Jeremy Weisz 4:45
Yeah, I want to talk about some of the companies that you have interest in now and before but, um, talk a little about the criteria. So right now, you said there’s five investments what is the criteria What you’re looking for right now for companies to invest in.
Keith Bank 5:05
So we, you know, we start with a very large funnel, we see about 1500 deals a year, we probably meet with between two and 250. Companies here, get into serious due diligence on 20 to 25. And make 5678 investments a year. So massive funnel, massive weeding out process. It’s a bit of an oxymoron. But we consider ourselves a value oriented early stage investor, we usually most of the deals, we do our single digit million pre money valuations, we want to own 10 to 30% of these businesses, we have to see certain characteristics. There’s lots of really interesting companies with great entrepreneurs. But if they do everything perfectly and execute flawlessly, they might be a 10 or $15 million in revenue business and make a million dollars a year. And those are great businesses, but they aren’t going to provide the type of venture returns that we’re looking for. So if we don’t see a path to at least a 10x return, if we don’t see a path to at least 100 million in revenue, it usually does not make the cut. Because you know, we again, those are the kinds of returns we’re looking to achieve high 20s low 30s on an IRR basis, we help our fund returns four to five times. So you know, those are very hefty targets. And in order to achieve those, you have to be very picky. And a lot of times you can make as much money on the going inside is that going outside if your basis is more reasonable. So we we try not to get attracted to the next shiny object based stupid prices, hoping someone will pay two or three times as stupid price down the road. That’s just not our style. You know, we’re looking for real businesses with real markets, competitive advantage, intellectual property grade teams, you know, all the standard things. But we’re, if anything in early stage venture, the who is way more important than the what in our mind the what has to be interesting and compelling. But without the who you don’t stand a fighting chance. So we spend an awful lot of time evaluating the teams, we’re considering backing.
Jeremy Weisz 7:05
You know, one thing about I find really unique about what you do, you’re very hands on your hands on as a firm, and you kind of roll up your sleeves and get in there and give advice and direction. And I don’t know which one would be best to speak to but there’s a bunch of information that was looking through that people say this exact same thing that I’m saying like Stan Woodward talks about it, how you know, the strategy and the partnerships. I’m Scott on musher petalled Tyner, co founder and chairman of Phoenix also says this. Mike Lazarus, I’m wondering which of these would be best to talk about? What advice Did you give them? What like, give me an example of what are some of the things you help them with?
Keith Bank 7:50
Yeah, so our whole model is, you know, we lead about 90% of the deals that we invest in, we take board seats 90 plus percent of the time, and you can throw darts, and you can make a lot of passive bets, and you’ll get average returns most likely, but we think to get outstanding returns, you really have to these companies all need help. It’s not that they’re not competent or capable, they can all use that key introduction, that key unlock. And that’s what we try to provide. We have an advisory board of 16 luminaries from the sports and tech world, all of whom are investors with us. And we can lean on them, we’re kind of one step removed from anybody we want to get to in the world of sports or technology. We provide our input, in many ways, it could be a key introduction to a missing link to the management team, it could be a key board member that we help recruit, it could be an introduction to a customer or a supplier could be with strategy, it could be with helping to fill out a syndicate on a fundraise, you know, wherever and whenever they need help. And you know, one of the things that I’m most proud of in my career is that the average venture returned for early stage venture, if you read the statistics, they’ll say about 30% of deals, you get your money back or make a profit 70% go to zero or get cents back on the dollar to hit space business. And in my career, my hit ratio is between 70 and 75%. And I think that’s directly attributable to the rolling up your sleeves, sticking with these companies, and really doing what it takes to give them a better chance of being successful. It doesn’t guarantee success. And we certainly don’t have the magic potion that we can wave our wand and make things successful. But I think through hard work, diligence, time, effort, TLC, all those things, being a good partner, you just give your companies a better chance for success. And as a result, entrepreneurs want to work with us and they’re willing to, you know, band to get us in their deals because they know they’re going to get that help. And you can’t really put a price tag on that in my view.
Jeremy Weisz 9:58
Yeah, totally. Let’s Talk about a couple lately. Status Pro.
Keith Bank 10:04
Sure. So that’s a company actually in our one of the last deals we did in our first fund, really interesting company, to minority founders, a former NFL player and a former college quarterback. They had developed an interesting product for elite athlete training using your virtual reality using a headset, basically, in some of the early adopters were the San Francisco 40, Niners the Baltimore Ravens Lamar Jackson’s actually, you know, on the cap table and evolve with the company. And we thought, you know, kind of interesting, but limited markets, there’s only so many proteins and D1 college teams that are going to pay for this and use it. But as we got to know them a bit better through due diligence, we realized that they were developing a virtual reality based video game to kind of compete with Madden, where the consumer could actually put on this headset, and pretend they’re Patrick Mahomes, or pretend their favorite NFL player, see the defense and run the play and see the play. And we said, Boy, that that’s kind of interesting, large market. We spent a lot of time and due diligence, a lot of time with the team. And we ended up leading around that has just an amazing group of investors, we have co investors, including Verizon. We have the Green Bay Packers, the Haslam family zones, the browns, Microsoft, LeBron James, in his financial management firm that brought some of their other athletes and celebrities, the bear. And two other very, very large companies that are in the headset business that most people will know of that have a strong vested interest in seeing this being successful to help them sell more headsets. So super excited about it, the game is going to be launched in conjunction with the Super Bowl this year. And we’re really excited to see what the what the outcome is gonna be.
Jeremy Weisz 11:58
Is it on? Is that particular game going to be on multiple headsets? So I know a couple months ago got an Oculus quest two. And I know there’s a bunch of other VR headsets, will that particular game be on?
Keith Bank 12:14
It will be on multiple platforms?
Jeremy Weisz 12:15
Yes, yeah. Okay. That’s great. I love it. I look forward to the Superbowl just for that actually. And then, you also mentioned before we hit record about a training apparel company.
Keith Bank 12:28
Yeah, so this is a company just coming out of stealth mode, actually kind of still in stealth mode. So I can’t say too too much. But we’re, we’re actually backing team of veteran Nike executives who left and who basically have created a new line of apparel, taking the old concept of a weighted vest that many people would train with. But a weighted vests are heavy, they’re clunky, they don’t move with your body, they’re not good for your back and for your joints. And they’re using a technology called micro loading, where they have developed a way to heat print tiny light weights across the entire breadth and depth of apparel, whether it’s long sleeve, short leaf tank, vast tight shorts, and by training in this apparel that has weight to it. When you take it off, you run faster, you jump higher, you throw a ball harder, you hit a tennis ball harder, you hit a golf ball further, all those kinds of things by the science behind it. And it’s not only usually we wouldn’t touch an apparel deal with the 10 foot pole, quite honestly, there’s a lot of challenges with supply chain and with inventory. This is a direct to consumer business. These guys have incredible track records, histories, knowledge experience. I’ve got a crackerjack team involved. The former seven year president of Nike is our independent board member. So just we’re back. We’re backing this team, the product is ultra ultra cool. We think we’re gonna create a new category of sportswear and the products probably going to be introduced into the market in the next two to three months.
Jeremy Weisz 14:12
That’s great. It seems like you from my research view of his love for golf. It seems like some of the companies follow suit when I look at it would be an interesting I mean go from full swing the golf to you know, there’s a bunch of kind of supreme golf golf companies on here, who it will be an interesting one to talk about on the golf realm.
Keith Bank 14:34
Probably the most interesting part is we haven’t made one golf investment in either of our funds, all those deals were in my angel investment fund but probably the one that has gotten the most acclaim and was wildly successful is a company called Club Champion Golf. It’s a company I started with a couple other guys. And the idea was to make custom clubs both in the fitting side and in the building. more accessible to the average golfer when you play with properly fitted equipment, your scores go down. We’ve done a lot of studies on that. And we basically took a concept that had been around but mostly with mom and pop operators that really didn’t know how to scale a business and how to run a business in a way that it can be financially successful bunch of hobbyists basically, and came up with a model, a retail model, which again, ordinarily, we wouldn’t touch a retail concept with a 10 foot pole, but I just had an inkling that this one had a chance for success. And we started with, you know, one location in Chicago and grew it to what what, by probably the end of the year will be close to 100 locations in the US, we sold the business to two different PE firms, and are definitely the, you know, kind of the largest player in the world in the space and the company has been wildly successful, our investors made a ton of money. And, you know, I’m not as involved anymore, I’m still on the board, but not involved in the day to day. But I mean, you know, this was in my entrepreneurial days before I had the fund. I mean, I, you know, did the first 65 Real Estate location, well, we came up with the concept, the logos, the color scheme, the name of the company that, you know, put the team together, you know, raise the money, all the things that go into starting a company, so, you know, our team that is still there’s, you know, doing a great job executing Joe Lee, Nick sherborn, to my partner’s, you know, done a great Brian Burke have done a really nice job, you know, growing and scaling the business, but, you know, most people lose a lot of money investing in golf, it’s a very tough space into which to invest. It’s happens to be hot right now, because it COVID and, you know, breaking all kinds of records in the last year. But, you know, I’ve made multiple investments in the golf space, and thank goodness, they’ve, they’ve all worked out well, so
Jeremy Weisz 17:03
Keith, there’s so many moving pieces. With that. I’m wondering, what was one of the biggest challenges when you were creating that, and, you know, launching 100, you know, actually bringing up and creating 100 different locations was was a challenging point.
Keith Bank 17:22
I mean, a lot of challenges. One is, you know, getting the right team in place to is, you know, figuring out a way to actually make money and scale the business and do it in a way where you can make real margins and, and be able to cookie cutter. Now, we came up with a model of a footprint. And you know, how we were going to set up that footprint, how are you going to supply it, a lot of people prior to that the same person fitting your clubs actually built your clubs, we saw that’s not scalable. So we built a central build facility where every location around the country, we build everything in Chicago, we ship it, the model originally was, you know, you come in for a fitting within seven to 10 days, you get your custom clubs in your hands, you know, built delivered, you know, to your store, where you got your fitting, whether it’s in Boston, or Philadelphia, or Los Angeles, Atlanta, wherever it is, supply chain with COVID were a little slower than that right now, just because it’s a lot of challenges. But basically, we just figured out a way to, to grow and scale a business and make it consistent across locations. So we put a training program in place for our fitters, where they came to Chicago for a month, and went through an exhaustive training procedure, not only how to fit the club, but how to talk to the customer, how to upsell, how to cross sell, how to treat handle complaints, how to, you know, just just really, you know, have people dress the same way, have them act the same way have them, you know, deliver, you know, in their own way, but a more standardize kind of kind of process. So, so really just putting a repeatable model together and then executing on that is very challenging.
Jeremy Weisz 19:03
It’s very Jim. Yeah, it sounds like a really comprehensive training program in general. Yep. And deploying it. I’m talking about Chicago Select Golf Invitational a little bit. So that’s
Keith Bank 19:15
a personal passion of mine. I started at 26 years ago, actually, when I was in the real estate business before I got into the venture business. I just, I’d given money to charity, but I’d never really done anything to make a difference. And I just a lot of my family and friends have been devastated with cancer, and it’s one of my pet charities and I approached the American Cancer Society in Chicago and said, I want to try to figure out a way to raise your money and I got an idea. I’d like to put together an elite high end golf tournament for you and raise some serious money. And the executive director at the time then said kind of laughed a little and said, okay, you know, whatever, if you want to try something, whatever. And we started the event in 1995. Had it Medina Country Club course number three, which is hosted a bunch of majors and Ryder Cup and our first year we netted about $90,000 through the event. And it just grew and grew and grew and grew. And over the course of the event after this year, we’ll have raised almost $12 million in the fight against cancer through the event. People fly in from all over the country to play in this thing. We have an amazing auction. People get a ton of gifts, they walk away like it’s Christmas in August with all the great stuff grow great food, great golf, great live and silent auction. One of the unique things that a couple years in I implemented was in our auction featuring the Golf Digest top 100 courses where you could buy the ability to go play Marian or Oakmont or Shinnecock. And I think one year at our peak, we had 56 of the top 100 courses in our auction and we sold $390,000 worth of you know hosted for some crazy nutjob offers like me that want to go play all these great courses. And it’s just been a passion. So I chaired the event for the first 16 or 17 years, still very involved in terms of the committee and helping but I’m not running it more and more our chairman this year. It’s doing an amazing job. He actually is one of our investors and advisors on our fund. And it’s growing this year. I think we’re gonna break a record. I think we’re gonna raise about 1,000,002 this year at the at the event in one day. So
Jeremy Weisz 21:28
congratulations. That’s amazing. Thank you. Yeah, from scratch to to raising, you know, over $10 million. What else makes it unique? So you have some unique things as far as the auction goes? Is it capped at a certain point?
Keith Bank 21:46
Well, this year for the first time, we have all three courses that Medina they have 54 halls and we’ve sold out all three courses. So we have 111, for some splaying. I’ve got some great sponsors. Again, we just kill people with kindness. It’s just It’s just that the day of event is fantastic. There’s all kinds of fun contests. Again, you walk away with all these gifts, you get fed, though you’re about to burst you. You know, we’ve had some interesting speakers over the year. We had David Ferranti one year, who was hilarious. You know, we’ve had we had a Miss America one year, we’ve had some, you know, some wild, wild things, it’s really not a celebrity driven event. It’s more of the celebrity is the caliber of the event itself. But I love when you build the reputation, it grows and people hear about it, they want to participate in it.
Jeremy Weisz 22:32
I’m curious, Keith young growing up. I love to hear how you got into this VC world. But growing up, what did you want to what do you want to do?
Keith Bank 22:44
So I always, you know, my dad and my grandfather were both what I would call small time entrepreneurs. I grew up in a very middle class family very middle class, I was one of those guys that actually said that we’re gonna join a country club and be a golfer, those rich snobs. And, you know, I was one of those guys, you know, now, you know, I take my words back. But
Jeremy Weisz 23:05
yeah, I just wanted your dad grandpa knew what
Keith Bank 23:08
they were both kind of in the residential real estate business. They rehabbed old houses. And my grandfather used to say, you know, your dad likes to slaughter the cow because my dad would buy him and rehab them and sell them my grandfather would rent him out. He said, I’d like to milk the cow, you know, your dad, like the slaughter the cow, but, you know, low end stuff and some fairly rough neighborhoods. But I grew up working for them in the summertime and I just a lot of business talk around the dinner table. And I just decided I wanted to do something entrepreneurial. And it’s funny, because the same dinner table, my brother grew up and became a cardiologist, and, you know, not entrepreneurial, and my sister ended up moving Israel. So you know, go Go figure. But as I just always knew, I wanted to do something, you know, on my own kind of be my own boss, not not that I couldn’t work for other people. But just, I guess, you know, like to try new challenges. I’ve done a lot of crack produced two feature films along the way, just this passion projects, not because I love the film business or thought it was just you wanted to try my hand at it and read some books that I thought would make interesting film material. And so I just I like challenges. And I like meeting people.
Jeremy Weisz 24:22
When you were at Wharton, you have a better idea at that point.
Keith Bank 24:27
Honestly, not you know, you know, this is a, you know, a top business school and then went to Kellogg, and most of the people go into consulting, or they go into investment banking, or, you know, the more traditional stuff. I got out of undergrad, took a job in corporate America and quit after three months, decided I wanted to be an entrepreneur, and spent a year trying to figure out what I wanted to do and look at some businesses to potentially buy to potentially start. And, you know, just I’ve always liked the kind of the thrill of the hunt.
Jeremy Weisz 24:57
What did you decide at that point? So you get out, you know, Corporate America is not for me. I was
Keith Bank 25:02
looking around for a long time I looked at a bunch of different businesses, I ended up starting a deep discount drug store in St. Louis, which is where I was from, copied after a concept in Cleveland, Ohio that had been wildly successful called Marx. And shortly after opening the business, I decided to sell my interest and go to business school at Kellogg, which is how I ended up in Chicago. But it kind of gave me the entrepreneurial bug and the entrepreneurial itch. And then, out of business school, I went in the commercial real estate development world for about a decade. And it was pretty entrepreneurial. I was a principal at a partner at a firm, it wasn’t my firm, but you know, you could be pretty entrepreneurial and create your own projects and own opportunities. And then just started as a glorified angel investor, for lack of a better term towards the tail end of my real estate. I started investing in the tech economy. This is kind of circa 1995 96, the internet was just getting started, cell phone technology was just emerging. And I thought Chicago in the Midwest had a real void for early-stage venture money, made some angel investments had some good early success. And one day I walked in my real estate partners and said, I’m leaving to go start a venture capital firm. And they said, What do you know about venture capital? I said, not much, but I’ll figure it out and can’t be that complicated. And that was, you know, 26 years ago and so this I’ve been at it ever since but, again, done some other crazy things along the way, like these movies and done some other startups and other things along the way. But but it’s all been around entrepreneurship and early stage companies.
Jeremy Weisz 26:37
Yeah, I actually lived in Boston so I maybe I Moran into your deep discount somewhere. The when you say crazy startup, talk about a few of the ones that stick out.
Keith Bank 26:50
But one which is kind of interesting. We bagged in our first fund two guys in business school while they’re still in business school at Kellogg company called Ethnic Grocer. And these guys had an idea for selling ethnic foods over the Internet to the person in Paducah, Kentucky that couldn’t get their ingredients for their Vietnamese food, or the person in Tallahassee, Florida, they couldn’t get their favorite Norwegian food, whatever. And the concept was, was really interesting. The guys were really sharp. We were the first investor, we put up a million bucks and bought a third of the business. And shortly thereafter, the internet just started taking off like crazy. Everybody and their brother was starting an internet business. We ended up bringing in money from some of the top venture firms in the world, Kleiner Perkins benchmark, Supervalu, Amerind. Inner girl, all these guys were and we raised a boatload of money, we got way out over our skis. And it ended up being a big fireball for everybody. But it was a great lesson that, you know, when you’re doing 40 orders a week, you shouldn’t build a tech infrastructure to handle 40,000 orders a week, and you shouldn’t lease 50,000 square feet of office space, and you shouldn’t hire 1000s of employees. And we just got out ahead of ourselves. And it was kind of that they were the GO GO, you know, go bigger go home days. And, you know, it was a great, great, great lesson. You know, it was all, you know, we got caught up in the whole Silicon Valley, you know, you know, you know, Mary Meeker saying we’re going to be a billion dollar company and all this stuff, and you start to read your press clippings. And though it was it was it was, in retrospect, a really good experience. It was a painful experience. But, you know, really, really interesting.
Jeremy Weisz 28:53
You know, oftentimes, Keith, we remember our first deal, or one of our first deals as a VC and from your VC firm. What do you remember as one of those initial deals, that still sticks out?
Keith Bank 29:08
Well, that was one of them, for sure. You know, we had another year, I think it’s sometimes you remember your failures as much as your successes, you know, where like, Where did I go wrong? What could I have done differently? You know, it’s hard when sometimes you fall in love with the technology, you know, and maybe you don’t have the right team in place or the right people to execute on it. And so there’s really not you know, I guess the first IPO was pretty exciting. You know, that was a neat, we’ll talk about that. We’ve done a few which was a company called Rubicon Technology they had. This was when we were doing strictly tech stuff, nothing to do with sports. But America had the CEO in my office just an hour ago who saw a deer friend and an investor with us. But we had a company they had developed this crystal Sapphire substrate, which is basically the raw material that goes into making LEDs that were used in all kinds of micro electronics and other things. And they had figured out a way to make the best The Purists that, you know, all these great attributes and he had I’m never forget what they we have facility in western suburbs and these furnaces that would heat up the 6000 degrees and, and melt this stuff. And you know, it’s really crazy stuff, a bunch of Russian scientists invented this. Again, this was a company that, at one point in time was really challenged was burning an awful lot of money. We ended up having to swap out a CEO and the new CEO, we brought in, in less than a year’s time, got the company, from hemorrhaging a ton of cash to making a ton of cash, took them public, and just a rock star was CEO. And I said he was just in my office today, because we’ve remained very close friends. But it was, again, really interesting to see a company really, there was a great product. But just the management was not up to snuff. And he brought in one guy turned the whole thing around into a rousing success. Everybody made a lot of money. You know, it was just, it was fun. Fun is it is
Jeremy Weisz 31:28
amazing. How did you find that person? And what did they do? When they came in?
Keith Bank 31:33
Um, his name is Roger Parvez and he’s a freak of nature. He is just a, got a will, the wind came to the US with $8 in his pocket from Pakistan, and ended up becoming a Bell Labs fellow, which is like the highest you can get at Bell Labs, like the the the half a percent of the 1% of the 1% went on to, you know, run a couple of crazy stuff. I mean, he was reminding me today, you know, as is a Muslim, and he was running an Israeli company in Israel as a Muslim back. And he was telling me like what used to happen at the airport, and all this stuff, and, but he’s got a zillion friends over there, you know, he was welcomed with open arms. And we recruited him when he was coming off a success for that company and a Japanese company that he had been recruited to. And I think we just kind of got lucky, we found a guy, we didn’t know how good he was, and we hired him. But, you know, a 24. Seven, what did you do to recruit
Jeremy Weisz 32:36
him? Because I imagine it sounds like he probably had a bunch of other offers or opportunities.
Keith Bank 32:42
You know, he was looking for an entrepreneurial opportunity, he was coming off a company that had just gotten sold. And I just think he saw something where his skill set would match with what this company was doing. And, again, timing is everything. There’s luck involved. You know, we’ve brought in other CEOs that haven’t been as good, you know, just, you know, you try to pick and choose carefully and sometimes if you nail it and other times, you know,
Jeremy Weisz 33:12
what did you see from an outside perspective, what he did become when he came out,
Keith Bank 33:16
I mean, again, like when I say freak of nature, I mean, eat, this guy’s just the home, do whatever it takes, whatever it takes 24 seven, I mean, he would hop on a plane to go to China for eight hours and turn around and come home. I mean, like, just whatever it took, if he had to have a key customer meeting, and he wanted to be there face to face, he did it. And, you know, he I think the employees respected and you lead by example. And then you get other people to buy into it. And so self taught guy too. He wasn’t a business by training. He was a, you know, I think one or two PhDs and you know, really technical in nature, and kind of self taught business in
Jeremy Weisz 34:01
what do you see Keith, thanks for sharing that. Yeah, I could definitely see someone just hopping on a plane like some of those examples of, yeah, I’m just gonna go there for eight hours meet and fly home. What are some mistakes people you see people make or in the acquisition process, because you you know, your companies have been you’ve had a number of companies get acquired, what are some big mistakes or orthings
Keith Bank 34:26
on the acquiring side or on the selling
Jeremy Weisz 34:28
side on the selling side?
Keith Bank 34:32
Think sometimes you can overplay your hand a little bit. You know, if you try to extract the last dollar, I mean, we negotiate hard and we don’t want to get the best price in terms for our investors. We’re a fiduciary, and we have that responsibility. But, you know, timing is important. And, you know, you can be in the midst of a deal and there’s a change in leadership in the acquiring company and the deal could go to hell. You could You know, rub somebody the wrong way, and they end up buying one of your competitors instead. Time does kill deals, if it takes too long, a lot of times, you know, the result is not great. So I think it’s an art more than a science. And, you know, the more you do it, hopefully the better you get at it, you know, to me that Win Win situations are the best, whether you’re acquiring companies crazy happy, even if they maybe think they overpaid for it a little bit. And when the selling company is really happy, and they felt like they gave it away to inexpensively, are both sides, you know, maybe feel like, but they’re, but they’re happy. The end result is everybody did did well. And, you know, the worst thing is, if you sell something to somebody, and either they screw it up, or it turns out to not be you know, that’s not a good feeling you don’t want people to, but I mean, I mean, there’s dozens and dozens and dozens of stories of big companies acquiring companies and messing them up and the founder buying them back for cents on the dollar and all that stuff. Because either cultural reasons, or, you know, many other reasons. So you hear those stories all the time.
Jeremy Weisz 36:12
I love to hear. So what made you start the Illinois Venture Capital Association.
Keith Bank 36:18
So I didn’t start it, I was one of a handful of founders who got together. And this was in the early days when Chicago in the Midwest really didn’t have a lot of venture money. And we just thought by combining our resources and hiring an executive director, and being able to lobby for stuff in Springfield, that would be beneficial to the venture capital industry, to have a trade association to bring credibility that, you know, Chicago in Illinois, does and could have attack economy when you’re, you know, fighting against the Austin’s and the bosses in Silicon Valley’s. So, you know, I don’t even remember whose idea it was, I can’t take credit for the idea I was a participant in helping get it off the ground. And, you know, it’s been a really, really good organization on a lot of levels.
Jeremy Weisz 37:12
Did it do early on what you wanted to do? As far as?
Keith Bank 37:16
Yeah, I think it did. I think it again, brought some credibility. And it’s not it’s called the Online Venture Capital Association, but it also includes private equity firms, that also includes some service providers. So basically, anybody that’s involved in the investing in companies ecosystem? Yeah. And I think it’s been, it’s been, it’s been wonderful. Yeah.
Jeremy Weisz 37:40
Yeah, I find it really interesting, you kind of go, like, I’m gonna do this, this VC thing, I’m gonna, you know, figure it out, and then you end up helping, you know, kind of form an association around it, too. So
Keith Bank 37:55
yeah, again, I won’t take a lot of credit for that, but, but I’ve always believed that it’s just how you’re wired. Short of being a rocket scientist or brain surgeon, you can pretty much do whatever you want, if you put your mind to it. And you have a little bit of intelligence and work ethic. So, you know, a lot of people are just fearful, because they don’t have a risk appetite. And they’re afraid of failure or afraid of whatever they’re afraid of, or they know the financial resources that my attitude when I was younger, I didn’t have any money that so if I lost everything I had, that wasn’t that much. So you know, I do back where I was, you know, start over again. But not everybody’s wired that way. I mean, lots of people just want a safe job. And they’re happy doing that, or, or unhappy doing that. I’ve just always wanted personal challenges and growing myself as a person, intellect, growing my network. And just find it I love I can’t wait to get up every morning and hate going to bed because and I like doing it. I’m doing it doesn’t feel like work. I’ve kind of taught my kids to if you if you love what you do, it doesn’t feel like work and the financial spoils will usually follow. And if you hate what you do, they probably want to, you know, it’s no way to go through life,
Jeremy Weisz 39:16
or keep any of your kids entrepreneurs.
Keith Bank 39:20
So my son is the Chief Operating Officer of a video streaming technology company in Chicago called Phenix Real-time Solutions. And in interesting story, he was working in the commercial real estate world and called me up one day about four or five years ago and said, Dad, I love what I’m doing. They liked me. It’s great, blah, blah, blah, but I want to go to work for an early stage tech company. I said, quit your job and go find something. And he did. But little did I know that three or four months in he would come back to me and say Dad, this is a really interesting company I think you should invest in. We’re actually the lead investor in the company. And we’ve got The largest investment I and we have ever made. And we think it’s a really, really exciting, interesting company. But
Jeremy Weisz 40:08
will you internally know the management?
Keith Bank 40:10
Yeah, yeah. So
Jeremy Weisz 40:13
what does it do?
Keith Bank 40:16
We have developed some very novel technology around real time video streaming. So kind of the current state of the art is when you’re watching a video stream of a sporting event, for example, last year Superbowl, I think there were nine or 10 different providers, and the latency ranged from 30 seconds to five minutes behind the ad. Wow. You’re watching it on your iPad, your cell phone, your Smart TV, you’d be way behind the actually heard the term spoiler alert and all these things. But it’s really important when it comes to betting and in game micro wagering in particular. So this Stefan Birrer, who’s the tech genius behind this, he actually got his PhD in video streaming at Northwestern in the early 2000s. Before anyone even knew what video streaming was. And he basically re architected an open source standard called web RTC that Google had developed for video chat. It was developed for speed, because when we have a zoom call or anything like this, you know, you have to have real time communication. But it wasn’t architected for scale, it’s for a few people to a few people. Stefan basically took the two endpoints of web RTC, and re architected everything in the middle and wrote about 2 million lines of code, and basically allows video to be transmitted with 300 milliseconds of latency so less than half a second, regardless of what device you’re on. And then anyone around the world will see the same action within one video frame or you know, 1/10 of one second of each other. So we scaled the broadcast sized audiences 10s of millions of people in total synchronicity, and sub half second latency. So why is that important? In the case of in game, micro wagering on sports, which is where it’s going, you know, if you want to bet is the next pitch a ball or strike is the next player run or a pass? Is Tiger Woods gonna make this putt? Is James Harden going to make this free throw? No one’s gonna take your bet if it’s 30 seconds behind, and they know what already happened. But we enable that. So we, you know, we think we are the enabling technology in the platform technology for not only for that there’s lots of applications across auction platforms and trivia, quizzes, other things where real time information at scale is important.
Jeremy Weisz 42:39
I could be wrong, Keith, but I think Mark Cuban, early on had you know, it was in the same genre of broadcasting sports, right? Is that how he started out?
Keith Bank 42:49
Yeah, I mean, his company was in that area, but not in anything?
Jeremy Weisz 42:55
No, not like that. Same type of Yeah, yeah. All right. That’s, that’s pretty amazing. I love to hear of, you know, mentors or colleagues that have influenced you,
Keith Bank 43:09
in your thinking. Sure. So my mentors, I’d say probably more than mentors from a distance like people that I like, I was a huge John Wooden fan growing up at UCLA led me to Oh, yeah, no, totally. I carried around in my wallet, all of his favorite sayings, all his his, you know, wouldn’t isms and his pyramid of success and all that. So, you know, he really had a big impact on me. And my favorite saying that my kids are tired of me telling it to him. But you know, things turn out best for those who make the best of the way things turn out. He just said a million of these great little sayings that if you live your life that way. It’s very, very impactful. So he and I wrote a paper on him when I was in third grade, and oh, wow, I just I just I have all this stuff at home. Still, I just saw he was a real influence. And then I had a basketball coach played on this United States youth games team, which was basically me and and, and a bunch of inner city kids. And we played in this national tournament, and we had this legendary coach named Jody Bailey, who coached in northwest High School in St. Louis in the inner city, and was just an amazing, amazing man. He just had so many brilliant things to say about how to live life and, and also a great basketball coach. So I’d say those, you know, were two of the biggest impacts on me. And that helped me develop my thought process early on.
Jeremy Weisz 44:42
Yeah, I would love to hear your favorite business books and I am a huge John Wooden fan, though someone gave me his book Wooden and I think I’ve read it probably over a dozen times. For sure. My favorite one is, I think it’s attributed to him but don’t mistake activity with achievement. So I think of that if I’m feeling busy well, is this really achieving anything? Or am I or the famous story of obviously him teaching his players to tie their shoelaces properly put their shoes on their socks on, tie their shoes properly, you know, the fundamentals even, you know, the greats, you know, whatever, Bill Walton or criminal dolger buyer, all of them went through that. So yeah, I totally appreciate you sharing that. Um, some of your favorite books, it could be business books, or, or whatever type of books are your favorites,
Keith Bank 45:31
I have to admit I am generally I pour over magazines, online stuff, newspapers, but on the book side, I wish I had more time to read books, I just I work too much and have too many other things that I enjoy doing, even though I love reading. So, you know, I, most of what I read is for enjoyment. When I do have the time, I read my share of you know, business books or self help kinds of things, but I don’t know, most of the stuff I find in those are pretty common sensical types, types of things. And I know that and I’m embarrassed because like, and I see all these other interviews, people who say, oh, what are the five books you’ve read in the last, you know, whatever, they name all these? And I’ve heard of them all, but I haven’t read them because they haven’t had time to do such. So I’m
Jeremy Weisz 46:23
sure you do a lot of research when you’re investigating all the companies. Yeah,
Keith Bank 46:28
I do a reading I’m more of a magazine, newspaper online reader than I am a cover to cover book reader.
Jeremy Weisz 46:37
Keith, first of all, thank you, I have one last question for you. And I just want to thank you for your time, your lessons, your stories, everyone can go to KBPartners.com and learn more there any other places, we should point people online, to learn more
Keith Bank 46:52
about us about you. I mean, I just think, you know, if they Google us, they’ll probably, you know, pull up a bunch of press releases of companies in which we’ve invested or exits, we’ve had whatever, you know, we’re pretty, we fly kind of under the radar, we don’t do a ton of self promotion, we don’t do a ton of you know, tooting our horn, I think we will, hopefully put out some type of story or release in conjunction with raising this new Fund, which, you know, I think will set some milestones for funds in this space. But I think reading the backgrounds of some of our advisory board members, actually the BIOS are all on our website, it’s kind of kind of interesting to see the mix of people that have. And that’s just our advisory board members, people obviously don’t know, and I can’t share who our LPs are. But you know, our investors, our team owners, league commissioners, high profile professional athletes, fortune 100 CEOs. Now we’ve always just like taking money from people who have an interest in what we’re doing and might be helpful. Not that we wouldn’t take institutional money. But in our view, that’s more just money. Whereas the folks that we’ve surrounded ourselves with, we think add a bunch of value beyond just that the check day, right? So it’s always kind of been my philosophy.
Jeremy Weisz 48:12
Yeah, no, I love it. Yeah, you have a rockstar team, Rockstar advisory board. People can go to KBPartners.com and learn more. My last question, he that seems like you, it seems like you grew up playing basketball, baseball, you’re an avid golfer, when it comes to your athletic achievements, or playing on a certain course or field or whatever it is, what sticks out to you as maybe your favorite game or personally, from from your standpoint,
Keith Bank 48:45
it’s a couple of things. One is I got the pleasure of taking my daughter to the Super Bowl, when it was in Miami and just being able to share something like that with your daughter who’s not really a sports fan. And who, ordinarily, you know, I’d be taking my son or going with friends or whatever, that was just so awesome to be able to share that with her and share the couple of days of being around all the excitement and the action and the hoopla and the celebrities and all that it was just really fun to see the joy in her and her face. And then I’ve taken a lot of great golf trips with my son, you know, he’s an avid golfer, too, and there’s nothing better than a father son golf trip and being able to share that, you know, we have in a shared interest and and so I think it’s as much about who you’re with, then it is the actual You know, I’ve been to a lot of Final Fours and Super Bowls and playoffs and that stuff, but if you’re not with someone you care about to share it with. It doesn’t have quite the same Um, so
Jeremy Weisz 49:44
yeah, totally. Everyone should check out KBPartners.com and learn more and Keith, thanks so much.
Keith Bank 49:51
My pleasure. Thanks for having me on. Take care.