Rich Habits Podcast – Episode 135: How To Invest In The Next Billion Dollar Startup w/ Colin West

Date: September 15, 2025
Hosts: Austin Hankwitz (B), Robert Croak (A)
Guest: Colin West (C), Founder and Managing Partner, Ensemble VC

Episode Overview

In this episode, hosts Robert Croak and Austin Hankwitz are joined by Colin West, the founder and managing partner at Ensemble VC—a venture capital firm with a data-driven investment approach. Colin, known for investments in companies like Zoom and Saronic and for holding a Guinness World Record, shares his perspectives on building winning portfolios in venture capital, the outsized role of team quality, the big risks and expectations in startup investing, and trends shaping the future, like AI and energy innovation. This episode is an essential listen for anyone interested in venture capital, startup investing, or understanding how world-class investors find the next billion-dollar companies.

Key Discussion Points & Insights

1. Understanding Venture Capital: Risk and Reward

• Venture Capital as a High-Risk, High-Reward Asset Class
  • Most startups do not make money at first; investing in them means large risk, with many going to zero. Only a handful (the “winners”) return outsized gains.
  • Colin likens startup investing to searching for the rare, transformative teams.
  • "A lot of startups don't make money at first and sometimes they need capital that's very risky ... and so you're just trying to find the ones that are going to become really big." – Colin (02:20)
• Portfolio Construction & Expectations
  • Robert shares his rule: invest in 10 ventures, expect 4-6 to go to zero, 2-3 to do okay, 1-2 to deliver 50x or 100x returns. Colin validates this and explains the “power law” of VC returns.
  • "Angel investing is a really quick way to make a millionaire out of a billionaire." – Colin (05:39)
• The "Power Law" in VC Returns
  • In a typical VC portfolio, the single best investment often outreturns the rest combined, making selection and diversification critical.

2. Colin's Origin Story and Lessons from the Arctic

• Entrepreneurial Roots & Grit
  • Raised in Texas with an entrepreneurial father, Colin founded two companies and then entered VC after business school.
• Guinness World Record: Rowing Across the Arctic Ocean
  • Teamwork, tenacity over talent, and working towards a common mission were critical takeaways from his Arctic expedition and have become pillars of his investment thesis.
  • "Building a company is all about who's in the rowboat with you, all rowing in the same direction." – Colin (02:56)
  • "As all bad decisions happen over beers with a friend… we ended up being the first team ever to cross the Arctic Ocean under human power." – Colin (08:55)

3. How Ensemble VC Invests: The Data-Driven Edge

• Origins of Data-Driven Investing
  • Ensemble VC was built from scratch as a data-first firm, using proprietary tools and a unique focus on profiling exceptional teams.
  • Half the team are data scientists, physicists, and mathematicians; half the firm’s budget goes to data science.
• Reducing the Loss Ratio
  • By using data and focusing on team quality, Ensemble has ~40% loss ratio in Series A (compared to a typical 65%), meaning fewer failed bets and a higher chance of hitting unicorns.
  • "If you can go from... a typical 65% loss ratio to 40%, that 25% difference no longer losing is actually making money. So it changes returns pretty dramatically." – Colin (07:09)
• Finding & Winning Access to the Hottest Startups
  • In private markets, money is a commodity for hot companies. VCs must compete by adding unique value (reputation, being the first/biggest check, or bringing impactful help).
  • Ensemble builds software tools for founders to find customers and future capital—helping them grow and raising their chances to win allocations in oversubscribed rounds.
  • "Private markets are not public markets. Public markets you can just click to buy. Private markets is access." – Colin (19:26)

4. Deep Dive: Saronic—A Unicorn in Defense Tech

• Discovering and Backing Saronic
  • Saronic builds autonomous, unmanned vessels for the Navy—a tough, capital-intensive business with geopolitical tailwinds.
  • The deal was made based on team quality: world-class engineers and operational leaders from Anduril, SpaceX, and more, powered by a founder with SEAL Team 6 experience.
  • "We could see the people that had joined the company… were the best autonomy engineers in the world... This is the team for it." – Colin (12:53)
  • Since their Series A investment, Saronic’s valuation soared from sub-$1B to $4B in two years.
• Macro View: The Defense Industry & AI
  • Colin explains how military strategy, energy security, and autonomous technologies are converging, and why these “swarm” defense concepts matter for global politics and economics.

5. The Tech & Future of Venture Investing

• Ensemble Unity: AI Copilot for Startup Picking
  • Ensemble has rolled out Ensemble Unity, an AI-based tool for finding and de-risking deals, now used internally and by other VCs and law firms.
  • "Our mission internally is to increase the slope of innovation ... and see all the cool stuff that humans want to build is we really gotta become more efficient and stop losing so much capital." – Colin (21:33)
  • The ambition: One day, an AI model could learn Colin’s investment preferences so well it could invest posthumously as "Colin AI."
• Democratizing Access & Unlocking the Future
  • Tech will transform VC: leaner teams, more efficient capital allocation, possible “one person, $2-3B funds.”
  • VCs will need to rethink value-add, not just capital, as information and diligence software levels the field.

6. Hottest Sectors and Future Trends

• Energy Transformation
  • Colin predicts a massive shift towards new, decentralized, renewable energy sources to power the AI and robotics future—areas where he is actively investing.
  • "If energy becomes free ... what is an economy when you have abundant labor?" – Colin (26:37)
• Robotics, AI, and AI-Driven Funds
  • The intersection of radically cheap energy and humanoid robotics could radically alter global economies, labor, and even infrastructure.

7. Mindset: What It Takes and Hard Lessons

• Conviction and Staying the Course
  • It takes discipline and a unique thesis, sticking with it over 10+ years, to win in VC.
  • "Bill Gates has a quote: Most people overestimate what they can do in one year and underestimate what they can do in 10 years. I'm 13 years in now and the lesson is, one, I had to have conviction in something and... dedicate the time." – Colin (34:21)
• Reality of Entrepreneurship
  • It's not easy. Even “overnight successes” are built over years, often glamorized after the fact. Most people underestimate the grind, grit, and number of failures on the path to a win.

Notable Quotes & Moments

• On Diversification and the Power Law:
  "Venture capital asset class of returns follow something called a power law, where, you know, there's a very small set of companies that return giant amounts of capital." – Colin (05:45)

• On Starting Ensemble VC:
  "Our culture... started very unique from a traditional VC firm because we just have this data platform at the core of everything we do... everything here starts with product-led and a scalable approach..." – Colin (17:03)

• On Tenacity vs. Talent:
  "I would take tenacity over talent every day of the week." – Robert (09:58)

• On Building for the Future:
  "If your job is to find the best startup teams for whatever you do in this ecosystem, then Ensemble Unity may be an interesting thing for you to look at." – Colin (22:31)

• On What the Economy Could Look Like with Cheap Energy & Robotics:
  “If we have humanoid robotics that are powered with extremely cheap form of energy, what does labor even mean? What is an economy when you have abundant labor?” – Colin (28:06)

• On Conviction and Long-Term Focus:
  "You have to actually believe something unique from first principles and then actually dedicate the time. And if you do that, you're probably going to be right." – Colin (34:28)

• On the Difficulty of Building:
  "The world is literally a museum to human passion. The strip mall over there was literally someone's 10 year dream. And whenever you build something yourself, you realize just how hard it is to make something happen." – Colin (36:15)

Essential Timestamps

| Time | Segment/Topic | |-----------|---------------------------------------------------------------------------------------------| | 01:50 | What is Ensemble VC? Colin’s investment focus and early winners | | 04:43 | Setting realistic expectations: Startup returns, losses, and the “power law” | | 08:55 | Arctic Row world record story and lessons about team & grit | | 12:10 | How they found Saronic; Building conviction around “impossible” companies | | 17:03 | Ensemble’s “secret sauce”: Data culture, team makeup, product-led approach | | 19:26 | Access in private markets: How top VCs differentiate themselves | | 21:33 | The Ensemble Unity platform: AI-powered deal selection and collaboration | | 24:15 | Sectors that excite Colin: New energy, robotics, AI models doing investing | | 26:37 | Deep dive on energy and the economic/societal impact of cheap power and AI | | 34:21 | Hard lessons: The long-term view and necessity of conviction | | 36:15 | The reality of building anything worthwhile (“museum to human passion”) |

Final Takeaways for Listeners

• Venture capital is not about getting every deal right; it’s about assembling a portfolio, managing losses, and securing a few outsized winners.
• The quality and determination of founding teams, backed by the right data and process, is often the biggest predictor of success.
• Access—not just capital—is king in private markets. Founders pick the best investors, just as investors pick the best founders.
• The future of investing is being shaped by data, AI, and relentless innovation—firms that harness these tools have a decisive edge.
• Looking forward, energy and robotics may disrupt the nature of work, economics, and human ambition itself.

Where to Find More

• Visit ensemble.vc for Colin’s firm and newsletter
• Colin West on X: @ColinRWest
• Rich Habits Podcast: official website | Spotify | YouTube
• Join the Rich Habits Network for additional access, resources, and investment opportunities

This episode is indispensable for anyone looking to understand how top-tier venture capitalists spot the next generation of unicorns—and the mindset, grit, and systems it takes to succeed in one of the world’s hardest, but most rewarding, games.