Lisa Calhoun
I’d like to invite you both, starting with Beth, to tell us a little bit about who you are and how you invest in venture. And we’ll take it to Tom and we’ll take it from there…

Beth Kytle Chandler
Sure. Thank you, Lisa. So, Beth Kytle Chandler. I am a managing director and wealth advisor at Cresset Capital. We are registered investment advisor. We just crossed $75 billion of assets under management and thank you. And we are a big believer that, you know, the alpha investing comes from the private markets and the real alpha comes from venture capital. So we love to allocate to venture capital portfolios.

Lisa Calhoun
Love to hear it. How about you, Tom?

Tom Weithman
Tom Weithman, Chief Investment Officer for Virginia Innovation Partnership Corporation. That’s a bit of a mouthful, but we are a nonprofit that has this foundation in the economic development mission of the Commonwealth of Virginia. So we invest in anticipation of a double bottom line impact. That second bottom line being economic development outcomes for the Commonwealth in the form of new companies created, assisting in the growth of new industries, new tax streams for the commonwealth and then returns for founders, co investors. And we seek to reinvest our returns so we can get out there and do it again.

Lisa Calhoun
So I want to say thank you very much for believing in Valor, trusting me and our team. I hope that some of the founders you met in our most recent fund are making you proud. Did you enjoy hearing from some of them today?

Beth Kytle Chandler
Absolutely. They’re fantastic.

Lisa Calhoun
And, and many more coming. So we have an exciting pipeline. What kind of things do you call a victory in your venture capital investing? I’m going to ask you to cast your eye back on this last year and bring to mind were there any victories you’re celebrating in venture capital?

Tom Weithman
I’ll go first. So we invest a couple of two different ways. We made our bones, 20 year history as a direct allocator. And two years ago we engaged, we launched with Aurelia, my colleague down front here, Aurelia Flores, our fund of funds mission. And we have not done this before and although we’ve done direct investment and we talked to some people that we knew in private industry that were in the fund of funds business and they said, oh, you guys have been doing Diifferential Calculus you’ve been doing direct investment. Investing in funds is going to be easy. 

Well that is hardly the case. We think there’s some transfer of know-how but very different experience and we learned a lot in doing it. So growing and developing that program has been a great achievement.

Then we had, you know, a nice little outcome. We’ve had a couple of outcomes this year, but one outcome from a company that we’ve been in for a long time. We’ve been in about 10 years and you know when, because we have, we are using patient capital from the Commonwealth, we can stay a little bit longer. But this is a founder that we supported some 10 years ago, the Zed tech startup and generated a, you know, a nice, you know, middle single digit outcome for us but was so grateful and recalled, you know, the initial conversation I had with him at the Silver Diner on you know, Fletcher street in McLean years ago. And that kind of thing just brings it all home when you have founders that you back been with a long time who are sincerely grateful for what you’ve done along the way. So that is a victory.

Lisa Calhoun
It certainly is. And you know, Tom, you have a long memory. I know when I went through the diligence process, I came and shook your hand at one of your investment committee meetings and you were like, you know, we talked a few years ago and I remembered and I was so impressed by that. 

Your diligence process in a way started years before you even had a fund of funds. If you don’t mind, I’m going to stay with you for a moment longer and ask what are your recent takeaways that are different about diligencing funds versus founders.

Tom Weithman
So you know, we look at the common denominator of course is people with funds. We look for track record. We don’t always have that luxury investing, you know, investing at the pre seed  stage with founders. Oftentimes we’re investing in first time founders that we’re looking. We probably have a little bit more by way to go on in terms of track record and history as we look at funds. Although we have done, you know, a couple of first time funds but it is a bet on the team and it is a search for differentiation. And as I think you mentioned earlier, you know how it may be more challenging these days to differentiate as a fund. I mean money at the end of the day can be viewed as a commodity. So what is different? I’ll put a plug for you.

What, what were intrigued by and I do remember the first conversation was about a study that you’d done on a demand for venture capital in the Southeast and that it was an underserved market. You attempted to quantify that, which I thought was a bold effort. And I was really intrigued by it because I’ve always, you know, ask myself questions about the latent deal flow out there. But we were really intrigued by your approach to AI and differentiating based on that as a means of creating value.

Lisa Calhoun
Thank you. Let’s turn to you, Beth. How do you call in victories for this last year? If there’s anything you’d be willing to share?

Beth Kytle Chandler
I think it’s a great question. And I would say there’s two major victories that I observed last year in venture capital, and one is that the flywheels started working again. I think what’s really important when we think about it from just an overall aggregate investment perspective is that venture is an asset class you want to continue to invest in over time. You don’t just sort of do the allocation and walk away. But the only way that can effectively happen is if the flywheel works and if there’s exits that happen so that capital can be recycled and then put to work again.

And as we know, over the last few years, you know, particularly kind of, you know, right after Covid, when valuations hit a high point, that there was a bit of debt capital for a while and there were both funds that weren’t calling capital and funds that weren’t returning capital. So I think you all are a great example with, you know, the victories you’ve had and the exits you’ve had, that is where the flywheel is working. And so that for me, was really great to kind of get that engine working again in client portfolios because it had been a line item without a lot of movement for the last few years.

Lisa Calhoun
Absolutely. And investing in venture at the very frontier, the very especially early stage,  it is a different journey than in almost the rest of the private markets. Let’s not even touch on public markets. So I’d love to hear how you both think of venture capital as an asset class. Not the technical definition so much as when you’re advising a client, Beth. and they don’t understand yet, and they don’t really maybe want to know. We don’t all really want to major in finance. How do you help them see ventures’ usefulness versus their risk tolerance? How do you talk about it today?

Beth Kytle Chandler
Yep, happy to. Happy to talk about that. So I think, you know, the key word is education, because I think it’s interesting where when you talk about sort of the private markets and where you can invest, venture capital is an area where people have preconceived notions and in particular when people have their first liquidity event. And this is something that I observe in the Southeast. 

I was having this conversation earlier with Greg about talking to founders who, some of which, particularly in the Southeast, have this perception that venture capital is predatory. And so as a result of that, they didn’t either want to take venture capital or when they think about their next company, they don’t want to take it.

And so there’s this education that needs to happen about what really venture capital is, particularly with funds like yours, that I mean, as we talked about today, I mean, you’re engaging with your founders in a whole a wholly different way than what those traditional models were, which is just allocate as much capital as possible, pilot into the winners, forget about the losers. Like it’s just that model that exists. That’s sort of the perception. So I would say that in particular in the south with clients, there’s an education about what venture capital is really about today and why that provide traditional tremendous value to the entrepreneurs and also to portfolios.

Lisa Calhoun
Well, we definitely like to keep things real at Valor. And I will say that perception of some venture capital as predatory is an honest experience and takeaway for many in the south and in almost every emerging economy. Because while it hasn’t been Valor’s journey, you know, I know many founding GPs and predatory terms is one of the ways they have chosen consciously to manage the risk of investing in an emerging region like the South. 

That’s not the choice we’re making, but it is a rational choice because when you invest in an emerging region like the South, you are, let’s be fair, adding some risk to the equation. And so I want to pitch that back Tom, who’s been investing in the south and in Virginia specifically for a very long time. And I want to, which I aspire to as well.

I would like to know how you look at the value of venture capital as an investment tool. I think that you use it as a non-profit in many interesting ways and I’d really love for you to share more about that with our audience.

Tom Weithman
Well, so from an economic development standpoint, as a non-profit, we view it as a tool in the toolkit to create out your value for the Commonwealth. But you know, as an investor, we, you know, we are looking for returns and we are looking for companies that will deliver those and we, you know, we come in with a small amount of models, we come in with a little bit up front and we kind of dollar cost average our way into people who are performing and hitting their milestones. And you know, that’s kind of been the model all along. You know, with the way you initially asked the question, what came to mind for me initially was that venture is a cyclical business. Has been and will be and there will be peaks and troughs.

There will be windows in which, you know, the M and A market, the IPO market is open. There will be those which you will have the enduring winter as well. And, and I think that if you’ve been at a long time, and we’ve been at it a long time, we’ve weathered a handful of business cycles, which is to say we’re as a team, we’re experienced.

Lisa Calhoun
You certainly are. And you know what, I’m not old, but experienced.

Tom Weithman
But it is a cyclical business. It’s important to know that. And they’re great companies created in adverse conditions.

Lisa Calhoun
It’s true that you can’t time the market, not the public and not the private, but you will be, if you stay in the market, there will be those winters and you’re going to have to hold through and it takes a lot of courage. One of the things that I’d like to talk about, since you mentioned cycles, is AI and shift our conversation a little bit to something that’s very top of mind for a lot of people right now. They read the headlines and they see AI, it’s booming. They see AI, it’s gonna bust. They see AI, it’s overvalued. They see AI, you’d be lucky to get in on the secondaries and anthropic at a, you know, I don’t even know, the latest valuation will be insane. And so how do you all parse the noise from signal?

Lisa Calhoun
How do you see this whole boom bust? Next God question. I know it’s playing out across both of your portfolios in real time.

Beth Kytle Chandler
Sure, I’m happy to start. So it is, I would say, one of the most commonly asked questions right now because we are living in a world where clients very deeply want exposure to AI and their portfolios and at the same time read these kind of alarmist headlines about, you know, oh, everything’s about to burst, stock market’s about to crash. You know, this because of AI or it’s either going to, you know, just accelerate because of AI or it’s going to crash. Like, there’s always these extreme scenarios. And I think the way that I think about it overall is that the trend that AI is bringing is not going anywhere. Like, it is a very distinct trend, and it is going to become more integrated in our daily lives. It’s going to become more integrated in both public and private companies.

Like, that trend is not going anywhere. Are there going to be companies that are misvalued and overvalued and potentially undervalued? Absolutely, because that is the nature of investing and that is the nature. But when I think about the seismic shift that is happening because of this technology, I don’t think that’s going anywhere. I think we can already see the rates of adoption of these types of technologies that happen at a scale that we’ve never experienced in history. But I do think we all have to recognize as investors that, yes, there’s to be misvaluations, there are going to be things that are going to be over and undervalued, and that’s sort of part of the ride. But I. It’s not going anywhere. And so transitions are messy.

Lisa Calhoun
Yeah, yeah, transitions are very messy. But one of my favorite entrepreneurs, Michael Mansfield, taught me very young in my entrepreneurial journey that where there’s chaos, there’s always opportunity. And so, of course, I’m leaning into the opportunity as well. Tom, how do you see AI affecting the portfolio? How you look at investments? Do you think it’s more bust, more boom? Where’s your head?

Tom Weithman
Well, I agree with that question. It is here to stay. Now, whether we’re in a bubble period or not. Now, I’m not even going to attempt to opine on that, but it reminds me a little bit, we’ve done a lot of cyber security investment over the years. Probably almost 20% of our portfolio, direct investment portfolio, has been in cyber security. And I dutifully go out to the RSA conference in San Francisco every spring and I walk the show floor, and I think, man, how do I possibly differentiate among all these cyber security companies? And that is a little bit how I view AI at present. We don’t see a company come in that doesn’t have. That isn’t paying homage to AI in some form.

And I think the critical thing that it behooves us as investors to do, and as you alluded to in your own presentation about how you’re using AI, is to discern how AI is contributing to value creation. That is the bottom. Is it. Is accelerating innovation? Is it accelerating market traction? Is it. Is it creating true value. And that’s that takes a discerning, I think, to determine as we sort out among those companies with AI appended to them in some way, what to invest in and what to pass on.

Lisa Calhoun
Very well said. I’m going to shift our lens a little bit to the south, and then we’re going to get a little bit into 2026 and sort of how you’re looking at the view ahead, because a lot of people are thinking about their portfolios in these times of year. And so it’s very timely. But to turn our focus to the region that you’re both so active in. I mean, Beth, you helped launch Cresset as a leading RIA in the south, and you focus on Virginia specifically. How do you see our region in terms of pros and cons relative to other regions? As much as possible around venture. But if you want to broaden it to investing in general, I certainly understand.

Beth Kytle Chandler
Yep. So I think the south is such an interesting microcosm because not only does it have the growth, which you spoke to earlier in terms of population growth, but the other thing is that when you look at kind of the macro trend from investing, which is that the number of public companies continues to shrink and the number of companies that stay private and choose to stay private longer, perhaps for their entire lifetime continues to increase, that world of investing in private companies continues to expand. Right. And so when you think about, when I just think about even anecdotally the clients in the south, there are very few very successful entrepreneurs that I speak to in the south that actually have a go public as an end goal.

And so when you start to think about that and the fact that more returns are going to be generated, if nothing else, because of the law of numbers, and they’re just more companies that are private, I think that venture is continuing to play a more important role in accelerating those companies up in a way that they become really attractive investment options. So I think that, you know, traditionally, I think we’ve been underserved as a market in terms of the venture capital that’s available here. I think that is changing. And I think that also it’s very different from like a New York and a West coast where there’s sort of these desire to become a public company. The Southeast tends to be, for the large part, most of the tech companies that come out of here want to stay private.

And so that, again, I think, is a great landscape for venture capital to be.

Lisa Calhoun
And with acquisition prices at a peak period in the cycle also very aligned with the market for the near term, which is an exciting time. Tom, how do you see it?

Tom Weithman
Well, so let me say, first off, being in, I live in Vienna, Virginia, and I, I look north and I wonder if I’m part of the mid Atlantic. I look east. Well, I try not to look east very much from Vienna. And then I’m delighted to be a part of the sunny south today. And here in this.

Lisa Calhoun
Thank you, Tom. We’re delighted to have you.

Tom Weithman
And I think there’s just immense opportunity. And I, you know, I go to those graphics charts that you’ve opened up with, and anytime you have that kind of a demographic shift and an influx of population, that speaks for tremendous opportunity. Evaluations are, you know, better than you’re going to see outside of some major tech centers outside of the west coast or New England or New York or Austin. And there’s both intellectual property here. So I think the last thing I guess I’d point to that I got from a conversations today and I get from, you know, from, you know, my occasional sojourn to Venture Atlanta and other places around the Southeast is that there’s a sense of community that is enduring, a sense of cooperation that maybe doesn’t exist everywhere. So I think those are the big pluses. And to me, that all spells opportunity for the Southeast.

Lisa Calhoun
You know, you’re so modest. I’m going to just push you to brag on what you have built with your team at VIPC here in Virginia, because as I’ve spoken with different states and different opportunities, because we invest across the 16 states out, I believe Virginia is number one in what it actually does for startups. You have developed something in VIPC that is unique and I am not afraid to preach about it. But honestly, I wouldn’t do as good job as you. So if you wouldn’t mind sharing what you’ve created for entrepreneurs who built their companies here in the Commonwealth, I’d love to hear a little bit about that.

Tom Weithman
First off, Lisa, I think you want to be a great leader. You find a parade and you run out in front of it and grab the baton. I know, look, I’ve got a great, I’ve got a fantastic team of people that have helped, that have been with me for a while. Some of them have been with me really since day one and almost 20 years in the direct investment mission that have been. Have been doing this with me. So it certainly hasn’t been a lone effort and we’ve had great support from the governance structure of our board and more detail than it’s probably worth. But we are part of a non profit called the Virginia Innovation Partnership Corporation. Its predecessor was CIT, or the Center for Innovative Technology.

That allowed us to start this funding effort almost 22, 23 years ago, investing in, I think, 330 companies by now along the way and seven funds. So we’ve been very active, the capital has been patient and we’ve taken a lot of bets and some have paid off. So it’s about having good people around you and being able to, I think, to adapt to change in the environment. And that has changed over time in many ways beyond the scope of this panel. But it’s really about the people who have been there. Around the table, a couple of interesting initiatives. We’ve had a great influx in the last few months of commitment from some large pharma companies. We’ve had an initiative called Lab to Launch, which is going to attempt to have a harmonious set of terms and conditions for outbound licensing from Virginia universities.

These are also accretive to what we seek to do by way of venture investment. So, and you know, we continue to try to be open and to learn from others. And that was a, you know, a big part of why we became involved with you guys is we not only do we believe in you as a fund and that you can create value for the commonwealth and returns from our fund, but were going to learn something from you. And you know, we had a great call with the Valor team a couple of weeks ago just to get a better understanding of how they were using AI to inform our operations. And we, you know, hope to have more of that. So there you go.

Lisa Calhoun
Thank you for those kind words, Tom. And some of the things that have stood out to us are if you’re founding a company in Virginia and you need a grant for your first team members, Virginia has a grant for that. If you want to go for SBIR capital, Virginia has an education program that will walk you through the process. No matter what your sector is, if you’re looking for that pre seed check, they do that and they do it relatively quickly and kindly. If you’re looking for a network, they have Virginia divided into different regions and they’ll connect you to your local network. That is next level operations and infrastructure for entrepreneurship. And I’m not at all surprised at this success that VIPC has because of that infrastructure that you and the team built.

So looking at 2026, tell me a little bit about how you see victory with your venture Capital exposure. And it can be, it doesn’t have to be about per se returns. It could be about what you’re looking for that the market hasn’t delivered to you yet or returns that you’re anticipating. I really want to take all the, the fetters off and here truly what would be victories for you that you’re looking for next year.

Tom Weithman
So we have some, some really interesting positions in our portfolio that we think are going to promise liquidity over the next 12 to 24 months as a function of circumstances in the market. Great opportunity there. We continue with Aurelius leadership to look at some really interesting funds that we look forward to bringing the fold. We look forward to really exploiting the synergy between our direct and indirect investment program. And we continue to try to learn how to do that. We are mirroring our sectoral strategy between the fund side and the direct side. The funds tend to be investing a little bit later than we go as direct investors, but we know there are synergies there that are yet untapped.

And for my comment with the last discussion, we think there are ways to unlock value in our portfolio just by way of the portfolio, the associations. We have 150 companies, we have a number of external advisors that we use and we think we can create a lot of motion and value there by learning how to probably using technology to enhance it, enhance those relationships.

Lisa Calhoun
It’s going to be a big year. Beth, how about you? What are you thinking about?

Beth Kytle Chandler
Yep. So I think Overall, thinking about 2026, when people think about kind of the economic environment, there are definitely a lot of headwinds right now both from, you know, geopolitical issues. You know, what’s going to happen with interest rates. You know, there is, you know, political situation.

Lisa Calhoun
It’s going to happen within China.

Beth Kytle Chandler
Let me my crystal ball, let me check. But it’s, but what I do think, and this is where I get very excited for, you know, our clients and investors, is that I do think that we have this generational opportunity to build wealth through AI companies. And I think that there are these step changes that happen in technology and we’re in the midst of one and we’re an early inning still. And so in that sense I do view both venture capital more broadly and specifically venture capital related to AI is something that we’re going to continue to be strategic about adding to because of the fact that there’s such an incredible opportunity set here that, so I’m very, you know, bullish on that overall.

But I think, you know, when it comes to the overall economy and investing landscape behind that, like, volatility is normal, you know, ups and downs are normal, you know, and that’s sort of part of the investing journey. But I’m really like, I’m all in when it comes to the AI part of it, so.

Lisa Calhoun
And you know, I’m all in for approaches like Cresset because one of the things I think that this AI technology layer allows us to have is service that really hyper suits the individual, family or individual’s needs. And that’s something that I’ve been very impressed by Cresset’s leadership on. It’s very easy to get retail wealth management and you get retail wealth management and it’s good, there’s nothing wrong, it’s great. Steak’s delicious, the chicken lunch is good and the people are amazing. But when you have specific needs in this age of AI, there are definitely wealth management strategies built to suit. And so I’m going to invite you to speak a little bit more about Crested’s leadership in this area because it is unique and differentiated and still a very young, fast growing company that I think more of the south needs to know about.

Beth Kytle Chandler
Well, thank you, I appreciate that. And yes, we’re only eight years old, so to grow to 75 billion in eight years is. It’s been very fast growth. And I will say this, that I think one thing that is, you sort of know my story, but I used Covid is the opportunity to sort of explore where is there innovation in this sector? Right. And there’s not a lot of innovation and a lot of sleepy wealth management areas, particularly big banks. And so finding Cresset and being able to join as a partner at Cresset was tremendous for me and for my clients. And I think one of the things that’s great when you’re at an earlier stage company is the ethos of change and innovation and is if we don’t do it well enough now, how can we change, evolve?

You know, we test and learn all the time. And so AI is a big part of that journey for us internally is it’s a tool. You know, you have to have discernment, you’ve got to have, you know, the people who are looking at what the tool generates. But I think I’m very excited to see how it continues to develop as a tool set internally so that we can better serve clients and continue to your point, to customize what we do for every family in their situation.

Lisa Calhoun
We’re all on AI notice that we have to, as George said, we have to reinvent ourselves before we’re made irrelevant by the market forces. Right. It’s actually kind of exciting. I really enjoy it, and I really enjoy working with the partnering with both of you. You are tremendous partners to Valor, and I look forward to continuing our conversation in all the best ways as we go through the holidays next year. Thank you for your time. 

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