Feb 17, 2020 · 38m · 20vc
20VC: Ashton Kutcher on Early Lessons From Investing in Airbnb and Spotify, Why VC Ownership Requirements Are Becoming More and More Egregious & What Being Good At Product Truly Means
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In this episode of The 20 Minute VC, host Harry Stebbings interviews actor and venture capitalist Ashton Kutcher about his transition into tech investing, founder evaluation criteria, product design philosophy, and the unique value proposition of Sound Ventures.
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 31.4% of the talking time here. How this is scored →
Harry as informed peer 2.1 Guest teaching 3.0 Guest disagreement 0.9 Harry pushing back 0.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 33:43 Blunt take on celebrity investing
When asked about the rise of celebrity investing, Ashton skips diplomatic hedging and bluntly states that a lot of people are going to lose money.
Hardest push from Harry ▶ 25:49 Challenging institutional check frictionHarry acknowledges his hesitation as a host before asking a direct question about how Sound's larger institutional checks create friction with traditional VC firms.
Biggest teaching moment ▶ 15:15 Reframing hardship as distance traveledAshton reframes Harry's question about founder perseverance by explaining that distance traveled from where a founder started is a far better predictive metric.
Harry holds his own ▶ 25:49 Harry probes Sound's institutional fund dynamicsHarry demonstrates his sharp understanding of venture capital market dynamics by pressing Ashton on how writing multi-million dollar checks infringes on traditional lead VCs.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Ashton Kutcher’s Journey from Entertainment to Tech Investing | 1 | 1 | 0 | 0 | Harry asks a standard introductory question about Ashton's transition into tech investing. Ashton provides a detailed narrative about his background in engineering, early media production, and early angel checks in Optimizely and Skype. | |
| The Role of Fatherhood in Shaping Investment Lens | 2 | 2 | 0 | 0 | Harry demonstrates good research by referencing a prior interview Ashton did with Arianna Huffington. Ashton elaborates on how having children expands an investor's perspective and consumer empathy. | |
| Culturally Driven Investment Strategy and Thesis | 2 | 4 | 1 | 0 | Harry sets up the discussion around deal sourcing from an entertainment perspective. Ashton contrasts traditional technical VCs with his own culture-driven thesis, pointing to investments in Modern Fertility and Carrot. | |
| Sourcing Strategies and Identifying Cultural Trends | 2 | 3 | 1 | 0 | Harry references Daniel Ek to ask about sourcing, and later asks Ashton about his personal hardships. Ashton politely reframes Harry's perseverance question around the concept of distance traveled rather than pure hardship. | |
| Building Vulnerability and Authenticity with Founders | 2 | 4 | 0 | 0 | Harry prompts Ashton on product intuition based on a question from Shahid Khan. Ashton provides a detailed breakdown of UI/UX mechanics, the appleification of enterprise software, and balancing friction with simplicity. | |
| Sound Ventures' Unique Value Proposition for Portfolios | 2 | 3 | 0 | 0 | Harry asks where Ashton most naturally focuses his time with portfolio founders. Ashton breaks down Sound Ventures' value proposition across distribution, branding, crisis PR, and narrative creation. | |
| Scaling from Angel Checks to Institutional VC Funds | 4 | 4 | 2 | 4 | Harry challenges Ashton on the friction created when scaling from angel checks to larger institutional checks that compete with major VCs. Ashton acknowledges the dynamic, calling traditional VC ownership requirements egregious and detailing fund economics. | |
| Long-Term Vision: Investing in a Happier Future | 2 | 3 | 3 | 1 | Harry asks about Sound's long-term legacy and conducts a quickfire round. Ashton gives candid, contrarian responses, notably predicting that most people investing in celebrity deals will lose money. |
Statements from this episode (20)
Kutcher's first angel investment was in A/B testing platform Optimizely
“I then made my first investment. It was in a company called Optimizely, and it was just small angel investment. And I thought this A-B testing platform could come in pretty valuable, could come in pretty handy.”
Kutcher's early angel portfolio included Skype, Alibaba, and Foursquare
“I invested in Skype and Alibaba and Foursquare and this platform called Brizly, which was like a Twitter client And just started putzing around and finding my way towards interesting companies and interesting people and had some early success, which then led m…”
Kutcher: Future internet builders are perpetually young college graduates
“I believe that the people who are creating the future of the internet are perpetually young. They're coming out of college. They're seeing what's on the fringe of technology and capability.”
Kutcher: Fatherhood expands an investor's consumer understanding through empathy
“When you have children, you have more than one head because you have such Empathy for those individuals. You have their lens as well, which gives you a broader scope of interest, investigation, compassion, and a broader scope for consumers that you otherwise w…”
Kutcher discovered and invested in Spotify before its US launch
“Spotify is actually one of the, it wasn't even in the United States yet when we found it.”
Kutcher sources deals by asking Twitter followers for home screen screenshots
“And I've actually like solicited my entire Twitter audience at times. Like, Hey, can you send me a snapshot of your home screen? I'd like to see what you're using, you know? And then I just run pattern recognition across thousands or hundreds of home screens. …”
Kutcher: Distance traveled is a better founder metric than past hardship
“So if you look at where somebody came from and where they've gotten to, that is the more important metric than what's the hardest thing that you've persevered through.”
Kutcher: Showing vulnerability encourages founders to drop their public personas
“If you're willing to be vulnerable with someone, they then open up and realize they see your humanity as opposed to the image of who they think you are.”
Kutcher lived exclusively in Airbnbs for six months after investing
“Like when I invested in Airbnb, I went and lived in Airbnbs for six months.”
Kutcher demands to use a startup's product before investing
“Before I invest in a company, I usually demand to use the product unless it's a product that I can't fundamentally use.”
Kutcher: Good product design simplifies the path to user desires
“Fundamentally at the end of the day, being good at product, Is understanding what people want and then simplifying their path to get there.”
Kutcher: Narrative drives startup mission, sales organization, and crisis management
“Being able to tell the story of your company, that is the narrative of your company, which is also the mission statement of your company, which also will dictate the sales org within your company, which also will dictate how you behave when chaos happens aroun…”
Kutcher: Sound Ventures faces no direct competition from other VC funds
“I don't think there are other competitive VC funds to us. And it's why other very big VC funds love to work with us and love having us on the cap table to help the companies that they're investing in.”
Kutcher: Traditional VC fund ownership demands are becoming increasingly egregious
“A lot of funds have these mandates about How much of a company they need to own to make the investment of value to them, and oftentimes I see those ownership percentages becoming, especially now, just becoming more and more egregious, where funds want to own a…”
Kutcher: Sound Ventures does not take board seats or demand high ownership
“One of the things that we just haven't historically done is we don't take board seats. We don't demand an egregious check size.”
Kutcher: Sound Ventures' average check size is $1.5M to $5M
“Our check size has gone from, you know, when I was writing personal checks, it was like 25,000 dollars or 50,000 dollars. Then when we did our first fund, I think our average check size was, you know, a 100,000 to 200,000 dollars. And now our average check siz…”
Kutcher mandates his team spends 40% of their time helping portfolio companies
“So the thing I'm constantly pressing on my team is let's make sure that we're proportionately spending enough time adding value to companies relative to looking for the next deal. And you should look at your day and really break down your day and go, am I at l…”
Kutcher: I do not personally track Sound Ventures' investment returns
“We have folks in our team that are, it's their job to track the returns. I've never been one to track returns.”