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Letter from our CIO

Updated: May 22, 2021

Welcome to Knockout Capital. My nascent passion for finance began in university when I saw how a few scrappy kids in my statistics class banded together to create their own fund out of 30k and fund their college education. I was baffled by such unrelentless passion, as they discussed markets incessantly before class, audaciously taking chances with their own capital to pursue their dreams. Finance is a field of trust, and the only way to establish trust is to have skin in the game and establish a track record.

I came from a family of physicians, where research was prided and an MD a credential that one was intelligent. It just simply wasn't my passion, but my capaciousness in research and quantitative skills was exactly what Morgan Stanley needed, the ability to make market conjectures and derive them from facts.

I learned from senior portfolio managers their strategies, and understood that there was no true correct way of analyzing the market: one needed to find their own means of investing that aligned with their values and interests.

Being exposed to SF and the Bay Area, I naturally gravitated towards the venture space. I had no clue what venture truly was, except that it a subset of finance, but filled instead of individuals chained to high heels and pressed suits, of laid back hoodies and short work days. I started to attend events on weekends when I could, and one day, took the leap to join a fellowship program for VCs, joining their consumer team. I joined an angel group shortly after, and perusing their dealflow of lower quality than my own network, joined on as a Managing Director of a crypto firm, before becoming disenchanted by the altcoin projects and starting my own. Focusing on crypto wasn't the only thing I wanted to pursue. However, my experiences in crypto and finance led me to found a microtransactions platform to share real-time market news and commentary.

Becoming a MD, and not the one my parents wanted opened doors to partnerships that branded me early. At Morgan, it was normal to shake hands and reach out to portfolio managers. It was easy to find the MDs of other venture firms to collaborate and run meetings, and create new bonds. I became a panelist, attending industry conferences, and overtime realized my time spent shaking hands became a waste of time if it didn't amount to actionable goals. I became a mentor to Alchemist accelerator, sFoundation, and joined UCLA Ventures as an alumni investor.

Knockout Capital started in 2019. We still focus on deep tech in our investments, but also finance and platforms that scale. The first event I ever attended in Silicon Valley, was Hemant Taneja's lecture on the Unscaled Economy. I'll always remember that moment, and the moment I met Pitch Johnson, essentially the founder of venture capital, Jurveston, Ohanian, Kupor, many more.

Most of all one of my heroes left me a note in his book, Principles, to stay humble, and keep my head down. Paulson & Co started with 3 million, and Ken Griffin of Citadel started with only 1. We're in ballpark of those numbers, and while that's modest and where we'll have to stay as I scale my startup, we'll be hitting our alpha.

I donated all my signed books, and forgot all the hands I shook, there were too many, except for that black bible. That, and Elad Gil's High Growth Handbook, because one day, I'll be Goku too, with hopefully a billion dollar company. As I grew more ensconced in venture, I realized investing sheerly in private markets was a high risk add on with the potential downside due to a lock up of liquid assets within a portfolio. I knew that public strategies would never give me the upside or glamor of 10x returns that treading on the markets; from our strategies at a 10-12% alpha we're comparable to real estate and can do a 3x return on public markets.

We devised a plan to do both, as an alternative asset class to maximize returns of both worlds.

We're actually not doing anything different; we were already algorithmically trading as a side project and simply combined operations as a venture add on. As of May 2021 I am writing this after my first midterm of Spring quarter. I moved back to my condo in LA, and am getting a second bachelors in computer science. I get it, for some degrees are a prolific usage of capital. I was a Regents so this time around, I'm just paying my dues. I am building out not only the UX/UI designs as the project manager, but the quantitative algorithms behind Weclikd, and of course Knockout Capital. My journey has come full circle and has come to an end.

There are only two stories in literature: a man going out to sea, and a man returning back home. I'm home.

// You can always access my old venture deck here. It will always grow, and is a milestone of my life journey. I'm thankful of my life path to be a woman in tech, and a woman in finance.

// We've decided to structure and keep future commitments only within friends and family.

In finance, a knockout option is an exotic option utilize to hedge positions. In medicine, it is an isolate allele, core to a phenomenon, and in boxing, a move that takes an incumbent out in one fell swoop. Here at Knockout Capital, we're looking for small moves with big impact.

All the best,

K.S. Osone


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