INSUBCONTINENT EXCLUSIVE:
Cyan Banister is an American success story
A homeless teenager who originally supported herself by making hemp necklaces, then silk-screen T-shirts, she went on to become a
self-taught engineer and to later hold several management roles at the security startup IronPort
It was a life-changing experience for her
She made an early fortune when it sold to Cisco for $830 million in 2007
She also met her husband, Scott Banister, who co-founded the company, and the two together and separately began writing seed-stage checks,
including to SpaceX, Uber and a long list of companies that are now household names.
When seed-stage valuations began soaring to levels that
gave them both pause, they hit the brakes, and Banister, a self-described workaholic, headed over to AngelList as an &ev-angel-list& to help
recruit people like herself to its platform
Soon after, Peter Thiel Founders Fund reached out to her and invited her to become a partner.
In a wide-ranging conversation at a San
Francisco event on Wednesday, we talked with Banister about that path, along with her investing style, which still sees her make angel
investments of $1.5 million or less in companies that are often ambitiously futuristic or boringly practical and very much needed
(She kidded that they balance out one another.)
We also chatted about Founders Fund, which has changed considerably since its 2005 founding
yet maintained its reputation as a top fund — and we discussed why she thinks many of its original partners no longer live in San
Francisco.
Among the things we learned: that Founders Fund doesn&t have Monday morning partner meetings, as do many firms
It doesn&t even have weekly meetings, with Banister instead describing a highly decentralized operation
&We have very few meetings, actually,& she said
&We have a brunch every two or three weeks that an hour, hour-and-a-half long
We submit the agenda over Slack; sometimes, we have nothing to talk about and it very short
You literally get a plate of food, talk about the one or two items, and you&re done.&
Founders Fund also has quarterly off-sites, typically
at a partner house, and these are &all day affairs,& she said, adding that the team &doesn&t talk about specific deals
We talk about the future, about what exciting to all of us, what our different strategies might be.&
As for how decisions get made, Banister
explained that the voting structure is dependent on the size of the check
&So you&d meet with one or two or three or four partners, depending on your [investing] stage,& she told attendees
Because she looking at very early-stage startups, for example, she doesn&t have to meet with many people to make a decision
As &dollar amounts gets larger,& she continued, &you&re looking at full GP oversight,& including the involvement of senior members like
Brian Singerman and Keith Rabois, and &that can a little more difficult.&
Asked how involved Thiel himself is in these decisions, Banister
said that there a certain threshold above which he is always involved
Pressed on what that number is, Banister smiled, adding, &Let just say it a lot.&
Pointing to the other senior members of the team, she
offered that the partnership doesn&t &need Peter advice all the time, but there a certain point where he has to get involved and meet the
Ideally, it a company that we brought in at its early stages and has grown with us and he has already developed a relationship with [its
We also do an off-site once a year, which is a great opportunity for him& to see everyone involved in the firm portfolio
&But he pretty involved,& she said
&He comes to these brunches and [quarterly] off-sites
We see him more now [since he called it quits in San Francisco and moved to LA] than we did when he lived next door because he stuck
If he comes to San Francisco, where he going to go? He has to stay in his office,& she joked.
Banister declined to confirm or comment on a
recent WSJ report that Founders Fund is in the process of closing on $3 billion in capital commitments across two funds — a flagship fund
and an opportunity type of fund to support its companies as they remain private ever longer.
But before we let her go, we asked Banister
about turnover at the firm
Specifically, we noted, while Founders Fund was formed by Thiel, along with co-founders Ken Howery, Luke Nosek and Sean Parker, Howery is
ambassador to Sweden, Nosek runs a separate fund in Austin called Gigafund and Parker is off doing a variety of other things, many of them
also in LA.
She explained that everyone is encouraged to do what they want
For instance, she said, &Ken was encouraged to pursue his political aspirations; that something he has always wanted to do.&
But she also
acknowledged that San Francisco itself might be a common thread
We need to build more housing
We can&t afford people to even serve us in this town, they come in from other cities, they can&t even live here
And that a huge problem when you&re investing and your thesis is to invest only in Silicon Valley and the surrounding area.& In fact,
Founders Fund is &already starting to look elsewhere [for startups], including in the Midwest,& she said.
As for whether San Francisco is
doing enough for founders — or founders enough for San Francisco — Banister suggested both are coming up far short, saying of the city
that &it should be the most technologically advanced& in the world
&There no reason we shouldn&t be like Tokyo
when we gave birth to Airbnb and Uber, and yet our city looks the way it does and operates the way it does and it a disaster.&
Tech
founders and employees are in a particularly &weird situation& where on the one side a &large part of this city hates technology and hates
all of us,& and on the other are people like Salesforce founder Marc Benioff who are funneling money into the city but whose efforts don&t
appear to her to be making a difference
&I&ve yet to see a dent& in homelessness, she said as an example
In the meantime, &crime is going up and we now have a district attorney who won&t prosecute crimes that have to do with any sort of
[San Francisco is] going to start something instead where if your [car] window is broken, they&ll replace it with some kind of window Uber
app at a discounted rate.&
The crowd laughed
Some attendees thought she was joking about the window replacement service
