The Exchanges

Q Absolutely. And then, uh, to completely go against that, what was the most recent publicly announced investment?

A Yeah, the most recent public investment I made is a company called Airtable. That's right. That's Howie Liu, a serial entrepreneur, just an amazing founder. And what we saw, I invested in Airtable when it was, when it was three people and, and really going back to the conviction and how we build conviction. Yeah, I met Howie, I met the team and I just fell in love with them and immediately and knew that they're going to build a very, very big company. And if you spend time with Howie, as it sounds like you may, you just know what I'm talking about. He's got that fire and that conviction around the idea and building something big that we just love. But in particular, the investment thesis that we got excited about was this concept of the unbundling of Excel, and we felt like Airtable could become the all-in-one collaboration platform that could kind of redefine how consumers think about productivity software. It's got the breadth of functionality, but also the depth, and it's a very powerful product That's delivered with a very clean and simple UI.

AI assessment note: “the most recent public investment I made is a company called Airtable.”

Q I'm really intrigued though, because it's not as, as kind of simple and straightforward Forward as, as that, I'm sure you painted a very nice picture, but it's not as simple and straightforward for many people, and often it's described as very difficult to break into. I'm intrigued. Why do you think VC is so difficult to break into?

A Yeah, I think it comes down to the fact that VCs really cherish their cultures, and in the, the cultures of the firms these are,. These are organizations that have kind of honed uh, specific cultures over decades, and bringing on someone new Is sometimes scary for folks, uh, in, in terms of understanding how they fit internally. I think the advantage that I had in particularly in breaking in what was that I had spent some time with the team and I'd shown myself and had also become familiar with, with the people at the team. And so it was a much easier decision, but in general, I think because they are small teams and it's an apprentice model and you spend and invest a lot of time in people, you really want to make sure that the people that you bring on are strong fits internally. And I think that that's The key barrier is just that, that time investment that a lot of partners don't have.

AI assessment note: “I think it comes down to the fact that VCs really cherish their cultures”

Q Question from saw your partner. What's one of your proudest moments in your venture career?

A You know, I've had, I've had a lot of proud moments. I think one of the, one of the one that stands out to me is I brought on someone into a company and kind of pursued an aggressive campaign to recruit this person into the company and really, you know, tried to sell this individual very hard. And a couple of years later, the company was acquired for a lot of money by Microsoft actually, and she did very well. So one of the proudest moments was, was just meeting up with her for coffee and And kind of hearing firsthand the impact that that had on her life, right? She was able to afford a home. She was able to put her kid in a private school. And a lot of that was due to my pursuit of her and her trust in me to kind of take the role of the company. And it doesn't often work out like that, but it was a very touching moment for me because I felt like I actually had a one-on-one impact on a person's life. You know, that's the kind of stuff that I love.

AI assessment note: “one of the proudest moments was, was just meeting up with her for coffee”

Q I'd love to kind of delve one step further down the funnel there then, and when kind of identified interest is made, how do you look to really build conviction around the one percent of companies you see and come to a really kind of conclusive answer?

A Yeah, this is probably one of the most challenging things in venture because you can imagine you see lots of companies and you know yourself, you see tons of companies, everything looks great. And then, you know, how do you get to the conviction of firing a shot, making sure that it's the one that counts? I'd say for, for me, it's, and again, it's different for every investor, but for me, it's really spending time with the founders and really understanding what motivates them. I think that early stage venture, which is kind of where we play is such a people, people business. And you really don't develop a sense for these types of things until you spend enough time with, with People and kind of understand their upbringing and their life story and their backgrounds. And that's the stuff that I get excited about. So I I'd like technical founders who have kind of defied the odds, who are persistent and resilient. And that's the type of personality that I love to see. Of course, it's easy to do diligence on the market opportunity and get comfortable with the risk from a product perspective and so forth. But I just think great founders can overcome all that stuff.

AI assessment note: “for me, it's really spending time with the founders and really understanding what motivates them”

Q I'm intrigued. You said about giving them a shot. With the kind of ever-increasing benchmarks required to attain the large Series A's that often a lot of founders want, does that influence how long you think founders need in terms of runway? We often hear the hallowed 18 months. Do you think now we move to a much more archetypal 24 months?

A Yeah, it's an astute observation because I think, I think you're actually right. The climate for startups, especially at the early stage, has gotten a lot more competitive. I think the bar has gone up, as you pointed out on Series A's, the check sizes have gone up, seed You know, seed rounds have increased in size. So I do think that's the case. And the way you address it is number one, by either raising more money or two, by watching your burn. And again, going back to the qualities that I look for in founders, it's the resiliency, it's the resourcefulness. So I prefer companies and founders that manage to keep burn low, to be resourceful, to kind of live a frugal and efficient lifestyle versus those, those that raise lots and lots of money in the seed round and kind of Live a little bit richer.

AI assessment note: “I think you're actually right... So I do think that's the case.”

Q And before we take a step onto the other side of the operational table, I'd love to hear your thoughts. You've spoken about kind of CRV's illustrious history, 47 years, incredible, and investing out of the 16th fund. So what lessons do you think the firm has learned over that immense history about operating a VC fund successfully?

A Yeah, I think the most important thing that we've learned is, is the respect for the entrepreneur. You know, I'd say that if, if I had to categorize the culture of CRV, it's a very humble firm with kind of a modest, you know, modest view and low ego. I think the entrepreneur number one is first and foremost. And if you look at some of the things that we've learned, so for example, we have a no phone policy where we find ourselves internally and thankfully we've never had to use it. But if you find a CRV partner breaking out his phone during the meeting, there's a very, very hefty fine for that. We try to be on time. We try to do basic things that don't take a lot of effort, but really show a lot of respect and admiration for entrepreneurs. And that's first and foremost, it's a very collaborative firm. So I think that one of the other unique things that we've learned is that venture works best in small teams and when partners can collaborate with each other. So the economic model here is, is also aligned so that we can work well with each other and, and help each other out on projects, which is somewhat unique in venture. So these are all the types of things that I think We've learned to hone in on over, over the history of the firm.

AI assessment note: “most important thing that we've learned is, is the respect for the entrepreneur”

Q I'm really intrigued though, because it's not as, as kind of simple and straightforward Forward as, as that, I'm sure you painted a very nice picture, but it's not as simple and straightforward for many people, and often it's described as very difficult to break into. I'm intrigued. Why do you think VC is so difficult to break into?

A Yeah, I think it comes down to the fact that VCs really cherish their cultures, and in the, the cultures of the firms these are,. These are organizations that have kind of honed uh, specific cultures over decades, and bringing on someone new Is sometimes scary for folks, uh, in, in terms of understanding how they fit internally. I think the advantage that I had in particularly in breaking in what was that I had spent some time with the team and I'd shown myself and had also become familiar with, with the people at the team. And so it was a much easier decision, but in general, I think because they are small teams and it's an apprentice model and you spend and invest a lot of time in people, you really want to make sure that the people that you bring on are strong fits internally. And I think that that's The key barrier is just that, that time investment that a lot of partners don't have.

AI assessment note: “because they are small teams and it's an apprentice model”

Q I'd love to kind of delve one step further down the funnel there then, and when kind of identified interest is made, how do you look to really build conviction around the one percent of companies you see and come to a really kind of conclusive answer?

A Yeah, this is probably one of the most challenging things in venture because you can imagine you see lots of companies and you know yourself, you see tons of companies, everything looks great. And then, you know, how do you get to the conviction of firing a shot, making sure that it's the one that counts? I'd say for, for me, it's, and again, it's different for every investor, but for me, it's really spending time with the founders and really understanding what motivates them. I think that early stage venture, which is kind of where we play is such a people, people business. And you really don't develop a sense for these types of things until you spend enough time with, with People and kind of understand their upbringing and their life story and their backgrounds. And that's the stuff that I get excited about. So I I'd like technical founders who have kind of defied the odds, who are persistent and resilient. And that's the type of personality that I love to see. Of course, it's easy to do diligence on the market opportunity and get comfortable with the risk from a product perspective and so forth. But I just think great founders can overcome all that stuff.

AI assessment note: “for me, it's really spending time with the founders and really understanding what motivates them.”

Q Can I ask, does that kind of desire for frugality within the founders and the founding team, does that go contra the traditional VC ethos of kind of all-out aggressive growth and really throwing money at customer acquisition and kind of geographic expansion?

A Not at all. I think they're very consistent. Let me explain why. CRV itself kind of has this view of the world, and most of us are immigrants, so we've kind of all lived, lived frugally at some point in our lives. Really, I think at the earliest stages, we look for those types of founders and teams that can get to product In a resourceful manner. It doesn't make sense to overspend or overhire until you get to that point. I think that there are certain cases and exceptions where that makes sense, where there are land grab markets, where you really want to hire the best, the fastest possible. But for the most part, most traditional businesses, I think it makes sense to be as resourceful as possible until you get to that point where you pour gasoline on the fire.

AI assessment note: “Not at all. I think they're very consistent. Let me explain why.”

Q AI and why the hype and is it deserved?

A It's an interesting time in AI. I think if you look at the next 30 to 40 years and where GDP growth will come from, I think a lot of it will come from technology and automation. And we're kind of at this point now where the substrate, the infrastructure substrate, is getting well developed by Amazons and Googles and companies like that. So I think as you think about where opportunity will get created in tech in particular, AI makes a lot of sense, and we're spending a lot of time looking at it. I think that we are in a time With AI today, where cloud was about 10 years ago, and we're going to see a tsunami of innovation, uh, associated with, with companies and entrepreneurs thinking about ways to apply AI towards more traditional, uh, software products.

AI assessment note: “we're going to see a tsunami of innovation, uh, associated with, with companies”

Q I'm intrigued. You said about giving them a shot. With the kind of ever-increasing benchmarks required to attain the large Series A's that often a lot of founders want, does that influence how long you think founders need in terms of runway? We often hear the hallowed 18 months. Do you think now we move to a much more archetypal 24 months?

A Yeah, it's an astute observation because I think, I think you're actually right. The climate for startups, especially at the early stage, has gotten a lot more competitive. I think the bar has gone up, as you pointed out on Series A's, the check sizes have gone up, seed You know, seed rounds have increased in size. So I do think that's the case. And the way you address it is number one, by either raising more money or two, by watching your burn. And again, going back to the qualities that I look for in founders, it's the resiliency, it's the resourcefulness. So I prefer companies and founders that manage to keep burn low, to be resourceful, to kind of live a frugal and efficient lifestyle versus those, those that raise lots and lots of money in the seed round and kind of Live a little bit richer.

AI assessment note: “I think you're actually right. The climate for startups, especially at the early stage”

Q Are there common inflection points, which are kind of landmarks for you, be it an MRR, ARR metric, be it a Team size, be it a kind of a revenue growth? Are there common inflection points which you kind of nail down as those points of aggressive growth time?

A Well, the first and most important thing when we feel like we're there is to raise capital because, you know, you don't want to really step on the gas until you have more capital and make sure that, that you can support that. Indicators. I think to your question of what we look for, you know, if it's a software company, more traditional MRR based company, we look for month on month growth. We look on, we look at logos. We look at, you know, an ability to kind of land into key accounts and with the opportunity to potentially expand. If it's more infrastructure or technology oriented, we look for key hires. You know, I think that a very strong engineering teams is a good leading indicator that, you know, people are speaking with their feet. Those are all the types of leading indicators that we look for. When we see those, we'll take the company out to market to raise capital and hopefully get positive validation from the market. And that's when we double down, right? That's when we then decide to, to really step on it.

AI assessment note: “we look for month on month growth. We look on, we look at logos.”

Q And before we take a step onto the other side of the operational table, I'd love to hear your thoughts. You've spoken about kind of CRV's illustrious history, 47 years, incredible, and investing out of the 16th fund. So what lessons do you think the firm has learned over that immense history about operating a VC fund successfully?

A Yeah, I think the most important thing that we've learned is, is the respect for the entrepreneur. You know, I'd say that if, if I had to categorize the culture of CRV, it's a very humble firm with kind of a modest, you know, modest view and low ego. I think the entrepreneur number one is first and foremost. And if you look at some of the things that we've learned, so for example, we have a no phone policy where we find ourselves internally and thankfully we've never had to use it. But if you find a CRV partner breaking out his phone during the meeting, there's a very, very hefty fine for that. We try to be on time. We try to do basic things that don't take a lot of effort, but really show a lot of respect and admiration for entrepreneurs. And that's first and foremost, it's a very collaborative firm. So I think that one of the other unique things that we've learned is that venture works best in small teams and when partners can collaborate with each other. So the economic model here is, is also aligned so that we can work well with each other and, and help each other out on projects, which is somewhat unique in venture. So these are all the types of things that I think We've learned to hone in on over, over the history of the firm.

AI assessment note: “the most important thing that we've learned is, is the respect for the entrepreneur.”

Q Speaking about kind of acquiring in other ways, I'm intrigued because before the call, you said to me that entrepreneurs often overlook tactics in the process of company building. I'd love to hear them. What are those? And why do you think they're not immediately apparent to entrepreneurs or utilized by them?

A Well, you know, so, so speaking of boards, you know, one of the things when, when a company Stages of, of its life. I think one of the most overlooked tactics is often finding, building a very powerful board, right? Because I think that a board can be a hugely valuable vehicle for a CEO, for an entrepreneur to find folks to bring in around the table to learn from, to, to find independent, you know, members, board members that, that are willing to invest their time and their resources and their network to help a company, et cetera. It doesn't make sense to build that up until the company's a little bit farther along, but I've seen companies, you Leverage it to extreme success. And generally in the Valley, you'll find independent board seat is a very rare thing, and it's a very prized thing. So you, you know, if you offer it to someone, very rarely will they want to turn it down or decide it's not a good thing for them. And so you can take that to someone that you admire, that you respect, and really invite them into the company in a way to add value, um, that I, that I rarely see entrepreneurs take advantage of. So I think that leveraging that independent board seat for someone of a prominence who can add value to the company at later stages, a vehicle that not enough founders, I think, use to their advantage. Also, again, for companies that sell to other businesses, uh, having …

AI assessment note: “one of the most overlooked tactics is often finding, building a very powerful board”

Q Are there common inflection points, which are kind of landmarks for you, be it an MRR, ARR metric, be it a Team size, be it a kind of a revenue growth? Are there common inflection points which you kind of nail down as those points of aggressive growth time?

A Well, the first and most important thing when we feel like we're there is to raise capital because, you know, you don't want to really step on the gas until you have more capital and make sure that, that you can support that. Indicators. I think to your question of what we look for, you know, if it's a software company, more traditional MRR based company, we look for month on month growth. We look on, we look at logos. We look at, you know, an ability to kind of land into key accounts and with the opportunity to potentially expand. If it's more infrastructure or technology oriented, we look for key hires. You know, I think that a very strong engineering teams is a good leading indicator that, you know, people are speaking with their feet. Those are all the types of leading indicators that we look for. When we see those, we'll take the company out to market to raise capital and hopefully get positive validation from the market. And that's when we double down, right? That's when we then decide to, to really step on it.

AI assessment note: “if it's a software company, more traditional MRR based company, we look for month on month growth”

Q I'm intrigued. You mentioned obviously the prominence of boards there and helping founders. To what extent do founders need boards in such an early phase? When is the right time to really acquire your board? And how big should that board be in the early stages, do you think?

A Well, it's a great question. I think that my general rule is that That companies don't need boards at the very early stage, with the exception of just creating a regular communication cadence. So, so long as, you know, what I don't want is what I don't, my CEOs to spend a lot of time preparing a lot of materials and getting, wasting a lot of effort that they could be spending on product or with customers to, to get a board deck ready. I think that that is not an efficient Use of time is, is having a regular communication cadence so that, that the investor and the entrepreneur are in sync and that there's a very strong synergy associated with finding ways to add value at different points in time. So I think the time when you want to formalize a board, like an actual meeting where you're reviewing slide decks and kind of going through, going through a cadence is somewhere around the series A. When you have an investor that's just put in a bunch of money, when there's some repeatability and some mechanics that are starting to form around You know, taking a product to market. That's when a board can, can really start to add a lot more value. But in the very, very early days, we, we advise against it, especially at the seed stage, because it just doesn't feel like a useful way to spend time for a CEO.

AI assessment note: “formalize a board, like an actual meeting where you're reviewing slide decks... somewhere around series A”

Q I do want to touch on the respect for entrepreneurs element there, though, and switch to the other side of the table, because even the best entrepreneurs with the traits that we described earlier sometimes need help. So with that in mind, When should a CEO ask for help, in your opinion?

A Yeah, it's a good question. In my opinion, this is one of the things that is not talked about enough, and very few CEOs that I've seen personally in my, in my own venture career, you know, have actually come to ask for help, and it's something that you don't see until it's often too late, right? I mean, there's very few cases I can even think of where a CEO would come to the Element here and I need help. And you know, these are the things I need help with. And oftentimes it's, it's like I said, when it's too late. So I think a CEO should, should ask for help all the time. Right. And I think that this is where a functional board and a trust-based board can add a lot of value is, you know, making sure that the CEO feels comfortable, that it's a safe environment, that we're all here to create value together. And there's the idea that you're creating value for the company and not just individually. And so creating that safe environment is important. And I work with all my CEOs to make sure that they know that, that I'm available to help and so forth. But I think it comes from a communication early on that this is something that we want to do. We want to be friendly in that respect.

AI assessment note: “I think a CEO should, should ask for help all the time.”

Q Speaking about kind of acquiring in other ways, I'm intrigued because before the call, you said to me that entrepreneurs often overlook tactics in the process of company building. I'd love to hear them. What are those? And why do you think they're not immediately apparent to entrepreneurs or utilized by them?

A Well, you know, so, so speaking of boards, you know, one of the things when, when a company Stages of, of its life. I think one of the most overlooked tactics is often finding, building a very powerful board, right? Because I think that a board can be a hugely valuable vehicle for a CEO, for an entrepreneur to find folks to bring in around the table to learn from, to, to find independent, you know, members, board members that, that are willing to invest their time and their resources and their network to help a company, et cetera. It doesn't make sense to build that up until the company's a little bit farther along, but I've seen companies, you Leverage it to extreme success. And generally in the Valley, you'll find independent board seat is a very rare thing, and it's a very prized thing. So you, you know, if you offer it to someone, very rarely will they want to turn it down or decide it's not a good thing for them. And so you can take that to someone that you admire, that you respect, and really invite them into the company in a way to add value, um, that I, that I rarely see entrepreneurs take advantage of. So I think that leveraging that independent board seat for someone of a prominence who can add value to the company at later stages, a vehicle that not enough founders, I think, use to their advantage. Also, again, for companies that sell to other businesses, uh, having …

AI assessment note: “one of the most overlooked tactics is often finding, building a very powerful board”

Q I'm intrigued. You mentioned obviously the prominence of boards there and helping founders. To what extent do founders need boards in such an early phase? When is the right time to really acquire your board? And how big should that board be in the early stages, do you think?

A Well, it's a great question. I think that my general rule is that That companies don't need boards at the very early stage, with the exception of just creating a regular communication cadence. So, so long as, you know, what I don't want is what I don't, my CEOs to spend a lot of time preparing a lot of materials and getting, wasting a lot of effort that they could be spending on product or with customers to, to get a board deck ready. I think that that is not an efficient Use of time is, is having a regular communication cadence so that, that the investor and the entrepreneur are in sync and that there's a very strong synergy associated with finding ways to add value at different points in time. So I think the time when you want to formalize a board, like an actual meeting where you're reviewing slide decks and kind of going through, going through a cadence is somewhere around the series A. When you have an investor that's just put in a bunch of money, when there's some repeatability and some mechanics that are starting to form around You know, taking a product to market. That's when a board can, can really start to add a lot more value. But in the very, very early days, we, we advise against it, especially at the seed stage, because it just doesn't feel like a useful way to spend time for a CEO.

AI assessment note: “companies don't need boards at the very early stage”

Q My partner and friend, Fred Destat, always says to me that board intimacy and efficiency are the two key parameters to building a successful board at the early stage. Would you very much agree with those being the two core character traits of successful boards?

A Um, intimacy for sure. I think that again, it really finding the right investor is really a delicate subject because you really got to find someone that you can spend time with. And, and again, the investor looking at looking at entrepreneurs and CEOs, same thing that intimacy is so important. It's really, really fundamental to capture it at an early stage, because if you don't have that, it's hard to build on that. And it's hard to get that back at a later time. So I think that while I don't think that it's necessarily in Important to have like a formal meeting and a formal board presentation. Um, I do think that intimacy can be acquired in other ways, whether it's just an occasional dinner, an occasional lunch, just to make sure that, that you're connecting and always in sync with the founder.

AI assessment note: “Um, intimacy for sure. I think that again, it really finding the right investor”

Q AI and why the hype and is it deserved?

A It's an interesting time in AI. I think if you look at the next 30 to 40 years and where GDP growth will come from, I think a lot of it will come from technology and automation. And we're kind of at this point now where the substrate, the infrastructure substrate, is getting well developed by Amazons and Googles and companies like that. So I think as you think about where opportunity will get created in tech in particular, AI makes a lot of sense, and we're spending a lot of time looking at it. I think that we are in a time With AI today, where cloud was about 10 years ago, and we're going to see a tsunami of innovation, uh, associated with, with companies and entrepreneurs thinking about ways to apply AI towards more traditional, uh, software products.

AI assessment note: “we're going to see a tsunami of innovation”

Q I do want to touch on the respect for entrepreneurs element there, though, and switch to the other side of the table, because even the best entrepreneurs with the traits that we described earlier sometimes need help. So with that in mind, When should a CEO ask for help, in your opinion?

A Yeah, it's a good question. In my opinion, this is one of the things that is not talked about enough, and very few CEOs that I've seen personally in my, in my own venture career, you know, have actually come to ask for help, and it's something that you don't see until it's often too late, right? I mean, there's very few cases I can even think of where a CEO would come to the Element here and I need help. And you know, these are the things I need help with. And oftentimes it's, it's like I said, when it's too late. So I think a CEO should, should ask for help all the time. Right. And I think that this is where a functional board and a trust-based board can add a lot of value is, you know, making sure that the CEO feels comfortable, that it's a safe environment, that we're all here to create value together. And there's the idea that you're creating value for the company and not just individually. And so creating that safe environment is important. And I work with all my CEOs to make sure that they know that, that I'm available to help and so forth. But I think it comes from a communication early on that this is something that we want to do. We want to be friendly in that respect.

AI assessment note: “So I think a CEO should, should ask for help all the time.”

Q people on and sometimes the hesitancy in doing so, I'd love to hear your thoughts and slightly going off script, so I'm sorry for that. But just in terms of taking new partners in and sunsetting potentially more seasoned partners would be a delicate way of putting it. How do you think about that and evaluate kind of the entering of new partners and the departure of slightly older partners?

A Well, it's, it's a topical discussion because it's, it varies by firm. I'd say that in general, venture is a job that people really enjoy and cherish. And so I can see, I can see from both ends, I can see why folks want to stick around, right. And continue the job because it's such a, such a fun job. And at the other hand, I can see why folks want to break in because it is, you know, a tremendous opportunity and a really unique role. So I think the discussion of kind of sunsetting folks and bringing in new folks is always, it's always going to exist. So as long as venture exists, Just because of the nature of the role, and you know, I think how unique it is.

AI assessment note: “I can see from both ends, I can see why folks want to stick around”

Q people on and sometimes the hesitancy in doing so, I'd love to hear your thoughts and slightly going off script, so I'm sorry for that. But just in terms of taking new partners in and sunsetting potentially more seasoned partners would be a delicate way of putting it. How do you think about that and evaluate kind of the entering of new partners and the departure of slightly older partners?

A Well, it's, it's a topical discussion because it's, it varies by firm. I'd say that in general, venture is a job that people really enjoy and cherish. And so I can see, I can see from both ends, I can see why folks want to stick around, right. And continue the job because it's such a, such a fun job. And at the other hand, I can see why folks want to break in because it is, you know, a tremendous opportunity and a really unique role. So I think the discussion of kind of sunsetting folks and bringing in new folks is always, it's always going to exist. So as long as venture exists, Just because of the nature of the role, and you know, I think how unique it is.

AI assessment note: “discussion of kind of sunsetting folks and bringing in new folks is always going to exist”