Driving Alpha

Can Middle America become the next innovation powerhouse? Aziz Gilani, General Partner at Mercury, thinks so—and he’s proving it by backing cloud and enterprise software startups across Houston and beyond. With a track record that includes major exits like Black Lotus and Modus, Aziz has helped Mercury’s portfolio reach over $9 billion in enterprise value. Here’s a glimpse of what you’ll learn: 00:43 Introduction to Driving Alpha   00:51 Meet Aziz Gilani: Venture Powerhouse   02:08 Aziz's Journey to Venture Capital   04:20 Houston: A Hub for Enterprise Software   05:37 The Evolution of Texas's Startup Ecosystem   06:29 What VCs Look for in Entrepreneurs   10:29 The Growth of the Venture Capital Industry   15:38 The Impact of Regulations on Startups   24:29 Future Opportunities in Technology   31:41 Connecting with Aziz and Mercury Fund   34:29 Conclusion and Final Thoughts   In this episode, Aziz joins Steve Brotman to unpack how Mercury is scaling venture success outside traditional hubs. He shares the journey that led him from early enterprise software gigs to shaping national innovation policy. Along the way, Aziz discusses the rise of Texas as a startup epicenter, fueled by domain-specific advantages and the growing infrastructure led by institutions like Rice University’s Ion. Aziz dives deep into what he looks for in founders—those with a “spike” of excellence—and why massive market potential, tenacity, and adaptability are essential. The conversation also explores the explosive growth of venture capital as an industry, the evolving regulatory landscape, and why now is a critical moment for sectors like AI, cybersecurity, and quantum computing. If you want insight into how to build capital-efficient, billion-dollar companies outside the coasts, this episode is a must-listen.

Matt McIlwain, Managing Director at Madrona, has spent over two decades investing in intelligent applications and driving innovation in AI. With a track record including Smartsheet, Apptio, and Isilon, he brings rare perspective from 25 years in venture capital. Here’s a glimpse of what you’ll learn: 00:43 Introduction to Driving Alpha Podcast 00:57 Guest Introduction: Matt McElwain from Madrona 01:41 Matt's Journey into Venture Capital 03:06 Early Years at Madrona and the Dot-Com Bust 04:45 Madrona's Investment Strategies and Success Stories 06:29 Driving Alpha for Portfolio Companies 09:34 Evaluating Founders: The Power of Why 24:49 Navigating Exits and M&A Landscape 28:25 Life Lessons and Long-Term Perspective 32:40 Conclusion and Future Outlook   In this episode Matt recounts his unconventional entry into venture capital—from auto parts to Amazon-era Seattle—and how he joined Madrona just before the dot-com crash. He reflects on the firm’s resilience through market downturns, the evolution of their early-stage to acceleration-stage investment strategy, and how conviction-driven bets like Isilon and Smartsheet became fund-makers despite difficult timing. Matt breaks down his “power of why” framework for evaluating startups, emphasizing founder-market fit and the value of long-term thinking. He shares candid insights into Madrona’s hands-on approach with founders, how he spots extraordinary teams, and why curiosity is the ultimate trait in successful entrepreneurs. From navigating exits in today’s M&A climate to building enduring partnerships, this conversation is a masterclass in venture capital longevity.

Lisa Chai, co-founder and general partner at Interwoven Ventures, joins Driving Alpha to discuss how robotics and AI are transforming industrial technology. With a deep background in venture capital and public markets, Lisa shares her insights into the megatrends driving automation, reshoring, and industrial AI. Here’s a glimpse of what you’ll learn: 00:43 Introduction to Driving Alpha Podcast  00:53 Meet Lisa Chai of Interwoven  01:10 Interwoven's Focus and Investment Strategy  02:04 Lisa Chai's Origin Story  06:24 Challenges and Gender Dynamics in Venture Capital  08:57 Advice for Women in VC  10:54 Industrial Tech and Megatrends  16:51 Tech Infrastructure and Human-Robot Interaction  20:20 Spotlight on Portfolio Companies  23:13 Why Founders Should Choose Interwoven 25:33 Conclusion and Fundraising Announcement    In this episode, Lisa dives into the key forces shaping the future of robotics and AI, from workforce automation to the role of government funding in reshoring supply chains. She highlights how Interwoven Ventures uniquely supports founders in this space, offering deep domain expertise and an extensive ecosystem. Lisa also shares her journey into venture capital, advice for women in the industry, and why she believes we are in the early innings of a massive industrial transformation.  

Bob Ackerman saw the future of cybersecurity before the market did. As the founder of AllegisCyber Capital, the first venture firm dedicated 100% to cybersecurity, and the co-founder of DataTribe, he’s been at the forefront of investing in cyber defense. With a 20+ year track record, Bob has backed some of the most cutting-edge cybersecurity companies, navigating the intersection of venture capital, AI, and national security. Here’s a glimpse of what you’ll learn: 00:43 Introduction to Driving Alpha 01:00 Meet Bob Ackerman: Cybersecurity Visionary 02:15 The Birth of AllegisCyber 06:00 The Importance of Domain Mastery in Cybersecurity 07:17 Collaboration Between DataTribe and AllegisCyber 12:49 AI's Impact on Cybersecurity 19:23 The Future of Network Security 23:46 Investment Opportunities in Cybersecurity 30:35 Challenges and Advice for Cybersecurity Founders 40:25 Conclusion and Final Thoughts   In this episode Bob Ackerman sits down with host Sam Silversheen to discuss the evolution of cybersecurity investing and the role of AI in both offensive and defensive strategies. He shares the early insights that led him to focus exclusively on cybersecurity, why domain mastery is essential for both entrepreneurs and investors, and how he identifies non-consensus bets that others miss. Bob also explores the increasing sophistication of cyber threats, from AI-driven attacks to vulnerabilities in critical infrastructure. He explains why cybersecurity is an ever-evolving challenge, how startups can stay ahead of the curve, and what the future holds for cybersecurity investments. If you're in venture capital, tech, or cybersecurity, this episode is packed with insights you won’t want to miss.

David Hornik, founding partner at Lobby Capital, brings over 25 years of venture capital experience to the table. He discusses his surprising transition from law to VC and the serendipity behind early successes, including Splunk’s massive acquisition. David emphasizes the art of networking through his Lobby Conference, cultivating meaningful connections. He reflects on his biggest wins and missed opportunities—like Facebook and Uber—while revealing how psychological insights and emotional intelligence play vital roles in assessing startup founders.

Laura Chau is a Partner at Canaan, where she leads investments in consumer technology and commerce tech. With over a decade of experience in venture capital, Laura has backed companies like Clutch, Ollie, Mischief, Solvely, and Nagish.   Here’s a glimpse of what you’ll learn: 00:43 Introduction to Driving Alpha 01:07 Guest Introduction: Laura Cho 02:58 Laura's Background and Career Path 05:35 Investment Strategies and Notable Companies 09:26 The Role of AI in Venture Capital 20:20 Traits of Successful Entrepreneurs 22:44 Geographical Trends and Future Outlook 32:10 Closing Remarks and Final Thoughts   In this episode... In this episode, Laura shares her journey into venture capital, from her early career at Deloitte and Kabam to becoming a key player in consumer tech investing. She discusses the role of AI in shaping new opportunities, the power of storytelling in fundraising and hiring, and how successful founders build communities around their vision. Laura also provides insights into emerging trends in AI-driven consumer tech, strategies for differentiation in a crowded market, and the importance of go-to-market expertise. Whether you're an investor or an entrepreneur, this episode is packed with valuable takeaways on navigating the fast-evolving consumer landscape.  

Dave Lambert, co-founder and managing director at Right Side Capital Management, has built one of the most active pre-VC investment firms in the U.S. With a portfolio of over 2,000 companies, Dave and his team take a data-driven approach to ultra-diversified early-stage investing, making quick decisions and challenging traditional VC norms.   In this episode... In this episode, Dave shares how Right Side Capital identifies high-potential startups before they reach traditional VC rounds. He explains how his experience as both an entrepreneur and an investor led him to see inefficiencies in early-stage fundraising—and how data and systematic portfolio construction can optimize returns. Dave also discusses the evolution of venture capital, the impact of AI on startup scaling, and why ownership percentage is irrelevant when evaluating investment opportunities. His unique approach reveals how ultra-diversification and a power-law mindset can uncover the next billion-dollar companies.   Here’s a glimpse of what you’ll learn: 00:43 Introduction to Driving Alpha 00:48 Meet Dave Lambert: Entrepreneur and Investor 01:48 Challenges in Early Stage Investing 04:11 The Data-Driven Approach of Rightside Capital 06:42 Evolution of Investment Strategies 13:47 The Impact of AI on Startups 17:01 Fundraising and Portfolio Management 19:50 Sourcing and Evaluating Investments 31:18 Advice for Aspiring Investors 34:23 Conclusion and Final Thoughts  

Charles Hudson, Managing Partner and Founder of Precursor Ventures, joins Steve Brotman to share his journey through venture capital. With over 15 years of experience, Charles has made more than 400 investments and raised over $200 million, making him a leading voice in the seed-stage community. Here’s a glimpse of what you’ll learn: 00:43 - Introduction to Driving Alpha Podcast 00:53 - Meet Charles Hudson: Venture Capitalist Extraordinaire 03:41 - Charles Hudson's Early Career and Entrepreneurial Journey  06:12 - The In-Q-Tel Experience 08:15 - Transition to Business School and IronPort Systems 09:50 - Founding Precursor Ventures 13:03 - Challenges and Strategies in Venture Capital 14:31 - Portfolio Construction and LP Resistance 19:52 - Reflections on Early Fundraising and Success Stories 22:34 - Investment Beginnings: From Ideas to Tangible Plans 24:40 - Evaluating Founders: The Checklist Approach 26:27 - Geographical Influence on Startups 27:55 - Diversity and Inclusion in Venture Capital 33:36 - Navigating the AI Investment Landscape 41:51 - The Role of Seed and Pre-Seed Funding 45:16 - Connecting with Precursor Ventures   In this episode... In this episode, Charles dives into his journey from aspiring public equities manager to leading one of the most successful pre-seed venture capital firms. He shares invaluable insights into his career path, including his work at In-Q-Tel, founding Precursor Ventures, and his investment philosophy. Charles opens up about the challenges of building a venture firm, including navigating LP skepticism, constructing diverse portfolios, and maintaining a founder-first approach. Charles also shares his thoughts on the current state of AI, its potential, and the challenges of finding sustainable, defensible models. From portfolio construction to diversity and inclusion in venture capital, his strategies offer invaluable lessons for VCs and entrepreneurs alike.  

How do you turn Texas into a global innovation hub? For Joshua Baer, founder and CEO of Capital Factory, the answer lies in empowering unstoppable founders, fostering a vibrant entrepreneurial community, and leveraging Texas’s unique advantages. Here’s a glimpse of what you’ll learn: 00:43 Introduction to the Driving Alpha Podcast 00:54 Meet Josh Baer: Texas Startup Powerhouse 01:37 The Impact of Capital Factory 03:44 Josh Baer's Entrepreneurial Journey 07:07 Early Ventures and Lessons Learned 11:06 The Birth of Capital Factory 13:58 Investment Strategies and Focus 17:22 The Future of Robotics and AI 18:02 AI's Impact on Humanoid Robotics 18:22 The Inflection Point of GPS in Smartphones 19:31 Capital Factory's Open-Door Policy 20:21 Texas: A Hub for Startups and VCs 21:12 The Path to Becoming a VC in Texas 26:46 Government and Dual-Use Technology 31:15 The Booming Tech Scene in Texas 34:34 Conclusion: Reflections and Future Prospects In this episode... On this episode of Driving Alpha, host Steve Brotman explores Joshua’s journey from launching a startup in his dorm room at Carnegie Mellon to building Capital Factory into the most active early-stage investor in Texas. With nearly 1,000 investments, the firm isn’t just funding startups—it’s creating an ecosystem. Capital Factory focuses on “dual-use” startups that serve both commercial and government markets, with Texas positioned as a leader in AI, robotics, and national security. Companies like Aptronic, a pioneer in humanoid robotics, showcase Texas’s growing role in transformative industries. “Texas is our nexus,” says Joshua. “It’s where we have a unique advantage—a center of gravity for innovation.” By combining talent-driven investing with a collaborative model that partners with VCs, Capital Factory is redefining what’s possible in venture capital.  

Chris Farmer, the founder and CEO of SignalFire, is transforming the venture capital landscape through a pioneering, AI-native approach. Leading a $2.1 billion early-stage venture firm, Chris has integrated cutting-edge data analytics to revolutionize how investments are sourced and scaled. His journey began with operational and entrepreneurial roles, including spearheading the turnaround of Skybitz and building early investment sourcing technology at Bessemer Venture Partners. Later, at General Catalyst, Chris led seed investments in groundbreaking companies such as Coinbase, Discord, and Stripe. Now at SignalFire, his AI-driven platform, Beacon, analyzes over 650 million people in the tech ecosystem, empowering founders and redefining the future of venture capital.   Here’s a glimpse of what you’ll learn: 00:00 Introduction to Chris Farmer 00:18 Chris Farmer's Early Career and Education 01:21 Journey Through Venture Capital 02:43 Founding SignalFire 04:13 Data-Driven Approach in Venture Capital 06:19 Challenges and Strategies in VC 08:59 Building and Supporting Startups 19:54 Market Dynamics and Valuations 25:07 AI-Driven Paradigm and Sector Selection 25:57 Technology Product Building and AI Applications 26:55 Healthcare and Vertical Specialization 27:44 Underdog Companies with Huge Potential 31:59 AI's Generational Opportunity and Labor Market Impact 39:35 Navigating Labor Displacement and Societal Impact 41:28 Valuation Models and Market Opportunities 44:29 Capital Return and Long-Term Investment Challenges 49:27 Regulatory Impediments and Government Efficiency 51:35 Conclusion and Final Thoughts In this episode... We dive deep into Chris’s journey, from his early career at General Catalyst to founding SignalFire. He shares the inspiration behind leveraging data in venture capital, the challenges of gaining LP buy-in, and how SignalFire was built to solve structural inefficiencies in the VC ecosystem. Learn about Beacon, SignalFire’s proprietary AI platform, and its game-changing impact on startup discovery, founder evaluation, and portfolio company growth. Chris also discusses why he believes AI represents one of humanity’s greatest opportunities, providing unprecedented efficiency gains and reshaping industries. He touches on how AI-native firms have a competitive edge, the role of data in early-stage investing, and SignalFire’s focus on vertical AI SaaS, health tech, and more.