Welcome to another episode of The 7 in 7 Show with Zack Ellison, which features full length interviews with the world’s leading investors in innovation.

The show this week features the first half of a deep dive with Dan Zwirn, a legendary hedge fund manager and one of the best credit investors in the world.

Dan co-founded Arena Investors in 2015 to bring creative solutions to those seeking capital in special situations. With a mandate unconstrained by industry, product or geography, Arena currently manages approximately $3.5 billion as a global investment firm focusing on special situations asset and credit investments in corporates, real estate, structured finance, and corporate securities. And Dan and his team have become well known for their ability to develop pragmatic, very precisely-structured investment opportunities in complex situations where others can’t or won’t.

Before founding Arena, between 2009 and 2015, Dan founded and/or led several specialty finance enterprises including Applied Data Finance (a consumer finance company), North Mill Capital (an asset-based lender), North Mill Equipment (an equipment lessor), and Lantern Endowment Partners (an investment fund).

In 2001, while a managing director and founder of the Special Opportunities Group at Highbridge Capital Management, Dan, along with Highbridge, co-founded D.B. Zwirn & Co., a global special situations firm. Dan served as managing partner of D.B. Zwirn & Co., which grew into a $6 billion enterprise. He had previously founded the Special Opportunities Group of MSD Capital, the private investment firm of Michael Dell.

Dan is a senior trustee of the Brookings Institution, a member of the Executive Board of the University of Pennsylvania Jerome Fisher Program in Management & Technology, and a member of the Board of Overseers for the School of Social Policy & Practice at the University of Pennsylvania. He previously served on the Leadership Council of the Robin Hood Foundation, the Board of Trustees of Barnard College of Columbia University, and the Board of Trustees of the New York Public Theater.

Dan holds a BS in economics from the University of Pennsylvania Wharton School of Business, a bachelor of applied science (BAS) in computer science from the University of Pennsylvania Moore School of Electrical Engineering, and an MBA from Harvard Business School.

In this episode, Zack Ellison and Dan Zwirn discuss:

1. The evolving venture debt market and its potential for investors.
2. The importance of being selective and disciplined in venture lending.
3. How market cycles affect venture debt opportunities.
4. Growth credit as a blend of venture lending, distressed debt, and direct lending.
5. The changing dynamics of venture capital and its impact on venture lending.
6. Strategies for de-risking venture debt transactions with a focus on cash flow.
7. Recommendations for investors to consider over the next phase of the economic cycle.