Pro-Entropic Investing

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Canalyst. Canalyst is the leading destination for public company data and analysis. If you're a professional equity investor and haven't talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick. 

Lemon.io. The team at Lemon.io has built a network of Eastern European developers ready to pair with fast-growing startups. We have faced challenges hiring engineering talent for various projects - and Lemon.io offered developers for one-off projects, developers for full start to finish product development, or developers that could be add-ons to the existing team. Check out lemon.io/patrick to learn more.

[00:02:51] - [First question] - Defining what a pro-entropic company is

[00:07:26] - Understanding external forces of chaos and why they’ll continue to increase

[00:11:32] - What he’s learned about identifying and investing in pro-entropic companies

[00:13:43] - Investing with entropy in mind can be a bet on unchanging aspects of human nature

[00:15:08] - Defining durability in contrast with resiliency and entropy

[00:17:27] - Timing and valuation matters less and less as you ascend the entropic scale

[00:18:53] - Coming from a traditional background and the origin of Valor

[00:22:05] - The theory of constraints and why it’s so powerful

[00:26:32] - Transitioning into a private equity structure and Valor’s 2001-2005 era

[00:30:42] - Asymmetric information and developing a stage deployment of capital strategy

[00:32:51] - The importance of understanding people and psychological ideas for investing he finds useful

[00:36:59] - Understanding the psychology of founders that have successful outcomes

[00:39:07] - Vision setting, narrative building, and qualities of effective and dangerous leaders

[00:42:02] - Decision making bias and combating bias effectively in practice 

[00:44:30] - Where security and control figures into his thinking

[00:45:45] - Identity in relation to ego; the tools he uses to combat identity related decisions

[00:49:04] - Lessons learned from the Japanese language versus Western languages

[00:50:37] - What he’s gotten better at when it comes to getting to the heart of what’s actually going on in a company and accepting reality

[00:53:07] - Questions he returns to when he’s getting to know a company

[00:56:16] - An episode of operational deployment that most stands out in memory

[00:58:54] - Key concepts that most stick with him from working alongside Elon Musk

[01:01:32] - Why there aren’t more Musk’s or Bezos’ in the world

[01:04:20] - Ensuring Valor invests in the best companies going forward

[01:06:06] - How to pass the torch of what Valor is to others when his time is done

[01:08:25] - The kindest thing anyone has ever done for him