Nov 11, 2021
Honoring Our Veterans
Not just today but every day, we honor our brave military who have served in the past and are serving in the present. We also remember, with tremendous gratitude, their families — who bear the burden of sacrifice for their loved ones serving in the Armed Forces.
As we continue to commemorate our heroes in uniform, our Navy-veteran guest host Wayne Moore, (KF Class 25) Managing Partner of Basecamp Fund, welcomes two prior Naval Officers to the podcast: Sherman Williams (KF Class 26) of Academy Investor Network and Zachary Ellis of HTX Fund.
In each episode, you’ll hear conversations about their transition from military to managing partner, how to find success via untraditional paths, why many vets are interested in pursuing venture, and how they think about fostering innovation.
Wayne’s entire mini-series is filled with stories of focus, discipline, and perseverance.
To ALL our veterans: thank you for your sacrifice, your bravery, and the example you set for us all.
This season of the Kauffman Fellows Podcast is produced in partnership with Mighty Capital. Together, we unravel what truly makes a great VC investor.
Academy Investor Network Managing Partner, Sherman Williams, On “Growing Up” in the Navy
In the third episode of Wayne Moore‘s “Vet to Venture” series, he hosts Sherman Williams (KF Class 26), Managing Partner of Academy Investor Network. Sherman invests in dual-use technology and veteran-led startups. Together they discuss the purpose of the Academy Investor Network and venture capital’s unique intersection of finance, innovation, and technology.
On learning about himself in the Navy
Sherman went from the U.S. Naval Academy to the Navy, where he was an intelligence officer for several years. While learning a variety of transferable hard and soft skills, he also learned about himself.
“My ability to persevere through anything. Hard work. I developed a love of technology. I developed a love of international things. I didn’t know I was international but when you’re 23 years old, and you go on your first deployment, you just find out that you’re really into it. I’d never been outside the United States before I went on deployment. And I say that I pretty much grew up a second time in the Navy, separate from my parents' house.”
On becoming interested in tech and VC
Sherman describes his entry into VC as an intersection of three sectors: finance, innovation, and technology.
“I became interested in finance as a junior naval officer because I didn’t want to just blow my money. I didn’t want to be the guy to go buy the Mustang or a motorcycle and need to crash on friends’ couches. I wanted to do the right thing with my capital. But I was also interested in innovation. And I’m interested in technology. So venture seemed to be in the middle of the Venn diagram for those three things.”
On how he moved from the military to VC
Though highly trained and skilled in his military career, he lacked the typical VC background.
“I absolutely did not know what I was doing whatsoever, not even a little bit. I did know to go to a good business school. Looking back, I think a lot of people don’t even have to do that. If anything, some funds frown upon that, because if you’re trying to go work for a fund, ideally would be to go start a company. Try to go work for an early-stage company, and then come up that way.”
Sherman earned his MBA at the University Chicago’s Booth School of Business and considers it one of the best decisions he’s ever made.
“It’s a play for people who are intellectually curious. And like rigor, I just completely loved it and ate it up.” While there he interned at a venture firm and got his first taste of working as a VC.
On the purpose of the Academy Investor Network
The Academy Investor Network focuses on graduates of the military service academies in bringing those people together to invest with the fund.
“We believe that venture-backed companies are where the wealth creation, job creation, and innovation are occurring in our economy, and we want our fellow graduates to be able to participate in that.
Another part of our thesis: we invest in veteran-led startups. Now, we don’t just invest in Academy grads; we invest in all veterans or people who spent time in the Coast Guard or folks that spent time in the Merchant Marine.
And the thought process there is that we’re investing at the early stages. So you’re betting the jockey, not the horse, you’re betting on the human being. Who better to assess whether or not this human being has the leadership, determination, and grit? Who better to assess that than folks that come from that background?”
HTX’s Managing Partner, Zachary Ellis, On University Tech Transfer and VC Success
In this episode of Wayne Moore’s (KF Class 25) “Vet to Venture,” series he speaks with Zachary Ellis, Managing Partner of HTX Fund. They discuss how to develop a robust ecosystem that fosters innovation, the massive opportunities he sees in Texas, and how to succeed on a nontraditional path into VC.
On succeeding in a “nontraditional” VC path
After his military career, Zach, like many transitioning veterans, was looking for an opportunity where he had a purpose. He found that purpose at the University of Wisconsin’s tech transfer office, where the mission was to move their technology into the marketplace. His experience in Wisconsin opened his eyes to career possibilities outside of the east and west coasts.
“I never really hitched my wagon to the idea of being in the Bay [Area]. In fact, a lot of my mentors who are successful VCs, none of them are in the Bay. And, you know, I had been taught from early on to simply follow opportunity and to not be afraid to distinguish myself in my own way.
VC is already the type of industry where it has no real front door, just a bunch of windows and backdoors. And so you get in any way you can. But I think the sort of underdog mentality of being in the Midwest or being from the south also had sparked something in me to want to build and to prove that this can be done other places.”
On what makes a robust ecosystem that fosters innovation
It’s not just money, Zach says. It’s a competitive environment and there’s a lot of money and a lot of talent, but his experience highlighted other key factors in successful venture capital.
“People think it’s really all about the capital, but there’s so much more to it. You’ve got to have a strong academic university base, which acts as both the source of innovation in terms of their research and thought leadership and various technical areas, but also talent; smart kids coming out of school who are willing to embrace new ideas and new opportunities.
That’s something that the Bay Area has in spades, that New York, Boston, Chicago, our current leaders are built on. Austin’s no exception. So I think it’s that I think there’s got to be a certain attitude with the local municipalities, whether it be the local government or state government, that is keen to help facilitate innovation and entrepreneurship, that’s willing to put in place the right legislation, that’s willing to help attract the right, large corporates to the area, and that’s willing to put in place the right sort of incentives for young entrepreneurs to take certain risks.
And obviously, you need the founders who want to be there. There’s often a certain culture that gets associated with cities that ultimately become leading emerging markets, whether it’s keeping it weird, like in Austin, or the Bay, or just renegades and we make things happen.”
On how he sees massive opportunities in Texas
Zach is in the process of launching a Texas-based fund, and said he sees incredible potential for VC in the state, such as talent from major universities, headquarters for major corporations, and a “renegade” attitude.
“When I look at the factors that exist in Texas, we talked about the academic institutions. There’s UT Austin, Baylor, Rice, SMU, Texas A&M. We talked about the rogue or renegade, scrappy, gritty attitude about forging your own path. That’s certainly there in the state of Texas in spades.
And the sort of corporate environment as well, surrounding the four major cities in Texas: Dallas, Houston, San Antonio, and Austin. Slightly more than 10% of the Fortune 50, the Fortune 100, Fortune 500, and Fortune 1000, all in one place. Between that and the concentration of people that live in that area, that’s also over 10% of the US population. There’s a lot of fertile ground there to help founders build companies. Whether you need talent, early customers, early adopters, co-developers, and capital, it’s all there in spades. And we’re working on something to really be catalytic to early-stage founders in that space.”