Exclusive Conversation with Alex Rubalcava of Stage Venture Partners

“Warren Buffett says he’s a better businessman because he’s an investor, and he’s a better investor because he’s a businessman. I feel the same way about venture capital and value investing.” –Alex Rubalcava

We were delighted to have an opportunity to speak with Alex Rubalcava, a founding member of Stage Venture Partners, based in Los Angeles. Prior to launching Stage Venture Partners, Alex managed a long-biased, value-oriented investment partnership focused on public market securities.

Before launching his eponymous fund, Alex was an analyst at Anthem Venture Partners, a venture capital fund in Santa Monica, CA. While at Anthem, Alex worked on early stage investments including Myspace, TrueCar, and Android. Alex has also been an active angel investor and is active in Los Angeles nonprofits; he has served on the board of Los Angeles Animal Services, KIPP LA Schools, and South Central Scholars. Alex is a 2002 graduate of Harvard University and we’ve known each other for a decade. Alex, thank you for the opportunity to learn from your experience and share your cumulative wisdom with our community.

Shai Dardashti, MOI Global: We’ve enjoyed many great conversations together over the past decade at Berkshire Hathaway shareholder weekends and Wesco annual meetings. Please help our community understand your professional journey.

Alex Rubalcava: I have always had one foot in the public markets with a value approach, and one foot in the early stage markets with a venture capital approach. I started my career as an analyst at Anthem Venture Partners, an early stage VC fund in Santa Monica. That was my first job out of college, and I was the only analyst supporting a team of four partners. Anthem I was a vintage year 2000 fund, which was a terrible year to raise a venture fund. Even though most vintage 2000 venture funds struggled, Anthem did very well, because the partners backed some really transformative and important companies. I was part of the team that did the Series A in companies like MySpace, TrueCar, and Android. It is amazing to see an idea go from a guy with a PowerPoint deck in your office like Andy Rubin in 2004, to Android with nearly 2 billion active devices globally today. That’s a kind of experience you just don’t get in the public equity business, and it is something I wanted to get back to in the venture business.

Warren Buffett says that he’s a better businessman because he’s an investor, and he’s a better investor because he’s a businessman. I feel the same way about VC and value investing. Being good at value investing can make you good at venture capital, and vice versa. At heart, VCs and value investors are fundamental investors. Both strategies emphasize longterm perseverance over short-term gratification. Both strategies reward independent thinking and contrarian perspectives. And both value investors and VCs benefit from mental models like circle of competence, opportunity cost, and the power of incentive.