Patrick Chung

Founder of Xfund

Patrick Chung is managing general partner of Xfund, the early stage venture capital firm that backs lateral thinkers. The firm was founded in 2012 as a partnership between leading U.S. universities and venture capital firms. Xfund closed its latest oversubscribed fund, Xfund 3, in September 2020 at $120 million.

Before Xfund, Patrick was a partner at NEA. He led the firm’s consumer and seed investment practices. Earlier, he worked at the Internet services firm ZEFER, helping to grow the business to more than $100 million in annual revenues and more than 700 people across six global offices. He began his career at McKinsey & Company.

Patrick is a director of 23andMe (NASDAQ: ME) and Philo, and led investments in Guideline, Halo Neuro, IFTTT, Landit, Nebula Genomics, NewtonX, Rock Health, ThirdLove, and Zumper. Some of his past investments include Segment (acquired by Twilio), Kensho (acquired by S&P Global), Plaid (almost acquired by Visa), Pulse (acquired by LinkedIn), Loopt (acquired by Green Dot), GoodGuide (acquired by Underwriters Laboratories), Ravel Law (acquired by Lexis-Nexis), Xfire (acquired by Viacom), and Xoom (NASDAQ: XOOM).

Patrick received a joint JD-MBA degree from Harvard Business School and Harvard Law School. He was a Commonwealth Scholar at Oxford University, where he earned a master of science. Patrick earned his bachelor’s degree at Harvard College in environmental science. He is a member of the New York and Massachusetts bars, was an elected director of the Harvard Alumni Association, and a member of the Committee to Visit Harvard College. He is also an associate of the Creative Destruction Lab at the University of Toronto.

Where did the idea for Xfund come from?

For many years, I was head of the consumer and seed investment practices at NEA. While I was there, I met a lot of young founders, some of whom hadn’t even graduated yet. The idea of Xfund came from my experience working with these founders. It’s well known that some of the most successful founders have been students—graduate and undergraduate students who founded their companies straight out of university.

What does your typical day look like and how do you make it productive?

I don’t have a typical day. Any given day can include things like meeting founders and learning about their companies, doing events on college campuses, and day-to-day management of the firm. Most importantly, we spend a lot of our days helping our current portfolio companies, solving problems, talking about strategies, and making connections. Every day is fulfilling and different.

How do you bring ideas to life?

We don’t bring ideas to life; we are lucky enough to work with the people who bring ideas to life: our founders. We’re really honored to work with them. We think of ourselves as cheerleaders, supporters, and backers, but we aren’t the ones who bring ideas to life. Our incredible founders do.

What’s one trend that excites you?

There’s a lot of fear around artificial intelligence (AI), but one trend that really excites me is AI making people almost superhuman. We are able to do much more, see much more, and understand much more when we are supplemented by AI.
For example, we have a portfolio company, Sirona, that uses computer vision and AI to diagnose illnesses from MRIs, X-rays, and other imaging. The technology allows radiologists to make more accurate diagnoses, catch problems earlier than they might have with the naked eye, and to compare a particular case with literally millions of other cases. The result is radically improved treatment.

What is one habit of yours that makes you more productive as an entrepreneur?

Not thinking of work as work. Because I feel so privileged and enthusiastic about what I do, it doesn’t feel like work. When you don’t think of work as work, you gain enjoyment, you don’t burn out as quickly, and you do a better job.

What advice would you give your younger self?

The advice I was given was to do what you enjoy and disregard the practical considerations. At first, I thought that was hopelessly naïve and misguided. But the older I get, the more I realize how true it is.

This advice also informs Xfund’s thesis. We support what we call “lateral thinkers”—founders from a variety of backgrounds who think across disciplines, not just engineers, computer scientists, and technologists.

Tell us something that’s true that almost nobody agrees with you on.

I believe that all human and non-human forms of life are, in a philosophical sense, equal. All beings have equal ultimate worth.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Hang out with other founders. Founding a company is an incredibly lonely experience, especially if you are both founder and CEO. Having the benefit of a community—people who are going through what you’re going through—will make you a stronger, more stable, and ultimately more successful entrepreneur.

What is one strategy that has helped you grow your business?

The ultimate strategy for our business is to produce outstanding returns for our limited partners. There’s no secret to our business. It’s a lot of hard work, a lot of enthusiasm, and a lot of luck.

What is one failure you had as an entrepreneur, and how did you overcome it?

Not being aligned with teammates. If you’re not aligned with your teammates, you’ll all be rowing in opposite directions.
As soon as you recognize any misalignment, a functional team will work together to get back on the same page and move forward.

What is one business idea that you’re willing to give away to our readers?

One idea: Airbnb for parking and storage. This would be a service where people could rent out their driveway, basement, or storage area to people who need somewhere to park their car or store their stuff.

A high-end wedding cake bakery would do well, especially in big cities. In New York, if you want a high-end wedding cake, it’s impossible to get a booking. This was true before the pandemic, but there’s an even bigger backlog now. The cakes have to be baked immediately before the wedding, and there are only 52 weekends a year, so there’s a time-space crunch.

What is the best $100 you recently spent? What and why?

Making a donation to the National Center for Lesbian Rights (NCLR). This is a national LGBTQ legal organization that has argued cases before the Supreme Court several times over the past few years and had many victories. It’s a very well-run organization—better than any other not-for-profit I’ve worked with.

What is one piece of software or a web service that helps you be productive?

Zoom, but I hope to never, ever use it again in my life.

What is the one book that you recommend our community should read and why?

I really loved The Hard Thing about Hard Things: Building a Business When There Are No Easy Answers, by Ben Horowitz. The book offers so many hard-earned experiences and secrets expressed so clearly that readers will be able to gain the benefits without the pain Ben went through to learn those lessons.

What is your favorite quote?

I love the inscription on the Boston Public Library: “The Commonwealth requires the education of the people as the safeguard of order and liberty.”

Key Learnings:

  • Do what you think you’re going to be good at, rather than defaulting to what’s “practical.” This will lead you to more success.
  • Starting a company can be a lonely pursuit. Reach out to other founders to create a community where you can support and learn from each other.
  • Find work that doesn’t feel like work.