The Pomp Podcast - #404: Wes Barton on Venture Capital in Middle America

Episode Date: October 9, 2020

Wes Barton is co-founder and Managing Partner of Third Prime. He started his career as a tobacco farmer, spent time on Wall Street, and now is focused on venture capital. Third Prime is a venture capital firm that likes to invest in entrepreneurs shaping a better future for humankind. In this conversation, we discuss what is happening in Middle America, the current income disparity, Nashville and other emerging geographies for VC, and Wes' thesis around health and wealth.  ============================== Diginex is the first company with a cryptocurrency exchange to be listed in the US. That exchange, EQUOS, has been built to institutional standards, but is available to everyone. You can trade Bitcoin and Ethereum spot, as well as Bitcoin perpetuals, and get a 5% discount on all fees, by signing up using equos.com/pomp ============================== Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Wes Barton is co-founder and managing partner of Third Prime. He started his career as a tobacco farmer, spent time on Wall Street, and now is focused on venture capital. Third Prime is a venture capital firm that likes to invest in entrepreneurs, shaping a better future for humankind. In this conversation, we discuss what is happening in middle America, the current income disparity, Nashville and other emerging geographies for VC, and Wes's thesis around health and wealth. I really enjoyed this conversation with Wes, and I hope you do as well. Before we get into this

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it. No brainer, absolute game changer. Retirewithchoice.com slash Pomp. Lastly, don't forget that I write a daily letter to over 75,000 investors about business technology and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at Pompletter.com. Again, Pompletter.com. All right, let's get into this episode with Wes. I hope you guys enjoy this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp

as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Wes here with me. Thank you so much for doing this. Hey, glad to be here, Pomp. Big fan of the show and excited to chat with you today. Absolutely. So right off the bat, everyone's going to hear that you don't talk like I talk, which is a compliment because you ended up with a Southern accent. So let's get right to your background. Where are you from? And how the hell do you end up doing venture capital having lived in New York for a number of years? Yeah, well, Paul, I like to joke. I think I might

be the first grain and cattle farmer turned venture capitalist. Grew up a little town called Glasgow, Kentucky. We thought going to Pizza Hut was a fancy restaurant, if that tells you anything. About 10,000 people here in my town. And spent the last 20 years in New York City. I'm actually back in Nashville now, which we might touch on a little bit, but yeah, you know, uh, my way into venture capital. So, so again, started small town, Kentucky, uh, very, very winding road for me. So I thought like my forefathers, I'd probably end up, you know, farming as well. Really all I knew to be honest with you, uh, went to the local college. I went to Western Kentucky. Uh, I was actually the first in my family to go to college. That was a big deal. And, you know, we'd like to

joke, you know, Western Kentucky is the Harvard of Southern Kentucky. Um, you know, so, so they were awfully proud um you know uh you know the the lens you know got widened just a little bit i guess when i was in college you know now i had a few people from nashville and louisville you know which were the big cities um and uh you know from there i thought you know i thought well maybe maybe i shouldn't farm maybe there are some other opportunities out there ended up going to duke for law school um and you know papa i think you're from raleigh so obviously you know so that neck of the woods but you know the aperture widened even more at that point you know started meeting folks coming from New York and all over the world, actually. And I really got excited about

what I could do. And from there, I ended up going and joining Skadden Arps, a law firm up in New York City. I practiced M&A law there for about three years, representing a lot of private equity firms, hedge funds, the likes of Carlyle and Apollo and all those guys. And really got excited about what they were doing and said, you know what? Maybe I don't want to be a lawyer. I actually want to be an investor. I want to sort of get over to that side of the table. And, you know, had the good fortune of joining a middle market private equity firm coming out of Skadden called Trimaran. You know, from there, we were, you know, investing in businesses across industries. I got to sit on boards. I got to work with entrepreneurs, you know, really fantastic experience,

worked with some really good people. And we also ended up spinning up a hedge fund while I was there as well with the guys from Tryon, Nelson Peltz, and those folks who got to, you know, evaluate public companies and, you know, really sort of develop a pretty unique toolkit, you know, from, you know, the law to, you know, the private equity and sort of the public markets. But really what I would say, Pop, is, you know, having spent about a decade in, you know, private equity and public equities, really started to notice some structural tailwinds. And, you know, to date myself a little bit here, that's going back to about 2010. You know, on the PE side, you know, just everything was coming through, you know, an auction.

you really start to see return compressions, you know, sort of across that, you know, across that asset class. Same thing on the publics, right? You just fewer public companies, more and more money coming into hedge funds, you know, the rise of the quants and, you know, the computers and just really hard to be a stock picker there as well. So I started thinking about, well, where might there be some structural tailwinds? And, you know, where might, you know, I sort of, you know, be best served to spend the rest of my career. And so really, it started as more of a, you know, a decision just thinking about, you know, sort of asymmetry around returns and where I could generate some alpha and really started thinking that, you know, early stage, whether

it be micro PE or sort of venture capital really sort of afforded a lot of opportunity. On the back of that, I started investing off my own balance sheet back in 2010, sort of testing this hypothesis. And, you know, me and a couple of guys that ultimately, you know, sort of launched third prime, which we'll get into, you know, put just under a million bucks into a little company called Jingle Punks. um you know fast forward two years later we sold to william morris endeavor was a fantastic you know sort of outcome from a financial standpoint but more importantly taught me a lot that all

right i love sort of you know getting my hands dirty working with these entrepreneurs sort of from day one or sort of being that first check-in we were on the board there we were you know making a lot of decisions over you know probably too many beers and whatnot but it all worked out um and from there said you know what this is really what i want to do you know i going all the way back to you know little kid as a farmer it's been a you know winding road but you know now i finally see it this is it um spent the next few years while still had the day job still working you know at trimaran uh putting a track record together just via spvs going into you know individual companies and uh you know on the back of that uh you know quit the day job launched

third prime and in 2016 uh now investing out of our second fund we've got 100 million uh under management. And really, like I said, we got the office in New York. I'm launching an office in Nashville, which I'm very, very excited about that city and sort of what we can do from that standpoint. And really also focused on investing in health and wealth, which I think has grown from sort of what I've seen here in Kentucky, having been back since almost, what is it, seven, eight months now through COVID and sort of the disparities that a lot of folks here are facing versus what I saw in New York. Yeah. So first of all, you've had this really kind of winding road where you've touched a lot of parts of just company building in general and kind of

seen from different seats from an application standpoint. But one of the things I really wanted to talk about with you is most people listen to this in somewhat of an overgeneralization, but most people are going to be living in a major metro. So they're going to be living in New York, San Francisco, maybe LA, Austin, et cetera. Those places are great. I live in New York, So have no complaints in that bucket, but they're very different than what we'll call kind of middle America or kind of other areas that are not those major metros. You have this unique experience of kind of going back and forth and really looking at some of the middle America opportunities. Maybe let's just spend some time talking about what are the differences and kind of give us a crash course for those of us that live in the major metros. What's going on in middle America that may surprise us or we may not be aware of?

Yeah. Well, yeah, look, I think it's a great question. I do feel very fortunate to sort of be a bridge into both communities. And they're very, very different. You know, what I would say, you know, first is what's the same, right? I mean, you know, people care about their families, they're trying to provide, you know, they're focused on, you know, their communities. Um, what, what you see that's so different though, is, you know, you're walking around New York, you know, San Francisco, yeah, you might see somebody that's a little bit overweight every now and then, but, you know, you come into the small town, Kentucky here, and it's just, uh, you know, frankly, like, you know, obesity is rampant. Um, you know, opioid abuse, right. Just sort of ill health is, is pervasive. Um, there is what I would also say, and it's really unfortunate and it's something that

that I'd love to sort of, you know, try to, you know, try to improve is, you know, there's just a bit of lack of hope, right? And, you know, I think, you know, you might see that, you know, with Trump coming into the presidency and people looking to sort of rebel and, hey, what's been going on just hasn't worked for me, right? Hasn't worked for these folks in the red states. You know, you see, you know, real economic stagnation. You find just, you know, empty factories, you know, just across the landscape. And it's really sad in a lot of respects, right? You know, I talk to people down here, you know, sort of in Kentucky and really try to sort of probe into, you know, how they thinking about things. And, you know, you hear that, look, it's just, you know, I don't feel like the opportunity is there anymore. Right.

You know, I tried to follow this path. You know, I've tried to go, you know, do what my dad did and granddad did and whatnot. And it just it's not leading to the same place. And I think there's just immense frustration around that. and people that don't really know where to turn, right? There certainly is, you know, high unemployment down here. And, you know, you see sort of automation. You worry about, you know, how that's impacting their jobs. And, you know, I think we could, you know, we could dig into several things. But it's, you know, when people say, you know, sort of world of haves and have-nots,

I mean, it's absolutely true. And you just see it all over the place. Yeah, it's really interesting. My parents both live in an area in kind of rural North Carolina, right outside of a place called Roanoke Rapids, North Carolina. which uh you know basically this has got three or four stoplights in it um but uh one of the things that is uh is really interesting um is uh when plin and i were down there last time uh we were driving kind of through the main strip if you will and this main strip uh all of a sudden

just hit us every single food outlet was fast food i mean there was there you couldn't eat healthy there if you tried right and unless you went to the grocery store and you actually went home and you cooked and all that kind of stuff. But I'm talking about everything from Arby's to Chick-fil-A to, you know, all the way on down. And it's one of these things where you got to ask yourself, like take obesity, for example, how much of that is your product of your environment? And how much of that is no, actually, it's a poverty problem, right? And an unemployment problem. And therefore, there's not a lot of capital. And so the only food that you're going to be able to buy kind of cheap, fast, you know, kind of QSR, if you will, type restaurants.

And so any thoughts in terms of maybe kind of cyclically how this is playing out? Is it a poverty issue? Is it an education issue? Is it just people want to do what they want to do? And so that's just kind of the lifestyle they choose. Like, how do we unpack why this is happening more so than just like what's happening? Yeah, look, I think a few components to that, certainly education. I think we could do a better job of, of letting them know, um, you know, how they should be eating. Right. And, you know, and that, that probably starts in the schools and, you know,

in the communities, churches, whatnot. But, um, you know, I think second to that, I mean, you know, minimum wage here is seven and a quarter an hour. Right. And so if you get a job, you know, most people are getting seven, you know, 725 and you think about that, right. Like there's just not much you can do. You're not going to go buy organic produce making seven and a quarter an hour. You just can't, right? And yeah, you go to McDonald's and you buy the value meal, right? Because that's really what you can afford. And so I do think, you know, that there are several sort of, you know, aspects to it. And then also just the dearth of options, as you touched on, even the grocery stores, though, many of them, the grocery stores are going out and all you're doing

is shopping at a Dollar General, right? And there, you know, you grab a bag of Doritos or, you know, you get, you know, some, some, you know, sugary cereal, that's just kind of what what's happening. And so I think it's a bit of a vicious cycle there. And you know, I don't believe there's there's a quick or easy fix. But it's something that like I said, it's just, you know, it's just, you know, pervasive. And it's, it's, it's incredibly sad. Yeah, I actually speaking of Dollar General, I forget where I read this, maybe it was a filing or article or something. But that's basically been their strategy, right is to go find kind of the smaller communities where it's too small for a Walmart to go. Uh, but the dollar general is kind

of the perfect, uh, you know, compromise if you will, for the community. And, uh, like you're saying, you know, they don't even have kind of fresh food deli or any of that. It's all packaged food and kind of not, you know, overly healthy stuff. Um, as you guys are investing, like how do you see, uh, let's, let's stick on kind of just the health issues, right? How do you see the solutions coming together? Are these companies that are being built by kind of tech entrepreneurs and the major metros and they're going to go and kind of save middle america or are these more kind of what i'll call homegrown solutions where it's going to take people who are not in the major metros who understand these problems uh you know kind of very intimately and can kind of build the

solutions uh that way you know look i i think it's i think it's both and you know you go to you know our portfolio and i'll take two examples so we've got you know a company called the new primal, it's based out of Charleston, South Carolina. And I'll be, you know, behind me sort of telling this story, but, you know, Jason Burke, the CEO over there, you know, grew up incredibly, you know, impoverished, right. And sort of saw all these issues. I know his parents had, you know, problems with, you know, with obesity and health problems. And that served as the catalyst for him to say, you know what, like,

I'm going to go try to improve things. And so, you know, sort of the, he started in beef jerky because he thought, Oh, this is healthy. I'm going to go out here and start eating beef jerky. Little did he know that it's just, you know, it's a wolf in sheep's clothing, full of sugar, you know, sort of full of things that are just, you know, terrible for you. And so he started by, you know, sort of cleaning up, you know, that product. And, you know, fast forward to today, the business is really, you know, really booming. And he's doing, you know, cooking sauces and salad dressings and really just trying to,

you know, be out there with, you know, sort of a narrative around, you know, how to sort of think about that educational component, how to go back to the table, how to eat with your family and your communities, right, in a healthy and approachable way. Is it more expensive than some alternatives? Of course, but he's very much trying to bring that cost down, very mindful of that initial mission, which was to try to address some of these pervasive problems around health and ingredient panels and whatnot. The second one is somebody that's coming from a very different standpoint, an investment that we recently made in a company called 28 Health, which is two folks that have been from Bain and the Gates Foundation and all this stuff, sort of saw it from a very different angle, but have launched a product that's catering to underserved women, digital health, telemedicine, all that stuff, starting with birth control and sort of just access to that, which, again, I think people just don't realize. sort of how difficult it is for maybe a woman in one of these communities to go to a doctor to actually get birth control. And they don't want to have a child, but they end up having one.

And what that costs the system and what that costs them and sort of just the snowball effect of that. So I do, I believe that the solution is being provided from all sides. And it's just those folks that are determined to do it. And to the extent that we can play a small role in that, be a capital and then trying to provide some insights is something we're super, super excited about. Yeah, so talk to me a little bit about the wealth side of this health and wealth thesis, right? So obviously, you know, something that I just go back to over and over and over again is the lack of financial education should be a national emergency, right, in terms of our country. I don't think that many people see this play out, right? If you kind of live in a major metro, you basically see kind of the most extreme ends of the two Americas. Because, you know, if you want to think of it that way, you see kind of the ultra wealthy, and then you see kind of the homeless drug addict, you know, type, you know, narrative or path in life.

But that kind of middle class is not as obvious, kind of on the streets of New York or San Francisco. In middle America, it is the middle class, right? And there is pretty pervasive. So talk through a little bit just about the financial education and kind of the issues around wealth and money. Yeah, no, it's a great question. And so one of the things that I sort of take issue with or say take issue with, but anyway, you keep hearing now about this K-shaped recovery, right, that the folks that own stocks are doing great. The folks that don't are really suffering. And when you look, it's – I think the latest data I saw is about 85 percent of the stock market is owned by 10 percent of households, right?

And most of that is sitting in New York and San Francisco and sort of where you and I are interacting in the venture ecosystem and whatnot. But, you know, sort of sitting here, you know, in Kentucky and Nashville, you know, you really, you know, sort of see the difference between what's happening in the stock market versus what's happening in the real economy, right? And, you know, I think, you know, New York Times was also talking, you know, what was it last weekend about, you know, sort of Milton Friedman and that similar work around, you know, sort of shareholders, right? And, you know, business, you know, what they need to do is just try to drive value for shareholders. And that probably worked 50 years ago, but I think what we're seeing now is it doesn't, right, because it just – this disconnect, right, this income disparity has grown so large that there's just got to be a different solve for it. And so I think whether it's business roundtable stuff, talking about stakeholder capitalism, whether it's us thinking about investing in companies that are sort of solving for all stakeholders, that's a big part of it. And, Pop, to go back to your question about education, yes, I think we could be telling them more, right? Like, hey, here's how you should invest. And, you know, here's, you know, sort of what you should do to be responsible around credit and whatnot.

But they just don't have much to start with. Right. So we've got to find ways to try to put more into their pocket. You know, I think it's sort of, you know, first principle. And then, you know, clearly that that'll come with it. But, yeah, I give a lot of thought to, you know, sort of that widening gap. And it just, you know, every time I sort of come home, I think it gets, you know, it gets greater and greater. And there's – if you go to Third Prime's website, it says a reckoning is coming, and it was sort of about what we were seeing. And this was before sort of Trump was elected, and you see sort of people going to the streets now and just this real divide. But I almost think we need to revise that website and say the reckoning is here. I really feel like it's on us, and if we don't do something about it – and I'm not saying that I'm smart enough to know all the answers, but I know something has to be done or we're moving to a really bad place.

I read a book, and I'm going to screw up the name, but Hillbilly Elegy, I think is how you pronounce it. And it was eye-opening, right? And this is coming from somebody who grew up in North Carolina, generally thought I understood some of these issues, but by no means lived in a 10,000-person town or smaller. And the book specifically, if I remember correctly, talked about West Virginia, right? And kind of a lot of the opioid crisis and the poverty and just this world that almost sounded like a third world country, right? I mean, it really was not something that you would have believed could happen in America to some degree. And so it sounds like this is much more pervasive than just the coal mines of West Virginia type thing.

this is actually happening across states, you know, between these major metros. And it feels like it's systemic in the sense of there's so much reinforcement to this, right? Whether it's the health, the wealth, just this is not something where we go in and we just give people some money and they're okay, right? And maybe talk a little bit about like, how do you balance your mind between like, we have to change a system versus we can actually come up with, I'll call them band-aid solutions right or kind of things that directly address the acute problem like how do you balance that and where do you think the solution lies yeah you know look i i think it's it's not just you know universal basic income or putting you know sort of money in somebody's

pocket right like that's yes that that helps right now that's that's that's a near-term fix but but what we've got to do is you know people want to work right they take pride in their work you know they come home from a hard day and they feel good about themselves right i mean i'm sure you do and And, you know, I do as well. So like, they want to have that purpose. And so I think that, you know, really, we have to sort of get to the root of the problem, which is just, again, how do we, you know, how do we sort of create jobs? How do we do things that, you know, that make them feel like that there's that purpose? And, you know, they come home and, you know, they're setting a good example for their child and, you know, for, you know, contributing to the community. So that's something where – I read that book as well. I think J.D. Vance has a very unique perspective, and I don't know that he's got the prescription either, but he's – from what I understand, he's trying to get into politics now or thinking about that. So obviously, he sees that certainly as a way that he can sort of enact change. I think we've got to do it from the public side and the private side, sort of working in tandem. And I'm very much a capitalist, but I do think that it's going to take folks at the top sort of giving back more progressive tax system. We've probably got to be even more progressive about that, somehow trying to sort of create this balance, right?

But it's just bringing back jobs, trying to create something that allows these people to feel like they've really got a purpose. That's sort of the biggest issue to me when people say, hey, we can go out here, we can put money in their mailbox. But it's just – it's still going to break, right, because they just don't have that sense of purpose and what they're supposed to do with their life. How much of this is around entrepreneurship in these communities as well, right? So it's kind of become cool for certain demographics of people to move to San Francisco or New York or LA and start a company and be a founder and kind of do that type of stuff. It may not be as cool if you're not building a technology company, for example, or you may not have the skills to do that type of business. But there's obviously opportunity in each one of these towns. Is there kind of the same rise in popularity of entrepreneurship in kind of middle America? Or kind of how do you see that having evolved in light of what you see in the Silicon Valley type areas? Yeah. Honestly, despite people being on Twitter and reading TechCrunch and your letter every day, you don't find that sort of permeating little towns like Glasgow, Kentucky, where I am.

And so it's entrepreneurship for the most part is starting a plumbing company or opening a used car lot or buying a subway franchise. So they are certainly impacted. They're on TikTok. They use Instagram and Facebook and all this stuff as well. But it's certainly not sort of pervasive through this ecosystem to start thinking about technology. You know, they're not talking about coding. They're not talking about, you know, the things that you and I are probably often sort of, you know, encountering on a regular basis. So that, you know, again, to bring us back to the educational piece. Right. You know, how can we change curriculums in schools, you know, maybe to reframe it, to sort of do some of these jobs that are going to be more future proof? I think that's a big part of it. But again, these disconnects I'm talking about, right, sort of the what's happening on the coast versus what's happening in the middle. It's not just sort of the obesity and the health problems. Again, it's educational. It's sort of aspirational. There's a lot of aspects to it.

And then from your guys' investment thesis, is it purely technology or will you guys go and invest in some of these other businesses that maybe don't have the zero to a billion users as part of the plan? Yeah. So obviously, we are a venture capital firm, and we've got limited partners, and we're trying to provide the best return we can as fiduciaries. So certainly, technology is pervasive across our portfolio. But as I said before, we're investing in that company, the new Primal, which started with beef jerky and now has moved into some other foods. Obviously, more and more venture capital firms are investing in consumer and products and whatnot these days. But, you know, by and large, it is technology. What I would say about us, though, is, you know, we've spent about half our capital in sort of what we call sort of secondary and sort of tertiary geographies, right? So we've got, you know, entrepreneurs we're working with in places like Greensboro, North Carolina and, you know, Richmond, Virginia and Huntsville, Alabama, right? And, you know, very much see increasing opportunities to sort of go into some of these, you know, these communities and to try to wave the flag and say, hey, look, you know, we're here, you know, to support.

um uh so so yeah you know we are uh i think probably more flexible as you know have a more flexible mandate than many firms um you know that said tech is is by and large a big you know big component of all we're doing one of the things that i've always uh struggled with right and especially coming from a place like raleigh north carolina is you know how big can the businesses get there not from an aspiration of the entrepreneur not from a um kind of competency standpoint or a value of an idea, but really around the talent it takes to build some of these companies. And if you're in San Francisco or New York, you just have access to a bigger pool of talent, right? Now there's more competition for that talent, but it definitely is bigger.

How do you guys think through being able to build a company in a Huntsville or a Greensboro, North Carolina, from a talent perspective? And is it something where remote work becomes much more important because you can kind of tap into a global workforce? Or do you see, no, we can actually find the right talent necessary just there locally? Obviously, remote work is helping, right? Because you don't necessarily have to be sitting in that location. But, you know, you do bring up a great point. You know, frankly, there's just not the level of talent that you need to build a billion dollar business in many of these places. And that's why, you know, we've got the office, you know, our headquarters has been in New York City,

And we're going to have the second headquarters in Nashville. Right. But we still feel like it is crucial to have that connection to New York, to those talent pools, to that, you know, sort of series A and B, you know, capital. So I think while improvements are being made, while Zoom is having an impact, while Slack and all these other things are having an impact, it's still not the full solve. You're going to need to have a presence in some of these markets and some of these cities to extract some of that talent that's just not existing in some of these more nascent markets. And so talk a little bit about kind of the funding environment in these towns, right? So obviously, it's well understood kind of the metros, but in terms of whether it's Kentucky or Nashville or Alabama or North Carolina, like what does that funding environment look like for these founders? Yeah, it's changing. You see more and more firms that are sort of willing to invest in some of these communities. But by and large, I think there's still valuation arbitrage that – I know Steve Case and the guys at Rise to the Rest published something not so long ago that sort of suggested there's still a 30% discount in some of these markets relative to the Valley and so forth. I'd say that's fairly consistent with what we see. So not only the valuation standpoint, but sort of what comes from that is there's not as much competition. So oftentimes, you're trying to do a deal in New York or San Francisco. Good company is going to have multiple term sheets.

You're in Huntsville. You're probably the only game in town. You're probably the only one issuing a term sheet, or at least if you aren't, there's probably not too many around the table. And to answer your question as well, sort of what's happening, if those VC firms aren't there, the gap is often sort of friends, family, some high net worth individuals that might be doing some things, but they're not dedicated to it, right? They're capital, but not much else. And they can't really provide that bridge to that Series A firm that's sitting in New York or San Francisco, which we feel like we've done a pretty decent job of doing. Yeah. And one of the other aspects of these communities just over the years I've seen is kind of the rise of what I'll really call startup communities, right? And what I mean by that is everything from accelerators to co-working spaces and kind of down the line. These are things that usually are somehow incentivized by the government, right? Because it's good for job creation and things like that. But they tend to help an entrepreneur, you know, have an easier path. They obviously can't build the company, they tend not to be kind of advice driven in terms of sitting on boards or anything like that. But they provide everything from legal services to physical location, you know, to work out of etc. I'm imagining that that has had to have been an important kind of accelerant for a lot of this, but maybe you've got kind of a different perspective, just having spent much more time looking at this, like talk a little bit about some of those service providers and other things that are helping entrepreneurs get started in the non metro cities. Yeah, no, it is great. I think they've got resources today that they never had. The quality of that varies from town to town, city to city. But nonetheless, I think it shows a dedication. It shows an appreciation for the need to try to be cultivating entrepreneurship in these communities for bringing not only the entrepreneurs together, but folks that might provide some seed capital, like you said, those service providers. So I think that is, you know, sort of an early sign of sort of what's to come. It is, you know, attracting, you know, more and more talent. You know, we've been spending a lot of time, you know, in Charleston, South Carolina over the past few years.

And it's been really interesting to sort of see sort of the quality of the entrepreneurs that are now coming out of that town, the number of those entrepreneurs. And I give sort of a lot of credit to sort of the local accelerators and some of the local sort of entrepreneurs and angel investors there that are really sort of engaged in that community. And I think, you know, they're now, you know, sort of the prototypes are out there, right? So I think, you know, if a city's not doing it the right way, I think there are places they can look and sort of, you know, make sure they got the right roadmap. Yeah, well, hopefully there will be many, many more. I think we're moving to a world where it doesn't necessarily matter where you sit. If you can build a great business, you can do it from anywhere. Talk a little bit before we move into kind of the rapid fire to wrap up.

Just your investment thesis is very unique. And so what does that look like in terms of opportunities of what you guys are looking for? And then also, how focused are you on specific verticals, right, versus just trying to find great entrepreneurs who are building awesome companies? Yeah, no, you know, look, if you went back to sort of, you know, version one, third prime, you know, we were just, you know, frankly, trying to try to make money. That's kind of how we got into it looking for the best sort of, you know, risk reward we could find kind of bringing that hedge fund, you know, mentality to it, you know, sort of, you know, fast forward to, you know, to sort of where we are today. And as I mentioned before, really focused on health and wealth really focused on, you know, those entrepreneurs that, you know, believe sort of doing good as good business, finding that mission alignment. And look, and I think that we're still – returns are sort of objective number one. We're not an impact fund despite hoping to have a positive sort of influence on what's happening with our capital. But yeah, I think – so we do believe that sort of investing in health and that kind of a large sort of range there, obviously sort of food companies, healthcare companies, even things that are more environmental health. We've got some investments, you know, in sort of, you know, folks that are looking to reduce carbon emissions and, you know, things of that nature. You know, on the wealth side, you know, again, you know, fintech, you know, sitting in New York, we've done a lot of those deals.

But, you know, really also trying to be thoughtful around who's providing a product or solution to sort of all Americans, not just sort of those that are sort of sitting along the coast. And I think we've got a bit of a competitive advantage there, again, sort of given the fact that I think I understand and know both of these communities. So really, that's where we sit today. And, you know, I think this new, you know, sort of vantage point sitting in Nashville is going to provide us a lot of unique exposure there as well. So I got to ask, why Nashville? Yeah, well, so again, you know, health and wealth, right? So you think New York, you think financial services, you think fintech, you know, Nashville, you think health care, right? And not only that, but, you know, I've got a lot of friends down there.

I'm familiar with that city, and it's pretty incredible, right? You know, if you come to Nashville, the number of cranes, you know, just the folks that you see moving in. I mean, you know, every time I talk to somebody, they'll tell me I'm, you know, sort of the fifth person they've spoken with that week moving from New York, right? There's a lot going on. And not to say that, you know, that the venture scene in Nashville is, you know, is lacking, but I believe we can, you know, we can have a, you know, a real impact there, especially outside of healthcare. We're obviously going to be investing in healthcare, but I think, you know, sort of the fintech. And then, you know, there's, there's a bit of a marriage to, I'm sure you've, you've been thinking about embedded FinTech and sort of how that looks and, you know, just, just ways that all this stuff starts to converge. Right. And sort of FinTech moving into healthcare. We think there could be some really unique opportunities there. So, so that, that's the reason for Nashville. Makes sense. Not, not too, too bad on the food, the beer or the country music either. Right.

Yeah. Yeah. Yeah. You know, and they, they're parsing my Southern accent down there. So that's good. I love it. Before we wrap up, two questions, then you get asked me one to end it. First one is, what is the most important book that you've ever read? Uh, you know, it's, uh, it's a good one. I, um, I would say that it was probably, uh, breath to air. Um, I don't know if you've read that one. It's about the, uh, you know, the neurosurgeon that unfortunately, you know, uh, got lung cancer and, you know, wrote just an incredible, you know, credible book about sort of that experience, unfortunately passed away. But, you know, for me, it was really sort of, you know, important in that, you know, I think we often think about, you know, all right, we're all going to pass away, right? But that sort of something just sort of shook me with that book and, you know, reminds me to be grateful about sort of what I had to try to be present, to try to enjoy, you know, sort of every day, you know, and just, you know, kind of back to the point again, try to make an impact, right? So if we can sort of give more to some of these communities, improve some of these communities, you know, it's something I'd be awfully proud of. Yeah, that's a fantastic book. And for those who are listening who think they only enjoy business books, I promise you will, you'll like that one. Second question is a little bit more fun. Aliens, believer or non-believer? Definitely a believer, right? I think, you know, it's a bit, you know, human arrogance to think that we could be the only form of life out there. So I'm definitely a believer in aliens.

No alien encounters or sightings down in Kentucky? Not yet, but I keep my eyes open, man. I'll let you know if I see any. I'm always surprised by – there's only two people ever who came on the podcast and asked about aliens, and they said, no, I don't believe in aliens, but I believe in ghosts. And those two people happen to be Josh Brown from Ritz-Holt and Jim Cramer. And I said, of course Jim Cramer believes in ghosts, not aliens.

Yeah. All right, you can ask me one question to finish up. What do you got for me? Yeah, man. So a lot of talk about the demise of the coastal cities and sort of the rise of middle America. Given what we've talked about here, where are you coming out on that? More things change, the more they stay the same. I tend to think that maybe there's a little bit more of an equitable distribution now just because some of the moats that the large cities had get broken down through remote work and kind of telecommunications and things like that. But for me, when I look at a New York, if New York doesn't come back to kind of the vibrant city that it once was across all kinds of different verticals, then basically you're not living in New York. You're just living in an overpriced apartment, right? If it comes back, though, I tend to think that there will always be a very large percentage of people that want to live in an environment where there's just the collision of people and ideas and industries and kind of have access to so much so close to them.

And so I think this whole situation has really kind of forced people to just ask themselves, what do I want? What am I being forced to do? Because now I don't have to go to an office. What do I want? And I know a lot of people who are changing jobs and, you know, moving and kind of doing all that. And I know a lot of people who are just staying and saying, look, I was already doing what I want to do. So I think that obviously the change will get kind of all the headlines because it's awesome to say, you know, there's a line around the corner at the U-Haul rental. But at the same time, you know, there's quite a few people who say, hey, you know, I'm in it for the long haul.

So we'll see how it plays out. But I tend to think that a lot of the short-term reactions might be a little overblown, and we really got to get the data on the long-term to see kind of what changes for real. All right. Alyssa West, this is fantastic. You've got a very unique kind of perspective just because you understand a place that actually a majority of Americans live, but people in kind of San Francisco and New York, they just don't really get insight into. So thank you so much for taking the time to do this. Where can people find you on the internet, find out more about Third Prime or anything you guys are doing? Yeah, so you can find me on the internet.

Pretty easy to remember, Farmer underscore VC. As I said, I'll go with that one. And then our website, ThirdPrime.VC. Any entrepreneurs out there that are looking to solve problems for middle Americans and sort of in that health and wealth sector would love to talk. farmer underscore vc might be one of the best twitter handles that have come on this podcast yeah i can't hear it absolutely man all right listen thank you so much for doing this i think people are really going to enjoy it and uh we will have to do this again in the future yeah man i appreciate you having me on