Former Virginia governor Glenn Youngkin joins Red Cell Partners as partner and chairman

sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Our next guest is former Virginia Governor Glenn Yncan, who is joining Red Cell Partners as partner and chairman. We're very honored to have him join us today. How are you doing, Glenn? Welcome to the show.

I'm doing great, guys. Thanks for having me. Love your show. And it's just a thrill to be here. I I mean to have a chance to talk about tech as opposed to politics, I'm all in.

I I it's it's very funny. I was reading and I was like, "Okay, I got to skip all this politics stuff, get to the Carile era. I want to talk about Carlile. I want to talk about your your journey." But first, just get us up to speed on what's happening today, Red Cell Partners, how you met Grant, the story there, what you're hoping to achieve.

Yeah. Well, first of all, I've known uh Grant for Standig for a while and just admired the work he's doing. and he's built an awesome firm at Redell that is really transl it's it's it's really transforming the way venture capital works where the actual founders are part of Redell

and they bring scaling capital and operating support in order to incubate and then grow businesses internally and then they help them find customers and what's really neat is it's kind of a different kind of entrepreneur I mean their basic view is that there may be entrepreneurs that think about the best technology. But guess what? A, you know, a case officer at the CIA's got a problem that he or she's trying to solve. She might actually or he might be the right CEO and let's bring the right technology to go solve that problem for them. And that's the whole approach. And as a result, they have cranked out some awesome companies that are doing crazy neat things. everything from trace which is the governance layer that sits on top of your AI platform that really manages your agents you know who comes in who goes out you get an audit of who's there so in the healthc care world and the national security world that are heavily regulated it's the kind of capability that you need they just closed a uh just under $ 110 million round for that business growing like crazy some cool hardware which is really addressing data center power needs guess But data centers swallow a ton of power. And if you can find a way both at the semiconductor level and at the operations level to conserve power, you can absolutely do that. That's what Claros does. Hunted Labs is really cool. It actually finds nefarious third parties and open architecture AI applications

and they find bad Russian guys who are making their way into stuff that they shouldn't have access to.

So this is the kind of stuff that Red Cell's doing. And I have to say, you know, coming out of my most recent job as governor where we just grew the state like crazy and we're bringing businesses in, uh, to be able to partner with guys who have big ideas and big ambitions, it's really awesome.

That's great.

Incredible.

Uh, is there like how how how hard are the edges around the thesis of the fund? Uh, because there's many funds that are the very heavily thesis driven. and some others are just like the right entrepreneur at the right time. Might be going into a weird market, might be going into something that doesn't even seem like that big of a business, but years later you find out that it's that it becomes a monster. So, uh, how are you thinking about the balance between being thesis driven value ad and just backing, you know, extraordinary entrepreneurs who maybe have a vision of the future that even you can't quite clearly see.

Yeah. Well, one of my big learnings at 25 years at Carlilele is it's all about the leader.

It's all about the visionary. And sometimes visionaries want to take you a place that maybe not everybody understands, but listen, you're really happy you got on the train with them when they got there. And so there's a real balance here to make sure that you're not being, you know, o o overly dogmatic about what you're going to back and what you're not. In fact, you know, Red Cell's got a particular uh investment right now that they're incubating that's really focused on the on the elderly health care market. It's a place that really isn't attracting a lot of attention right now uh because folks are worried about it. But let me tell you, it's going to be a big hit because that's a giant market. And so oftent times, you know, running where everybody else is going isn't really the place to be. And what I found during my 25 years at Carlile both boast a as an incredibly active investor but also when I had the great privilege of being co-CEO is you got to back people

and that's what it's all about. It is it is great talent and when you find great talent oftentimes the right thing to do is to let them run.

Can you actually take us back in time? I believe you joined Carlile 1995. What was the core thesis of the firm? How much infrastructure was there? I know you were uh you know incredibly involved in building Carlile as a business as well as doing deals, but uh what was the first day on the job like? What were the first couple years like? How was the firm evolving in the mid '9s?

Well, you guys have started and grown businesses and so you know that there's always the moment in time where you wish it was further along than it was. When I joined Carl, they had already had some real big successes and and David Rubenstein, Bill Conway and Dan Daniela had already demonstrated that they were extraordinary investors and were building the building a great business, but it was still, you know, you know, very much the entrepreneurial environment. And I'll never forget the first day I got there, first of all, I didn't have a phone. Uh I didn't have a computer and and David Rubenstein went running by my office. I've been there for about an hour and he said, "Don't worry, we're going to raise some money. it's going to be okay. And I sat there and I said, "WAIT A MINUTE. WAIT A MINUTE. You didn't tell that to me when you were recruiting me." Um, so, you know, this that's the that is the awesome part about these fast growing uh energyfilled environments which are it's all about getting it done and and that pulls people in who want to go 24/7, who want to change the world, who want to do something that hadn't been done before. And it's the exact same energy that Red Cell has now. I mean, literally, you sit in their in their big big big conference room and they bring a bunch of their CEOs in and investment professionals and and a lot of their adviserss and it is it is just racing at breakneck speed to keep up with the ideas on how to grow. How can they bring a technological solution that's at one of their portfolio companies to aid another one or a great technology that sits inside one of the portfolio companies that's not being really commercialized in the right way? Can you spin it out and actually actually drive capital and opportunity? So that is so exciting to me. I have to say when when I was governor I had this awesome group of people around me who came to grow Virginia and we had the same environment. All right. What can we do to actually put a rocket fuel on the back of this great opportunity? And uh and that's what I'm hoping we get a chance to do a lot more of at Red Cell.

Can you take me through uh the story of the Kinder Morgan transaction, what that was like, what that meant to you in your career at that moment, what it did for Carile?

Yeah. So, for those of you who don't know, Kinder Morgan was at the time one of, if not the the largest take private Yeah.

uh in in business. It was enormous and uh and it was for me an opportunity to lead it for the Carlilele team. Kind of a uh you know a breakout opportunity as a professional. But the but the coolest thing about it was Rich Kinder who uh was the chairman and CEO at the time and the majority shareholder uh was just an extraordinary uh I mean leader to work with. I mean, I kept a notebook of just great management and leadership lessons from being able to sit at the table with Rich Kinder during that entire transaction about how do you serve customers, how do you grow talent, how do you think about expanding and opening up brand new markets where you might not have had a footprint, but there's a real opportunity. And for me at that stage in my career, it was an absolutely transformative opportunity. By the way, it was a great deal, too. All the investors did it very very well and I look back on that and I will tell you that one of the great great business builders of all time was Rich Kinder.

Uh what what did you learn from uh international expansion throughout your career at Carlile?

Well, it was also um I think one of the great opportunities for a young guy. When I was 33, I had a chance to go over and run our London office.

Yeah. and uh and I had uh Middle East uh North Africa, Russia, I I had some really new territories that I'd never been to before.

And you know, at that stage of your career, um you know, you one got to make sure you have good mentors to talk to to say, "Hey, wait a minute. You know, I'm getting ready to I'm getting ready to go to Moscow for the first time. You know, what should I be aware of?" uh all the way to listen, we've got this investment opportunity and I'm not sure I've seen one like this before. Where do I go in order to get input? But I have to say one of the things that I loved about Carlile uh for the every day of the 25 years I was there which was David Bill and Dan believed in growth.

Yeah.

And they believed that they could take young people and put them in search situations that they might not have been in before and stretch them. Mhm.

And I got to tell you, that's why I was there for 25 years. I loved every minute of it and every day was exciting. And international growth is one of those places where if you do it well, you can have tremendous success. But let me tell you, if you do it poorly, it can it can really wipe out a great business.

Yeah. What was the focus or or like the key unlock? Is it is it hiring driven? Is it bringing over the right people from the existing team, educating them, getting them up to speed, hiring from the local market? Like, take me a click deeper on that.

Well, the answer is all of the above.

And you you hit it right on the nose. So, you first have to have people who are I'm going to call it geographic experts, but you know, subject matter experts.

Yeah.

How do we perform in a new geography, in a new culture? most likely in a in a place where English is not the primary language and how do we do really well? Second of all, how do we bring what we do and make sure that we continue to do our business in a way that's consistent with our values so that it's Carlile or whatever company it is in this new geography.

And then finally, and I just think matching deeply experienced folks with young talent that wants to run is a great mix. And you know, you look back, Carlilele expanded around the world. I will tell you, our our business in Japan, uh, which we were one of the very first movers into Japan. It was an incredibly tough market uh, for a non-Japanese firm. And it became and has become one of the biggest markets around. And that it was part of the key strategy of hire local, make sure they make sure that we have consistent values, but let people run and do do what they can do best. And it also translates into into new areas. So, you know, we got into this area of secondaries.

Yeah.

Which is liquidity around LP interests.

And let me tell you, back when we first got started and bought Alpin Invest uh you know, that was not a business that people thought much of. And I think Alpin Invest and I just read about it in the newspaper today because I've been out of Carlile for six years, but I think they raised 20 billion dollars last year uh to provide liquidity into the private investment market. It's a huge part of allowing investors to expand their exposure and to bring more capital, which is why I'm excited about what Red Cell's doing.

Yeah.

Because they they are bringing a new idea into venture capital and they are they are raising money. I can't talk much about it because they're they're in the market now. Um, but you know, they have a substantial capital capability to help companies grow, but they're also bringing trusted and brandame partners, venture partners of other funds in to help them be the next round of of, you know, rocket fuel to help these companies grow.

Uh, the chat wants to know about how you processed the uh, Supreme deal. you were you were co-CEO, right, when when Carle bought Supreme. I don't know if you were there when when he eventually exited it, but at the time, you know, street wear today is sort of established as like this, you know, massive massive category. Uh, but you guys were, you know, an early mover in it. I'm curious how you processed it. I don't can't tell that you're wearing Supreme right now, but, uh, how did you process it originally? I I think I actually think it's in a it's in a a frame on my wall is one of the great deals ever that Carile did.

Wow.

Well, and I imagine like a lot of your peers would have looked at you guys at that time being like, what are these guys doing?

Yeah. Like stick to the energy infrastructure, do another pipeline deal, where's the next Kinder Morgan? And you're like, actually, it's Supreme.

Well, you know, Jordy, part of part of an investment environment is getting creative. And there was a we had a great team that was focused on consumers and consumer trends and you know we invested in a lot of consumer product companies really fashion

at that time and were really kind of out in front. Golden goose was one of our great European deals. Uh and then of course Supreme was such a such a unique idea and we had this extraordinary group of investors that came and said we think this is a great idea. Here's how it's going to work. We had good partners in the deal with us, the founders. And before you know it, you know, it just really took off. And and what you see over and over and over again is by bringing capital and unlocking an opportunity, they're they're self-fulfilling, right? I mean, without the capital, it might not have grown as fast or as large because you couldn't have expanded and had inventory and all the things. Although, they had a really interesting inventory management system just to go back to that deal. But, but the net of it is often times when you can bring an investor and a an entrepreneur and visionary uh together that actually see where they're both going, then you can take one plus one and turn it into 10.

Yeah. Um, please

got to talk about data centers. So much in the news this week, obviously the the New York state moratorum.

Uh what is Red Cell? How is Red Cell thinking about the category overall? You got to lead the the data center capital of the world.

And we're seeing more and more startups and incubations work up and down the supply chain, whether it's semiconductor design to data center construction. like startup is used to mean you write software and now you can be shovels in the ground. Uh and we see a lot of successful companies there but how are you seeing the opportunity risk uh anything else on data centers?

Yeah. Well well let's just begin with the aside from anything else there's trillions of dollars that's going into data centers.

Yeah. And I think this year it's going to be a 700 billion dollar capex sector.

And um with that one, it's driving a big chunk of our economy today. Uh I think out of the GDP contribution, the data center and tech investment world is the lion share of it right now, driving so much of what we're doing. Uh and so if you are thinking about big markets, it's hard to think that's not one of them because of course it is. Um I think second of all um so much of the of the opportunity like what uh what Redell has leaned into with Claros is how do you address the problems that are that are really inhibiting data centers and the acceptance into the marketplace and power consumption is right at the top of the list.

Yeah. And so if you are thinking about an opportunity to to either re-engineer the the semiconductor infrastructure to re-engineer the power draw so that you can power the entire thing without power conversion and therefore the associated power loss and Claros does both of these things then all of a sudden you can see 20 25% almost 30% uh efficiency gains in in power utilization. That's a gamecher.

Yeah. And that's real value added. And so this big supply chain which has been built up in order to meet this massive uh industrial investment activity going on around the country I think has tremendous opportunities just in that supply chain not to mention all the opportunities around the technology itself. Totally

and that's why red cell I think has got so many ways that they are playing around this this you know tatonic movement and investment where you know go going back to trace if you are the governance layer over top of your AI uh capabilities and that governance layer can manage uh the the uh interactions between agents and information in a way that is restrictive when you need it to be. It's secure. It's reportable. It's auditable.

Then all of a sudden, this is a bit of the holy grail about what people are worried about from a from a information security standpoint, but also from a real dependability that what's being used to to in fact drive uh a large language model is dependable and repeatable. And that's huge. And so we're seeing we're seeing trace have big applications in the health care sector like they're like they have with Duke where they now are starting to drive a lot of the patient data at Duke because they can be they can be compliant with all the healthcare rags but on top of that they're seeing big applications of course in national security and uh and that's why I mean that's why you see you know you see a guy like Grant for Stanic and he's got this really cool idea of what can be done with this governance layer and now you start seeing lots of markets you can get into. I think the next market for for trace is going to be in the fintech world and in the financial services world because once again it provides that governance layer which provides people with great certainty about security.

Where do you see red cell in 25 years? If I was naively pattern matching on your work at Carile, I would say there's going to be more strategies. This is a mega fund. I'm looking to what general catalyst did a private equity deal for a healthcare company. There's raas now that are trading publiclix. You're there's growth fund. There's an incubator. Like if there's someone you want around the table when you're adding strategies, new markets, it's probably you. But where do you see red cell going in 20 years? Is that naive or is this uh is this possible?

Well, I would say from from my standpoint, it's it's premature for me to answer that question.

Um, this is this is Grant's company. He founded it six years ago. It's been his vision. I totally buy into his vision.

Sure.

But I think there's this tremendous room to create great companies.

Yeah. And you know, I think at the heart of a great investment firm, a great venture capital firm or private equity firm,

um, you're an investment firm. You're you're you're a visionary place where entrepreneurs can come and grow great companies that really do address missionritical concerns for sectors and in this case for the country as well.

Yeah. And I and I think by being able to address both missionritical issues for industries like healthcare and cyber and national security, not to mention financial services and fintech.

But if you're but you're also able to bring uh uh solutions that address the national issues,

then I think we've got big markets, we've got big momentum, and that's going to define Red Cell. And that's why I'm so excited because that's exactly what Grant's vision was. That's what he's building and has built time and time again. And I got to tell you, there are there are uh so many talented folks in America today dreaming up and inventing just amazing things. And I got to tell you, Grant Bstanzig is one of them.

I love it. That's a great

Well, we want to hit the gong for you.

Hit the gong. Thank you so much for coming on the show. What a pleasure.

Congratulations on joining as a partner and chairman.

Look at that. I broke the mallet. We broke the

very excited to have you on the show. Have a great rest of your day. Have a great rest of your day soon and hopefully we can talk to you.

I I I hope we'll get a chance to do it again.

There's a big discussion topic that you guys are on recently, which is what do we do with

with workers that might be um

uh dislocated because of AI and that's something I'd love to engage with you guys on at a future date.

Yeah, that'd be great. Thanks so much for coming on the show. We'll talk to you soon. Congrats.

Have a good one. Um,

mallet broken.

You broke the mallet.

Look at this thing.

What a I mean, it basically came off.

Yeah, these mallets. Uh,

we need to mill we need to mill a m a mallet out of pure titanium or something. Uh, maybe castings. And when we break a mallet, we can merely pour more.

Next, they're going to want us to warm up the mallet

over over a fire. Well,

um um

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