February 20, 2024 • 1hr 25min

Cyan Banister - Investing for a Higher Purpose - [Invest Like the Best, EP.361]

Invest Like the Best with Patrick O'Shaughnessy

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Cyan Banister, a renowned angel investor and venture capitalist. Cyan has an extraordinary life story, overcoming homelessness and dropping out of high school to become one of the most successful early-stage investors of her generation. She was an early investor in companies like SpaceX, Uber, Postmates, and DeepMind. Cyan was also the first female investing partner at Peter Thiel's Founders Fund and now invests at Long Journey Ventures. The conversation covers Cyan's unique approach to investing, her spiritual journey, and her perspectives on life, business, and the future. Cyan's insights offer a fresh and thought-provoking view on venture capital, entrepreneurship, and personal growth.

0:00

-0:00

Key Takeaways

Spirituality and investing: Cyan believes spirituality is an investable category that has been overlooked, especially as people seek meaning post-pandemic.
Contrarian thinking: Being contrarian for its own sake is not good, but thinking differently and identifying opportunities others miss can lead to high alpha investments.
Early stage vs. later stage investing: Early stage investing is more qualitative and intuitive, while later stage requires more quantitative analysis. Cyan excels at the early, intuitive stage.
Overcoming adversity: Cyan looks for founders who have overcome adversity, as it builds resilience needed to succeed as an entrepreneur.
Optimism and curiosity: Maintaining childlike curiosity and optimism, even in difficult circumstances, has been key to Cyan's success and resilience.
Trusting intuition: Cyan relies heavily on her intuition and "gut feelings" when making investment decisions, which has led to early investments in companies like Uber and SpaceX.
Higher purpose: Cyan believes aligning investments with a higher purpose or North Star leads to better outcomes and more fulfillment.
Spirituality and consciousness: Cyan had a spiritual awakening that changed her worldview and approach to life and investing.
Future of work and creativity: With AI advancement, Cyan believes human creativity and artisanship will become increasingly valuable.

Introduction

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Cyan Banister, a renowned angel investor and venture capitalist. Cyan has an extraordinary life story, overcoming homelessness and dropping out of high school to become one of the most successful early-stage investors of her generation. She was an early investor in companies like SpaceX, Uber, Postmates, and DeepMind. Cyan was also the first female investing partner at Peter Thiel's Founders Fund and now invests at Long Journey Ventures.

The conversation covers Cyan's unique approach to investing, her spiritual journey, and her perspectives on life, business, and the future. Cyan's insights offer a fresh and thought-provoking view on venture capital, entrepreneurship, and personal growth.

Topics Discussed

Spirituality as an Investable Category (2:56)

Cyan believes spirituality is an overlooked but highly investable category, especially in the wake of the COVID-19 pandemic. She cites examples like pray.com and Angel Studios as successful ventures in this space.

People are increasingly seeking meaning and answers to life's big questions
Spirituality can manifest in various forms: prayer, meditation, psychedelic medicine
There's a growing market for content and experiences that address spiritual needs

Contrarian Thinking in Investing (4:31)

While not self-described as contrarian, Cyan acknowledges that her thinking often differs from the mainstream. She sees this as a strength in identifying unique investment opportunities.

Being contrarian and right is key, not just being contrarian for its own sake
When others consistently say an idea won't work, it can indicate a potential opportunity
Thinking differently can lead to discovering "secrets" and high alpha investments

Journey to Founders Fund (5:37)

Cyan describes her experience joining Founders Fund as a "Cinderella story," given her background as a high school dropout. She was brought on to run their early-stage efforts but found challenges in adapting to later-stage investing.

Founders Fund became a multi-stage fund, making it difficult to execute different strategies
Early-stage investing is more qualitative, while later stages require more quantitative analysis
Cyan's intuitive approach was better suited for early-stage investments

Overcoming Adversity and Embracing Optimism (13:14)

Cyan looks for founders who have overcome adversity, as she believes this builds resilience necessary for entrepreneurship. She shares her own experience of overcoming homelessness and maintaining hope and optimism.

Adversity can take many forms, from challenging family expectations to overcoming trauma
Choosing hope and faith in difficult circumstances can lead to positive outcomes
Optimism requires bravery and is often more challenging than pessimism

The Power of Authenticity and Curiosity (19:46)

Cyan emphasizes the importance of reconnecting with one's inner child and maintaining curiosity about the world. She believes this approach leads to more authentic living and better decision-making.

Many people lose touch with their childlike wonder and curiosity as adults
Allowing oneself to be silly and authentic can lead to new perspectives and insights
Curiosity and wonder can help overcome challenges and find joy in difficult situations

The Skill of Feeling in Business (24:40)

Cyan describes her intuitive approach to investing, which she calls her "lightning bolt" feeling. This skill of "feeling" was identified by Peter Thiel as one of her strengths.

Cyan visualizes the potential future of a startup when hearing a pitch
She experiences a physical sensation when encountering a promising opportunity
Trusting this intuition has led to successful early investments in companies like Niantic (Pokemon Go)

Investing in Uber (29:13)

Cyan shares the story of her early investment in Uber, highlighting how her curiosity and intuition led her to recognize the company's potential before others.

She learned about Uber from a livery driver and immediately saw its disruptive potential
Cyan invested at an $8 million valuation after seeing Travis Kalanick pitch
Her ability to envision the long-term potential beyond the initial black car service was key

The Changing Dynamics of Early-Stage Investment (35:55)

Cyan discusses how her investment approach has evolved over time and the challenges of maintaining connections with rapidly growing companies.

Early-stage investors often lose direct access to founders as companies grow beyond 100 employees
The role shifts from active involvement to more of a supportive "back phone" position
Success can bring challenges, including public scrutiny and speculation about personal wealth

The Philosophy of 'Set it and Forget It' (37:43)

Cyan advocates for a "set it and forget it" mentality when it comes to long-term investments, focusing on the higher purpose rather than constantly monitoring returns.

Avoid becoming too attached to specific outcomes or constantly checking valuations
Align investments with a higher purpose or North Star
Consider how investment returns can be used to make a positive impact

The SpaceX Story: A Leap of Faith (41:04)

Cyan recounts her decision to invest her entire windfall from a previous exit into SpaceX, demonstrating her willingness to take calculated risks based on conviction.

She was convinced by Luke Nosek's passion for Elon Musk's vision
Cyan invested despite SpaceX having just experienced a rocket explosion
This investment exemplifies her philosophy of taking big swings when conviction is high

Cyan's Spiritual Awakening (47:10)

Cyan shares her journey from atheism to a spiritual awakening, which has profoundly impacted her worldview and approach to life and investing.

The pandemic provided time for deep reflection on life's meaning
She experienced a sudden shift in perception that changed how she views reality
This spiritual perspective has influenced her investment philosophy and personal growth

Her Story of the Violin Kid (1:00:14)

Cyan tells a heartwarming story about hiring a young violinist at a conference, illustrating her spontaneous approach to creating magical moments and helping others.

She and a friend hired a busking violinist to follow them around a conference
This act of kindness helped the young musician raise money for a certification course
The story exemplifies Cyan's belief in creating unexpected joy and opportunities for others

The Art of Trusting Your Gut in Business (1:03:20)

Cyan reflects on how her investing approach has evolved over time, emphasizing the importance of learning from both successes and failures to refine one's intuition.

Early mistakes are valuable lessons that help tune one's "antenna" for future investments
Experience helps in recognizing patterns and making better gut decisions
Cyan now focuses on teaching others to trust their intuition and follow their North Star

The Spirit of Founders Fund and the Future of Venture Firms (1:05:21)

Cyan discusses her vision for Long Journey Ventures and how it differs from Founders Fund, emphasizing a more supportive and nurturing approach to founders.

Long Journey Ventures aims to be more "hospitality oriented" than Founders Fund
They strive to provide honest feedback with unconditional support, like a "bubby" (grandmother)
The goal is to create a venture firm that embodies certain values and outlives its founders

What She Would Do With 1 Trillion Dollars (1:14:02)

When asked what she would do with a trillion dollars, Cyan outlines several ambitious projects focused on disrupting industries and promoting free speech.

Reimagining the Hollywood studio system to empower artists and promote diverse voices
Creating a school of comedy to train the next generation of comedians
Supporting the legalization of mind-expanding substances for therapeutic use
Addressing high incarceration rates for non-violent offenses
These ideas reflect Cyan's commitment to fostering creativity, free expression, and social justice

The Kindest Thing Anyone Has Ever Done For Cyan (1:22:43)

Cyan shares a powerful story of kindness from her youth when a stranger saved her life while she was hitchhiking in extreme cold.

An RV driver picked her up when she was near death from hypothermia
The driver felt compelled by a "lightning bolt" feeling to help her
This act of kindness from a stranger had a profound impact on Cyan's life

Conclusion

Cyan Banister's journey from homelessness to becoming a successful venture capitalist is a testament to the power of resilience, curiosity, and intuition. Her unique approach to investing, which combines gut feelings with a higher purpose, has led to remarkable successes in companies like Uber and SpaceX. Cyan's recent spiritual awakening has further shaped her worldview, emphasizing the importance of authenticity, presence, and making a positive impact.

Throughout the conversation, Cyan highlights the value of maintaining childlike wonder, overcoming adversity, and trusting one's intuition in both personal and professional contexts. Her insights offer a fresh perspective on venture capital, encouraging investors and entrepreneurs to think beyond traditional metrics and consider the broader impact of their work.

As the world grapples with rapid technological advancements and societal changes, Cyan's focus on human creativity, artisanship, and spiritual growth provides a compelling vision for the future. Her story and philosophy serve as an inspiration for those seeking to make a meaningful difference in the world while achieving financial success.