Bryce Gilleland, MBA 20 – Coaching Founders & Creating Social Impact

(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)

[00:00:00] Sean Li: This episode of OneHaas is brought to you by the Haas Fund, fueling opportunities for our students, faculty, and strengthening our Haas community. Join us in making an impact today at haas.berkeley.edu/give. 

Welcome to the OneHaas Alumni podcast. I’m your host, Sean Li, and today we’re joined by Bryce Gilleland. Bryce is a general partner at the Cal Innovation Fund, and he is also a class of 2020 grad, my year. So, go Bears.

[00:00:43] Bryce Gilleland: Go 2020, Go Bears.

[00:00:44] Sean Li: Go pandemic.

[00:00:47] Bryce Gilleland: Yeah.

[00:00:47] Sean Li: No, this is actually kind of cool because I don’t think I’ve had a chance to interview anybody from our year post-graduation, you know, the start out as a student podcast and interviewed a bunch of people when we were in school. But, for the alumni podcast, I think you’re one of the first that I’m interviewing. So, first off, welcome to the podcast, Bryce. We’d love to start these conversations, hearing about your origin story. You can talk about how you grew up, where you’re born, your family, feel free to share.

[00:01:16] Bryce Gilleland: All right. I grew up in Irvine, California, and I went to Irvine High School, and then I went to UC Irvine. So, I lived a… What I like to say is a very sheltered life, you know, my line that I share is that Irvine has more parks per capita than any city in the U.S., it’s very pleasant. And I think the most positive thing for that, for me, is I just have a positive frame of mind about a lot of things because I didn’t get to see a lot of turmoil when I was little, you know, everything is in kind of fairytale little land in Irvine. 

[00:01:47] Sean Li: Yeah, still is. 

[00:01:48] Bryce Gilleland: Yeah.

[00:01:50] Sean Li: Yeah. It’s a nice little place.

[00:01:51] Bryce Gilleland: It’s great for kids. But yeah, the bad part is you miss a bit of what’s actually happening in the world. So, yeah, it was great, going to college was great. And then I moved to San Francisco, and when I moved to San Francisco. Moved to the Mission 16th Street, next to the BART. So, it’s very, like, the world’s just going to smack you in the face. You know, every day you walk into work on the BART, you’re going to see stuff that you’re like, “Oh, wow, that’s a shocker.” And so, that was very different, but I feel like something I… You know, probably get a little used a little more of in growing up. But you know, you get those different perspectives, and I think it’s really good for that. 

[00:02:23] Sean Li: I do have to ask you, Bryce, like, how did your parents end up here? Because from what I know, you know, I’ve been in Irvine for five or six years now, and before I was in LA and I just swore I’ve never moved to Orange County because it felt, you know, I moved from the burbs of Michigan to LA and so I thought, you know, I’ve never moved to the burbs here, right? and now you can’t pay me to leave Irvine. But like, how do they end up here? Because back then, it was literally not what it is today. It was like orange groves and farms, right? And so, where were they from your parents?

[00:02:57] Bryce Gilleland: Yeah, my dad grew up in Downey, he was the son of a aluminum factory worker. My grandpa was, like, a foreman on the Alcoa aluminum steel lines. And then my mom, her first dad was a police officer, and he died when she was young. She grew up in Claremont, and then her second dad was also a police officer. And so, they moved to Irvine because it was a nice little community with good schools. And I have a half-sister who’s nine years older than me. I only say half because that shows you the age gap. And yeah, we moved there and, you know, where, like, test and marketplaces in Irvine Marketplace.

That was all strawberry fields. And where, like, north of Irvine is, that was all orange groves, like I used to go play in catch lizards back there. Go on little hikes back there, get lost on the orange trees, go through a couple pipes you’re not supposed to go through. So, it was really fun. And then seeing it change over the years was wild. It’s all track homes, you know, and many shopping markets and stuff, and it’s very nice. But for me, I’m like, “Oh man, those were strawberry fields,” you know, “Where’d they go?”

[00:03:57] Sean Li: Yeah. Now it’s overcrowded Pleasantville.

[00:03:59] Bryce Gilleland: Yeah. Yep.

[00:04:01] Sean Li: That’s totally. That’s how I describe it. No, that’s awesome. So, you know, coming with that family background, what did your parents do?

[00:04:09] Bryce Gilleland: My mom worked at the electric utility. She worked her way up from being a secretary all the way to an executive. That’s where I get a lot of, like, my business drive. And then my dad was a teacher for a long time, and then eventually he also worked at Edison, Southern California Edison. So, there was one time where all three of us worked at Edison for a year or two, because I’ve worked there right out of school, and it was just like, it’s like a family business, with, you know, 20,000 employees.

[00:04:35] Sean Li: What did you study at UCI?

[00:04:36] Bryce Gilleland: I study economics. 

[00:04:38] Sean Li: And I guess what brought you to SF? I mean, it’s not far from home, but it is far from home as a Californian, I feel like.

[00:04:45] Bryce Gilleland: Yeah. I’d say as a slightly sheltered person, I was like, if I don’t get a job outside of Southern California. I could work at Edison my whole life, and I could just stay here, and that would be comfy and cush. And just, something was like, no, you got to do something, you got to shake yourself up. And so, I moved up to Northern California. I worked at PG&E, of similar but different utility in the same state. But, you know, it was enough of a shakeup for me at the time to, I guess, put my life on a different trajectory, you know?

[00:05:13] Sean Li: Yeah. And then, from PG&E, what brought you to Haas? Like, why the MBA? What was that drive?

[00:05:20] Bryce Gilleland: Yeah. At my job, I’d worked my way up to middle management and, you know, people I was managing had MBAs. People at my level had MBAs. People above me had MBAs. And I realized that unless I have a manager that just really, really likes me. There’s almost no chance for moving up unless I go get an MBA myself.

And so, it was kind of a matter of like, “All right, well, I guess I got to go back to school,” and that was always a bit of, like, a ho-hum, like, I don’t need to go back to school. You don’t need an MBA to do anything. Kind of attitude. And then it was like [crosstalk 00:05:50], I’m going to go get it, I guess. I subscribe to this world, so here I am. But you know, the beautiful part of the whole thing was like, after going to Haas. It really opened up my eyes. You know, I saw a bunch of other students with a bunch of other jobs. I saw a bunch of people starting their own businesses, and it really expands your mind going there and just talking to your fellow students and hearing some really inspirational professors, and, you know, the chancellor now.

Chancellor Lyons. He was the dean of Haas right when we joined, and he was super inspirational. So, even like the welcome dinner, I still remember, he was like, “You know, I want my students to learn all this stuff, but I really want them to learn. They do that, we do that.” And that line stuck with me so much where it’s like, “Oh, okay, yeah,” like, I don’t have to just simply, like, revere or wonder why other people did it. I could actually go leap in and try to do it myself.

And so, I think I saw a lot of students empowered with that, and it took me a few years to fully subscribe with that, but it was a great message. And so yeah, going to Haas was from a utility basis, but then it led to so much more.

[00:06:49] Sean Li: So, that begs the question, what did it lead to? Because what you did at Haas during your time here and after Haas is quite different from PG&E, to say the least.

[00:07:00] Bryce Gilleland: Yeah. I took leadership communications. You got to write this letter to yourself a year from now. And in that letter, I was starting a coaching business. I was coaching clients because I wanted to help make better leaders in the world.

And so, I took a semester off. I traveled the world. I got more, like, attuned with myself. You know, I went to Bali. I got spiritual. I did yoga and meditation. Love all those things. I’ll go real deep on that with anyone. Then I started a small coaching business, and at the same time, I had a friend who was really good at trading cryptocurrencies, but actually trading it like a technical trader, technical analysis.

So, we started managing a few people’s money. We built that up, and then by the time I had finished Haas, we started a hedge fund, which was not starting a coaching business and not in the utility business. And something I never, ever thought of doing. So, yeah, it was really great. We started this hedge fund, and that’s where the, I guess, the magic happened. In 2020, we were the number one fund in the world. We had 846% returns, and it was super exciting.

And it was me and two buddies, and we’re just, you know, we’re taking Zoom calls or Google Meet calls, you know, sometimes with our shirts off, just like, “Oh my gosh, can you guys believe we’re managing this fund right now? This is crazy.” So, it was just a wild, positive rollercoaster of a ride. And you know, just a bunch of left turns that you never expect until you kind of get in it, and you just keep moving forward.

[00:08:19] Sean Li: Right. Wait, I didn’t know this about you. You took a semester off at Haas to travel the world, like, where did you go aside from Bali? Unless you just traveled all of Bali, which there’s a lot to see there.

[00:08:31] Bryce Gilleland: Yeah, I started doing this personal coaching course called New Ventures West, and it gets you a lot more in touch with yourself, like spiritual, emotional, relational, somatic. And then doing that, you know, I got to take some time away from the normal world.

So, I quit my job, and I stopped Haas in my, what would be the third semester? So, like the first semester of the second year. And I went to Machu Picchu in Peru. And then I went to Bali for a month. I went to China. I saw the Avatar mountains. Those were amazing. And then I went to Cambodia, Thailand, and Vietnam. And it was just a great, great trip. And I think I spent about three months traveling in total over there.

[00:09:10] Sean Li: So, when anybody brings up Bali. Bali is like probably my favorite place on earth. But where did you stay? I’m just curious, like, where did you go in Bali? 

[00:09:21] Bryce Gilleland: I think I went to Seminyak. And then, I went to Ubud and stayed in Ubud for two weeks. I went to the yoga barn like every single day. I did the crazy juice cleanse there, which has its own wild aspects. I went to the monkey temple. I slept in a family’s temple. I still remember, because you know, kind of on a budget. It was $13 a night, and they would give you breakfast, and you slept in the back of their temple in this room. And it was just fantastic. And then from there I went to, I think it’s Amed. And it’s this quiet, sleepy town in the Northeast of Bali.

And then there’s these three islands that you can go to if you take this ferry. And like, literally, you can bike around the islands in like 45 minutes. Like they’re that small.

[00:09:59] Sean Li: The Gili Islands?

[00:09:59] Bryce Gilleland: Yeah, I think so. It was really fun. And I was just digesting as many books on like emotional intelligence and spirituality and the universe and like stages of development for humans as I could throughout that process. Like I had a practice of meditating either 20 or 40 minutes a day, like two 20-minute sessions or one 20 in the morning, journaling for like 30 minutes, and then reading intensely. And then also taking a lot of time to just do nothing because that’s how that stuff sets in.

[00:10:28] Sean Li: If you don’t mind me asking, was there something at Haas or prior to you quitting at PG&E that kind of inspired you to take this break? Because it’s very uncommon. I don’t think I’ve heard of anybody. I’m sure there are, but I don’t personally know anybody that, you know, took a semester off or, you know, whatnot to go travel the world. Yeah, like what inspired it.

[00:10:51] Bryce Gilleland: I think going to Haas was such an accomplishment for me growing up. I always felt really smart, but I would struggle to get good grades. Just, you know, kind of laziness, almost or like, “I know the concept.” Okay, that’s fine. And so, like, a B plus was fine with me. I was like, “Yeah, I get it. That’s fine.” And then getting into Haas was really hard. I hate to tell people this. I had a 2.77 GPA out of college, but, you know, like I was president of my fraternity. I was president of the inter-fraternity council. I was, you know, this or that.

So, like, I was very active in college. I just don’t care about my grades as much, you know, I need to understand the concepts. And then I didn’t ever think I could get into Haas for that reason. And because, like, I wasn’t the, you know, straight-A student in high school. So, I felt really, really accomplished getting in there. And I think that spurred up this, like, “Hey, hey, you can do it.” You’re like, “Yeah, you can do it.” And then taking, getting in, and hearing Chancellor Lyons, like they do that. We do that. Like, “Oh yeah, you could do it. You did this. Other people did this. So, why not?” And then it was like, “You want to learn about coaching and stuff? Like, we’ll dive in, just do it. Go take a semester off.”

And so, like, I remember I talked to Avni in the program office, and I was like, “Hey Avni, I’m going to take a semester off, but I promise I’ll be back.” And she’s like, “Is there anything I can do to convince you?” I was like, “No, please don’t try.” And she was like, “Okay, here’s how you do it.” So, I was like, “Cool. That was great and easy.” And then I came back, and I was like, “See, I told you.” And she was like, “Okay, well, most people don’t.” But yeah, it was just… I don’t know. There was, like, a need to go do it and, you know, find more of myself, like shed the layers.

So, it was really, really cool that… You know, I’m forever thankful for Berkeley for many things. But one of them was that they were like, “Yeah, we have a method for this. We’ll make it work.” And they gave me that chance to do that. 

[00:12:30] Sean Li: And you had mentioned leadership communications earlier, but what was it that you wrote in terms of where you want to be?

[00:12:36] Bryce Gilleland: Yeah. So, they have many activities. There’s, like, I think they might have the deathbed activity. And then they have this write a letter to yourself a year from now. So, a year from now, you write a letter to today you. And so it’s a cool visualization journey that you go on. Like, where would I be if my life turned out perfect this next year in my mind?

And that’s where I wrote like, “Oh, I’m running a coaching business. In my coaching business, I’m teaching, you know, like eight different executives on how to better manage their people and how to bring more inclusivity to work and how to leave everyone more motivated and more engaged. I’m a firm believer in win-win outcomes. And it’s like, there’s a way to get people on your team to work a lot harder and to be a lot happier. And if we all could do that, as opposed to, you know, disparaging people or, you know, just not hearing them, you know, we speak past each other. Then I think we can find more positive outcomes.”

And so, that was where, like, that letter is like, “Yeah, I’m doing this thing.” I’m actually the guy who’s helping leaders do more of this, so that they have more impact on others, so that there’s this huge ripple effect, and I can be part of positive change in the world. Like, I love a lot of cheesy phrases, like be the change you want to see. It was a bit of that. And it did not end up like that at all. I mean, I was coaching some people a year later, but change is a winding road that we don’t have the path for. And so, you know, I got to figure out what that winding was by diving into something I didn’t really know.

[00:13:59] Sean Li: I guess growing up, did you have mentors and coaches yourself, or were you helping coach people at. PG&E, during your, you know, in your job, or did it just come about from Haas? 

[00:14:11] Bryce Gilleland: Yeah. I feel like, for business coaching, I just relied on my mom a lot. She didn’t have a college education when she started working. And then by the time she finished, she got her undergrad degree. Just, I want to say like five years before I got my undergrad. And then she got her MBA, probably about the same, like five years before I got my MBA, maybe 10. And it was so inspirational to me to see, like, “Hey, this person who came up from a family that didn’t have much,” you know, “she had like seven brothers and sisters.” She would tell me that she put Fritos in her sandwiches to make them more exciting because, you know, all they could afford is like a meat and white bread sandwich.

And then, you know, she worked her tail off to get where she was. It was also interesting to put my parents side by side. Like, I love my dad too. And my dad was the more book-smart guy. You know, he got a master’s degree for math. And yet my mom, you know, was more accomplished in the workplace. And it’s because she had this kind of ferocious, tenacious project manager type attitude. You know, my dad did fine, too. He had a fine career. But I think that was always an inspiration to me was to like to step it up and keep working harder.

And I have a belief… I don’t know where it came from that, like, you should try to outdo your parents. And not in a competitive way. Like they set you up for success. Like their parents set them up for success. So, try to add more value.

[00:15:27] Sean Li: It makes perfect sense because ultimately, from my perspective, what you do now, right? As a GP is very similar, despite you not going into strictly coaching. I feel like a GP’s role as a investor, right? Your role is to, in many ways, help coach founders in addition to investing in them. So, I find that really interesting. So, I guess, how did you end up at the California Innovation Fund?

[00:15:56] Bryce Gilleland: Yeah. So, I always kept in touch with Kurt after college, and well, in college is grad school. When I was starting my first hedge fund, I went to him and asked him a bunch of questions. He ran a family office.

[00:16:09] Sean Li: This is Kurt.

[00:16:10] Bryce Gilleland: Kurt Beyer. He’s the professor of entrepreneurship. And founder of the Cal Fund. And I always kept in touch with him and asked him questions. He was always very even-keeled and always willing to give advice. And then I noticed he was always willing to give advice to others, too, you know, like he’s very supportive, service-oriented guy. And then about a year ago, he called me up and was just like, “Hey, do you have any thoughts on being GP for the next Cal Fund?” And I was taken aback. I was totally shocked. Like, “Yeah, that sounds awesome. What are you talking about?”

And then I asked him a bunch of questions. And, you know, I was like, “Hey, do you get to coach?” Like, I was lucky that my prior businesses have made me a lot of money. So, I don’t have to worry about finding a paycheck immediately. And, you know, that’s a very privileged place to be now in life. And so, it lets me pick an opportunity. And when this presented itself, I just dove in and was like, “Okay, I got to have some ability to coach and impact leaders. Because that’s what I feel like is kind of in my soul, almost. Or like spirit is aligned towards that.”

And then I want to be able to make impact in the world. And the Cal Fund aligns with that totally. So, I was asking Kurt, “Okay, do I get to do this? Do I get to do that? What’s your vision on this?” And I asked him how he wants to be able to coach and work with other founders. And how do we look at the different aspects of that? And Kurt’s wife is a coach, actually. Slight tangent is we were in class and Kurt asked, like, “Does anyone know what the Enneagram is?” And so, the Enneagram is like a personality test. And I love the Enneagram. I could talk to you for hours about the Enneagram. It really helps you see the “Why you operate.” Whereas most personality tests are the “How you operate.”

And so, he was like, “Does anyone know?” And like, no one raised their hand. No one knows what the Enneagram is. And then I raised my hand, and I was like, “Oh, here’s what the Enneagram is. Here’s what it does.” He was like, “Huh?” And then he was like, “Yeah, my wife coaches the Enneagram.” And like, I still don’t know how I came up with this next question. But I just raised my hand, and I was like, “Can I get your wife’s number?” And then Kurt just gave me his wife’s number. And so, I was like, I went up to him after class like, “Hey, for real, is this okay if I reach out to her? Like, I want to be a coach.”

And so, I ended up going to lunch with his wife and asking her about her coaching and coaching business, which was just fascinating. But like knowing that his wife is a coach and Kurt’s very much into coaching, like he looks for coachability with the founders that we look at, was just such an extra blessing for me, and being like, “Cool, this totally aligns. And I will get to lean into, I think, what I’m here to do.”

[00:18:30] Sean Li: Yeah. For any listeners who are not familiar with the Cal Innovation Fund, can you tell us a little bit about what it is?

[00:18:37] Bryce Gilleland: So, the Cal Innovation Fund invests in founders that are out of Berkeley or the UC system. And then we try to invest in startups that are going to make a greener, healthier, more sustainable world. So, it’s a kind of a value-based fund. And then the fund donates 50% of the GP profits. So, the company profits not the investors back to the school.

And so, it just feels very aligned in that, you know, we’re trying to support the Berkeley ecosystem, really all the UCs, but most founders are out of Berkeley and trying to make the world a better place in the process. And then trying to give back to that system, create the flywheel of innovation for that.

[00:19:13] Sean Li: What stages of investment typically?

[00:19:16] Bryce Gilleland: Yeah, we typically do seed and series A, but we will do later-stage investments. We work with the IP office, and we get some investment opportunity through them. And then, you know, Kurt’s been teaching for 15 years. So, if he has a smart student that comes back and has a company that we can add a little value to and invest in, then we’ll look at those as well.

[00:19:35] Sean Li: I didn’t even realize that. That’s an amazing pipeline.

[00:19:38] Bryce Gilleland: Yeah. It’s pretty interesting. I mean, I get emails from Kurt a few times a week with a student who’s like, “Hey Kurt, just checking in. Hey, I started this company. We do blah, blah, blah. Can you check us out?” And we’re like, “Yeah, let’s look at it. You know, let’s see what you’re doing.” 

So, it’s always interesting. And the different companies that are coming out are crazy. You know, you get AI, you get biotech, you get someone who’s like, “Hey, I found a new shipping and manufacturing process. Like, how are these things similar? They aren’t, but they can all add value. And that’s cool.

[00:20:05] Sean Li: On that note, how do you keep up being sector agnostic? How do you keep up as a GP?

[00:20:11] Bryce Gilleland: Yeah, that was one of the parts that I was so intrigued by with VC is you’re trying to stay ahead of the curve, but you’re trying to stay ahead of the curve in every sector. And then, you know, it’s just an impossible task. So, sign me up for that. And then you get to constantly ask people a bunch of questions. I love student always. I love, like, there’s no dumb questions, you know, or I’m going to be the guy asking the dumb questions. I love the theory of “Be the dumbest guy in the room,” because then you’re learning from everyone always. And just don’t be afraid of that. Like, if you don’t know what something means, ask, right? That’s been really fun. 

So, how do you keep up? I don’t think you fully keep up, but you do your best. And then as soon as something new or interesting comes up that you’re looking at, you just dive in, you know, be that student, always really learn as much as you can, and then have a really good network, which, like, we have a bunch of Haas friends, I don’t like to call them, but alumni network. And you can tap into them, and then you have your own friends and industry network. So, like, I don’t understand all the biotech coming out, but I do have a lot of scientist friends that love this stuff and will help me out and are super curious themselves.

And you always want to give, you know, like give first, hey, how can I help you? What can I do? The interesting part is like asking people for their advice. They appreciate that a lot of the time. And then if it’s something new and innovative, they love actually being a part of that learning process because for people at Cal, like, learning is a gift.

And so, I found that very interesting. I’m like, “Hey, this is something really cool. Can you tell me about that? Oh, wow. Thanks for showing me.” And so, there’s a pretty like mutual playoff there that you’re able to do. I would say going from being quasi-retired a year and a half ago to, you know, yesterday I was out of the house at 8:00 and I got back at like 10:30 at night, just going to different events and being on campus and talking to a bunch of people. And it was really exhilarating.

So, I think there’s that energy in the Bay that’s really intoxicating that you get to be a part of. And hopefully, that drives me to help try to stay up with it. Try to keep up.

[00:22:06] Sean Li: That sounds like a lot of fun. To just be connected back to Haas again and Cal, in general. No, that’s, makes me jealous down here in Irvine. Like I want to… I need some more energy. This is, this Pleasantville is, only great for having kids, I feel like, and raising our kids. But as an entrepreneur, I do wish there’s more activity down here. Who are the LPs of the Cal Innovation Fund?

[00:22:31] Bryce Gilleland: Yeah, I’d say LPs are some of the contacts and friends I know, you know, some people from my previous hedge funds, we’re looking to expand and get more LPs that are successful entrepreneurs, successful founders, successful alumni in some category, really one of the parts of theirs sourcing selection and stewardship for a fund. And so, I’d love to have as many LPs that can help us with the stewardship process or the selection, but that have done it before and are successful, and can, you know, help drive a new business.

And then almost every alum has some kind of knowledge that we can tap into. So, happy to bring them on board and bring them into the circle.

[00:23:09] Sean Li: Can you explain those three things a little bit more?

[00:23:11] Bryce Gilleland: Sure. So, sourcing is where you get your deal flow, where you find these new companies. And that’s one of the big competitive advantages that you look for in the space of VC is do you have competitive sourcing edge? Can you get deals that others can’t? Do you know about them early enough? Or can you get into deals that are overcrowded? The second one is selection. And that’s okay, you found all these deals now, how can you determine if it’s a good investment or not? And so, that requires enough expertise in that set area to be able to make that investment.

So, tapping into my scientist friends for biotech or tapping into my retail friends for a retail product, or maybe I have the knowledge of the space, and I could just dive deep, and then making sure that your deal terms are good. There might be a really brilliant company, but it’s just too expensive. Or there might be a really brilliant company, and it’s too early stage and risky. So, they need to take a couple more steps for our investment strategy, per se.

And then the last one is stewardship. And that’s how we help companies along the way. So, are you in defense tech? Curtin has a lot of contacts there, he can help you. Are you in biotech? Cool, we have a biotech lawyer, and we have great facilities on campus and a lot of contacts in that space. And so, how can we really support our companies? And that’s probably the part I’m most interested in. My personal mission is to try to support others to achieve their dreams.

And so, as much as I can help steward them along, whether by making a few intros or connections or diving in or being that therapist coach for them, then that can help them hopefully stay a little more sane, stay a little more stable, be a little more efficient, and have a just much better chance of success. 

[00:24:46] Sean Li: That’s amazing. Thanks for sharing that. So, what’s on the horizon for you in terms of where you want to take the Cal Innovation fund? So fund one, I presume, is fully deployed.

[00:24:59] Bryce Gilleland: Yeah, so we’ve made 27 investments in fund one, and then we have follow-on capital. So, that’s also an interesting part of the thing is like finding your winners and reinvesting in some of your winners.

And then there’s a whole bunch on portfolio theory, which I love diving into from a math perspective. 

[00:25:15] Sean Li: Are you able to share?

[00:25:15] Bryce Gilleland: Yeah, so you’re looking to maximize your returns in the fund generally. And then you’re also looking to support companies. And so, one model I really like is there’s a four-tier model. There’s your tier one companies, which is they’re flying off. All their KPIs are hitting. They’re doing amazingly. When they go for another round, they may be a very expensive round. And so, you know, it’s a great company to invest in, but you’re also paying a high price.

So, generally a good investment. And then there’s your tier two companies, which they’re usually, like, meeting or slightly beating their KPIs. And they go out for funding, and it’s a little harder for them to get funding. So, they may have a slightly lower-priced round. So, also a very good investments to invest in and maybe your priority. Or like if you’re like, “Hey, I have these contacts and I think we can get these new contracts coming in the next year.”

So, right now they’re priced here. But if we have these two or three things happen, which we think can happen, then boom, that’s going to have a nice, nice up round. So that would actually be your optimal investment entry. Your tier three is the company struggling, but you think they can survive. And so, you know, not particularly good investment. And then your tier four is your kind of zombie companies, which are like, there might be a miracle that can get them out of there.

But, you know, these are unfortunately part of the percentage of why, you know, Ventures does have a failure rate for companies. And so, looking at those and trying to map those companies and staying in contact with them to see how they’re performing, and then how you can really help them achieve their next few hurdles.

[00:26:37] Sean Li: Let me ask you this. So, being industry agnostic or relatively industry agnostic, how do you figure out those KPIs? Right. I’m sure the company, the founders themselves, are setting their own KPIs, but how do you, and take this from a lay person, you know, I’m just actually curious about this. How do you figure out they’re even tracking the right KPIs? Right. Yeah. Versus just vanity metrics.

[00:27:00] Bryce Gilleland: So, I mean, I worked in investor relations, as my second job was interesting because everything just summed up to like dollars at the end of the day. It was kind of disappointing because we were doing all these green initiatives and new solar. And I was like, “Tell them about our new customer program,” you know, “That’s making our customers happier.”

They’re like, “No, this is going to Wall Street.” And I was like, “Well, they don’t care.” And they’re like, “No, they don’t think.” I was like, “Oh, okay.”

So, for performance of these companies, a lot of it just boils down to numbers of like, what’s your ARR growth rate? You know, how many contracts are you’re signing? If it’s more retail-facing, you’ll look at what’s your turnover rate for your customers or what’s your retention rate. And so, it’s like, if you have a really high retention rate or low turnover rate and you’re achieving your goals for numbers, like, okay, your top tier, and that’s pretty easy. And then that’s for most industries.

And then if you go to biotech, that’s very different. It’s what did you do at your last stage? What’s the chance of your next stage of approval? Like, if you go from mice testings to large animal tests to human tests, and then what results did you get during those stages? And so, you can see, like, those are completely different pathways. And then with other companies, it’s like, are you pivoting, right? You know, if you’re not getting enough growth rate, what are you doing to change your product or talk to them? So, that’s a more art and less science perspective. It’s just less numerical in nature. For the earlier-stage startups, it’s more of that art.

And it’s like, how are you finding product market fit? How are you finding these customers? What are they seeing or needing in a product? And so, it’s really a series of experiments that you’re running and you’re trying to test these different experiments. And then as you get the later stage, it’s more, how are all the metrics going, which is just the ARR, your revenue growth rate, your growth over time kind of thing.

[00:28:45] Sean Li: What are some common mistakes that you’ve seen founders make in your experience? 

[00:28:52] Bryce Gilleland: One of the most common mistakes is they are not budgeting for their next fundraise. And so, a lot of founders are overachievers. They want to get somewhere. They want to be lean in the process. And so, they’re like, “Oh yeah, okay. If we do all this, then we’ll have enough money for 16 months. So, in 12 months, we’ll go raise capital and we’ll be good.”

And that is often not going to work because if you get to the 12 months and you haven’t met all your KPIs, now you only have four months of runway. And then if you budgeted perfectly, and if you didn’t budget perfectly, which is also sometimes the case, you have even less runway. And so, now you don’t have enough runway to do a raise that’s going to help your company sustain.

And so, you might have to do a down round or a small up round to continue. And then that just doesn’t set a good precedent with investors, and investors are less likely to add onto that. And so, ensuring that you have enough runway, which is usually at least six months. And sometimes we recommend, like, up to 12 months for that. And then accompanying that is being very lean on your hiring, you know, like if you don’t have product market fit yet, don’t hire your sales team. Don’t even think about it. You know? And if you’re struggling with that, make sure your founder can sell. And so, that one of the things we do is we always look for founders who can sell.

Because you are the evangelist of your product. You’re the evangelist to your employees. You’re the evangelist to your investors. So, you got to sell three different ways. If you’re struggling to do that, then it’s going to be a struggle down the road. So, I’d say, you know, funding and selling for that.

[00:30:21] Sean Li: I think your point about the six months is so accurate because I’m sure founders’ experiences when they first raise, right? It’s such a time-consuming process. Both just physically time-consuming and just mentally consuming. That, yeah, just, just hearing now if anybody were to budget four months for fundraising, it’s tough because it… I think it puts on a different kind of pressure. And that’s also, like you said, assuming that they had hit their KPIs, right? And they don’t, then they’re going to be trying to continue to hit their KPIs while fundraising at the same time. And it’s just dreadful.

[00:31:01] Bryce Gilleland: Yeah. I have one buddy who is, I mean, he’s got to be one of the coolest cats I know. And he did make his fundraising round, but it took like five months longer than he thought. And I had never seen this person so strung out ever, like, I’d never seen this person not in seeming total control.

And it, you know, to see someone who’s always seems relaxed, confident, in control, to be kind of like fraying at the edges a little. It was just a testament to, like, how much stress these founders are going through when they’re going through their fundraise, and always going to have a ton of stress in a startup. Like it’s a highly competitive environment.

And whatever we can do to lower that stress level and help our founders oftentimes by planning a lot in advance with them, I want to do, because, you know, I deeply care about the mental state of the founders as well. We’re here to make the world a better place, and we’re not here to burn ourselves out or kill ourselves in the process. So, like, let’s, let’s work really hard and know we’re going to struggle, but let’s minimize some of that risk.

[00:31:59] Sean Li: Right. No, that makes perfect sense. Bryce, you mentioned you like to read. Yeah, I would love to hear what are some books that are piquing your interest these days?

[00:32:08] Bryce Gilleland: Right now, I am reading so many different venture and industry books. I love How to Win Friends and Influence People by Dale Carnegie. Like, I really like that. It’s not one of my favorite, but like Mindset by Carol Dweck. Did such a great thing for me because I was such a fixed mindset person of like, “Oh, I’m good at this or I’m bad at this.” Because I was a bit of a- 

[00:32:32] Sean Li: I’m surprised. Really?

[00:32:33] Bryce Gilleland: Yeah, yeah, it was well, like overachiever when I was young, and so like, I either picked up something real quick and thought I was good, or I didn’t pick it up quick and was like, “Never mind, I’m not going to do that thing.” You know, like kind of a competitive attitude and realized, you know, that’s just a terrible attitude to have.

[00:32:47] Sean Li: What did you grow up playing sports, I imagine? 

[00:32:50] Bryce Gilleland: I played a lot of sports.

[00:32:51] Sean Li: What’d you play?

[00:32:53] Bryce Gilleland: I played soccer and tennis. But yeah, I played soccer goalie and, you know, I say-

[00:32:59] Sean Li: It makes sense. You’re tall, by the way. Just for any listeners, we, Bryce, had invested in one of my startups, actually, during the pandemic. And I always met with you on Zoom, right, during the pandemic. And when I saw you in person again, I was like, I forgot how tall you were. I like, seriously, almost didn’t recognize you when you came up to say hi. And I was like, wait, is that Bryce? No, I think Solar Suns say play goalie for soccer.

[00:33:32] Bryce Gilleland: Yeah, it’s a fun position, but you’re the weirdo on the team. You’re like, “What’s your job?” Yeah, I dive on the ground to stop balls from going in this net, and everyone else gets it to run around all game. But yeah, I always say there’s the best feeling in soccer is scoring a goal. The second-best feeling is blocking the forward shot from scoring a goal.

[00:33:51] Sean Li: No, that’s awesome. My last question for you, Bryce, is, was there anything that you wanted to share that I didn’t get a chance to ask you?

[00:33:58] Bryce Gilleland: I mean, I guess I’m just really into personal development and personal growth and pushing yourself to try to be your best self. So, if anyone ever wants to connect on those items, I’m happy to connect on any of those or dive deeply into good books to read or meditative practices or growth habits, any of that stuff, I love it.

[00:34:19] Sean Li: I really appreciate that. Because you brought up How I Win Friends and Influence People, and I just reread that like a year ago, having read it, I think when I was like 13 or 14. Same with Mindset. It’s like some of these books, you know, I visit again and again, and every time I open it and read it, it’s like I’m reading a different book. And part of it, I feel like, is because you just, you have a different takeaway from it, right? You see something different that catches your eye, your attention, than the first time that you read it. 

So, food for thought. Happy to riff on anything personal growth as well with you. For any listeners, we will include Bryce’s LinkedIn contact. Feel free to reach out to him. But again, thank you for taking the time to come on the podcast today, Bryce.

[00:35:05] Bryce Gilleland: Yeah. Thanks, Sean. Thanks for having me.

[00:35:09] Sean Li: Thanks again for tuning in to this episode of the OneHaas Podcast. If you enjoyed our show today, please hit that subscribe or follow button on your favorite podcast player. We’d also really appreciate you giving us a five-star rating review. If you’re looking for more content, please check out our website at haas.fm. That’s spelled H-A-A-S.fm. And there you can subscribe to our monthly newsletter and check out some of our other Berkeley Haas podcasts.

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