Nathan Clark - Ganymede - Part 1

Intro - 00:00:01:

Welcome to The Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, serial entrepreneurs, and experienced investors about the challenges and triumphs of running a biotech startup from pre-seed to IPO with your host, Jon Chee.

Jon - 00:00:23:

My guest today is Nathan Clark, founder and CEO of Ganymede. Ganymede is the modern cloud data platform for the life sciences and manufacturing. Their Labisco technology allows you to quickly integrate and harmonize lab instruments and app data, automate analysis, visualize all your data and dashboards built over a powerful data lake, and ultimately speed up your operations to accelerate science or production. Prior to founding Ganymede, Nathan was product manager for several of Benchling's data products, including the Insights BI tool and machine learning team. Before Benchling, Nathan worked at Affirm as a senior product manager and was also a trader at Goldman Sachs. Nathan's extensive background in machine learning and data systems across financial and lab technology and knowledge of their applications in the life sciences offers unique insights for founders to benefit from. Over the next four episodes, we cover a wide range of topics, from Nathan's adolescence and his fast-paced experiences in cutting-edge roles at Goldman Sachs, Affirm, and Benchling, to the importance of data integration and automation in the life sciences, and Nathan's insights from founding Ganymede. Today, we'll chat about Nathan's early years, the influence his entrepreneurial father had on his career decisions later in life, and his time studying business and finance at UNC. We'll also discuss the role he eventually landed at Goldman Sachs, where he learned about the intricacies of bond trading, including the importance of liquidity, risk management, and attention to detail in the fast-paced trading environment. Nathan also highlights some transferable skills and lessons that can benefit entrepreneurs in any industry. Without further ado, let's dive into this episode of The Biotech Startups Podcast. Nathan, so good to see you again. Thanks for coming on the podcast.

Nathan - 00:01:53:

Yeah, thank you for having me.

Jon - 00:01:55:

So in classic, you know, The Biotech Startups podcast fashion, we always like to go as far back as possible. The reason being that we think that your early kind of formative years impacts and influences how you, your business philosophy and your leadership style today. So I thought it'd be fun to go to turn the hands of time back. Can you tell us a little bit about your upbringing and how it's influenced you? You know, what got you into business, your leadership style? You know, just give us some color there. 

Nathan - 00:02:26:

Yeah, it's definitely a throwback. But going all the way back, I think a lot of it for me comes from in my childhood, seeing my dad as a role model for how to conduct business. He was always very entrepreneurial and did a lot of different entrepreneurial things, spun up companies of all sorts, including spending a lot of time as a contractor for home building and then going into more of a white collar direction. But through that, I think he is an amazingly proficient person at everything he does. And I think also just has the sense of there's no secret to a lot of business and there's no secret to a lot of things like home building, when you build a house from the outside, it sounds like an intimidating concept. But the reality is you just go do it. You go read up on what you need to do and you go start and you start digging and you start throwing concrete. And there's a lot of technique that you can learn over time, but there's no secret to anything. Most progress that we have to do, even in science, I now find, you know, there's no secret. You just go dig in and then you discover the answer and then it's execution. The problem in a lot of things is not any secret insight. It's really execution. And I think that bears through all the way to technology. So I think that was really formative for me in being interested in business and also gaining that perspective to push forward and either do something entrepreneurial or in any job that you're in. There's no secret. You just push and execute and help avoid some of that imposter syndrome. Since there's no real secret insight. There's no reason that means imposter syndrome. It's more like there are just people who do things and there are people who do not do things and you want to be the person who does. And then as long as you're working hard, you'll end up succeeding.

Jon - 00:04:05:

And that is incredibly refreshing to hear. And don't get me wrong. Like exactly what you said. There's like process improvements and techniques that you can learn. Like, right. Like we have tools. Like maybe we use the tools, but. There's no like silver bullet. I totally agree with you to like, you know, building a company, running research. It's like oftentimes it's not glamorous. It's like almost like running through walls on the daily. And it's kind of like, you know, having these conversations and learning from my parents as well. It's just like. It's the unglamorous stuff, that execution, that kind of like, you know, you don't see it because oftentimes it's behind closed doors. And then you see the final product. I'm sure you see your dad construct something beautiful and you're like, oh, like it must have been easy. Right? It's like, no, like this was like a lot of blood, sweat and tears to get this done. You know, and one of the kind of overarching reasons why we started this podcast was to kind of unpack that. And I think with the proliferation of podcasts, you know, and everyone wants to figure out like, what is the secret sauce to it all? But something like this was like, there is no secret. It really is just doing.

Nathan - 00:05:16:

A hundred percent. Well, and I think that bears through all the way to what I'm doing now. You know, there's no secret to Ganymede. There's nothing but just doing a lot of research, getting a lot of insight and then doing a lot of work, building out the product and the platform. And I think that's one of the things that motivated me to make the leap into biotech from finance originally. And I'm sure we can go deeper into that. But in that process, that was really kind of me putting it to the metal of really saying like, okay, I can just go learn molecular biology. I can just go, you know, build out this this app that I built a little plasmid viewer app to cart around to companies that I was interviewing with to say, look, like I can do the technology. I can I understand molecular biology. And yeah, maybe I have no business doing it, but no one does. You know, he just do it.

Jon - 00:06:02:

Yeah. And also, it's like this is things like everyone's like that's the the longer you do it, too. You kind of just realize everyone's just figuring it out. Like everyone as much as like there are people are very experienced, but they're like in their daily execution. They're still figuring it out, which is kind of like this thing. I sleep easy at night or I sleep, I sleep better at night. There are definitely things that are like stressing me out. But I sleep better at night knowing that even very successful people are still just figuring it out. And it was funny when you were talking about like learning molecular biology. It reminds me of The Matrix, obviously the very famous movie. You know, Keanu Reeves is like, teach me Kung Fu and then just like plugged in. It's like I now know Kung Fu like, is like the opposite of that. It is not like downloading just like information, the piping back in. But I digress. So you sound like your father had a lot of influence and kind of this entrepreneurial ventures on top of just like. Showing you that like there's nothing that replaces the sweat equity and the elbow grease. Was your father what kind of like spurred that entrepreneurial spark in you? Or was that something that you've kind of discovered or coalesced in your career later?

Nathan - 00:07:14:

I think it was a combination of things because I did end up going into a pretty standard career path after college. But I think in the back of my mind, I was always interested already in doing something like a startup. But I do think it's quite valuable to also make a pretty big push on the career side and grow there to build up the momentum required to do that. And I'm not the kind of person, some people I think just have that feeling of, oh, I need to do a startup. I need to forge my own path. And that's actually not me, I would say, quite as much. I think for me, the reason that I converged on doing something like this is because it's so hard to replicate the amount of leverage and the amount of impact that you can have by doing your own startup. It's definitely a very risk-on kind of move to do a startup.

Jon - 00:08:02:

That's an understatement. But that was also an understatement. Yeah.

Nathan - 00:08:05:

Yeah, understatement of the year, perhaps. That was exactly what I wanted to do. I kind of wanted to say, all right, I'm almost acknowledging. I'm throwing with my career and doing this, you know? It's definitely not an expected value positive thing to do versus having a career. But I love it. And I think it's been a great direction. The feeling of there's a lot of ups and downs, but having that ability to control your destiny within reason, it is very satisfying when things work, let's say.

Jon - 00:08:30:

Yeah, yeah, absolutely. Absolutely. And that's exactly it. The highs are high and the lows are really low. But it's kind of like there's like this equilibrium to it where you're just like on net, like this feels decent. Like, you know, like we feel like we're tracking and directionally in the right, you know, right area. And I guess like another question, just like on that, did you know that you would end up in the life sciences or was that another kind of spark of interest for you?

Nathan - 00:08:53:

That is it's an interesting question, because when I think about it, it's always been at the periphery of what I've been doing even before I started my career. I mean, I've always loved futurism. And, and things like that. And biology is a big part of that. So even going back in 2012, I volunteered for a bit with this group called OpenWorm, which was doing a fully in C. elegans model of a C. elegans nematode. C. elegans is whatever I can like 50 or 100 cells. So it's about as small as you can get and have an animal model that's very easy to model, but still actually show some animal behavior. So they were creating a physics based simulation of it. And I spent a little bit of time, trying to help them on the business side. So I've always had that interest and I've always kind of geared towards looking at that, even when I was at the buy now pay later company Affirm, which is a super formative place for me. We had these open-ended lightning talks that we'd sometimes do. And I did one on molecular biology, transposons and retro transposons for things like how HIV operates. So it's always been at the periphery. And then I think after a firm, I was just like pushed over the line. It was like, all right, let's make this my career. I, I feel like it's calling me as much as I love finance. I love finance as an academic thing and in practice. but, Biology is just, it's always been kind of eating away at me.

Jon - 00:10:31:

Yup. Very cool. Very cool. yeah. It's like I'm always very curious on where the original spark was? And when that occurs, um, and everyone's story is always a little bit different, you know, for me, it was like, AB Biology a little bit more of traditional kind of thing. But I was a teacher that like, just like got me fired up about it. And I don't think I had that spark until then. But, you know, that being said, like, you know, there are folks who even find that spark way, way later in their career and still have remarkable, you know, outcomes in the sciences. So I don't think it's ever like too late. But it's always fascinating to hear those stories. And so, you know, now you're kind of entering, you know, you're starting to evaluate universities, you know, and tell us a little about your university selection, what you chose to study, and kind of your time in your undergraduate.

Nathan - 00:11:03:

Yeah, well, the selection process. So I had a very unusual high school process, actually, which informs us, because for a little bit in middle school, my parents tried homeschooling me and that didn't really work out. And I was also pretty far ahead of the curve on a lot of subjects. So what we ended up doing for basically my whole high school time was just taking college classes at a bunch of different colleges, kind of like the dual enrollment model, except nothing but dual enrollment. And so all of my, you know, I have like six different colleges worth of transcripts. So when I applied to colleges, it was a pretty weird package that they got.

Jon - 00:11:38:

Sure.

Nathan - 00:11:39:

Suffice to say. And they worked out with some colleges. I got some good acceptances. But UNC, I think, was a pretty good one because I got a little bit of a scholarship there for some study broad stuff. I got a into their honors program. And they have a really good business school, which I was definitely entrusted in. And it was also just a beautiful campus, felt like really strong people there. So in the end, that was where it just made sense to make the jump. So I don't think it was considered honestly that deeply. And it was really focused from the business side because, I think that was where around that time when I was whatever, 17, 18, the idea in my head was probably some sort of like business finance direction to go in, which was sort of the starting point for me. But UNC was a great choice and I loved it there. It was an awesome place to have an undergrad.

Jon - 00:12:27:

And was UNC close to home for you or were you like going out of state?

Nathan - 00:12:32:

 Pretty far from home actually. Yeah, I grew up in Western Massachusetts. So it was a long haul down there, but it was great. And I still go up to Massachusetts every winter, every summer.

Jon - 00:12:43:

Absolutely.

Nathan - 00:12:44:

Nice to get out of North Carolina for the summer.

Jon - 00:12:46:

Yeah, yeah, yeah. That's gotta be strategic about it. I always love hearing those stories. Because, like for me, I had like the opposite kind of like, I'm from the Bay Area, born in Berkeley, and now I'm in San Francisco. Quite frankly, I haven't left a like seven mile radius like my whole life. And so like, I'm always like curious. I'm like, what is it like on the outside, like outside of the Bay Area? So trying to do a lot more travel and like really embracing, you know, the opportunities to travel for work as kind of like a cheat code. It's like two birds, one stone. I can go like see, see a new place and like learn about the cultural, like business culture, just like and get a vibe of like the, you know, the scenery. And so like you're at UNC now, far away from home, and you're focusing on business. Were there any kind of pivotal or like, like pivotal classes, professors or mentors that left a lasting impression on you, or perhaps took you under their wing?

Nathan - 00:13:40:

 I think in class terms, I love my economic classes, my economics classes, I loved my finance classes. And I always in that I spent a bunch of time also doing I thought about getting a math major for a little bit. And I thought about originally doing a biomedical engineering major, too, which is another sign of that biology interest kind of going through. But in the end, I just gravitated towards the finance side, especially because I found that really satisfying to be both the business side, but also a very quantitative one in a place to really exercise myself on that. And so I think that's what really drove that interest was finding that that combination of something more analytical and quantitative in the business side. And when I eventually I was recruiting for jobs, you know, at first, I thought, I'm going to go into investment banking and was recruiting for that. But then I got the offer from Goldman for trading. And in retrospect, it makes so much sense. I feel like they pay me probably the moment they saw me of like, okay, you know, you love finance, and you love business, but also you're a little bit nerdy and want to be really quantitative. So perfect, come on in.

Jon - 00:14:40:

 Yeah, yeah, yeah. 

Nathan - 00:14:41:

So, yeah.

Jon - 00:14:42:

That's amazing. Like, and also, like, I think it's such a blessing to, you know, kind of find that, that kind of like the resonance of like a subject matter and like what works personally for you. Because I think sometimes a lot of the time you're like trying to grapple and try to figure out and you're kind of like feeling around in the dark of like, what's this fit of like discipline and my style of learning and style of like critical thinking. And so you're mentioning you got recruited to be a trader, you know, for those, you know, the podcast audience is broad, but primarily scientific, like life science. For those who are, you know, not familiar with trading as a discipline, particularly at Goldman Sachs, can you talk about what is trading?

Nathan - 00:15:23:

Yeah, and you'll have to cut me off on this because it's rare for me these days to get a chance to do this.

Jon - 00:15:26:

Yeah, yeah.

Nathan - 00:15:28:

 But fundamentally, so the business of trading, especially post-crisis, is market making. You're in the market to bring liquidity to things and make it so that people can buy things and make it so people can sell things. If you imagine a bond, for instance, bonds can be pretty hard to model, especially when you get into weird, illiquid stuff. The kind of stuff I was trading, I ended up joining a CLO desk, collateralized loan obligation. It's kind of the one collateralized something that survived the crisis. And actually, it's a pretty great product overall. But there's a little bit outside of that market. People hear that and they wince. But-

Jon - 00:16:06:

 Yeah, they tense up a little bit.

Nathan - 00:16:08:

Exactly. But when you have stuff like that, it's so important to have someone. If you are investing in those and you need to be able to buy them or sell them. Unless you know a bunch of people and know how you want to evaluate the risk of it, it's pretty hard to just go buy and sell them from nothing. So the role of trading ultimately is to be able to be a central place in the market where people can go to and they can buy the thing from you or they can sell the thing to you. And what you're trying to do is not invest necessarily. That is something that was mostly shut down. There were investing desks that were more like hedge fund style pre-crisis. But your role post-crisis as a market maker is to say, I'm trying to balance my books. I'm letting people sell things to me at a fair price. And then I'm selling things to people at a fair price. And I'm really just trying to facilitate sales. In the process, you're not necessarily matching up people one-to-one. You do take some of that investment yourself. You have an inventory. So you're still having to manage a lot of risk and balance your books in that. And so you need to get paid for that risk. So when you buy things from people or sell things to people, you do make some margin. You make some spread to get paid for the risk you're taking. And then a lot of it comes down to how well can you manage that risk? And balance your buyers and sellers? Hedge things. If you're in a market that can hedge, you can't really hedge collateralized loan obligations. So it's much more of a balancing act. Yeah, so that's a lot of what the trading desk does. And what you do as a trader is trying to understand the risks of things in the market. Because you can buy things, you can sell things, you can evaluate a fair price. And when things move normally, it's pretty easy. Everything is an exercise in understanding what happens when things move in unexpected ways. Or just when things move in regular ways, how much will they move so that you can manage that? So you think a lot in terms of how to turn scenarios that might happen into quantitative things, how to evaluate risk scenarios and try to turn eventualities and possibilities into numbers that determine, okay, what's the actual sale price or fair price for things? And one other thing that's really nice that I found really interesting as an ethos was the trading desk, because you're not just investing, you're trying to do the right thing for your market. You want to get paid. You want to make your margin. But you are trying to do the right thing by your clients and buy things at a fair price and sell things at a fair price. The trading desk, if you name any bond, they'll quote you both a price and a sale price. It's the bid and the ask. And that's nice in a way because it prevents people from it prevents the trading desk and clients if they do this, too, from having a price that's completely out of whack. Because if you say, oh, you know, I go to the trading desk and I want to sell something for ninety dollars and then the trading desk says, oh, well, I'll only buy it for fifty dollars. I'm going to rip your face off on the price here. The trading desk also is obligated to. Give a sale price in that too. And if they're only willing to buy it for $50, well, they're probably only, they're going to sell it for $60 or something, right? Because you can't have, that's a huge spread already, $10 difference. So you might say, well, I was going to sell this for $90, but I happily buy it for $60. So that actually is an enforcement mechanism. You have to kind of all be within reason because anyone could trade against you in any way, as long as you're playing things fair. So lots of interesting stuff. I'll kind of digress on that, but you're just trying to understand risk and quantify things.

Jon - 00:19:18:

That's super fascinating, we have never been on a trading floor. So hearing this from someone who's been there is really fascinating. Because in the life sciences, bonds are far more rare. It's a lot of just equity issuances. Credit is kind of a weird child in the life science space. So it sounds like during this time, and trading more broadly, it seems to me that it's kind of like bringing efficiency to something that's incredibly inefficient and just not that well-connected or just liquid. Would that be a kind of a, you know, if I'm really just like taking it like 10,000 feet up away to think about trading?

Nathan - 00:19:58:

Exactly. And I think people get made fun of for saying this sometimes, but the value of liquidity is pretty high. If you want to invest in something, you're going to be concerned around whether you can sell it at all or sell it for a fair price or sell it quickly. And so if you're buying something a little more exotic, like a collateralized loan obligation, or even any bond, you know, general corporate credit bonds are also subject to this, everything is, it's going to actually help the value quite a lot. If you can then turn around and sell it when you want, and not just have to hold the thing forever or go find a buyer and spend tens, hundreds of thousands of dollars on transaction fees and lawyers, and all that stuff, standardization and efficiency, and being able to know, I could call up Goldman or anyone out there who's market making for this thing and sell them, you know, I might not like the price, but they'll give me a price. That's such a huge premium. So it was very important for the origination side of these bonds, the investment bankers that actually created the bonds and worked with the issuers to create them, to then have a trading desk that would then support them and provide liquidity after, because it provides quite a substantial actually amount of value into that deal. So that's one of the reasons that the investment banking side and trading side need to work hand in hand.

Jon - 00:21:10:

That's really fascinating because like, so for like Excedr, we primarily live in like the early stage venture space. And that's like the definition of an illiquid asset, especially like if you're a biotech, like seed stage company, you might not see liquidity for a very long time. And we're now in this interesting period, right? Where it's like, it's not just the early stage venture folks who are finding out that like, there's like serious illiquidity here with the IPO markets now being kind of like frozen, but it's like private equity too, right? There's like, what do we do? We're here now. Like the time horizon has arrived. But like, there is no, it's not liquid. So it poses a really... I don't pretend to have the solution, but it's like what you're describing of the value and importance of liquidity is very relevant right now. And it's not just the early stage ventures. It's the big kind of later stage, more mature companies that are big corporates and private equity as well. But obviously, we're starting to see a lot of interesting continuation vehicles to figure out a way to kind of give some sort of semblance of liquidity. But it's interesting to hear that's at the institutional level and bonds being a great example. Now I'm really starting to nerd out. Why are bonds more liquid than stuff like equity? Or maybe I'm wrong. Maybe I'm wrong there. Maybe I'm wrong. I don't know. But I'm assuming bonds, for some reason, are just more.

Nathan - 00:22:31:

 Yeah, that's mostly right. You know, there's types of equity, even publicly traded stocks that are going to be less liquid than certain types of really liquid bonds. But I mean, like treasury bills, all the treasury products are technically types of bonds. And those are the most liquid of traditional financial instruments. But yeah, most of the time, bonds are issued in a little bit more of a bespoke format. And the existence of stock exchanges and the way that stocks are regulated and structured creates a lot of transparency and structure and efficiency around stocks specifically. So when you say that, yeah, if you think about something like Apple stock or something like that, Apple bonds are probably pretty liquid versus other bonds. But the fact that it's stock and comes in that standard. I structure and the fact that you have all this retail interest and you have people, there's huge mutual funds that want to invest in it. All of that helps create a much more liquid market. Whereas bonds, there's been a lot of standardization that's coming over time, but there's still a little more goofy and a little more nonstandard. And I guess the other issue with bonds, equity, everyone kind of gets what equity is about. Equity is about you're investing in that long-term health of the company and the growth of revenue and making money off that. Bonds because they are something where they either pay out or they don't. The evaluation of the risk back to what trading is. Tying to figure out what is the risk that they don't pay and why does that happen and how does that impact the price is a much more fine grained thing because you need to you're thinking much more in edge case scenarios. There's also a lot of different types of risk, like some things like Apple bonds. I don't even know if Apple issues bonds, but there's plenty of big blue chip companies that do. What are you actually trading on? How would you establish the price of the bond? The answer is, you know, with really AAA corporate credit kind of stuff, it's mostly not actual risk of the bond defaulting. It's mostly around interest rates. And it's mostly around where you're expecting the yield curve to go and like risk premiums between general corporate stuff versus treasury bills. And so it's as much more like second, third order consideration for the valuations. You can be pretty liquid in that market, but for traditional retail investors, they're not going to be generally capable of really understanding why things are priced the way they are or get into that and actually trade it effectively. And so there's just less interest. And so it means that there's fewer market participants, too.

Jon - 00:24:53:

Interesting. Interesting. I'm learning a lot here. A buddy of mine trades in basically liquid credit. And what he talks about when you get into like the weird esoteric kind of like spaces. It becomes. So like super bespoke, just like you're like playing 40 chess. I'm like, oh, my God. So like, what's going on here? I'm just like, I'm just for me. I was like, I'm going to put in the S&P 500. And, you know, I don't have to do like quantum physics to figure this out.

Nathan - 00:25:19:

Yeah. And now it's more liquid.

Jon - 00:25:21:

Yeah, yeah, exactly. Exactly. So, okay. And just like real quick to like zoom out a moment. So, you know, you're at UNC. Did you move to New York to work at Goldman?

Nathan - 00:25:29:

 Yeah. Yeah, I was working out of their headquarters. So I ended up living in Manhattan for like seven years after that. 

Jon - 00:25:36:

Very cool. How was that experience? So you're now in New York. You're at Goldman 

Nathan - 00:25:40:

 It was an amazing experience. It was also a ton of work. Yeah. And luckily, though, at least, you know, in our market, in the trading side, you kind of do have a little more closed formness to your hours because on the investment banking side, these deals can kind of happen at any time and you end up working like every weekend. For us, it was really, really focused, concentrated bursts of work between 8 PM and 6 or 7 PM, during the weekdays. And then sometimes a little bit of weekend. But it mostly balanced out, you still have some late nights. But I think what drew me to Goldman and what I think was true when I got there was just the level of, this sounds kind of like a platitude, but the level of excellence and the level of fortitude and attention to detail that they have a reputation for and that everyone I saw there exhibited, you know, you hear they have a very strong reputation, but I think that bears through and they have a culture of having very high expectations and pushing really hard, but then you get more responsibility really quickly. So I think what I found there was that it is back to that just pushing and executing and being diligent. And that's what matters. You know, everyone there is smart. Everyone that's smart is more of a check the box thing. Like, you know, I expect every single person I see on that trading floor could do calculus. It's not a thing. It's more, how well do you pay attention to detail? How well do you execute? How can you remain creative while still getting the work done and, you know, answering the phone and having things blow up on an hourly basis? Yeah. So I think that was really the exercise there, but the fact that they managed it because you have people that have really high horsepower there. And so I think that's really what I took away from that is it's just one of those things where relentless attention to detail and execution, will get you wherever you need to be ultimately.

Jon - 00:27:22:

Yeah. And I think, I mean, that's like cross-applicable, like across all industries, right? It's kind of like, it's a, you know, transferable skill to have that attention to detail and kind of just like really holding yourself to a really high bar, you know, and Goldman is definitely known for that. When you join Goldman, and again, I'm asking from this position because I've never worked at Goldman, but is it a thing where they're like, figure it out, like figure out bond trading? Or was there someone who's like, here's the bond guru and let me show you the ropes and then we'll cut you loose. What was that like? You know, I'm not looking for a specific answer, more I'm just like curious.

Nathan - 00:27:58:

I think it's a mixture of the two, but that's, I guess, coming back to the notion of it being really execution heavy. The trading desk is like a big machine and you're kind of oiling it and pulling the levers in a lot of ways. Goldman talked about it as the client franchise. The trading desk has relationships with all the different clients in the market, all these hedge funds and mutual funds. And things like that, that buy and sell these bonds or whatever it is. And you're making the flow, you're making bonds flow at the end of the day between them. So I think when it comes to learning about the process, a lot of it is actually learning just about the actual mechanics of what's going on. Like, what does it actually mean to sell a bond? How do people actually exchange money and things like that? How do you do P&L, the profit and loss statement every day? That was something we were extremely rigorous about because you have to, you know, you better have control and understanding of your numbers. And there's a lot of the numbers that are flying around. So it's a lot of reconciliation and careful diligence. And I think learning that is really important as a way to understand when you then start getting to the higher level and you start reasoning about bonds and the abstract and saying, okay, I think this has risk because of XYZ. You understand exactly what that means because especially in our space, you know, you'd have stuff like, oh, this, you know, the, the interest payment that's going to come on this actually is delayed because there's some provision in the contract over here. And then that means we actually will receive it on this date. So this is actually not worth as much as it looks like and, you know, you see XYZ in your Bloomberg terminal, but Bloomberg's wrong because it doesn't have the right data because it doesn't know that the custodian of the bond has elected to defer the interest payment, all these things. They're very interrelated. And so I think that's a lot of what I learned through osmosis from other analysts and junior folks on the desk. And then eventually you start, once you understand that and you can kind of intuit like, what is this, what's really going on? How did these things really flow? What are the mechanics? Then that helps provide that grounding for reasoning about it. Because ultimately, when you say, okay, I think this bond should be priced at 96 cents on the dollar instead of 95. When it comes down to why, you really have to understand every aspect of that. And it's truly a blend of the mechanics and the risk profile and the actual business reasons why it's different. Then there's a lot of gurus. The senior people on the desk are definitely all gurus in that sense. And they have an amazing intuition. And it's a lot of interpreting why did they make a certain decision and seeing that and observing that as you start to get comfortable as a very junior trader. Seeing how they reason and then starting to be able to replicate that and apply that to your own small segment of the book.

Jon - 00:30:29:

Very cool. And it almost sounds like it reminds me of like, kind of like learning a second language. You got to understand like conjugations, like you got to understand tenses, like the very basic fundamental blocks of like, the language, you get the basics down to the foundational elements. And then you start, you can start intuitively, like having conversations and like feel your way around. Obviously, you're probably stumbling the first couple trades. You're like, oops, didn't get that one right. I can't imagine it was like you stick a landing every single time or in the very beginning. But you know, as you start to kind of like get more comfortable with it, you're like, okay, and I guess maybe this is a question, how quickly are these trades going? Are these like super quick? Or do you have time to like ruminate on it?

Nathan - 00:31:14:

At the end of the day, the frequency of decision making for almost every trading desk, in an interesting way, kind of comes back to the same 10, 20, 30 minute cycle. I'll talk about that a little bit. But the reality is, if you're going to be operating, you need time to think, you need time to be able to be strategic. Sometimes things do start moving really quickly. And then you pick up the phone. And then, you know, as a trader, you just say, okay, I mean, I'm now less liquid, things are getting weird, you know, I widen my markets to handle the fact that I don't even have time to think. But generally, you try to keep things in a disciplined way. And so for our desk, you know, we were trading pretty illiquid things, you know, you'd have maybe a dozen trades, plus or minus, if you're in there on on the day, other desks, if you have something like the Treasury desk, they're actually probably trading, or let's not say the Treasury, but like corporate credit, investment grade corporate credit, they're probably trading hundreds, thousands of things a day. And some desks are fully automated, a lot of the equities trading desks are actually all programmatic, in terms of what they're doing. So they're executing algorithms and trading thousands of things per minute. But at the end of the day, you're still like operating in some cycle where you can say I can make decisions through whatever means I have, like at our desk, it would be saying, okay, I'm making decisions where it is actually like per bond, we'll go through and look at it and think about it very deeply. For the corporate credit desk, it's probably saying, okay, I have these categories of bonds and category, like baskets of different risks that I can look at. So I have a kind of aggregation upwards that I'm using, and then I'm deciding on that. So I'm kind of like dialing things in more at a categorical level. And then for those algorithmic desks, it's kind of the same thing, like you're really, dialing the algorithm around so that you can make sure that it's adjusted properly, or then you truly just have also software developers on the desk that are developing the algorithms on a longer term basis. But yeah, I think that you need time to think so everything has to kind of ultimately pull back to that. And then you can try to make things automated or categorical within that. That's a big one. And then kind of similarly, the way that the desk are actually segmented was based on risk type, like when these bonds trade, and they have a certain price, why is that the price? For us, we were part of credit, because the risk in a collateralized loan obligation, these are all loans, mostly to private companies. So they actually were those loans, you pull them up, but ultimately, their risk profile is still very much based on actually, this loan might default. That's why the prices are what they are. So what's the risk you're trading and the risk you're taking is default risk credit, but in something like investment grade credit, that's more of a rates thing. So that might be bundled into rates. And then certainly like Treasury bills, that's actually part of the rates desk, because with Treasury bills, you know, you're not really there. You can't think about the default risk of the US government. It's all just what are the future passive interest rates versus how this bond works. So that all falls under rates. So that's kind of the unit of the cycle is like, what risk are you taking? And then how do you evaluate that and apply that to the decision? Window you have, which is going to have to be at least on the order of five or 10 minutes. You can't, um, faster than that and kind of be serious about providing insight or adding value.

Jon - 00:34:07:

Yeah, yeah, you're just like, let me get back to you tomorrow. They're like, no, no, no, need it done now. Like you need it done now. That's super fascinating. And I can, I can imagine all this, like, it's kind of like, you know, being a founder of a company, it's like capital allocation, understanding risk, like, you know, long tail risk, and obviously running a tight ship, right? Like you're talking about like reconciling the P&L, like and making sure that it's airtight. I can imagine these are lessons that, you know, Albeit, it feels like a very different experience working at the trading desk at Goldman that any founder can benefit from thinking about it and conceptualizing it. Because I think when it comes to entrepreneurship, I think there's so many lessons that you can learn from other industries, other disciplines that are. Very much applicable. Kind of like what you mentioned at the top of our conversation, your father's kind of instilling in you, there's no secret sauce here. It's like, you got to just execute every day and get it done. Again, very, very applicable, irrespective of your industry.

Outro - 00:35:14:

That's all for this episode of The Biotech Startups Podcast. We hope you enjoyed our discussion with Nathan Clark. If you enjoyed this episode, please subscribe, leave us a review and share it with your friends. Thanks for listening and we look forward to having you join us again for part two of our conversation with Nathan. The Biotech Startups Podcast is produced by Excedr. Don't want to miss an episode? Search for The Biotech Startups Podcast wherever you get your podcasts and click subscribe. Excedr provides research labs with equipment leases on founder-friendly terms to support paths to exceptional outcomes. To learn more, visit our website, www.excedr.com. On behalf of the team here at Excedr, thanks for listening. The Biotech Startups Podcast provides general insights into the life science sector through the experiences of its guests. The use of information on this podcast or materials linked from the podcast is at the user's own risk. The views expressed by the participants are their own and are not the views of Excedr or sponsors. Co-referenced any product, service or company in the podcast is an endorsement by Excedr or its guests.