🎙️Episode 13: Nathan Low — The Investor Who Bets on People, Not Just Products

here. How a delayed flight and a serendipitous conversation with a stranger serves as a catalyst for a financial career that raised over 10 billion dollars in capital, subsequently impacting Jews worldwide. Be fascinated by the story of angel investor Nathan Lowe this week on Jewish Grit. [music] >> [music] >> Nathan, welcome to the podcast. >> Thank you. >> So, you graduate Harvard University and you start with a pretty mediocre job if I'm not mistaken, and fast forward a bunch of years, you've raised 10 billion dollars of equity, maybe even more. How does a guy get from zero to 60? A lot of fortuitous events which I now realize are divine but at the beginning I didn't realize that they were divine. Fortuitous meetings fortuitous help fortuitous mentors. Every step was pre-planned but I didn't realize it at the time. >> Share share with us a little bit about what your entry level was like. You graduate Harvard, you get a job. What are you doing at that point? My first job was in the semiconductor business as a management trainee, a class of one. They had no others. And it was a very paternalistic company. I love them to death. Was ultimately sold to Infinion for $1.2 billion. They had factories all over the world making semiconductors and the uh cycle time was too long and the work in process was too high and the uh the cycle time for to make the semiconductors was too long. And they said, "We're going to put you in this department. you can't fire anyone, you can't spend any money, and we won't let you switch from this department to another department until you fix it. But you can't spend any money, and you can't fire anyone. So, I had to learn how to work with the people that were there, to work with the systems that were there, and to save 80 to 90% of the cycle time to make the products. And then my reward was I got to do it at the next factory. So I did it in LA, I did it in Mexico, I did it in London, I did it in help them in Italy and then I had to do India and uh Tokyo. >> That has absolutely very little to do with what you do today. How did you segue into that? So as I mentioned before um God had his ideas of taking me on the journey that he had me planned for had planned for me and uh I was skiing in Shamani uh France um and flying in from Geneva Switzerland and uh the plane was delayed and I'm standing next to a guy and he's telling me what he does and what I do and I started telling him yo I've been investing in the stock market since I'm 14 blah blah blah. He said, 'Well, I think you should come interview at my company. I said, I don't know. And he was working at Solomon Brothers, which was the hottest company in the 80s by far. I go to interview with his boss and they make me an offer. The offer is then contingent on two things. One, by taking an 80% pay cut. And number two, going to uh to New York and having what they now call a super day, that is these interviews from 8:00 in the morning till 5:00 in the afternoon. And uh he calls me the next day. He said, "Could you sleep last night?" I said, "No." He said, "Okay, so then you got to go to New York and get everybody to approve you." So I go to New York, have the whole day of the interviews, and at 5:00 they come in and they say, "We've decided to extend you an offer. You have 5 minutes to accept." >> Wow. >> If you don't accept now, the offer is rescended. So >> forever rest your peace. So, I accepted the offer, took the 80% pay cut, and went to work at Solomon Brothers in the training class that Michael Lewis uh was in as well. He was the art history major from Princeton. I was the American history major, and we wiped the floor with the MB with the MBAs. >> Why did you take a 80% salary cut? It was like an investment. >> In retrospect, say it was an investment. Solomon Brothers was the hottest firm in the world in the 80s. And the idea that I would be able to get a training program from them for 5 months was of great interest to me. So I just decided to do I was 24 years old and just thought that this was a great opportunity that had literally fallen in my lap. >> Was it commission based? >> No, not at all. Solomon Brothers didn't ever pay anybody commissions. It you had your salary and you had your bonus. The bonus was subjective by your boss and in your first two years your bonus was fixed. So, how did you do at Salman? >> So, I made $300 million trading for them in the first year and not too shoddy. >> And they paid me a $6,000 statutory bonus on top of my $42,000 salary. >> Wow. But how did you feel about that? That they took made so much money on your back. >> I didn't think it was the right thing to do. And then when the chairman of Barrett Sterns heard about it, John Slade, they made me an offer at almost 10 times the the uh the salary. And then I got the same offer from Credential a year later. And so and after four years I was out of Wall Street. >> And what were you doing then? >> So one of the partners at Solomon Brothers asked me to join his firm which was a small investor relations company helping micro cap I would even call them fto cap companies like teeny companies with $10 million market caps. And so that's what I did. >> And then at what point did you segue into your your own shop? about a year later uh I got married and my wife said you know that with our savings in a roughly four months in our spending we will have no money so you need to quit now. So thanks to her I quit and started Sunrise which is where we're still sitting here. Um and thank God it worked out well. >> So you grew up in Los Angeles, correct? I did. And your wife's from New York. >> She's from New York and Israel. Blind date from someone who was soliciting me to uh to finance his movie. I wasn't interested in his movie, but he said, "You have to meet this wonderful girl, not knowing that she was observant." He knew that she was observant and he knew that I was the antithesis of obser observant. So, I don't know how, but he decided or God decided that we should meet. So, >> how does that work out? Your wife's observant. You're not. >> She bought me a Keepa, not this one. Had me meet her uncle and her aunt. Her parents were in Israel. The rest is history. And I guess on some level you shifted a little bit more to the word stay observant. >> So way of life. >> So she introduced me to Rabbi Lukestein who introduced me to Rabbi Rubin. >> Um and I started uh learning once a month and then it was once a week and it was three times a week and then Rabbi Kolski used to come in every day >> to the office uh fixed part of the schedule and all my other meetings would be fit around that. >> So you study Torah every single day? every morning without fail for over 32 years. >> That's fascinating. So, a fellow who didn't grow up with much Torah knowledge. >> Zero. Negative zero. I'm actually upset at my college for thinking that you could graduate with honors and not let people know that true knowledge is in these books. >> How do you feel about your alma mater in 2020? >> The formerly the formerly great universities, the formerly elite universities. I think all of them are are pedalling. They're teaching what to think and not how to think. When I went in the 80s and in the 70s, we were taught how to think. They've given up on that. Now they only teach you what to think. And what to think is not a way that you can actually explore the world. >> Are you in touch with your gra anyone in your graduating class at Harvard? >> I'm friendly with one kid from my graduating class that I met the first day of of college and we we work together on projects. But I'm also part of an alumni network at Harvard. And what's interesting is how the rest of them of varying levels of religiosity were unaffiliated or reasonably unaffiliated before October 7th and then have become much more sensitive to all sorts of things including religious things. And they realized that the fellow travelers that they were in the tunam world in the repair the world uh philosophy, the people who were their friends were their friends as long as the Jews supported their woke ideologies. But unfortunately the other people are at base uh anti-semites. >> Is that troubling? >> No, because it's ex how the world is. For the last 2,000 years, anti-semitism is normal. And the last the 50 years from 1945 to 1995 was an aberration. But now we're just back to normal anti-semitism. So it's not different than Spain and it's not different than England and it's not different than Germany. We're back to normal anti-semitism. And we can't base our futures on what was for the 50 years after the war. It's just an aberration. And so with as they say in the finance business, past performance is no guarantee of future performance, future results, we should expect that anti-semitism, which has now reverted to historically high levels, will continue at these high levels. As someone that didn't grow up, you know, observant and then found this connection to Judaism in a meaningful way, does that bother you that you have this beautiful, amazing way of life where you study and you grow and you have this connection with God and spirituality and the world hates you for that? >> I don't know if the world hates us for being religious. Perhaps the world hates those of us who aren't as lucky as I was to find um the truth. And so anti-semitism, as my late father would say, is God's way of keeping the Jews together. And so if the Jews are together, God doesn't have to inspire the anti-semites. And if the Jews are not together, then we need to be reminded uh of how important it is to be unified. So I am all for Jews being unified and accepting every Jew wherever he is. And >> my understanding also is that you have a deep connection to the land of Israel. So my great-grandparents moved to um Erits Israel in the 1880s, so 145 years ago. My grandmother was the first baby born in Rishon. My great-grandfather was the first Jewish doctor in Palestine. Um very very deep. My great-grandfather brought citrus and eucalyptus trees to Israel to dry up the swamps to get rid of the malaria. He was he the Ben Yehjuda wrote his dictionary of Hebrew in our family's library and my great-grandfather wrote his dictionary of coining all the medical and scientific terms in Hebrew in that same library. >> That's fascinating. And you know turning to your professional career that also has a big component of Israel. Can you share the >> So the the the angel investing I do is almost entirely but not entirely but almost entirely for Israeli companies and helping them to access capital and build up partnerships here in America and ultimately get purchased by American multinationals. >> And how has that journey been? It's >> been a lot of fun. >> Um how many companies do you think you how many companies have you have you >> 157 >> and how many of them are flourishing? >> Well let's say first of all 87 of them have failed. Let's talk about the failures. This is Jewish grit after all, right? >> And the companies that fail typically fail because they run out of capital and they run out of capital for different reasons. Mainly because some of the entrepreneurs think they know better than the market. When the market punches you in the nose, you're supposed to pivot. But some engineers think that they know better and as a result um they wait for the market to correct itself which it doesn't and they run out of runway. 37 of the companies have exited, thank God, and the others are on route to exiting. So it's been a very interesting time. I was >> that's that's a amazing statistic. >> It's higher than average. >> How are you hedging your bets a little bit better than everybody else? What's your edge? >> It took a long time to evolve the first 15 years of the angel investing. I'd say 27% of the companies exited. More recently, we're running at 60 or 70% of the companies exiting, which is a better percentage. To which I ascribe three things. one, I pick better entrepreneurs. And the secret to those entrepreneurs being better is what we talked about before about the market punching you in the nose. And so the idea is that if the entrepreneur, assuming that they have a good product and they have intellectual property and they have a good total available market and they have all the things you're supposed to have, the most important thing is modesty. If the entrepreneur is modest, when the market punches him in the nose, he will pivot. he or she will pivot. If they are arrogant, they will not pivot and they will run out of money, which is what happened to 73% of the companies in the first goround of my angel investing. Um, the second thing is I'm investing ever so slightly later, not appreciably later, but slightly later. And number three, I try to find a strategic partner who is interested in the product. So if IBM or Cisco or whomever says, "I'd really like to sell this widget. I'd really like to buy this widget. I'd really like to distribute this widget." It doesn't matter what I think. It really doesn't. What matters is that IBM thinks that this software is something that they want to distribute. And IBM or Huelet Packard or NCR or any of these companies, they've had an opportunity. Every single entrepreneur in the world came to them with a similar widget. And if they chose this widget, then that's the due diligence that I need in addition to their being modest, in addition to their having all the right um uh characteristics, then there's a good chance the company will succeed. >> The name of this podcast is Jewish Grit, and we talked to many different people, many different types, many different stripes, and we asked them, share with us a moment of Jewish grit. Could you think back in your career uh at some point where you had a really challenging moment and it took a lot of grit and determination to pull out? >> I think the the the toughest grit we had was with one of our children who unfortunately had cancer when he was four and 5 years old. Thank God he's fine now, but for nine months I really didn't work. Um and it turned out that that was perhaps the most successful time in the business. Maybe you could argue that because I wasn't there. It's why the business succeeded. Thank God he's fine now. Um, but it was a nine-month period in which I did some very deep introspection and came through that period a much more observant person and it had wonderful effects on everybody in the family and I think cancer is a very clarifying condition. The people who are your good friends become better friends and the people who are not your good friends they disappear. Cancer serves to purify and clarify all of your relationships. Your relationship with God, your relationship with your spouse, your relationship with your children, your relationship with your friends. >> Is that why you're involved with bike for high and you bike all the way up to the cat? How isund something miles? >> So I did 157 miles. Some people that didn't mind the rain did 182 miles. The rain was very heavy, so I I stopped a little early. And by doing so, you're raising funds for for cancer kids. And >> we're ra so half the kids are cancer kids and half the kids are developmentally challenged uh very serious handicaps. >> Looking back at mult many decades of of a profession successful professional career also as a successful career and really helping the Jewish people. Um what do you think is that secret ingredient? What's the special sauce for success? realizing that the Torah is not a bill of rights like the Constitution, but a bill of responsibilities. And so when you decide that you exist in this world only to help others, helping your parents, helping your spouse, helping your children, helping your grandchildren, helping your co-workers, helping your friends, helping Jewish people you've never met before, when you realize that God put you on this earth only to help others, you've succeeded. But doesn't that take you out of the equation? >> You are the actor. You're the You're the person that God decided was the one that needed to do this. Whether it's helping the little old lady cross the street or helping to create opportunities for handicapped children in Israel. I've been the president or chairman or now chairman of Shalva. >> I always say when you when you take care of God's children, he make sure your children are taken care of. So to that end, um, when the maid off scandal hit, I got a frantic call from Israel. What's going to be with our donors? Because it it decimated the Jewish philanthropy world. I said, I'll get back to you. And two days later, I called back and I said, you're not going to believe this, but only one of our donors was affected, and it was only 1% of his net worth. And you were worried about the Shalva children. It's the other way around. The Shalva children are what protected all of our donors. And we had thousands of donors in the Jewish community here in the tri-state area who should have been affected very greatly by the ma made maid off scandal and they were protected because of the saddaka that they the charity that they gave to Shalva. >> Most of our viewership are young professionals, people in their early 20s, mid20s. Some are older, some are younger and all of them want to be >> they're all 20s at heart. >> Correct. All of them want to be successful. What would you tell your 20-year-old self if you had an opportunity to have a conversation with yourself today? >> That I wished I had been afforded the opportunity to become observant earlier in my life. I wish that I'd had the opportunity to go to yeshiva, which I never had. Um, I now try to make up for it every morning, but it's not the same teaching a 64 year old person with a 64 year old brain and a 64 year old memory as, you know, a 17-year-old that has a a much more supple brain. So, I I wish I'd known about the Torah earlier. I wish I'd known about the oral law earlier. I wish I had started studying earlier so I would retain more of it. As a Jewish person um in a leadership position both in the United States and internationally, what are you most proud about in being a Jew? >> Being there for Jews and being there for non-Jews. We take care of lots of people. We had a an employee 25 years ago who ultimately died and we took care of his family. >> I think the Jewish people have a copyright on taking care of themselves and the world around them. And that's the almost like the irony like on one hand we're amazing and the world doesn't see it or they choose to ignore it. >> The world I just read an article a few days ago. The world is filled with minorities. Majorities don't like when minorities do well and the Jews as a minority have done well in every single country that we have ever lived. And minorities in other countries don't like the fact that the Jews succeed when they themselves have failed. And so we make other minorities look bad. uh because we succeed and we don't want handouts and we want to join the majority and then the world doesn't like the fact that Israel succeeds. The countries that have not succeeded don't like the counter example of Israel having succeeded. Israel has no natural resources. It has enemies around it. It has all the negative attributes that you would expect Israel to have failed. And yet Israel has succeeded because Jews always want to make things better. And as a result, you have minorities who don't like us because we make them look bad. We have majorities that don't like us because we make them look bad. >> Very interesting. Do you think that as your career has evolved, as your family has grown, as you've had grandchildren, that your definition of success has changed? >> Totally. It's uh it's not about financial success, which if you'd asked me in my 20s, it was totally about financial success. It's about getting children and grandchildren and ultimately great-grandchildren to follow in the footsteps of our great-grandparents. >> Do you plan on um broadening your business? Is that part of your next two decades? Let's say you plan on pulling back a little bit and spending more time. >> I have more work to do. tuition costs money and [snorts] one has to help one's grandchildren at some point if we have sufficient for the grandchildren. I would still keep working every single day to help all the other Jews around the world. Uh to answer your your very short question with a long answer, I hope to be working for a very long time broadening and deepening as much as I can. >> And God should give you the health and the ability to be successful for your own family. and his hashem should give you the opportunity to keep being successful so that you can impact your family and ultimately the greater Jewish community. Thank you so much for this time. It's been very precious. >> Thank you. >> And for anyone that's watching this and listening to this, you said so many beautiful things. Take one thing at least make it your own and be part of Nathan Loe's success. >> And if anybody wants to get in touch with me, please do and be happy to act as a mentor or a sounding board for anybody and everybody. Fantastic. Thank you so much for your time. >> Thank you for listening to Jewish Grit, an Oly mentorship podcast. At Oly mentorship, we believe that everyone needs a mentor. What better way is there to tap into your personal and professional potential than with a Jewish mentor at your side? Learn more at olami.org/mentorship. Don't forget to keep listening on Apple Podcasts, Spotify, or wherever you get your podcasts.