Wesley Chan he can often be seen wearing his trademark buffalo hat; nevertheless, he could also be much more famous for his ability to spot unicorns.
Over the course of his enterprise capital profession, he has invested in over 20 unicorns, including AngelList, Dialpad, Ring, Rocket Lawyer, and Sourcegraph. Five of them became decacorns: Canva, Flexport, Guild Education, Plaid and Robinhood. For most of them, Chan was the first to check in.
While working at Google initially as an engineer, he became an investor. His enterprise capital story began at Google Ventures and continued at Felicis Ventures. Currently, as co-founder and managing partner of FPV Ventures, he leads a two-year, $450 million enterprise capital fund with co-founder Pegah Ebrahimi.
And while all of this success has been well documented over the years, his personal journey… not so much. Chan spoke to TechCrunch about how his life influences startup investing.
His story began before he was born, when his family immigrated to the United States from Hong Kong in the Seventies.
“They came here with no money and they didn’t really have any money growing up,” Chan said. “It’s just fascinating to watch this journey. For them to leave a place where they didn’t speak a word of English and – they still don’t speak much English – and start a new life because they thought that was what was needed.”
Chan admits that when he was young, he underestimated his parents’ fortitude. But growing up in a hard-working immigrant family that did not have much money taught him how to recognize nuances and be an adaptable person.
“I run a company now where people are very quick to judge,” Chan said. “Among my LPs, many of them don’t have the same background as me. I have to listen to all the songs they were taught on and act like a chameleon. Then I have to signal to them that they can trust me.”
How he got into MIT despite bad grades
Chan’s parents divorced when he was a child, and his mother raised him in a single-parent household. In highschool, he worked three jobs to help support his family, including as a parking attendant, waiter and dishwasher in a biology lab at the California Institute of Technology.
He got a job as a dishwasher through an ad on Craigslist and remembers taking the 22 bus from his working-class Southern California town for 42 minutes to CalTech, where he washed beakers.
One day, the head of the laboratory, a famous genetic biologist Ellen Rothenberg, asked him if he would read a college textbook on biology and laboratory techniques. Not wanting to lose his job, he did it.
“I barely took biology in high school,” Chan said. “I went to highschool, which wasn’t great. It was like hook or swindle that I finally made it through school. Other kids played extracurricular sports or took PSAT prep classes. Not only did I not have that, but I had to earn money for my family.
It seems that no matter his highschool experience, Rothenberg saw something in Chan. When one of the graduate students left, Chan was promoted to a lab position. For the next three years, while he was ending highschool, Chan also engaged in research.
This took place in the early Nineties, at the starting of stem cell research. Rothenberg’s team taught the teenage Chan how to conduct research, and he later joined a group that discovered a protocol for turning stem cells into red blood cells. It also helped when the team published a scientific paper on the protocol.
One day, Rothenberg, who had studied at each Harvard and MIT, asked if Chan had thought about college.
“I’m thinking, ‘Oh man, I have to finish this job and earn money for my parents,’ and she tells me I should go to school,” he said. “I didn’t know she called the admissions offices. When you are like a poor immigrant student, you do not understand all this stuff.
Harvard ignored her, but MIT didn’t. And that is how people find yourself in school with terrible grades, Chan said.
“Someone gave me a chance,” he said. “So many people stumble in life, and I don’t think I would have had the opportunities I have today if it wasn’t for someone who said, ‘I work hard.’ He wants to do research.”
Business lessons from loneliness
Chan said he also looks at enterprise capital this manner. He’s not looking for someone who was a member of the relevant country club. Instead, he looks for individuals who have character and understand what it means to work hard.
“One of the lessons I learned growing up this way was that you have everything to gain and nothing to lose,” Chan said. “It’s labor and a lot of luck. Plus understanding that there are individuals who will aid you ultimately open the door to all the things.
He credits him with Rothenberg’s help in all the things that followed.
“If it weren’t for MIT, I wouldn’t have found Google. If it weren’t for Google, I wouldn’t have found Google Ventures. If it weren’t for Google Ventures, I wouldn’t have found my team at Felicis,” he added. “And if it weren’t for Felicis, I wouldn’t have Canva and all these amazing companies, many of which are run by immigrants or people with great grit who grew up in a very non-traditional environment, like I did.”
To attend MIT, he had to leave all the things he knew at home and move to the opposite coast. There, Chan also worked various jobs to pay for his studies at MIT, where he earned a bachelor’s degree in computer science and later a master’s degree in engineering.
What was it like leaving your loved ones? In one word, it’s hard. Due to the need to support himself, Chan couldn’t attend as many classes as he wanted, nor could he behave like his friends who went on interesting trips during their breaks.
However, he recalls this experience as one other thing that shaped him for life as a enterprise capitalist.
“When I led Canva’s Series A, which will ultimately deliver over 40x returns for this fund, 111 people said no, which made it a very lonely deal to do,” Chan said. “When you’re a guy who can’t go to prom because you have to work, or you can’t go skiing or to your graduation party, that’s what I deal with.”
Such exclusion taught him: “Who cares if the remainder of the world laughs at us; you have an incredible amount of decisiveness and the ability to like being alone and cope with loneliness.
After graduating, Chan returned to California and got a job at HP labs. Then the web crash happened and that job fizzled out. But not all was lost. Despite the disastrous environment, one company found employment. And they happened to like people from MIT.
Spoiler, it was Google. Working at Google now is different from the movie “The Internship” where Vince Vaughn and Owen Wilson get an internship and spend their time competing against other teams on different projects. It was higher this manner… for those that liked dogs.
“Dogs were running around and bumping into you and knocking you down,” Chan said. “It wasn’t like that movie. You have to go to work.
He was assigned a project developing an promoting system “which was most needed at the time, so I was very lucky.”
Building something the founders want
This began a 15-year profession at Google that included seven years in product development and five years as chief of staff to Sergey Brin, who founded Google with Larry Page. Chan worked on projects including the Google toolbar that became Google Chrome.
“When you’re one of the few companies that can do that, it’s great,” Chan said. “Larry and Sergey were very nice and always said, ‘Hey, maybe Wesley brought us something and we should let him experiment with it.’ Ultimately it will become Google Analytics or Google Ventures.”
He was even one of the individuals who interviewed Sundar Pichai when he applied for a job at Google. Pichai, after all, later became CEO of Alphabet and Google.
In 2009, Chan told Google he wanted to start a startup. He joined the company when it had slightly below 100 people and stayed until it exceeded 35,000 people. He remembers how they joked that when you go to a startup, you are the one buying the toilet paper. Chan replied that he didn’t mind buying toilet paper. Instead, they suggested he help Bill Maris create Google Ventures.
“They told me to build the product the founders want, rather than being the founder whose product the company wants. And we did it,” Chan said. “Google Ventures is still really the company that people want to take money from.”
In addition to overcoming obstacles to get to where he is today, Chan still faces some adversity, especially as an Asian gay man working in the tech industry. When he began in enterprise capital, the firms were run by older white men, sharing deals on soccer fields or on African safaris, he said.
If you are someone who wants to build a transaction flow network, but your background doesn’t fit the country club mold, it’s difficult, he said. There aren’t many enterprise capital support groups for the LGBTQ+ community either.
“That’s the challenge of being an outsider in this industry,” Chan said. “You have to fight your way to the top or find other ways to work with founders so it doesn’t look like you’re lazy or not making any progress. If you look at venture capital and the number of successful LGBTQ+ partners, you can count on two hands. There are not many of them, and there are probably 6,000 venture capitalists. Why is there such low representation? And the number of open-minded people like us is even smaller.”
That’s why he and Pegah Ebrahimi founded FPV Ventures two years ago – to provide an investing style based on their unconventional experience. (Ebrahimi cut her teeth as Morgan Stanley’s youngest CIO before serving in a series of management roles at various tech firms. She actually worked on the Google IPO).
And managing partners do this with the support of charities and foundations. Many of the founders of the firms the company works with “care very much about making money for good people,” Chan said.
“Our founders happen to be underrepresented minorities or women, and a really fascinating theme that I hear over and over again is that they feel like people misunderstand them,” Chan said. “We find founders who have the drive to succeed and have an incredible combination of humility and success. They also make sure all their people are taken care of.”