Gordon Winston: Redefining Authenticity and Innovation Technology

Gordon Winston, grandson of Harry Winston, started out on Wall Street working at Lehman Brothers while still a student at Cornell University.  He continued a successful career on Wall St on the trading floor at Lehman and later at Kidder Peabody in structured debt capital markets.  As a loving father and husband, he raised 2 wonderful children, both now attending University Southern California. He was also tasked with heading up a family office and managing a diversified debt and equity portfolio.  Initially with family capital he gained an impressive track record investing in innovation and healthcare and gained a following with some of the large institutional investors and pension funds raising over $3 billion into several life science royalty funds.  Winston has since emerged as a leading investor in life sciences and biotech having invested over $1.5 billion in over 40 companies over the past decade.  As dedicated as he is to his business, he shows an equal dedication to his philanthropy with his family. He is actively involved in a number of SDG initiatives and the application of innovation ecosystems to achieve impact objectives. He is also an active member of YPO, and also spends his spare time perfecting his black belt in karate having been a third dan black belt Tang Soo Do national champion and is passionate about heli skiing.

IW: Can tell us a little bit about the projects that you’re invested in?

GW: I’ve spent the better part of the last 17 years investing in innovation intensive knowledge-based businesses and intellectual capital whether intellectual property in the life sciences industry and acquiring royalties on underlying pharmaceutical products, devices and diagnostics or the use of IP-based financing models in technology more broadly. I would take a portfolio of investments in these intangible assets and ultimately securitize them and have them agency rated. We would then use that as a proxy for scaling our own internal funding capabilities, eventually reaching $1.5 billion.  We started off with a family office that had no exposure to this greenfield asset class, got involved in hostile acquisition as a white knight, and transformed a life sciences incubator into a leading innovator in that space ultimately raising over $3 billion in equity capital across four funds and $1.5 in debt. I led a vast majority of the key initiatives at DRI Capital giving me a very robust perspective on how to build this this nascent industry into what would become a $100 billion industry.

While navigating this realm of financing I wanted to apply deeper learning capabilities and data analytics into underwriting processes to inform how we would invest in late stage pharmaceutical research and development programs, portfolios of drugs that had failed clinical trials where billions of dollars had been spent, and the pursuit asymmetries under an absolute return strategy. To broaden the scope on investing into IP and innovation more broadly I worked with Edward Jung who was the founder of Intellectual Ventures.

Edward and Nathan Myhrvold started IV with this very bold objective of investing in intellectual property as an asset class. Ultimately, they would raise about $8 billion in capital. They identified 40+ of the fastest growing technological segments in the world and acquired intellectual property relating to that. There was a lot to be learned from that model as they were an incubator of ideation, and the broad investment mandate was to buy, build and monetize intellectual property and intellectual capital through licensing, technology transfer, start-ups, partnering with Fortune 1000 companies, lift-outs, hybrid structures and even litigation; whatever it took to translate intellectual property into technological deployment, even earning them the recognition as an 800 pound patent troll with a club and all.

GW:  I also realized that there was a very different framework for intangible assets and innovation models which are ecosystem and platforms. A lot of that experience informed my perspective on identifying asymmetrical risk rewards situations across and along an investment continuum.

Another project we are invested in is building an authenticity platform for a peer-to-peer ecosystem that tracks the authenticity of a product across a supply chain through the relationship with a consumer before and after their initial purchase. Just through PPE, we have seen how things are readily and easily counterfeited.  This authenticity platform can be applied to many industries including luxury goods, pharmaceuticals, medical device technology and food.  We’re also looking at the same sort of application in the hemp and cannabis space because of the need for reference ability, authenticity, and the practice of standards.

IW:  What is your vision for the future?

GW: This past year we have been faced with the issue of transparency and authenticity.  Today the world is hyper connected.  Even in traditional news reporting, facts and journalism have been so blurred for their speed to entertain vs the authenticity and veracity of checking and reporting the facts. Digital transformation is rapidly evolving global supply chains, business models, consumer habits, and we can envision a future in with the average global citizen has insight into the authenticity of all goods, services, and news that they consume.  I am obsessed with this idea at the moment and finding ways to authenticate every step of the way and bring this service to mainstream consumers.

Rhetorically speaking, would the idea of traveling to the moon be such a bad idea? Provided the opportunity to do that, it would be interesting. I do believe that the world will be a very different place 20 years from now and that physical representations and digital representations will overlap, in may ways they already are, but more broadly. It’s hard to imagine, and not all parts of the world are going to advance with the same fervor as others, but I don’t feel like there are any limitations to innovation.

I think there are greater efficiencies in the way that we live, yet there are greater problems with the ethics of how we live as human beings. I’d like to believe in the betterment of the world and that as a collective we can find ways to be helpful and address some of the most vexing problems of our time. There is a lot of work required to do that.  I think it also leads to a series of other potential problems that will need further resolve in the future.

Where do I think we’ll be in 20 years and what will we be doing? I think that looking at innovation is going to be an interesting way to think about investing. It could potentially be in the form of intellectual property. Or it could be setting up funds that use revenue insurance financing to get finance, help scale emerging businesses or using real, absolute return strategies that take a holding company approach to working broadly across technology categories and advancing those.

I see taking some of the learnings from the pharmaceutical space and applying those to other industries.  There are smarter ways to invest and get a toehold strategy into a company’s capital structure to help that business grow whether that’s a form of diluted or non-dilutive financing and think about using the intellectual property or the human capital in different ways than we are thinking today. Advance what they are doing and then navigate to reflection points and provide investors with a very unique set of investment opportunities.

IW: What are some of the philanthropic endeavors that your family office is involved in?

GW: My mother is the president of the UN Women for Peace Association an NGO granted consultative status by The Economic and Social Council (ECOSOC) of the United Nations. The Organization’s Mission is gender equality, inclusion, ending violence against women and children, and promoting peace, education and advancing sustainable development goals. I have been working with and in discussions with futurist, family offices, Business Counsel for International Understanding, International Finance Corporation and others to advance ESG investing both from a top down and bottom-up, transformative vs impact investment.  While the pandemic will likely end up killing about 1.75 million people globally, 150 million people will move into poverty due to Covid, and more than 540 million children will be out of school-40% of these because they lack internet connectivity. In additional to destroying SME business, mom and pop shops, the intergenerational wealth destruction has been severe. I fear that there will be a lost generation of children who will not receive or return to education.

We need to think in terms of transformation something dramatic is done and we engage to create a more transformative and equitable approach to building back where WE create investable and bold platform initiatives which challenge conventional models and innovation ecosystems for a better future.

IW: When you mentor the next generation what, what kind of advice do you have for your kids in terms of their future?

GW: Find your intent, be passionate and mindful of how you allocate your time, the choices you make and be prepared to make mistakes along the way while pick yourself up again and again to continue on your journey. Having passion and a “love of the game” is essential to happiness and success.  I try to lead by example with my kids so they can see that dad is passionate about his work, loves what he is doing every day and finds it fun and challenging.  My hope for my kids is that they pursue their passions and are dedicated to excel at them too.  I think that science and technology are important, but I also do think humanities, history, ethics inform judgement and an understanding of the world that you live within and its complexities.

I think if you can instill a sound moral compass in your child or in another person that you’ve won a good part of that battle. The ability to be able to develop critical thinking and judgment to determine between right and wrong or malintent are critical in today’s world.  Data and information easily be manipulated or forget with keystrokes.  Without these basic tenants, I think that our children would be challenged.  Look, we’ve dealt with difficult business and personal situations, failure, mistakes and poor judgements, and questionable people, most can attest to the fact that it’s not always a bowl of cherries. Get knocked down, stand up and go again.  What makes me most proud of my children is that my wife and I were good role models and instilled that strong moral compass and ethics in them.  Whether they succeed in life or in their chosen professions I know they are good kind people

Embrace a growth-oriented mind-set, embrace positivity, and find time for reflection.  Along the way I think that you do need to go through the pain to realize your capabilities as a human being.

The younger generation seems to be losing their ideals and their perspectives are being distorted by the digitization of all things, the information overload and the chosen continuous distraction. The innovation is transforming each and every aspect of our lives in both negative and positive ways.

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