true accountability comes from employees within a company.
  • Chris respects VCs like Bill Gurley who are willing to challenge and push for rigor and discipline in board meetings.

"Vcs are fucking terrified of saying anything critical to founders because they don't want the founder to say something bad. They're worried about their reputation."

Chris points out the hesitation of VCs to provide necessary critical feedback due to concerns about their professional image.

"The power has swung so much that no one is willing to say anything bad at all."

This quote highlights the imbalance of power where VCs may feel unable to speak up against founders, affecting the quality of guidance and oversight.

Effective Communication and Management

  • Chris Sacca shares his approach to communication and management, both in parenting and professional relationships.
  • He emphasizes the importance of listening, validating, and asking questions to guide others to solutions.
  • Chris believes in expressing feelings openly and allowing others to take ownership of solutions to problems.

"The first thing you do is when somebody's upset, you repeat back to them what you just heard them say."

Chris advocates for active listening and validation as the first step in addressing someone's concerns.

"I express my feelings, and I don't have to do it enraged. I'm just like, I express them as, this is where I think we fucked up, or this is the disappointment."

Open and honest communication about feelings and disappointments is key to Chris's management style.

Hiring Philosophy and Team Dynamics

  • Chris Sacca values effort and ownership in team members and rejects mediocrity in his hiring practices.
  • He describes his organization as small and efficient, with radical transparency and outsized responsibility for each team member.
  • Chris shares his belief that people rise to the expectations set for them and that treating team members with respect and ownership leads to better outcomes.

"I have to believe that if I empower somebody and treat them like an owner and give them real ownership... they'll fucking act like it as a result."

Empowering team members and treating them like owners is central to Chris's philosophy on team management.

"So for me, the people who suck, it's never a lack of raw talent... It's always a lack of effort and ownership."

Chris attributes failure in team members not to a lack of talent but to a lack of effort and taking ownership of their work.

Obsession in Venture Capital

  • Chris Sacca discusses the obsessive nature of venture capitalists, their need to constantly think about and synthesize information.
  • He shares personal anecdotes about his own obsession with topics like lithium mining and nuclear fusion.
  • Chris highlights how a lack of obsession can lead to disinterest and a decrease in job performance, as seen in his own experience with e-gaming.
  • He emphasizes the importance of genuine interest and excitement in one's work to excel in venture capital.

"I think people in this business are obsessive."

The quote emphasizes the characteristic of venture capitalists to be deeply engrossed in their work and interests, often to an obsessive degree.

Transition from Venture Capital to Shark Tank

  • Chris Sacca explains his transition from being a venture capitalist to participating in Shark Tank.
  • He describes the authenticity and unscripted nature of Shark Tank, where investors use their own money and have no prior knowledge of the companies they invest in.
  • Chris shares his personal realization that his passion no longer aligned with certain aspects of his work, such as e-gaming and kitchen gadgets, leading to his departure from traditional venture capital.

"Shark Tank's fun. Shark Tank's real. Just so you know that none of that is scripted."

This quote clarifies the genuine and spontaneous nature of Shark Tank, distinguishing it from other reality shows that may be scripted or staged.

Chris Sacca's Management Style

  • Chris Sacca reflects on his management style and self-awareness regarding his strengths and weaknesses.
  • He contrasts his approach with that of other successful leaders like Sundar Pichai at Google, acknowledging his own limitations in managing large organizations.
  • Chris advocates for distributing management power due to his self-professed lack of management skills.

"I fucking don't. I know how to throw a grenade in the room, launch some fucking crazy idea, and think in a contrarian way."

The quote reveals Chris's recognition of his strengths in generating innovative and contrarian ideas rather than traditional management and organization.

Climate Change and Lowercarbon Capital

  • Chris Sacca discusses his work on climate change and clean energy, starting from his time at Google.
  • He talks about the increasing urgency of the climate crisis and his personal experiences witnessing its effects.
  • Chris explains his and his wife's commitment to various causes, including climate change, criminal justice reform, and democracy.
  • He describes the evolution of the economics of climate-focused companies and how advancements in technology have reduced startup costs.

"So at the same time that they were investing in companies, they were hiring Al Gore and Colin Powell to go to DC and try and lobby."

This quote illustrates the past efforts of early climate-focused investors who had to lobby for government subsidies due to unfavorable unit economics, contrasting with the current state where technology has improved the economics of starting a climate company.

Venture Capital and Climate Investments

  • Chris Sacca describes the process of creating a successful venture capital firm, including achieving the best deal flow and collaboration with other investors.
  • He explains the rationale behind raising external money for his climate-focused fund, Lowercarbon Capital, despite having personal wealth.
  • Chris expresses confidence in the financial potential of climate investments, predicting that they will surpass his earnings from tech investments.

"I mean, to do this right is going to take billions and billions of dollars."

The quote explains Chris's decision to raise external funds for climate investments, acknowledging the scale of capital required to make a significant impact.

Venture Capital Discipline

  • Chris Sacca addresses the notion of discipline in venture capital, arguing against rigid industry norms and advocating for conviction-based investing.
  • He shares his investment approach, which includes ensuring the best companies can find him, being selective, and actively improving the companies he invests in.
  • Chris emphasizes the importance of venture capitalists being helpful and adding value to their portfolio companies.

"Make sure that the best companies in the world can and want to find me."

This quote encapsulates Chris's strategy for success in venture capital, focusing on reputation and the ability to attract and support top-tier companies.

The Role of Venture Capitalists

  • Chris Sacca discusses the helpfulness of venture capitalists, using Bill Gurley as an example of someone who significantly contributes to a company's success.
  • He highlights the importance of venture capitalists in areas such as hiring, strategy, and connecting companies with valuable resources.
  • Chris contends that the consistent success of top venture funds is not accidental but the result of skilled individuals who add value.

"That guy just materially increased the likelihood of success of this company on that fucking day."

The quote underlines the impact a venture capitalist like Bill Gurley can have on a company's trajectory by providing crucial resources at the right time.

Cyclical Success in Venture

  • Chris Sacca reflects on the cyclical nature of success in venture capital, where one success leads to another.
  • He discusses the role of reputation and past successes in attracting future deals, while also acknowledging the role of chance.
  • Chris questions the idea that deals automatically come to successful venture capitalists, suggesting that reputation and active effort are key.

"Kevin Systrom literally said, I want three angels. You, Ada..."

This quote exemplifies how a venture capitalist's reputation and past successes can attract entrepreneurs like Kevin Systrom to seek them out for investment.

Reputational Influence in Venture Capital

  • Chris Sacca highlights the importance of reputation in the venture capital industry.
  • He shares how his written work and helpfulness influenced Kevin Systrom to involve him in Instagram's deal.
  • Reputational credibility can attract other investors to bring deals to a VC.
  • Collaboration is key in VC, as not every opportunity can be seen by one investor alone.
  • Other investors may seek collaboration based on complementary skills and manageable check sizes that do not threaten their lead in a deal.

"And so he pitched me. I literally was not seeking photos. It sounds fucking hilarious, but I thought it was spent. I thought it was done. He came and pitched me why he wanted me involved. And it was specifically because how I was helpful." "This is inherently collaborative business."

These quotes emphasize the personal experience of Chris Sacca being sought out for a deal due to his reputation and the collaborative nature of venture capital.

Shift in Venture Capital Dynamics

  • Chris Sacca acknowledges a shift in the VC industry towards being more transactional and less collaborative.
  • He suggests reading Series B post-mortems to understand how successful deals come together, even in the current VC climate.
  • High-quality founders still seek quality investors over "party rounds" despite having more leverage.
  • Sacca gives an example of a collaborative deal with T. Rowe Price in the lithium mining business, where complementary expertise benefited the company.

"VC now is less collaborative than ever. It's more transactional than ever." "Read the series b stories, right? It's fun to read the IPO stories, like, how did that deal come together?"

These quotes reflect the perception that the venture capital industry has become more transactional and the advice to study Series B rounds for insights into successful collaborations.

The Role of Diversity and Inclusion in Investments

  • Chris Sacca discusses the financial and ethical motivations behind investing in diverse teams and managers.
  • He emphasizes that diverse teams outperform monocultures, and investing in diversity can also be profitable.
  • Sacca's LP portfolio of diverse managers is performing exceptionally well, challenging the notion of diversity as merely a charitable endeavor.
  • He shares a personal initiative to provide Historically Black Colleges and Universities (HBCUs) with no-fee, no-carry access to venture funds to foster a culture of ownership and direct venture investment.

"Diversity in this industry, you can either hire diverse people for your firm because you acknowledge there's been hundreds of years of systemic discrimination... or you can hire diverse team members because the data are clear that diverse teams just outperform monoculture." "Our LP portfolio of diverse managers is running about two and a half x."

These quotes highlight the dual benefit of promoting diversity in the investment industry—addressing systemic discrimination and achieving superior performance through diverse teams.

Personal Reflections and Relationships

  • Chris Sacca reflects on his strengths and weaknesses, citing storytelling as a strength and talking too much as a weakness.
  • He discusses his partnership with his wife, Crystal, and how their long-standing relationship and mutual weirdness contribute to their success.
  • The couple values robust debate and supports each other's unique personalities and interests.

"My biggest strength is I'm a storyteller... My biggest weakness is talking too much and not asking enough questions." "One is mutual weirdness forever... And then the other thing we have engraved in our rings is in violent agreement."

These quotes reveal Sacca's self-awareness regarding his communication style and the dynamics of his partnership with Crystal, which are based on mutual support and constructive debate.

Criticism of Facebook and Softbank

  • Chris Sacca is highly critical of Facebook, accusing the company of knowing the harm it causes, particularly to teenage girls, and not caring.
  • He shares a negative personal interaction with Mark Zuckerberg and condemns Zuckerberg's attitude and actions.
  • Sacca also criticizes Softbank for its aggressive investment strategies and lack of loyalty, which he believes are value destructive.

"Facebook is a cancer and they know it." "What happened to a little bit of fucking loyalty?"

These quotes express Sacca's strong disapproval of Facebook's and Softbank's business practices and the negative impact he believes they have on society and the industry.

Future of Lower Carbon and Climate Initiatives

  • Chris Sacca outlines his vision for Lower Carbon, emphasizing the need for a swift transition to a clean energy economy.
  • He discusses the importance of investing in carbon sequestration and research into sunlight reflection to mitigate climate change.
  • Sacca's goal is to demonstrate that profitable investments can also have a significant positive environmental impact.

"We are going to transition to a clean energy economy... It's just not going to happen fast enough." "We are going to sequester carbon... we are going to capture and sequester carbon." "We have no way out of this without reflecting sunlight back into the solar system to buy us some time."

These quotes convey Sacca's commitment to combating climate change through innovative investments and the urgency he feels in addressing environmental issues.

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