Founder's Story - The Investor Who Left the Rat Race to Build a $100M Fund | Ep 225 with Sam Chipkin the Founder & CIO of 5AM Capital

Episode Date: June 2, 2025

Sam Chipkin, after nearly a decade in the high-stress world of New York finance, moved to Bondi Beach and rewired his approach to investing. In this episode, he shares how quiet mornings, long walks, and deep research shaped his investment strategy—and why 5AM Capital is betting on patient capital, enduring businesses, and disciplined risk. Key Discussion Points: Leaving Wall Street: Why chaos isn’t required to create value Building a boutique fund that caps growth at $750M The power of investing in monopolistic businesses with durable moats Why the best investors act like long-term owners, not traders Founder vs. hired CEO mindset—and how it affects outcomes How stress and stillness each played a role in shaping his success What most people get wrong about investing returns The underestimated mental load of wearing every hat as a founder Takeaways: Slower, focused growth often outlasts fast, flashy scale The best investments are deeply researched, not broadly scattered Building something meaningful requires clarity, conviction, and capacity to think long-term Culture and alignment are assets—don’t outgrow them Closing Thoughts:Sam Chipkin proves that high returns don’t require chaos. With a boutique, conviction-driven strategy and a firm belief in doing fewer things better, he’s showing why simplicity and discipline are the ultimate edge in business and investing. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

so sam it was great just chatting about when somebody feels that they're in a chaotic state like wall street in new york city moving to somewhere like the beach like bondi beach in australia which seemed like two completely different places could shape their entire business what was that experience from you because i think a lot of people are in what they would call the rat race and they want to get out of that and they want to move to a place that might be more quiet but still really inspires them and gets the juices going for business. Yeah, it's a good starting coin. Thanks for having me, Daniel.

So I spent almost a decade in New York working in global finance. And there was everything you'd expect of fast-paced, demanding, field. It was really talented people. And it was also really formative. I met my wife there. She's Australian too. And while we both loved New York, I think we had this. So a quiet understanding that Australia would be home one day.

And we were like really sure exactly when. But we did know that when it came time to raising a family, we wanted to do it in proximity to nature, to community, a place where life could be a little like slower and more grounded. So I moved back from New York in 2014, a bit of 10 years ago. And, you know, before we had kids and my three kids all been born in Australia. And I think looking back and so the point that you raised there is that the decision to move sort of set the foundation for our, not just about family life, but then for Firefam Capital, being, being away from this like constant market chatter, the daily noise of Wall Street and the financial media and, you know, the 24-hour news cycle and the, you know, being here created. the space to think a bit differently.

In Bondi, as I'm saying, you know, we're not commuting through Midtown jammed into, you know, as a subway like sardines and, you know, with the CNBC on, you know, the sort of interactive skyscrate there. I'm walking the coastline. I'm spending time with my family and community and thinking deeply. And then, you know, this becomes a key differentiation

about long-term capital allocation. And I think that that distance both like physically and mentally, it helps keep, keep focused on what really matters. And for us in our investment strategy, backing in during businesses, managing risks really carefully, compounding wealth thoughtfully through decades. And we've tried to build FIREVAN capital to reflect that philosophy. Recently, we had a doctor on that was talking about how strong, stress was like the number one factor of causing aging for people, like their biological

marker and their biological age. I imagine Wall Street has to be one of the most stressful jobs or places. At least, you know, that's what I see on TV. That's what I hear. But what did you learn when you were in that type of environment that you brought into business that has helped with success? I think stress, particularly at the wrong point in your life, when you're not in a a way to be able to cope with it can be, you know, really problematic and, you know, cause real issues for people. I think stress that the right time of your life can be really beneficial. And for me, it was. I think it sort of allowed me to push myself. Also, you know, a decade spent there is almost, you know, more than a couple of decades of experience elsewhere.

And so I wouldn't, I wouldn't change that for anything. I think also, you know, I was probably working, you know, double shifts equivalent for most other jobs. So, you know, it brings you up the curve drastically. You're, you know, in the flow of really important dynamics working with great people. So, you know, learned a lot from competencies, learned a lot from, you know, that they, like building my own sense of perspective on intrinsic valuation. and managing dynamics, but I think as I started to approach family life, I knew that I needed to change a little bit.

There's a lot that I learned from my time in New York, happy to go into different aspects. One thing that did, I think, really impact our philosophy was that in my first decade, I've had a couple decades of investment experience, but, you know, the first decade was investing in unlisted businesses, so owning the whole of a business, and these were typically monopolistic things like airports or telco towers. And so, you know, you had to bring a real rigor to the approach because you're holding these assets for a long time, and you couldn't just sort of unwind an incorrect decision.

and you have to think, you know, carefully about the cash flows, the durability, the long-term profile. And so that was very formative in parts of the philosophy that we've got at a five-end capital, where we invest in monopolistic businesses in the listed space, so the public equity markets,

but we're bringing that sort of unlisted mindset where we're identifying great, great businesses and happy to sort of go through the, you know, the network affects the scale, the economies of scale, the IP, the things that we look for. But, you know, the point is that, you know, we take a very deep research analytical.

We don't own, not 100 companies. We just own 25. We study them inside out. And if we wouldn't feel comfortable owning the whole business for like 10 plus years, we don't want to own a single single. share of it. And, you know, that that strategy has helped deliver some great returns, results for our clients, results for us, 30% annualized in my prior CIO role before setting up

5M capital and then 19% annualized since setting up 5FAM capital. And, you know, I think a lot is attributable to that mindset of like the discipline, only investing in a business. business when we really understand it, you know, the long runway for compounded growth. And, you know, that mindset of bringing that sort of unlisted to the listed space, it gives us conviction when volatility hits when, you know, there's, you know, Trump tariffs and trade wars and headlines where we're able to, you know, know, know really clearly, like what we own, why we own it. And that clarity helps us avoid some knee-jerk reactions that plague most public market investors.

I imagine knee-jerk reaction is the definition of 2025 so far. When you think about what makes a successful company, so if you're looking at a company and you say, these are the factors that make it successful, or this is a company that has potential, what are you looking for? So we're really focused on long-term, durable, high-quality businesses, and to have conviction over the long-term, you need to have a very, like, strong, sustainable competitive advantage. And a lot of that then falls under what we, you know, loosely referred to as monopolies. It's sort of funny. Monopoly is often getting bad rep, but in the right reputation, but in the right sort of

category with the right dynamics, they can be incredibly beneficial for their customers, their employees, their shareholders, sort of the whole trifectar as long as sort of, that the North Star is aligned correctly and it can create great outcomes to everyone over an extended period of time. What we look for is businesses that dominate their categories, not through brute force, but through unique competitive moats, you know, things like strong network effects where, you know, that they've got, you know, the supply and the demand meeting and they're able to sort of hold court in the center of that scale economies whereby, you know, that their sheer infrastructure, you know, that their logistics chains, that their entire systems provide such benefit

but they can then offer things more cheaply and more accessible than their other competitors. And it creates like a self-fulfilling dynamic where it's still good for the customers. You know, IP regulatory positioning, something of irreplaceable value where, you know, it's very been difficult to dislodge these great businesses. And they can earn a very high return on capital for a very long period of time, you know, such that, you know, that competition, you know, is almost irrelevant because of these great structural advantages. Would you look at these founders or C-sweets?

Because I heard, I know it's different than maybe other types like VC investing or things like that. But I know from them, they always say they're really investing in the founders, which, you know, might be totally different. But when you look at either the founders or C-suite, because these might be much, larger companies. What do you think or what do you see in terms of traits that these people possess that maybe other companies that haven't reached publicly traded or reached anywhere near the revenue markers that these companies are reaching? Oh, look, it's a really good question.

So we're definitely on, you know, not the VC side. We're on the lattice side where the businesses have great, you know, economic and profitable. VC companies almost by their definition. are investing in profitable businesses. We like cash flows. We like seeing the strength of that business being unleashed. But many of them within our portfolio do have very strong founders or founders that have been very important in setting the North Star, the overall dynamics for the business trajectory. And that's really, really important for us. And I think One of the most defining characteristics there is patience. They're not just looking for like an immediate short-term win.

They're looking for like great long-term outcomes, building over decades, potentially, you know, potentially more. No, there's certainly great examples on, you know, the bigger end of, you know, people are well celebrated like Jeff Bezos where, you know, that they were reinvest. everything back into the business to make it better for their customers. They had this like customer obsession from day one. They didn't care about like the short, short term. They were thinking about how do you build the business to the best? It can be over an extended

long period of time. We've got other ones in Europe where it's like networks of laboratories where these family founders have been building really disciplined ways, looking to strength and not taking, you know, undue risk. And when it's got that fundamental, mentality, it's, it can be really, really different compared to, you know, some businesses where there's just a, like a hired CEO who then tries to feel that they need to make their stamp on the business and they do some, you know, destructive M&A or something just to try and feel like they're making a change because it needs to happen in their tenure, their short tenure as CEO, you know, we like founders that have that, you know, incredibly long perspective and that aligns without, without

thinking. So I don't know exactly how, what is the mindset of an investor in terms of what is the return or how does a return even work? So with what you're doing, you as the investor, what are you hoping to gain? And then what does an investor gain when they invest? And the reason why I ask is like you're saying, I know that different types of investors, some are looking long term, some only want an exit, you know, someone different, you know, a variety of reasons.

But for you, when you're looking to invest, what is it, what is important that you understand, you know, you'll return your money or whatever that looks like for you. How do you, how do you need? We're really focused on compounded, durable, repeatable, risk-adjusted returns. You know, it's some stability to it. We want to do this over a long period of time. And this isn't a strategy where, you know, VEC can be a bit like, you know, let's pick 10 and, you know, or even like way more that, you know, like a lot of them are going to go bankrupt and then you're hoping that one or two shoot the lights out and then that sort of returns overall for everything. And it's like quite a, you know, like maybe portfolio aggregated. I'm not trying to like slam that environment at all.

It's just very different to the way that we think about it where, you know, we expect all of our businesses to contribute. You know, maybe some of them not as compounded as quickly as others, because some of them might have reached some stability already, whether it's like an airport or an online classified or an essential B2B business software or a testing and certification business, all these different monopolistic modes. But we're looking for what we would say is teens plus returns. So each year, you know, the value of your investment, with us grows, you know, more than teens and we can do that through cycles that that's going to create terrific compounded wealth for our, for our clients. It's this balance of what we says capital preservation and capital generation. And I think that's, you know, that's sort of something for us there. I think, you know, when we think out, like, what do we want to be doing

out over 10 years? We want to, you know, we're ambitious absolutely as a team, but we're very, like risk tolerance really focus where we've got all of our own investable capital in the fund who've got capital of our respective families or our teammates have invested their own capital so we're very much aligned you know it's you know this alignment isn't a marketing slogan it's it's a lived reality and I think that changes that behavior we treat risk different we're not optimising for just total size of like growing to a behemoth where we're asking ourselves is this um investment good enough for um uh to protect and and and grow the wealth of the people that we care deeply about um you know our our our families and our clients that are

incredibly important to us so we've we've also we've got now and be going for about three years we've got about a hundred million under management and you know that that's been some good trajectory off the back of some really good returns and good top-ups by committed clients. And we've got a firm cap at $750 million because it's not that we lack ambition because there's some very, very large funds out there and you say, well, you know, why are you trying to be, you know, boutique and small? But it's because from our perspective, we believe that performance and scale have a tipping point that beyond a certain size, the flexibility to how you invest starts to a road,

and we would rather be the best in class boutique than like a massive sprawling asset manager. We've got very deep personal relationships with a select number of our clients. We care deeply about the team and our culture. We're thinking in generations, not quarters, sort of back to your point of how you're thinking, It's not just like, do you do an outstanding job this quarter? We're talking about over the long term where it's like about transparency, accountability, consistency. And our team is tight-knit. We challenge each other.

We trust each other. We're pulling in the same direction. And I think the culture doesn't scale that easily. And that's sort of the point we want to just make sure that we get these great consistent returns for our capital. over an extended period of time without getting to a point where it was seen with many others where they almost get too big and they start to then almost implode. We want to stay within that sweet spot. That could be an amazing lesson, right?

I know a lot of people that saw some very fast success, but their business ended up imploding because of that versus maybe a little bit slower and steady. And I'm just shocked that a lot of these other models even exist. Like you said, they might have to invest in 100 companies and only one hits, hoping, knowing that 99 will never go anywhere. It always fascinates me. But what, besides this lesson of, you know, going at this rate to ensure success and not, you know, growing too big, is there another lesson where you look back?

It could even be in your personal life that you would say every founder, every executive, needs to hear this. Oh, look, I think that that's a good, a good question, one that I, you know, done, did some research before starting, but I still wasn't quite prepared for it. And I think that's probably, well, you've got to have patience and tenacity. You sort of knew that. But one of the things that really hid me, particularly going from a larger corporates

and, you know, like, you know, Wall Street type dynamics where, you know, there's lots of back office and ops and everything to do, you know, a lot for you. And when you're going on and building a business, all of a sudden you realize how many hats you have to wear at any, you know, point in time. And, and that's, you know, that's sort of difficult. Like, yes, intellectually I sort of knew that starting a firm will be demanding. But I just, I think I really underestimated how fragmented my intention would be. you know one moment it was like deacon investment analysis and then the next I'm choosing like what type of accounting systems we need for our group and then managing

compliance and then onboarding staff and evaluating like tech solutions and and all of that while I was trying to like reach out and build a client base from from scratch and that I mean that constant uh constant context switching you're being pulled in so many different directions it's some more more taxing than I expected. But fast forward three years. We're in a very different place now. We've got a very strong foundation, systems that work,

a lean and high-quality team and a culture that's deeply aligned. So as someone approaching and building a business, there's always going to be distractions and there still will be. But now I'm sort of fortunate that we've got the right infrastructure, rhythm and scale to build the business with focus and integrity. but, you know, it was a lot harder. You know, it still continues to be harder than, you know, I'd anticipate it. There's an amazing point.

We do think, oh, I just want to do, I just want to do sales or marketing, but you don't realize you have to do all that and then you have to do customer service and then you have to send emails and you have to do many things that you never thought you would have to do and you have to do all of it until you can obviously hire team. And I mean, that's a whole, another complexity there. But Sam, this has been great. If you want to get in touch with you and they want to find out more, how can they? Our website's a good starting point, 5amcapital.com.

And, you know, we have lots of materials that we're happy to share with people, some good information on our mailing list. You know, we're happy to connect with people globally. You know, absolutely, we've got an international client base, you know, part of the name there, 5am capital, where up early it's the time to think clearly, but also then, you know, connect with global parts of the world. So please feel free to reach out. People always tell me, you work a lot because I'm always working at 5am, but they don't realize that I stop working in the day. But I love to work at 5am. So I appreciate that. And I can

appreciate the name. By the way, Sam, this has been. great having you today and thanks for joining us on founder's story thank you daniel thanks for having me