From eye surgeon to venture capitalist at 53: Sam Goldeberger - Ambit Health Ventures

0:00 Hi everyone, I'm really excited to bring you this conversation with Sam Goldberger. Sam is a managing partner and co-founder of Ambit Ventures, an early stage digital health venture firm. He is also on the board of multiple startups, including Soap Health, in which we are co-investors and that is how I met Sam. At the age of 53, he decided to pursue an MBA and transition from clinical practice to private equity, in which he stayed for two years before launching his venture fund with his co-founder. We talk about his childhood, launching a venture fund, decision making, life, what he looks for in founders and startups. I hope you guys enjoy this conversation as much as I did.

0:42 Hi Sam, thanks so much for joining me today. I'm really excited for this conversation. I think our childhood has a significant impact in our life. I want you to talk about how do you think your childhood has shaped you into who you are today? And perhaps we can talk a bit about what are some things you had to unlearn from your childhood to make you the person you are today? It's great to be here as well and thank you for inviting me. So it's a great question. So a little bit about my childhood. I grew up to two parents who came from foreign countries. My father was born on the border of Hungary and Romania.

1:23 The borders kept changing during those times. He went through the Holocaust. He actually worked in the underground. He has a really fascinating story. He ended up going through Israel where he fought in the palmach back to America where he had an uncle and that's where he met my mom who was born in Belgium who also went through the Holocaust and was hidden during that time. So I have European parents and they both have thick accents. As an aside, one kid once said to me, I don't understand your parents so much with their accents and I said what accent? But then I realized they had an accent.

2:03 I was probably 12 at the time and then I began to realize that that's not what everybody's like. So but anyway, I grew up in Beverly Hills and I went to a public, I went to a private Jewish day school up until eighth grade and then I went to Beverly Hills High School afterwards. And I guess I saw a lot of affluence just because of where I came from. My dad was in business. My mom always worked with my dad. So I had a lot of business influence on me when I was a kid. I used to run my dad's business during the summers in high school.

2:44 He would go on buying trips and he would put me in charge and I was pretty young for that but I guess that's a lot of the European way to do it. And it was actually a lot of fun, a lot of responsibility. I guess those are things that really, there was a strong work ethic from my parents. You have to strive, you have to do good, you have to do good for the community. A lot of my parents don't need a lot of their time for communal events. I guess those are things that shaped me that you work hard, you do a lot of things and you do good for the world. Thanks for that answer, Sam.

3:24 Let's go deeper into your dad's business. If you could tell me a bit about what was the business and was the expectation that you continue on with the business? And that would be my assumption when you're telling me that story. And if so, how did you break from that expectation? Yeah. So the truth is my dad is a diamond importer. He used to go to Europe and Israel, Belgium particularly, every summer and actually in the winter too, twice a year, he'd buy stuff, he'd bring it back, he'd sell it as a wholesaler. And my mom always worked with him. My mom's from Belgium, that was kind of a connection.

4:05 And I did work summers and my dad wanted, I have one brother and he's also a doctor, he's chief of cardiology at the University of Miami. So he's also well entrenched in medicine. And my dad wanted us to go into his business, but he always said, you know, you got to do what you want to do. And gave us the freedom to go whatever college we wanted to, medical school, et cetera, et cetera. He's still around, he's 95, my mom's 88, they still work. And boy, would they love it for me to go and take over their business now. But you know, there was a realism that people have to do what they want to do.

4:47 And yeah, I mean, you're right. It was some subliminal pressure that we should do it. But I think my dad accepted the fact that we did what we wanted to do. And given that we were successful, he had no real complaints about it. I'm happy to hear that, Sam. And I hope moving forward that others from your cultural background and mine have similar experiences. And I know too many people who don't. Let's go a little bit forward to you're in your 50s. As he said, you're well entrenched in medicine, you have a thriving practice, I imagine.

5:30 You're well on your way or you're already reached financial freedom. And you make a decision to pursue an MBA. There are a lot of physicians currently burning out, wanting out of clinical medicine. Take me back to what you were thinking then, why the decision to go for an MBA? And is that something you would recommend to physicians? And if so, which persona of physicians would you recommend it to? So a little background. When I was about 45, I remember driving to work and saying, wow, I've accomplished everything I wanted to. You know, I had multiple practices.

6:12 They were going well. And thinking, okay, you know, can I keep doing this? Right? And I kept doing it. Then one day I said, you know what? Surgery is really hard on a person's body. You know, I was doing 10 to 20 cases a week. It's a lot of bending over and, you know, a lot of stuff going on. And I said, can I keep doing this when I'm late 60s, 70s, whatever? My dad's 95, still works. My mom's 88. It's like, I don't want to retire, so can I keep doing this?

6:54 And I said, probably not. And I said, I always loved business. Right? And math was always my first love. You know, growing up, there was not much you could do with math except become, you know, maybe an accountant or do something professionally in a university or something like that. But there are very few careers in math, in actuary maybe. So you know, I love medicine and I did it. But I said, what can I do that can let me also change my career path, but use some of the other things I love to do?

7:39 My wife was extremely positive about it, supportive and said, do what you want to do. You know, that's the most important. Again, you know, she was the one that bore the most stress regarding moving and with the kids. I have six kids, so it's not so easy. And so she was extremely supportive and positive. And I knew MIT where I had gone undergraduate had a one-year MBA program. So I said, you know what? People think doctors are really smart, but they're horrible businessmen. That's the word on the street. So I said, you know, how am I going to change that?

8:20 Right? How can I change that perception? So if I get an MBA from a top cure program, you know, people will then look at me maybe as an MBA and not as a doctor. Right? So I said, okay, MIT has a one-year program. I got their undergraduate. I knew the area really well. It would be very comfortable and convenient and, you know, just would feel like I'm right at home. And it wouldn't be strange. So I said, okay, let me apply to that program, see what happens, see if I get in. And if it does, then, you know, maybe I'll take that route. And it was in Boston. We were living in LA. My wife was extremely supportive. She was, you know, happy to move out of LA.

9:02 We technically were moving for a year and ended up being longer. We've been in Boston since. This was in 2015. So at the age of 53, I went and sold my practice and got the MBA. Okay. Thanks for sharing that. Let's go back to your math brain. And I'm someone who loves math as well. It tends well to structured decision making, but it almost disallows intuitive decision making. Let's talk about structure versus intuition and decision making. And I've talked previously about Danny Kahneman's framework about low and high validity environments and how investing from his framework would be a structured decision making process with little room for intuition.

9:54 Let's focus solely on evaluating founders, evaluating humility, grit, stick-to-itiveness, founder problem fit. How to structure an intuition factor in evaluating founders for you in a startup. It's probably mostly intuition, to be honest with you. It's hard to structure looking at a person, right? I mean, you do have a structure. You say, is this person reliable? Is this person honest? Is this person a hard worker? Is this person willing to be malleable when decisions aren't easy and they have to shift?

10:37 Right? So you talk to them, you kind of get an understanding. And I guess that's the structure, but it's really more of a feel. Do I think this person has it or not? And again, there's no way to be right or wrong about it. The only way to know is to see what happens in the future. So nobody has a crystal ball. But that probably I would say is more an intuition-based decision than a structured-based decision. Okay. And how do you refine that intuition? Do you always go with your intuition? And if your intuition is wrong, you refine it that way? Or do you ever go against your intuition?

11:18 Which is when your intuition is saying, no, this person is not trustworthy. You say, maybe my intuition is wrong and let me take a chance. I have done that and it's very painful to go against your intuition. I was just wondering what your thoughts were. Is it better to always go with your intuition when evaluating people and be wrong sometimes? Or maybe I'll use the phrasing, push yourself more. Maybe it's not the right phrasing to use. Go against your intuition at times. I would follow my intuition on these things. As someone once said to me, I've never regretted a deal that I've not gone into, but I've regretted deals that I have gone into.

12:01 So if there's a deal that I was wrong, the person was the best CEO for that position and took the company to wherever it needed to go and there was a great exit and I didn't invest in it, I'm okay. I mean, I didn't think it was right, so you have to make decisions. But if I thought somebody was great and then they weren't, I'm saying, what did I do wrong? How can I improve my own decision making so that that doesn't happen again? Okay. Yeah, I agree with that. It's too painful to go against your intuition. Yeah.

12:42 Especially in some of that. The other thing is it's not my decision right now and that's the main thing. It's like I'm responsible for other people's money. I have a fund. So I can't say Sam Goldberger is willing to do it, right? I might be willing to do something that's just Sam Goldberger, but I'm not willing to do it if it's my fund's money. And I also have a partner and thank God I have a great partner and she's got great intuition as well. And I take her feedback. The truth is my wife has amazing feedback on people too and often she'll see people, meet people and I use her intuition as well because she can pick up on a lot of things.

13:26 Yeah. I would say the same things about my wife. Let's talk about your fund. Let's talk about the decision to start the fund and the decision to decide what to focus on in investing. Just give me a bit of background about your post MBA career to where you are now. So right after I got my MBA, I was recruited by a private equity fund to do a large ophthalmology rollup. It was extremely successful and I did that for two years and then I said, okay, what am I going to do next? So I looked around, I looked at the market, I looked at my skillset, I looked at what I wanted to do and between all that I said early stage healthcare investing is really the place for me to be.

14:17 I mean, I want to use my medical knowledge. I thought early stage was the best place for me to be able to understand what products are going to be out there in the market that are useful for doctors, for patients, insurances will support them, pay for them, things like that. So I love experience in that. So that's where I decided to go. I formed my own investing company that was just private to get enough infrastructure and experience and I did several deals myself and then after a couple of years I said, you know what, it's time.

14:58 I found my partner who is somebody that I've known for many years. Our both of our eldest sons were roommates in college. They that's still when we were in LA and they were here in Boston. Turns out when we moved to Boston, we became friends as well. And it was a really good fit. She's an expert in digital health and that's what we said. We're going to really focus most of our efforts. Okay. Is that something you look for in founders? How long have they known each other and have they gone through hard times and arguments and debates together or are you open to invest in founders who just met? That's a great question.

15:42 I don't structure things that way because I think each case is individual. I do look at how they interact and how they know each other because people can know each other for a long time, but never done business together and then it's not a great match. Right. So people who wouldn't be friends normally, but business-wise, they're a great match. So I kind of like look at them individually. I talk to them. I see where they're at. A lot of times when I'm investing, it's actually past the founders stage.

16:27 In other words, they've hired a CEO. Now, founders are still important there, right? But then it's a different team dynamic and I look at the CEO and I look at the board and things like that. Okay. But I wouldn't say that it's important how they know each other and why they're together and what their goals are, right? And if they're aligned, but whether they knew each other for lots of years is not necessarily the most important thing. And are you having them take personality tests or is it more based on intuition as you said previously? Intuition. I've not done the personality testing. Okay. A lot of people believe in it and the truth is I would have to do more research about it to figure it out.

17:12 I've had to take some myself, but I'd have to do honestly more research about it to see is this something that's really useful for me? Okay. That makes sense, Sam. Let's go into your PE background. You have learned deeply about organizational structure, how to make an organization more productive, more aligned. What advice do you have for founders in the idea or the very early on stage? When should they start thinking about structure, hierarchies, decision making, how big their board should be? And this is a very open-ended question, so you may answer it as you choose.

17:57 What is the ideal organizational structure for a startup pitching to you? I care less about the organizational structure when they pitched me early stage because I can dictate that. Most early stage founders or companies just don't know how to do it. Right? I mean, they've never done it before. So I like seeing a product that has at least a minimal viable product, something that I can look at, touch, feel. I like to see that it has applicability in the market.

18:44 Patients will like it. Physicians will like it. Insurance will pay for it. I like them to think a little bit about what their business model is. I like them to think a little bit about what their exit is. And there are so many companies out there right now that even if you have all of that, it doesn't mean I'm going to invest in them right now because there's a limit. So then it has to be something that honestly I feel that I can help the company with because as a VC, my main advantage is that I know that I can help these companies.

19:33 And so I'm going to make the company better. That's going to bring value. I'm about bringing value to these companies and to my investments. So I'm not going to invest in something that I can't bring value to. So it could be an amazing product, but if I'm superfluous, I'm not giving that little extra sauce that's going to make the investment better. So those are the things that I look at. Organization structure in early stage is too hard to really have something set out. And usually I will talk to the founders and say, okay, so we're going to do this round.

20:15 I always either take a board seat or a board observer role. How is that going to work? How are we going to get the people that we want, et cetera, et cetera, et cetera? And then we work it out. And if they're not amenable to working it out, then it's probably not for me. What advice do you have for yourself when you were 30 if you could go back in time and tell yourself one thing? I'm going to go back in time and tell myself one thing. So I have six kids and this is what I tell them. Do what you like and what you're good at.

20:56 Right? If you play to your strengths, you always do that. You'll usually like it. You'll be good at it. And you'll be successful. I like that. Well, it's important to work in your weaknesses. The focus should be on enhancing your strengths, as I think that's how you stand out in the world. Exactly. No, I'm not saying, right. It's a good point. I'm not saying you should avoid your weaknesses. You have to actually challenge yourself. Right? You have to do things that are uncomfortable. I mean, that's one thing I learned really well in business school, challenge yourself, do the uncomfortable things, have the uncomfortable conversation.

21:41 I never did before. Right. But I do now a lot. And as long as you're doing it for the right reason, it's okay. Let's go deeper into the business model. A lot of founders say, as we grow, we will be profitable, economies of scale will make us profitable. What does that actually mean? Does it mean customer acquisition costs will go down, cost of goods will go down? And do you find that in practice, the cap actually goes down as companies scale? Looking at the companies recently, like, and I pick on these two companies too much in my podcast, For Hems and Romans.

22:23 It seems like their tech is not going down. If anything, it's going up. Give me your feedback on metrics you look at business models and the drive to profitability. And if that, how important is that for you? So if someone tells me as we grow, we will be profitable. I asked to see their projections. Right? I mean, that's where my numbers died. You think that's the case? Great. Now let's see what you're talking about. Are your cogs going down? Are you being more efficient? Now you need a huge sales force, your prices, your overheads gone way up.

23:04 Are you going to be able to meet that? It's a numbers game. If they can show me the numbers and the numbers make sense, because I have to make sense of the numbers. Someone tells me that they're going to be a United States distributor but have two salespeople. Okay, that's just not going to work, right? I asked them, show me the numbers to support it. I don't believe in blanket statements like that. As we grow, we will become profitable because that's not necessarily true. I can grow a company and grow expenses too. And my revenue goes way up and my expenses go up and I'm not profitable.

23:44 What question do you ask founders that they don't answer well, that they get stumped at and you wish founders did more research or answered it better? I don't know if I have one. To be honest with you, every founder is different. So I don't know if anyone's stumped. People get stumped sometimes, but I don't know that people get stumped on the same question. That makes sense. Let's talk about what excites you in healthcare? What is a problem do you think more people should be working on? So the problem is people don't have access to healthcare as much as they would want, and there's no reason that really should be that way.

24:37 Especially now with telehealth, AI, all these things. I remember one of my attendings was telling me 95% of your diagnosis is from a history. Now I don't know if that's true right now, not sure, whatever, but I know as a practicing physician, sometimes I can tell what people had just by them telling me what's going on. You don't need everyone to go and make doctor's appointments and take days off of work. That's one of the main reasons people don't go to the doctor. They have to take time off of work, they have to travel, they have problems with, let's say children or whatever.

25:21 The appointments are during the daytime and they're working. There's a lot of reasons why people don't get care and those reasons don't have to be there in today's world. So I think we should try to figure out how we can provide care to people that is appropriate and everyone be able to have good solid care. I think that's the biggest problem in medicine right now. That's not an easy answer because a lot of it is not necessarily the system's fault. Some of it is patients don't know what to do and even if you changed it, they still wouldn't know what to do.

26:02 So we have to figure that out. I think the digital revolution is a way to get there but it's going to take time because people need to learn how to use it properly as well. As someone who's trying to make his life more efficient, I have found you cannot make fatherhood more efficient. What my children want is my time and there's no way to play faster or in a more productive or efficient manner. What advice do you have for me and for people in my shoes and how to balance fatherhood being a good husband and working on my ambitions?

26:54 So always try to be there for your family. Whenever there's an important event, you got to be there. Whenever a child has a question, don't shrug it off. Try to deal with it. When your wife needs something, even if you can't do it at the time, say, I'll get to it but make sure you do. Try to be around. You're right. It's a relationship that you have to give and you have to just be around and you have to put time into it and you have to think about what they want necessarily and not what you want.

27:45 What is your biggest failure in life so far, Sam? And how did you move past it? So I don't look at experiences as failures. Everything's an experience. You learn from your failures. So I look at everything as a learning experience. And I don't know what my biggest failure is, but I've had lots of learning experiences. I think I look at things in a positive way that things happen for a reason. And if you learn from it, you will become a better person.

28:27 If you put your head down to the ground and don't want to see what happened, then you won't learn from it and things won't change. So I don't look at things as failures really because even in the startup world, everyone says the most successful people are the ones that had failed startups previously. And was that really a failed startup or was it a positive experience? I think it's a positive experience. That's a beautiful way to look at life, to look at things as learning experiences. Would you rather have a life full of many successes or big, massive learning experiences chasing audacious goals?

29:12 That's a tough question. So I think everybody's life should be about what's important to them and it's not selfish to them. For instance, I'm very involved in my community and I give a lot back into my community. When I was in LA, I was very involved here in Boston. I'm very involved in the community, in my temple, in schools, and whatever, and time and charity, whatever. But I also want to be successful and I want to provide for my family and I want to help the world, both as a doctor, I want to help people and I want to help new medical technology come out and help the world in that way.

30:06 So audacious goals are good if they're for a purpose, right? But just to have audacious goals is not really useful as far as I'm concerned to say that I'm the best person in the world, I'm the richest person in the world. It doesn't really matter. And lots of experiences, lots of experiences are good because you learn from each one. Are you someone who are you goal-oriented? Do you think happiness is, I'll use the word chasing and it may not be the right word again, chasing new goals as you conquer them, or is it more learning to be in the moment and more along the lines, the journey is the destination?

31:00 I'm more into the moment. I have goals, but I'll pivot, right? And it doesn't matter that my original goal wasn't where I wanted to be, right? If I'm happy with what I'm doing, right, then that's the right thing because situations change. What's your biggest tip from early stage VCs or people thinking of starting a fund in terms of how to raise capital from LPs and how to best manage LP expectations in terms of cadence of communication and depth of communication?

31:45 So someone were to start a fund, I would tell them, think carefully on how big of a fund you want and what is your strategy in fundraising because people aren't giving you money for a first fund. It's very, very hard. I think I was able to raise my first fund because I was 53 years old at the time. Actually, no, I was probably 57 at the time. 53 was when I stopped practicing medicine. And I had a whole lot of life experiences. Many were positive, many were successful.

32:26 So the people that knew me that invested, invested in me, right, because they figured I knew how to figure things out. Make sure that the people that you want to go to raise a fund know that that's who you are. Institutions aren't interested in investing in a new person. Extremely unlikely, right? Family offices, it's too risky. They have a lot to lose, but people will invest in people. So that's what I found. I'd say go to the people you know that really believe in you and trust in you and would lose some money for that, for a potential gain, obviously.

33:09 In terms of communication, you have to let people know every time you do investments, you should update them, speak to whatever else he wants to talk to you, speak to them, don't ever ghost anybody. If it has an issue, you deal with it. Just regular stuff like that. You know, quarterly reports. Which verticals in healthcare do you think will bring the highest return of investment over the next five to 10 years? Is it pharma, biotech, digital health, remote patient monitoring, med tech?

33:52 I can't predict that. I just think digital health is ripe right now. I think traditionally pharma has been great, but no reason to think it's not going to continue. So I don't know which is going to be the biggest, but I know for myself, I bring the most value in what I'm doing right now. So I want to do what I'm going to bring the most value. And I think I'll do the best because of that. That's a good way to look at things. How has your investment strategy changed given the recession? The last recession saw the birth of multiple unicorns like Uber, WhatsApp, Fitbit to give a few examples.

34:34 Are you more aggressive, less aggressive, or has your strategy changed at all over the next few years? So my strategy really hasn't changed because I'm early stage. I'm looking at things three, four years from now. At best two years if it's extremely lucky, let's say. So the economy will be completely different. Now valuations are much lower now. So if someone is coming with a valuation from a year ago, even if I like the product for my investors, I can't invest in it. It's just not a good deal. You know what I'm saying? So I have to look at what things are right now. So as investments, I can enter at lower valuations because that's what the market's saying.

35:24 My strategy really hasn't changed because I'm still looking for the same types of companies. I'm not a big believer in looking for unicorns because who knows? Did Uber know there would be Uber? Nobody knew any of these things. There's a lot of being at the right place at the right time. How much importance do you put into market tailwinds and headwinds when looking at startups right now? And I would describe what tailwind, COVID was a good tailwind for remote patient monitoring, digital health. What are some tailwinds you're banking on right now?

36:04 And the common headwinds would be just regulatory changes, reimbursement structures in startups. What is the biggest headwind that startups have to keep in mind when trying to form a digital health company in this environment? So to me, the biggest headwind is that don't think COVID is there forever. When I see startups with COVID on every other slide, I'm just not interested. I mean, two years ago, that might have been something that people were interested in. Now, it's just not. So the biggest headwind is that people try to rely on the past too much.

36:58 Look at a problem that's been around for a long time. Try to solve it. That problem is still going to be there. Don't look for the new thing that just came out because new things come and go. You can always rely on, unfortunately, diabetes being there. You can always rely on glaucoma being there. You can always rely on a lot of these diseases that are out there. Osteoporosis will always be there. Try to solve a problem with that. Don't worry about COVID affecting, and I'm going to get into this niche because when you're doing it, so are 50 other people, and as soon as it's over, there's nothing.

37:42 Some of these companies have created new markets as they have grown. How much importance are you putting on the market slide, the time? And if a startup sees on their slide, we will create our own market. What is your response to that? That's a great question. So I'm going to answer a little bit roundabout. I like technologies that are new, never been developed, and are very useful. Now, sometimes those are completely new markets.

38:23 You can't possibly look at a previous device, a previous therapy and say, oh, wow, we'll just do this. It's completely new. So you're going to have to teach people how to deal with it. For instance, there's one company that I invested in bone health technology that has a belt that treats osteopenia and osteoporosis. What happens is it increases bone density through vibrations with research from NASA, et cetera, et cetera. Now, people are dying for something like that because a lot of people don't want the medicines that are very toxic, and there's no other medicine for it. So we're creating a new market. So I'm not against creating a new market, right?

39:05 Because that's the only way you do it in this type of field. I think it's actually something real interesting and positive. So when someone says, I'll create a new market, that's okay, as long as there's a pathway to it. It may not work, and that's the risk in everything. But the reward is huge. I think that it's something reasonable. I would certainly support it. Thanks for that answer. That is truly insightful, and too many investors run away when founders say that, and I think that's too bad. If founders are creating a new market in healthcare, would you recommend they focus their business model on B2C or B2B?

39:56 I'm not a big B2C fan for startups. Okay? Yeah. That's just a general rule. It's hard. Possibly. How are you going to get the money? So I'm a bigger B2B fan, but new markets can occur in so many ways that you can focus on a B2B plan and get there too. There's two different schools of thought when hiring people and how to incentivize or motivate them. I'll name two big-name VC firms, Andreessen and Sequoia.

40:36 I may be getting this wrong, but I believe Andreessen just gives titles to everyone because they feel if your name says vice president, you will work harder, whereas Sequoia makes people work more to get their partner title, and it's a more structured, hierarchical path to it. Which structure do you think is better for startups, is to give everyone a C-suite title or to not give titles out easily and make people work hard for them? So when I was in business school, I took a class that really focused on startups.

41:25 It was based on, I think, a class that Noam Wasserman, who was then at Harvard, but now he's the chief head of business school at Yeshiva University, that he created. One of the things that the professor then taught me, it was a different one, it was a C-suite title, but I think it was from there, is that when you give a C-suite title to one person, you can never take it away without causing a lot of disharmony in the company.

42:07 So if somebody is the CTO and now you want to replace them, because really they were fine early on, but they're not fine when it's getting bigger, that person is going to be mad, there's going to be less strife. So I don't believe in giving everybody the maximum title, but I believe in giving them a real good title. So give them head of technology title, give them something like that. But I think C-suite titles are very difficult because once you give them, it's hard to take away. And I see that in practice a lot too, that once someone gets a title, they don't ever want to have that taken away.

42:53 A good friend of mine who's a founder was glad to take the CEO title away and give it to somebody else because he knew it was better for the company. And he said, at the end of the day, that's what I care about. He's right, but not most people think of it that way. This is an incredibly difficult problem most founders face. Adam Grant talks about this in his book, Originals. Early on, you should hire for commitment, not the star candidate, not the exceptional talent. But as your startup grows, you need talented, exceptional experts to take it to the next step. How far ahead are you thinking in your startups?

43:35 This person might need to be replaced as we grow. And if so, how do you balance hiring for commitment, rewarding people who helped you get to where you were, and they were incredibly important in that journey, but also letting them go because they might not be the right people? What advice do you have, I guess, for yourself? And for founders, when you meet them early on, and you can tell this person is not suited for an executive role five years from now or three years from now, but you need them right now because they're so committed to the mission.

44:16 So no, I'm very loyal. Someone helped me bring the company to a certain place. I'm going to be loyal to them. I don't believe in being disloyal because I think, first of all, it's not right. Secondly, it's a bad message for your culture. And I think the culture of the company is extremely important. Having said that, I've had discussions with current CEOs of companies I was about to invest in or potentially invest in and said to them, you're great at taking this technology and getting it FTA approved, I said. When it needs to be commercialized, I don't know that you're the right person.

44:58 Would you be willing to step aside? And I have that conversation ahead of time. Those are the hard conversations that I told you that I never would have had 20 years ago, but in business school, they taught me you have to have those hard conversations. And it's right. So if I have that conversation with someone and someone says, no, I think I can do it, I'll be CEO, then it tells me I don't really want to invest in that company because I don't think that person will do it. And I think it's going to be harmful company. The person says, I'm willing to step aside. I want what's best for the company. I own a big chocolate company. I will make more money. Then, hey, that's a great answer. Doesn't mean it will be easy when it comes time, but at least I'll have the ability to say, remember, we had this conversation.

45:39 Remember you said you would do that? So that just having that conversation, I think is very helpful. But I think it's extremely important to have that conversation. And if you never have that conversation, you shouldn't invest because I think that can kill a company. Is it better to be an excellent visionary or an excellent operator? And which one is more rare? I go with the operator over the visionary anytime, but the visionary is the one that's going to have the unicorns. But I'd rather get a steady return than a huge return on one in a hundred.

46:27 And I think operators know what to do to make things happen. Companies are sometimes too unfocused to run day-to-day operations. And I think that would be bad for the company. That's an interesting take. And it goes against other discussions I've had where people say 20% of your investments will be duds or you will lose out completely, 60 to 70% might bring you one to two X, maybe three X.

47:08 And then it's a 10 to 20% that will bring you 10 to a hundred X. And essentially you focus all your energy as well as 80-20 principle on that 20%. Is that a principle you follow or are you looking for say two to three X on all your investments? And is that difference in strategy because of your PE background? And how did you reach that decision? My strategy is that any company I invest in, I want to see at least a 10 X. I want to see that has the ability to have a 10 X. If it ends up four X, I'm happy because not all will have 10 X.

47:55 A hundred X is extremely unlikely. I'll be dancing if that happens, right? And extremely happy. But I don't know that you can rely that that will happen, especially in medical technologies and stuff. I mean, I think it's different than pure tech. So I like that all my companies have the potential to get 10 X and that almost all will be successful. Now having said that, for sure 20% will fail, right? And maybe another 60% will be between, let's say two and six X, average of four.

48:45 And then the other 20% at 10 X and I'm going to do very well with that. If I can get a five X average for my investors, I think everybody would be very, very happy. How do you quantify that potential for 10 X? Are you looking at, can this start to reach this many million in ARR and what the path to that is? Or are you looking at the market as a whole and saying, okay, if they, it's not a popular way, but if they can get 0.1% of the market or 1% and that is enough for a 10 X, what metrics or what variables are you using to quantify that?

49:30 So I look at exit potential in terms of usually acquisition. Most of my companies will not IPO. That's just realistic. For a company that IPO is extremely difficult. And actually in today's market, I'm really glad that I've not gone for companies that want to IPO because I think it's just a really bad market, especially now. So I look at equivalent acquisitions. I look at what type of revenue they're going to be able to have and what the exit will be at a certain point.

50:11 What types of companies and come up with valuation that way. And then I look at future funding that will need and dilution that'll happen along the way and whether I'm going to continue funding along the way, et cetera, et cetera. And I come up with some mathematical analysis and then I say, if this meets that I'll make at least 10 X, that's great. I mean, sometimes it's way more than that. I have a million more questions, but in the interest of time, I'll ask one last question. Okay. What is the end goal for you, Sam? You said you will likely never retire in the past. And feel free to correct me if I'm misremembering that.

50:54 What is the end goal? And talking to yourself when you are 95 or 90, looking back at your life, what would you be most proud of? So the end game, I mean that retired, but I don't want to keep working operationally as hard as I'm doing. So I want to create a structure so that I can make high level strategic decisions and be involved. But have people junior to me, partners who are doing the day to day operational things that I'm doing right now. I won't be able to, I mean, I have three grandkids right now, a couple more on the way.

51:42 I love seeing my family, I'm involved with my family. So I want to be able to do all that. Great wife won't be able to travel with her. So although I won't retire, I want to be able to have freedom. Having said that, what am I going to be most proud of? Probably my family. It's like who they become, part of that is what they've seen at home from my wife and myself. Our values, and we see that in them.

52:23 My portfolio companies are not a reflection of me. It turns out it helped the world. That's great. Right. But it wasn't necessarily me. I've made it helped a little bit. Everything I've done in life has had some type of effect on helping the world, whether it was a doctor right now in venture, even in PE, it was doing a lot of multi-practices. There's something on healthcare. So I can be proud of that, but I'd be most proud of seeing my family and what they've done and where they're at.

53:09 I completely agree. I'm sorry about the grandkids. And grandkids. Helping others brings me the most joy as well. And I think it's a noble end goal to have. Thanks so much for coming on today, Sam. I learned so much. And I hope to talk again, maybe do a part two in a few months. Great. Thank you. Great being on. Thank you.