Steve Brotman is the Managing Partner at Alpha Partners, a company that co-invests with the world’s best VCs by sharing economics with early-stage VCs. With extensive experience in venture capital, Steve co-founded and managed venture capital firms such as Greenhill SAVP and Silicon Alley Venture Partners, with notable investments in companies like LivePerson and Medidata Solutions. His entrepreneurial journey began with AdOne, a venture-backed company that revolutionized online classified advertising and garnered significant industry recognition. A recipient of multiple accolades, Steve has been named in Crain’s Tech 100 and 40 Under 40 among New York business leaders.
Here’s a glimpse of what you’ll learn:
- [00:36] Steve Brotman reflects on launching the Driving Alpha podcast
- [1:59] Steve discusses venture capital trends
- [2:50] Changing the venture capital model to benefit both parties
- [4:02] Why Steve partners with 850 VCs to provide funding for technology companies
- [4:27] AI’s potential impact on jobs and industries
- [13:00] How has technology influenced the democratization of education?
- [18:00] What is the future of biotech and an AI-driven society?
In this episode…
Venture capital, an ever-evolving landscape, serves as the engine driving innovation and growth in the tech realm. How can investors in this space harness technology for positive societal impact while navigating ethical considerations?
Venture capitalist Steve Brotman delves into the future of VC, highlighting the transformative impacts of emerging technologies like AI. As the discussion extends to early-stage investments in drone and robotics companies, Steve explores the ethical considerations surrounding autonomous driving and the prospect of robots serving humans in the future. By prioritizing ethical considerations, venture capital can emerge not only as a vehicle for financial gain, but as a catalyst for innovation that balances progress with social responsibility, shaping a future where technology serves humanity’s collective interests.
In this episode of the Driving Alpha podcast, we flip the script as veteran journalist Ron Insana interviews Steve Brotman, podcast host and Managing Partner at Alpha Partners. They discuss the evolving models of venture capital, AI’s benefits and potential impact on the VC ecosystem, and the viability of biotech investments.
Resources mentioned in this episode
- Steve Brotman on LinkedIn
- Alpha Partners
- Ron Insana: LinkedIn | Website
Sponsor for this episode
This episode is brought to you by Alpha Partners, an NYC-based growth equity firm.
Alpha co-invests in top-tier growth equity companies led by the world’s best investors. We focus on scaling and late-stage tech investment opportunities primarily in the essential technology sector, including e-commerce, enterprise software, fintech, edtech, and health IT.
To learn how we can help you with your funding goals, visit www.alphapartners.com, or email us at vc@alphapartners.com.
Episode Transcript
Intro 0:01
Welcome to Driving Alpha, where we feature our friends, the outperforming investors who demonstrate their paths to driving alpha or outsized investment returns. We’re Alpha Partners, where we partner with 1,000 early-stage venture firms as their opportunity capital to invest in their best companies.
Steve Brotman 0:26
Hi, I’m Steve Brotman, I’m your host of Driving Alpha, where together, we engage in conversations with allocators of capital and entrepreneurs in the venture capital and tech realm. The inspiration for this podcast came from a supercar event I hosted with my firm about 10 years ago with my favorite VC and investor friends and entrepreneurs. And every year, what I would do is I’d rent six exotic supercars, Lamborghinis and Ferraris, and McLarens, just for the day and invite 11 other investors, VCs and entrepreneurs to spend the day together. So each car would hold two people, a driver and a passenger. And we’d swap cars and driver positions every half hour. And it turns out that the cars are fun. But it was the people and the interactions between those people for 30 to 60 minutes at a time. That was just the best part of the day for everyone. And the food is great, and the drinks are great afterward and the dinner. But this podcast was really inspired by an attempt to recreate that type of conversation. So this is part two of my conversation with Ron Insana. In part one, I primarily interviewed Ron, in this episode, Ron, a longtime business TV host, interviews me.
Ron Insana 1:44
I flip it now. What do you see coming down the pipe here in venture capital? Your damn unknown, right? Absolutely, man, I mean, you know, so waste time and in these conversations.
Steve Brotman 1:59
You know, so like, I have to tell you, so first off, I should probably share what you know. So while I’m a smart man, um, I, I’ve had the good fortune to also kind of echo some of your career as well, in terms of, you know, benefiting from a lot of other people. But when I started this phase of my venture career, I decided that instead of competing against all other VCs and private equity firms, why not? Why not partner with them? And if they have the best idea in the world, why not compensate them for that? Right? Yeah. So.
Ron Insana 2:45
So you change the model, basically. It’s just early days, right?
Steve Brotman 2:49
Yeah. What’s that? You’re changing the model. And yeah, we’re changing the model. So for the first 15 years, well, first I was an entrepreneur, and then I became a software investor, as a software entrepreneur, and then an investor. And then I was like, How do I after 10-15 years? I mean, you just sort of got that mojo. And I realize, you know, what, all my friends who I took on the exotic car trips, they know so much more and have so many opportunities. It’s like, okay, if I make sort of a typical venture firm makes 20% of the profits from investing their fund. Well, the difference between a median returning venture firm, and a top 5% venture firm are hundreds, hundreds of thousands of basis points. Yeah, yeah. So a median rich venture fund might lose money, on average, or make their money back, a top decile fund might make 9-10 times their money. Right? So what if I gave up, you know, up to half my care, half the font that’s like an athame. That was like changing the model to your point that was like that, that that’s so crazy, it might just work. And so today, I work with 850 VCs that are in 78% of all technology companies. 95% of the time, they don’t have an opportunity, they don’t have the money to do their best deals. So I started, I’ve been — to get back to your original question. So I rest on the giants and have a lot of other folks who know a lot or a lot know the experience. Well, a lot more access, but to get right to the point. I think the biggest thing, at least in our lifetimes is going to be AI. Yep. Um, the recent trend has been around the software, like how can we replace, you know, journalists? Or how can we replace teachers or radiologists or, you know, but using software like book writing or movie making, and I don’t. I’m not sure it’s about replacing, I think it’s about augmentation.
Ron Insana 5:03
Right? Yeah. I don’t disagree with you. And I think you know, and we’ll go. Going back to that type of point, right? I’ve seen estimates that 300 million people are going to lose their jobs globally, because of the implementation of AI, but there’s no quantified amount of people, yet, we’re going to gain jobs or gain employment or become more productive. Because of AI. That number is not out there yet.
Steve Brotman 5:24
So I like to remind people that it’s now almost 250 years ago, when we started this when America started, but 200 years ago, 98% of Americans worked on a farm. No one’s crying in their soup today about how only 2% of Americans work on a farm.
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