In a recent episode of The Dealmakers’ Podcast, we had the pleasure of hosting Jonathan Winer, a seasoned entrepreneur and investor with a wealth of experience spanning across multiple industries.
From his humble beginnings as a philosophy student to his pivotal roles in founding startups and shaping innovative infrastructure projects, Jonathan’s journey is a testament to the power of unexpected opportunities and the impact of strategic decision-making.
His venture, Sidewalk Infrastructure Partners, has raised funding from top-tier investors like Alphabet Inc. (Alphabet), Google’s parent company, StepStone Group, and the Ontario Teachers’ Pension Plan (OTPP).
In this episode, you will learn:
- Being open to unexpected opportunities that may deviate from your original plans. Sometimes, the most significant breakthroughs come from unexpected conversations and decisions.
- Navigating evolving markets and investor sentiments, and staying agile to adjust strategies based on the macroeconomic environment
- Embracing technology to create innovative solutions that address real-world challenges
- Transforming industries and infrastructure through the thoughtful integration of technology
- Focusing on thematic investment by deeply understanding a specific industry or sector and developing a comprehensive strategy that aligns with emerging trends and challenges.
- When considering corporate spinouts or strategic decisions, prioritize alignment, integration, and long-term goals
- Establishing transparent discussions and ensuring stakeholders share a common vision
- Bridging the gap between technology innovation and existing infrastructure needs by building infrastructure solutions that are sustainable, resilient, and responsive to modern demands.
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About Jonathan Winer:
Jonathan is the Co-Founder and co-CEO of Sidewalk Infrastructure Partners (SIP). Over two decades Jonathan has led three private equity platforms and personally led investments of over $3B with a focus on the application of technology to real assets.
Previously, Jonathan was Head of Investments for Alphabet’s urban innovation platform. In this role, Jonathan managed dedicated investment funds related to technology venture capital, real estate, and infrastructure.
He previously founded Nereus in 2009, a private equity fund that invests in alternative energy infrastructure in Asia. Prior to Nereus, Jonathan worked at the D. E. Shaw group where he built the private equity team across venture capital, growth equity, and structured finance.
Jonathan started his career by founding startups in natural language processing and computational biochemistry.
Jonathan graduated from Yale with degrees in Philosophy and Computer Science. Jonathan is based in SIP’s Brooklyn office and lives in Brooklyn, New York.
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Connect with Jonathan Winer:
Read the Full Transcription of the Interview:
Alejandro Cremades: Alrighty hello everyone and welcome to the deal maker show. So today. We have ah a very interesting founder a founder that has raised you know Gu ah quite an exciting fund is a spinout you know from alphabet and definitely you know we’re going to be talking about how some of. Some of the moments in your life and decisions that you make you know take you in different directions. But definitely you know what? what this founder is doing and and the and the segment that he’s also tackling you know there’s quite a lot in it and I’m sure that you’re going to find it very inspiring so without further ado. Let’s welcome. Our guest today. Jonathan Weiner welcome to the show. So originally born in Boston but raised in ariona give us a little of a walk through memory lane. How was life growing up.
Jonathan Winer: Um, thank you for having me.
Jonathan Winer: Um, life growing up was great. Um I grew up in suburban Arizona primarily as as you mentioned um I grew up in a very academic family. Um education was really important um to our family but it was a wonderful place to grow up in ah a great childhood.
Alejandro Cremades: So in your case I mean obviously you had to go to a good University I mean having having the academic yeah going on in the family so you went to Yale but but it didn’t It didn’t unfold the way that perhaps your parents had hope you know and I’m sure that. Making that phone call you know was was a tough one. So What happened there what they railed you from from the plants.
Jonathan Winer: It’s actually funny. It was it. It was a tough phone call you but you picked up on that exactly so you know as as you mentioned, um, when I went to college I was actually myself focused on being an academic I was studying philosophy. Um, and as plan spend um most of my undergrad career doing that and potentially. Pursue a graduate degree in philosophy and and become an academic. Um and you know it’s funny. It’s the most unexpected conversations that really pivot you know your day plans and so um, 1 evening 1 of my roommates who had grown up. And the East Coast and um you know in New York city and it was really focused on you know, entrepreneurship and and and what his you know, professional career might look like came into my rooms is our our sophomore year whatever I amm 1920 years old and says you know hey I think I think we should drop out and I think we should start a software company. Is like you know two Thousand or Ninety nine or something like that. So you know at the time that was sort of like the the n vogue thing to do. Of course it had absolutely nothing to do with my personal plan in life. My plan of life was to study and go to get a graduate degree and so you know but you know there’s a little of peer pressure in that moment and I didn’t want to be the person who was scared of of pursuing this thing. So. But than to say like hey I’m not interested in in doing that. Um I said to him you know, hey look um, unless the following 4 or 5 things are true. You know we had an anchor investor a first customer you know we had some you know Mvp path on on our engineering and software. You know, really really crazy for us to drop out and remember we stayed up. So.
Jonathan Winer: 1 or two o’clock drinking drinking bourbon or something and you know eventually it’s like yeah, you’re right? It’d be really risky and silly for us to drop out of college to pursue this unless those 5 things were true and so I thought that was the end of the conversation and then about a week later. You know he came back into my room and he’s like hey look great news I got all 5 of those things done. Here’s my letter I dropped out the other guys who are starting to thing with us. They’ve dropped out now. It’s time for you to take ah a leap of absence to dropout too. So i’ kind of I kind of coerced into becoming an entrepreneur the first time but we did that um I dropped out of school I ultimately went back and finished but dropped out of school for a couple of years to focus on I’m building a software startup.
Alejandro Cremades: Um, so what? whatever happened with that. So for startup.
Jonathan Winer: Ah, it’s interesting. So you know at the time we we raised our series a um, just focused on natural language processing and and keep mind this is. You know, twenty something years ago before we had large language models in the current approaches that we have to Ai, there’s using early neural net technology to sort of focus on on problems related to natural language processing and at the time we set out to do that. Um, we had absolutely no business raising money. But you know it was 2000 and people were you know passing out terms sheet to the hall at the you know the computer. Science department and so we were able to raise. Ah you know around and and get things going. Um you fast forward a couple of years and believe or not we had a pretty decent product that actually kind of worked for the application we were looking at. We had an anchor customer we were approaching a cash flow break. Even we were really scrappy so with just one customer about to have second customer where sort of. At a place where we thought we’re going to be very successful in raising our next round. But of course 2001 happens and you know the dot com you know crash a bus. Whatever you’d like to call it and you know I joke a lot because I we had no business raising money when we raise money the first time where nobody should given us money that was the silly thing. But the second time we should have been able to raise money but the environment was so different that we actually weren’t able to we wound up you know selling the company and sort of an allstop deal to ah a larger software company. Um, which which was a fine outcome wasn’t it wasn’t a win for people but is a fine outcome. Um, and went back to school.
Alejandro Cremades: I Mean obviously that team that gave you quite ah a lot of disability I mean not only into into really understanding. You know what? it is the full cycle of a business but then also when it comes to market cycles because right now there’s a lot of founders that they have an experience you know, ah downturn like for example, the one that they.
Jonathan Winer: Um, yeah.
Alejandro Cremades: That we’re looking at with these macro environments I Guess you know from taking a look at that and experiencing that you know what were some of the lessons that you took away you know from you know, operating a business and and being in a downturn.
Jonathan Winer: You know, particularly for early stage businesses I think it’s true, more broadly but particularly for early stage businesses. The macro environment is just so critical and can turn on a dime and I think you’re right? we’ve we’ve lived in this bull market of roughly the last you know called. Decade where there was always another round and some of the key metrics. Um that we you know traditionally would look at in early stage technology companies people have been willing to sort of look away from um for you know because there was so much capital moving into the space. Um, and so you know I think timing is really really critical and you know. I was naive in my first company to think that if we were simply just executing if the product worked and people were buying it. Everything would be okay, but you really are at the mercy of you know capital formation and so being very sophisticated about that understanding how you’re going capital raise capital who you’re going to raise capital from. Their ability to support you in the event that there is um, a down term um your your investors track record in downturn. The 1 thing that’s fascinating to me and some the companies that we we were currently a part of you know, um, there are. Investors that say you know other investors might be on the board. Um, or on the investment committee of of other institutions out of table that have never been through um a capital market quite like this and so I think you know if I were a founder I’d be very thoughtful in making sure that you know if I had the choice I probably take capital from folks who.
Jonathan Winer: Ah, been through a couple cycles and understand how to navigate them.
Alejandro Cremades: Um, so in your case, you ended up going back to Yale you got your degree So I’m sure your parents were happy and.
Jonathan Winer: I Mean it’s It’s a philosophy degree I don’t know how I mean you know I don’t know they spend all this money and all yeah was a philosophy degree I Know you do with that. But yeah.
Alejandro Cremades: Ah, and and then basically after that you you you ended up being the show and today that was quite pivot with time for you. So so tell us what happened there and and obviously getting into the investment side. You know that was a nice push to get on the other side of the table door.
Jonathan Winer: It was. You know we had. We’d actually first encountered um deshaw in their technology ventures group. Um, when we were trying to exit our software startup so that was the first context in which we had some exposure to them and you know, ah, really an incredible organization I mean still to this day and certainly back then um as as well. Um, and and one of the things that was sort of interesting is is the group that I landed in um, was a ah research group working on problems related to computational biochemistry where the founder of that organization. Um David Shaw um you know was sort of very personally involved in sort of leading the day-to-day activities. That was just an extraordinary opportunity to get exposure to somebody who had built you know an incredible financial institution over several decades. Um to understand how they think about risk um and risk return um to see how they manage organizations. You know one of the things I you know. I wound up being a part of the founding group there that set up their private equity business and and talk a little bit about you know some of the lessons learned from all of that. But 1 of the things that I tell folks you know, particularly younger folks that are joining their first investment firm either as an associate or you know senior associate after banking or something like that. To be very thoughtful about where they go not just because of the brand name of the place or you know the signing bonus or whatever motivates people to to choose where they they work first but you know where you learn how to invest um in private and here I’m talking about private equity style investing. Um ill like you know, private companies. Um.
Jonathan Winer: You know there are very different ways to do this. This is an apprenticeship business people understand risk return fundamentally different ways and you will be forever shaped in how you see the world and how you think about capital allocation and and risk return based upon sort of your early career and where you you develop some of your training. So. I think that choice I got very lucky I stumbled into it I don’t think at the time I could have in a sophisticated way describe. You know why? Deskco was such a such an amazing place and and why David was such a thoughtful investor I kind of locked into it. Um, and and really got an incredible education and and how to invest.
Alejandro Cremades: Now now. Um I’m sure that there’s a lot of founders that they are listening and that are very used to the venture capital model and to how venture Capital works when it comes to investments How is private equity different from let’s say Venture Capital How would you. Define it or or explain it so that the people that are listening really get it.
Jonathan Winer: Um, so when I think of of private equity I think of as an overall category of allocating capital to illiquid private companies and within that there are lots of different sort of sub asset classes venture being sort of early stage investing. You can think about growth stage investing so investing in companies that are are somewhat more mature but there are all sorts of various types of private equity style investing you know on on far stream. You might have you know the leverage buyout of a large public company or a large private company for that matter. Um, but there are other sub asset classes of. That type of investing um real assets is interesting. You know here I’m talking about real estate or infrastructure. You might very well be invested in a private company that is a liquid. Um, ah you know related to those types of businesses and that might be a different type of Subcategory but all of these types of strategies. Um I I sort of think of it within sort of the private equity bucket. That’s not exactly how limited partners would carpet up but but it is how I’ve I’ve come to evolve over time. One of the things that I think is important is within each one of those sub asset classes whether it is venture whether it is growth or your lbo shop or distress shop or whatever it is. Um, different investors have very different, not just mandates like what they can invest in or what they’re seeking to invest in but different ways of thinking about risk and return and if if you’re a founder and you’re thinking about raising capital I think it’s really important, not just to understand the individual in their history and to reference them with.
Jonathan Winer: You know, previous founders that their companies that they’ve invested in and to understand how long they’ve been in the business and what their background was um but also to understand how their investment committee and how their firm thinks about it and so if you take venture capital. For example, there’s been this real evolution and venture in last twenty some odd years that I’ve been you know involved in it. Historically, there were many many fewer venture capital firms. They were typically staffed by folks who were um, maybe somewhat see more senior in their career than they’re typically staffed today many of those folks were former operators people technologists former ceos of technology companies people who had had exits. Um, the idea of a career venture capital investor. Someone who came out of college you know and went into being an analyst program. You know that didn’t exist and fundamentally the you know different venture firms would have different stories about value creation to their limited partners. Might say hey we’re really hands-on and you know operational with our founders and to help them build businesses. Others might say something along lines of you know we have proprietary relationships or a proprietary brand that allows us better deal flow and therefore we’re able to pick companies. There are all sorts of different subsegments of that but we’ve seen that really evolve. Um, today you know there are some venture firms. Um, early stage and and maybe even growth stage firms who think of themselves much more as index funds than as stock pickers and here I’m using some public markets jargon but the distinction being you know, hey you limited partners. Those are the this are the large. Um.
Jonathan Winer: Capital allocators that typically fund. Um you know venture capital firms or other types of private equity firms. You know you could go over here to fund x and what fdex tells you is they have the smartest people around and they’re going to pick the best companies and then ah in their specialist. They only know this sector and so they’re to find the best companies sector. That’s great if you want specialized exposure to that sector. Invest in fund apps our fund. Why? what? What we’re promising. You is something different which is we actually don’t think we are the best stock picker. We think we have access to the most deal that fall into the following categories companies for the following revenue characteristics the following you know growth, characteristic following error or whatever it is. And we think if you look historically at the data if you simply had an index that is if you had like pro rata like allocations to all the companies that fell within that type of allocation that that would actually outperform the stockmaker I use as as 1 subexample we could talk you know each fund has its own flavor of how it positions itself. But the point is as a founder. It’s really important to know hey if I’m taking money from fund to x and then I have a subsequent round that I need to get done or you know there’s a turn in the market in the way that we’re just talking about a moment ago. How are they going to think about. They’re probably going to be hands on. They’re probably going to look at the very specific things that are going on in my industry and they’re probably going to determine hey. Do we think we have product market fit. Do we think we can fund another round based upon the nuances of my company. You know, ah more of an index style fund one that is much more high velocity and trying to index private market companies. You know might say hey look the metrics are off. That’s not It’s how our maning now. I.
Jonathan Winer: You may have the best turnaround story and maybe you’re just six months behind on you know your next product development but the metrics are off and so you know just understanding how your investors think based upon what they have told their investors their mandate is I think that’s something that that the founders maybe don’t do enough of.
Alejandro Cremades: Now in your case, it sounds like when when now you got into the private equity arena you know you really carved yourself an expertise around the energy side of things. So so walk us through this and. And and some of the things that you were doing too especially with with projects in India.
Jonathan Winer: Yeah, so you know, um, when I got involved in private equity at deshaw. Um, the firm was in in in the process of setting up multiple different verticals and private equity and to the point of this being like an apprenticeship business. A great great way to learn this business is to work for multiple different senior investors in the space and so we had somebody who was focused on China and somebody who was focused on India and somebody who was focused on distress turnaround and we had a group that was focused on energy as well. Um, and you know in each one of these groups. We’d made lateral hires. Sort of senior folks who had come from other shops who had their own approach to risk return their own approach to underwriting and it was really fascinating to be a part of working with all those different teams part of that investment committee understanding how capital allocation decisions were being made um to just see how differently people thought. But one of the things that was nice about that is it got me exposure to some of the early renewable energy work that was being done in this country. Some of the first um ipp um wind ipp that were were taking place other types of um, renewable energy ipt and also some of the early technology investing what now is called clean tech one point. Ah.
Jonathan Winer: Um, I also wound up doing some generalist private equity investing in in India primarily and and it was this weird moment when I started to look at the indian energy market compared to the american energy market and so you know as we were in in the us we’re trying to. Make a transition towards renewables. We were effectively a power surplus market which meant we’d have to turn off you know more cost-effective thermal power in order to bring on intermittent more expensive renewable energy. And yeah, there was you know government subsidies and other reasons that we went into from a policy perspective. But that was fundamentally different than what was going on in India at the time you know in India at the time there’s just a power deficit. You know there’re roughly 300000000 people who didn’t have access to power. Um, you know the the power grid itself. Um, you know, relied on very large. There won’t power with a lot of coal being imported through from Indonesia which was starting to be harder and harder to do. Power costs were going up the distribution grid was incredibly challenged. So their huge line losses as you tried to bring centralized power out into the more rural communities and so some of the technologies like solar and wind that could be more distributed and colocated closer to end users were actually economic on their own without subsidies in India. At a time that in the us you know they really weren’t um, now this has changed in very meaningful ways. That’s the cost butized cost of energys and these technologies has come down but you know solar is twenty cents for whatever you know it was expensive. Um back then and so that was certainly the case and so I got super excited about the opportunity for renewable energy. Um, investing in India.
Jonathan Winer: Um, when I was at the eastha we’ve made one of the first investments um in that space. Um in India and and really had to understand the energy markets there which operate very differently obviously than in the us. Um, but yeah was was super excited about the the huge potential for renewable energy in India this is you know going back like 2008
Alejandro Cremades: So tell us about connecting with Larry Page and for those that they you know doesn’t sound familiar the founder of Google one of the founders of Google now known as alphabet.
Jonathan Winer: Yeah, so um, I had um, wound up spining out of the eshaw and and starting an alternative energy infrastructure fund in in India um, investing in that thesis that I just described to for you know gosh almost a decade and um. You know the the fund that I was a part of the general partnership was determining whether it wanted to go out and raise another fund um or not and you know my wife and I were thinking about you know, having a child and going back and forth to India and raising a fund is not necessarily conducive to being a super present. Ah, father and so um, you know made the decision I wanted to come back to the us um, and and really focus the rest of you know my career here primarily um and you know then no idea what I wanted to do to be honest, you know I for a while like can’ be a full-time dad for a while. Be, really nice and you know maybe I’ll do some angel investing on the side or something like that. But. Really focus um, trying to think about what I’d want to do next Um, and take some time to do it and through a friend who um, worked um, ah with Larry at at alphabet um, wound up getting connected to him a couple different sort of more social occasions and at the time he you know he was um, thinking a lot about. Challenges that cities face and in particular how technology could be manifest in the physical world in a way that could fundamentally alter the urban environment can make it more sustainable make it more resilient make it more inclusive and you know alphabet had a long track record when it came to digital technologies there obviously. Ah.
Jonathan Winer: Tremendously successful at scaling digital technology. You know they had a far less experience. They had. They had some to be clear that fiber and other other things but you know fundamentally had had less innovation in in physical assets than they had in in digital assets and so he was in the process of thinking about what he ultimately stood up as. s now called an other bet so sort of a a group within alphabet. That’s that’s not part of google um, sometimes people call them the moonshots or or other things. Um, that was focused on this question of could you design an urban environment in ah in a fundamentally different way. Um, it’s called sidewalk labs and so as part of the the early team to sort of set that up.
Alejandro Cremades: So what is it like to pitch Larry page on on an idea or to even pitch yourself. You know as a candidate to to execute on something that they have going on.
Jonathan Winer: Um I don’t know because I didn’t go into it think he was a pitch meeting so I wasn’t pitching anything to be ah, be honest to be honest of what what but what I will say about my first couple conversations with Larry that they got me really excited about what they were doing there and even some once I was there some of the early.
Alejandro Cremades: Um.
Jonathan Winer: Ideation sessions that we had in terms of figuring out what we’re going to do um you know Larry’s an incredibly thoughtful, um, intellectual provocateer and and by that I mean he would often start with a really fundamental premise of like what if blank. What are all the sort of follow on. Implications of that fundamental transition transition I remember being in a a brainstorming session with him early in in the sidewalk lab days where you know he asked this question of you know if you had an a v only environment. So this is early waymo days where we’re still proving out the efficacy of of as and he’s already asking the question. Well wait imagine where where there are no legacy vehicles. Moment no human driven vehicles. They are just a and if that were the case. How would you design a city differently and of course there are like lots of things that you do just different that you can make a far more pedestrian forward city you could have outer ringroves that you know, operate much more quickly but much slower where p pedestrians could interact with vehicles. You could fundamentally change how you do things like logistics and delivery you fundamentally change how you do public transit. There are like 30 different foundationally different things you would do in designing an urban environment you think of density in a radically different way. Um, if that were true now we can all debate whether or not that’s going to happen or when that’s going to happen. But actually free like starting with a a provocative premise like that and ideating around what things would change even if you have to scale back that that you know sort of first principle vision. Um and sort of think about innovation. Um in in a more practical way. It’s a highly effective way of of forcing people to sort of.
Jonathan Winer: Leave their preconceived notions at the door so to speak and and to engage in in really first principles ideationtion. So you know I remember a few conversations like that with him that were really formative to you know to sidewalk labs and and some of the innovation that we we focused on there.
Alejandro Cremades: Um, so what was it like the um because you guys ended up ended up doing a spinout of of the company. So what happened there I mean how did that come about.
Jonathan Winer: Well, you know we we at sidewalk lab for focused on on a very large scale um greenfield mixed use. Ah real estate development in right outside of toronto in an era called called the portlands. Um, it’s it’s a project got a lot of press and. Um, you know? Ultimately, um, didn’t go forward during covid but at the time we were really thinking a lot about you know a multi-deca project which was going to be fabulously, um, complex and fabulously expensive and trying to think about how to structure and organize. Um you know, ah. Companies sidewalk labs um to to execute on that project and and they really ultimately came down to 3 different types of businesses on the 1 hand you had innovation businesses. Um literally technology development companies um or unit business units within sidewalk labs. You had you know real estate the actual development of vertical real estate. You had the enabling infrastructure um things like roads and power grids water systems digital infrastructure. So you know, connectivity and other things. Um each one of those businesses is fundamentally different with fundamentally different skill sets. It’s fundamentally different cost to capital you innovate it in fundamental to different ways and so the. Sidewalk infrastructure partners my my current platform I was really born out of hey how could you set up a vehicle that could generate. Um next generation infrastructure systems that more sustainable more resilient more inclusive.
Jonathan Winer: And finance them and bring them to scale in a thoughtful way like what skill sets would you need what team would you need what type of capital would you need? Um, so we’re really focused on that and it it turns out that that problem isn’t just applicable to the context of sort of a greenfield development. Um in Toronto but rather there there are specific problems within cities today that we can address. Um, you know using and innovation so that that’s really the origin set.
Alejandro Cremades: So So I guess saying what? what makes I mean I guess you know more importantly here I mean how how when when the when this spinoff happens. How do you guarantee that the. That everyone is going to be left in a good in a good space in a good spot and that everyone is feeling good about it.
Jonathan Winer: Look I think this is a great question and and and for folks, you know who wind up doing corporate spinouts I think this is really important and what what makes them win-win and it starts with like a fundamental question of why should this business either be within you know the corporation or or ought to be independent. And you know it’s different in every case but you know it probably took us took us some period of time. Not sure maybe over a year um of of really iterating and and and debating in good faith like does this make more sense to be part of the motherships of speak or its own independent business and in our context, it’s. How focused is this on uniquely toronto versus a broader business. What is the right cost to capital for these types of infrastructure systems and is that most aligned with alphabets cost to capital what’s the capital structure you know how much debt are we going to use and is that appropriate. Um within the balance sheet of of of alphabet. Um, and and specifically how integrated is this into the core business and the core technologies of alphabet as opposed to sourcing best and class technologies more broadly and so um, yeah I think it’s a great question every every spinout’s going to be a little different. You know, having been in that seat now a couple times you know I just urge folks that are. You know, having that discussion to happen in and a really honest and transparent way. Um, you know life is long and enforced years later, you know we’re we’re 4 years and just being an independent company having spun out from alphabet and of course the world is different than we thought it was going to be making sure that you have that real alignment in first principles is is really important.
Alejandro Cremades: So I guess say for the people that are listening to really understand you know what? you guys are doing a site at sidewalkinfrastructurepartners also as I p to make it easier. What. What are you guys doing and and essentially you know from a thirty Thousand foot view on what makes you different from everyone else.
Jonathan Winer: Yeah, you know I use what we’re doing is we are applying technology to critical infrastructure systems. Um, so things like power networks or power grids ah road networks water generation digital infrastructure. Um, and we’re trying to build infrastructure in a way that is more um, efficient. More inclusive more sustainable more resilient. Um as a result of leveraging technology and I usually would answer this question in a slightly different way. But since earlier in this conversation. We um, we had this conversation about understanding different types of um investors. Um, you know if if you today have an idea for. You know a new sustainability technology. There are plenty of early stage you know venture capitalists like we spoke about before who will write you a series a or a series b term sheet to develop a new mobility technology or new energy efficiency technology or or whatever the case may be but but fundamentally those investors for the most part there are some exceptions but. The most part are are looking to find asset lightte businesses. Um, they’re you know they’re not looking to deploy large scale amounts of capital into building physical assets because the return profile of physical assets can’t possibly meet their venture return benchmarks. You know you’re not can get 100 x on building a powerpoint. Um, even if it uses the best technology you know you you can find on the flipside if you do want to build you know sustainable infrastructure and you are proven technology or you have operating projects at scale. There are plenty of you know core plus or sometimes called value added infrastructure investors.
Jonathan Winer: Will write you the billion dollar check or aquire or multibillion dollar operating asset or whatever the case may be but that middle how you take technology that still needs to be demonstrated at scale deploy it um in in in the real world and ultimately scale it up and and particularly when that requires a fair amount of. Innovation both on the engineering side but also on on on the contracting side. Um, there really aren’t that many you know organization you know, operating companies like ours or investment firms that are are focused on that sort of missing middle and so that’s that’s really where we are focused and what we do and and the way we do that is we stand up. Development platforms. We. We currently have 5 that are focused on next generation infrastructure and and doing that similar to what we did back with renewable energy all the way back at Dee Saww you know, asking the question of hey how can we prove? This technology is effective. Ah, can we deploy it in the field and and have we scale it up in in a capital efficient way.
Alejandro Cremades: Um, and how much capital have you guys raised today for this.
Jonathan Winer: I Don’t know if we’ve ever commented publicly on a specific number but it’s it’s a little under building.
Alejandro Cremades: Okay, got it now in this in this regard. You know when when you’re thinking about you know, an operation like this and and also the way that you deploy capital and and and grow all these all these different initiatives that that you have I mean how do you guys? think about that.
Jonathan Winer: Um, you know this is also a little bit of a lesson from some of the the work did that we talked about dating all the way back to both the shah when we started a whole private equity group and then when we were setting up sidewalk labs then we started with a bit of ah a blank sheet of paper. Rather than saying like this is how an infrastructure fund does this. This is how a technology company does. This is how a venture capitalist does this and then sort of mimicking the processes and the approaches that other people use we started with a blank sheet of paper and said the things that we want to actually manifest in the real world These these innovation platforms. What is true of them. How long. Do they take? How do they use Capital Where’s the risk. Um and what type of risk are you taking at various different points of time and we basically designed a team um a process an underwriting approach an operating model that is you know. Borrows from lots of different things. It borrows from you know how other bets thought about technology risk it borrowed how we did project finance all the way back at you know my my Indian alternative energy fund. Um, but it borrows from those things and designed our own process. Um, so you know we’re incredibly thematic in our approach. We’re not. Calling investment banks and asking them to send us a sim. Um, you know we’ll we’ll hear founder pitches. But the way we found we fundamentally are not spending most of our time taking founder Pitches. We’re fundamentally spending most of our time exploring areas of infrastructure understanding How technology can transition them to be more sustainable.
Jonathan Winer: Ah, more resilient and more inclusive developing what we call a digital master plan around where the engineering risk where the policy risks where the contracting risks lie and then only after having done all that thematic work. Are we asking the question of like how do we do a deal or how do we build a company in this space. Um, and and we’ve done everything from incubating companies to. Carving companies out of of larger companies to um, acquiring companies and assets so where we’re sort of tactically agnostic but we start from a very thematic place.
Alejandro Cremades: So I guess same if you were to go to sleep tonight Jonathan and you wake up in a world where the vision of s I p is fully realized what does that world look like.
Jonathan Winer: Um, you know what that looks like is um s ipu is a holding company that that holds several different um infrastructure development companies and you know I really think a lot about what I think of is infrastructure to point out. So like in roads there were companies like um transurban or sintra who are road operators and they might be infrastructure 1.0 that they’re not particularly tick technologically sophisticated. You know we own a road company and it’s false manifestation might be version. 2.0 of that that has a far more technology enabled road. Um, you might think about a peaker. Power plant and there are a lot of peaker power plants operated by um, various folks in this country. Um, we think a lot about you know version 2.0 of that which might be more of a virtual power plant um or or sort of ah a distributed aggregation of grid edge flexibility. So you know my vision is we would own infrastructure development companies. Have proven themselves to be version. 2.0 of those are smarter infrastructure systems.
Alejandro Cremades: So I’ve been asking you now here about the future but I want to ask you about the past and doing so with a lens of reflection. So Let’s say I put you into the time machine and I bring you back in time you know perhaps to your time at Yale Maybe that moment where. You were thinking about dropping out of school. Let’s say you had the opportunity of going there and whispering to your younger self one piece of advice before launching a business. What would that be and why even what you know now.
Jonathan Winer: Mean the well the one piece of advice would be do it because at the time I was very ambivalent about the decision of whether or not to do and I sort of went back and forth in that for some period of time. Um in terms like a specific piece of advice to somebody at that stage of their um career. Thinking about starting a business I you know I think I’d be incredibly careful about who the few first few experienced people that you bring on either the team or the board are so when we had when we when we formed that company. It was a bunch of folks dropping out of college of young folks. And we’re all equally you know ignorant about what we didn’t know which is actually sometimes a very powerful thing to not know some of the things that you’re sort of up against you know our very first board members and our very first sort of more senior experienced hires came with a lot of perspective. And you are obviously at that point your career you know, very ah, influenced by the perspective of of the folks that you know bring that experience early on and so just being very very thoughtful about who those folks are um, both anchoring to it because you need to benefit from that wisdom but also realizing that you know. If you are starting a company at that stage in your career. You’re not going to be the wisest company so you better be the most nimble. You must be the most directed the most something else. Um and not over anchoror to it either.
Alejandro Cremades: I love it. So Jonathan for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.
Jonathan Winer: Ah, email. It’s just Jonathan at sidewalkinfrastructure.com or sidewalk in for dot com excuse me.
Alejandro Cremades: You see enough you see enough. Well hey Jonathan thank you so much for being on the deal maker show today. It has been an honor to have you with us.
Jonathan Winer: I It’s been a pleasure. Thanks so much.
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