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- [00:03]
A
Welcome to the Investor, a podcast where I, Joel Palo Thinkle, 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.
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B
It you have to send me the link so I can share it on LinkedIn.
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A
Yeah, yeah, it'll be on YouTube. So, yeah, definitely we'll do that. And we are live. So, Jacob, welcome to the web show and you know, been. Been a long time coming trying to get you on the show. I know we've been busy. So glad that we're able to make it happen. So you've got a really awesome background. Diverse and just different skill sets. I know you guys invest in different sectors and areas of focus, and there's different dynamics with Cowboy Tech and Oklahoma Life Science Fund. So excited to dive into all of those things. But let's start with you. Let's learn about you, your background, where'd you grow up, what your parents do, and a little more on your career and we can just kind of take it from there and navigate through your journey of how you. You got into venture.
- [01:52]
B
Yeah, of course. That sounds great. So do you want me to start and give you some of my background about growing up and. Okay, cool. Yeah. So, kind of interesting. So my, my dad's a chemical engineer and my mom's a landscape architect. So young, when I was, you know, maybe five, my dad gave me some funds and I had to pick different stocks and.
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A
Oh, nice.
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B
So that was kind of a fun, you know, as an introduction, I remember my brother invested in Marvel and I've invested in Walmart and the new Marvel movie came out and he made a lot of money and, you know, overnight, and I was on the steady run. Today, my stock's valued a little bit higher than his. So that's, you know, life lesson. Takes a little bit of time to get those returns when you do a more solid investment.
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A
But hey, and how much did your dad give you? Like, I guess, did you. Did he give you and your brother equal shares?
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B
Yeah, well, yeah, he gave us equal shares. And we had at that point in time, I think it was several thousand dollars we were investing.
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A
I don't. Oh, wow.
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B
Exactly know how much he made, but yeah, we got to see how much it was and how it multiplied. And his went up. They released New Marvel and he bought like a dollar a share and it went to $2 a share or something. And the Walmart was, you know, $30 a share and didn't know, it just kind of slowly went up over time, you know.
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A
And how old are you guys? So, you know, your dad was giving you a couple thousand bucks. You know, what age did you, did you start?
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B
Yeah, really young. I mean, I was maybe 5, 8, maybe 12, like that. So. And he's got those funds and he transferred those over to me. And there's substantial amount of money in that fund now. So it's good to know. And you know, it's good. So, you know, I do the same thing, right. So I have a two year old daughter and she's already got a decently large fund ready to go and hopefully I'll teach her the same thing. And it's the same with students, right. You have diversification. So when you think about venture capital, you want, you want to have your base, right? So anybody who has a portfolio, if you're a wealthy individual, you should have your stock base. You should have, you know, your bonds and funds you can take out quick. You can have, you know, obviously a bank account with cash that comes in on a recurring basis. Hits as well. And then after that you can make your venture investment. So that's kind of how I tier my stuff and I think that other people should do it. And then with cowboy Tech, you know, VC fund, we, you know, we have solid bets, but I mean, they're all bets. So we have our fund criteria as well. We abide by those.
- [04:27]
A
Yeah, no, it's great. And I'll do both of us a favor. I'll give the disclaimer. Hey guys, this is not financial advice. You know, consult your financial planner if you truly want financial advice. That way Jacob and I are off the hook. You know, we can say whatever we want.
- [04:41]
B
We're off the hook. Yeah, definitely consult your financial people. But you know, you need, you need money, you need secure funds and you need risky funds. So, you know, on average there's not very many venture deals make it to an exit. So just know that and I, you know that you need, you need sound investments too.
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A
Sure. And you know, so how did your dad teach you to invest? Did he log into like, what did you guys use? You guys use like E Trade or Fidelity or.
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B
Yeah, we Schwab. And so now, yeah, back then I use Schwab. I saw my Schwab account and then Fidelity for other money. So diversification.
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A
So he was kind of showing you. And what was he looking at? Like the charts and stuff and the changes in price when he was Kind of teaching you that stuff.
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B
Yep, exactly. And the growth over time, you know, investing early. Right. So when you're a child, if you put. If you put $1,000 or $10,000 in then and you let it grow, I mean, versus if you put. Now that I'm, you know, 32, if I put it in today and let it grow, you know, the same $10,000, it's just going to be valued a lot differently. So the time value of money was real important. And that's what it teach me is just saving and investing early in life can sure yield large returns with, you know, an average 7 to 12% returns in the stock market. It's huge, you know.
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A
Yeah. And was your brother older or younger?
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B
Just a year older than me.
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A
Okay, got it. So you got, like one year of time on your side, you know, so you could still, you know. I don't know. I don't know who's winning between you and your brother as far as returns.
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B
Yeah.
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A
It sounds like you guys are competitive a little bit.
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B
We are. I think he spent all of his on home furniture.
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A
Oh, okay. Got it.
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B
So not really. He spent a lot of it. He's more on the spin, spin, spin, spin side. He's good, though. Yes. He's a physician's assistant, so.
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A
Yeah, that's what happens, you know, once you get married and, you know, you got a kid. You know, it's like every time you get, like, a couple extra dollars, like, oh, wow, this is like one whole. The currency turns into, like, baby goods or, like, daycare. I'm like, wow, this is like 2,000 bucks. I just saved, like, one month of daycare. You know, I don't know if you do that, but no time.
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B
Exactly. Measuring in quantities.
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A
Yeah.
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B
The other thing is he measured time and TV shows for us whenever we're driving in the car. That was another thing.
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A
I did that when I was a kid, too. I'll be like, wow, this is like. This is like one whole full house. You know, it's like I could have watched two episodes of, like, you know, I could have watched Step by Step and Full House. I don't know if you remember those shows, but those, like, back in the day, but cool. Okay. So, you know, learned investing early on. That's great. I mean, I wasn't given that education from my father. I think it would be, but I think it's a good idea, too. I. I ended up just kind of reading up on it later in high school, so it's great to immerse your kids in that I actually spoke to a friend that teaches his kids. He's got like a young, you know, like a three year old and he teaches them to have like a couple different buckets. So there's saving, their savings, there's investing, and then I think they also do giving as well. So that's kind of an interesting concept too because then I guess you get some of the tax benefits of, you know, writing off charity. So I think that's, that's a thing too.
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B
Really, really cool. My dad was really big on that too. And I still have my giving fund as well. But you know, the new Trump incentives, it changes the game and giving in the text benefits that you have.
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A
Yeah. And have you seen any interesting apps that can help with that? Because I think that'd be cool if you could just kind of like create an app for your. For your daughter or my son and just say, hey, you know what? Here, I'm going to give you, you know, 100 bucks a month and then it's going to automatically split into those three. But like maybe they control the investing or something like that. I don't know. I don't know if you've seen anything like that.
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B
Yeah, no. So what I do is with Schwab and Fidelity, I just make new brokerage holdings and I. Rene, you can rename them in Schwab and Fidelity. So you could have like your giving fund, your investment in your savings fund. So. Yeah, that makes sense. And then I always split it. There is now the. If you do Fidelity and Schwab, they're all coming out with their own like checking or their banking end of it. But I just think connecting them and then, you know, so I have it connected to whatever. A local branch is easy to get cash out of. I know.
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A
Yeah.
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B
Unless I'm paying somebody to do like house renovations, I don't really use cash very much anymore.
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A
Sure.
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B
But other than that. But it's good to have access to it. Right. Or even Chase bank or whoever it is. So, you know, you're active spending, putting that account and then you're. You can rename your savings and your giving account. And then when just give or you know, we go on missions trips. So we'll save until we get a large monetary amount. We'll spend it all on a mission trip.
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A
That's really great. And I guess the, the brokerage account for like giving, that's just kind of like a cash account that this holds in. In Schwab. That way it's kind of like you. You already have that money set aside, you don't see it, you don't touch it, and then it just kind of splits it out automatically.
- [09:50]
B
Exactly. And you can. They can be in their own investments. Right. So depending on how quickly you're gonna spend it or not spend it or. I invested in some stocks with it and I just, I. In all the different accounts, I kind of mirror my own investments. I do a lot of EFTs and a lot of, you know, mutual funds. And so I'll choose the same ones. I just use the select list of either Schwab or Fidelity and get a number of those and I'll kind of mirror it in the three accounts to a certain extent. It's extent just depending on when and how much I'm going to spend. And you know, plan it out. So when it's almost ready to be spent, put it in bond and then sell the bond last. And the more risk, it just kind of depends. Right. You know, what's your strategy and how is that working?
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A
Yeah. Cool. So, you know, good experience in the world of investing really early on and then. And then what did you. So were you in Oklahoma your whole life?
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B
Pretty much, yeah. So we grew up and I was in Joplin. So I was born in Salt Lake and I was only there until I was 2. My dad was oil and gas. He's a chemical engineer. So he worked for NASA. So my.1 of my friends favorite fact about me is my dad's a rocket scientist. I'm like, that's not a fact about me, that's a fact. But so I always give him a hard time about that. But yeah, he did that for. He mixed the fuel for NASA and then he moved to work in Galena, Kansas. We lived in Joplin, Missouri. It was a little bit down about 30 minutes away from Galena. Galena is just a rural. So we have a chemical factory. They're kind of out in the middle of nowhere for the most part. Now he works for Exterran in Tulsa. He worked for Alcoa for a little ppg, I guess. Now you work for Alcoa? Yeah. So he worked in. That was Alcoa out in Galena, Kansas. And then he worked for PPG Industries in Little Rock. So I was in. I graduated my last two years of high school in Little Rock at Bryant High School. And then he moved back to Tulsa when I was in undergrad. Sure.
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A
I told you a while back, I told you a while back that I spent a lot of time in like Tinker Air Force Base for one of My past jobs. So is that. How far is that. That's the. That's the Sooners, right? Is that the football team?
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B
Well, that's. That's the other one. I'm at Oklahoma State, where the Cowboys and then the Sooners are. Yeah, ou.
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A
Oh, you.
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B
That's in Norman. So Tinker is a little ways away from where I'm at. I'm in Tulsa, so. Got it a couple hours away.
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A
Yeah. I have family. It's funny because when I used to. I used to have to go there a lot for one of my past jobs, you know, several years ago. But I had family. The coincident. Lived in Norman, so I would, you know, I'd be there for a few weeks and I'd visit family there.
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B
That's awesome.
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A
Yeah. But I haven't been there in a long time. I remember it being so hot there, though. It was like 100 degrees, like, in the summertime. People was talking about, like, heat strokes and stuff. But I think that's just Texas, that whole area. Right? Like, Texas and Oklahoma. I think it gets pretty hot in the summertime, right?
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B
Yeah, it does, for sure. So it was 93 yesterday. We get highs of 105, 110. It gets real dry. Have to water my grass, you know, every day or every other day at least. So I'm kind of between this. Do I Every day or Versus every other day to keep it nice and green. So, yeah, it's. It gets hot in Oklahoma, for sure.
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A
Yeah. Yeah. That's cool. So, okay, so then you. So you went to. So you grew up, you know, moved around a little bit, still in kind of the same area. And then. And then what did you study in school, I guess, for, you know, college after you graduated?
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B
Yeah. Kind of interesting. So coming out of, you know, high school was kind of split between do I do business or science? So when I was in high school, one day, one of my friends got to take the day off and go wander around at the Capitol, which was just down the road in Little Rock. But I was like, hey, this is pretty cool. You get to skip a day of school to go do this. Why are you getting to do that? He's like, oh, I'm in fpla. Future Business Leaders of America. So I did it. This was my junior year. And I just was like, okay, well, we'll skip. You know, I'll join the club. I'll see what it's all about. Well, I ended up winning the competition. I got, like, I won the regional, and then we got to go to Nashville. And so the next year I saw I was first, this one, I got second. Didn't get to go to Nashville my junior year, but my senior year I was like, hey, let's get real serious about this. Let's go do this as a trip. And so I did.
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A
So this is, this is high school or college?
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B
High school.
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A
Oh, high school. Okay, so is it like a pitch event or is it like a business plan competition?
- [14:25]
B
There's all kinds of things. Right. So I had a business plan. I did a test in international business and I scored real well in it versus my peers. And so I just kept with that. But I took a business class in high school. I made a business plan for a fly fishing shop. And I still have business plan in my office. So maybe when I retire one day I'll do that. Since then migrated from fly fishing to boats, but I still do fly fishing more. So we'll see how if I ever end up using that business plan or not. But I spent a lot of time. It's nice whenever you're a high school student and you get to spend.
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A
Yeah.
- [15:02]
B
Hour every day working on a business plan over the course of a semester. I mean, you tranche a lot of hours in this one business plan, so it's pretty robust. And I spent a lot of time with the floor plan and all these things. I remember dicking around with that. And in high school, so.
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A
And how technical is a test? Do they make you do like financial models and do like income statements and all that, or was it more.
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B
It was all just written ABC type of a test for a high school student. So yeah, they did the same thing in college. They have five Beta Lambdas, the business competition teams. And I did a little bit of that in college as well. But yeah, it's kind of interesting. So it's good. So for high school kids, you know, get involved early. There's a lot of studies on getting, you know, students involved early in their career. And I think it's important now even if you do science. For me, you know, I reflected on that. So then I kind of decided, okay, well, I'm going to go the Dr. Route. And then, you know, when I was in med school, I reflected back and said, hey, you know, I want to do the business route again, the business science route. And so kind of shifted back and that's what I really made my transition from.
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A
Oh, wow. So you finished, you actually took the mcat and went to med school?
- [16:09]
B
Yep. So did undergrad in biology, University of Arkansas, and then went. Took the mcat got accepted to William Carey University College of Oxygen Medicine, did that for three years and decided, hey, I want to go do business. And so there was a pharmaceutical company that I needed some help, so I did some stuff for them, made more money than I would as a resident, and kept going down the.
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A
You just did the math. You're like, wait a minute. You know, the unit economics work better with this path for you.
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B
Yeah, exactly. So in lifestyle, too, you know, I mean, they were. There was a surgical residency program, and they said, well, you're only allowed to work, you know, 90 or 120 hours a week. It was either 90 or 120, I remember. But they're like, well, we'll fudge your numbers, and we'll expect you to work a little bit more than that if you come to our program. And we're one of the top ones in the nation, so come join our team. I'm like, no, not gonna happen. You know, the hour. Yeah. Uni, economics, a little bit below minimum wage. By the time you bail that out to do surgery, it's like, were you.
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A
Were you married at the time, too? Because that just adds a whole other level to it as well.
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B
I ended up. I was engaged, and we got married there. Right. That transition, when I transitioned, that was kind of the big deal breaker for me, was I knew if I did residency like, that I would. I would have gotten to divorced, probably.
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A
Yeah, it's tough. I mean, it's like, you know, between you and I and everyone else in the world that's watching this YouTube channel, it's like, you gotta. It's like you have to kind of budget time for the family or else it just takes a toll on it, I think. So it's like. And I resonate with that. I have to, like, have blocks of time, right? It's like, this is work time. This is family time. I'm getting yelled at by my toddler to, like, put my phone down.
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B
So.
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A
So that's kind of something I'm working on now. It's like, phone off. Like, phone off time is something that I'm still working on. So.
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B
Yeah, it's always a challenge.
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A
Yeah. Cool. Okay. So the pharmaceutical company, you're like, hey, this makes sense. And the hours were better? I guess. They were like nine to five.
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B
Yeah. Yeah, they were a lot better. And so I liked that a lot. And it was good. It kind of got me back into the business world. And then I went masters in operations management and then.
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A
And what was the actual role at the pharmaceutical company? Was it like doing clinical trials or.
- [18:23]
B
It was continuing medical education that I put together for them. And I also did some sales as well. Sure, it was good. It was a unique time in history where these compound pharmacies made a lot of money, they charged a lot and the drugs were novel and they did a lot of good for people. And so they made, they made a lot of money. So it was good to do.
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A
How do you think that's changing now with some of these startups? You know, because I think now, I mean they have, I think it's hims, they have a bunch of the generic pills and it's like a really easy slick ui. So what are some of the patterns you're seeing there with just. My brother's a pharmacist too, so him and I talk about it all the time. So do you think just that whole industry, right. I mean in Florida that's like the cash cow job. Like people like, oh, I'm going to do pharmacy, I'm going to be making, you know, that's my ticket to make like six figures in Florida. And that's a lot of money in Florida. Right. But you know, I wonder if that's getting saturated with the tech that's happening, which is kind of delivery. And now with COVID too.
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B
No, I mean like there's always going to be a need for it, so it's always shifting. Right. So the pain, we did pain pharmaceuticals that were topic topical compounds and that's where it was at. There was some dermatology compounds too that were topical compounded solutions. Now I mean those generations, they, you know, they're novel, you can charge a lot and then after time you do studies and the reimbursement gets set at a certain level. But like it's all the novel compounds that come out that are really expensive and they get reimbursed a lot. A lot of these infusion therapeutics, it's trending more. I mean we're going to see this is different cells and different cell line therapeutics that are infused and that's where the new novel compounding is going to be at now in pharmacy, where it's shifting towards. But opto drugs, drugs that are novel, they're just expensive, you know, I mean at first you invest in all the R and D to make it happen. Your methods and your procedures are more expensive and more time consuming. People, after it's been out a while, they can refine all those and reduce the cost down. But at first the cost is high and you have something that the market desires a lot and so you can get high margins for it. So it's, you know, when the first cars came out, they can only produce so many. Right. So whoever has the most money to buy them gets them. And so it's the same with drugs, too. And they do what they can and there's going to be large margins there and people are going to take advantage of that. But that's the key. If you're in pharmacy, you just shift, right? So they did pain and then they shift to derm and they shifted to ophthalmology compounds. And that's where the market was at. And then the reimbursement got a little bit lower, but they still made good margins and it was still a profitable business. At that point in time, they had scaled so much that they were set. Now there's these select pharmacies that do different classes of drugs. So those are an option. And that's one way that the larger industry is taking advantage of the market there in the pharmacy.
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A
Yeah, yeah. And some of the innovation that I think you're talking about, those complex compounds, you need that subject matter, expertise. However, I think that sometimes in like the emergency room, a lot of times, and this is just my limited knowledge, but from my understanding, I feel like if you're in the hospital setting versus the retail setting, the role is really like, hey, you know what? Like, this is a dose that we need to deliver to the patient. The doctor will kind of like prescribe it, but then like, you need to check the dose. So I wonder if that's something that you can do completely virtually, like, and maybe even offshore it to like, qualified pharmacists in India because you're kind of like checking the dose. But I'm not sure, I don't know if like, you still need to be hands on and be, you know, maybe pop into the emergency room and see the patient. Or do you think that could be like, that could be virtual?
- [22:16]
B
Well, no. So, I mean, all hospitals have a inpatient, depending on the scale, right. They'll have at least one person who mixes the compounds and certain ones will have different people who do that for their unit. But yeah, you're right. They need an infusion. The pharmacist mixes the dose. Exactly. So you have a powder and a liquid. They're making liquid boluses. And so they've got to put the powder in the liquid and yeah, give it to the patient or dilute it to a certain level. So there's always going to be a need for people like that, you know, and so it's a good service to do and it's going to. Going to be needed because people need drugs. Right? You. You need somebody local to actually mix that compound for you versus, I mean, you could let the nurses do it. Eventually you could have oversight, but at the same point in time, it gets complex, you know. And yeah, knowing those. And having a pharmacist there, I don't think in the near future we'll see a shift away from those inpatient pharmacists.
- [23:06]
A
Sure. Cool. Okay, so next step. So you're. You're at the pharmaceutical company, you know, wearing a couple different hats. You're liking it there. And then. And then what. What next after that? What happened after what was kind of your next step?
- [23:19]
B
Yeah, so then I said, I want to get back to Oklahoma. So I worked for clinical trial company for a little while called Tulsa Clinical Research and enjoyed it, but it was just real. So when you're doing. I was on the. The part that I was doing was working in the studies and running the patients through the clinical trial and educating them on compliance and parts of the study, it was very molded. So like, you know, here's the trial that's already been written. I would help write a little bit on the trial side. But still it was very, you know, this is how it's going to be set up and very structured. And there wasn't a lot of free thinking and a lot of creativity involved in it. There was some. But it was very scientific creativity. And I decided be more on the front end. So I shifted over to Cancer Treatment Centers of America and did. And that's when I really got my first VC role was with them. It was a company called Rising Tide who hired me. And my job was to, I was the medical guy to select what investments they should make on the medical side. And that's kind of been the niche that I fit into, is having a medical background, some business acumen to kind of help the business people figure out, you know, technically, does this make sense for an investment standpoint, and then working with the scientific minds to show them the business side of it. And so I kind of can play right there in the middle of business and science. So I think there's a large niche and role and other firms, you know, I was listening to another lecture before where they did biomedical engineering, and it was kind of the same thing as, like, how do you get these teams of people to work together? There's a real need for that to accelerate the TRL level of a Product.
- [24:57]
A
Yeah. That's interesting. Okay, so and then I guess, you know, kind of thinking about the VC role, were there startups that were coming in that were looking for like some seed investments or commercialization opportunities? And did you guys deploy some initial capital?
- [25:15]
B
We did. So it's kind of interesting. That firm and the one I work for now, we have our own internal fund. So it's kind of like entrepreneurship where you have an internal fund, you're selecting which internal projects you choose from. So there we had over 5,000 different projects from across the enterprise. So there were, oh, I don't know, about 600 physicians at each of the five hospitals. So there was a lot of people who were coming up with ideas. And each person, you know, the good people, had 50 ideas. So there was more ideas than can be invested in internally. And you know, based on intellectual property laws, the firm owns the intellectual property so they can monetize it. So that's a strategy a lot of people are creating. And all the device companies and the pharmaceutical companies are doing the same things they need to figure out, you know, they have these internal people who they think are the best and brightest in the industry. Everybody thinks that about their own employees. And so they want to invest in their own employees first rather than investing in external opportunities. And yeah, big companies, they do invest in external opportunities. And there's accelerators and incubators that kind of function in a different way as well. But that was kind of was my job. There was. We had a fund and I chose which projects we wanted to invest fund monies in. And then after that we had a couple of external opportunities that we acquired just based on things we wanted to do. And we made some external investments as well.
- [26:42]
A
Sure. And I guess so that was with Rising Tide, right?
- [26:46]
B
Rising Tide GmbH. Rising Tide Property, Cancer Treatment Centers of America. So its organization and they own the intellectual property and they sold to International Private bank and still the same setup and they're still doing it.
- [27:00]
A
Yeah.
- [27:01]
B
I joined OSU and my colleagues continue that work. And one of the thoracic surgeons that I worked with, Peter Bake, he's for OSU on our new product development center is making one of the devices I worked on with him. So it's gratifying. Venture capital takes a long time before things hit. Right. So I joined year one. We were starting on a product that had its first sales five years later. And now that product was 20, 15, 16 or 20, and they've almost got their MVP made. So sometimes it's like the time from getting a Product, filing a patent, making the prototype, it just depends on how fast and nimble you are. But it can be a long time. So it's gratifying to see, hey, you know, I started this project with you, you know, several years back, and here we're getting to, you know, make the prototype and kind of see, you know, talk to him, have a little bit of interaction with him and see how things are progressing. But it's, it's fun to see that because you set out to do this to do good things for people. Right. And so until a product's actually placed in a patient, you're. You're not doing good. It's just all ideation, investment. The capital is not really, you know, worth a lot to people. So I mean, it's worthwhile, but it's not. You're not impacting society. So it's fun when you just, oh, yeah, we. We spent all this time and all these years working on this thing, and now it's actually being commercial.
- [28:22]
A
And I guess. Would the closest analogy be kind of like almost like a corporate. Like a mini corporate VC for the camp, because it's projects internally that you guys are kind of incubating. It's not. But then I think you said there are sometimes like external projects or just small, small ventures that come to the table that you also will fund and probably take an equity, equity position in that too.
- [28:42]
B
Right, Exactly. So we had another cancer drug and then we had another device that was just good, that kind of came about. Rising Tide had a for profit arm and then a philanthropy arm too. So some of the interactions kind of went back and forth. The flank of the arm would find out about something and be like, oh, yeah, this is interesting. We want to fund this in the for profit side.
- [29:06]
A
Yeah. Can you give us a look? You know, I'm still learning about this. The whole just endowments and foundations and philanthropies. You know, I had a couple family offices come in, kind of unpack it a little bit. But can you just tell. Can you just unpack that a little bit? Just the philanthropy side, some of the mechanics of it, and you know, obviously there's tax breaks, but what are some of the other things to consider when it comes to philanthropy versus kind of the for profit side?
- [29:34]
B
Yeah, so that's the other thing. Even with our foundation at osu, it's. It's hard. Right. So if you're fundraising on philanthropy side, if you. And I'm in the for profit side of osu, so we have Oklahoma osurf Research foundation and then Cowboy Tech rolls under that, and then you have the Philanthropy Foundation. So very similar names, but you. So you have this. Let's take an individual. So I'm not gonna use a real one. So let's say we have Steve Jobs, right? And so Steve Jobs wants to give money to. Let's say we're at Harvard. Well, let's say he's at osu. Let's say he graduated from OSU and he wants to give money back. Right. So he'll give money back and he'll want to have a center named after himself. But he also has monies that he wants to get a return on investment because if he has money he wants to make, they always want to make a return on investment because he has. All the people who work for him want to continue to have their jobs and make a good salary. Right.
- [30:36]
A
So, so can he double dip too? So let's say he, let's say he invests and obviously this is just hypothetical. Right. But if he does invest, obviously there's a tax break because it's charity. But then could that also be directed into the investment vehicle to get some financial return as well? Can you double dip like that? Or is it either or?
- [30:55]
B
Normally it's either or because it gets messy. It's real messy. But it just depends, right? So if you're OSU and you put. So we have a fund that. It's called the RIADA Precede Fund. And what we did is donors put money into that fund and the fund gives money to students. And so if you put money into that fund, if the fund invests in a student project, then you can't personally invest in that project. Does that make sense?
- [31:21]
A
You can or you can't?
- [31:22]
B
You can't. So you double dipping, Right? So your philanthropy fund invests in a project and then you personally invest in it too. It's like you skirted the tax benefits, right?
- [31:35]
A
Sure.
- [31:35]
B
By putting it in that fund and that. Invest, then you invest and it's your money, your money.
- [31:40]
A
But if you don't. Yeah, I guess if you don't invest, then it's just a tax break because it's, it's almost like an impact investment or kind of like a charity. It's like a giving pretty much thing that you do. Yeah.
- [31:51]
B
So if you were sitting on. So what you would do is if you were sitting on the committee, Right. If you. And you wanted to invest in it. So from a practical standpoint in this situation, like you're okay, so let's say that You've been donating money to this fund. Right. The fund's doing due diligence and you want to invest in a deal instead of the fund investing, they can personally invest on the front end before the fund invests. So they're. You get both benefits. Right. So that's the trade off. And that's when this, when Steve Jobs and having Steve Jobs in the room to help you out is a big deal because then, you know, so he gave this money, let's say he gave $5 million the fund. And then he's sitting on this and his money can still. He's choosing, okay, I want my money to go to these things because they're good. And he's like, no, this one's really going to make a lot of money. I've got this other for profit arm. Now my for profit arm is going to invest in this one deal and we're going to accelerate that. And then my philanthropy fund can invest in the other deals that I want to invest in.
- [32:48]
A
Sure.
- [32:49]
B
So, you know, I could see something good for the community like they're making OSU T shirts. Right. That's a great thing. Want to give back. But I mean, it's not going to be like a new drug or a new airplane, you know, and he might profit those other areas. So that's kind of where you have the crossover and why there's the philanthropy side division and the for profit division in bigger companies. Go ahead.
- [33:10]
A
I was just gonna say you may not even need a double dip if you just allocate your assets effectively where you just, you have assets for giving and then you just kind of have a set allocation for profit and you can kind of just maybe split that up. And that's good that you have those multiple entities so people can kind of construct their portfolio.
- [33:31]
B
Right, Exactly. In a bigger company, these divisions don't talk to each other. So like Pfizer, for example, at osu, we have a tobacco cessation project. And you know, there's a 4 prop. There's a philanthropy arm that's giving money for the education aspects. And then we want to make it a commercial product. So in that entity, somebody who's receiving money can. Could double dip. Because a philanthropy could help give us education, get us some momentum. And then when the, the asset is curated and we have a patent on it, we can sell it back to the for profit side of the entity. So I guess in that instance there, that's kind of their own internal corporate legal would have to say, we did this, we can actually acquire it. We're not violating, you know, legal laws, but it's something to consider. Or, you know, one of their competitors could acquire it. So knowing that those two arms exist, you get monies from both arms. And larger entities like a Pfizer or a Merck or Boeing is important because if you. There's different missions for philanthropy versus the for profit arm. And so you could fall into both. So like something like tobacco cessation. Right. So they have drugs for that, but they want to, you know, tobacco's bad and they want to give back. It helps their brand image to give philanthropy money to help people stop smoking. And then they make money off of selling a tobacco cessation drug. So, you know, so there's these two aspects that are important and it's a category. They give categories. So for people to know that smoking is bad, they give money away so people know about it and then they will buy their drug.
- [35:15]
A
That's really helpful. And you know, so thanks for unpacking that. I think that's really helpful for the audience. And one thing that I think we talked about too, which would be helpful is maybe just unpacking your whole universe. So you have the Cowboy Tech Seed Fund and then there's Oklahoma Life Sciences. And I think you told me there was like three or four other entities as part of the program, right?
- [35:37]
B
Yeah. So we have, we've made a really good education document that helps unpack different things. But it's confusing, right? If you don't know, you don't know. So the, what we've done is that they put me in, I wear several hats. So it makes talk to Jacob and he'll help you figure it out. And it makes it easy. And I think that's important for people in an ecosystem is to have these front facing people they can just go talk to and you know, figure out how to navigate a system. So like I was talking about before, we have the Oklahoma OSURF Research foundation and then that gives monies to Cowboy Technologies, who is a business incubator and accelerator for technologies. We have a small fund that we can invest to help accelerate those projects. And that's my primary role. I also teach in the school of Entrepreneurship. I'm an adjunct professor over in the school of Entrepreneurship. And they have the Riata Pre seed Fund, which is a philanthropy fund. I also have the Riata Incubator and accelerator, so named after a donor who worked for the Riata Oil and Gas company. And so, yeah, so we have that. And then there is the Oklahoma Life Sciences Fund. So I also work for the center for Health Systems Innovation. So I'm with Cowboy Technologies. OSU has a medical school and a the Stillwater main campus. So they're split. And the med school is in Tulsa. The main campus is in Stillwater, about an hour and a half away. They have different presidents, they have different vice presidents of research. And so there's different funds available, but they want the same support. All the intellectual property is owned by the Stillwater campus. So the medical patents that come out are owned by the Technology Development center, which is my collaborative division. They work on the earlier patent end of things. So I help out there as well. And then at the center for Health Systems Innovations, William Paiva, who you've met before and doing another show on that, he wears two hats. He is with that entity, which is under the School of Business, who I teach with and who is also hosting me, is the medical school employee. There's that entity. And he also wears another hat with the Oklahoma Life Science Fund, which is another larger VC fund, which he'll talk more about.
- [38:02]
A
That's really helpful.
- [38:04]
B
So that's kind of the ecosystem and how it's set up.
- [38:06]
A
And with Cowboy, do you guys have a cohort? Do you guys have like a demo day? Or is it more just kind of looking at interesting opportunities and using your discretion to invest? Deal by deal?
- [38:17]
B
Yeah. So we have our board that meets twice a year. So we aim for two investment cycles per year. My goal throughout the year is to go talk to everybody on campus and use. We have what we call associate deans of research. So these are the people who should know who the most innovative people within their college are. We also look at how much grant funding people get. And so from that, our goal is to take something that has a lot of base grant funding and then we give some commercial funds to it so they can translate their research into a commercial product. So we do our own scouting. We utilize the associate deans of research to scout. We have our. I also manage another program called the NSF I Corps program. And this is something that all people can get involved with. So anybody who has a startup or, you know, a tech idea, the National Science foundation has funds that they give to help new customer discovery and figure out if the customers have an unmet need. So great opportunity and program. If you're just a community team, the Bay Node in San Francisco has some funds to get people involved, and then mine as well. In Oklahoma, we can get people involved, collaborate with a professor at the university to get some traction on your research and get those funds. But it ends up being a $2.2 million funding stream from the government, just from the National Science Foundation. And if you do nih, you can get about three and a half million and so you can get both of those. And then DoD has their own funds which can be just as much if not more contract position. And you're a Lockheed Martin, you get a lot more because you're making something like you're making a drone for the military to shoot down. You're the exclusive provider of that so they can just put more and more funds in so you can make that drone. So the net net is if you. I always tell this to my students. If you put $5 million into a business, your valuation should be at least $5 million. Yeah. So it's, you know, it's, it's not no brainer. And then if you have, you work for OSU, you get 50% of proceeds you sell, you raise $5 million in grants, you sell your company for $5 million, you should get a check for at least $2.5 million. So based on the employment agreement. So it's great. You know, I mean if you're a professor, you don't make, it takes you a long time to make $2.5 million. So it's a good value proposition to tell people and you know, anybody who's listening to this, I encourage them to get involved and find that there's nodes all over the US so you can, there's lots of different people who teach this program.
- [40:48]
A
Sure. And I guess to get access to the National Science foundation funding, I guess they would, they would just apply for the non dilutive funding on the website, I guess.
- [40:58]
B
Right, exactly. So apply icor. OK State I think is our URL. Okay, we'll share that with you and they're welcome to apply for ours, but we've OSUs received about $100,000 a year to give back and we split it up into $3,000 increments to give back to teams. And so there's a lot of grants like that and it's all listed on the NSF website. But yeah, if someone has questions listening to this, they can just reach out to me. I'd be happy to get them connected.
- [41:35]
A
That's great. And I guess with Cowboy Seed Tech Fund, is that also non dilutive funding or is it like pretty much convertible notes and safes? Or is it, or is it like non dilutive?
- [41:47]
B
Yeah, so we typically do a safe just because it's, we like to Invest early. So once something, you know, the majority of investors want to invest later when you have a product or you have your sales. And so we like to invest right there at the cusp of, you know, you have a product, you receive some. Some grant funding, but now you need to make it a commercial product just because there's less investors who want to take that much risk on. So our fund is designed to be that gap and gap, that chasm to get the proof of product completed.
- [42:22]
A
Sure.
- [42:22]
B
Yeah.
- [42:23]
A
It's really helpful. And last time we spoke, I think you were telling me your focus is digital health, life sciences, ag tech and aerospace. Is that correct? Or feel free to correct me if I missed it.
- [42:37]
B
That's exactly right. So as I was telling you before, my background is life sciences, so. And Daniel Will, who is my boss, his focus, he's an electrical engineer and, you know, does a lot of mechanical engineering stuff. So he focuses more on the aerospace. But just from acumen of OSU in general, our biggest revenue generations have been airplanes and ag crops. A lot of grass, turf grass for golf courses. Yeah, Just for people's yards as well. Has been a revenue driver. And then corn and crops and water management. And then we have obviously life sciences. We have one of the few vet schools. We have a highly ranked vet school nationally. So we do a lot of vet med research as well and have a lot of big veterinary pharmaceutical partners. So those are our key strengths.
- [43:29]
A
You guys have the. I think it's because my cousin in Norman, he was studying aerospace, so that's probably. Is that your school that has the aerospace program?
- [43:37]
B
It does, yeah. We have a big aerospace program now. And Jamie Jacobs has a lot of grant funding as well.
- [43:43]
A
Sure. Yeah. So you guys probably do a lot of collaborations with like, the military and just the defense contractors too, right? Who are the big defense contractors there? Is it like. It's L3. Is that the big one there?
- [43:55]
B
Yes, yes. Yeah.
- [43:56]
A
Okay, cool. That's great.
- [43:59]
B
Working with them and, you know, Tinker Air Force Base and.
- [44:02]
A
Yeah, I got good memories there. I used to spend a lot of time there. Man, it'd be like sometimes like two weeks at a time. So. Yeah, I knew that area pretty well.
- [44:11]
B
Yeah. Yeah, it's fun.
- [44:13]
A
Yeah, it's a good time. And let's talk a little bit about, you know, some of the, you know, your portfolio. So some of the things that you guys have been excited about. And you do two deals a year. So is it usually. Is it usually like one ag tech, one healthcare is just whichever one is the Best deal, whichever one is the.
- [44:34]
B
Best deal, we do about five a year. And so sometimes more than that, we'll do seven. So we have a grant called the ocast or state grant. And so we try to do about three from that, just based on people who have good ideas and need a match. And so we'll do that and then we'll do a couple other ones. The one I'm most. The deal I'm most excited about is plasma bionics. You know, we talked about taking a long time for, you know, ideas to make it to market. This is a company that started back in 2011 and they finally got their first sales earlier this year. So, you know, that just gives you timeline. You know, they made it through a series pre seed and series A. And so I'm really excited about their sterilization product that's making it to vets today.
- [45:23]
A
And the stereo. So that sterilizes the equipment or sterilize. Okay.
- [45:29]
B
Yeah. So the company's called Plasma Onyx and it sterilizes surgical devices.
- [45:35]
A
Sure. And I guess what, what do they do that's unique is it just. Does it sterilize it much faster and more effective and cheaper?
- [45:42]
B
Is that kind of their secret? Exactly. So they use a different type of sterilization called plasma plasmapheresis. And so what they do is they put an electrical charge through a sheet. So speaking of acumen and aerospace, this is an aerospace mechanical engineering design with a human application. So the sheet heats up. It makes, you know, free radicals that kill bacteria out of ozone, and it's just a gas that kills all the bacteria. So there's other types of gas sterilization, but the agents are more noxious, and there's a fear they could cause cancer. And this one, because it's just using air and ozone, there's less of a fear of that. And so. Yeah, no, it's great. And so one of the main applications relevant for people on this call is they're going to be able to sterilize N95 mask is their goal.
- [46:34]
A
Oh, wow.
- [46:35]
B
In addition to just regular instruments. So they're doing it for surgical instruments. They want to do orthopedic scopes and different scopes as well, and colonoscopy scopes that have a lot of crevices and are hard to clean. Hopefully they'll do a little bit better job of getting into those nooks with this device without breaking the device down.
- [46:55]
A
Yeah, no, that's really. That's really exciting. What are some trends that you're excited about that's still far away that you want to see coming sooner. We've talked about in the past, we talked about, like, bioprinting and some of that stuff. But what are you waiting to come sooner than it's happening now?
- [47:13]
B
Well, I mean, everyone wants the vaccines, right? The COVID vaccines come out. We're working. We've got some vaccine projects and some researchers doing vaccines. You know, a trend that we're seeing go away is baboon model studies, which, you know, I understand, you know why. And that's a trend that I personally don't like as well, because I think it's a good model that we're losing. But, you know, I mean, I like the trend of new vaccines, obviously, and being able to prevent Covid from spreading and making society normal again. I think that's really going to help our economy a lot.
- [47:55]
A
And for the audience, the baboon model study, is that just an existing model that has modeled diseases and baboons, and then you use that as a baseline?
- [48:04]
B
Is that baseline? So without having a baboon model study, you would model it maybe a rat or rabbit or a pig, but the.
- [48:14]
A
Baboon'S a little more accurate than the rat.
- [48:17]
B
Yeah, exactly. It's a little bit more accurate. You want a large animal study, a dog or a cat. Typically, dog or cat would be next. So you do a rat.
- [48:25]
A
Okay.
- [48:27]
B
But I mean, baboon just helps us out a lot. And there's a lot of. So in vaccines, there's baboon and there's also. You do mouse or rat and then baboon. And so a lot of them, they test them in mouse and rat, and they just go straight to human phase one. But I like the idea of being able to use a. An animal model just. Or like a baboon model, just because it gives us more insight, especially on elderly. We're doing rsv, so we're doing it what the vaccine would be used on children or elderly people. And so I think it's really important to get some baboon model data before you give it to a child or sick elderly person, just because you don't know. I mean, phase one is testing safety. So, I mean, if it was me, I'd much rather have the vaccine test on a baboon rather than my grandfather and my child first.
- [49:21]
A
Yeah, absolutely. And how much time do you think it'll take for us to kind of get a vaccine that has, you know, decent efficacy?
- [49:30]
B
Well, I mean, there's. There's a plethora in clinical trials right now. There's some other good YouTube videos that dialogue them, but I'm hoping January, February, March of next year, so we'll see how that goes. Maybe somebody gets a little bit sooner, but they've. The FDA has done a great job of accelerating the studies and partnering with all these companies to push a lot through. But I think there's somewhere between 15 and 30. And then the professor who is making the RSV vaccine sat on another review panel and they're continuing to fund a lot of different opportunities. So I think we're going to, I'm hoping by, you know, next summer for sure things should be back to normal. So we'll see.
- [50:10]
A
Should we also be concerned or factor in like if the virus mutates or do you think the vaccine will cover that overall?
- [50:18]
B
No, I think it's going to be another thing, just like flu, you know, I mean you're going to have to.
- [50:22]
A
Come out just like a new vaccine every year pretty much kind of like the COVID probably.
- [50:27]
B
So we don't know that for sure. We don't have evidence yet. But just based on influenza, you know, I mean, I just think that in what we're seeing, that's what we're going to find eventually.
- [50:38]
A
Yeah, that makes sense. Well, hey, this was amazing. Thanks for all the time. I think it was really helpful just unpacking a lot of these concepts because I know we're chatting a lot and don't get enough time to really sit down. So this was great. Just kind of learning about your childhood. I didn't know you, number one, I didn't know you went to med school and number two, I didn't know you started investing when you were like 8 years old. So good fun facts. I always have one final question for you to leave the audience with. It's just a piece of life advice. So anything that you took away from a mentor or a family member or just in your life, any, any advice, that'd be great. And if.
- [51:17]
B
Yeah, so two things. I mean, I think the first thing is, you know, figure out what you want to do and don't give up on your dreams and achieve them, you know, and you have a lot of opportunities and you can make it happen. So I would just say continue to pursue your dreams, however hard it may be. And the next one is, you know, take advantage of non dilutive opportunities. You know, being in the university world, I say that and I'm kind of different. But even people who want to be in the for profit world, I mean, take the NSF's $2.2 million and invest that in your business. You know free money is always good to utilize so I highly recommend those, those would be the two pieces of advice I would give people is seek those opportunities out and the NSF has set it up where it's real easy for anyone to get involved. They've given out a lot of, a lot of these hundred thousand dollar grants. There's a lot of opportunities for anyone in any stage of development to get involved and get some free money to help spur the economy and I think you know having more small businesses who get funded by the government's important this is great.
- [52:19]
A
Well hey thank you so much and hope you have a good rest of the week and again you know really appreciate your time. It was good catching up.
- [52:26]
B
Yeah you bet. It's great to catch up with you Joel.
- [52:28]
A
Yeah take care. Bye.
- [52:29]
B
Take care. Bye. Thank you Jacob. Sam.