Innovation Comes From Venture

Bloomberg TV and Forbes Magazine Call Upon Poston for his Take on the Climate of Venture Capital.

By Michelle Valigursky, Nicholas Sommariva 15C

Very few people can say they manage more than $1 billion in assets, but Edwin Poston 95MBA 95L does this every day for TrueBridge Capital Partners, a boutique alternative asset investment firm he cofounded in 2007 to provide investors with “differentiated value, access, and insight through alternative investment strategies.” TrueBridge is primarily focused on investments in venture capital and growth equity.   

Poston

Edwin Poston 95MBA 95L

“I’ve always had the entrepreneurial itch,” he said. “I knew the market needed TrueBridge and I liked the idea of running my own business.” Given the success of both the firm and Poston, Bloomberg TV recently called upon Poston for his take on the climate of venture capital. For the past four years, Poston and the TrueBridge team have also partnered with Forbes to produce the Midas List, an annual ranking of the top venture capital investors. “We work very closely with Forbes to uncover the most successful folks in venture. It’s a very opaque industry, and we help bring light to it.” 

A large percentage of TrueBridge’s investors are smaller foundation endowments such as the U.S. Tennis Association and Lehigh University, which seek to invest in the best performing venure managers that typically only larger institutions, such as Yale and Harvard, can directly access. As a “niche” expert in venture, TrueBridge understands that top-tier investment managers who have performed well in the past have a much higher probability of outperforming in the future, a trend which has been supported by academic data

“We try to give our investors the same exposure that traditional foundations like Yale, Harvard, and Emory have access to,” Poston said. To provide this top exposure, TrueBridge researches alternative asset classes and builds upon relationships forged with industry leaders and strategic partners.

TrueBridge Capital also invests alongside its fund managers. “About 10% of our portfolio investments consist of direct investments in IT companies,” Poston shares, noting that the firm has invested in companies such as MoPub (acquired by Twitter) and Pinterest. “Our investments, at both the fund level and directly, can take the form of hardcore software coding or complicated and technical endeavors that are very consumer focused and more broadly accepted, like Twitter, Pinterest, or Spotify.”

So how does TrueBridge Capital choose its investments? In accordance with the firm’s strategy to invest in the best-performing venture managers, TrueBridge is highly selective when choosing the funds in which to invest its partners’ capital. As a result, TrueBridge invests in firms focused on early-stage IT companies primarily based in Silicon Valley, which have a history of generating the greatest returns.

TrueBridge has invested as little as $250,000 in companies and in excess of $40 million in funds. An exhaustive process of research, analysis, and reference calls precedes every investment.

“There are so many areas in which a venture capitalist can invest,” Poston explains. “Twenty years ago it might have been software and hardware. Now technology is ubiquitous. Everything we do is touched by technology, so the spectrum with which a venture capitalist can invest is incredibly broad.” He adds, “While we may look at investments through different lenses, the primary focus is dollars in, dollars out.”

According to a 2011 Global Insight study, venture-backed companies accounted for 12 million jobs and $3.1 trillion in revenue in the United States in 2010.* “Approximately 20% of companies listed on the Standard and Poor's and the NASDAQ were backed by venture capitalists,” Poston explains.

“There’s a certain can-do element to the American economy and spirit, and U.S. innovation in large part comes from the power of venture.”

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Success built quickly for Poston and his cofounder, Mel Williams. In the early days of TrueBridge, Poston said the firm’s investments primarily came from close professional and personal friends. “The overarching focus was to make sure we got our investors really positive rates of returns.”

But building a successful business is not all about profit. “We also wanted to build an environment and team that we are proud of, and hopefully we will leave something that lasts beyond us.” In that vein, TrueBridge gives half of its profits to the Kauffman Fellows Program, a two-year apprenticeship designed to mentor and train future leaders of venture capital. Since its inception, TrueBridge has maintained an exclusive partnership with the Program with the goal of building a long-term endowment.

Poston grew up in South Carolina, but jokes he’s no Frank Underwood. After graduating from the University of North Carolina at Chapel Hill, he saw an opportunity in the world of distressed real estate investing and capitalized on it. Eventually, Poston returned to the South and began law school at Emory.

“I had a somewhat unorthodox MBA experience. I began life at Emory in the Law School where I studied for two years.” But, after those two years Poston wanted to join the Goizueta Business School. “Emory was very receptive and non-bureaucratic and I will forever give those administrators credit for being so flexible and encouraging.”

After graduating from Emory with his dual MBA and law degree, Poston moved to Charlotte and then to New York, and dove into the world of investment banking. He went on to manage assets for the Rockefeller Foundation before settling with his family in Chapel Hill.

For new grads, Poston suggests the world of technology is a compelling and interesting place for young people to work.

“Emory grads are more than capable to go work for a tech startup in California,” Poston said. “It’s hard for me to imagine much downside. Working in an industry focused on innovation opens doors in ways that other industries simply cannot.” 

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Editor's Note: *According to the National Venture Capital Association.

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Michelle Valigursky