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Isabel Nathan on Startup Investing and AI Infrastructure

Summary

Richard C. Wilson speaks with Isabel Nathan about how her family's real estate background led to venture capital and a mix of startup investments and property development. Isabel describes finding a venture partner and building the relationship over time. She also explains how they identified industries that fit their strengths. Adding outside capital and co-investors helped support their venture activity, while focused research can help founders and capital raisers prepare before approaching family offices. The discussion covers deal terms and independent due diligence, along with the trust that can grow through repeated conversations. Isabel then describes the family's Copper Valley project in Northern California, where they are developing land for data centers and related infrastructure. The conversation offers family offices, founders, and property owners ways to assess venture exposure, fundraising, and AI infrastructure opportunities in light of their capabilities and assets.

Key Moments

Venture investing can complement a real estate foundation when a family office brings relevant knowledge and takes time to review each opportunity. In this conversation, I hosted Isabel Nathan to discuss how her family office combined property development with startup investing, and how its Copper Valley land is being developed for data center infrastructure. These lessons apply to family offices considering venture exposure, founders seeking capital, and property owners assessing how their assets might support new uses.

Enter a New Sector With the Right Expertise

Isabel described a family whose wealth originated in real estate development. The office began investing in venture capital after deciding to diversify, even though venture was outside its original area of expertise. Isabel emphasized finding a partner who understood the sector and taking time to build that relationship before committing to work together. The team later reviewed its results and identified industries where it had been more effective, then focused more attention there.

That process offers a practical model for families and founders alike. A family office can recognize a market opportunity without assuming it already knows how to assess every company in that market. A specialist partner can help frame questions and identify risks. The partner can also explain how a business operates. The office still needs its own review, since a partner's knowledge does not replace the family's responsibility to understand what it is funding.

For founders, the same principle applies in reverse. Approaching an investor is more effective when you understand that investor's experience and interests. A focused conversation grounded in a real fit gives both sides a better starting point than a generic pitch. For further context, see why family offices prefer direct investments.

Build Relationships Before Asking for Capital

Isabel explained that her team's venture partnership took more than a year and many meetings to establish. The introduction opened a door, but ongoing conversations helped the parties assess whether they could work together. She also described how time spent getting to know a potential partner supported trust. Richard's framing in the discussion was that deal access and strategic value can matter, while the relationship provides context for evaluating both.

Founders and capital raisers can use this lesson by learning who they are contacting and why that person may be a fit. Isabel said that careful outreach to a smaller, well-matched group can be more useful than sending the same message to a much larger list. An introduction can help, but preparation is still needed. Explain how the opportunity connects to the investor's interests. Be ready to answer direct questions about the business and its terms, as well as the risks.

She also discussed structuring an investment vehicle to provide value early in a negotiation. For a founder, this means understanding the terms being offered and how they affect each party. For an investor, it means considering whether a proposed structure fits the opportunity and the office's goals. If a structure involves legal or tax specifics, talk with your attorney or CPA. You can read more about raising capital from family offices.

Review Claims and Match Assets to a Real Plan

Isabel's advice on evaluating an opportunity was straightforward: do your own homework. Founders may have plans for growth, and brokers may describe a property's future value, but the investor needs to test those claims. A family office can examine the business model and its assumptions. It can also review the people involved and the proposed terms, then assess whether the opportunity fits its knowledge and the resources it can commit.

The conversation then moved to the overlap between real estate and venture capital. Isabel described Copper Valley, a town in Northern California owned by the family office, and the effort to develop part of its land for data centers. She connected the project to the demand for infrastructure that supports AI. The project shows how a property portfolio can present new operating and development opportunities while still requiring careful evaluation. That work calls for relevant expertise and partners.

For property owners, a new use is worth exploring when the location and infrastructure support a workable operating plan. The people involved also need to be able to carry it out. For investors, the broader lesson is to look for opportunities where the family's assets or knowledge may offer a genuine advantage. Families weighing direct opportunities can use our direct deal IRR and MOIC calculator to organize return assumptions as part of their analysis.

My experience is that a family office can consider emerging sectors without abandoning discipline. Start with a clear reason for entering, add expertise where it is missing, build trust through sustained contact, and test the claims behind each opportunity. That gives families and founders a sounder basis for deciding whether to continue a conversation. Investors can use the same basis in their assessment.

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Full Transcript

Machine captions from the video, lightly cleaned. Names and terms may be misspelled; the video is the authority.

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0:02 All right. So, uh, Isabelle is with Nathan Family Office. Um, they've done over 300 venture capital investments. They've done over 100 real estate transactions. They own their own town in California. Um, and I wanted to have her on stage for a few reasons. Um, part of it is just the interesting combination of real estate with venture capital, but also it's a trend I'm seeing that right now the desire to invest into hard assets or profitable cash flowing operating businesses is really high. But at the same time, we've seen these trends. Uh, whether you like sports betting or cannabis or crypto, these are markets that have exploded in size um and expanded so greatly they created a lot of wealth. And so a lot of families realize that there's these big waves of change that come and that perhaps maybe one or two% of their portfolio should be allocated to some of these venture type activities um and investment opportunities. And so I thought it'd be interesting just to um have Isabelle here and kind of explain their mentality, what you invest in, what you focus on. Um and I'll have her introduce herself further in just a second. But if anyone who is standing in the back would like to sit down. There's about one chair available at each of the tables.

1:17 So, if you do prefer to set, then feel free to come up and grab a chair just so you don't have to stand if you don't want to be. But, uh, as well, what would you add about your your bio and your background and your your family office? Well, first of all, uh, before joining the family office, um, I was in real estate on the real estate brokerage side where I ran my own business, but that was back over in Sweden. Then moving moving over to the US about six years ago. Now being with the family office for about five years, it's been an amazing opportunity to both continue on the real estate side, but also learn and grow with the venture capital side, which is something that we only got into about five or six years ago. So to grow along with the with the family office, right? So going from um starting getting into venture capital five or six years ago to doing hundreds of investments, how did you get started? Who did you figure out who to trust in that area?

2:09 That's a very very good question. First of all, finding the right partner because it's really important that I mean we're coming from real estate or we came from real estate and that's not where our expertise was at but we knew that we wanted to get into venture capital um cuz it's way different and we wanted to diversify our investments. So first of all find the right partner with the domain expertise that we did not have and first of all you got to build that relationship over quite a long period of time. So this was not made in in one day. It took us quite some time to get there. Sure. I know some families that made their money like in in manufacturing or industrials. Uh when they look at tech and venture capital, they say, "Oh, well, maybe we'll invest in manufacturing tech and we can try the new device at our manufacturing facility and have expert extra expertise in that area." Is that the case with you? Do you do mostly real estate tech or do you look at all types of tech? All types of tech. And I think that we've also learned along the way. There are now industries that we tend to stay away from because after taking a step back looking at the portfolio uh we see what we've been good at picking and where we've been less good at picking. So we just double down where we're you know have the main expertise. Sure. Makes sense. Um for the wealth creation of the family office like what was the the main

3:27 event or the turning point or where did the the wealth kind of come from originally? So that came from the real estate side. So we're a single family office and it's the first time generation uh money and local here in LA. So basically from real estate development but I would say what um you know our pivot and our main um you know what has made a lot of difference for us is when we decided we're going to supplement uh our own capital with outside capital from other investors and we came to this decision about 7 years ago before that our head of the family office Richard always thought that it was easier and better to do all of the invest ments on our own. Um that's also when we decided that we were going to get into venture capital and started our VC firm expert dojo uh that we've now invested in 300 companies from and um most of these companies uh have raised follow on capital from outside investors who are now our co-investors and what that has has allowed our initial investment to do is to grow already by five or 8x. So it looks like our real estate portfolio is not even going to be

4:45 as good as our venture capital portfolio. So it's going to be outperformed and our real estate portfolio is what allowed us to become a family office in the first place. Right. Yeah. Interesting. So um you see a lot of deal flow now. Um if somebody is looking to approach you or another billion dollar plus family office, what what's way to get your attention? Um, one way obviously being here in the room is introduce themselves and then say something unique perhaps, but if they're not in the room with someone they're trying to get a hold of, what gets through the hundreds of emails per day in your inbox and gets you to reply to somebody? Well, first of all, I would say that surround your yourself with people who have the domain expertise. If you want, if you're after the right type of deal flow and the best type of deal flow, uh either have the domain expertise yourself because then the best opportunities will come to you or surround yourself with the people who are the best in the industry that you want to get into. But if you want to, you know, send a cold email, it is hard.

5:49 But but sometimes it works but you really need to do your own homework uh at first and you cannot you know it's not always a numbers game. I think that you'll be better off maybe going after 10 or 20 people that you know exactly why you are approaching them rather than 200 or 2,000 people. Right. Yeah. Interesting. Okay. um what what would you say is the most valuable strategy you could share with either investors or capital raisers here in the room that u would be worth a lot in terms of getting them more traction? So for us I would say that elaborating on your investment vehicles has been one of the best approaches. So for example what we did is that we brought in a public market instrument in the form of warrants into early stage startup to allow uh for the maximize to maximize return on our uh investments. So if you have a lot of value to give in the beginning um you're in a at a great negotiation point um which is much harder to do later on. Um, so that would be I think that would be number one, right? Yeah. I think one thing that most people here have heard me say before is that I found that investors who can see deals, you know, first exclusively or at a better valuation or at like a major advantage. And if you can add that

7:07 strategic value because you have domain expertise as an investor, um, then people are just much more likely to want your capital versus someone else's, right? Um, what's a a costly mistake to avoid for investors in the room? Don't trust anyone. No, but seriously, I uh you you know you you speak to founders uh everyone's going to make x amount of revenue. You speak to uh real estate broker. Whatever deal is going to be worth x, y, and c in 10 years time. Um you have to do your own homework. That's just it. Um, it sounds uh it sounds depressing and sad, but honestly, it's going to give you a lot of stress relief and a lot less headache. So, I can give you I can give you a fun little backstory there. Um, and which is why, you know, so Richard, who is the man behind our office, he he was a basketball player back in the days, and he still loves basketball. So, I'm not sure how many times I've heard this story, but uh he was about to buy the Clippers way way way back in the day. So, I think he was about to buy for $2 million. And he was going to do this together with a business partner of his.

8:22 So, going in half half. And Richard showed up, the seller showed up, but the one who didn't was the other business partner. So, he couldn't go through with a deal. And I think I still hear about this, you know, once a week or so. Um, so it took it took another 35 years, honestly, before we ever made an investment together with another partner again. So, lesson learned. Yeah. Uh, yesterday both John Leter, manages a billion dollars, said that he just assumes everyone's lying when he talks to them in real estate. And then Larry Neymar says in his book that to survive in Los Angeles, you have to assume everybody is lying until they prove to you otherwise. So it's come up three times now on stage from fireside chats. Um yesterday the other number one thing that came up that investors agreed with was to create a relationship before you pitch a deal. Um and it's not that you shouldn't pitch a deal. The point of investor club is to make connections with investors and for investors to find deals. The point is that without the context, they don't really care about your deal because they don't know you yet and you don't know them yet or how to work together yet. Um, and I think that can be heard the wrong way. But how does that work with your family office in terms of creating relationships first? How do you balance meeting a family office but showing them what you

9:40 have so they actually want to reply to your email or get to know you, etc. Well, for example, when we decided we're going to get into venture capital, we didn't really know where where to start. And for us um we actually you know we actually got introduced to to a gentleman um through our our banking partner. Um so that was all serendipity but what was not serendipity was the partnership that then came from that introduction because it took over a year to establish that partnership and well over 20 meetings. But so it's just, you know, interviewing and spending time with people who you think that you can do great business with and then build up some kind of trust. But again, it's not going to be built over 24 hours. It's it's it takes time, right? Yeah. We had a pleasure of introducing Robert Chelini recently and and I always emphasize that he's shown it scientifically proven 16 times as effective to meet in person.

10:39 And if he has to build trust over like one Zoom call or one phone call, it's like almost impossible. if you're investing any significant amount of money, right? Um, so when you're vetting somebody and conducting due diligence, are there any kind of like litmus tests or, you know, things you do to see how they respond or any specific things you do or is it more just kind of a osmosis process where over time you learn to either trust them or not. And it's not like a super specific question or four-step process you put them through. No, I think it's the latter where you're just, you know, you're you're spending time, you're getting to know each other and you also, you know, trusting your gut is a big part of it all, right? Yeah, for sure. Um, what unique strategies and exciting things are you focused on in the venture capital space? Is there some subniche that you're most excited about that you want to source uh from here in the room? You know, the fun the fun thing about this is I think it's a real like 50/50 combination of real estate and venture capital that we are the most excited about right now. Uh which is data centers. So um we are we have a project right now which we believe that our family can make another2 to3 billion off from. Um so we are building out data centers with some of the best people in AI at the moment.

11:54 Um, so we're partnered up with a former uh department head from OpenAI. So we're building out data centers together with this gentleman and some of his team members um up in Northern California. Um, so we have a town there that's called Copper Valley that we bought from the Murdoch family back in 2018 and uh it just has a lot of land that we are now turning into a big data uh data center hub and we're starting with 50 acres and so just to you know most of you have probably heard about the Stargate uh project at this point which is the project between OpenAI, Oracle and SoftBank where they're going to invest $500 $100 billion into AI infrastructure um over the next couple of years and AI is everywhere today but the facilities needed for this is not but so what their project is actually only going to cover 20% of open AI's need and I repeat that again 20% and it's $500 billion so that speaks to how big the playing field is for for the rest of us and this just makes great sense for us to to do this and we have a huge lake up on our land as well. So, we're building out a a

13:12 hydrogen plant. Awesome. Yeah, that's exactly what I was talking about with the uh the second order inevitability thinking in my opening talk was like it's inevitable if we go from 1 to 2% power usage for AI, you know, uh and then it's going to go to 30 to 40% in the future. No matter what that timeline looks like, then eventually you're going to be positioned super well with that rising tide, right? Warren Buffett says that sometimes the the direction of the tide matters more than the swimmer, right? If you're swimming up upstream, you're in trouble maybe, right? So, what about on the real estate side? I know we have some real estate folks here. What if they also own a town and don't know what to do with it? Or what if they have solar or abilities and data centers or other real estate assets and they want to cogp or work with you in a creative way? What are you open to, not open to? What are you looking for specifically?