The Exchanges

Q And it's fascinating. You say that about the fund being the container. So on a more personal level, then how do you sell the maiden lane container? What is it for you that is your pitch?

A So we really focus on what makes us different, and there's two main pieces that really differentiate us from, from pretty much every fund out there. The first is that we were born and bred online, and that means we define roles and activities a little bit differently. So we don't have, you know, your classic Monday meeting and, you know, big office with a bunch of people in it. We really try to do everything product first because we believe that can make our process and our judgment better. By using the data that that creates. The second thing that makes this different is most people think I sit around and make decisions like click, fire, go on angel. It's kind of like a trading desk. Um, or they think I sit around and invest mainland's money directly and neither of which are true. What's really going on is I'm working with a set of angel investors who invest our money on our behalf, right? So they take it and they say, I'm really excited about this company. I've known the founder for five years. You know, I've worked in and around this space. This is a good investment. Let's go do it. And in doing that, we share our carried interest. Carried interest is how VCs make their money. It's a form of profit sharing, right? Um, it's usually just shared from within the GPs of the fund. Uh, but at Maiden Lane, we have more GPs and we share it more aggressively with people. Thanks to ang…

AI assessment note: “we really focus on what makes us different, and there's two main pieces”

Q Now, is that, is that very strange in the VC industry? I mean, are you unique at Maiden Lane for having that? And do you think you'll kind of set a trend? Or, or what's the kind of situation like at the moment in terms of current fees?

A The thing that makes Maiden Lane so unique, yes, is that we have 30% carried interest. There are other funds that have 30% carried interest. Uh, Sequoia and many others demand premium carry and get it because they demonstrated better returns. The reason we asked for 30% carried interest is because we share 15 to 20% of that carried interest with syndicate leads. So the amount of profit that I get is actually less than the syndicate leads. And the reason for that is they are the ones sourcing the deal. They are the one adding value, um, and they are the one ultimately driving the Maiden Lane brand. Um, they interact with companies on a more regular basis than I do. My goal is to be more of a shepherd amongst all the syndicate leads and for the fun to create resources that we can share together, right? One of our first things that we did was we opened a live work loft so that people could do meetings and host dinners and just kind of a third space because most all the syndicate leads have a full-time job, right? Um, and so this allows them to, you know, do their syndicate's work outside of their office, um, but still have a space that, that's, you know, more professional than their home. Um, and, and so my job is to do things like that and create a community and the norms around that community so that we can scale and become, um, Hopefully a very, very successful fund in its own …

AI assessment note: “The thing that makes Maiden Lane so unique, yes, is that we have 30% carried interest.”

Q And it's fascinating. You say that about the fund being the container. So on a more personal level, then how do you sell the maiden lane container? What is it for you that is your pitch?

A So we really focus on what makes us different, and there's two main pieces that really differentiate us from, from pretty much every fund out there. The first is that we were born and bred online, and that means we define roles and activities a little bit differently. So we don't have, you know, your classic Monday meeting and, you know, big office with a bunch of people in it. We really try to do everything product first because we believe that can make our process and our judgment better. By using the data that that creates. The second thing that makes this different is most people think I sit around and make decisions like click, fire, go on angel. It's kind of like a trading desk. Um, or they think I sit around and invest mainland's money directly and neither of which are true. What's really going on is I'm working with a set of angel investors who invest our money on our behalf, right? So they take it and they say, I'm really excited about this company. I've known the founder for five years. You know, I've worked in and around this space. This is a good investment. Let's go do it. And in doing that, we share our carried interest. Carried interest is how VCs make their money. It's a form of profit sharing, right? Um, it's usually just shared from within the GPs of the fund. Uh, but at Maiden Lane, we have more GPs and we share it more aggressively with people. Thanks to ang…

AI assessment note: “there's two main pieces that really differentiate us from, from pretty much every fund out there”

Q And how important do you think those kind of formative years in operations were for you now as an investor? Did they, have they shaped your investing thesis quite heavily?

A I don't know if it shaped my thesis. I think what it did for me is it really instilled a deep sense of empathy. I have so much respect for people who are able to start something and get it off the ground. I, I really, really, really make an effort to not snicker, um, and, and kind of, you know, fault people for not building something maybe as big as a Facebook or a Google or an Apple because I myself, you know, wasn't able to do that. And so I don't think it informed anybody. A thesis per se, but I can connect with people and really feel that, you know, this is not a small task to build a company. And, and I think it makes me a better advocate.

AI assessment note: “I don't know if it shaped my thesis. I think what it did for me”

Q Absolutely. And then can you tell us now a little about Maiden Lane, where you are now, uh, the kind of fund structure, uh, your association with AngelList, there's obviously a lot on the web about that. Can you kind of set the record straight on that one?

A Sure. So I joined Atlas in 2010 and started getting emails from two guys I never met, one Nivy, the other Naval, and started taking introductions to the companies they introduced me to as really my first source of deal flow. I was a very, very, very early user evangelist, all the way from Waltham, Massachusetts at that point, and a big believer that, uh, you know, Venture was moving online, and sort of, I think my Venture career has probably focused mainly on this thesis, that the game of venture is changing, and how companies are built today are obviously also changing, and so, you know, where is it gonna go in the next five to 10 years? Um, and really for the first couple years, just became a fan of what AngelList was doing, and so just was a normal user. I, I didn't really have any special access. Atlas would end up leading the Series A for AngelList very quietly. And, uh, have invested in every round since, and I think just continue to drink the Kool-Aid around online investing. Uh, in 2012, I moved out to San Francisco and worked really closely with the AngelList team. That was the year that they passed legislation to make everything that we see today legal. Um, that's kind of the why now of AngelList. In 2013, when they launched Syndicates, uh, my partner Jeff and I had the idea of starting a fund purely dedicated to investing. In Angel of Syndicates. At the time, Syndica…

AI assessment note: “my partner Jeff and I had the idea of starting a fund purely dedicated”

Q And how important do you think those kind of formative years in operations were for you now as an investor? Did they, have they shaped your investing thesis quite heavily?

A I don't know if it shaped my thesis. I think what it did for me is it really instilled a deep sense of empathy. I have so much respect for people who are able to start something and get it off the ground. I, I really, really, really make an effort to not snicker, um, and, and kind of, you know, fault people for not building something maybe as big as a Facebook or a Google or an Apple because I myself, you know, wasn't able to do that. And so I don't think it informed anybody. A thesis per se, but I can connect with people and really feel that, you know, this is not a small task to build a company. And, and I think it makes me a better advocate.

AI assessment note: “I don't know if it shaped my thesis. I think what it did for me”

Q Absolutely. And then can you tell us now a little about Maiden Lane, where you are now, uh, the kind of fund structure, uh, your association with AngelList, there's obviously a lot on the web about that. Can you kind of set the record straight on that one?

A Sure. So I joined Atlas in 2010 and started getting emails from two guys I never met, one Nivy, the other Naval, and started taking introductions to the companies they introduced me to as really my first source of deal flow. I was a very, very, very early user evangelist, all the way from Waltham, Massachusetts at that point, and a big believer that, uh, you know, Venture was moving online, and sort of, I think my Venture career has probably focused mainly on this thesis, that the game of venture is changing, and how companies are built today are obviously also changing, and so, you know, where is it gonna go in the next five to 10 years? Um, and really for the first couple years, just became a fan of what AngelList was doing, and so just was a normal user. I, I didn't really have any special access. Atlas would end up leading the Series A for AngelList very quietly. And, uh, have invested in every round since, and I think just continue to drink the Kool-Aid around online investing. Uh, in 2012, I moved out to San Francisco and worked really closely with the AngelList team. That was the year that they passed legislation to make everything that we see today legal. Um, that's kind of the why now of AngelList. In 2013, when they launched Syndicates, uh, my partner Jeff and I had the idea of starting a fund purely dedicated to investing. In Angel of Syndicates. At the time, Syndica…

AI assessment note: “starting a fund purely dedicated to investing. In Angel of Syndicates.”

Q So then where do you think the venture industry will be in, say, 20 to 30 years, taking that long view approach? Will we, will it be a complete democratization of funding, do you think?

A I don't think it'll be a complete democratization. Unfortunately, the reality is there's a scarce number of insanely talented and crazy people who can build big things. They don't need thousands of people on their cap table. And so what's really democratizing is instead of people like myself being An intermediary to capital, right? Um, I, I think where venture capital moves is more explicit sets of communities, right? And Maiden Lane has not led the way here, right? We're actually standing on the shoulders of several other people, you know, including Y Combinator, including First Round Capital. I think even SV Angel deserves some credit there. Um, and if you look at, like, the best versions of the future, it's, it's the capital is, More like a shared resource. I think that's where it goes even more explicitly than, than Y Combinator and SV Angel and first round capital. Um, and that's how I see Maiden Lane moving is the capital is not mine. It's not my budget to invest. It's my responsibility to build a community around it so that our LPs can make a really healthy outsized return. Right. Um, and that shift in thinking to do that, you need to move the economics with it. Right. And that's, that's where I think the future is going is the economics of venture are changing. And AngelList has basically taken them and unbundled them, and so you can rearrange them in whatever form that…

AI assessment note: “I don't think it'll be a complete democratization.”

Q So then where do you think the venture industry will be in, say, 20 to 30 years, taking that long view approach? Will we, will it be a complete democratization of funding, do you think?

A I don't think it'll be a complete democratization. Unfortunately, the reality is there's a scarce number of insanely talented and crazy people who can build big things. They don't need thousands of people on their cap table. And so what's really democratizing is instead of people like myself being An intermediary to capital, right? Um, I, I think where venture capital moves is more explicit sets of communities, right? And Maiden Lane has not led the way here, right? We're actually standing on the shoulders of several other people, you know, including Y Combinator, including First Round Capital. I think even SV Angel deserves some credit there. Um, and if you look at, like, the best versions of the future, it's, it's the capital is, More like a shared resource. I think that's where it goes even more explicitly than, than Y Combinator and SV Angel and first round capital. Um, and that's how I see Maiden Lane moving is the capital is not mine. It's not my budget to invest. It's my responsibility to build a community around it so that our LPs can make a really healthy outsized return. Right. Um, and that shift in thinking to do that, you need to move the economics with it. Right. And that's, that's where I think the future is going is the economics of venture are changing. And AngelList has basically taken them and unbundled them, and so you can rearrange them in whatever form that…

AI assessment note: “I don't think it'll be a complete democratization.”

Q Now, is that, is that very strange in the VC industry? I mean, are you unique at Maiden Lane for having that? And do you think you'll kind of set a trend? Or, or what's the kind of situation like at the moment in terms of current fees?

A The thing that makes Maiden Lane so unique, yes, is that we have 30% carried interest. There are other funds that have 30% carried interest. Uh, Sequoia and many others demand premium carry and get it because they demonstrated better returns. The reason we asked for 30% carried interest is because we share 15 to 20% of that carried interest with syndicate leads. So the amount of profit that I get is actually less than the syndicate leads. And the reason for that is they are the ones sourcing the deal. They are the one adding value, um, and they are the one ultimately driving the Maiden Lane brand. Um, they interact with companies on a more regular basis than I do. My goal is to be more of a shepherd amongst all the syndicate leads and for the fun to create resources that we can share together, right? One of our first things that we did was we opened a live work loft so that people could do meetings and host dinners and just kind of a third space because most all the syndicate leads have a full-time job, right? Um, and so this allows them to, you know, do their syndicate's work outside of their office, um, but still have a space that, that's, you know, more professional than their home. Um, and, and so my job is to do things like that and create a community and the norms around that community so that we can scale and become, um, Hopefully a very, very successful fund in its own …

AI assessment note: “The thing that makes Maiden Lane so unique, yes, is that we have 30% carried interest.”

Q list syndicates, but, but it's not an angel list fund. So I think that distinction is quite important just to, uh, in terms of understanding the, the broader trend of the next five years. So you said there slightly about kind of democratizing funding, uh, and taking it away from the country clubs. So is there any other trends that you see happening in venture in the next five years?

A Yeah, so the reason people sometimes confuse mainlanded AngelList is we were born on AngelList. We're sort of like a native app on AngelList, if you will. Um, but to say that we are AngelList is to say that Uber is Apple because you use it on an Apple device, right? Um, that makes no sense. AngelList actually has some of its own funds, just as Apple has some of its own apps that it uses on iOS, right? Um, and so that, that's actually just the cleanest way to think about it. We are legally separate. Mainlane's just a fund. It, it's just chosen its strategy to only work on AngelList. Initially, we didn't even think there would be enough deal flow on AngelList, and so we put it in our documents that we would do half the deals offline in a more traditional manner, and then half online, kind of waiting for the platform to scale. It turns out that it scaled very quickly, and so, 95% of the investments that we make are done through AngelList, and specifically through syndicates. So That kind of just shows you how little was known back in 2014 and how quickly we're moving. Um, where I see this going is, it's, it's amazing. AngelList is unbundling the activities of venture capital, and so what's happening in short order is people are starting to, to learn and understand and internalize all the, the mechanics of, of venture, and I think that's really exciting, and so what Maiden Lane is,…

AI assessment note: “where I see this going is, it's, it's amazing. AngelList is unbundling”

Q list syndicates, but, but it's not an angel list fund. So I think that distinction is quite important just to, uh, in terms of understanding the, the broader trend of the next five years. So you said there slightly about kind of democratizing funding, uh, and taking it away from the country clubs. So is there any other trends that you see happening in venture in the next five years?

A Yeah, so the reason people sometimes confuse mainlanded AngelList is we were born on AngelList. We're sort of like a native app on AngelList, if you will. Um, but to say that we are AngelList is to say that Uber is Apple because you use it on an Apple device, right? Um, that makes no sense. AngelList actually has some of its own funds, just as Apple has some of its own apps that it uses on iOS, right? Um, and so that, that's actually just the cleanest way to think about it. We are legally separate. Mainlane's just a fund. It, it's just chosen its strategy to only work on AngelList. Initially, we didn't even think there would be enough deal flow on AngelList, and so we put it in our documents that we would do half the deals offline in a more traditional manner, and then half online, kind of waiting for the platform to scale. It turns out that it scaled very quickly, and so, 95% of the investments that we make are done through AngelList, and specifically through syndicates. So That kind of just shows you how little was known back in 2014 and how quickly we're moving. Um, where I see this going is, it's, it's amazing. AngelList is unbundling the activities of venture capital, and so what's happening in short order is people are starting to, to learn and understand and internalize all the, the mechanics of, of venture, and I think that's really exciting, and so what Maiden Lane is,…

AI assessment note: “where I see this going is, it's, it's amazing. AngelList is unbundling”