Andrew Cleland: Chief Investment Officer, Techstars

Summary

Podcast Summary: Andrew Cleland on “The Investor With Joel Palathinkal”

Introduction of the Guest

In the August 1, 2025 episode of The Investor with Joel Palathinkal, host Dr. Joel Palathinkal welcomes Andrew Cleland, the Chief Investment Officer at Techstars. Joel provides an extensive overview of Andrew’s impressive career, highlighting his two decades of experience as an institutional venture investor and his operational roles in various startup companies. Andrew has notably invested over $100 million across diverse themes such as big data, artificial intelligence, and robotics, and holds board seats at prominent companies like FanDuel and Data + Math Regatta.

Early Career and Entrepreneurial Ventures

Andrew begins by sharing his early life in London, shaped by his father's work as a demographer with institutions like the World Bank. Despite a family background in medicine, Andrew pursued a broad education encompassing English, physics, math, and economics, ultimately discovering a passion for game theory. After graduating, he joined Booz Allen and Hamilton, where he worked for four years while casually building businesses in the music industry—running nightclubs and DJing to fund his vinyl collection.

Transition to Time Warner and Post 9/11 Experiences

Following his entrepreneurial stint, Andrew was approached by a former colleague to join Time Warner as they prepared to merge with AOL. Initially hesitant, he was persuaded after spending a pivotal weekend in New York, an experience he describes as “the biggest business issue of the time” ([00:54]). However, shortly before his planned move, the September 11 attacks occurred, profoundly impacting his transition. Andrew recounts the city's transformation post-9/11, noting, “everything below Houston was just blitzed… a very different city” ([14:37]).

Tenure at Time Warner and Comcast Ventures

At Time Warner, Andrew worked on various strategic initiatives, including VOD strategy for Time Warner Cable and digital projects for Turner. He played a significant role in the flirtation between AOL and MSN mergers, a process he describes as “one of the most richly banked deals” ([27:16]). After Time Warner, Andrew joined Comcast Ventures, where he spent 11 years overseeing investments and developing enterprise seed programs. He emphasizes Comcast's strategic approach, allowing teams to “maximize returns” while fostering strategic value ([43:36]).

Role at Techstars and Current Market Insights

In his current role at Techstars, Andrew oversees capital formation, deployment, and investment strategy. He explains Techstars’ unique accelerator model, which combines cash investment with a 13-week entrepreneurial boot camp. This program focuses on early-stage founders, providing them with mentorship to make critical business decisions ([48:14]). Andrew highlights the impact of deep tech and AI, stating, “AI is clearly a horizontal… becoming almost table stakes for any discussion we have around it” ([55:05]). He underscores the exponential growth and transformative potential of AI, urging founders to anticipate rapid market changes.

Career Progression and Hiring Practices in Venture Capital

When discussing career advancement in venture capital, Andrew outlines a typical progression from analyst to managing director, emphasizing the importance of analytical skills, relationship-building, and salesmanship. He advises that successful leaders in venture capital must be adept at both technical analysis and cultivating a vast network of industry relationships. Andrew remarks, “in venture, you’re looking for somebody who isn’t just successful in the back room but is able to build a network” ([22:53]).

Investment Strategies: Deep Tech, Software, and AI

Andrew delves into Techstars’ investment strategies, particularly in deep tech and AI sectors. He distinguishes between different types of deep tech investments, highlighting the necessity of understanding the specific risks and market dynamics associated with each sector. For instance, partnerships with NASA and JPL Labs enable Techstars’ founders to penetrate specialized ecosystems effectively ([55:05]). In AI, he emphasizes the need for founders to anticipate and adapt to the “exponential rates of change” that characterize the industry ([59:13]).

Characteristics of Great Founders

One of the standout insights Andrew shares is his perspective on what makes a great founder. He asserts that exceptional founders possess an in-depth understanding of their business, exemplified by their ability to discuss “20 layers deep” into their company’s operations ([59:49]). This comprehensive knowledge signals a high-quality CEO who can manage every detail while delegating responsibilities effectively.

Final Advice: “Give First”

Concluding the conversation, Andrew offers invaluable advice aligned with Techstars’ philosophy of “give first.” He encourages professionals to help others without expecting immediate returns, fostering a culture of reciprocity that ultimately benefits one’s career and personal growth. Andrew states, “give first without asking for anything in return. And you will see the rewards come back to you manifold” ([59:49]).

Closing Remarks

Joel wraps up the episode by expressing gratitude for Andrew’s insights and contributions to the venture community. The conversation highlights Andrew Cleland’s extensive experience, his strategic approach to venture investing, and his commitment to fostering entrepreneurial success through mentorship and strategic investment.

Notable Quotes:

• Andrew Cleland ([00:54]): “How about I pay for a free weekend in New York for you and you have to wear a suit for an hour?”
• Andrew Cleland ([43:36]): “Comcast was enlightened enough as a strategic investor to say like super light touch. You guys just go find great technology companies and maximize returns.”
• Andrew Cleland ([59:49]): “Give first without asking for anything in return. And you will see the rewards come back to you manifold.”

This episode provides a comprehensive look into Andrew Cleland’s career trajectory, his strategic insights into venture investing, and his philosophies on leadership and mentorship. Listeners gain valuable lessons on navigating the venture capital landscape, building successful startups, and the importance of fostering a supportive and knowledgeable investment community.

Transcript

[Andrew Cleland]

Forget about the job. How about I pay for a free weekend in New York for you and you have to wear a suit for an hour? How about that? And I said, okay, yeah, that, that sounds good, so let's do that. So he, he, he got me out there, I spent an hour with him and with a bunch of others in a suit and, and I got super excited about it. Of course, it was like the biggest business issue of the time.

[Joel Palatin]

Welcome to the Investor, a podcast where I, Joel Palatin, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. All right, so really excited to have my guest today. I've got Andrew Cleland. He's a chief Investment officer at techstars. He, his responsibilities span from everything from strategic leadership to the accelerator to directing techstars strategy, developing its investment products. And Andrew before that has had two decades of experience as an institutional venture investor, along with several years of operational experience working at different startup companies. Previously he was at Comcast Ventures, you know, really building that portfolio on the corporate venture strategy. And then he was a managing director for 11 years. You know, he built the corporate ventures east coast office team while founding CVs Enterprise Seed Investment and Entrepreneur residence program. Previously he was a managing director of investments at Time Warner Investments, where he focused on early stage media technology companies. Andrew has invested over $100 million across themes including big data, artificial intelligence, robotics, marketing tech, you name it. He holds and has held numerous board seats including FanDuel, Data +Math Regatta, Data, Gigano, and several more. He lives in New York, just like me, with his wife and two children, just like me. And outside of work, he likes to paint, run and kick around soccer balls and, and knock out tennis balls. But Andrew, you know, welcome to this show. Excited to go much deeper on the state of venture because you guys see a lot of volume, right? With all the programs that you guys have and the global platform that you've built, which I'm very familiar with. So welcome to the show. Thank you for making time for us today.

[Andrew Cleland]

Thanks, man. Thank you for that intro. You hit almost every point on my cv. It's amazing.

[Joel Palatin]

Yeah, I memorized it too. No, just kidding. I, I memorize a 5 paragraph intro for everybody. No.

[Andrew Cleland]

Yeah, that's a, it's a unique skill.

[Joel Palatin]

Yeah, it's, it's the only skill I got. So try to, try to train well, but anyways, Andrew, you know, why don't, why don't you go back a little bit, tell me a little bit about your early days. Tell me a little bit about your family. You know, I mean, what, what did you think you were going to do growing up? What, what did your parents do for a living and how did that kind of form your career interests and your first stages in your career? The platform that we've built, obviously we've built an engaged community of people that are looking to sharpen their skills and number one, break into venture capital, private equity, investment banking, and then also eventually build their own practice. You can do that as an entrepreneur and kind of build a strategy, you know, for a big conglomerate like Comcast or you can actually just go out and be a breakthrough manager and be a spin out fund manager and build something of your own. But tell me, tell me kind of the beginning days of how you kind of thought about your career and, and how that, you know, navigated to where you are now.

[Andrew Cleland]

Yeah, yeah. Well, first of all, I totally agree with you. Many, many paths to success. And so there's no one linear path. And I think it's pretty true of me too. I didn't really, I wasn't one of those kids who grew up thinking, you know, I want to be X or I want to be Y. And also I think helpful to understand that I grew up in Europe, right. I grew up in the UK and there's, there is a different kind of mentality. You asked about family and education stuff. There just is a different culture over there with respect to education that I've come to really understand because I've American kids who grew up in the US and so I got to experience both sides of it. But so to answer your question, I'm a London kid, so very urban, lived all my life in either London or New York, but with a, with a father who was a demographer and so was an academic or worked for institutions associated with the World bank and was always traveling to Sub Saharan Africa or Southeast Asia and would bring back these amazing tales of travel and different cultures. So I always had a very kind of worldwide view growing up. And the rest of the family was medical. So there's kind of some assumption that I might be a doctor when I grew up. But that bug didn't bite me. For whatever reason. I went to school, I went to college in the uk. I didn't really know what I wanted to do. I chose you required to stream really early in the uk, so I chose English, physics and math just to try and get as broad a grip on, you know, the range of possible outcomes as I could. And I did economics at college just because I felt economics really ranged from almost psychology at one end to hardcore math at the other. And it would give me the flexibility to head in the direction that I most wanted. And I went to a college in the UK that looks much more American in style. So I did criminology and psychology and English literature and English history and math and econ and ultimately spent lots of my time doing things like game theory, which was the part of econ that I got most excited about. So graduated again. Didn't really, like, have a conviction for what I wanted to do. I knew I wanted to learn and I wanted. I wasn't afraid of hard work. So I joined one of the big consulting firms. I worked for Booz Allen and Hamilton for about four years when I graduated college and went to business school during that time came out and then, and then I had built businesses at college very casually. I'd run music businesses, I started nightclubs and I would DJ in the back room and I'd invite my favorite DJs over from the US to play in the club. And I'd really done that because I fell in love with music. And vinyl is really expensive and so I needed to get an income stream to cover my vinyl habit. So I kind of done these small entrepreneurial things in college. And then coming out of business school, it was 99. And joined with a couple of others to start a. A.com in the music business. That was my first kind of entrepreneurial venture.

[Joel Palatin]

So tell me about the origin story of that. That business. And you know, I. I've been thinking about this, so I'm really into music as well and I've been playing with a lot of vibe coding tools recently. So I just think it would be. I'm just excited to see where that goes. You know, if you can completely use some type of vibe coding to kind of come up with a beat, a symphony and then lay down a track and then master it, you know, obviously that's where we're heading. Right. But would love to hear the origin story, you know, with your love of music and how you built that and, you know, how you get the customer.

[Andrew Cleland]

Or real vibe coding, which is, you know, I'm going to be at the beach tomorrow. I want a kind of Brazilian theme and I'm going to be with 12 others and it's got to be at this kind of tempo. Write it for me.

[Joel Palatin]

Sure.

[Andrew Cleland]

So So I was a very urban kid and you know, like a lot of inner city kids, I was running nightclubs at university. I was going out to nightclubs a lot. I was, I enjoyed music, I had a real passion for it. I, I don't have much musical talent, but I could dj. I can, I can hold a beat. And so I was being a consultant and working really hard and also, you know, trying to have a personal life around the edges as well. And I graduated from business school and I came back to my consulting firm and was clear, at least I had enough about me to realize that something super interesting was going on and, and if I stuck at the consulting firm, I'd miss out on it. And so, you know, I'd had, I built businesses as a very modest manner in college, but I, I wanted to jump out and make sure that I didn't miss what I thought was going to be a really important event in my business life. So I started looking around and I got introduced to two other founders. One was a Goldman Sachs banker and the other one headed dance music for Sony Worldwide. And the idea was, the idea was to corner a set of rights and those rights were dance music rights. Because dance music, the economics of dance music is structured completely different to any other genre. In any other genre, composer and artist really matter. That's where the rights value sits in dance music. You had a lot of single track producers and composers and it's really the DJ that lends their imprimatur that aggregates a lot of the value in that market. And the UK was, was a big dance music country, more so than the U.S. and so the U.S. music industry was less attuned to where the economics were shifting in dance music. And so we saw an opportunity to go and kind of run the table on music rights and dance music. So we went out, we signed up 20 of the world's best known and biggest DJs and we created a record label and an events company and online retail and, and, and sought to drive that, that value. And the business, the business, the business worked, the business was profitable. We grew it to about 30 people. It was, you know, profitable and it was a real business. But it was clear that the offline pieces of the business were working well and the online pieces, it was still early, was still just difficult to ship bits at that point. And so good entrepreneurial experience without it being the kind of dot com rocket ship that I had hoped that it might be.

[Joel Palatin]

Sure. And then walk us through kind of the next adventure after that.

[Andrew Cleland]

So I was A chief operating officer of the company that I've just described. And one of my former colleagues from Booz Allen had gone over to New York to join Time Warner and he reached out to me kind of out of the blue and said, look, we're just about to merge with aol. We want to take this business global because both businesses are pretty US centric at the moment, Time Warner and aol. And we want somebody who is European, you know, kind of digital ready, entrepreneurial and has consulting experience. And, and so I was a, I was a kind of unique fit and known to him. He worked in the, in the newly formed strategy group. And so he said, come over and, come over and work for us. And the idea was I'd go over and work for Time Warner for a couple of years, get to know everybody there, and then run European strategy in London when, when those two years were up and, and I said, no, I'm not interested. I'm running this dot com and I having fun. I like it. I think it, it's, has, has all this potential. And he said something smart, which was, okay, how about this? Then forget about the job. How about I pay for a free weekend in New York for you and you have to wear a suit for an hour? How about that? And I said, okay, yeah, that sounds good, so let's do that. So he got me out there, I spent an hour with him and with a bunch of others in a suit and I got super excited about it. Of course, it was the biggest business issue of the time. And so long story short, I wrapped it [e-mail] and joined, actually joined. I agreed to join Time Warner in something like August of 01 and would physically move there in October of 01. And so in between, September 11th intervened and it's just a weird time. I phoned up. Time Warner is very kind of naive, I guess, in retrospect, but I phoned up Time Warner. I said, look, you know, this has just happened. Do I still have a job? Like, what's going on? They were like, of course you do. Like, yeah, starting in 28 days or whatever. But it felt like a massive, massive event to us in London. And when I arrived in New York, it felt that way in Manhattan. I don't know. Were you around in Manhattan in no. 1?

[Joel Palatin]

No, I wasn't actually. No.

[Andrew Cleland]

Yeah. So my, so my, my impression was when you arrived and I arrived whatever, 25 days after the event or something, everything below Houston was just blitzed. Like the city was in shock and you could feel it for months after, you smell the dust and you could see all the. Yeah, you know, police ticket tape. And it was just a very different city. And then everything above Houston was kind of midtown as normal. This huge cultural chasm around Houston. So we're trying to be there, but I've been there ever since.

[Joel Palatin]

That's amazing. And, you know, I'm hearing a amazing sales story, right. Hey, you know, here's an irresistible offer. Come out to New York for the weekend. Come in. So I think that's just kind of a skill that probably cascades in terms of just getting the right people, no matter what it takes, even if you got to give them an irresistible offer. That's how they got you to come out there for the weekend. But what was it about that weekend, that one hour in the suit, that made you cross the line and say, look, this is. This is what I want to do? Because in the beginning, you're just like, look, I don't want to do this. I'm having a lot of fun. I don't think this is something that I really want to do. So what. What was it that kind of got you over the line?

[Andrew Cleland]

I was really easy. It was, you know, I. I wanted to do entrepreneurial stuff, and I was doing it with a bunch of really good people in London, so that adds some stickiness to it. But you walk into. You walk into the Time Warner offices, they're just merging with aol. Like, the energy there was, we're gonna rip it up, right? We're gonna. We've just brought two of the biggest companies in the world together. You know? Know, I was excited about the Internet. This was the powerhouse of the Internet. You know, the level of ambition and the quality of the people being aggregated around that ambition. The EU felt like you could move mountains. And. And as I say, it was clear that the company that I helped to found in London was going to do fine, but it probably wasn't going to be a giant hit. And so you walk into, you know, first of all with a friend who I loved, and then with a group of people who are some of the most talented people I've ever worked with going, look, we got to solve this problem about how to bring the Internet and media together and build massive international businesses off the back of it. The level of scale of ambition and talent behind it all kind of aligned. And then, you know, the offer, stay here, get to know us, get to understand how we work, and then you run. European strategy for this behemoth is difficult to resist.

[Joel Palatin]

So you you know, right now at techstars, you're, you're pretty much running a pretty massive franchise and it's important to hire really good talent. So you can't fly everybody in for the weekend, obviously. So what are some other learnings that you've taken away from just trying to retain, number one, attract talent and retain them? I think, you know, the spirit of entrepreneurship, you know, will continue to persist forever. Right. And just kind of just that energy of just building something and, and getting it to scale. But what are, what are some things that you've learned around just attracting and retaining talent?

[Andrew Cleland]

I think the way I've always worked and the way it works in investment firms and I know you really care about is essentially, even if it's a larger company, it's little teams and it always feels kind of family and often there's a mentor, mentee model, because it's an apprenticeship business. Sure, yeah, you can learn some skills in an academic fashion, but really you do most of your learning by doing and by studying what your longer tenured peers or your, you know, your, your bosses are doing. And so in that environment, I think the first thing to make sure is that you're doing a job that you really love and that you're really excited about. And then you communicate that enthusiasm to people you work with and you make sure that you trust them and that you're straight with them and that you're giving them information and that you're protecting them and that you're helping them to thrive and grow and be as good as they can be. So I think, I think it's not the world's greatest management challenge, frankly. You know, it's very easy if you care about people and you care about growing their skills. It's very easy to do that because you're in relatively intimate groups, groups of five or six or seven people that might rely upon you. And through, you know, personal efforts, you can communicate a lot of that value. It's different to, you know, it's different to big manufacturing companies where you've gotta, you gotta have systems and you gotta have values and you've got to do everything at one or two degrees removed. That's a bigger management challenge.

[Joel Palatin]

No, absolutely. Do you feel that? And I feel like this happened to you with the Time Warner deal. Do you feel that sometimes you see someone and you just know that they're supposed to be on your team and you, in that instance, you might have to do what it takes to get that person to come aboard. And I feel like sometimes you see the talent in them, but maybe they don't even see themselves. So it's kind of. And I. And I. I personally have done that with hiring specific people on my team. I was like, look, you know what? You should do this thing. And that person actually had doubts. But, like, I don't know. I think it's going to be too difficult. And I was like, no, you can do it, you know, So I don't know if you've ever experienced that where you've seen something bigger in someone else that they haven't even seen themselves, and it takes someone like you to kind of help them see that.

[Andrew Cleland]

Yeah, there's a couple of different instances. There's just. There's just raw diamonds that are clearly elite talent. And that's really easy to recognize. Sure, that's really easy to recognize. And honestly, if you're that level of talent, you probably have some understanding yourself that you're good. That's kind of in the easy box, that there's a. There's another type, which is this person can be stretched a lot. And I think that's the example that you're talking about. Like, they have a background where they've never really been stretched and demanded of, and you see that potential and you can lay it out in front of them. I think that's rare and very rewarding when it happens. I think the best answer to your question is, I think it's very easy to tell fit quite quickly. I think I found it very helpful to also have people do little elements of the job technically to see whether. Whether they're a great fit technically for the job, because you can. People can get flustered if they don't have the skill set yet. That's not to say that they can't get the skill set, but people can get flustered around technical tasks that throw them, and then they thrash a little bit. And that's very difficult, actually, to. To get from a straight kind of fit interview. So I like. I like the parallels of both.

[Joel Palatin]

Sure. No, that's great. Yeah. Appreciated that perspective. I'd live. I'd love to go to the next career move. So talking a little more about maybe some learnings that you had working at Comcast and maybe just some things that you'd like to take away in terms of reflecting on those lessons that you learned. And I see it as kind of a natural trajectory because you kind of oversaw the merger and kind of manage that process with Time Warner and aol. So it's like, hey, you know what? This is the perfect person to come in and, and run Comcast would love to, you know, learn a little more about that stage in your life.

[Andrew Cleland]

Well, so, so you're right. But, but backing up a little bit. I, ultimately the pitch made to me was, you know, go back to Europe after a couple years. Obviously that didn't happen and obviously it didn't happen for obvious reasons. Right. Which is AOL started to crater and the focus became not how do we take over the rest of the world, but how do we make sure we fit Time Warner and AOL together in the best structural way possible that retains value while AOL struggles with its business model, frankly. So that became the issue for three or four years and I worked on a bunch of the businesses I worked on. You know, I did some of the VOD strategy for Time on a Cable and I worked on content stuff for Turner and digital stuff for Turner as well as AOL issues. And then after about four, four and a half years, oh, the big project I did was, this was interesting was we flirted for about a year with merging AOL with msn. And I worked, I worked hard on that deal trying to figure out what the merger would look like and how the pieces would fit together and what the benefit would be and so on. And difficult deal to do. Tens and tens of bankers on that deal. That is one of the most richly banked deals I've seen in my career and a lot of hard work. And so we did that work for a year and then Google swept in at last minute and kind of took the deal away from, from Microsoft. And so we kind of collapsed over the finish line, rinsed out and exhausted from working intensely on this deal for a year. And my boss at that point took a welders, a sabbatical and, and Time Warner offered me a choice. He said, look, you can be number two strategy globally for Time Warner or you can go venture best. And I took path number two because I was done with strategy by that point and I'd always had an interest in venture and I loved that Venture kind of offered some elements of strategy plus plus plus and you got your homework marked. The thing that I found most frustrating about strategy was you do good work, but you'd never really understand because it would get intermediated by, you know, implementation. You never really understand the full impact that you could have. Venture is very clear. Like if you were good, you'd get rewarded and vice versa, you know, allowing for luck and, and, and over time and so on. So I did that and I ultimately ended up working for Time Wars Investments group for about five years as an MD and then in 11 Comcast ventures. I'd worked a little bit with Comcast Ventures, co invested with them and traded ideas them as a group and they came along in 2011, very similar situation actually. They would. Comcast was just merging with, with NBC and on the back of that wanted to expand its investment activities both to, both to invest more prolifically but also more strategically across media as well. And so they approached me and said look, we're, we're currently based in Philly, we're going to re headquarter into San Francisco, but we also want somebody to help stand up a New York office. Would you consider that? And I was pleased to do so because Comcast Ventures was run at least structurally as a typical venture firm. So it's most easily thought of as a 1Lp venture firm. So it had, it had Time Warner Investments was truly strategic and structured as, as a strategic investor. Comcast Ventures was, was much more like a traditional venture firm. And I was, I was looking for that kind of opportunity at that point. So that took me to Comcast Ventures. I stayed there for about 11 years. Really great bunch of colleagues, very good culture. I think we did some good work there and, and had the opportunity to work on a bunch of deals that I appreciated but also do things like stand up our EIR program and encourage some of our early stage enterprise investing activity as well.

[Joel Palatin]

So I got a question. You know, this is kind of a career advice question. So what are some things that you need to think about when you're upskilling from becoming maybe an analyst to a principal to now becoming an md? What are the different delineations, you know, so in terms of like your, your leadership, are you managing a team, are you having more trigger pull capabilities? And then what should you think about when you're recruiting to kind of shoot for those more senior roles? What are some of the characteristics if you were to kind of hire, you know, a senior, you know, managing director or a partner or just, you know, pretty much like a junior partner. But what's kind of the secret sauce that is important to get to that level of leadership and asset management?

[Andrew Cleland]

I think it follows a, I think most careers or most business careers at least follow the following shape, which is analyst, manager, salesperson. And so as an analyst you've got to be good at, you know, breaking down the numbers and coming up to well reasoned, well researched, well supported, well argued conclusions. As a manager you got to manage the work and get the trains to run on time and make sure that work gets done efficiently and to the kind of. To go. And then, and then the last third of your career is can you sell in some form or another? Right. You may not be selling a widget for a price, but you may be selling services, or you may be selling your partnership to founders as they think about increasing their business. Or you may, you know, you may, you may have to represent the interest of the investment firm that you're, that you're a partner of. And you want to see succeed and grow by making sure that people choose you either as an LP or as a, or as a founder looking for a partner. And so if you're recruiting, I think your question was junior partnerships, you want to see, you want to see the combination of charisma and storytelling and presentation that will allow that person to have a successful last third of their career.

[Joel Palatin]

You make a good point. I mean, because this is very prevalent also in the legal industry. Right? You're an associate, you're an analyst, you're an associate. Then I think you're like a senior, you know, associate. And then I think when you become a partner, you know, everybody's accountable, especially at the partner level, to produce, so they have to actually bring in. And I learned about that not too long ago that, you know, that responsibility relied on the legal team. You know, if you want to kind of row in the ranks, you. You have a certain amount of producing that you have to do as an attorney, especially at these bigger law firms. And then to your point, you know, in the, in the venture space, you know, getting a stake in the partnership, you know, there is some, you know, LP capital that you got to bring in. I'm trying to think of some other practices, probably, you know, consulting, like, I'm, I'm assuming if you're consulting for sure, if you're an eny. Eny. Banking. Yeah, all those points. Yeah, it's a point. It's, it's pretty, pretty parallel across any industry. So that's good advice. And then kind of going a couple levels down in the ranks, what are some characteristics as you're recruiting? We talked about talent that a investor should have, you know, coming in at maybe the analyst level. What are some skills that they have to master? You know, obviously, sourcing, screening, taking, taking deals to the Monday partner meeting. And then, you know, how does that differentiate when they're becoming an associate or a principal or a senior associate in terms of responsibility, skill set, maturity level, all that kind of stuff?

[Andrew Cleland]

Yeah, the table stakes is ability to manage numbers and not only to be able to run sometimes complicated analyses and make good commonsensical decisions about where to estimate and where to be precise. That all falls within the kind of table stakes analyst role. What your, as a, as a, I'm going to talk about the venture industry for, for a moment. It's a little bit different in, in private equity, as I understand it, but in venture you're, you're also looking for sourcing edge. And so you're looking for somebody who isn't just successful in the back room but is able to build a network, build a set of reciprocal relationships where they get early heads up on interesting founders. Founders like being with them. Founders will share information with them and they reward those relationships appropriately. So they, you know, they trade information and they swap leads with other investors that might suit those other firms better than our firm. They know how to build personal relationships that are trusting and, and, and also protective of, of, of people's information. So it's a, it's a, it's appropriate relationship building. They're not, they're not trading on founder information that was told to them in confidence, but they might give a founder a heads up that an investor would be a great fit for them. So as a more junior person, you're looking for both of those skills because a venture firm needs the biggest sensor network possible. And there's two modes, right? One is, one is do I have the big ears open for deal flow that might come across the transom that might surprise me and that I might hook into as something new that I never thought about but I quickly recognize as incredibly compelling. And the other mode is outside in. I'm going to look at a part of the market that I think might be interesting. I'm going to pick something at random like Quantum, right? I believe I'm going to kind of place a stake in the ground that Quantum is going to be a really important investment thesis for the next five years. I'm going to go out and I'm going to understand everything that I possibly can about quantum industry structure, unit economics, big players, best scientists, best research groups in the world. And I'm going to understand that theme and thesis as well as I possibly can. And then I'm gonna in a considered way place two or three bets with the best companies I could find. And, and so you, you do both and you need, it kind of divides your brain into the skills that you need to do both, right. You need a kind of consulting, analytical market brain to go after the second motion and you need that personable network, build relationship brain to hear about the.

[Joel Palatin]

First month and then what would be the differences that you would say would be relevant for private equity? So when you're thinking about, you know, maybe buyout or growth equity or just late stage investing, what are some of the additional chops that you think are important on the PE side?

[Andrew Cleland]

I think you should handicap this answer because I'm just less well qualified to answer it. So my impression is that the private equity industry is a relatively more orderly market in the sense that deals are relatively well known. Even the dynamic, which is yield some great funds over the last 20 or 30 years, which is, you know, reaching out to private companies and kind of prompting them to move towards taking private equity money. Even that market, my understanding is reasonably played out. And everybody understands the dynamics well enough that they're unlikely to do a private one on one deal anymore. And so, and so it's a little bit less about discovering gems in the marketplace that other people haven't discovered yet, or getting to them quickly and moving quickly. It's a little bit more about, okay, there's a pipeline of deals that is relatively well understood by the market at the moment. We need to think about them in a more acute kind of value generating way and we need to understand how we add value to those deals and we need to find edge in order to get to the right outcomes for us as a fund. So it's a little bit less about, you know, raw sourcing, it's a little bit more about, okay, how do we find the deals that we think we're uniquely suited to pursue and add value to.

[Joel Palatin]

Sure, no, I totally agree with that. And tell me a little bit more about maybe a couple more learnings about Comcast and then we'll love to hear about what happened after that. So I'm assuming the, the next step after that was. Was techstars?

[Andrew Cleland]

Yes, it was. So. So learning from Comcast is, you know, great people and great culture get you a long way. It was a, it was a, is a really good team doing work in the right way. One of the other takeaways was Comcast for a long time ran it the right way, which is they recognize that they set a frame for a playing field within which we could play. So nothing too crazy far afield. So I don't know what would be an example of that. So, you know, they wouldn't get excited about consumer good stuff, for example. But basically, if you think about the set of assets that Comcast had, almost anything within the technology space was fair game to go invest in because if those companies became really big, consequential companies, it almost certainly would have a touch point with one of our businesses. And so Comcast was enlightened enough as a strategic investor to say like super light touch. You guys just go find great technology companies and maximize returns. And by doing so you will maximize strategic value for us. And that culture sustained for a long time and produced some really great results for them, not only in terms of investment returns, but also partnerships and strategic deals that they considered as well. And, and so actually ultimately that that shifted a little bit because the company, company ultimately decided that it wanted to bring in our investing activity for a bunch of complicated reasons to do with, to do with shareholders. It wanted to bring in that capability to be a little bit more strategically focused and a little bit more directed in a straight line manner. Upon look, this is what we need to get done in the next five or 10 years. And you guys have been really successful by ranging broadly now focus your efforts and help us within this set of targets. And, and so I helped the company transition the group and help them stand up the new set of principles. But I still wanted to invest broadly in a much more traditional kind of venture capital like manner. And I had two convictions. One was I think that early stage is the most interesting part of the venture marketplace. My belief in venture is that it's maturing as an industry and it will continue to standardize and it will continue to consolidate. And I think we see that happening at the middle and growth layers in the venture market. The early stage market is very difficult to commoditize and make orderly. It's this noisy, chaotic marketplace of ideas and talent. It's really difficult to point math at that problem and solve it. And so that I think will always be the part of the marketplace that you get most rewarded for investing into because you got to solve a really difficult set of problems in order to select well at that stage. And yet it's a really noisy market with a ton of new companies formed, new funds formed, chasing those ideas. And so it is the richest, most rewarding part of the market, but also one that is very well populated with early stage funds and sometimes early stage funds that aren't that long tenured and are still learning their trade, which makes the early stage market subject to winners curse deals as well, because there are, there are early stage funds that will lean into deals that don't have 10 years of experience and don't have the discipline yet to price appropriately. So I knew I wanted to do early stage, but I also knew that I wanted to find a platform or an entity that had some structural advantage, some reason that it would sustainably win over the long term. And techstars got me to pay attention to their business model. And I found those two things in the business model. It was investing at scale into early stage, which was what I wanted to do, but it was doing so in a manner that provided some kind of returns advantage in the manner in which it was investing, which is via an accelerator model and a model that I, Even after almost 20 years in the venture business, had never really understood as a, as a venture partner before.

[Joel Palatin]

Yeah, one thing I'll say is, you know, the other extreme with corporate venture is, you know, just going through five layers of leadership to make a decision. And you know, it's got to be approved by the finance department. So it's, you're, you're essentially kind of going through a budgeting exercise just to make an investment. And by the time it's approved, the deal's closed. So I think that's kind of the extreme that I've, I've heard from friends that work at big CBCs, even though they say that they have a fund, you know, it's just kind of a whole budgetary exercise where from what I've heard too, you know, at some of these other more nimble firms that are forward thinking, you know, they want to run the firm like a, like an investment firm. They want to hire talent that has, you know, built franchises on the investment management side before and just kind of building an actual true firm where there's number one, strategic value, but then there's also some financial upside as well that could be recycled in the future. So I think that's kind of interesting to, to hear about that.

[Andrew Cleland]

Yeah, you're, you're dead right. There's a lot of, there's a lot of pitfalls you can fall into when you're setting up a CVC group. And one is in effect not to let your investors off the leash. Like they need to be able to operate in real time with the market.

[Joel Palatin]

Sure.

[Andrew Cleland]

And if you're going to put them through four layers of management to make decisions, you've lost before you start. You really have, you will only you will almost by definition select for the worst deals if you set it up in that way. And so if you're not prepared to let your investors react in the market, and if you don't trust them to do deals right, then you shouldn't start in the first Place. The other really difficult thing for corporates to get their heads around is there's a marketplace for talent in venture and there's a method for paying that talent and it doesn't line up very well with corporate pay scales or corporate pay methods or even corporate pay, you know, compensation philosophy. And you can, you can maybe get by for a little bit. If you trust your investors and if you let them off the leash and you happen to spot a mid career executive who you trust and you're going to empower, that person will do the job for less than market pay for a few years. But long term you won't manage to sustain that. There just is a market for venture talent and it takes corporations with a little bit of bravery or internal fortitude to be prepared to compensate their venture teams in line with the market. And if you don't compensate your venture teams in line with the market, then you will get, you'll get, you'll get people who you'll either get lucky or you'll get people commensurate with the pay and you'll see it in your returns. Ultimately these things start to play out.

[Joel Palatin]

Yeah, the two, the two cliche comments are you got to spend money to make money and you get what, you get what you pay for pretty much. Right. So, so the nice thing is it scales.

[Andrew Cleland]

Right. So you're typically not, you're typically not paying out a lot of fixed salary.

[Joel Palatin]

Sure.

[Andrew Cleland]

And so you won't end up with egg on your face if the venture team doesn't perform. But if the venture team does perform, you've got to be prepared to reward the team, I think.

[Joel Palatin]

Yeah.

[Andrew Cleland]

Otherwise over the long term it's, it's going to be tough to hold it together.

[Joel Palatin]

Yeah, no, I totally agree. Well, we'll love to hear a little bit more about your role at Tech Stars. The state of the market right now with Venture and kind of what you're seeing. You know I talked about vibe coding so that's a hot topic right now and just kind of the whole direction where AI is headed. But tell me what you're seeing, you know, because you guys. And then maybe you know, give us an update on kind of how the cohorts are structured when the next one is how many you have active globally. Would love just kind of a overarching update on the, on the Tech Stars franchise.

[Andrew Cleland]

Cool. I'll, I'll, I'll try to provide a 60,000 foot view. So my job, I guess I'll start. It's, it's reasonably broad on the investing side. So I am responsible for forming capital, I'm responsible for deploying capital and I'm responsible for the strategy around that and the products that we put into the marketplace. And so that, that's the breadth of what I do. I, I have, I have a lot of talented colleagues that sit alongside me who manage the operations of how we deliver that value. So techstars is one of the original accelerators and so take half a step back. Unlike a traditional venture firm, we provide cash to founders but also service. And that service is effectively putting them through entrepreneurial boot camp for 13 weeks. And, and that, that 13 week process is very structured and well refined over the 18 years that we've been in business and involves a packing mentorship around founders, for example, and effectively and coaching them very actively. And the idea is that typically we work with founders that are earlier in their entrepreneurial journey and they're just about to make a set of decisions that are going to define the trajectory that their companies travel along. How do I go to market? Do I bet more on marketing or sales? How do I structure my salesforce? How do I price? What tech stack should I choose? What's my next hire? How should I manage talent? What culture should I set? There's a bunch of really important questions that founders either default into unthinkingly or give a lot of consideration to. And our founders are typically elite upon one or two or three of those dimensions, but they're not elite across all 20 decisions that they're going to have to make. And so there's a lot of value to surrounding them with senior mentorship and complementing their experience with tenured people that have been through these situations many times or seen these situations many times and can help them make the right decision for their business. And by making the right decision for their business, they save themselves running up a dead end and having to reverse out of it potentially very painfully in the, in the, in the instance of choosing the wrong technical stack, for example, and wasting time and wasting investors capital. And so that's the value prop, that's what we actually deliver. And I'm on the investing side and I have a set of colleagues who are managing, managing how we run those programs and make sure that founders see value out of those programs. So that's, that's what the business is. We run, we're running something like 13 programs at the moment. There is a, there is a fund which I oversee which is just for, which is purely tuned to LP returns. And then we also partner on occasion with Corporations or occasionally universities to help them stand up these kinds of boot camp programs. And we advise and manage the capital that goes into those programs as well. That's a little bit more oriented for single corporate partners or occasionally academic institution partners. But the main fund is built just for, for LP investment returns and it's highly selective. So I'll just speak about the main fund. Now we approve about, let me think, we approve about 100 deals a year and over the course of three years of running that fund we'll look at something like 30,000 applications. Those very highly discriminating. We apply a little bit of AI at the front end just to clean up applications that we know ultimately won't make the grade. And then we put it through a series of human reviews and, and ultimately each managing director running a program will put together a slate of compelling opportunities that might be. For example, we run a, a program in conjunction with NASA and so we run a space program. So it'll be a slate of 15, 16, 17 space companies and ultimately we'll get down to six or seven or eight approved. Similar with Johns Hopkins and Care. First we run a program that focuses on AI in health tech and, and focuses on that particular part of the market. And then we run a series of generalized programs as well. Does that give you a sense for the business?

[Joel Palatin]

No, that's definitely really helpful and I've co invested with you guys and you know, just love the community that you guys are building. I've taken a unique approach to looking at deep tech companies versus software companies. So would love to hear if there's any kind of thoughts around strategies around how you guys invest, what you're looking for in founders. Obviously when you're looking at like capital intensive businesses, I would assume if you're looking at a space company that this founder really needs to be able to raise a lot of capital. And on top of that the other characteristic is they need to have some type of tech barrier. They need to build a company that is highly, highly defensible where some of those bars of defensiveness are not as clear with software and not as much of an issue because you can fix that with sales, you can fix that with, you know, automations or better ways to get out into the market with, with you know, paid ads. Right. So any insights that you have in terms of the different sectors that you guys are investing in, whether it's, you know, highly deep tech versus you know, the state of AI, would love to hear what you're hearing from your managing directors across those different, those different industries.

[Andrew Cleland]

Well, if we think about deep tech for a moment, the. I think, I think the first thing to say is you got to understand the kind of bet that you're making. And some deep tech bets are, look, if they solve nuclear fusion, then there's a huge market for it, right? It's, it's kind of obvious. It is a, almost a binary outcome, technical risk bet. And then there are, and there are, then there are different classes of bets, which you kind of alluded to, which is, okay, we have a really interesting technical product, but how do we get that out into the market? And the two places that we've chosen to partner have been thoughtful because it's difficult to break into the space ecosystem if you come up with an interesting technology, if you solve an interesting technology, that doesn't really guarantee that the company is going to be successful. You have to break into that ecosystem. And that's not necessarily sales in the way that one might think about enterprise software sales, where you can carry a bag and go around a ton of prospects. There's a very limited number of customers. And so partnering with NASA and JPL Labs helps. Our founders kind of entered that ecosystem from day one and solves one of the big problems about how do you penetrate the market. So we isolate down those bets a little bit more into technical risk. There's a very similar story on the healthcare side. It is difficult to penetrate healthcare systems. They're difficult entities to kind of get grappling hooks on and start conversations with. And by, by partnering with the partners that we have in that program, we can help to solve a problem for our entrepreneurs right from the start. And our founders get input from our partners on refining their ideas to make sure that there's good market fit there as well. So that's on the deep tech side. On AI. There's any length of conversation we can have on AI. I think our view is AI is clearly a horizontal. It's seeping into everything. We see it referenced to a greater or smaller degree in almost every company that we see, we believe in that value. AI is going to solve a lot of problems for a lot of different companies and enable them to move further, faster at lower cost. And so it is, it's becoming almost table stakes for any discussion that we have around it. And it feels silicon chips aren't the right analogy, but it feels like, you know, loud maybe, but even for enterprise software, but an even bigger shift, it is huge and monumental. And I'm pretty convinced the biggest business issue that we'll see in our careers. And we just need to think about AI in a way that humans find difficult to think about rates of change. Humans are reasonably okay at seeing linear rates of change, but find it difficult to imagine exponential rates of change. And so you just got to make sure that you sit back and say, okay, but in two years time, what will the state of the market look like? Because it's going to take you two years to build a solution. Are you being ambitious enough? Are you anticipating the competitor set that you really should be thinking about? Because the world within AI in particular is going to look very different in two years time.

[Joel Palatin]

Sure. Well, two final questions. I know we're coming up on time. What characteristics do you think are important to be accepted in your accelerator? Because I know you guys have a really strong filter. And then to wrap up just, you know, would be great if you had a piece of advice from maybe a past mentor or maybe just a work experience. Just reflecting on this entire conversation and taking a look back. You know what, what piece of advice would you give? Whether it's life advice or professional advice. So again, what makes a great founder and piece of advice.

[Andrew Cleland]

Okay, great questions. Look, the thing, the thing I find always differentiates great founders is you can sit with them at a bar or you can sit with them at a pitch meeting and they can go 20 layers deep in the company. They know every metric, they know their business. And that is not a, that's not a cure all, but that is, that is a signal of a really high quality CEO, a really high quality founder that knows every single detail of the business. Still respectful of their colleagues, hands out responsibility to their colleagues, but knows everything. Like at an early stage business, the CEO should know everything. The counter to that is a CEO that needs to turn to an executive to get a lower order number in the business sometimes correlates with red flags. So know your business really well, know every number, be detailed about it, pay attention to the details because you're worrying about every single detail in order to turn all the cogs into the exact right position to make the magic happen and this and the sparks to fly within the business. And then, and then a piece of advice. I'm, I'm gonna, I would have given you this answer before I joined techstars, but aligned really well with one of the techstars mottos, which is give first. I would have phrased it before I joined techstars as kind of pay it forward, but I think it's something that actually the US does exceptionally well. I'm in London at the moment. So I may be thinking about some of the cultural differences the the US and US venture in particularly in particular is very good at. Hey, I know you don't know me that well, but I need this kind of favor. Will you do it for me? And eight times out of 10 people will do that for you. And you should be doing the same things for other people. It is incredibly accelerating for one's career and you should give first without asking for anything in return. And you will see the rewards come back to you manifold. I really think. Be a good person. Try to help other people out. That value will come back to you multiple times.

[Joel Palatin]

I totally agree. And Andrew, thank you for paying it forward. Really appreciate you taking time out to to educate us on so many pieces of your career and also just kind of all the great work that Tech Stars is doing. So hopefully I'll see you when you get back to New York and we'll get together for a cocktail or something.

[Andrew Cleland]

Sounds great, Sean. All right, thanks, man. Appreciate it.

[Joel Palatin]

Bye.

[Andrew Cleland]

It.