5 Questions with Edward Tsai: Westwood Ventures Managing Partner
April 7, 2021 | Ashley Brindamour
We are pleased to welcome Edward Tsai as Managing Partner for Westwood Ventures, Alumni Ventures’ fund for UCLA alumni and friends of the community. Edward has a background in technology and 15 years of investment and strategy experience in the U.S. and China. We recently caught up with Edward to learn how he came to join Westwood Ventures.
Will you share your background before joining Westwood Ventures?
I grew up in the Bay Area, surrounded by technology. I went to UCLA to study Computer Science for both my Bachelors and Masters degree. While at UCLA, I worked in several tech companies like Cisco, HP, Extricity (acquired by Peregrine), and Neoteris (acquired by Netscreen). My family also worked around technology: my dad was a network engineer and my mom started a small business selling tele-caption machines to help immigrants learn English.
Right after UCLA, I joined Bain and Company in the Palo Alto/San Francisco office, and I learned the fundamentals of strategy. I then began my venture career at DCM, a $4 billion AUM global (U.S., China, Japan) early-stage venture capital firm. It was here where I learned a lot about how to invest in successful companies. DCM partners like Dixon Doll (NVCA Chairman Emeritus) and Ruby Lu (invested in Kuaishou, which reached ~$160 billion after its IPO) and others were great examples in the venture capital industry of how to treat people. DCM also supported my fellowship at the Kauffman Fellows Program (Class ’15).
After DCM, I joined a large technology company, 360, and later joined an enterprise security company, Qianxin, which spun out of 360. During this time, I had the opportunity to learn strategy and corporate development and invested in companies such as Cruise Automation (acquisition by G.M.), Life360 (ASX: 360), Palantir (NYSE: PLTR), and Brave Software. I also served on the LP advisory committee at top funds Cendana Capital and Ten Eleven Ventures. At Qianxin, I led 5 billion RMB (~$700 million USD) in fundraising and incubated a 600 million RMB cybersecurity spinout fund called Security Capital. Qianxin IPOed on the Shanghai Stock Exchange in 2020 and reached above 90 billion RMB in market cap.
How did your time at UCLA impact you, personally and professionally?
UCLA provided a great way for strong academic learning and exploring and learning from others through many student activities and opportunities. While at UCLA, I served as the undergraduate student representative for the Academic Information Technology Board, which was responsible for I.T. policy and strategy at UCLA. I learned a lot from seeing how academic leaders carried themselves in high-level discussions, including recruiting the first CIO of UCLA. I met people from diverse backgrounds through student groups and projects like ESUC’s Engineering Week and hosted an innovation talk with a VC from Redpoint and a UCLA CS professor. While in my Master’s program in Computer Science, I cross-enrolled in classes at UCLA Anderson, which broadened my horizon on business and strategy. These experiences were helpful for me in observing smart people collaborating on important ideas.
What sparked your interest in working at Westwood?
Westwood Ventures is a UCLA-community empowered venture firm, and with over 500,000 alumni, UCLA has one of the largest alumni networks in the nation. Joining as Managing Partner of UCLA has allowed me to strengthen and build new relationships in UCLA’s entrepreneurial community, which continues to grow with many successful companies.
Additionally, as Westwood Ventures is a fund in the Alumni Ventures’ fund family, it leverages Alumni Ventures’ investment coverage across multiple investment sectors and stages across networks of other top schools. I found that attractive, as I enjoy looking at a wide range of startups and technologies in both the consumer and enterprise space.
What trends in venture capital are you most excited about?
Venture capital and successful startups are driven by disruptive innovation in product, technology, and business model. Cybersecurity will continue to be at the forefront of innovation because new technology platforms require new security architectures and approaches. There have been several strong IPOs in Cybersecurity in recent years, such as Palantir and Qianxin, who reached >$10 billion in market cap after IPO. Within cybersecurity, companies addressing privacy, the intersection of identity and data, and security visibility are good to watch. I believe consumer-experience driven innovation will continue to bring disruption in large markets with slowing incumbents — giving opportunity to new agile and customer experience driven Fintech, Insurtech, and Proptech, etc. companies. Next-generation consumer entertainment, including new media consumption form factors and business models, is also an exciting area. Innovation is global, so there are many learnings from products and business models from one market (not just in the U.S.) that can be applied to other regions (including the U.S.).
What resources do you recommend to people interested in venture capital or entrepreneurship (books, podcasts, etc.)?
When thinking of venture capital and entrepreneurship, it is important to be knowledgeable about a space you are passionate about. You should not only read good general startup sites like Techcrunch, but also follow focused conferences, sites, blogs, and podcasts. For cybersecurity, I’ve regularly attended RSA Conferences and broadly walked the expo floor to learn about emerging cybersecurity trends and companies. For China-related topics, I like Tech Buzz China and Tech in Asia. It’s one thing to know which startups are hot, but it is even better to understand the underlying ecosystem drivers and technology trends that enable these startups.
Also, the world of VC is very reputation-driven, and your reputation is directly impacted by how you treat and help people. I was blessed to have been mentored by a number of VCs who valued that. I learned from them and others the importance of treating everyone with thoughtfulness and respect and to proactively find ways to help people.
It’s important to have the right perspective, principles, and promises to guide what you do — like loving your neighbor as yourself, and whatever you wish that others would do to you, you also do to them. In the Kauffman Fellows Program, I presented my final project research on “How to Love Your Neighbor as Yourself in VC,” of which I found that there are many areas of how people treat one another in the same firm, across VC firms, and with the entrepreneur that could better reflect that principle. This included areas such as sharing quality deal flow, giving appropriate credit to teammates, and providing realistic expectations — which reflect ways we would naturally want others to treat us. Hence, I recommend reading material that shows you what kind of person to be. Having the right perspective, principles, and promises in your mind to shape your actions will help tremendously in your venture capital and entrepreneurial journey.