The Exchanges

Q Do you worry about the weight of your words? You look at, and I love Mike and I think he's great, but like you look at someone like Mike, he's younger than you. He's a lot less experienced than you. When you say, no, we've, This is what I think. Do you worry that you have too much impact at points?

A You have to be, well, I'll say globally, a VC and a board member absolutely needs to worry about this all the time. Um, so I've learned from some of the best. Vinod, uh, Roloff, um, taught me some lessons. I'll articulate a few. Pierre Lalonde taught me early in my career, like, how to do some of these things. So I think Roloff taught me As a board member, one of the best ways is to ask things in terms of questions, not in terms of answers. So you probe by questions, because then you're never leading. Um, you may be leading a little bit, but you're never prescribing, and it's a very big difference, so you try to do that. The second thing I've learned is to describe intentionally, carefully, and calibrated your level of conviction. So I will sometimes say to somebody like, Mike, like, um, my instinct is to do X, But actually, I'm not that, I don't have that much confidence that I'm right. Like, if you force me to make a decision, this is how I would make the decision here of why, but it's a close call in my mind, I'm not sure. Or there's sometimes when I might say to somebody, whether Mike or someone else, I have about 80% confidence, I, I know, I know the right answer here. So the, you know, being able to communicate the level of conviction, um, can help them just challenge or, you know, solve it. Some founders also, the other thing I do pretty well is reverse engineering the l…

AI assessment note: “a VC and a board member absolutely needs to worry about this all the time.”

Q Do you think FF and KV have the same type of founder? When I look at like Mike, he fits the founder mold for what I think a founder's fund founder would be. Run through walls, very opinionated, very kind of hard, and shares a lot of traits with a lot of other FF founders I know. Do you think KV has an archetype like that?

A Yeah, I actually do. I mean, I think one of the reasons why you see such a high portfolio overlap is like the proof's kind of the point. Um, so, you know, obviously, KV and FF have almost exactly the same ownership in Chamba. Um, I believe in OpenStore, we have the same preferred ownership, KV and FF. I think in, um, Avon, um, FF and KV have very similar ownerships. So we all, and, well, and a lot of people at KV are founder-driven. I wouldn't say that's the only Criteria at KB, sometimes KB can be technology-driven, innovation-driven, whereas FF is mostly founder-driven, but the Venn diagram overlap of a successful founder is pretty high, which is why the portfolio overlap, Hsleep, you know, more portfolio overlap, Varda, more portfolio overlap, Ultima Bio, as we talked about, more fair, high portfolio overlap. So obviously the criteria, you know, Is clearly similar, because you're seeing the manifestation of that in the portfolios.

AI assessment note: “the Venn diagram overlap of a successful founder is pretty high”

Q You said that's what they need. Truth be told, we're seeing a lot of rounds that are 15 to 30, 40 even, especially in kind of AI with pedigreed founders. What do you make of those? Because when we see those, you probably don't need 1520, 30 to get started. How do you feel about those?

A It depends. So one of the, one of the most important pieces of feedback a really good VC can give a founder is what do you need to achieve where the rest of the world will then appreciate you? So that capital is unlocked, something like capital will be easy to raise. And it depends on what business you're in, what market you're in, what your team composition is. But one of the things I try to do is calibrate that right away. So, okay, for this kind of company with this team, if we can achieve two of the following three things, people are going to appreciate us, whether it's my firm or someone else's firm. So let's, let's dial in how much time and how much money is it going to take to get there. And let's make sure you have the sufficient resource. It's a little bit like the driving the car metaphor of like, there's some destination you need to get to, sort of amount of fuel that's required to get to that destination. But I don't want to over fuel you. That doesn't work. It's like a plane. When you over fuel, you're just like bogging the plane down and it sort of creates more resistance. I, there are times when ten million, like, so for example, let's talk about Opendoor. We raised 10 of the seed for Opendoor. That was actually the correct dose. Buying homes, you really can't prove that you can buy cohorts of homes accurately, like priced accurately and resold properly in less, …

AI assessment note: “It depends... sort of amount of fuel that's required to get to that destination.”

Q Why were they bad? Because they were just price insensitive.

A Chasing momentum, not really understanding fundamental company building, thinking spreadsheets dictate results, like, you know, not understanding the inputs versus the outputs, that these companies are built by people, not by math. At the end of the day, still, I think most growth funds are either dead or dying. So I think there's a zone there that's pretty non-competitive. It's not what I do for a living. Um, you know, you have to figure out what your comparative advantage is in life, and I don't think growth investing is mine. I've made a few growth investments over the last three years and three or four years, unfortunately they've worked out, but I'm extremely careful if I'm leading a growth route that I think I have some alpha, some comparative advantage. Like, so for example, back in my KB days, one of the better investments I made was co-leading the Series C for Stripe. But, you know, I worked at PayPal, Square, I understood financial services pretty well. Um, so there's a reason why I was dialed into Um, that price, um, being willing and comfortable investing at that price. At the time at KV, when we invested in Stripe Series C, it was an order of magnitude more expensive than the entry price for any investment in the history of KV. And back to the point, though, about the partner meetings being sometimes counterintuitive. The one of the things that was most valuable wa…

AI assessment note: “Chasing momentum, not really understanding fundamental company building, thinking spreadsheets dictate results”

Q Do you think funds actually do that? I mean, dude, we know, we know Midas lists are formed by the, we definitely, okay.

A They, we absolutely do that all the time. Like, like every week, like really like, like, Instantly. Founders fund, we do, we did it too, but more on an ad hoc basis, not systematic, but at KVU is very systematic, like top down. Even Vinod sometimes would say, let's say something came in to me. He might say, Hey, don't you think like Sven or Samir or David would be a better partner? The way we usually resolve it. If like, for example, it wasn't clear. Sometimes we'd actually tell the founder, Hey, you get a choice. Like a founder slide, like we might say, hey, good choice. Why don't you meet with three or four people and see who you think would be most useful and who's the right parent. So that's my normal default is if not me, is there somebody else I have conviction about? And then if not our fund, then it's a much more complicated decision of what to do.

AI assessment note: “we absolutely do that all the time. Like, like every week”

Q How do you advise me Keith for the companies that aren't performing? How do you kind of delicately say, Hey, super appreciate it, but like, it's not going to be a fun impact for us. And actually I have to be conscious of my time.

A It's very, very, very complicated. Uh, I think the most important thing you can do is agree upon with a founder what the best destination is. Meaning given what we know about the company, founder team metrics, product market fit, Where's the best place this company can go? What's the probabilities of getting there? And then I'd ask the question, okay, let's agree on this destination. What do you think you want to shoot for, given the constraints? And then what I can do is help you get there. So I think therefore it structures the conversation around what are we trying to accomplish collectively and I'll do whatever I can within my power and time to get you to that destination if I can increase the probabilities. And then that way when we get there, the founder and team is thrilled if we can get there and it doesn't have this infinite sort of mission creep. And then I do filter by impact. There are companies That, for a variety of reasons, I can impact a lot, and for other reasons, I can't. It's not totally correlated with success or failure, but if I'm going to allocate a scarce hour at the end of the day, I'd rather allocate it to an hour that's going to create high leverage for somebody.

AI assessment note: “agree upon with a founder what the best destination is”

Q Can I ask what are the most common, um, suppressors of growth that can take down the rocket ship or the rockets that have been launched in the early days of kind of product market fit signs?

A Yeah, that's a good question. It does vary by market. I think that there are a lot of things that you tend to throw humans at, for example, like, so for example, you don't have time to build tools and software, so you throw humans at it. Eventually those humans don't scale. Where you run out of humans or they become so expensive. So that's one sort of simple example, but fairly universal. Um, another one is that your customers are not having great experiences. So you have a high churn rate or a poor NPS score. So you're growing rather fast in terms of onboarding. You have a magnet for onboarding new users, but you don't actually have the ability to deliver a delightful experience that you promised these users. So that would be very painful. And, you know, it could be also catastrophic. In the more complicated businesses, where there's a business equation, and every variable needs to be aligned to yield success, sometimes you tend to break one of those variables. So two of the three variables look pretty strong, but the third one starts breaking really fast, and you don't know what to do about it.

AI assessment note: “you don't have time to build tools and software, so you throw humans at it.”

Q into a quickfire round, discuss your multiple board director Partnerships. Uh, in a core approach from 2010, you stated your seven years of experience on, on boards. Uh, I presume that's now 14 years, obviously being 2017. Um, that made me feel very old, and that's a rarity. Um, so how have you seen yourself then develop as a board member? Uh, do you think first, over that time period?

A I think the art to a board role is, there's two components. One is, Understanding and deciding when to inject yourself and when not to, and that's a tricky balance because I don't think it's productive to have an opinion on everything. I think deciding where you have a competitive advantage based upon your experiences and skills and have a specific and unique insight where it's worth bringing to bear that skill to a Is a lot of the art. I don't yet be very judicious. The more experience you have, I think hopefully you get better at picking and choosing, selecting where to attempt to contribute value takes years of experience, different boards. Then secondarily, I think the other art to a board is a board is a living organism of multiple people, usually between, you know, three and nine people that kind of create, uh, takes on its life of its own and has its own culture, own ways of doing things over years. And trying to identify what role you're going to play on the board. So for example, most boards have one board member who's sort of like the consigliere for the CEO. Then there's one role on the board for someone who's a little bit more critical and probing. And so identifying what the right relationship is for you on this specific board, you can be the cheerleader or you can be the critic as an example. So I think there's different dynamics and those two things pretty import…

AI assessment note: “The more experience you have, I think hopefully you get better at picking and choosing”

Q into a quickfire round, discuss your multiple board director Partnerships. Uh, in a core approach from 2010, you stated your seven years of experience on, on boards. Uh, I presume that's now 14 years, obviously being 2017. Um, that made me feel very old, and that's a rarity. Um, so how have you seen yourself then develop as a board member? Uh, do you think first, over that time period?

A I think the art to a board role is, there's two components. One is, Understanding and deciding when to inject yourself and when not to, and that's a tricky balance because I don't think it's productive to have an opinion on everything. I think deciding where you have a competitive advantage based upon your experiences and skills and have a specific and unique insight where it's worth bringing to bear that skill to a Is a lot of the art. I don't yet be very judicious. The more experience you have, I think hopefully you get better at picking and choosing, selecting where to attempt to contribute value takes years of experience, different boards. Then secondarily, I think the other art to a board is a board is a living organism of multiple people, usually between, you know, three and nine people that kind of create, uh, takes on its life of its own and has its own culture, own ways of doing things over years. And trying to identify what role you're going to play on the board. So for example, most boards have one board member who's sort of like the consigliere for the CEO. Then there's one role on the board for someone who's a little bit more critical and probing. And so identifying what the right relationship is for you on this specific board, you can be the cheerleader or you can be the critic as an example. So I think there's different dynamics and those two things pretty import…

AI assessment note: “The more experience you have, I think hopefully you get better at picking and choosing”

Q Sorry, I'm intrigued here. I never think it's worth looking at existing market comps, because in so many, because in so many ways, we're changing markets, we're reinventing them, we're expanding them, and so it almost is incomparable to, compared to a prior generation. To what extent do you think it's valuable comparing a next generation Carvana to Carvana, for example?

A It's a good question. I mean, fortunately, most of what I do And most of what I've been successful at are really seed and series A investments, in which case the public comp rules don't really matter, and I don't pay too much attention to them. I've also funded a lot of not what I call non-comp companies where they're forging a new market completely from scratch that didn't exist, which is also something I prefer to do. That said, you know, I now work As a GP at a very large fund that does a lot of late stage investing, growth stage investing. And so I have to have an opinion on later stage rounds. I don't need too many. I've only led in nine years of investing three late stage rounds, uh, later stage rounds, series C co-led with, uh, Stripe fares series C. I led a founder's fund. And then I invest a lot of money in two late-stage rounds in a company called Ultima, which is relatively, uh, secretive, but should be public, meaning public about their plans and why they're so impressive next week or so. Um, those three companies that had incredible asymmetry of information, uh, Stripe, Fair, Ultima. And so it's very rare for me to be doing a growth round. So I don't think about it too much when the growth team, my colleagues, Brian Stigerman, Peter, Napoleon, We're really excellent at this stuff, are constantly taking into account the public comps.

AI assessment note: “seed and series A investments, in which case the public comp rules don't really matter”

Q What if you're not the best for, but you know it is incredible? Like, are you not gonna do that deal?

A Great question. I think at a fund, the first instinct is, do I have a partner? Who would be a really good pairing? And at KV, we did do this. Um, I would consciously think, like, oh, David Wyden may be a really good partner for this specific, uh, you know, both market and founder, or Samir might be. There are times when Samir would be a much better partner, for example, than I would be to the, to a specific founder, depends again, or Vinod, Vinod can be, or Sven, it really depends what the company's doing and the founder's skill set. So the first instinct would be, okay, I don't really feel I have a comparative advantage, but our fund may, or someone else at the fund may be, let's introduce them and see if that, you know, kind of partnership can work really well. Um, so this does work. Now, the answer may be within our fund, whether it's founders fund.

AI assessment note: “first instinct is, do I have a partner? Who would be a really good pairing?”

Q Did kids change your mindset, Keith? Becoming a father.

A I think there's a couple of epiphanies you have at a minimum. I strongly believe, but have watched it already, my kids are two and a half years old, that people are much more baked and impressionable at earlier ages that dictate how they are when they grow up at much earlier ages than people realize. They absorb so much And even if they can't communicate back to you what they're absorbing, they are absolutely absorbing their brain. It's like, you know, in a world, their, their inputs are kind of like training their brain in a kind of machine learning sense. And so you ought to be very careful and very thoughtful about what those inputs are, even though most parents are not. So I think incredibly conscious about that and just watching what they've already been able to learn, absorb, That started almost like from day one.

AI assessment note: “I think there's a couple of epiphanies you have at a minimum.”

Q I do have to ask, though, before we discuss some of the incredible companies you've worked at, often I'm told, you know, you can't really be considered a, you know, a domain investor, Harry, until you've seen multiple hype cycles and experienced the downturn. What did experiencing the downturn there, as you said, how did that affect your evaluation of startups and of people moving forward?

A I think it's a good point, which is sometimes when everything's going really well, either at a macro or micro level with, with respect to a specific company, you forget how fragile the ecosystem is and that not everything is just up and to the right. And I think having grown up in an environment that was quite difficult, um, and quite painful gives you an appreciation for that, maybe searing appreciation for that in your brain. And maybe it makes you a little bit too cautious sometimes because you remember what can go wrong and maybe the people who do the best try to forget that. But it also makes you a little bit more sensitive to understanding the degrees of freedom and levers that you want to have under your control when either the micro or macro metrics start shifting so that you don't get caught in a way where you have no degrees to maneuver so that you have a burn rate situation, for example, or a lease situation or an employee headcount situation where you have much more flexibility to Because you've seen sort of what can happen and what can happen rather rapidly and how the cost of capital or the availability of capital can change quite quickly so that you want to have control of your destiny. And I think having gone through different cycles up and down leaves you with more, uh, you'd wind up spending more attention devising control of your destiny and so that you alway…

AI assessment note: “makes you a little bit more sensitive to understanding the degrees of freedom”

Q here, but I don't like them because I feel that there's so many mistakes one makes in their first company that you would never make in a second or third. And if runway in time is the killer of progress, you waste so much time hiring the senior execs. Before you should, finding PMF, customer discovery, all of these things. Why am I wrong to not like first time founders?

A I think first time founders are actually better on average. Um, most of the best companies I've invested in are first time founders, not all. Um, but, and I think part of it is ambition. Uh, part of it is you don't know what you don't know, which means you don't accept any rules. Like once you learn too much, even as an entrepreneurial person, you're taking You know, taking some of those, and they're not always right. I think the best thing you can do though, and we had this side conversation at Twitter thread about this is, Pair yourself very well with either investors or board members who can help identify some blind spots, sometimes when the grass isn't quite greener, so that you can take advantage of those lessons while you're a first-time founder with all the positive energy and all the positive, no excuses, kind of a certain mentality than most second-time founders have. I mean, you know, obviously I think I've learned some things, and I have avoided some mistakes at OpenStore, but in some ways, I wish I had done some things naively.

AI assessment note: “I think first time founders are actually better on average.”

Q But have you missed Keith? Like, I love you dearly. Like, it doesn't seem that you have really.

A Um, not someone I've met in person. I've, as I talked about, I've screened out people I definitely should have met and absolutely would have been. Um, but like in person, I've always made an offer to someone who's done super well. You know, we talked about the biggest mistake ever was not raising the valuation on rippling. Um, you know, Parker was nice enough to tweet our episode afterwards. It's really helpful in my sleep, but, but like, you're going to miss an investor. Like, look, let's put it this way. I'm playing baseball. You hit 400, you're Ted Williams to go to the Hall of Fame. Early stage investing, you're going to miss more than you hit, like period. Like, and you just should admit that. As executive, you cannot be right 40% of the time and miss 60%. Imagine hiring, for example. Imagine if 40% of your hires were good and 60% were terrible. Like, you'd fire that person as a leader. Like, you'd have to. Like, you can't have an organization with that ratio.

AI assessment note: “not someone I've met in person. I've, as I talked about, I've screened out”

Q and you know, for the last years I've felt pretty good at what I do. Um, and now I'm actually questioning whether I'm any good at what I do. Um, when you advise younger people on your team who are suddenly questioning themselves And they're very insecure actually on whether they're any good at what they're doing. How do you advise them with the wisdom and experience that you have?

A Uh, obviously unsuccessfully, because both Peter and I figured out this market was crashing last summer, and we really tried to stop people from investing at ridiculous prices, but even the founders thought we weren't totally successful. And actually I had lunch with one of my colleagues yesterday, uh, two days ago, and he said, you know, I think I had the disadvantage of never having been through a negative cycle before where Peter and I obviously lived through one and we realized things can go off and they do go down. Um, where I think all my junior colleagues felt things only go up and to the right. Um, now, It's a little bit like baseball, which unfortunately, you know, I know Europe may not resonate as much as maybe the American audience will. Uh, you know, there's a period of time, a considerable period of time, 1015, 20 years ago, when a lot of major league baseball players were taking steroids, and you saw these really artificially inflated stocks. In fact, there's this fairly mediocre center field for the Baltimore Orioles, Brady Anderson, who made 52 home runs one year, which was the signal of, wow, um, you know, like, absolutely impossible for somebody like that to hit 50, I mean, 50 home runs is a major milestone. It'd be like equivalent of ten billion dollar, you know, public company. And you had this, like, Very benign, you know, kind of a normal baseball player h…

AI assessment note: “when everything is boosted by steroids, everybody looks really good on paper”

Q Is there a data network effect that you can apply across different customers in Ramp?

A There absolutely should be. Like, for example, Ramp will be your fiduciary agent, so it's going to save you time, save you money, make sure that you're allocating your resources in the best, most prudent way. Secondly, it's going to be your compliance agent, which is, we have processes and procedures, we just want to make sure that they're adhered to you without throwing lots of humans at it and making it painful on the employees so they don't get the work done. So like you can only do things like being your fiduciary agent and your compliance agent, and then be insightful, let's say at the strategy level, unless everything, all the data from all sources, from all employees rolls together.

AI assessment note: “There absolutely should be.”

Q When you think about, kind of, reflecting on your time with Founders Fund, what's been your, if we, before we do a quick fire, what's your biggest takeaway from that time and how it impacted your investing style?

A I think you learn, well, I mean, I've had the advantage of being a senior person at two different funds, and I think what you learn from that experience is what's endemic to venture. There are fundamentals about our business that are basically baked into the business, and then what, what are optional decisions around culture, decision-making, hiring, And then how can you tease those out to be more successful? So I think having two different vantage points, I hopefully will lock in my brain and allow me to manipulate, you know, those decisions to be ideal, you know, ideal to reduce the best possible outcome and produce the best possible happiness for me. Um, but it's very rare to have like those kind of unique vantage points. So that's my takeaways. I mentioned like, for example, I learned significantly more about growth investing and how to be disciplined about Figuring out the valuation for a high potential company, et cetera. That'll take with me, but just how do you make decisions? What's the best way to make decisions? How much time should you spend in a partner meeting versus not? What are the benefits of spending eight hours a week in a partner meeting versus spending 30 minutes a week? Where's that final, you know, where's the diminishing marginal returns, et cetera.

AI assessment note: “I learned significantly more about growth investing and how to be disciplined”

Q Why did you not think you could get rid of the drag coefficient? I was the same, but then I'm like, I just hired CFOs.

A I don't think you can get rid of the drag coefficient, certainly from scratch. I mean, they say the first six months, let's say, heavy drag coefficient. Can you later, it's like a high fixed cost, the way one very successful founder, uh, described it to me as I was asking for a little bit of advice. The fixed cost is very high, and once you get over the fixed cost, maybe the marginal cost is, is, is more tolerable, but that first fixed cost is really painful, and I like what I do, and the reason why I work is I really enjoy meeting these founders Discovering these people and saying, yeah, this person's got a shot, and then working with them and helping, you know, unlock their brain once in a while, um, and helping, and watching their eyes light up, and, you know, that, that's what motivates me every day.

AI assessment note: “The fixed cost is very high, and once you get over the fixed cost”

Q Why were they bad? Because they were just price insensitive.

A Chasing momentum, not really understanding fundamental company building, thinking spreadsheets dictate results, like, you know, not understanding the inputs versus the outputs, that these companies are built by people, not by math. At the end of the day, still, I think most growth funds are either dead or dying. So I think there's a zone there that's pretty non-competitive. It's not what I do for a living. Um, you know, you have to figure out what your comparative advantage is in life, and I don't think growth investing is mine. I've made a few growth investments over the last three years and three or four years, unfortunately they've worked out, but I'm extremely careful if I'm leading a growth route that I think I have some alpha, some comparative advantage. Like, so for example, back in my KB days, one of the better investments I made was co-leading the Series C for Stripe. But, you know, I worked at PayPal, Square, I understood financial services pretty well. Um, so there's a reason why I was dialed into Um, that price, um, being willing and comfortable investing at that price. At the time at KV, when we invested in Stripe Series C, it was an order of magnitude more expensive than the entry price for any investment in the history of KV. And back to the point, though, about the partner meetings being sometimes counterintuitive. The one of the things that was most valuable wa…

AI assessment note: “Chasing momentum, not really understanding fundamental company building, thinking spreadsheets dictate results”

Q So, talk to me, Keith. Moving back to Kostler, um, I guess the first question is, why did you decide to make the move back from Founders Fund to Kostler again?

A Well, you know, in some ways, so I spent six years, just so everybody has some context, I spent six years from 2013 to 2019. As an MD at Coastal Ventures, and we had a really successful run together, uh, KB-Four, KB-Five, and KB-Five were the funds I was a partner in, and we produced, you know, really stellar returns working as a collaboration team between Vinod, Samir, Cole, David Wyden, and Sven, and, um, I never really left in some senses, because after I left, I stayed in really significant contact with Vinod, Samir, and David particularly. We co-invested Almost every quarter together. So Samir invested and led a financing round in the company I run as CEO named OpenStore. Samir led the Series A for a company that you're familiar with, Trauma. Um, you know, he led the Series A for Mike's company. So we worked together, we worked together there. Uh, I led a growth round from one of Samir's favorite companies called Ultima, Ultima Genomics. Um, so, you know, it's a company I learned a lot about, a founder I knew really well from my days at KB. Samir also led, you know, an investment round in Varda, uh, Delian's company. I worked very closely with David Wyden on a bunch of companies, including Fair, Bungalow. Um, so I felt like I was actually seeing more of Samir and David than I did when I was at KB for six years in the last five years at Founders Fund. I, because in, in basi…

AI assessment note: “I never really left in some senses, because after I left, I stayed in really significant contact”

Q Is there anything I could do better, Keith? You've known me for a few years.

A Oh, wow. I mean, it seems like the combination of, uh, you know, content plus investing is working really well. It is differentiated as we talked about. There's not that many people to do it, period. And so I think it's a cohesive, coherent, unique strategy, which is I think how you get alpha in venture. So that's great. Um, I think the guest quality is obviously awesome. Uh, so yeah, no, I would keep going. Like if you have a strategy, keep doing, you know, keep, keep, keep chasing it. Uh, eventually all strategies and venture people learn that they're effective and Can reverse engineer them, but you may have a five or 10 year window before that's the case.

AI assessment note: “so yeah, no, I would keep going.”

Q like, necessarily a great asset class in terms of returns. I totally agree with you, actually. When you look at the historical data on distributions, there's very small windows where liquidity is apparent and strong, and if you don't take advantage of them, it's quite crap, even for the best, actually. How do you think about When to sell. My biggest mistake? I didn't sell shit in the last era.

A I'm not sure I have a great answer to this, by the way, and one of the benefits of being a super real estate investor is you don't have to be perfect. I've watched other people make these decisions, and I've seen brilliance sometimes. So, for example, uh, KB before my days, uh, invested ten million dollars, or roughly ten million, in the seed round for Square. After I joined KB, there was always a question, you know, obviously Square in public, When sell, the market didn't really appreciate Square fairly for a long time, so there's lots of debate internally, and Vinod had a very strong perspective that proved out to be incredibly valuable, incredibly pricey, predicated on a couple key dimensions, and I won't, I won't show the exact logic, but fundamentally, he had a very strong view that KB should absolutely not sell, period, and it turned out to produce meaningfully different results based upon his insight, and I remember Listening to those debates, I wasn't able to participate because I had my own shares, you know, as an executive, so I was completely recused from deciding what to sell, but the logic in his insight was incredibly penetrating, and it led to significantly better returns for KV-III. Understanding how to think about that, um, is a real superpower, but I think it's very rare, and I certainly haven't mastered it.

AI assessment note: “I'm not sure I have a great answer to this, by the way”

Q I mean, my, my question to you was actually, could Traba, or could any of the companies that, you know, you've worked with Keith, be built outside of the ecosystems they were in? We joke about Europe, but could they have been built in Europe? Like, how important is that local maximum of talent that you have, Mike, in Traba, but it's in person, in office?

A Well, personally, I believe you need to be in person. So when Mike started the company, he had actually were courageous because at the time there was this consensus view that people could work remotely in distributed ways and blah, blah, blah, blah. The world changed the COVID blah, blah, blah, blah, blah. And they were like, we're doing an in company and in person company only period, like six days a week. Now, I think more people realize that that is the correct way to build a startup. But three years ago, that was Incredibly contrarian. And, you know, we at Founders Fund have pretty much put a light in the sand that we won't invest in remote companies because we've just watched 50 years that there's almost no examples of people building companies that way. And there's lots of, if you've actually been a founder, if you've been a CEO like Peter has, if you've been a CEO and founder like Abin, if you've been a co-founder like Trey, you just know why. It's very obvious why it doesn't work. And so we immediately filter that way. But I have to give Mike a lot of credit because that was not Almost like an acceptable view to have, but we have a great company, Trade Republic in Berlin, run by a very, actually a founder who's very similar to Mike in terms of DNA, Christian, and it's doing very, very well. We have a board meeting actually later today, so it's possible, but I think it t…

AI assessment note: “Trade Republic in Berlin... so it's possible, but I think it takes a courageous”

Q and you know, for the last years I've felt pretty good at what I do. Um, and now I'm actually questioning whether I'm any good at what I do. Um, when you advise younger people on your team who are suddenly questioning themselves And they're very insecure actually on whether they're any good at what they're doing. How do you advise them with the wisdom and experience that you have?

A Uh, obviously unsuccessfully, because both Peter and I figured out this market was crashing last summer, and we really tried to stop people from investing at ridiculous prices, but even the founders thought we weren't totally successful. And actually I had lunch with one of my colleagues yesterday, uh, two days ago, and he said, you know, I think I had the disadvantage of never having been through a negative cycle before where Peter and I obviously lived through one and we realized things can go off and they do go down. Um, where I think all my junior colleagues felt things only go up and to the right. Um, now, It's a little bit like baseball, which unfortunately, you know, I know Europe may not resonate as much as maybe the American audience will. Uh, you know, there's a period of time, a considerable period of time, 1015, 20 years ago, when a lot of major league baseball players were taking steroids, and you saw these really artificially inflated stocks. In fact, there's this fairly mediocre center field for the Baltimore Orioles, Brady Anderson, who made 52 home runs one year, which was the signal of, wow, um, you know, like, absolutely impossible for somebody like that to hit 50, I mean, 50 home runs is a major milestone. It'd be like equivalent of ten billion dollar, you know, public company. And you had this, like, Very benign, you know, kind of a normal baseball player h…

AI assessment note: “obviously unsuccessfully, because both Peter and I figured out this market was crashing”

Q Is there a data network effect that you can apply across different customers in Ramp?

A There absolutely should be. Like, for example, Ramp will be your fiduciary agent, so it's going to save you time, save you money, make sure that you're allocating your resources in the best, most prudent way. Secondly, it's going to be your compliance agent, which is, we have processes and procedures, we just want to make sure that they're adhered to you without throwing lots of humans at it and making it painful on the employees so they don't get the work done. So like you can only do things like being your fiduciary agent and your compliance agent, and then be insightful, let's say at the strategy level, unless everything, all the data from all sources, from all employees rolls together.

AI assessment note: “There absolutely should be. Like, for example, Ramp will be your fiduciary agent”

Q Why is that? Because you were aggressive in 21. Is it because of the pricing in the market?

A Yeah. So I led 13 or 14 new investments or so plus or minus in 21. None, you know, basically halfway through 20, 22. So that's the sign, you know, something, um, maybe, uh, maybe, maybe it's good. You know, maybe I actually probably should be slowing down anyway, but it's good to have a natural correction. Um, but fundamentally, I think the last one we announced publicly is found, which does bookkeeping, taxes, uh, and payments for SMBs, micro merchants led by Lauren, who I worked with at Square. She was the, Most important PM in the history of Square. Um, so she founded the company. Alfred, uh, Lynn from Sequoia led the initial Seed Series A, and I led the Series B. Just had a board meeting yesterday. So if you want to join a company, I highly recommend it.

AI assessment note: “fundamentally, I think the last one we announced publicly is found”