The Exchanges

Q Absolutely. And talk to me, how did you get into the world of VC in the job today? What was the starting point for you?

A Well, I got into VC back in 2006. I moved from the Bay Area to New York City, chasing my then girlfriend, now wife, Lisa, across the country when she got accepted to Columbia Medical School. And so at the time, I applied to Columbia's computer science department for a master's program in kind of like machine vision. I was two weeks away from enrollment, and I just Fell over backwards on the opportunity to work with Fred and Brad at USV. Found the job via Fred's blog. They never asked for my resume. They never checked any references. They just wanted to see my web presence. So I showed them my blog at the time because this is pre-Twitter or pre-Tumblr or anything like that. They brought me in for a 40 minute interview and they hired me the next day. The interview was mostly around one question, which in retrospect, I was like dead wrong. They asked me, uh, would the mobile internet be bigger than the desktop internet? And so this was 2006. It was like pre iPhone coming out. State of the art was the Blackberry for mobile web browsing. And I foolishly said no with a lot of conviction, but I really defended my point of view with some evidence for my background in product design. And so they hired me. And the decision between Columbia and USV was really easy. I haven't looked back since.

AI assessment note: “I got into VC back in 2006. I moved from the Bay Area”

Q Absolutely. And talk to me, how did you get into the world of VC in the job today? What was the starting point for you?

A Well, I got into VC back in 2006. I moved from the Bay Area to New York City, chasing my then girlfriend, now wife, Lisa, across the country when she got accepted to Columbia Medical School. And so at the time, I applied to Columbia's computer science department for a master's program in kind of like machine vision. I was two weeks away from enrollment, and I just Fell over backwards on the opportunity to work with Fred and Brad at USV. Found the job via Fred's blog. They never asked for my resume. They never checked any references. They just wanted to see my web presence. So I showed them my blog at the time because this is pre-Twitter or pre-Tumblr or anything like that. They brought me in for a 40 minute interview and they hired me the next day. The interview was mostly around one question, which in retrospect, I was like dead wrong. They asked me, uh, would the mobile internet be bigger than the desktop internet? And so this was 2006. It was like pre iPhone coming out. State of the art was the Blackberry for mobile web browsing. And I foolishly said no with a lot of conviction, but I really defended my point of view with some evidence for my background in product design. And so they hired me. And the decision between Columbia and USV was really easy. I haven't looked back since.

AI assessment note: “Well, I got into VC back in 2006. I moved from the Bay Area”

Q No, I completely agree on that decision. And Fred and Brad clearly know when they see something special. And so they did suggest a question in terms of how did the USV experience impact you as a VC, and were there any key takeaways for you?

A Yeah, look, when I first arrived at USV, I had only one year of work experience, so I was quite wet behind the ears. They helped me in two really important ways that I rely on every day. One is they helped me understand what it takes to develop an investment thesis, which by the time I left could be summarized there as large networks of engaged users, differentiated through user experience, defensible by network effects. Tweet form. All the credit, really, to Brad there. And it sounds nice in one sentence, but it wasn't easy to get there. You know, it was honed and debated over a number of blog posts, whiteboarding sessions, developing PPM for the, the O-A-T fund. It was a really thoughtful process. And, you know, those conversations I had with them, especially with Brad, were really formative for me. So I don't pretend to have influenced that process that much. You know, like I was pretty young, primarily an observer, but I was really privileged to be a fly on the wall for that. And then the second way that I feel like they really helped me was just in learning the mechanics of the business. Creating a safe place to make a bunch of dumb mistakes. Fred Wilson especially was helpful when it came to learning deal modeling, waterfall analysis, comparable valuations. All this stuff was new to me. I was very quantitative by nature, so I think I picked it up pretty quickly, and I cou…

AI assessment note: “They helped me in two really important ways that I rely on every day.”

Q would love to move to the other element of the deal. And we, I always say that the best investors not only pick initially, but pick on reserves. So I'm intrigued. Doubling down, how do you assess reserve allocation at Spark and really think about concentrating capital into the best companies? Is it a guaranteed for every investment? Is it a stack ranked quarterly? How do you think about that?

A Yeah. No, look, you led me to exactly where we go, which is that we close the fund to new investments with ample reserves to continue to support the portfolio over the life of the investment. And the reserves are updated quarterly, uh, exactly as, as you described. Now the reserve estimates are updated quarterly. We don't do a stack or a prioritization at that time. It's just always making sure we have a sense of where are we going to land the fund? You know, it's like trying to land a glider. You don't get a second chance. And so we're always just making sure we know each deal sponsor is contributing what they think a company is going to need over the life of the company. And then we can do like some kind of probability weighted approach there. Uh, we've even done a Monte Carlo simulation against those estimates to see where that would land. And then, yeah, you asked about, is it guaranteed or not or whatever? And I'd say we continue to support companies that demonstrate clear progress. Reserves aren't guaranteed, but that said, I haven't seen that be the issue. I think if you're making progress, like we're going to be there.

AI assessment note: “Reserves aren't guaranteed, but that said, I haven't seen that be the issue.”

Q No, I completely agree on that decision. And Fred and Brad clearly know when they see something special. And so they did suggest a question in terms of how did the USV experience impact you as a VC, and were there any key takeaways for you?

A Yeah, look, when I first arrived at USV, I had only one year of work experience, so I was quite wet behind the ears. They helped me in two really important ways that I rely on every day. One is they helped me understand what it takes to develop an investment thesis, which by the time I left could be summarized there as large networks of engaged users, differentiated through user experience, defensible by network effects. Tweet form. All the credit, really, to Brad there. And it sounds nice in one sentence, but it wasn't easy to get there. You know, it was honed and debated over a number of blog posts, whiteboarding sessions, developing PPM for the, the O-A-T fund. It was a really thoughtful process. And, you know, those conversations I had with them, especially with Brad, were really formative for me. So I don't pretend to have influenced that process that much. You know, like I was pretty young, primarily an observer, but I was really privileged to be a fly on the wall for that. And then the second way that I feel like they really helped me was just in learning the mechanics of the business. Creating a safe place to make a bunch of dumb mistakes. Fred Wilson especially was helpful when it came to learning deal modeling, waterfall analysis, comparable valuations. All this stuff was new to me. I was very quantitative by nature, so I think I picked it up pretty quickly, and I cou…

AI assessment note: “They helped me in two really important ways that I rely on every day.”

Q would love to move to the other element of the deal. And we, I always say that the best investors not only pick initially, but pick on reserves. So I'm intrigued. Doubling down, how do you assess reserve allocation at Spark and really think about concentrating capital into the best companies? Is it a guaranteed for every investment? Is it a stack ranked quarterly? How do you think about that?

A Yeah. No, look, you led me to exactly where we go, which is that we close the fund to new investments with ample reserves to continue to support the portfolio over the life of the investment. And the reserves are updated quarterly, uh, exactly as, as you described. Now the reserve estimates are updated quarterly. We don't do a stack or a prioritization at that time. It's just always making sure we have a sense of where are we going to land the fund? You know, it's like trying to land a glider. You don't get a second chance. And so we're always just making sure we know each deal sponsor is contributing what they think a company is going to need over the life of the company. And then we can do like some kind of probability weighted approach there. Uh, we've even done a Monte Carlo simulation against those estimates to see where that would land. And then, yeah, you asked about, is it guaranteed or not or whatever? And I'd say we continue to support companies that demonstrate clear progress. Reserves aren't guaranteed, but that said, I haven't seen that be the issue. I think if you're making progress, like we're going to be there.

AI assessment note: “Reserves aren't guaranteed, but that said, I haven't seen that be the issue.”

Q So with that being the most important quality in a CEO, I If we transition to the other but equally or almost as equally important quality in being a board member to that CEO, what's most important there?

A Oh, well, um, look, I really like working with board members that have a sense of duty in being helpful to the CEO. So as opposed to framing the relationship the other way around, thinking that, like, you know, the, the CEO just reports the board or something like that. Like, I think Henry's cultivated a relationship with his board very well. In part by deputizing his directors to adopt business units inside of the company and engage with these teams running these units regularly. I don't do this with any other companies or any other boards that I'm on on nine boards, and I really love it. I mean, I think it requires a lot of trust on Henry's part to do this, and it's an example of the healthy relationship that Henry has cultivated with his board, and then, you know, just the sheer elbow grease that the directors are putting in and taking on this mission and working with these business units is one example of this health That I'm talking about, And I really hope that it helps the underlying business unit, but it really significantly improves the quality of the board meeting discussions because there's always one director in the room as we're talking about each different business unit inside of the business. It's close to the situation on the ground and can help take the conversation that we're having in the boardroom a layer deeper directly to the media issues at hand. It's not…

AI assessment note: “board members that have a sense of duty in being helpful to the CEO”

Q How do you balance between vision, vision to see the end goal and persist through the tough times, but then also just naivety when it's not working? Where's the balance?

A Well, you know, that naivety is often a feature. You know, I remember talking to, like, some very consumer-oriented fintech companies where, you know, they wanted to move money in a way that was really progressive and Remember thinking at the time, like, oh my gosh, the regulations here, this is gonna be crazy, they're gonna get sued in two seconds, and it's like, this is never gonna work, and it was actually the naivety that helped these founders build a really big company, or at least in terms of consumer impact, which was called Venmo, and so, like, I think that naivety actually reinforces the persistence when necessary, but I understand what you're talking about, which is like, you know, you could take it too far, and you could just, you know, lose a lot of time on a mission that would otherwise be Flawed or fatal, and you know, runway is one constraint there that's helpful, though it shouldn't be the only constraint. Always being a founder that's willing to listen to people, having strong opinions, weakly held, such that you can be moved off your opinion when necessary, if you're hearing very strong consensus from multiple parties, being willing to take in new evidence and rethink your position. That's kind of the right balance with that naivety and persistence.

AI assessment note: “having strong opinions, weakly held... being willing to take in new evidence”

Q But kind of mentioning the board members and their functions there, you've said before that board members work for their CEOs, and absolutely I agree with the thesis, but the mandate of the board is to hire and fire the CEO, essentially. How do you reconcile those responsibilities?

A Yeah, I mean, I think a director has a fiduciary obligation in service to the common share of holders of the company, and so a responsibility there is, is hiring and firing a CEO, but certainly not the only thing. And I think the nuance to, you know, how you behave as a director on a day-to-day basis is Is like, are you a helpful person? eShares specifically has a really strong company culture, and one of the core values is they expect all employees to be helpful to each other. Sounds really basic, but they back up these words with action. They even named one of their conference rooms, Be Helpful. So they survey their internal employees and analyze who is the most helpful people inside of the organization, and then publicly recognize them. And even for some of the real outliers there, they'll promote them the next day. So, you know, when I talk about A board working for a CEO. I mean this in a spirit of this helpfulness, right? I mean just embracing helpfulness. A director can and should be helpful to a CEO while the board can still uphold its responsibility to hire and fire the CEO when necessary. You know, helpfulness doesn't prevent you from, like, objectively analyzing performance data or making difficult decisions, but it's about that day-to-day relationship.

AI assessment note: “A director can and should be helpful to a CEO while the board can still uphold its responsibility”

Q So with that being the most important quality in a CEO, I If we transition to the other but equally or almost as equally important quality in being a board member to that CEO, what's most important there?

A Oh, well, um, look, I really like working with board members that have a sense of duty in being helpful to the CEO. So as opposed to framing the relationship the other way around, thinking that, like, you know, the, the CEO just reports the board or something like that. Like, I think Henry's cultivated a relationship with his board very well. In part by deputizing his directors to adopt business units inside of the company and engage with these teams running these units regularly. I don't do this with any other companies or any other boards that I'm on on nine boards, and I really love it. I mean, I think it requires a lot of trust on Henry's part to do this, and it's an example of the healthy relationship that Henry has cultivated with his board, and then, you know, just the sheer elbow grease that the directors are putting in and taking on this mission and working with these business units is one example of this health That I'm talking about, And I really hope that it helps the underlying business unit, but it really significantly improves the quality of the board meeting discussions because there's always one director in the room as we're talking about each different business unit inside of the business. It's close to the situation on the ground and can help take the conversation that we're having in the boardroom a layer deeper directly to the media issues at hand. It's not…

AI assessment note: “board members that have a sense of duty in being helpful to the CEO”

Q I do have another learning element that I'd love to ask, and it's, I know your father was a VC, and you watched him and were inspired by him growing up. What were the big lessons that he taught you with regards to the industry, really, as you developed into it?

A Yeah, look, um, it's true. I'm second generation, and, uh, I, I got some kitchen table venture experience growing up, for sure. Hearing my father talking about, you know, the latest company in crisis, the latest deal he was really excited about, But in retrospect, I think the most helpful lesson came from really just watching his career arc beyond when I was living at home. His story is really great. I mean, you know, he started at a lab bench, uh, working upwards inside of a publicly traded chemicals and materials company to become their VP of R&D. And then he transitioned to VC where he built a really impressive cash on cash track record over 18 years. He was a co-founder of the firm that he was a part of called Ampersand Ventures. And then he left, uh, in 2006, right as I was actually entering the industry. And he left Found a couple of life sciences companies, one of which exited for nine figures. It's called Boston Heart Diagnostics. Became a really big company and employer in the Boston area, and then after that, he had another second act. I mean, he co-founded a co-working lab space called Lab Central. It's kind of like a WeWork if you need wet lab, just outside of MIT and Kendall Square, and he did it as a non-profit, and then after that, he recently just re-entered VC. He just Co -founded a new firm with his co-founder from lab central called bio innovation, uh, levera…

AI assessment note: “the biggest lesson that he really taught me is that for entrepreneurship”

Q Well, that's very kind of you, but I've got to start today with a question from a legend of industry, Fred Wilson, and he asks, how did your time as a tree at Stanford prepare you for life as a VC?

A Well, being a tree was certainly a unique experience. I think if you're in and around the valley, it's kind of like a part honor, part joke, whereas if If you're outside of the valley and you're not as familiar with Stanford, then it's mostly just a joke. So I don't lean on it too heavily on a day-to-day basis, unless maybe the entrepreneur I'm talking to is a Stanford entrepreneur, in which case, you know, might get me a point or two. Um, but becoming tree actually is kind of an entrepreneurial process. I mean, you have to go through an audition, do a whole bunch of stunts, and there's an application, you have to bribe the prior tree, and it requires a lot of creativity and ingenuity and just sheer hustle. And so, uh, I think that that actually, surprisingly, has some overlap with my job today.

AI assessment note: “requires a lot of creativity and ingenuity and just sheer hustle.”

Q How do you balance between vision, vision to see the end goal and persist through the tough times, but then also just naivety when it's not working? Where's the balance?

A Well, you know, that naivety is often a feature. You know, I remember talking to, like, some very consumer-oriented fintech companies where, you know, they wanted to move money in a way that was really progressive and Remember thinking at the time, like, oh my gosh, the regulations here, this is gonna be crazy, they're gonna get sued in two seconds, and it's like, this is never gonna work, and it was actually the naivety that helped these founders build a really big company, or at least in terms of consumer impact, which was called Venmo, and so, like, I think that naivety actually reinforces the persistence when necessary, but I understand what you're talking about, which is like, you know, you could take it too far, and you could just, you know, lose a lot of time on a mission that would otherwise be Flawed or fatal, and you know, runway is one constraint there that's helpful, though it shouldn't be the only constraint. Always being a founder that's willing to listen to people, having strong opinions, weakly held, such that you can be moved off your opinion when necessary, if you're hearing very strong consensus from multiple parties, being willing to take in new evidence and rethink your position. That's kind of the right balance with that naivety and persistence.

AI assessment note: “That's kind of the right balance with that naivety and persistence.”

Q Well, that's very kind of you, but I've got to start today with a question from a legend of industry, Fred Wilson, and he asks, how did your time as a tree at Stanford prepare you for life as a VC?

A Well, being a tree was certainly a unique experience. I think if you're in and around the valley, it's kind of like a part honor, part joke, whereas if If you're outside of the valley and you're not as familiar with Stanford, then it's mostly just a joke. So I don't lean on it too heavily on a day-to-day basis, unless maybe the entrepreneur I'm talking to is a Stanford entrepreneur, in which case, you know, might get me a point or two. Um, but becoming tree actually is kind of an entrepreneurial process. I mean, you have to go through an audition, do a whole bunch of stunts, and there's an application, you have to bribe the prior tree, and it requires a lot of creativity and ingenuity and just sheer hustle. And so, uh, I think that that actually, surprisingly, has some overlap with my job today.

AI assessment note: “becoming tree actually is kind of an entrepreneurial process”

Q I do have another learning element that I'd love to ask, and it's, I know your father was a VC, and you watched him and were inspired by him growing up. What were the big lessons that he taught you with regards to the industry, really, as you developed into it?

A Yeah, look, um, it's true. I'm second generation, and, uh, I, I got some kitchen table venture experience growing up, for sure. Hearing my father talking about, you know, the latest company in crisis, the latest deal he was really excited about, But in retrospect, I think the most helpful lesson came from really just watching his career arc beyond when I was living at home. His story is really great. I mean, you know, he started at a lab bench, uh, working upwards inside of a publicly traded chemicals and materials company to become their VP of R&D. And then he transitioned to VC where he built a really impressive cash on cash track record over 18 years. He was a co-founder of the firm that he was a part of called Ampersand Ventures. And then he left, uh, in 2006, right as I was actually entering the industry. And he left Found a couple of life sciences companies, one of which exited for nine figures. It's called Boston Heart Diagnostics. Became a really big company and employer in the Boston area, and then after that, he had another second act. I mean, he co-founded a co-working lab space called Lab Central. It's kind of like a WeWork if you need wet lab, just outside of MIT and Kendall Square, and he did it as a non-profit, and then after that, he recently just re-entered VC. He just Co -founded a new firm with his co-founder from lab central called bio innovation, uh, levera…

AI assessment note: “the biggest lesson that he really taught me is that for entrepreneurship”

Q But kind of mentioning the board members and their functions there, you've said before that board members work for their CEOs, and absolutely I agree with the thesis, but the mandate of the board is to hire and fire the CEO, essentially. How do you reconcile those responsibilities?

A Yeah, I mean, I think a director has a fiduciary obligation in service to the common share of holders of the company, and so a responsibility there is, is hiring and firing a CEO, but certainly not the only thing. And I think the nuance to, you know, how you behave as a director on a day-to-day basis is Is like, are you a helpful person? eShares specifically has a really strong company culture, and one of the core values is they expect all employees to be helpful to each other. Sounds really basic, but they back up these words with action. They even named one of their conference rooms, Be Helpful. So they survey their internal employees and analyze who is the most helpful people inside of the organization, and then publicly recognize them. And even for some of the real outliers there, they'll promote them the next day. So, you know, when I talk about A board working for a CEO. I mean this in a spirit of this helpfulness, right? I mean just embracing helpfulness. A director can and should be helpful to a CEO while the board can still uphold its responsibility to hire and fire the CEO when necessary. You know, helpfulness doesn't prevent you from, like, objectively analyzing performance data or making difficult decisions, but it's about that day-to-day relationship.

AI assessment note: “A director can and should be helpful to a CEO while the board can still uphold”