He Built An $8 Billion Venture Capital Firm To Invest In Startups That Are Fixing Our Broken World

Drew Oetting is one of the biggest forces providing the financial fuel this new generation of fast-growing, super-sized startups need to make it.

On the Dealmakers Show, Oetting talks about the links between golf and investing, raising money for venture funds and startups, network management, taking advantage of trends, the new shift in where the best talent is moving now, and the companies he is excited about funding now.

Listen to the full podcast episode and review the transcript here.

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Golf & Investing

Drew Oetting grew up in the small college town of Iowa City. A place they relocated to from the south for their own university studies.

While perhaps not the most buzzing place in the world, he describes it as a nice, safe, classic American place to live. Somewhere that both his parents and grandparents have chosen to call their home through today.

Two big passions have been with Drew throughout his life, golf and investing.

His parents played golf, but weren’t big investors. Though he found that once you start playing golf as a kid you very quickly began to be interacted with as an adult around the course.

There he met a friend’s parents that were into investing, got to listen into conversations about business life, divorces, and more. He heard a lot about the financial crisis before it happened, and spent a lot of time reading.

When it came time for college, he received a scholarship from the Bill Gates Investment Group, and went to study math and science, while being able to continue playing golf.

It is a competitive sport, an individual sport. Drew says that he hated making mistakes. It taught him drive, and to take ownership of his game. In entrepreneurship, he says it is similar that if you believe you are responsible for it, you can determine your future.

While he got caught up in investing and building companies for a few years, he is back to playing golf, with even more appreciation for the game, and the time he gets to spend with others playing.

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Launching A Venture Capital Fund From Scratch

Drew got introduced to Joe Lonsdale by a mutual friend when Joe was looking for a new Chief of Staff.

Joe was one of the founders of Palantir. A tech company involving Peter Thiel, which has recently had a market cap of over $18B.

Storytelling is everything which is something that he was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.

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Lonsdale told Oetting that he wanted to build a new venture capital fund called Formation 8 (now called 8VC).

Of course, he didn’t want to start just any old investment firm. He declared that he wanted to raise the biggest first-time fund since the previous crash.

In spite of their previous achievements, it’s never easy to get big institutions to make a big bet on you when you are doing something new. So, they started taking meetings seven days a week.

Their first fund ended up being $448M, with 282 LP investors. Some of those just started out putting in $1M each. Now, as they’ve continued the relationship, they might put in $50M at a time.

Building Relationships, Network Management, And Resilience

Drew says that it is all about relationships, and managing your network, which is your best asset. That is where deal flow comes from. That is true whether it is about raising money to start your own fund, helping a startup get funded, or selling to customers.

They did a lot of events, dinners, BBQs, and speaking engagements.

Two of the notable investments they have been involved with are Affinity. Which Drew also cofounded. A business that grew out of its own need to manage data.

Resilience is another. One which was able to ride the tailwind of COVID, and the cheap money environment of that time. A startup that has gone on to raise $700M, and bring manufacturing back to the US.

Investing In The Future

Another big trend that Drew began noticing was that all of the great tech talents seemed to be disappearing from the usual big tech companies.

People were leaving Facebook, Salesforce, and Twitter. He found out that they were migrating to biotech. A space seen as one that offered the most challenges, and where so many new innovations and technologies appeared to be merging. Among them being CRISPR.

Today, 8VC has $8B they are managing in their fund. Primarily targeting early-stage seed startups in non-consumer technologies.

Listen in to the full podcast episode to find out more, including: