[00:00:28] Julie Yoo: Hi, everyone. Welcome back to Day Zero. I am Julie Yoo, a general partner with Andreessen Horowitz and a member of the advisory council for Day Zero. And today it is my sincere pleasure to be hosting Leshika Samarasinghe, who is a founding general partner of Twine Ventures, amongst many other things. So Leshika, welcome.

[00:00:48] Leshika Samarasinghe: It’s such a pleasure to chat with you, Julie.

[00:00:50] Julie Yoo: Awesome. So glad we’re doing this. Why don’t we start with you? I don’t know that there’s anything that you could call a traditional path into venture capital these days, but you do have quite an interesting background. So tell us about your journey, upbringing, what led you down the path to founding Twine Ventures.

[00:01:06] Leshika Samarasinghe: Sure. So I’ve had a non-traditional personal and professional path, to say the least. My family and I emigrated from Sri Lanka when I was really young, at the start of that country’s civil war, and landed in Erie, Pennsylvania, which is a manufacturing town along a lake where my parents ran a small laundromat and where some of my best friends still live to this day. It was a fun place to grow up. But I wanted a break from the 10 feet of lake effect snow and happened to be pretty decent at standardized tests, so I was very lucky to end up at Stanford, which was like this promised land to me with palm trees and sunshine everywhere. Google was recruiting on campus my senior year and I joined as an early member of the product team and had a front row seat to that company’s tremendous growth, which was really incredibly special to be a part of. But as the company got bigger, I went to smaller and smaller offices because I wanted to be a part of more nimble operating environments. And that’s when I realized I had the startup bug. So after business school, I joined a startup of a different sort, as part of the first Obama administration, which was helping set up the Advanced Research Projects Agency for Energy, modeled after DARPA, because I wanted to do more mission oriented work and address climate change in particular. So that was actually my first exposure to venture, when I was working in government. So my team worked with the venture ecosystem to provide follow on funding for projects. And I ended up joining one of the firms that I collaborated with, called Alexandria Venture Investments, which you might be familiar with because they are a really active investor in biotech and health tech and climate tech, where they’ve invested a few billion directly into startups and other venture funds. I then came back to the Bay Area and joined a former Google colleague, David Freeburg and running the production board for the last five years, which is a venture studio here in San Francisco. We were co-founding companies from the ground up with a strong focus on health and sustainability, and had Alphabet and Gates and other great investors around the table. So that was both investing and operating experience for me because we were very much in the trenches alongside our founders. So it’s been a varied path to founding Twine, but I think the theme that runs through is working on mission-driven problems and then working with teams at the earliest stages.

[00:03:21] Julie Yoo: Amazing. That’s a very interesting and unique winding path. But in many ways you can see the themes that sort of were consistent along the way. So tell us about Twine Ventures. What is the firm about? What is kind of the ethos behind it. And why did you decide to found it yourself?

[00:03:36] Leshika Samarasinghe: Yeah. So Twine is an early stage venture firm, primarily focused on seed, investing in purpose-driven companies. And I think there are a few areas that are most conducive to building those kinds of businesses, which is health, climate, and financial empowerment. So that’s what I focus on at Twine. I personally believe there’s never been a more exciting time to be investing in general, and in particular, those sectors, because I think this next generation of founders are especially motivated to work on things that matter. And I think talent is too which is, by far, the hardest thing in this market is not only finding, but retaining great people. As far as why start a firm, I think it’s starting venture firms is the same reason a founder starts a company. You’re passionate about a mission. You see a need. In this case, it’s for dedicated seed capital in areas like healthcare, which isn’t quite yet as specialized as downstream capital in the sectors. Fundamentally it’s about having a sense of agency and wanting to be a builder, especially if you’re an entrepreneurial person. For the value prop for Twine. I like to dig in areas like talent recruitment and follow on fundraising for my companies because that’s where I spent an inordinate amount of time at the venture studio, like building your team after team. IN general, I try to take a bespoke approach to whatever founders might need help with and leverage my own investor base and advisory network accordingly. I should also note that I’m a solo GP, so I’m able to move pretty quickly and be nimble in my investment approach.

[00:05:12] Julie Yoo: Yeah. And to that end, you have gotten your way into many, many super interesting and really exciting companies, some of which we share with you, obviously, as an investment. Can you speak to maybe two or three of the theses and kind of investment themes that, that you’re most excited about these days, given just the broad surface area of everything that’s happening in our universe?

[00:05:30] Leshika Samarasinghe: Yeah. Yeah, of course. Health in particular, I just, there are so many excellent founders gravitating towards building in that area, I think, especially in a pandemic, when the cracks in the infrastructure are more exposed than ever before. And obviously so many trends have been accelerated. Within that theme, I’ve particularly been gravitating towards infrastructure opportunities to improve, similar to you, to improve things like operational efficiency and quality of care delivery on the front lines, back companies like Capella that improve quality outcomes for surgical teams. I’ve also been spending time in provider enablement to help doctors adapt to the changing industry. We’re both investors in Waymark, which improves outcomes for Medicaid patients, but it’s also very much about enabling physicians. There’s such crazy stats I’m sure we’ve all seen around, one in five physicians leave clinical practice in the next two years, which is pretty disconcerting. I’ve also been conducting thesis research in areas like commoditization of healthcare data and making insights from that data actionable versus overwhelming. So those are some of the themes in health that I’ve been focused on.

[00:06:38] Julie Yoo: Are there certain, again, characteristics or themes that you’ve seen that you are attracted to, but also that you think are most conducive to success in some of these complex markets?

[00:06:48] Leshika Samarasinghe: Yeah, So for types of founders, clearly there’s having strong founder market fit and then also working with founders who are great at communicating a narrative. This is what you’re doing all day long as a founder for talent, to investors, customers. One of the things I think about a little bit as well is investor founder fit. I think there’s a lot of different types of companies Twine can invest in to make money and make an impact. But I think, am I uniquely suited to accelerate the success of this particular company? Do I have a strong connection to that founder to weather through 10 years of ups and downs and vice versa. I think that should definitely be a lens for founders as they’re seeking investment partners. Do I connect with and trust this individual? Can they help me when? I think forging that connection can oftentimes be, it can be more challenging in a world of Zoom investing, which is why I’m up actually often on a plane now that we can do that again. So it’s probably a little less efficient than Zoom, but I think it matters when you’re establishing trust and developing relationships that can hopefully lead to better outcomes for all in the long-term. And it’s just more fun too and I think fun’s an important part in all of our jobs.

[00:07:56] Julie Yoo: Yeah, absolutely. I’m guessing you’re seeing a lot more competition from maybe funds that had historically focused downstream and then, but also hyper specialization, where people can really tout the fact that they’re hyper-focused on one particular stage. Can you just talk us through kind of what your decision calculus was for focusing on seed? And is that something that you think is immutable going forward or do you think flexibly about how you might partner with companies down the road?

[00:08:21] Leshika Samarasinghe: Yeah. I mean, I focus on seed because I just, I really love early stage. I mean, at the Venture Studio, I was co-founding companies. It doesn’t get much earlier than that. And so I kind of love operating when things are kind of at their messiest and most ambiguous and, again, really helping get companies off the ground. And so, I think that is more to do with like my skillset and where I enjoy spending time. And I do think, at the seed stages, things seem to be a bit more collaborative. And for smaller funds, if you’re investing early, you can still return the fund even with flexible checks, because I think outcomes can simply be so much bigger than they ever were before. I still, I remember when it was like, oh my God, Instagram got bought for a billion dollars. And now it’s like, can I underwrite this to be a $20 billion outcome, which we’ve already seen in areas like AI applications to healthcare. So I don’t know that it’s necessarily immutable, but I do think that there’s something to be said for specializing in a stage where you can add the most value.

[00:09:18] Julie Yoo: You know, we’ve been talking a lot about funding the companies, but obviously some people underappreciate the fact that you as a fund have to fundraise as well. And given that this was your first time sort of going to bat on your own as a GP, what were some of your guiding principles as you started your fund raising process and what surprised you the most as you were going through that process, given all the dynamicism in the market today?

[00:09:44] Leshika Samarasinghe: Venture firms raise money from limited partners or their LPs. It can range from high net worth individuals to huge multi-billion dollar college endowments, which are institutional investors. The funny thing in raising money for a company, your lead investor can oftentimes want to take as much of the round as possible. And for institutional investors in the fund, they’re actually limited in owning more than a certain amount of the fund. So for a lot of new firms, it ends up being a long list of LPs and you have like hundreds of conversations as you’re fund raising, which can definitely be exhausting. For me, I found what I call like funder funds or investment funds dedicated to investing in other venture funds to be helpful, as they have a lot of experience helping new firms ramp and can be a bit more nimble than, say, a pension fund that couldn’t write a check small enough for a small fund. So I’m lucky to be working with a few like Foundry Group out of Colorado, who has been very helpful. I’ve also tried to be pretty intentional about going after individual LPs, who can provide leverage for me in the portfolio. As a solo GP, you’re constantly thinking about leverage and how you can create it. So I’m lucky to have executives from One Medical and other awesome healthcare companies whose network I or my portfolio can tap into, or engineering leads from Google and Amazon who can help with CTO recruitment or help diligence AI companies. So it’s pretty analogous to having strategic angels on your cap table. And I think at a macro level, as part of this wave of innovations happening in new funds and new strategies, there’s also lots of new ways for investors to fundraise. Rolling funds via angel list or there’s FinTech startups that specialize in matching LPs with alternatives, which, as an asset class, venture falls into. Or, special purpose vehicles. And I think these are all welcome and needed innovations and offers founders more choice in where and from whom they can access capital versus, when I started in ventures, only a small handful of firms calling all the shots. And if you didn’t get capital from them, you’re out of luck. So I think in general, the startup venture ecosystem is just, it’s democratizing all fronts. On the supply side, there’s more infrastructure in place and communities to lean on for founding companies. So, more companies are being founded than ever before. And on the capital demand, there’s more awareness in startups and venture investing and venture capital. I’m sure Shark Tank probably had something to do with that. And so there’s paths for individuals to be able to gain access to both investing in companies and in funds. And that follows through the public markets as well. The rise of retail platforms participating in public equity markets. And so, I just think there’s really great innovation happening across the board in the venture ecosystem.

[00:12:19] Julie Yoo: To that end, can you share, what were some of the most helpful resources for you as you were getting off the ground? Again, solo GP, doing this on your own, but presumably, there were either people or groups or other resources that you tapped into to kind of guide your way. Were there any in particular that you found particularly helpful in that process?

[00:12:36] Leshika Samarasinghe: Yeah. It’s funny because I was a little, when I was thinking of starting Twine, I was a little concerned that being a solo GP would be a lonely or overwhelming path in the same way that a company founder debates whether to have a co-founder. But one of the things that I’ve been most pleasantly surprised by is the strength of the community amongst emerging managers, which is an industry term given to newer firms like mine, which really parallel founder networks and support systems. So there’s a bunch of slack channels and WhatsApp groups for folks to share investment opportunities and they really want to help each other succeed. So for me, what was helpful was talking to friends who started their own firms like FECA, or fuel, or section 32, who were like you can do it, here’s how, were so helpful in giving me the confidence to think it was even possible. So combined with other part-time teammates and advisors and LPs, and of course the founders you’re working with day to day, there’s more support now than there’s ever been. It doesn’t mean that it’s easy, but there’s support, which is so necessary when you’re doing anything and the infrastructure for things like the administrative items in running our firm are more turnkey than they’ve been before. So all those things made the prospect of founding a firm less intimidating.

[00:13:46] Julie Yoo: That’s wonderful. Often people think of venture capital as a bit of a lone wolf sport, right, where it is really kind of the individual partner doing their own thing and not a ton of leverage per se on the team side. How are you thinking about that? And are there models that you think, novel models maybe, for how you think about building early-stage venture firm teams? Or do you envision continuing to leverage a more kind of network based approach with part-time resource and consultants and things of that sort?

[00:14:15] Leshika Samarasinghe: Yeah. I mean, I think again, you’re just always thinking about where you can get leverage. And so being intentional about who you have around the table on all fronts, ranging from your LPs or investors, to advisors, to some of those potentially part-time resources as well. And I think what that enables is also being able to flex and provide more specialized approaches depending, too, on what’s needed for supporting specific portfolio companies, right, because it’s like, oh, I have this pool of people that I can tap into for thinking about healthcare payments integrity, or this group for supporting on climate, for example. And so, for me, it has been a more flexible approach to team building in the near term.

[00:15:02] Julie Yoo: Amazing. To that end, as a solopreneur, I’m guessing you get pulled in a million directions and you have a million possible things you could be working on at any given time. What has been your rubric for prioritizing your time and what advice would you give to others who are kind of going down a similar path?

[00:15:18] Leshika Samarasinghe: Yeah. I mean, I’m just constantly asking myself that one because time and attention is by far our scarcest resource. And the challenge with ventures, it’s infinite, you can always be looking at more and more companies. You’re constantly context switching between topics. There’s a barrage of communication, but for me, it’s been so important to create time and space to think and learn and like read voraciously more than just headlines and tweets. And by blocking calendar time to do that, even though I’m not always successful in sticking to it, is one of ways that I’ve created that kind of space. I’ve found it helpful to have some investment theses to anchor on, the kinds of things I mentioned earlier on the pod. Part of that’s coming from a studio background where we go super deep into topics or incubating so that you can center yourself somewhat in the universe of things you could be looking at and have a perspective, although not be prescriptive because founders are always the ones that are going to be closest to what innovation is actually needed. And that way, you can have a prepared mind going into conversations with founders, have the ability to move quickly and, again, hopefully be better positioned to help them win. And so, taking the time to think, like, having those investment theses are some of the ways that I prioritize my time. I’m also probably an atypical VC and that I don’t spend anytime on social, really, and on VC Twitter, in particular. For me, it’s like putting that time and attention into a ground game and, like, one one one relationship building with downstream investors or customers, it can be helpful to my companies. And so, a venture firm is a company. Like all companies, you want to have a strategy and align it with your core competencies. So, on Twitter I’d write, like, let’s go with five o’s, like that just wouldn’t be one of my fortes. I’d get like five likes and it’d be really sad.

[00:17:03] Julie Yoo: It’s probably better that you’re not distracted by everything happening in that universe, but that’s great. No, it sounds like you’re being very focused. Given that you’re just getting started and it sounds like you sort of knew that you wanted to do something on your own, but I’m curious, if for whatever reason you weren’t doing Twine today, what do you think you would be doing?

[00:17:19] Leshika Samarasinghe: Potentially being like an urban planner. I actually considered studying that in college because I have this obsession with cities and how they’re built and run and the virtuous cycles that happen in them, which I think was especially missed during lockdowns. I thought about that quite a bit. It’s funny, my husband and I always have this debate about where to go on vacation because he’s very much a beach person and I always want to explore a new city. I think I always want that action and stimulation, which is probably why a career in venture appeals to me. That or be a full-time scuba diver, which is another activity I really enjoy.

[00:17:50] Julie Yoo: Awesome. Yeah there’s some parallel between urban planning and investing in companies and company building, for sure. I guess a last question here would be, as you think about 2022, obviously very, very active times on the market side, right, of what’s happening to the public markets. As you said, just more capital pouring in, but also a lot of questions about, what will 2022 look like from a capital markets perspective. Do you have any particular points of view on how you feel that will impact the early stage game that you’re playing and any other major kind of themes that you think about as you build your strategy for the next 12 months?

[00:18:26] Leshika Samarasinghe: I just couldn’t be more excited. I mean, I think that there’s a lot of new firms. There’s a lot happening in the markets. There’s volatilities. But there’s more new companies being started than ever before and a more diverse set of industries and a more diverse set of geographies and by more diverse founders than ever before. So, I just, again, think it’s a really exciting time to be investing right now. And it’s a little bit messy because of this explosion of companies and firms and matching our capital, the right founders. But I guess in that inefficiency is where you’re able to generate some alpha for your own firm. And so, I think that the volatility in public markets, I haven’t seen that like quite translate to early stage valuations and effecting early stage valuations and things like that. But we probably might see that in the coming months. But the macro areas that I’m investing in, I think there’s kind of a lot of secular tailwinds and those markets will continue to grow. So in general, again, a really exciting time to be early stage investor.

[00:19:26] Julie Yoo: Amazing. Thank you so much for your insights and congrats on Twine. And we look forward to collaborating more with you as you find great companies to invest in.

[00:19:35] Leshika Samarasinghe: Thank you, same. This was awesome, again. I really appreciate your taking the time. I’m such a big fan of your work and portfolio. So it’s an honor to be on the show.