Apr 16, 2018 · 24m · 20vc
20VC: How a16z Uses NPS To Create Better Founder Experiences, Why Intellectual Curiosity Is The Most Important Investor Trait & Creating A Fund To Last Through The Ages with Zal Bilimoria, Founding Partner @ Refactor Capital
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Zal Bilimoria, Founding Partner at Refactor Capital, to discuss lessons learned at Andreessen Horowitz, investor traits, and Refactor's thesis on deep tech and bio-industrial startups.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 38.8% of the talking time here. How this is scored →
Harry as informed peer 3.0 Guest teaching 3.0 Guest disagreement 0.3 Harry pushing back 1.7
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:19 Reframing Deep Tech Hype and Seed Market Gap
Zal counters the concern of a clean tech style bubble by pointing out that while growth capital is inflated, seed-stage lead investors in deep tech remain rare.
Hardest push from Harry ▶ 10:59 Challenging Deep Tech Hold TimesHarry directly confronts Zal with the VC fear of having to carry deep tech startups across extended timelines, asking why that fear isn't justified.
Biggest teaching moment ▶ 11:55 Venture Fund Return Math and Power LawZal educates Harry on fund mechanics, detailing how portfolio construction expects a majority of companies to fail while relying on a single outlier to return the entire fund.
Harry holds his own ▶ 15:00 Citing Elad Gill on Clean Tech Bubble RisksHarry demonstrates strong industry context by invoking Elad Gill's warning about the 2007 clean tech bubble to question whether generalist VCs are entering deep tech prematurely.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Zal Bilimoria's Path from Product Management to Venture Capital | 2 | 3 | 0 | 0 | Harry welcomes Zal and asks standard background questions about his journey from operator to VC. Zal provides structured insights into Andreessen Horowitz culture, detailing the NPS evaluation system and the idea maze framework. | |
| Key VC Traits and Assessing Vision vs. Reality | 3 | 3 | 0 | 1 | Harry cites partner David Lee's praise regarding Zal's high founder NPS and asks how to evaluate vision versus reality. Zal breaks down key VC traits and outlines his criteria for assessing whether scientific breakthroughs can convert into commercial go-to-market products. | |
| Evaluating Scientist Founders and Leadership Potential | 4 | 3 | 1 | 4 | Harry challenges the premise of backing fundamental human problem startups, pointing out the traditional VC fear of long hold times and carrying costs. Zal validates the concern while detailing how specialized LP capital and funding structures accommodate longer lifecycles. | |
| Portfolio Strategy, Risk Allocation, and Liquidity Pathways | 3 | 4 | 0 | 1 | Harry asks about portfolio loss ratios and liquidity pathways for deep tech investments. Zal explains power law fund economics, noting that over half the portfolio will likely hit zero while one breakout returns the fund, and contrasts therapeutics exit timelines with synthetic biology. | |
| Navigating Capital Density in Deep Tech | 5 | 3 | 1 | 4 | Harry brings up Elad Gill's quote comparing the rise of deep tech VC to the 2007 clean tech bubble and asks if non-expert VCs pose a risk. Zal acknowledges the capital influx at Series A but notes that dedicated lead seed funds remain scarce. | |
| Partnership Dynamics with David Lee | 1 | 2 | 0 | 0 | Harry asks about Zal's relationship with co-founder David Lee before transitioning to a quickfire round. Zal outlines his belief that biology is eating the world and details their investment in Solugen. |
Statements from this episode (17)
Andreessen Horowitz's Early Investment Team Was Mostly Product Managers
“What I loved about A-Six-Z is that everyone had operating experiences of different kinds, especially on the investment team, which was mostly made up of PMs at the time.”
Andreessen Horowitz Sent NPS Surveys to Every Founder Who Pitched
“So all founders that interacted with A-Six-Z in a pitch setting, so regardless of us investing or not, would receive a short survey with one important question. Would you recommend A-Six-Z to friends and colleagues based on the interactions you had with this p…”
Refactor Capital Uses Delighted to Track Founder Net Promoter Scores
“So we adopted it at Refactor, and we actually used this really great, inexpensive tool called Delighted to do all that.”
Zal Bilimoria Says Extreme Curiosity Is the Most Important Investing Trait
“And then the second thing I learned at A-Six-Z is how to be an insanely curious person, and why that's the most important thing about investing.”
Refactor Capital Prefers Scientific Founders With Clear Go-To-Market Strategies
“These founders who are scientists, especially that we spend time with in biology, especially need to have strong answers on these go to market questions. We of course help our founders in these areas as well, but we'd much rather see founders go from one to a …”
Scientist Founders Must Be Great Storytellers to Build Enduring Companies
“I think the scientist founders we meet have to be incredible storytellers. They need to be able to tell amazing stories to investors, which reduces financing risk, but they also have to be able to tell amazing stories To customers, to talent that they want to …”
Refactor Capital LPs Support Alternative Funding Structures for Deep Tech
“We're lucky enough to have some very wonderful LPs who are open to different funding structures to finance these companies.”
Average Time to Exit for Seed-Backed Startups Exceeds Ten Years
“The typical tenure fund life cycles are pretty hard, especially for seed investors that are writing those super early seed checks and time to exit time to IPO is maybe sometimes greater than 10 or 11 years now on average.”
Refactor Capital Plans to Invest in 40 to 50 Companies Per Fund
“If we're going to invest in 40 to 50 companies in this fund, one of them has to be the breakout winner, and a few of them have to be able to, you know, cobble together another one X, let's say.”
More Than Half of Hard Science Startups Will Go to Zero
“You have to assume that more than half of your companies are going to go to zero, and that's no different when it comes to biology and other harder science companies.”
Bio-Industrial Startups Reach Product Launch Much Faster Than Therapeutics
“The idea of being able to actually create value in these companies can actually be much more rapid. They have the ability to launch products within the first few years after receiving seed funding versus a therapeutics company, which might take much longer.”
Refactor Capital Hired an In-House Scientist for Deep Tech Diligence
“We also recently hired an in-house scientist who, helping us as well, lead a lot of the evaluation of these technologies.”
Very Few Dedicated Seed Funds Lead Rounds in Deep Tech
“Yeah, there's certainly a lot more capital and deep tech at the venture and the growth stages of investing. So let's say series a and beyond, which is really fantastic news for us at refactor, but we haven't seen many dedicated seed funds in these areas, espec…”
Series A Investors Demand Far More Traction Than Five Years Ago
“Some of these larger series A's as we've been seeing really do require quite a bit of commercial traction nowadays versus maybe even five or seven years ago.”
Zal Bilimoria Believes Engineered Biology Is Eating the World
“We believed, Biology is eating the world. Literally every portion of it.”