The Exchanges

Q Dave, Tish, we always have slightly different views around portfolio construction and pricing. How do you think about price and price sensitivity today, both at a company level and then at a portfolio level?

A It is important to be price aware on a portfolio basis, and I don't think on a deal by deal Basis. Price is a determinant of making a decision. Pretty simple. If you love a company and you want to invest and the deal is what the deal is, you make a decision to invest or not invest. I don't control price. The market controls price. Now on a portfolio basis, right, if I look at a fund and I say our entry point is up three X from our last fund, that's a problem. So I need to have some understanding of the portfolio Price, but I don't need to have rigid discipline on a deal price. I have a hundred plus million dollars that I manage. I know what returns I have to make in order to succeed without much money. The founder doesn't need to care about that. If they build a great company, I can figure out the math. I promise you, if we invest in unique outlier companies, our math works. Every VC's math works if you fund great companies. And so it's not about This, like, ownership threshold. If anybody owned one percent of Facebook, one percent of Uber, .1% of Coinbase, your math works. Your math works really well, and it scales.

AI assessment note: “It is important to be price aware on a portfolio basis, and I don't think on a deal by deal Basis.”

Q Do you have a timeline then for investing? Do you like to see them several times before the investment? Sorry.

A I mean, I think at the stage we invest and the way we invest, it's hard to have, um, structure. And so what we do again is, is it's deal by deal. There are some deals where we're, uh, writing a little bit bigger check or we're getting involved much earlier and they don't have, you know, experience beforehand where we want to, Get to know them, and that might be, you know, three, four, five interactions with a team before we're even close to making a decision. There are other deals that, you know, we'll get an introduction to super late in the process. They have, you know, 1.9 out of 2.1 million dollars in their round closed, and so we know normally going into that, we got about, you know, 60 minutes here to make a decision, and if we don't make the decision by the end of this phone call, we're probably not going to get into this deal if we want it. Um, and so I think the market controls timelines a little bit more than, uh, we can given the way in sort of, uh, the pace that we invest at.

AI assessment note: “it's deal by deal. There are some deals where we're, uh, writing a little”

Q Dave, Tish, we always have slightly different views around portfolio construction and pricing. How do you think about price and price sensitivity today, both at a company level and then at a portfolio level?

A It is important to be price aware on a portfolio basis, and I don't think on a deal by deal Basis. Price is a determinant of making a decision. Pretty simple. If you love a company and you want to invest and the deal is what the deal is, you make a decision to invest or not invest. I don't control price. The market controls price. Now on a portfolio basis, right, if I look at a fund and I say our entry point is up three X from our last fund, that's a problem. So I need to have some understanding of the portfolio Price, but I don't need to have rigid discipline on a deal price. I have a hundred plus million dollars that I manage. I know what returns I have to make in order to succeed without much money. The founder doesn't need to care about that. If they build a great company, I can figure out the math. I promise you, if we invest in unique outlier companies, our math works. Every VC's math works if you fund great companies. And so it's not about This, like, ownership threshold. If anybody owned one percent of Facebook, one percent of Uber, .1% of Coinbase, your math works. Your math works really well, and it scales.

AI assessment note: “It is important to be price aware on a portfolio basis, and I don't think on a deal by deal”

Q you take the piss, I take the piss, but you know I respect the shit out of you, and you've been in some great companies. Genuine question, like, at this, at a stage, like Taryn said there, ten billion dollars, does it not just make sense to take 3020, 30% off, return a great amount of cash, and still ride the upside? I just genuinely love to understand why not.

A Does it make sense? Sure. I think if, if you believe that that is the outcome size of that company and there isn't another 10 X or five X on the table, sure. But I think to Terence's point, the compounding at the end is so much more valuable than the compounding at the beginning. The, the path from zero to one billion Is impossible. The path from one billion to five billion is more predictable, and it's more easy to see at a given moment, but I, do we, like, fundamentally reject the idea of ever doing a secondary? No, but I don't believe our job is to figure out how to hack the system. Our job is to figure out how to back unique outlier long-term Generational companies, and if you look at the time that it takes to build those companies, you have to stick with it sort of till the end.

AI assessment note: “compounding at the end is so much more valuable than the compounding at the beginning”

Q You sit in a Zoom, whatever you want to call, a mutual shared Whatever, virtual or physical location, because there are transferable learnings that one partner can pass on to another about a space. You will do that though, correct? Fine.

A We talk about things. We just don't, we don't vote, and we don't look for consensus. We don't, not everybody is equally ramped up onto each individual company such that their voice is valid. I don't think, it's, the easiest thing to do at Seed is find a reason to say no. You name a company, you give me an idea, you give me a market, I can tell you the, like, 32 reasons why it's not gonna work. But that's not the job. The job is to squint and see the one reason it's going to work, and say yes when it matters. And the yes is so much more important than the no. And the cost of omission at seed is so much more expensive than the cost of commission. And if you say no to the wrong company, you blow your returns. If you say yes to the wrong company, it's a rounding error in your model.

AI assessment note: “We talk about things. We just don't, we don't vote”

Q you take the piss, I take the piss, but you know I respect the shit out of you, and you've been in some great companies. Genuine question, like, at this, at a stage, like Taryn said there, ten billion dollars, does it not just make sense to take 3020, 30% off, return a great amount of cash, and still ride the upside? I just genuinely love to understand why not.

A Does it make sense? Sure. I think if, if you believe that that is the outcome size of that company and there isn't another 10 X or five X on the table, sure. But I think to Terence's point, the compounding at the end is so much more valuable than the compounding at the beginning. The, the path from zero to one billion Is impossible. The path from one billion to five billion is more predictable, and it's more easy to see at a given moment, but I, do we, like, fundamentally reject the idea of ever doing a secondary? No, but I don't believe our job is to figure out how to hack the system. Our job is to figure out how to back unique outlier long-term Generational companies, and if you look at the time that it takes to build those companies, you have to stick with it sort of till the end.

AI assessment note: “the compounding at the end is so much more valuable than the compounding at the beginning”

Q Are the discussions then not just doubt generators in the people making decisions? If we get together and discuss a deal.

A We structurally Push our group to not allow that. We have vocabulary internally. We say, like, throwing a grenade. You're not allowed to throw a grenade on some deal. It doesn't help. And so, again, if you come in and you just have this loud no, everybody who, who is excited about it, the, the level of pushback that you need to have to push to, to say, Like, I hear that grenade, and I reject it, and I'm still a yes. I don't think that's where the best decisions get made. I think that's where group decisions get made. And I think again, especially if you have a firm where people have been around longer, or if people are newer, or if people are thinking about harder, newer, interesting spaces, this gets challenging, right? Like, AI. Nobody knows the answer to AI, like how the market plays out, where the value gets created, what the best tenure out companies look like, other than probably like Vinod Khosla. He probably knows the answer or, um, someone like that, but we don't have perfect answers. We don't know the future. If you knew the future, you would be, again, higher percentage correct than any seed investor is going to be. And so the more that you allow for negativity to creep into conversations amongst the firm, I think less variance you will have in outcomes and the safer you will play, and I don't think that that model works at Seed.

AI assessment note: “We structurally Push our group to not allow that.”

Q Final one before we dig deep on, on portfolio. Success has many different kind of connotations and meanings. What does success mean to you?

A Yeah, I, I think I take the personal perspective of, like, success is building a life that you're content with. And whether that's, uh, family or, or friends or, uh, the people that surround you, I think there's, you know, the core of, of that answer is there. And then on the work side, our goal is to be part of other people's journeys. This is a job that actually isn't about us, but really about, The founders were fortunate enough to have the opportunity to work with, and watching them succeed brings us both emotional and psychological success, but also financial success. So I think there is real alignment in the success of the people we're able to work with.

AI assessment note: “success is building a life that you're content with”

Q What's the trend that you're seeing that others are ignoring, David?

A Uh, the, the trend to me that's most interesting is that people are bored with today's consumer products. None of them are fun. What's fun on your phone today? The fun has moved to content, and content is TikTok, content is YouTube, and content is, if you're, you know, into certain things, Discord or Reddit or Twitter or whatever those niches of the world, and you can call them communities, and sometimes they are, But sometimes they're just content. And in reality, content's always been fun. People have always watched TV. People have always watched movies. That time is actually still pretty consistent. It's just shifted into more diversified places where you are consuming content. And then you go back to the early days of mobile and the early days of the internet around connecting with people and whether it's photo sharing or, or different versions of that, the social part of the internet. It feels like has become very boring, and I long for, uh, the days when that gets exciting again. We are open for consumer social businesses. We would love to fund them. We get excited about them, and I think you're at a point where the generation, the, the 12 to, you know, eighteen-year-olds, and then separately the 18 to twenty-five-year-olds have not experienced native products for them. Built by their generation that are fun.

AI assessment note: “the trend to me that's most interesting is that people are bored with today's consumer products”

Q with, you know, my pre-seed partner often where it's like, oh, we can only get a hundred. Now, I have a thirty-three million dollar seed fund and a hundred and ten million growth fund. There's, there's no point in me writing a hundred K checks. It doesn't make sense. And so where is that barrier for you of not letting business get in the way and a too small check?

A I don't, I don't have one. Um, and I don't necessarily walk in and say, this doesn't make sense. If the core of the decision is, this is a company that we want to be part of. And Can I build a portfolio of only a hundred K checks that feels like a bad decision? Can I build a portfolio where there are exceptions to the norm throughout in different ways? Yes. And is, are, are individual exceptions capable of, uh, creating venture returns on an individual company basis? Probably not. Now, Like there's exceptions to that rule, right? If you put a hundred K into the best company of a generation, it was likely a good decision. So you can fake rationalize the math version of that answer, and you can logically rationalize a handful of other directions as to why that is a logical decision. I think, um, it's easy to Put up rules. It creates consistency, and it aligns to fund math, and I appreciate that, but we true, we truly hold to the idea that we want to invest in companies we're excited about, and if what we're able to invest is not in perfect alignment with the math, we're willing and able to make exceptions.

AI assessment note: “I don't, I don't have one.”

Q Exactly. Is it going to get worse with their intrusion into seed?

A It's not even worse. It's been this way. I think the idea that it hasn't been this way and this is a net new thing is just totally incorrect. Like, since 2018, multi-stage firms figured out that the competition for Series A is so steep, and there's only one winner, that if you don't take risk on seed, you might not have a shot at the A, and so they're, they've been slanting earlier for a long time, and if you talk to each one of these firms, whether it's dedicated capital, whether it's dedicated people, whether it's a certain amount of time firm-wide, um, They've been writing that five million dollar seed round for long before the 21 period and long after this new downturn we're in.

AI assessment note: “It's not even worse. It's been this way.”

Q Final one before we dig deep on, on portfolio. Success has many different kind of connotations and meanings. What does success mean to you?

A Yeah, I, I think I take the personal perspective of, like, success is building a life that you're content with. And whether that's, uh, family or, or friends or, uh, the people that surround you, I think there's, you know, the core of, of that answer is there. And then on the work side, our goal is to be part of other people's journeys. This is a job that actually isn't about us, but really about, The founders were fortunate enough to have the opportunity to work with, and watching them succeed brings us both emotional and psychological success, but also financial success. So I think there is real alignment in the success of the people we're able to work with.

AI assessment note: “success is building a life that you're content with.”

Q What's the trend that you're seeing that others are ignoring, David?

A Uh, the, the trend to me that's most interesting is that people are bored with today's consumer products. None of them are fun. What's fun on your phone today? The fun has moved to content, and content is TikTok, content is YouTube, and content is, if you're, you know, into certain things, Discord or Reddit or Twitter or whatever those niches of the world, and you can call them communities, and sometimes they are, But sometimes they're just content. And in reality, content's always been fun. People have always watched TV. People have always watched movies. That time is actually still pretty consistent. It's just shifted into more diversified places where you are consuming content. And then you go back to the early days of mobile and the early days of the internet around connecting with people and whether it's photo sharing or, or different versions of that, the social part of the internet. It feels like has become very boring, and I long for, uh, the days when that gets exciting again. We are open for consumer social businesses. We would love to fund them. We get excited about them, and I think you're at a point where the generation, the, the 12 to, you know, eighteen-year-olds, and then separately the 18 to twenty-five-year-olds have not experienced native products for them. Built by their generation that are fun.

AI assessment note: “the trend to me that's most interesting is that people are bored with today's consumer products”

Q Someone asked this and they said, you know, your family is very successful. And they said, were you running from the perception of like being one of the family members and wanting to strike out on your own?

A I mean, I, I think it's a, there's, there's a lot of nuance in that answer. I'm an individual, and I have my own ambition and desires and goals that are not necessarily attached to the history of my family. At the same time, I have an immense appreciation for, uh, the blessings of, of coming from a group of people that worked really hard and found success, and so it's not this Rebellion or desire to, to strike out on my own as much as it's like, I love what I get to do, and it happens to be in a different world than what other people, uh, have done. And so it's, um, it's not a negative lens of it versus a sort of positive one.

AI assessment note: “it's not this Rebellion or desire to, to strike out on my own”

Q with, you know, my pre-seed partner often where it's like, oh, we can only get a hundred. Now, I have a thirty-three million dollar seed fund and a hundred and ten million growth fund. There's, there's no point in me writing a hundred K checks. It doesn't make sense. And so where is that barrier for you of not letting business get in the way and a too small check?

A I don't, I don't have one. Um, and I don't necessarily walk in and say, this doesn't make sense. If the core of the decision is, this is a company that we want to be part of. And Can I build a portfolio of only a hundred K checks that feels like a bad decision? Can I build a portfolio where there are exceptions to the norm throughout in different ways? Yes. And is, are, are individual exceptions capable of, uh, creating venture returns on an individual company basis? Probably not. Now, Like there's exceptions to that rule, right? If you put a hundred K into the best company of a generation, it was likely a good decision. So you can fake rationalize the math version of that answer, and you can logically rationalize a handful of other directions as to why that is a logical decision. I think, um, it's easy to Put up rules. It creates consistency, and it aligns to fund math, and I appreciate that, but we true, we truly hold to the idea that we want to invest in companies we're excited about, and if what we're able to invest is not in perfect alignment with the math, we're willing and able to make exceptions.

AI assessment note: “I don't, I don't have one.”

Q I understand in some ways, but then I'm also looking at a lot of outcomes and bluntly, you have a billion dollar outcome, a two billion dollar outcome. And actually when you only return ten million or twenty million, really, who gives a fuck? Sorry, it sounds awful, but when you got one 20, it just doesn't make a difference.

A And so our, our belief is that if a founder is able to build a company from the seed stage to a billion, a two billion dollar outcome, There's gonna be a lot of people that that's a life-changing outcome for, and those are the, the journeys that we're signing up to be part of, and I don't view it as, as a dismissive outcome. Can I build an entire fund off of, um, 1,000,000,002 billion dollar outcomes? If there's a higher, high enough percentage of the companies that we invest in that end there, sure. But Like, is that the ambition when we set out to deploy capital, that that's the target outcome for every company? No, we need to have and hope to have some outcomes that are bigger than that. And so, um, not dismissive and deeply appreciative of, of, you know, you're investing, whether in your world and your numbers at 25, at fifty million dollar entry points, or at five or ten million dollar entry points. That founder that embarks on that journey exiting at a 1,000,000,002 billion dollars, as long as they didn't raise an egregious amount of capital and get offensively diluted along the way, they're gonna have a wonderful day, and they're gonna have a wonderful life-changing moment in that journey, and that's what I'm here for.

AI assessment note: “and I don't view it as, as a dismissive outcome.”

Q David, which one would you let slip? You can only have two.

A Um, it matters the gap between who, uh, if you're talking about, you know, like, my top choice versus my fifth choice, that's a fine compromise, versus, um, you know, my top choice versus my 100th choice, that's not a fine compromise. So I think, you know, figuring out who you want to work with is vital. So I'd actually put that as the most important, but I think a bit fluid in, it's not a perfect, like, You don't just pick one person. So I would not over optimize for a single person, but I would put that first. The second is how much money is vital. You need enough money to make enough progress, to hire enough people, to, to use that capital effectively, uh, to build your company. And the third is price. So I think you end up having and should compromise on price if you can get the other two right.

AI assessment note: “should compromise on price if you can get the other two right”

Q Exactly. Is it going to get worse with their intrusion into seed?

A It's not even worse. It's been this way. I think the idea that it hasn't been this way and this is a net new thing is just totally incorrect. Like, since 2018, multi-stage firms figured out that the competition for Series A is so steep, and there's only one winner, that if you don't take risk on seed, you might not have a shot at the A, and so they're, they've been slanting earlier for a long time, and if you talk to each one of these firms, whether it's dedicated capital, whether it's dedicated people, whether it's a certain amount of time firm-wide, um, They've been writing that five million dollar seed round for long before the 21 period and long after this new downturn we're in.

AI assessment note: “It's not even worse. It's been this way.”

Q the single company approach. Um, uh, final one before the quickfire, because David, I could talk to you all day. What does venture look like in five years, in your mind, in the early stage? Do we see, like, the even further productization of multi-stage fund money at seed? Do we see the tigers and co-twos come there as well and do it also? Do the boutiques survive? Help me.

A I thought the crossover funds were coming to seed imminently if the market maintained the up moment that it was having. So I think if you didn't have the turn of the market in 22, you were going to see enormous amounts of capital pointed at seed. Whether that was good, bad, or, or right or wrong, we didn't get to see that play out. I think the multi-stage firms have, as I said, I've been doing seed for a while. We'll continue to do it. Um, there will probably be less investors because I think what this has done is push out the tourists, and I think the tourists were dangerous, and the tourists were not here for the long term, and that was capital that doesn't make sense for founders who are here for the long term to be working with.

AI assessment note: “there will probably be less investors because I think what this has done is push out the tourists”

Q Well, I'm sure we've got a lot to discuss, but for those that missed our first episode, like, tell me, how did you make your way into this very weird and wonderful world of venture, and what was that kind of founding moment for you with Box?

A I think you have to date yourself when you go back and tell a story, and the world in 2000 and 10 or nine when I started making early stage technology investments. It's just so different. Venture capital isn't this word that gets talked about in school. People aren't aspiring to join our industry. Startups are still in the rebel phase of what people are doing to go against what normal is, and I think today when you look at it, startups are taught in university. They're taught in grad school. There's hundreds of different programs that allow you to start companies. It's just a different era if you go back As little as 12 years ago. And so for me, it was just a love of technology, the internet specifically, more than it was technology, and watching at that time, pre-mobile, that the internet, sort of that moment that they call web two point oh, starting, where it started to unlock a combination of two things. One is like, better software for doing things online. Connecting people was probably the biggest change, sort of the Facebook era. And the second was doing more things offline. So how do you use the internet to connect the world? And I think my head had always been oriented around falling in love with watching that happen from childhood days, that when I sort of figured out you could do this as a career, it was like, wow, this is what I should be doing. And so I started maki…

AI assessment note: “Box Group became my way to invest Into companies that were outside of the Techstars”

Q The pleasure is all mine, trust me, but I want to get the ball rolling today, and for those that missed the first episode, because it was largely just my mother that listened back then, how did you make your way into the wonderful world of Venture and come to FoundBox?

A Yeah, so it's, I would say, pretty accidentally. I grew up loving the internet, and I think it's the internet, not technology, that I fell in love with, and so I watched the internet get deployed through Prodigy and CompuServe and then on to AOL, and AOL was really my entry point into this world, and it was at a moment when the sort of worldwide web, the internet was starting, and so you watch these ideas come to life, and whether that was successful ones or failed ones, I, as a teenager, was in the Sort of mindset of predicting. The same way I was interested in sports, the internet was the same, of like, ooh, that's interesting, or ooh, that isn't. The idea of making a career out of it was not something I understood until probably 10 years later. So I was a lawyer for a minute, and then I left there to just start a company, joined this bigger company, and left there in New York in 2009. And 2009 in New York was the nascent period of what today is our modern ecosystem here, and I was watching startups get started Bloom and Blossom, and ended up joining David Cohen at Techstars to help start and run the New York program here, and so when I signed up at Techstars, I realized I was an investor job, and so Box Group was about five investments at the time, and I said, I need to take this Box Group seriously on the side of Techstars as a way to explore the opportunities I was natural…

AI assessment note: “Box Group became the vehicle to invest in non-Techstars opportunities”

Q And then how have you seen the New York venture scene and the startup scene develop over, over the last few years since those Techstars days?

A You know, New York's, New York's my home. It's, it's where I grew up. It's, it's a place I'm gonna raise my kids and live for the rest of my life, and so I'm passionate about this city, uh, It means a lot that just overall that I'm connected to the city. I think if you look at the startup scene here, it's incredible. There's, there's a lot of activity. There's a lot of incredible people that are building things in New York. I think the, the negative of what's happened here in the past seven years is you haven't seen the true emergence of a, a destination company, right? We have incredible companies that are building Uh, incredible foundations here. Some have went, went public already. Some will go public in the future. But you don't have your Apple, Facebook, Google that was started here that is this worldwide, uh, phenomenon that hundreds of people are, you know, applying to work at after college every year. And I think that, uh, what will cement this, um, ecosystem is the emergence of that company. And so, uh, hopefully over the next couple of years you start seeing the emergence of a company that's that transformative, uh, That can really capture the, the hearts and minds of a really big city with, with a lot of incredible activity going on in it.

AI assessment note: “the negative of what's happened here in the past seven years is”

Q And do you think it's just a matter of time before that rocket ship emerges from New York, or is there something that needs to happen within the ecosystem, do you think?

A I don't think there's anything systematic. I think, um, you know, these are once in a, a couple decades style companies. So, uh, it's, it's insane to expect it to happen or assume it's just going to happen. I think on one hand, you can focus on this, right, and hope and expect it to happen. On the other hand, you can celebrate what the city has, which is, uh, incredible companies being built across such a diverse amount of industries. You see, uh, technology penetrating so many different Components of what used to be the core New York industries, right? Finance, fashion, uh, publishing, media. These are industries that are deeply disrupted by technology only in the past handful of years. And then you see, uh, you know, retail and even just the way the city works, you're seeing this, this landscape be, uh, a test case for new ways of running a city, for new technologies, uh, that can penetrate what clearly is a global shift towards Urban environments. And I think that that's a powerful differentiator that New York's able to, to bring to the table that, you know, other cities, the breadth and the depth of what New York has, it's hard to match.

AI assessment note: “I don't think there's anything systematic... insane to expect it to happen”

Q They know everything. Exactly. Biblical. Um, so how do you respond then to, to Fred Wilson's post about the mobile downturn, downtown, sorry, and, and the difficulty in attaining and maintaining traction for mobile apps? What are your thoughts on that?

A Yeah, I mean, hard to argue with that, right? Like, distribution's harder than ever. The biggest companies are dominating your time on the phone, and they're dominating the consumer experiences, and they've You know, been as good as they've ever been. You look at the strength of Facebook today, it's a marvelous company. It's hard to not admire the products that they build and the constant iteration that they go through. So if you're, you know, three people with an idea who can code and design and do a little marketing, good luck. Um, it's really hard to break through. That said, On the totally flip side, you know, we're about three, two, three years into everyone in the world basically having a smartphone. You have three billion people that are looking at this thing an absurd amount every day that are opening it. I think the number was 249 times a day. You're, you're opening your phone to do something. To think that, that we're this short in and all the experiences and all the innovations done, uh, I think is, is crazy, right? What there is, is there's a higher expectation. Because there are no more early adopters. You can put an app in the app store, anybody downloads it, it goes as wide as it goes, and you basically have one shot, right? You download an app, you open it, you make a decision pretty quickly, like, am I ever going to open this again? Am I going to delete this, a…

AI assessment note: “hard to argue with that, right? Like, distribution's harder than ever.”

Q I want to move into a quick fire round while we're on the seed will always be the most important round. I think that's a good, a good transition to a quick fire and you've both I'm sure been given much advice in your investing career. What's the best investment advice that stuck with you most?

A Our job is to say yes, not to say no. And our job is to, uh, communicate that decision to a founder in a transparent and quick way. And our job isn't to waste people's time and our job isn't to, um, mislead people. And I think as I've looked at this business, um, for years, there's, there's people that come and go that are just wasting founders time. Our job is to not Waste their time. And our job is to give them money and get out of their way until they ask you to do something, at which point you should try to do it, um, as best as you can and as quick as you can with as little friction as you can. And so, uh, my job as an investor is to invest and it's to give people money and do what they ask me to do.

AI assessment note: “Our job is to say yes, not to say no.”

Q long-term relationships, I'm very much, again, with you on that, and I find it very difficult when I'm forced to make a ten-year commitment predicated on One meeting and then maybe a second meeting a day or two later. I find it very, very challenging in a way that Series A allows you a little bit more luxury. How do you do that then, given the preference for long-term relationships?

A So, see, pick, win. You have to see it in order to pick it, in order to win it. Seeing it, the earlier you see a founder, the better your relationship is when that transactional moment comes into play. And so, if you can meet people Before they're starting a company, before they're thinking about starting a company, if they're at a university, if they're working at a different company and thinking about starting one, that is the best time to meet them and to build a relationship that you can have conviction when they do show up for that transactional moment to say yes. I think that that is the, the essence of seed investing. The hardest part is getting Exposure to founders at a scale that allows you to see in a given year, in a given fund cycle, enough of those potential great opportunities and great founders and the pick. I don't know. I, we, we debate this internally at our firm. I don't know how to get better at picking when you don't find out the results of your picks for like five to 10 years. And so how do you wake up tomorrow and do work to be better pickers? You can be prepared in markets. You can be prepared in the businesses and the types of businesses that you're trying to fund. You can sort of try to find better people, but I don't, Really know what that is. So I come back to it of like, can you build relationships that you get excited enough about to say yes, becau…

AI assessment note: “the earlier you see a founder, the better your relationship is when that transactional moment”

Q Are the discussions then not just doubt generators in the people making decisions? If we get together and discuss a deal.

A We structurally Push our group to not allow that. We have vocabulary internally. We say, like, throwing a grenade. You're not allowed to throw a grenade on some deal. It doesn't help. And so, again, if you come in and you just have this loud no, everybody who, who is excited about it, the, the level of pushback that you need to have to push to, to say, Like, I hear that grenade, and I reject it, and I'm still a yes. I don't think that's where the best decisions get made. I think that's where group decisions get made. And I think again, especially if you have a firm where people have been around longer, or if people are newer, or if people are thinking about harder, newer, interesting spaces, this gets challenging, right? Like, AI. Nobody knows the answer to AI, like how the market plays out, where the value gets created, what the best tenure out companies look like, other than probably like Vinod Khosla. He probably knows the answer or, um, someone like that, but we don't have perfect answers. We don't know the future. If you knew the future, you would be, again, higher percentage correct than any seed investor is going to be. And so the more that you allow for negativity to creep into conversations amongst the firm, I think less variance you will have in outcomes and the safer you will play, and I don't think that that model works at Seed.

AI assessment note: “We structurally Push our group to not allow that.”

Q Uh, tell me for those that missed our first show, how did you make your way into Vanship? 60 seconds.

A Yeah. I, uh, I grew up loving the internet and that's what I, I fell in love with as a kid. And, uh, I never understood what the career path, uh, into this world is. And I actually don't think, uh, there is a traditional one. I think everybody finds their own way. And my way was Um, you know, I, I joined an organization called Techstars early on, and when I did that, I signed up to be an investor, and Box Group, uh, at that time was my side hustle, uh, and then in 2012, left Techstars to do Box Group full-time, uh, so now I'm 11 years into that, uh, full-time Box Group journey, so I'm, I'm old in this world.

AI assessment note: “joined an organization called Techstars early on, and when I did that, I signed up to be an investor”

Q I understand in some ways, but then I'm also looking at a lot of outcomes and bluntly, you have a billion dollar outcome, a two billion dollar outcome. And actually when you only return ten million or twenty million, really, who gives a fuck? Sorry, it sounds awful, but when you got one 20, it just doesn't make a difference.

A And so our, our belief is that if a founder is able to build a company from the seed stage to a billion, a two billion dollar outcome, There's gonna be a lot of people that that's a life-changing outcome for, and those are the, the journeys that we're signing up to be part of, and I don't view it as, as a dismissive outcome. Can I build an entire fund off of, um, 1,000,000,002 billion dollar outcomes? If there's a higher, high enough percentage of the companies that we invest in that end there, sure. But Like, is that the ambition when we set out to deploy capital, that that's the target outcome for every company? No, we need to have and hope to have some outcomes that are bigger than that. And so, um, not dismissive and deeply appreciative of, of, you know, you're investing, whether in your world and your numbers at 25, at fifty million dollar entry points, or at five or ten million dollar entry points. That founder that embarks on that journey exiting at a 1,000,000,002 billion dollars, as long as they didn't raise an egregious amount of capital and get offensively diluted along the way, they're gonna have a wonderful day, and they're gonna have a wonderful life-changing moment in that journey, and that's what I'm here for.

AI assessment note: “I don't view it as, as a dismissive outcome.”

Q David, which one would you let slip? You can only have two.

A Um, it matters the gap between who, uh, if you're talking about, you know, like, my top choice versus my fifth choice, that's a fine compromise, versus, um, you know, my top choice versus my 100th choice, that's not a fine compromise. So I think, you know, figuring out who you want to work with is vital. So I'd actually put that as the most important, but I think a bit fluid in, it's not a perfect, like, You don't just pick one person. So I would not over optimize for a single person, but I would put that first. The second is how much money is vital. You need enough money to make enough progress, to hire enough people, to, to use that capital effectively, uh, to build your company. And the third is price. So I think you end up having and should compromise on price if you can get the other two right.

AI assessment note: “should compromise on price if you can get the other two right”