LA Venture: Technology Crossover Ventures’ David Zhang On His Approach to Investing

On this episode of the LA Venture podcast, Technology Crossover Venture (TCV) Partner David Zhang discusses his approach to investing.

TCV is a venture capital firm that invests in seed-stage, early-stage, later-stage and growth-stage companies. The multibillion dollar fund is known for its investments in technology giants including Netflix, Airbnb, Peloton, Spotify and Facebook.

“Going public is the start for us,” Zhang said. “Ninety percent of the time we're buying or we're purchasing a bigger stake in the company when it's going public. So, where most traditional venture capital firms will see going public as this sort of, ‘I'm getting out of here’ event, that's sort of like the beginning of the dance for us.”

Zhang is a long-time veteran of the VC world. He has invested in companies including rental and booking services platform Airbnb, expense management services Brex and online payment platform Klarna.

“One of the things that I personally enjoy about private investing is that there is this true long term alignment,” Zhang said. “Both from an investor and company perspective and also there's a relationship element that sort of compounds over time, whereas public market investing is definitely less so.”

In 2019, TCV invested in fintech companies like Brazilian digital banking company Nubank. Zhang said the app has now expanded into Mexico and Colombia.

Zhang said that replicating what's working well in one geography can be difficult, especially in regards to fintech companies.

“There is this element of, you have to account for consumer behavior, cultural norms,” Zhang said. “But you need to very well understand the lay of the land of regulation and infrastructure. Cultural differences tend to necessitate a different product.”

Zhang has been involved with the Nubank boardand is also on the board of the financial advisory and trading platform Wealthsimple.

“I think the function of the board is to allow a CEO and a management team to achieve their full potential,” Zhang said. “We like to think of ourselves as a trusted adviser. I think a lot of what we do also is, or a big part of the value proposition is having consistency in the themes and the values in the messages that we send to companies.”

Zhang said that the qualities of a good trusted advisor is someone who is “calm” and “balanced.”

While Zhang agreed that VC is still a small percentage of all investable capital in the world, he is convinced that, “in our world (venture capital), it's large. It's huge and it makes sense because, in my view, it’s the most exciting place to be, it's where most of the value in dollars should and will shift over time.”

dot.LA Reporter Decerry Donato contributed to this post.

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This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.