My guest today is Gaurav Kapadia, founder of investment firm XN. Gaurav is a veteran of the investing arena. We cover his lessons while rising to partner at TPG Axon, co-founding Soroban Capital, and his decision to launch XN in 2020. We then discuss his approach to building XN around a culture of rigor and kindness, the importance of relationships in investing, and finding investments that are obvious in retrospect. Please enjoy my great conversation with Gaurav Kapadia.
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[00:03:05] - [First question] - What lead to kindness and rigor becoming pillars in XN’s company culture
[00:05:30] - The types of situations where it’s hardest to be kind or rigorous
[00:07:58] - Asking one question that can stump a founder can be a display of rigor
[00:08:58] - An example of looking at a situation and reducing the problem to a single variable
[00:12:51] - How he trains investors and team members to consider outcomes that would be obvious in hindsight
[00:14:28] - Developing the art of interacting with company management
[00:17:54] - Dimensions that typically find their way into his presentations and what tends to create complexity
[00:21:13] - Whether or not rigor has declined in public markets over the years
[00:21:55] - Why fewer talented people are going into public markets
[00:23:01] - What it felt like when he first started XN and being successful at a young age
[00:28:58] - Being impressed with his peers and rooting for each other
[00:30:33] - The nature of public versus private investing today writ large
[00:32:32] - How he gets to know a company when he’s never heard of them before
[00:35:20] - Reasons he won’t invest from a personal policy standpoint
[00:36:01] - Common problems he encounters that companies are dealing with
[00:37:32] - Defining the strike zone of companies to invest in where he can be best-in-class
[00:39:10] - The insane valuations of public markets in recent years especially in tech
[00:40:42] - Why there are so few great businesses and common attributes of the great ones
[00:44:12] - Biggest problems in the investment industry writ large
[00:45:48] - The most remarkable business he’s ever seen
[00:49:22] - How he would teach investors to deploy XN’s operating partner model
[00:51:32] - His perspective and thoughts on diversity in the investing industry
[00:56:58] - A business or institution he would own outright personally
[00:57:37] - What outside of investing most has his attention lately
[00:59:50] - Key touchpoints of coming from Queens and going to Hunter
[01:02:15] - What stands out looking back on his relationship with his parents and how hard they worked to build a better life for their family
[01:04:10] - Two things that manifest in a system that is seemingly rigged towards the wealthy and the problem with generational wealth
[01:05:29] - What has him most excited and optimistic about the future in the investing landscape today
[01:08:16] - Investing mentors deserve gratitude for believing in their pupils
[01:09:12] - The kindest thing anyone has ever done for him