Are you confident in the way the younger generation is approaching entrepreneurship and investment? In this episode of The Angel Next Door Podcast, host Marcia Dawood sits down for an intriguing conversation with Sal Buscemi, an expert in family offices and investing. Sal shares his journey into the world of investing and demystifies the concept of family offices, shedding light on their unique perspectives and approaches. As the founder of a boutique multi-family office, Sal unveils invaluable insights into the world of family offices, offers advice for early stage investors, and discusses the changing landscape of wealth creation. This episode is a must-listen for anyone seeking to gain a deeper understanding of family offices, early stage investing, and the evolving dynamics of wealth creation. With insightful discussions on strategies for engaging with family offices, navigating investment opportunities, and the long-term vision of wealth preservation, this episode is a compelling resource for aspiring entrepreneurs and seasoned investors alike.
Are you confident in the way the younger generation is approaching entrepreneurship and investment?
In this episode of The Angel Next Door Podcast, host Marcia Dawood sits down for an intriguing conversation with Sal Buscemi, an expert in family offices and investing. Sal shares his journey into the world of investing and demystifies the concept of family offices, shedding light on their unique perspectives and approaches. As the founder of a boutique multi-family office, Sal unveils invaluable insights into the world of family offices, offers advice for early stage investors, and discusses the changing landscape of wealth creation.
This episode is a must-listen for anyone seeking to gain a deeper understanding of family offices, early stage investing, and the evolving dynamics of wealth creation. With insightful discussions on strategies for engaging with family offices, navigating investment opportunities, and the long-term vision of wealth preservation, this episode is a compelling resource for aspiring entrepreneurs and seasoned investors alike.
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Sal's book Investing Legacy: How the .001% Invest - https://a.co/d/8BqCmTd
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Marcia Dawood
Well, hi, Sal. Welcome to the show.
Sal Buscemi
Thank you for having me. It's a pleasure and a privilege. Of course. I appreciate this. Thank you.
Marcia Dawood
Well, I'm excited to have you on the show. I know we had been communicating a little bit before, and then I made you wait a real long time to come on.
Sal Buscemi
Yes, Marcia, you did.
Marcia Dawood
I appreciate your patience, but I would love for you to help us understand a little bit more about family offices. I know you have a book that came out called Investing Legacy, and we'll get all into that. But let's start out first, tell us a little bit about your background, how you got into investing, how you became such a knowledgeable expert in this field. And then let's dive in from there to demystifying family offices.
Sal Buscemi
I've always had a penchant for investing. When I was a kid, I remember my parents used to save for my brother and my college education at the time, in the early 80s when interest rates were different with prudential based municipal bonds, New York City sewer authority, and I didn't know what was going on, but I would always go down to the bank with my father with these kindergarten scissors, and we'd clip out the coupon and put a stamp on the envelope and send it out, and the check for money would come back, and that would go into our college fund. And it worked very well for a while, and I was able to comfortably put my brother and I through college. But going back to it, I didn't think that that was really something at that point. That was a skill, to be honest with you. It was esoteric to me because coming up with a family of professionals, academics, doctors, I thought medical school was the way to go. But I could tell you viscerally in college, I did not enjoy it. I had to jam my senior year, about 24 credits in the second half of my senior year just to graduate within four years.
Sal Buscemi
Today, people graduate like six years, ten years. It's a lot looser today. But I just remember during my internship, and I write about this in the book, but, you know, shorttake it to you, I passed out on the floor of Bethesdrill Hospital north in Yorkville in Manhattan on the Upper east side when I was holding a femur. And when I graduated, I really thought I wanted to go to medical school because this one gentleman who championed me the entire time, through the year and a half I was working with him was really going to help me get into medical school. And I looked up to him as a symbol of success and everything. However, I just knew, again, viscerally, I could not become a doctor. It would be something, when you avoid something, you're not interested in it. You're not really attuned to it.
Sal Buscemi
So after avoiding him for a couple of weeks, I finally called him back. And I was kind of ashamed that what came out of it, Marcia, was something I didn't really anticipate. And that was, he said in his New York accent, he's like, I agree with you, however, I want you to talk to my brother. He just made partner at Goldman Sachs. I think you and him should talk. And I didn't know what was going on at the time. So fast forward, at the age of 29, I leave Goldman Sachs and I raised $30 million from a Park Avenue institutional money manager. And then after that, from another investment manager based out in Denver.
Sal Buscemi
And we were doing a lot of what's happening now, which is the distressed real estate. And I did that. And through that, I was able to build a brand, not just with the institutions, but also with the families who I was also working with, who came on and they would participate, but they weren't the main investors at the time, because we were working with institutions, and institutions like to hold the cards themselves, if they will. So they don't like too many of the people sometimes to come into these deals. We're not. Or sometimes they do. And when we did, we'd have these families we'd be introduced to. They would just come in, sort of like they were introducing you to a family member of theirs.
Sal Buscemi
And it became very tight. And at that point, everything sort of crystallizing that there's a whole different world out here. Although I knew this working at Goldman Sachs, but I never really had really understood the power that a lot of these families had until I started working with them directly. And it's an entirely different world out there, and it's much different than something you'll see Jim Kramer talk about on CNBC.
Marcia Dawood
Totally. And then when you were working with these families and they were interested in early stage investing deals, would they sometimes be the first money in, or were these companies that had already gone through a pre or seed round?
Sal Buscemi
Well, I mean, that's interesting, because when we started going into these, with these families, they would be the first ones going in, and what we would do is we would follow them. And we had two rules when we were working on these deals, when we were working with venture deals specifically, is that we wanted founders that have had multiple exits under their belt, right? Not multiple starts, multiple finishes. Meaning they got through the 1 yd line to the end zone, they got a windfall. They're very well respected. And these guys, even though they have billions of dollars, some of them, they're never going to stop working. It's in their dna. I know one guy, I told you, one of our founders, it's going to be his 18th exit and his 8th unicorn if he knows what he's doing. It's a company called Thrive Bioscience.
Sal Buscemi
And we love Tom. We have a significant amount of money invested into that, but we were not the lead family into that. And the second role is that we like to see a cap table with those inkind families leading it. Right. We want to make sure that there's a lot of smart money there that has a lot more to risk other than money, right. People who are really taking this seriously and the money is always a sign of conviction, and we like that. And so to us, that gives our families the creature comforts knowing that they're getting into best in class operators or opportunities with world class founders and operators who are going to be good custodians, whether the storms get darker or the skies get lighter. And we started to see this during Silicon Valley bank.
Sal Buscemi
A lot of technology companies started going out of business. There was a lot of pullback in financing, but our companies did well because of those two simple rules.
Marcia Dawood
Interesting. So how can angels, who we all come in at very early stages, and I get it, sometimes we're not the most organized groups. Some are. But how can we help to get these companies, these early stage companies, off the ground and then cohabitate with family offices or get to know the family offices a little bit better so that there's a little more trust between the two.
Sal Buscemi
Okay? Again, money is conviction. If you're really an angel, write a check and then tell the world you wrote a check into it? What that does is that signals to someone that you're actually somebody who's doing something. You're a grown up man or woman, right? So you've earned a spot at the table because of the fact that you put your chips into the table and you're ready to play. That's the first way to do it. The second way to do it is something that is very counterintuitive to people, but it's something they should be doing. And if you're really serious about meeting these families, every exclusive club has a barrier to entry. And I talk about this in my book, and that is go to conferences. If you're investing in, like we do, life sciences, for example, go to those conferences that might cost $2,300 to attend.
Sal Buscemi
But guess what? The cream is much nicer at the top than it is when you're dealing with everything in the gravel at the bottom. And I think that's something that a lot of people don't understand is like they just stay in their industry silos because angels themselves, they made their money in one industry. But that doesn't necessarily mean that they have the skills that transition over to an industry that they're investing into. And I think a lot of people forget that. And I've seen people do that, be very cavalier with their money and lose a lot of money because they thought, because they've made it a lot of wealth once that could transition over. But really, they were tyros. Marcia. So lead with the checkbook.
Sal Buscemi
Tell everybody about it. Stay on top of people. Build relationships with these people. Tell them how the investment is going. Ask them before you invest. I'm thinking about investing in this. Will you take a look at this? Your life, science, family, just like that. If you build the relationships, it works.
Sal Buscemi
But you're going to have to go outside of your comfort zone. And that sounds so cliche, but it's true. You're going to have to get on an airplane and go to a conference in San Francisco or go to, like I was telling you beforehand, the kerosene forum or something like that, or things like that where you can actually have multiple eyes on it, because that's just going to build your ability, too, right?
Marcia Dawood
Yeah, that makes a lot of sense. So tell us about some of the other lessons that you talk about in your book.
Sal Buscemi
It's, it's interesting how the world has changed over the past 20 years. I mean, Amazon, a trillion dollar company, hasn't even been around 30 years. Right? So media has democratized wealth in a way that we haven't seen before. And that's had tremendous influences on people and really how they find legitimacy today. And we talk about that where influencers are the new investment bankers. Right? I mean, think about it, and the world has sort of gotten a little topsy turvy. But what comes down to it is that these people are craving relationships. I think it's a very lonely world out there.
Sal Buscemi
Everything I read in the New York Times, for example, or Washington Post talks about headlines that come across as being there's a loneliness epidemic and it's going to kill people. So I think the ability for you to build a meaningful network quickly is going to really help you get in your career where you need to be, regardless of what it is. And the most pathetic example of this is someone who loses a job. They're not on LinkedIn. They're asking their friends for emails for them to spam. There's no relationships there. And today, especially when you're dealing with families, people treat them as like ATM machines. I mean, I can't tell you how many times since moving to Miami, I'd meet someone for coffee.
Sal Buscemi
And, Marcia, you're not going to believe this, but they have an iPad underneath their arm, you know what I mean? And if we were to make that even more awkward, that would be like if he had an engagement ring, because what they're looking for is marriage on the first date, and that's creepy, right? Whereas crypto. Crypto is like maybe a one night stand, because that's transactional. But when you invest in these companies for the long term, you are partners, right?
Marcia Dawood
Oh, absolutely. Yeah. We talk about that all the time. This is a way long tale. I even get messages through LinkedIn, hey, I need 50 grand or whatever they're asking, and they don't even know. So we're always telling people, too, about making sure that you build those relationships. Do you think that you mentioned before about how there's this wealth from, like, Amazon hasn't even been around for 30 years, and all of these tech companies have created some really wealthy people. So we don't have the Rockefellers and the Hillmans and the scapes and all the people of the.
Marcia Dawood
If you didn't recognize them. I've spent a lot of time in.
Sal Buscemi
Yes. Yes, I did.
Marcia Dawood
Yes. So are we getting away from some of the family office, like, traditional ways? And now there's kind of the newer ways you were talking about with the influencers or explain more about that a little bit.
Sal Buscemi
When we're talking about family offices, I'm talking about people who have net worth of $100 million in investable assets or more because it costs about 1% to manage a family office from taxes, accounting, legal fund administration, all of that stuff. So there's an expense to it. There's an expense to having money. I equate it to owning a yacht. You have to maintain the yacht, otherwise you're going to lose it. Right. It's going to be destroyed. And when you look at it that way, as if you're running a business rather than like a philanthropy or some people do, like, donating tuition for startups sometimes when it's like his brother in law who's an alcoholic, who's going to start a new uber that's donating money, that's not investing.
Sal Buscemi
Right? And there's many examples of that. But when you look at the families, they're the ones who have the real wealth, who are looking for influence. Whereas when you look at the influencers today, they're the new rich, they're the new doctors. They're the ones who are making between 500,000 to 3 million a year. And there's things that have been a lot more liberal since the days of Rockefeller, right? But today, owning that media is also a driver of wealth. You own your own media, you own that wealth, right? And that's the most important part. They're rich, but they're looking to get into investing in the same assets that some of these 100 million dollar plus families want to get into. And that's what we call statement class real estate.
Sal Buscemi
Like class a real estate in great cities or logistics. I'm sure you've heard of Zara, the clothing factory, right? The clothing brand. And the founder of that, Armancio Ortega, has a family office, that company. There's so much Zara and intermix being bought that he buys $1.3 billion each last year in class a real estate statement real estate, because he's not looking to get rich. He's already rich, and he's looking for a store of wealth, and that's what's happening. So as far as the traditions are concerned, they're still there. As far as the wealth creation. And everybody becomes, back in the day, in a book that I told you about, the merchant bankers, they take that wealth and they invest it, and that's how they make impacts in the world.
Sal Buscemi
We're seeing that today with Bezos, with his blue origin, although I don't think he really takes that seriously. But there's still that same semblance out there. It's just that the modern family is different than the traditional family, what we saw before.
Marcia Dawood
Interesting. So from your vantage point, how do you think the younger generation is going to invest moving forward?
Sal Buscemi
I think the younger generation, the ones that I've been with, are not confident enough to transition to that. And so I don't know if all of them are going to be active investors or not.
Marcia Dawood
Yeah, that's what I worry about. I worry that there's too much information that isn't necessarily accurate information that is being just poured into their brains and our brains, all of our brains, over and over again. And then when we're going to ask these Gen Z's and even the gen A's to move forward with supporting entrepreneurs. I'm worried that they will make uninformed decisions, not necessarily bad decisions. Like, they weren't trying hard. I'm sure they will, but they won't have all the information that they need. Or maybe they'll have misinformation, and then they'll get discouraged because they will end up in bad situations.
Sal Buscemi
Yeah, it is. Or they'll just be paralysized. There's a paralysis there. And I think that's even worse, because I think what they'll gravitate towards, and I see it all the time, is they'll go to the shiny object, right? So they'll look at, like, investing in SpaceX, which is, we're investors in know and other higher profile companies, to enhance their status, rather than the. I think, you know, this is where you start to see the mix of marketing and fiduciary responsibility. I mean, there's a lot of people who are great marketers, but they're not really good operators or custodians of capital, to say the least. And without naming names, I think people are gravitated towards that, because now they're gravitated towards the personality, because that's really all they know growing up in a post 1999 global Internet revolution.
Marcia Dawood
Yeah, I totally agree. Well, before I let you go, I have to ask you, as a fellow author, since my book is in September, tell me a little bit about why you wrote the book and what you're hoping people will learn from it.
Sal Buscemi
About ten years ago, after I finished my second book, which was very technical on raising funds for real estate, I was having a lot of conversations with families, and I was having a hard time, actually, at first, relating to them. And the reason is because I always was used to working with institutions, and institutions love number numbers, and anything quantitative, for that matter, to look at. And that's actually been something that I would assume that a lot of these families going into it, but when we're talking about the later generations, and you have to sometimes go through them first before going to someone else, it falls on dead ears. And so you really had to learn how to communicate this. And what I noticed, and I went with a female publisher, because 70% of book buyers are woman, and they buy audibles, too. So I would highly recommend that you narrate your book as author, because that carries a certain prestige. Marcia, from what I've discovered and moving forward with that, one of the clinchers was, I remember I was out to dinner with a couple, and female, who was around my age said, what is this. And I know they inherited a tremendous amount of money, and they were just feeling out things.
Sal Buscemi
And I would tell stories and like, oh, what were you doing in California? And I said, well, I was helping this family build a library with the name on the side of it. Like, what? But it got the female's attention, right? Because the females are usually the purse string holders in most relationships, especially if the wealth descends from her side of the family. And when you look at it, they're more looking at the preservation of wealth rather than the speculation of wealth. And the husbands today, most guys, they don't really read books much, unless it's Tom Brady's biography, maybe. But generally speaking, guys get their investment advice off of Reddit and Instagram memes, and they only invest in liquid things. For the most part when we look at Americans and those conventions carry on because everybody's been indoctrinated, as you said before, Marsha with CNBC and Jim Kramer saying bye bye bye and turning the stock market into a, I mean, that's the way it's become today because those companies make up tremendous amount of fees off of trading revenue. Whether Kramer's right or wrong, I mean, I think he should have been wearing cement shoes at the bottom of the Hudson by now. But time will tell on that with the amount of money that's been lost.
But when you look at it, I was in San Francisco not too long ago for the JPMorgan health conference, and there I am in the Charles Schwab wing of the San Francisco met. Beautiful artwork, right? I mean, those trading season losses buy a lot of expensive artwork that you can put your name under, gold, copper colored letters usually reserved for the catacombs of the Vatican. But, hey, that's capitalism, because that's just the way it works. So a lot of guys look at it short term, where the women look at it long term. And with that in mind, we've been able to use that book as sort of like a de facto business card. I wrote it during the pandemic. My mom was very sick at the time, before she passed, and then after she passed, I called it my publisher. I remember I rented a house with a few friends out in the Hamptons in August, and I said, I'm bored.
Sal Buscemi
Let's start the book. And we did, and we just went right straight through it. Andrea Albright at Beverly Hills publishing was my publisher. She's also published a couple other books in the legacy and leadership series with some other families that I've introduced to her, too, as well. So we're very happy with that. And when people read the book, it's sort of like I wrote it myself. People know me. If I didn't write it, people would call me out on it.
Sal Buscemi
Right. So I didn't want to be called out. I'd rather be a little maybe too edgy than to be called out for not being myself or authentic, for that matter. And it paid off in space. It paid off in space. And for that, I'm very grateful about it because now it's invited people into a community and we have things to talk about. And it also gives me a reason to follow up with people of consequence. Should I, you know, should I give him a copy of the always, you know, gently ask him for an Amazon review later and an opportunity to talk about other things?
Marcia Dawood
That's great. Well, Sal, thank you so much for coming on the show. Really appreciate you sharing your insights with us.
Sal Buscemi
Got it. Thank you very much, Marcia, I appreciate you, too. Thank you for the privilege.