Invest Like the Best with Patrick O'Shaughnessy

Pat Grady - Relentless Application of Force - [Invest Like the Best, EP.378]

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Jun 18, 2024

Pat Grady, a seasoned growth investor at Sequoia Capital, shares insights from his extensive portfolio, including giants like Snowflake and Zoom. He discusses the unique culture of 'healthy peer pressure' at Sequoia, emphasizing relationship-building with founders. Grady also highlights the importance of clarity over perfection in investment evaluation, using vivid examples. The conversation delves into the role of AI in transforming investing and ends with reflections on mentorship, kindness, and the pursuit of excellence in business.

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INSIGHT

Founder Quality

Markets struggle to assess founder quality, a crucial factor for success.
Top investors excel at understanding people and predicting market trends.

ANECDOTE

Early Career Tactics

Early in his career, Pat Grady used brute force, writing long, tailored emails to secure meetings.
He then leveraged Doug Leone's talent for understanding founders' visions.

ADVICE

Effective Memo Writing

Write investment memos with a service mindset, prioritizing clarity and understanding.
Aim for conciseness, ideally three pages, focusing on the key aspects of the investment.

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My guest today is Pat Grady, a longtime growth investor at Sequoia and one of the firms senior leaders. Pat has been a part of a long list of legendary investments, ranging from Snowflake, Zoom, ServiceNow, Qualtrics, Okta, Hubspot, Notion, and OpenAI, among many others. There aren't many investors who reference as well at Pat, both inside and outside of his firm. We talk about investing, building an investing firm, and building enduring companies. Please enjoy this great conversation with Pat Grady.

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For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

(00:00:00) Welcome to Invest Like the Best

(00:05:48) Doug Leone's Leadership and Changes

(00:06:54) Creating Internal Pressure and Structure

(00:10:46) Sequoia's Team Values and Family Influence

(00:13:40) Assessing Founders and Investments

(00:20:28) Winning Competitive Investments

(00:24:45) Pat’s Early Career at Sequoia

(00:29:38) Memo Writing and Investment Criteria

(00:35:20) Evaluating Companies Through Three Business Criteria

(00:40:15) Building Sustainable Competitive Advantage

(00:47:48) Turning Bad Numbers into Good Investments

(00:51:20) The AI Frontier: Market and People

(01:01:13) Harvey: The AI Legal Assistant

(01:05:33) Sequoia's Platform Strategy

(01:17:16) The Importance of Teamwork and Performance

(01:26:07) Legendary Potential: Relentless Application of Force

(01:28:37) The Kindest Thing Anyone Has Ever Done for Pat