Taylor Adams, Noname Ventures
Taylor Adams is a fifth-generation family-office member and a consultant to family offices. He founded Noname Ventures, an early stage venture capital firm based in Los Angeles, after starting his first technology company as an undergrad at the University of Southern California. Adams invests across private equity, real estate and venture capital.
How is your family office structured?
Our family office was formalized in 1962. In each subsequent generation, at least one new entrepreneur or value creator took whatever legacy capabilities existed, retooled those and started a new type of business. Now, the office is four distinct family branches. Within my branch, there’s a lot of active entrepreneurship.
What was your path from family office to venture capital?
I joined the office out of college and was part of a direct private equity team, then worked on the real estate side of the business and then spent a few years inside the more administrative functions of the family office and realized my life is supposed to be about more than this.
I pivoted to technology and entrepreneurship. I started my first tech company when I was an undergrad at USC and found myself at a technology incubator helping three different founders raise seed capital. I realized I really enjoy working with entrepreneurs, so I naively started my first venture fund.
What’s your view of the current family-office model?
Family-office best practices are broken. Family offices prioritize the management of financial capital over the development of human capital. A family with origins in entrepreneurship goes from risk-taking and value creation to preservation and protectionism. I believe in empowering people to become value creators rather than default value consumers.
What’s the solution?
I advocate for a decentralized family office where you have the core office, but you empower individuals within the family to create their little satellites establishing their own vision and purpose. It might start with an empty LLC that serves as a developmental sandbox to experiment with an entrepreneurial or philanthropic idea. Next-generation leaders feel like because they’re surrounded by a culture of extreme success, they don’t have implied permission to fail. So they tend to be risk-adverse. Creating this sandbox where the purpose is for them to fail small and fail forward is incredibly empowering.
Biggest investing mistake you’ve made?
Taking an opportunistic approach for too long. Everyone starts investing in a new asset class opportunistically. Over a prolonged basis, an individual might be discouraged by the outcome, but it could be that the approach to the asset class is wrong, rather than the asset class itself.
Best investment decision you’ve made?
The best investment decision I’ve ever made is to build investment capabilities that can sustain and create value. When I established my first venture fund, it could have been fully capitalized from our family office, but I made the decision to raise outside capital. I wanted to have an outside smell test. If I was simply using my own or family capital, it might get tempting to overlook certain institutional-grade operating processes that are necessary in running a good investment strategy.
What’s your investment approach?
From a family-office perspective, I embrace programmatic investing, where you’re creating an investment thesis around a certain asset class or thematic thesis strategy. You’re building an investment capability to operate that thesis through cash flow modeling, management schedules and a portfolio construction model with performance, metrics, benchmarking and analytics. Programmatic investing is important on a multigenerational timeline because it’s a lot harder for future generations to blow through assets if they’re wrapped in a thoughtful strategy and operating structure.
I employ a blended platform approach, which combines different types of investing. In venture capital, it includes a certain allocation to fund-of-fund investments. The goal is market coverage, market credibility and benchmarking. The next bucket is single fund investments, with a goal of accessing insights and collaboration from fund managers. Those two buckets feed the third bucket, which is direct investment for differentiation and engagement. The buckets come together to create a powerful investment capability with value multigenerationally.
Amy Guttman, who conducted this interview, has been covering entrepreneurs and startups since 2014. She contributes to Forbes and has been a correspondent for the PBS Newshour, BBC, Associated Press, CBS News and others. Amy also is a podcast presenter and regularly participates in tech summits around the world, conducting fireside interviews, moderating panel discussions and speaking about how to tell compelling stories.