The Exchanges

Q Can I ask, in terms of what are you building that's hard to copy, my partner Fred always very much Deep dives on unit economics, even at the early stages, and looks for the scalability over time. Do you think unit economics is a defensible most, and how do you think about the scalability of unit economics?

A I actually disagree with Fred. I think if CAC and LTV is a focus on a series A deck, I essentially just want to throw the deck out. Right for me is an entrepreneur who targets an area that seems niche, but once you dig in, it actually has a path to significant revenue. I mean, an example of that in our portfolio would be a company called Dow scale. So it's a niche online boutique, fast fashion brand that really targets your edgiest women, 15 to 30. So when you look at the site, it seems like this could be a really niche offering, but the reality is it's a giant market. I mean, when we looked at it, we saw that almost 30% of millennials attended a music festival in the past 12 months compared to half of that in 2014. And then you started to ask, If Zara is worth a hundred billion, is there an ability to create a brand focused on the 15 or 20% of women who are most fashion forward that's worth billions in market value? And the answer to that was yes. So I think in that case, artistic voice and being incredibly different and having a rabid community of followers was the moat itself. And I think, you know, that's a company which spent very little on paid marketing. I think if there's a unique characteristic across the most successful portfolio companies we have, It's high repeat and a lack of dependence upon paid acquisition for a significant piece of your revenue.

AI assessment note: “I actually disagree with Fred. I think if CAC and LTV is a focus”

Q Oh, stop it. I'm blushing, but I do want to get started today by discussing you and how you made your way into what I always call the wonderful world of venture. So what was your start, Jason?

A So like many paths to venture is a winding path. So I grew up in a suburb of Detroit. My dad was a phys ed teacher and my mom stayed home. To give a sense of who they were, they still live a mile from where they met at a Sweet 16 party. So I think that middle class upbringing really informs who I am today. I rarely do interviews like this one. I really prefer to stay in the background, and I also have a deep affinity for companies that target middle America versus companies that are focused on the one percent. So from the time I was little, somehow I had a deep curiosity on how the world works. So my first job after I graduated from the University of Michigan was an internship at Cranes. A business newspaper. And when I was there, I quickly came to the conclusion that it was more fun to be a part of events than to report on them. So the most interesting thing happening in 99 was the first internet boom. So I got into U-Haul. My dad drove me out to San Francisco. In San Francisco, a kid with no technical chops, no business connections, no network. So I go on hot jobs, and I apply for a venture capital role, and somehow talk my way into a small firm called Spinnaker Ventures. The reason they wanted me is it was a firm with partners who were focused on Latin America, investing in companies in the U S and bringing them to Latin America. And given my journalism background, I was abl…

AI assessment note: “apply for a venture capital role, and somehow talk my way into a small firm”

Q said that about paid acquisition channels. I had Peter Fenton on the show, and he said about the lack of free and open distribution being the biggest barrier to consumer. Eric Fang and Jeremy Levine at Bessemer said that we'd be in a fallow period for consumer because of the lack of distribution channel availability. How do you think about this today, kind of investing heavily into transactional consumer businesses?

A I think the era of being able to toss up, to start a new brand online and scale it and take it public I think it's very hard to do. I was struck by, there was an article in Inc. from Wharton how there were like, 400 new vertical brands that were started in the past few years, and they all start to look the same. I think where we've been spending a lot of our time is in areas where it's hard, and where the solutions include touching the end consumer. So to bring that to life, I think a couple areas where that plays out is in real estate and healthcare. In real estate, we've invested in a couple of companies, one called Common, and then there's a hospitality We haven't announced yet, which are thinking about what are ways where millennials want to use space, which are able for developers and property owners to yield higher dollars per square foot than current uses of that space. Now, that's a brand that requires having people on the ground. It requires contracting house cleaners, but you kind of look at it and say, you know, there's not a brand like Starwood that represents multifamily housing, and that's what Common is really creating. It's creating a community that Millennials can call their own when they live in urban cities. So I think that's a brand that's not in any way dependent upon launching and then scaling. It's dependent upon creating long-term relationships with deve…

AI assessment note: “where we've been spending a lot of our time is in areas where it's hard”

Q I mean, we're going to dive into all things paid acquisition because it's one of my passion points, but we do on staying on moats have a question from Rebecca, your former colleague, who says, how can founders look to create the strongest form of defensibility?

A Sure. I mean, let me give a couple of examples. My formative experience in venture was Zulily. When I first joined Maveron, I had the chance To sit in the room as the founders of Zulily were creating the framework for building the brand, and one thing we thought about deeply was supplier power. They were intrigued by private sale, and we're looking side by side at where are areas where there's high purchase frequency by women, where there's an opportunity to sell a product which is on closeout, and they were looking side by side at beauty and at kids, and what became clear in beauty is there was a dozen companies that controlled Essentially the vast majority of the supply of product in the world. And on the kids side, there were hundreds, if not thousands of boutique brands, which had no supplier power whatsoever. So you kind of look at that and say, can you create a moat by becoming the closeout go-to brand for these thousands of boutique kids focused companies? And the answer to that was once they use you, they're not going to use anyone else because you'll take a hundred percent of their supply. And any one of them has no power over you. So that was a really kind of strategic way to think through creating a moat. And I think supplier power is one way to go. And I think the other way to go is sometimes you build a brand and then you have to think about how can I use the brand…

AI assessment note: “supplier power is one way to go”

Q I mean, we're going to dive into all things paid acquisition because it's one of my passion points, but we do on staying on moats have a question from Rebecca, your former colleague, who says, how can founders look to create the strongest form of defensibility?

A Sure. I mean, let me give a couple of examples. My formative experience in venture was Zulily. When I first joined Maveron, I had the chance To sit in the room as the founders of Zulily were creating the framework for building the brand, and one thing we thought about deeply was supplier power. They were intrigued by private sale, and we're looking side by side at where are areas where there's high purchase frequency by women, where there's an opportunity to sell a product which is on closeout, and they were looking side by side at beauty and at kids, and what became clear in beauty is there was a dozen companies that controlled Essentially the vast majority of the supply of product in the world. And on the kids side, there were hundreds, if not thousands of boutique brands, which had no supplier power whatsoever. So you kind of look at that and say, can you create a moat by becoming the closeout go-to brand for these thousands of boutique kids focused companies? And the answer to that was once they use you, they're not going to use anyone else because you'll take a hundred percent of their supply. And any one of them has no power over you. So that was a really kind of strategic way to think through creating a moat. And I think supplier power is one way to go. And I think the other way to go is sometimes you build a brand and then you have to think about how can I use the brand…

AI assessment note: “supplier power is one way to go... another way to go is sometimes you build a brand”

Q said that about paid acquisition channels. I had Peter Fenton on the show, and he said about the lack of free and open distribution being the biggest barrier to consumer. Eric Fang and Jeremy Levine at Bessemer said that we'd be in a fallow period for consumer because of the lack of distribution channel availability. How do you think about this today, kind of investing heavily into transactional consumer businesses?

A I think the era of being able to toss up, to start a new brand online and scale it and take it public I think it's very hard to do. I was struck by, there was an article in Inc. from Wharton how there were like, 400 new vertical brands that were started in the past few years, and they all start to look the same. I think where we've been spending a lot of our time is in areas where it's hard, and where the solutions include touching the end consumer. So to bring that to life, I think a couple areas where that plays out is in real estate and healthcare. In real estate, we've invested in a couple of companies, one called Common, and then there's a hospitality We haven't announced yet, which are thinking about what are ways where millennials want to use space, which are able for developers and property owners to yield higher dollars per square foot than current uses of that space. Now, that's a brand that requires having people on the ground. It requires contracting house cleaners, but you kind of look at it and say, you know, there's not a brand like Starwood that represents multifamily housing, and that's what Common is really creating. It's creating a community that Millennials can call their own when they live in urban cities. So I think that's a brand that's not in any way dependent upon launching and then scaling. It's dependent upon creating long-term relationships with deve…

AI assessment note: “I think where we've been spending a lot of our time is in areas where it's hard”

Q Oh, stop it. I'm blushing, but I do want to get started today by discussing you and how you made your way into what I always call the wonderful world of venture. So what was your start, Jason?

A So like many paths to venture is a winding path. So I grew up in a suburb of Detroit. My dad was a phys ed teacher and my mom stayed home. To give a sense of who they were, they still live a mile from where they met at a Sweet 16 party. So I think that middle class upbringing really informs who I am today. I rarely do interviews like this one. I really prefer to stay in the background, and I also have a deep affinity for companies that target middle America versus companies that are focused on the one percent. So from the time I was little, somehow I had a deep curiosity on how the world works. So my first job after I graduated from the University of Michigan was an internship at Cranes. A business newspaper. And when I was there, I quickly came to the conclusion that it was more fun to be a part of events than to report on them. So the most interesting thing happening in 99 was the first internet boom. So I got into U-Haul. My dad drove me out to San Francisco. In San Francisco, a kid with no technical chops, no business connections, no network. So I go on hot jobs, and I apply for a venture capital role, and somehow talk my way into a small firm called Spinnaker Ventures. The reason they wanted me is it was a firm with partners who were focused on Latin America, investing in companies in the U S and bringing them to Latin America. And given my journalism background, I was abl…

AI assessment note: “I apply for a venture capital role, and somehow talk my way into a small firm”

Q Can I ask, in terms of what are you building that's hard to copy, my partner Fred always very much Deep dives on unit economics, even at the early stages, and looks for the scalability over time. Do you think unit economics is a defensible most, and how do you think about the scalability of unit economics?

A I actually disagree with Fred. I think if CAC and LTV is a focus on a series A deck, I essentially just want to throw the deck out. Right for me is an entrepreneur who targets an area that seems niche, but once you dig in, it actually has a path to significant revenue. I mean, an example of that in our portfolio would be a company called Dow scale. So it's a niche online boutique, fast fashion brand that really targets your edgiest women, 15 to 30. So when you look at the site, it seems like this could be a really niche offering, but the reality is it's a giant market. I mean, when we looked at it, we saw that almost 30% of millennials attended a music festival in the past 12 months compared to half of that in 2014. And then you started to ask, If Zara is worth a hundred billion, is there an ability to create a brand focused on the 15 or 20% of women who are most fashion forward that's worth billions in market value? And the answer to that was yes. So I think in that case, artistic voice and being incredibly different and having a rabid community of followers was the moat itself. And I think, you know, that's a company which spent very little on paid marketing. I think if there's a unique characteristic across the most successful portfolio companies we have, It's high repeat and a lack of dependence upon paid acquisition for a significant piece of your revenue.

AI assessment note: “I actually disagree with Fred. I think if CAC and LTV is a focus”

Q In terms of kind of creating that economic value, We've discussed before many companies kind of scaling top line and raising big rounds as not creating that economic value. Tell me, when these kind of unsustainable business models come to bear, will we see a graveyard of heavily funded consumer startups with kind of insufficient unit economics in the graveyard, do you think?

A I think the example of Birchbox yesterday versus Ipsy is a good example of a case where you have one business in Ipsy which grew in a very Capital efficient way out of the gate and used social influencers creatively to build a brand which has sustained and grown. And I think with Birchbox, you had a similar level of virality out of the gate, and then they raised a lot of money. So what happens when you raise a lot of capital? You feel a lot of pressure to grow because your Series B and Series C backers are underwriting two aggressive plans you put in a fundraising deck. So then the most natural thing to do when you raise that amount of capital is you'd say, you know, it costs 20 bucks to acquire a customer on Facebook, so I'm going to just start spending money on these paid channels, and what ends up happening is that the organic growth that got you there starts to fade away, so you lose the muscle memory you built, because it always makes more sense to spend money on paid channels that are working than it does to do unscalable things that don't have a direct tie to an economic output, so your growth investor wants to put in a dollar and get Three at the back end. It's hard to do that by saying I'm going to hire someone else who's going to reach out to more influencers who are then going to post about my brand. There's less of a direct tie. So I think the best entrepreneurs fig…

AI assessment note: “I think the example of Birchbox yesterday versus Ipsy is a good example”

Q No, absolutely. I mean, you mentioned quite a few of your portfolio companies there, which brings up the role of VC. And you've said to me before that VC is a struggle. So I'd love to start top down with this one. What elements of the role do you personally find the hardest, Jason?

A I think there's a couple things. I think first and foremost, as a young VC, it takes a long time to know if you're any good. So I was lucky enough to be on the board of Zulily. It went zero to a billion in revenue in five years. It was a great outcome. And after that, proceeded to lose fifteen million dollars. And you go through, in your head, you are, it's an emotional rollercoaster. It takes a long time to know if you're any good. And I Everything you say to an entrepreneur you work with has to have intent. You can't let your stress, what's in your head, or your mood impact them. So let me give you a couple examples. One is, just the other day, I was meeting with an entrepreneur in their office. Their office is packed. It's not a great space, and I said out loud, it looks like a 99 office with Ethernet wires hanging from the ceiling, and as we walked outside, said, you know, as you said that, there were a Dozen employees looking at us, and you know, the biggest complaint employees have is office space. It does not help for you to say that out loud in front of people who are working here. It made me really think about kind of who's listening to what I say. Another example was, I think back a few years ago, and there was a company running a thousand miles per hour, and it was clear they were running into a brick wall. I pushed hard with the CEO to get clarity on where things st…

AI assessment note: “first and foremost, as a young VC, it takes a long time to know”

Q And then I want to finish today on your most recent investment, Jason, and why did you say yes, publicly announced, that is?

A The challenge is we, in large part, due to the Amazon question you just brought up, And due to the fact that we don't announce a lot of investments these days. You know, my last three core investments still haven't been announced, largely out of fear of competition, both from Amazon. I mean, frankly, if something's really working, you don't want to tell a lot of smart EIRs at venture firms around the world that it's really working. I can speak briefly to a seed investment we did in a company called Imperfect Foods. They source Imperfectly shaped fruits and vegetables from the farm and sell them at a discount to what you'd pay at a Safeway or a Costco delivered to your door in a customized box. I love online grocery as a category. It's growing incredibly fast, and what this company is playing on is the customer's desire to save both on value and customers' values around wanting to eliminate food waste and feel like they're being part of Earth's sustainability. So I love when a company can hit on a customer's heartstrings, both in terms of they feel good by using the brand, and they're able to save money versus their alternatives. That's what Nirvana looks like for me, and that's why I'm excited about that one.

AI assessment note: “That's what Nirvana looks like for me, and that's why I'm excited about that one.”

Q No, absolutely. I agree. Capital can't always be a moat, but I do want to start on that theme of moats. We've discussed before the importance of moats, and so I'm intrigued. In today's immensely brand-centric world, you've said that moats matter as much, if not more, than brand. What makes you say this, Jason?

A Well, I think, you know, at Maveram, we invest across a wide variety of industries, everything from retail to real estate to healthcare, and I think across any of those, when you start a company, you start it because you have so Some sort of customer insight that inspires you to start the brand. And then you fight really hard just to get the business to work. And then once it starts to work and scale, you raise money and it's incredibly exciting, but raising money isn't good enough. And I think you have to have this mindset flip where you start to think about five, 10 years out. Once you're large, what makes you unique and what enables you to be a brand that's defensible in the minds of your consumers? So I think there are some rare brands that truly become a part of someone's identity, and in those cases, brand alone can be a moat. I mean, luxury brands are clearly the best example of this, and there's also emerging brands like our portfolio company Everlane, which has a rabid customer base that loves the company's focus on value, on transparency, on sustainability, but in most cases, you have to think more strategically around what are you building that's hard to copy?

AI assessment note: “in most cases, you have to think more strategically around what are you building that's hard to copy”

Q Yeah, no, absolutely. I'm intrigued. We said about kind of looking to those large incumbents. Does Maveron actively think about whether a potential investment would be attractive to an incumbent CPG or retailer?

A You know, I don't want to put Maveron in a box. I mean, physical product companies might be a quarter of what we do. So I think, you know, when we're investing in real estate, for example, we think through what is the potential set of acquirers. I mean, you have big traditional CPG brands. You would have your next gen technology brands like a WeWork or an Airbnb. And we start to think through Is the asset we're investing in something people are going to acquire and why? What might the multiples look like? And multiples is tricky, right? Because a lot of incumbent brands trade at 10 or 12 times EBITDA, and then you have kind of paper unicorns. So it's hard to understand kind of what a valuation multiple might look like. So ultimately, we look at kind of what would an EBITDA multiple be at a mature EBITDA for a business, and kind of what could happen if there's some froth in the market, or alternatively, if there's a macro downturn. So I think you're always looking at If they build this, what's the economic value that's being created, and are there going to be acquisition opportunities along the way, or is really the only exit option a standalone public company?

AI assessment note: “we think through what is the potential set of acquirers. I mean, you have big traditional CPG brands”

Q In terms of kind of creating that economic value, We've discussed before many companies kind of scaling top line and raising big rounds as not creating that economic value. Tell me, when these kind of unsustainable business models come to bear, will we see a graveyard of heavily funded consumer startups with kind of insufficient unit economics in the graveyard, do you think?

A I think the example of Birchbox yesterday versus Ipsy is a good example of a case where you have one business in Ipsy which grew in a very Capital efficient way out of the gate and used social influencers creatively to build a brand which has sustained and grown. And I think with Birchbox, you had a similar level of virality out of the gate, and then they raised a lot of money. So what happens when you raise a lot of capital? You feel a lot of pressure to grow because your Series B and Series C backers are underwriting two aggressive plans you put in a fundraising deck. So then the most natural thing to do when you raise that amount of capital is you'd say, you know, it costs 20 bucks to acquire a customer on Facebook, so I'm going to just start spending money on these paid channels, and what ends up happening is that the organic growth that got you there starts to fade away, so you lose the muscle memory you built, because it always makes more sense to spend money on paid channels that are working than it does to do unscalable things that don't have a direct tie to an economic output, so your growth investor wants to put in a dollar and get Three at the back end. It's hard to do that by saying I'm going to hire someone else who's going to reach out to more influencers who are then going to post about my brand. There's less of a direct tie. So I think the best entrepreneurs fig…

AI assessment note: “I think the example of Birchbox yesterday versus Ipsy is a good example of a case”

Q Amazon does more to make the market than it does destroy it. Thoughts?

A Amazon scares me. Every single Series B that our portfolio companies raise, the question raised is, what's Amazon going to do? The fact that they significantly reduced the price of ring post the acquisition, you look at that and say it's very hard to make a connected home investment now. Amazon is unafraid to step on the neck of a competitor. I do think that you can beat Amazon, so what we're looking for is how. I think there's the best way to beat Amazon is with heart. I think Amazon doesn't create the emotional connection with a brand that, say, a Chewy's did, or a Zappos did. The other way to beat Amazon is by focusing on an area where their best people aren't focused, so I think there's certainly retail categories, but I wouldn't want to go up against Amazon and voice, for example, just too hard given the amount of focus they have there.

AI assessment note: “Amazon is unafraid to step on the neck of a competitor.”

Q come. I do want to discuss, though, the macro environment. You mentioned that General Assembly's exit. We've seen many large acquisitions in the kind of maybe more traditional software consumer space, from Dollar Shave Club to Bonobos, so I have to ask, do you believe there's a consolidatory environment ahead of us, or do you think we will see this crop of next-gen, incredible companies that Dollkills could scale into?

A I think the big question to ask is, can you build a sustainable brand over decades? I think there's a number of elements to that. We have a portfolio company called Trupanion, which is a health insurance business for pets. It's integrated into the point of sale at veterinary offices and has had an incredible tailwind in terms of the markets growing and they're a market leader. And you have incredible revenue predictability in January of any given year. So I think if you have that set of characteristics, that sets up well as a public company. I look at a Chewy's as an example, and the challenge with many of these businesses, which are driven by CAC, is they kind of work until they don't. CAC doesn't gradually go from 20 to 25 to 30. It goes from 21 day to 80 the next, and I think in many cases where you've created a online category leader, the best solution really is to sell it to a offline previous category leader that's looking to maintain their relevance. So I think you need to really look through, are you building something that's of deep need to the fortune 500 brands who are pounded on every analyst call asked about what's your digital strategy, or are you building something that can become one of those fortune 500 brands? And I think that differs based upon the company.

AI assessment note: “I think that differs based upon the company.”

Q Amazon does more to make the market than it does destroy it. Thoughts?

A Amazon scares me. Every single Series B that our portfolio companies raise, the question raised is, what's Amazon going to do? The fact that they significantly reduced the price of ring post the acquisition, you look at that and say it's very hard to make a connected home investment now. Amazon is unafraid to step on the neck of a competitor. I do think that you can beat Amazon, so what we're looking for is how. I think there's the best way to beat Amazon is with heart. I think Amazon doesn't create the emotional connection with a brand that, say, a Chewy's did, or a Zappos did. The other way to beat Amazon is by focusing on an area where their best people aren't focused, so I think there's certainly retail categories, but I wouldn't want to go up against Amazon and voice, for example, just too hard given the amount of focus they have there.

AI assessment note: “Amazon is unafraid to step on the neck of a competitor.”

Q this kind of, you know, we have opposing worlds in some cases, where you have the much harder, more confident, bold VCs, and then you have the Brad Fells of the world who are very much more open to authenticity and transparency. How do you think about that and being your authentic self when you are stressed and you are concerned? And is it not right that you show it?

A My partner, Dan Levitan, usually says the best and worst entrepreneurs make you very nervous. I think the best entrepreneurs we work with, the ones who are able to manage putting a company through hyper growth, inherently are aggressive in their orientation. And many times are willing to push hard, even in times where there's not a clear amount of information out there. As a board member and fiduciary, that often makes you nervous. I think you have to balance agita, which you might be feeling, with the fact that the CEO is someone who you're on their bus, and you trust that they're making the right decisions going forward. There's an argument around how aggressive an entrepreneur should be. If you think they're running the train off the track, I think you have the obligation to tell them that. But if you're just generally nervous around a number of things, I think you have to constructively talk through those without making the entrepreneur more stressed than they inevitably already are. So I think there's a fine balance there.

AI assessment note: “constructively talk through those without making the entrepreneur more stressed than they inevitably already are”

Q this kind of, you know, we have opposing worlds in some cases, where you have the much harder, more confident, bold VCs, and then you have the Brad Fells of the world who are very much more open to authenticity and transparency. How do you think about that and being your authentic self when you are stressed and you are concerned? And is it not right that you show it?

A My partner, Dan Levitan, usually says the best and worst entrepreneurs make you very nervous. I think the best entrepreneurs we work with, the ones who are able to manage putting a company through hyper growth, inherently are aggressive in their orientation. And many times are willing to push hard, even in times where there's not a clear amount of information out there. As a board member and fiduciary, that often makes you nervous. I think you have to balance agita, which you might be feeling, with the fact that the CEO is someone who you're on their bus, and you trust that they're making the right decisions going forward. There's an argument around how aggressive an entrepreneur should be. If you think they're running the train off the track, I think you have the obligation to tell them that. But if you're just generally nervous around a number of things, I think you have to constructively talk through those without making the entrepreneur more stressed than they inevitably already are. So I think there's a fine balance there.

AI assessment note: “constructively talk through those without making the entrepreneur more stressed than they inevitably already are”

Q No, absolutely. I agree. Capital can't always be a moat, but I do want to start on that theme of moats. We've discussed before the importance of moats, and so I'm intrigued. In today's immensely brand-centric world, you've said that moats matter as much, if not more, than brand. What makes you say this, Jason?

A Well, I think, you know, at Maveram, we invest across a wide variety of industries, everything from retail to real estate to healthcare, and I think across any of those, when you start a company, you start it because you have so Some sort of customer insight that inspires you to start the brand. And then you fight really hard just to get the business to work. And then once it starts to work and scale, you raise money and it's incredibly exciting, but raising money isn't good enough. And I think you have to have this mindset flip where you start to think about five, 10 years out. Once you're large, what makes you unique and what enables you to be a brand that's defensible in the minds of your consumers? So I think there are some rare brands that truly become a part of someone's identity, and in those cases, brand alone can be a moat. I mean, luxury brands are clearly the best example of this, and there's also emerging brands like our portfolio company Everlane, which has a rabid customer base that loves the company's focus on value, on transparency, on sustainability, but in most cases, you have to think more strategically around what are you building that's hard to copy?

AI assessment note: “in most cases, you have to think more strategically around what are you building that's hard to copy”

Q Yeah, no, absolutely. I'm intrigued. We said about kind of looking to those large incumbents. Does Maveron actively think about whether a potential investment would be attractive to an incumbent CPG or retailer?

A You know, I don't want to put Maveron in a box. I mean, physical product companies might be a quarter of what we do. So I think, you know, when we're investing in real estate, for example, we think through what is the potential set of acquirers. I mean, you have big traditional CPG brands. You would have your next gen technology brands like a WeWork or an Airbnb. And we start to think through Is the asset we're investing in something people are going to acquire and why? What might the multiples look like? And multiples is tricky, right? Because a lot of incumbent brands trade at 10 or 12 times EBITDA, and then you have kind of paper unicorns. So it's hard to understand kind of what a valuation multiple might look like. So ultimately, we look at kind of what would an EBITDA multiple be at a mature EBITDA for a business, and kind of what could happen if there's some froth in the market, or alternatively, if there's a macro downturn. So I think you're always looking at If they build this, what's the economic value that's being created, and are there going to be acquisition opportunities along the way, or is really the only exit option a standalone public company?

AI assessment note: “we think through what is the potential set of acquirers. I mean, you have big traditional CPG brands”

Q come. I do want to discuss, though, the macro environment. You mentioned that General Assembly's exit. We've seen many large acquisitions in the kind of maybe more traditional software consumer space, from Dollar Shave Club to Bonobos, so I have to ask, do you believe there's a consolidatory environment ahead of us, or do you think we will see this crop of next-gen, incredible companies that Dollkills could scale into?

A I think the big question to ask is, can you build a sustainable brand over decades? I think there's a number of elements to that. We have a portfolio company called Trupanion, which is a health insurance business for pets. It's integrated into the point of sale at veterinary offices and has had an incredible tailwind in terms of the markets growing and they're a market leader. And you have incredible revenue predictability in January of any given year. So I think if you have that set of characteristics, that sets up well as a public company. I look at a Chewy's as an example, and the challenge with many of these businesses, which are driven by CAC, is they kind of work until they don't. CAC doesn't gradually go from 20 to 25 to 30. It goes from 21 day to 80 the next, and I think in many cases where you've created a online category leader, the best solution really is to sell it to a offline previous category leader that's looking to maintain their relevance. So I think you need to really look through, are you building something that's of deep need to the fortune 500 brands who are pounded on every analyst call asked about what's your digital strategy, or are you building something that can become one of those fortune 500 brands? And I think that differs based upon the company.

AI assessment note: “best solution really is to sell it to a offline previous category leader”

Q Can I ask, you mentioned the element of kind of the incredible ride with Zulily to losing fifteen million dollars. How do you personally deal with the shit hit the fan moment, so to speak, Jason?

A I think a lot of this is around, are you getting better? I think you look at the cohort of companies you're investing in year over year over year. The vast majority of VCs are mediocre. That's why the asset class generally is poor, and the top funds generally perform quite well. So I think you need to look yourself in the eye, honestly, and Say, are you learning, and are you getting better? I think you, you really learn the business over your first couple of years writing checks, and I think you have to look yourself in the eye and say, do you think you have the insight to really generate venture scale returns or not? Fortunately, I've been able to do that over the past couple of years and answer that yes to myself, but the reality is there's still a lot on the come. I mean, General Assembly was my first outcome in terms of providing a good-sized check back to, uh, limited partners, and there's still a lot on the come.

AI assessment note: “So I think you need to look yourself in the eye, honestly, and Say, are you learning”

Q Can I ask, you mentioned the element of kind of the incredible ride with Zulily to losing fifteen million dollars. How do you personally deal with the shit hit the fan moment, so to speak, Jason?

A I think a lot of this is around, are you getting better? I think you look at the cohort of companies you're investing in year over year over year. The vast majority of VCs are mediocre. That's why the asset class generally is poor, and the top funds generally perform quite well. So I think you need to look yourself in the eye, honestly, and Say, are you learning, and are you getting better? I think you, you really learn the business over your first couple of years writing checks, and I think you have to look yourself in the eye and say, do you think you have the insight to really generate venture scale returns or not? Fortunately, I've been able to do that over the past couple of years and answer that yes to myself, but the reality is there's still a lot on the come. I mean, General Assembly was my first outcome in terms of providing a good-sized check back to, uh, limited partners, and there's still a lot on the come.

AI assessment note: “I think a lot of this is around, are you getting better?”