The Exchanges

Q Okay. So that's how you got your start. And then you also worked at the likes of Kleiner. I'm intrigued. Summit and Kleiner, two phenomenally renowned and respected institutions. What were the big learnings and takeaways from you from those two time periods, really in the formative stages of your career?

A Yeah, really great question, and I think the firms are very different and view the world differently, and both have tremendous positives to them. So at Summit, you really learn the science of investing, and what I mean by that is analytically driven, price was very important, numbers were key, hard work and hustle could really be a differentiator in venture. And then I'd contrast that with Kleiner felt like you were learning the art of investing or thought more intellectually about why a company was working or why it was growing versus just being as formulaic and staring at numbers. And so I think the marriage of both of those two is what makes a venture capitalist great. There's no right or wrong way to do it. And I'm fortunate to have learned from the best on both those dimensions.

AI assessment note: “at Summit, you really learn the science of investing... Kleiner felt like... the art”

Q Okay. So that's how you got your start. And then you also worked at the likes of Kleiner. I'm intrigued. Summit and Kleiner, two phenomenally renowned and respected institutions. What were the big learnings and takeaways from you from those two time periods, really in the formative stages of your career?

A Yeah, really great question, and I think the firms are very different and view the world differently, and both have tremendous positives to them. So at Summit, you really learn the science of investing, and what I mean by that is analytically driven, price was very important, numbers were key, hard work and hustle could really be a differentiator in venture. And then I'd contrast that with Kleiner felt like you were learning the art of investing or thought more intellectually about why a company was working or why it was growing versus just being as formulaic and staring at numbers. And so I think the marriage of both of those two is what makes a venture capitalist great. There's no right or wrong way to do it. And I'm fortunate to have learned from the best on both those dimensions.

AI assessment note: “at Summit, you really learn the science of investing... with Kleiner... the art”

Q Who's the best board member that you've worked with? And maybe more importantly, what makes them so good?

A So maybe it's a bit self-serving, but it's, it is the true answer, but it's my partner, Rob Ward. I think he's the best investor and board member I've ever worked with. I feel so blessed to just learn and be around him. And whenever I am, I'm copiously Lots of notes, and what makes Rob so good is his ability to distill lots of information down to one key point. He does it like no one I've ever seen, and so he just gets to the core of an underlying issue, and then can surface that core thing that might oftentimes be obfuscated or hidden in some way, and then he crystallizes it in a way such that everyone sees it, And then can act on that piece of information.

AI assessment note: “my partner, Rob Ward. I think he's the best investor and board member”

Q possible. I'm constantly stuck in this conundrum. That I need your help with, Max. Is it a case of meet as many founders as possible, and benefit from that benchmarking process that is just allowed from seeing the data points? Or is it a case of being a highly specific, meeting one or two founders a day, and being very deliberate, intellectual throughout the day, then, with the additional time?

A It's such a case-by-case choice for people, and it is the choice that I think you consciously need to make sure you're evaluating the Every year, every week, every day, because it's really how you spend your time, and so when I first started in the industry at Summit, I had very little background and very little data on being able to pattern match what made a great company, and so the advice I got was just talk to as many companies as possible, and eventually you'll feed enough data into your personal decision-making engine such that you'll start developing a filter, and I think over time, at least in my evolution, I've moved from super high Volume two, very, very focused, such that I am at a cadence now where every single month I pick a single company that is my priority, one company per month. And my view is, okay, that allows me to manufacture 12 shots on goal a year. And inevitably, half of those companies I'll prioritize won't be interesting enough for some reason where I actually learn in prioritizing that company that I don't want to invest. But then I have six companies that I know I want to invest in, and I've developed early conviction. And then my goal is, okay, can I convert one or two of those six companies? Because I only have to make one or two investments a year. So can I convert one or two of those six companies into investments for Ameritech?

AI assessment note: “I've moved from super high Volume two, very, very focused”

Q analogy of the core before the quickfire, and it's the area of focus for you being the current cycle of consumer. I'm intrigued. How do you think about this? We had Jeremy at Bessemer. We had Kevin at TrueVentures. And they both said opposing things. Jeremy, we're in a fallow period for consumer. Kevin, we're in innovation period. How do you think about this period we're in now for consumer?

A I think that relative to other time periods, take when I joined Kleiner in 2012, this feels like a harder time to be investing in consumer and that there are fewer high quality and super high upside opportunities in consumer. And I think if you look at some of the data around that, you know, you look at the series A Funding times of the consumer decacorns that are out there, the Ubers, the Lyfts, the Airbnbs, the Snaps, the Pinterest, the Spotifys, those series A's were all done pre-二零 12. And so it feels as though there has been just a gap in the amount of exciting consumer opportunities. Not to say there are and there won't be, but I just think if you just look at it holistically, the, the overall quantity of high quality upside opportunities is lower than it was a couple years ago.

AI assessment note: “this feels like a harder time to be investing in consumer and that there are fewer”

Q Who's the best board member that you've worked with? And maybe more importantly, what makes them so good?

A So maybe it's a bit self-serving, but it's, it is the true answer, but it's my partner, Rob Ward. I think he's the best investor and board member I've ever worked with. I feel so blessed to just learn and be around him. And whenever I am, I'm copiously Lots of notes, and what makes Rob so good is his ability to distill lots of information down to one key point. He does it like no one I've ever seen, and so he just gets to the core of an underlying issue, and then can surface that core thing that might oftentimes be obfuscated or hidden in some way, and then he crystallizes it in a way such that everyone sees it, And then can act on that piece of information.

AI assessment note: “it's my partner, Rob Ward. I think he's the best investor and board member”

Q to And maybe to the people around you, we mentioned your nine years in industry there from associate to GP today. There are many young VCs today that do churn out of the industry and not make it to partner, which for me begs the question, which might be a terribly broad and macro question, but in your eyes, what matters most in terms of being a truly good VC?

A It is a broad question, and I think there are at different times in your career at different firms and at different levels, I think Firms are hiring someone to be, quote, a VC to add value potentially in different ways, and so the way I like to break out in a very simple formula of what a VC does, and it is relatively simple, is first they need to find companies, which is sourcing, then they need to be really good at picking companies, then they need to eventually win the companies once they know that they obviously want to be an investor, and then the last part is helping companies, and so I think Early in one's career, certainly the dimension of winning matters less, and oftentimes associates are hired for their finding and sourcing ability. The reality is, I think, the most important skill, and it probably sounds obvious for a venture capitalist, is picking, right? Like, picking solves, if you pick the right companies, that is probably the hardest skill to develop, and it leads to the most forgiveness, and even if you're not Finding and seeing every one of the best companies, or you're losing some companies, if you pick the right ones, and you invest in the right ones, inevitably you, you're successful.

AI assessment note: “The reality is, I think, the most important skill... is picking”

Q analogy of the core before the quickfire, and it's the area of focus for you being the current cycle of consumer. I'm intrigued. How do you think about this? We had Jeremy at Bessemer. We had Kevin at TrueVentures. And they both said opposing things. Jeremy, we're in a fallow period for consumer. Kevin, we're in innovation period. How do you think about this period we're in now for consumer?

A I think that relative to other time periods, take when I joined Kleiner in 2012, this feels like a harder time to be investing in consumer and that there are fewer high quality and super high upside opportunities in consumer. And I think if you look at some of the data around that, you know, you look at the series A Funding times of the consumer decacorns that are out there, the Ubers, the Lyfts, the Airbnbs, the Snaps, the Pinterest, the Spotifys, those series A's were all done pre-二零 12. And so it feels as though there has been just a gap in the amount of exciting consumer opportunities. Not to say there are and there won't be, but I just think if you just look at it holistically, the, the overall quantity of high quality upside opportunities is lower than it was a couple years ago.

AI assessment note: “this feels like a harder time to be investing in consumer”

Q Where do you sit on the value add of follow on funding and being able to provide that follow on funding? Some say it's crucial part of being a VC. Others say the best companies can always raise follow on funding and from great VCs. They don't need that value add. How do you think about that one?

A So as a later stage firm, we reserve fewer dollars for follow on investing and that the companies we're partnering with are closer to liquidity. So have fewer rounds before they go public. So I think that's a difference versus early stage firms. And then as it relates to being value add, you know, the companies that are raising future rounds that we're invested in, and most of the companies we're invested in, they're working. So they usually have the vast, vast majority of the time have the option to raise additional capital for multiple people. And so usually we're taking our cues from the entrepreneur. And if they're saying, Hey, we'd love for you to lean in and participate and be a larger player in the next round. We're super happy with that. On the flip side, if they say, hey, it's actually really helpful for you to pare back a little bit to get this new investor in at the table that we think is great for the business, then we'll do that as well. And so a lot of it for us is taking our cues from the entrepreneur.

AI assessment note: “a lot of it for us is taking our cues from the entrepreneur.”

Q No, absolutely. I can completely see that element. Obviously, though, with the lack of operational experience, there are elements that are missed. I'm intrigued from the experience in the nine years now in venture, What would you say are the biggest missed elements for you?

A There are certainly elements that are missed, and I feel most disadvantaged from when an operator is going through specific challenges, and they're mostly around people, right, where I haven't managed large organizations before, and so fully understanding the psychology of managing a really large organization when you've never done it is something that I certainly try to pick up secondhand, but having never managed A hundred person organization. A lot of the questions our CEOs are working through are issues at that type of scale. And so you develop pattern matching and that you see it from company to company. And so you can anecdotally pull from those experiences, but there is an element of jealousy of wishing I had the ability to live parallel and multiple lives and have some of that experience.

AI assessment note: “they're mostly around people, right, where I haven't managed large organizations before”

Q possible. I'm constantly stuck in this conundrum. That I need your help with, Max. Is it a case of meet as many founders as possible, and benefit from that benchmarking process that is just allowed from seeing the data points? Or is it a case of being a highly specific, meeting one or two founders a day, and being very deliberate, intellectual throughout the day, then, with the additional time?

A It's such a case-by-case choice for people, and it is the choice that I think you consciously need to make sure you're evaluating the Every year, every week, every day, because it's really how you spend your time, and so when I first started in the industry at Summit, I had very little background and very little data on being able to pattern match what made a great company, and so the advice I got was just talk to as many companies as possible, and eventually you'll feed enough data into your personal decision-making engine such that you'll start developing a filter, and I think over time, at least in my evolution, I've moved from super high Volume two, very, very focused, such that I am at a cadence now where every single month I pick a single company that is my priority, one company per month. And my view is, okay, that allows me to manufacture 12 shots on goal a year. And inevitably, half of those companies I'll prioritize won't be interesting enough for some reason where I actually learn in prioritizing that company that I don't want to invest. But then I have six companies that I know I want to invest in, and I've developed early conviction. And then my goal is, okay, can I convert one or two of those six companies? Because I only have to make one or two investments a year. So can I convert one or two of those six companies into investments for Ameritech?

AI assessment note: “in my evolution, I've moved from super high Volume two, very, very focused”

Q No, absolutely. I can completely see that element. Obviously, though, with the lack of operational experience, there are elements that are missed. I'm intrigued from the experience in the nine years now in venture, What would you say are the biggest missed elements for you?

A There are certainly elements that are missed, and I feel most disadvantaged from when an operator is going through specific challenges, and they're mostly around people, right, where I haven't managed large organizations before, and so fully understanding the psychology of managing a really large organization when you've never done it is something that I certainly try to pick up secondhand, but having never managed A hundred person organization. A lot of the questions our CEOs are working through are issues at that type of scale. And so you develop pattern matching and that you see it from company to company. And so you can anecdotally pull from those experiences, but there is an element of jealousy of wishing I had the ability to live parallel and multiple lives and have some of that experience.

AI assessment note: “they're mostly around people, right, where I haven't managed large organizations before”

Q to And maybe to the people around you, we mentioned your nine years in industry there from associate to GP today. There are many young VCs today that do churn out of the industry and not make it to partner, which for me begs the question, which might be a terribly broad and macro question, but in your eyes, what matters most in terms of being a truly good VC?

A It is a broad question, and I think there are at different times in your career at different firms and at different levels, I think Firms are hiring someone to be, quote, a VC to add value potentially in different ways, and so the way I like to break out in a very simple formula of what a VC does, and it is relatively simple, is first they need to find companies, which is sourcing, then they need to be really good at picking companies, then they need to eventually win the companies once they know that they obviously want to be an investor, and then the last part is helping companies, and so I think Early in one's career, certainly the dimension of winning matters less, and oftentimes associates are hired for their finding and sourcing ability. The reality is, I think, the most important skill, and it probably sounds obvious for a venture capitalist, is picking, right? Like, picking solves, if you pick the right companies, that is probably the hardest skill to develop, and it leads to the most forgiveness, and even if you're not Finding and seeing every one of the best companies, or you're losing some companies, if you pick the right ones, and you invest in the right ones, inevitably you, you're successful.

AI assessment note: “The reality is, I think, the most important skill... is picking”

Q Where do you sit on the value add of follow on funding and being able to provide that follow on funding? Some say it's crucial part of being a VC. Others say the best companies can always raise follow on funding and from great VCs. They don't need that value add. How do you think about that one?

A So as a later stage firm, we reserve fewer dollars for follow on investing and that the companies we're partnering with are closer to liquidity. So have fewer rounds before they go public. So I think that's a difference versus early stage firms. And then as it relates to being value add, you know, the companies that are raising future rounds that we're invested in, and most of the companies we're invested in, they're working. So they usually have the vast, vast majority of the time have the option to raise additional capital for multiple people. And so usually we're taking our cues from the entrepreneur. And if they're saying, Hey, we'd love for you to lean in and participate and be a larger player in the next round. We're super happy with that. On the flip side, if they say, hey, it's actually really helpful for you to pare back a little bit to get this new investor in at the table that we think is great for the business, then we'll do that as well. And so a lot of it for us is taking our cues from the entrepreneur.

AI assessment note: “a lot of it for us is taking our cues from the entrepreneur.”

Q But kind of remaining on the analogy of the core and moving one further layer out to the ecosystem now around you and really more investing and growth, as we've discussed, we're in the time of SoftBank, eight billion Sequoia funds, Billion dollar funds every day. How does Meritech compete in such competitive growth environments?

A I think you're hitting on a great point, and it's where we spend a lot of time thinking about how we strategize to position ourselves to be really successful in this hyper-competitive environment, and so I think there's the top-down, which is the SoftBank and the Sequoias and the mutual funds and some of these hedge funds with really large funds that are moving down market, and frankly, those Players we see less of at our stage. And I think the line of demarcation is growth has really been bifurcated into two stages over the last five to seven years. And so traditionally there was really one or two growth rounds and then companies would go public. But now that the time in which a company stays private has extended quite a bit, we look at the world and say there's late stage and then there's pre IPO. And most of these larger players are playing in that pre IPO space where We play, uh, we play less in. I think on this growth or late stage world, the competition is coming bottoms up by these full stack venture firms, the likes of, you know, historically it was catalyst. And those are the most recent examples.

AI assessment note: “those Players we see less of at our stage. And I think the line of demarcation”

Q Can I ask, do you think that one kind of type of investor, so to speak, is destined maybe more for a particular type of stage? Maybe career VCs are better, later stage, given the analytical rigor and scientific approach?

A You know, I think that is a fair overgeneralization. You do have some early stage folks who are less operationally focused, like Bill Gurley. You have one of our partners, Craig Sherman, on our side, who was a career operator and then started doing growth and has been amazingly successful. And so, Again, I do think there are certain pieces that are indispensable, right? Being able to have experience versus secondhand experience from a board level, what it's like to solve certain problems, and being able to see around the corners and understanding truly how difficult an operational problem may be is an advantage in some respects. The flip side to that is you might understand that there's a problem that's so hard to solve, it was so hard for you to solve, that then you don't believe that This entrepreneur will solve it, and it might lead you to overestimate the difficult of that problem because it was so hard for you, but maybe that's situationally different, and so someone in that case, the ignorance of not knowing the difficulty of solving that problem might actually lead you to take that leap, which in that moment in time is the right decision.

AI assessment note: “I think that is a fair overgeneralization. You do have some early stage folks”

Q Can I ask, do you think that one kind of type of investor, so to speak, is destined maybe more for a particular type of stage? Maybe career VCs are better, later stage, given the analytical rigor and scientific approach?

A You know, I think that is a fair overgeneralization. You do have some early stage folks who are less operationally focused, like Bill Gurley. You have one of our partners, Craig Sherman, on our side, who was a career operator and then started doing growth and has been amazingly successful. And so, Again, I do think there are certain pieces that are indispensable, right? Being able to have experience versus secondhand experience from a board level, what it's like to solve certain problems, and being able to see around the corners and understanding truly how difficult an operational problem may be is an advantage in some respects. The flip side to that is you might understand that there's a problem that's so hard to solve, it was so hard for you to solve, that then you don't believe that This entrepreneur will solve it, and it might lead you to overestimate the difficult of that problem because it was so hard for you, but maybe that's situationally different, and so someone in that case, the ignorance of not knowing the difficulty of solving that problem might actually lead you to take that leap, which in that moment in time is the right decision.

AI assessment note: “I think that is a fair overgeneralization.”

Q But kind of remaining on the analogy of the core and moving one further layer out to the ecosystem now around you and really more investing and growth, as we've discussed, we're in the time of SoftBank, eight billion Sequoia funds, Billion dollar funds every day. How does Meritech compete in such competitive growth environments?

A I think you're hitting on a great point, and it's where we spend a lot of time thinking about how we strategize to position ourselves to be really successful in this hyper-competitive environment, and so I think there's the top-down, which is the SoftBank and the Sequoias and the mutual funds and some of these hedge funds with really large funds that are moving down market, and frankly, those Players we see less of at our stage. And I think the line of demarcation is growth has really been bifurcated into two stages over the last five to seven years. And so traditionally there was really one or two growth rounds and then companies would go public. But now that the time in which a company stays private has extended quite a bit, we look at the world and say there's late stage and then there's pre IPO. And most of these larger players are playing in that pre IPO space where We play, uh, we play less in. I think on this growth or late stage world, the competition is coming bottoms up by these full stack venture firms, the likes of, you know, historically it was catalyst. And those are the most recent examples.

AI assessment note: “most of these larger players are playing in that pre IPO space where We play... less”