The Exchanges

Q Yeah, I totally get that. When we go back to the alleys and the micro ones for the fundraise, What do you advise founders when they get multiple term sheets and the heat is on?

A There's kind of two groups of firms. There's like the kingmaker firms that you should accept at any price. Um, one example would be Founders Fund or Sequoia, uh, or people like that. Um, and so if you get an offer from them at X and the offer from, um, someone else is at two X, you should take their offer because even if you're maximizing, um, amount raised and minimizing dilution, in the long run, Um, it, it, you're king made, and it will save you in the next round. Um, so you should definitely go for, but the, the, another mistake these entrepreneurs make is they have the list of the kingmaker firms as too big. Um, there, there's probably like some tier two firm that think very highly of themselves that aren't in that same level as, as Founders Fund or Sequoia.

AI assessment note: “There's like the kingmaker firms that you should accept at any price.”

Q Do you think chat interface is the right UI for the future of consumer AI?

A It's good in some areas, terrible in others. I think for the travel use case, it's terrible. There's a big debate on X going on about this right now. Um, the reason it works for us is you're taking kind of unstructured responses and making them structured. So, um, when I started Do Not Pay, I did a Freedom of Information Act request in the UK for the top 12 reasons why parking tickets are cancelled. Poor signage, um, the parking bay being legally too small, all of the reasons. And the problem, the reason I did a chatbot is the consumers had no idea which reason to pick, and they'd, and they'd, um, pick the wrong reason, or they just wouldn't select what, what was the best thing to pick. But, so when I did chat, they could write whatever gibberish they wanted, and it would match them to the correct defense. And that was really the, the unlock of do not pay.

AI assessment note: “It's good in some areas, terrible in others.”

Q Are you able to predict the ones that will be hot versus not?

A No, the, the opposite is true, actually. The, the crazier it is, um, the, um, the better they do. Um, so Ali Ansari is a micro one, is objectively my best performing investment in terms of multiple. The founders get upset when I reveal exact valuation numbers, but let's say over a thousand X, well over a thousand X, um, and based on the kind of the scale of the business. Um, and When I met him, he, um, I said, I'll invest only on three conditions. So as a California LLC, Uninvestable, it has to be Delaware C Corp. Um, he was based in kind of Los Angeles as a solo founder. Um, and he was running a kind of a staffing business, um, which there's a million staffing companies, even in the UK. And so I said, you have to move to the Bay Area. You can live in my spare bedroom. Um, You can, um, you have to reincorporate in Delaware or shift to Delaware. Um, and, um, you have to use, do a software style product. I don't mind what you do, but it can be anything. And we grinded and he's the hardest, one of the hardest working people I've ever seen. Um, and actually, um, he still lives in my building to this day. And I like come at 12 AM and he's like working like, um, middle of the night. And he did all those three things and it changed everything.

AI assessment note: “No, the, the opposite is true, actually. The, the crazier it is”

Q It is the shittest question, um, which I've often been asked, but actually I've found there's more and more nuance to it, and Dak should, Greptile told me I should ask this. He said, you back founders that others maybe wouldn't when you actually look at them in that instance. What is it that you look for that is non-obvious or atypical in the founders that you do invest in?

A So, the number one thing I look for is a deep connection to the problem that they won't give up. So, I, I go back to my own journey. I'm Mr. Do Not Pay. Um, I'm the type of person to get 10 parking tickets just to test out the service or wait on hold for hours to save 20 pounds or dollars, I guess. Um, and I look for those founders with, with a really deep connection to the problem. So, for example, I was in the very, very first pre-precede of a company called Owner.com with Adam Guild, and He built the initial version of his product to help his mother's dog grooming business. And so many of these founders come up with these BS stories, but, um, that is a real story and he really did it to help his mother. And similarly with me, I really did it because I hate the government with parking tickets. And so I look for that sort of founder market fit where they're, they're their own first customer. And I joke, if you're building for yourself, at least you have one customer.

AI assessment note: “the number one thing I look for is a deep connection to the problem”

Q Going back to the core ingredient of success and venture that the founders themselves, you, you're a dropout. Um, how do you think about the value of university today? And if you were sitting with, you know, a university student today, advising them on whether it's worth staying or worth pursuing a dream?

A People see their life as paint by numbers. So they say, if I go graduate, I go to business school, I go work at X company, then in five years I'll be ready to start my company. The problem is the world changes so quickly that the paint by numbers approach doesn't work anymore. And so I would say to any founder who has an idea of what they want to do, they should just go for it, and the world won't wait for them. Um, on the other hand, you see a lot of people drop out just for the sake of it. In fact, um, When I, when I dropped out, um, in 2018, I actually had like one or two classes left at Stanford. So I was very close. Um, it was very kind of taboo to drop out. Um, now dropping out is almost the establishment. So you see people drop out just for the sake of it. And I think that's definitely wrong, um, because there are huge advantages to, to being in college. Um, even if you're doing a startup, like you can recruit your friends, um, you have your college email and people will, um, Take you more seriously if you email them from Stanford or MIT.edu. Um, also people give college students more of a free pass. Um, if all of these founders who are getting this controversial stuff are in college, they, they might, they might be able to kind of pivot more quickly.

AI assessment note: “I would say to any founder who has an idea of what they want”

Q Do you think chat interface is the right UI for the future of consumer AI?

A It's good in some areas, terrible in others. I think for the travel use case, it's terrible. There's a big debate on X going on about this right now. Um, the reason it works for us is you're taking kind of unstructured responses and making them structured. So, um, when I started Do Not Pay, I did a Freedom of Information Act request in the UK for the top 12 reasons why parking tickets are cancelled. Poor signage, um, the parking bay being legally too small, all of the reasons. And the problem, the reason I did a chatbot is the consumers had no idea which reason to pick, and they'd, and they'd, um, pick the wrong reason, or they just wouldn't select what, what was the best thing to pick. But, so when I did chat, they could write whatever gibberish they wanted, and it would match them to the correct defense. And that was really the, the unlock of do not pay.

AI assessment note: “It's good in some areas, terrible in others.”

Q Why is it that you place such a bet and conviction on very young founders so much earlier than maybe others would?

A So I think young founders have no option but to succeed. Um, if you back a Google engineer, um, the first thing they'll do is they'll hire 10 of their friends, and it's like this endless, like, scheme of hiring. Um, the first thing a young founder will do is they'll build the product, and they don't have anything to fall back on. Especially if they have a chip on their shoulder, they, they really, the only thing they can do is succeed. And so I think the grit level with young founders is 10 X, and Being an entrepreneur is like eating glass. If you don't, like, um, have a true kind of dedication to win, uh, they'll, they'll give up at the first opportunity.

AI assessment note: “grit level with young founders is 10 X”

Q Browder Hotel, let's go. Um, along the way, you said, hey, um, you'll be worth hundreds of millions, blah, blah, blah. How do you advise founders on the ability to take secondaries off the table early? We're seeing it more and more earlier and earlier. How do you advise them?

A I think that the people buying these secondaries are sharks. If, if someone, if someone, um, is emailing you asking to buy Anthropix shares, they, the value of Anthropix is probably going to go up. And the same is true with these founders. And so I would say to them, um, if you're being bombarded with secondary offers, perhaps they have more experience with the market than even you do as a founder of your own business. And so I think a lot of founders, they've regretted, a lot of my friends, they've regretted taking secondaries. Um, because they've got one of these Kingmaker firms in, and then the valuation has gone up three X in a few weeks. So why not do the secondary at the higher price? Um, so I would say if it's too much inbound, um, there could be something that they have within their investing experience that as a founder, maybe it's their first time business. They maybe shouldn't jump to, to sell too quickly.

AI assessment note: “They maybe shouldn't jump to, to sell too quickly.”

Q It is the shittest question, um, which I've often been asked, but actually I've found there's more and more nuance to it, and Dak should, Greptile told me I should ask this. He said, you back founders that others maybe wouldn't when you actually look at them in that instance. What is it that you look for that is non-obvious or atypical in the founders that you do invest in?

A So, the number one thing I look for is a deep connection to the problem that they won't give up. So, I, I go back to my own journey. I'm Mr. Do Not Pay. Um, I'm the type of person to get 10 parking tickets just to test out the service or wait on hold for hours to save 20 pounds or dollars, I guess. Um, and I look for those founders with, with a really deep connection to the problem. So, for example, I was in the very, very first pre-precede of a company called Owner.com with Adam Guild, and He built the initial version of his product to help his mother's dog grooming business. And so many of these founders come up with these BS stories, but, um, that is a real story and he really did it to help his mother. And similarly with me, I really did it because I hate the government with parking tickets. And so I look for that sort of founder market fit where they're, they're their own first customer. And I joke, if you're building for yourself, at least you have one customer.

AI assessment note: “the number one thing I look for is a deep connection to the problem”

Q Yeah, I totally get that. When we go back to the alleys and the micro ones for the fundraise, What do you advise founders when they get multiple term sheets and the heat is on?

A There's kind of two groups of firms. There's like the kingmaker firms that you should accept at any price. Um, one example would be Founders Fund or Sequoia, uh, or people like that. Um, and so if you get an offer from them at X and the offer from, um, someone else is at two X, you should take their offer because even if you're maximizing, um, amount raised and minimizing dilution, in the long run, Um, it, it, you're king made, and it will save you in the next round. Um, so you should definitely go for, but the, the, another mistake these entrepreneurs make is they have the list of the kingmaker firms as too big. Um, there, there's probably like some tier two firm that think very highly of themselves that aren't in that same level as, as Founders Fund or Sequoia.

AI assessment note: “There's like the kingmaker firms that you should accept at any price.”

Q Going back to the core ingredient of success and venture that the founders themselves, you, you're a dropout. Um, how do you think about the value of university today? And if you were sitting with, you know, a university student today, advising them on whether it's worth staying or worth pursuing a dream?

A People see their life as paint by numbers. So they say, if I go graduate, I go to business school, I go work at X company, then in five years I'll be ready to start my company. The problem is the world changes so quickly that the paint by numbers approach doesn't work anymore. And so I would say to any founder who has an idea of what they want to do, they should just go for it, and the world won't wait for them. Um, on the other hand, you see a lot of people drop out just for the sake of it. In fact, um, When I, when I dropped out, um, in 2018, I actually had like one or two classes left at Stanford. So I was very close. Um, it was very kind of taboo to drop out. Um, now dropping out is almost the establishment. So you see people drop out just for the sake of it. And I think that's definitely wrong, um, because there are huge advantages to, to being in college. Um, even if you're doing a startup, like you can recruit your friends, um, you have your college email and people will, um, Take you more seriously if you email them from Stanford or MIT.edu. Um, also people give college students more of a free pass. Um, if all of these founders who are getting this controversial stuff are in college, they, they might, they might be able to kind of pivot more quickly.

AI assessment note: “there are huge advantages to, to being in college.”

Q Dude. What did you see in him? I, I don't mean that rudely to Ali, he's, I've seen actually interviews, he's clearly brilliant now, but you learn and develop. Staffing business, how, I'm sorry to be rude, how uninteresting, as you said, there's millions of them living in, what did you see in him that made you so convinced that he would pivot, change the company location, change his location?

A Never give up. Um, if you back someone who's above average IQ, very smart, um, and never give up, of course they'll succeed. And I think this is actually a mistake a lot of VCs are making. They are focusing too much on, on these credentials. So there's a race right now to back the math Olympiads. Um, VCs are like going to spelling bees and math competitions in high school. And I think IQ is very important. You need someone smart, but Much more important is they'll never give up. And I could tell from my own journey and interviewing people for the Teal Fellowship and seeing so many founders that Ali was someone who has never give up. And he's, he's, um, overcome huge challenges along the way to kind of build his business.

AI assessment note: “Ali was someone who has never give up.”

Q VCs are sharks. I love that. Um, it's a good title. Um, what other ways do you advise founders to just be mindful of a shark-like mentality towards VCs or from VCs?

A So I say to the young founders, the VCs will say anything to get you to sign right there and then. Anything. They'll say, I, they, so they'll reverse engineer what the founder is looking for and say, oh, I'm friends. I'm buddies with that, uh, guy. Um, I know someone at that company with golf buddies. I can get him to be a customer. Like right now I can introduce you to so many customers. And they just say exactly what the founders want to hear. And these poor young founders, they're so impressionable. Sometimes they sign the safe on the spot. And afterwards, of course, it never materializes. They never get that, ah, customer that they were wanting because it turns out they weren't as close golf buddies as the person made it out. So I say to founders, do not sign on the spot. And going back to my offers, I don't make them sign on the spot. It's just too much, especially for these young founders. I say, you have the night to think about it. I think decisiveness is a key quality. So I do want to know by the next morning, if not, it's done. But they can't sign on the spot.

AI assessment note: “So I say to founders, do not sign on the spot.”

Q there. I'm seeing more and more funds, uh, founders, sorry, who are like, oh, I'm being very dilution sensitive with this round, and it's often very early rounds, and they'll do five percent, maybe 10% dilution on a seed round or a pre-seed round, where it used to be 1520. That's hard for me as a fund. What do you advise founders on dilution sensitivity from your lessons and observations?

A I think it's, it's nonsense. I think, um, they shouldn't do something stupid, like sell their company to, sell 50% of their company to a Midwest angel for like a hundred K like you see with some of these shark tank deals. But at the same time, the number one thing I say to, especially these young founders I back is either it succeeds or it doesn't. If it succeeds, at a minimum, you're worth hundreds of millions or billions. Um, you're on the cover of magazines. It's life changing. If it fails, you're nothing. So it's best to if, if,, if taking that extra money can reduce the chance of failure by even five percent, the kind of expected value is infinity in terms of life improvement. Five percent of infinity, you should still do it.

AI assessment note: “I think it's, it's nonsense.”

Q Has Trump been better for business for you?

A Absolutely. I, I think that whether you agree or disagree with what's going on right now, um, it's objective that for tech, um, the current administration is a lot better. Um, Lena Kahn in my view is, is evil. Um, several companies I invested in had the acquisitions blocked by, by the kind of Lena Kahn style approach. Um, and The, the worst kind of Lina Khan story I heard is there's like a biotech company that, um, was being acquired by a much larger kind of pharmaceutical company, and Lina Khan's FTC blocked the acquisition, and to this day, and the drug didn't get developed, and to this day, 50 people die a year because, because of the acquisition being blocked. So I actually think that, um, the, the kind of tech policies of the last administration were not very good.

AI assessment note: “Absolutely. I, I think that whether you agree or disagree”

Q Why is it that you place such a bet and conviction on very young founders so much earlier than maybe others would?

A So I think young founders have no option but to succeed. Um, if you back a Google engineer, um, the first thing they'll do is they'll hire 10 of their friends, and it's like this endless, like, scheme of hiring. Um, the first thing a young founder will do is they'll build the product, and they don't have anything to fall back on. Especially if they have a chip on their shoulder, they, they really, the only thing they can do is succeed. And so I think the grit level with young founders is 10 X, and Being an entrepreneur is like eating glass. If you don't, like, um, have a true kind of dedication to win, uh, they'll, they'll give up at the first opportunity.

AI assessment note: “I think young founders have no option but to succeed.”

Q Browder Hotel, let's go. Um, along the way, you said, hey, um, you'll be worth hundreds of millions, blah, blah, blah. How do you advise founders on the ability to take secondaries off the table early? We're seeing it more and more earlier and earlier. How do you advise them?

A I think that the people buying these secondaries are sharks. If, if someone, if someone, um, is emailing you asking to buy Anthropix shares, they, the value of Anthropix is probably going to go up. And the same is true with these founders. And so I would say to them, um, if you're being bombarded with secondary offers, perhaps they have more experience with the market than even you do as a founder of your own business. And so I think a lot of founders, they've regretted, a lot of my friends, they've regretted taking secondaries. Um, because they've got one of these Kingmaker firms in, and then the valuation has gone up three X in a few weeks. So why not do the secondary at the higher price? Um, so I would say if it's too much inbound, um, there could be something that they have within their investing experience that as a founder, maybe it's their first time business. They maybe shouldn't jump to, to sell too quickly.

AI assessment note: “They maybe shouldn't jump to, to sell too quickly.”

Q Do you worry about the susceptibility of founders when they're that young? Like, bluntly, I see a lot of very young founders now getting so caught up in the fundraising game that it's like, it's almost a game of, I raised a round and from who? And it's like, we're building a business to create a product for customers. Let's not forget why we're here. Do you worry about that?

A Yes, so I escaped the UK to go to Stanford, and there was a, um, Stanford Review article, which is a student publication, and the publication said, It's easier for a Stanford student to get into YC than it is for them to get a job now. And so we've seen a rise of, um, I would say fake founders where they don't have that connection to their problem and they're just starting something just because it's cool or because they have nothing to do for the summer. And actually being an investor, you have to be very careful about backing students over the summer because part of the signal is they've dropped out and they're going all in on this, but of course during the summer you can't actually tell if they've dropped out. So Um, I'm actually, it's scaled back a bit during the summer, not because I'm in Capri like all the other VCs, but because you have to worry about these fake founders.

AI assessment note: “we've seen a rise of, um, I would say fake founders”

Q Dude. What did you see in him? I, I don't mean that rudely to Ali, he's, I've seen actually interviews, he's clearly brilliant now, but you learn and develop. Staffing business, how, I'm sorry to be rude, how uninteresting, as you said, there's millions of them living in, what did you see in him that made you so convinced that he would pivot, change the company location, change his location?

A Never give up. Um, if you back someone who's above average IQ, very smart, um, and never give up, of course they'll succeed. And I think this is actually a mistake a lot of VCs are making. They are focusing too much on, on these credentials. So there's a race right now to back the math Olympiads. Um, VCs are like going to spelling bees and math competitions in high school. And I think IQ is very important. You need someone smart, but Much more important is they'll never give up. And I could tell from my own journey and interviewing people for the Teal Fellowship and seeing so many founders that Ali was someone who has never give up. And he's, he's, um, overcome huge challenges along the way to kind of build his business.

AI assessment note: “Ali was someone who has never give up.”

Q there. I'm seeing more and more funds, uh, founders, sorry, who are like, oh, I'm being very dilution sensitive with this round, and it's often very early rounds, and they'll do five percent, maybe 10% dilution on a seed round or a pre-seed round, where it used to be 1520. That's hard for me as a fund. What do you advise founders on dilution sensitivity from your lessons and observations?

A I think it's, it's nonsense. I think, um, they shouldn't do something stupid, like sell their company to, sell 50% of their company to a Midwest angel for like a hundred K like you see with some of these shark tank deals. But at the same time, the number one thing I say to, especially these young founders I back is either it succeeds or it doesn't. If it succeeds, at a minimum, you're worth hundreds of millions or billions. Um, you're on the cover of magazines. It's life changing. If it fails, you're nothing. So it's best to if, if,, if taking that extra money can reduce the chance of failure by even five percent, the kind of expected value is infinity in terms of life improvement. Five percent of infinity, you should still do it.

AI assessment note: “I think it's, it's nonsense. I think, um, they shouldn't do something stupid”

Q VCs are sharks. I love that. Um, it's a good title. Um, what other ways do you advise founders to just be mindful of a shark-like mentality towards VCs or from VCs?

A So I say to the young founders, the VCs will say anything to get you to sign right there and then. Anything. They'll say, I, they, so they'll reverse engineer what the founder is looking for and say, oh, I'm friends. I'm buddies with that, uh, guy. Um, I know someone at that company with golf buddies. I can get him to be a customer. Like right now I can introduce you to so many customers. And they just say exactly what the founders want to hear. And these poor young founders, they're so impressionable. Sometimes they sign the safe on the spot. And afterwards, of course, it never materializes. They never get that, ah, customer that they were wanting because it turns out they weren't as close golf buddies as the person made it out. So I say to founders, do not sign on the spot. And going back to my offers, I don't make them sign on the spot. It's just too much, especially for these young founders. I say, you have the night to think about it. I think decisiveness is a key quality. So I do want to know by the next morning, if not, it's done. But they can't sign on the spot.

AI assessment note: “So I say to founders, do not sign on the spot.”

Q Has Trump been better for business for you?

A Absolutely. I, I think that whether you agree or disagree with what's going on right now, um, it's objective that for tech, um, the current administration is a lot better. Um, Lena Kahn in my view is, is evil. Um, several companies I invested in had the acquisitions blocked by, by the kind of Lena Kahn style approach. Um, and The, the worst kind of Lina Khan story I heard is there's like a biotech company that, um, was being acquired by a much larger kind of pharmaceutical company, and Lina Khan's FTC blocked the acquisition, and to this day, and the drug didn't get developed, and to this day, 50 people die a year because, because of the acquisition being blocked. So I actually think that, um, the, the kind of tech policies of the last administration were not very good.

AI assessment note: “Absolutely. I, I think that whether you agree or disagree”

Q What's your favorite story of serendipity from San Francisco?

A I, I think, um, there's a class at Stanford, um, and it was only 20 people, and, um, as I was not, I was focused on building my business, not necessarily, um, focused on classes, and it was taught by a billionaire, um, Pat Hanrahan, who's the founder of Tableau, um, and just the fact that you can have, like, billionaire professors teaching classes of 20 people is something that wouldn't exist anywhere outside of the Bay Area, and I remember, like, Um, working through a problem set, and he was like spending like 30 minutes with me working through this very elementary problem, and I was thinking, why is he spending his time? And, and I realized it's all about human connection, and he just wants to kind of meet interesting people, and I think the same is true across the Bay Area, where everyone is just a human, and you can kind of short circuit the kind of business guards that people put on just by having a human connection with them.

AI assessment note: “Pat Hanrahan, who's the founder of Tableau, um, and just the fact that you can”

Q Are you able to predict the ones that will be hot versus not?

A No, the, the opposite is true, actually. The, the crazier it is, um, the, um, the better they do. Um, so Ali Ansari is a micro one, is objectively my best performing investment in terms of multiple. The founders get upset when I reveal exact valuation numbers, but let's say over a thousand X, well over a thousand X, um, and based on the kind of the scale of the business. Um, and When I met him, he, um, I said, I'll invest only on three conditions. So as a California LLC, Uninvestable, it has to be Delaware C Corp. Um, he was based in kind of Los Angeles as a solo founder. Um, and he was running a kind of a staffing business, um, which there's a million staffing companies, even in the UK. And so I said, you have to move to the Bay Area. You can live in my spare bedroom. Um, You can, um, you have to reincorporate in Delaware or shift to Delaware. Um, and, um, you have to use, do a software style product. I don't mind what you do, but it can be anything. And we grinded and he's the hardest, one of the hardest working people I've ever seen. Um, and actually, um, he still lives in my building to this day. And I like come at 12 AM and he's like working like, um, middle of the night. And he did all those three things and it changed everything.

AI assessment note: “No, the, the opposite is true, actually.”

Q Do you worry about the susceptibility of founders when they're that young? Like, bluntly, I see a lot of very young founders now getting so caught up in the fundraising game that it's like, it's almost a game of, I raised a round and from who? And it's like, we're building a business to create a product for customers. Let's not forget why we're here. Do you worry about that?

A Yes, so I escaped the UK to go to Stanford, and there was a, um, Stanford Review article, which is a student publication, and the publication said, It's easier for a Stanford student to get into YC than it is for them to get a job now. And so we've seen a rise of, um, I would say fake founders where they don't have that connection to their problem and they're just starting something just because it's cool or because they have nothing to do for the summer. And actually being an investor, you have to be very careful about backing students over the summer because part of the signal is they've dropped out and they're going all in on this, but of course during the summer you can't actually tell if they've dropped out. So Um, I'm actually, it's scaled back a bit during the summer, not because I'm in Capri like all the other VCs, but because you have to worry about these fake founders.

AI assessment note: “you have to worry about these fake founders”

Q Do you think, you know, your father's an incredible figure, incredibly respected figure, but there was a little bit of a safety net. Do you think that your ability to have a safety net slightly enabled you to drop out?

A No, I think, um, the opposite was true. So I was sitting, um, and I've never told this story before, but I was, um, sitting at a poker game at Stanford with my friends, and this is no exaggeration, I, I got a, um, news alert, um, saying, so my father is a human rights activist, and he's like an enemy of the Russians, and it was a news alert about my father And that he'd just been arrested. They just, the Russians managed to get him. And I think it's taught, it's just made me incredibly paranoid. And so I, I think I was more paranoid, um, because of most people, um, don't have the mafia after your family. And, and so I, I was, um, always like paranoid and fearless. And so I think actually, um, it's kind of, it kind of made me More, more paranoid to like.

AI assessment note: “No, I think, um, the opposite was true.”

Q What's your favorite story of serendipity from San Francisco?

A I, I think, um, there's a class at Stanford, um, and it was only 20 people, and, um, as I was not, I was focused on building my business, not necessarily, um, focused on classes, and it was taught by a billionaire, um, Pat Hanrahan, who's the founder of Tableau, um, and just the fact that you can have, like, billionaire professors teaching classes of 20 people is something that wouldn't exist anywhere outside of the Bay Area, and I remember, like, Um, working through a problem set, and he was like spending like 30 minutes with me working through this very elementary problem, and I was thinking, why is he spending his time? And, and I realized it's all about human connection, and he just wants to kind of meet interesting people, and I think the same is true across the Bay Area, where everyone is just a human, and you can kind of short circuit the kind of business guards that people put on just by having a human connection with them.

AI assessment note: “there's a class at Stanford... taught by a billionaire, um, Pat Hanrahan”

Q Do you worry about the level of fraud that's going on with the current ecosystem, with the founders that we're seeing? Uh, do you worry about that increasing with the pressure we're putting on?

A I think that at the earliest stages, the only fraud there can be is ideological, which is not illegal. It's not illegal to say you've had childhood trauma when, when you've actually grown up middle class, and that's a huge, huge issue. It's, it's interesting because the best founders are hustlers in some ways. Um, so it's, it's a, it's a balance. Um, I actually think it's becoming easier and easier. The world is becoming much more transparent. Um, you have Twitter sleuths who Will detect anything as like several companies recently have been taken down because of like someone published an article about SOC two or something like that and the entire company is done. Um, so I think actually fraud that the illegal type of fraud is becoming harder.

AI assessment note: “I think actually fraud that the illegal type of fraud is becoming harder.”

Q Co-founder dispute is one that really kills companies, I find. How do you measure, analyze, co-founder relationships when they're staying with you? And any lessons learned?

A So the good news is that with all sort of red flags, young founders are very bad at lying. So, um, if they say we're kind of best friends, and then they start interrupting each other, you kind of know that that's not true. Um, so I look for kind of a long history. The best co-founder dynamic that I've seen among young founders is friends from high school. So I was the first, and they lived with me as well. I was the first investor in a company called Halladier very recently. And They were, uh, friends from high school, went to different colleges, dropped out and rejoined. So that's the, that's the kind of perfect, uh, dynamic. Um, one thing I'll say is I, I've noticed a really worrying trend of people reverse engineering what I say on podcasts and in articles to pitch me exactly what I'm looking for. So sometimes, so just now I said, um, friends from high school, I can guarantee you in three weeks, Someone is going to say we were best friends in high school, and so this is a worrying trend where they're using Claude and ChatGPT deep research, and so I have to worry about that.

AI assessment note: “I look for kind of a long history. The best co-founder dynamic”

Q Do you worry about the level of fraud that's going on with the current ecosystem, with the founders that we're seeing? Uh, do you worry about that increasing with the pressure we're putting on?

A I think that at the earliest stages, the only fraud there can be is ideological, which is not illegal. It's not illegal to say you've had childhood trauma when, when you've actually grown up middle class, and that's a huge, huge issue. It's, it's interesting because the best founders are hustlers in some ways. Um, so it's, it's a, it's a balance. Um, I actually think it's becoming easier and easier. The world is becoming much more transparent. Um, you have Twitter sleuths who Will detect anything as like several companies recently have been taken down because of like someone published an article about SOC two or something like that and the entire company is done. Um, so I think actually fraud that the illegal type of fraud is becoming harder.

AI assessment note: “fraud that the illegal type of fraud is becoming harder”