The Exchanges

Q have you here, but I want to start with a little bit of context because, um, you know, you've heard the show many times that, oh, I serendipitously fell into Venture from being at Harvard Business School and Google, and it was just so surprising to me. It's not your background, so tell me, how did you make your way into Venture, and what was that entry point for you?

A Yeah, it's weird. Like, it was like, I was a software engineer, and I was a government contractor for years, and then went on to be a two-time founder, but my second company wasn't a success, it was a failure, and so I had ended up working at a marketing firm for a year, and That firm ended up getting a client I didn't agree with ethically, and so I quit, but when I quit, I didn't have any plans, and so I quit on a Friday, and the very next Monday, I get this email saying the investment arm for the state of Maryland's hiring. I'm like, ok, I don't have a college degree, I don't have a finance background, but I know startups, and I know a lot of people in Baltimore, Let's go ahead and try this. And four and a half months later, they hired me. That's how I broke in.

AI assessment note: “And four and a half months later, they hired me. That's how I broke in.”

Q I mean, I absolutely love that. There's a couple of points I have to unpack there. On the DM strategy, I love it. How many responded and how many didn't? Like, what was the ratio? And were there certain people who went out of their way to really help?

A It was like, 70, 75%, because at the end of the day, in the world of venture, we're all happy to meet each other, because everybody's looking for deal flow, right? So, if you see a name, Mac the VC, you assume I'm an investor, so you'll try to take that meeting. Um, so that worked out. People who reached out, you know, like, Elizabeth was really helpful. Niv from Strug Capital was really helpful. Marlon Nichols from Mac Ventures. He's like a mentor of mine. That, that dude has been great. Like, I've known him for years. Um, Low Tony at Plexo has been amazing. Um, Hunter Walk early on, you know, really helps. Um, Jason from Sastr, the first guy who, like, really looked at my deck and beat it up and was honest with me about it, like, I don't know if he understands, like, how impactful that was in my journey. Just a lot of people helped.

AI assessment note: “It was like, 70, 75%”

Q Yep, no, I'm totally with you, and, uh, you should come to London. We're totally partying up here. Seriously, restaurants, everything. It's great. I'm more than happy to show you around. But I do want one final one, and it's, as you know, what's the most recent publicly announced investment, and why did you say yes and get so excited?

A Most recently publicly announced investment was an investment in a company called unspun out of Oakland. Um, if you go to their website, it shows that they make custom jeans. You, they have an app that scans your body, your jeans that made to fit. And what they're actually building is in the background is they have a hardware component that takes the information from the app of your sizing and basically in three D printer clothes. Um, And one piece was zero waste. And when I first met the founders, they were just incredible people, um, who were truly passionate about this. And they were building a tool that could revolutionize manufacturing all across the globe. And then they had a letter of support from like the head of design from Levi saying, my job is to figure out how to make the best jeans and they do better than me. Nothing, I'm okay, I'm in. Like, that works for me, right? It's, it's a combination of the amazing people, the ambitious goal, and then the support they have behind them. And I should also say that that company was sourced by my venture partner, Jonathan Kroll. Shout out Jonathan. You know, he was truly bullish on this company and wanted to get it done. And so we were going to do it regardless because, you know, if somebody on my team truly believes that strongly, then I believe in conviction. Like, if you have that strong enough conviction, I'll ride with yo…

AI assessment note: “Most recently publicly announced investment was an investment in a company called unspun out of Oakland.”

Q Be very bold. What do you want to build with Radbreed? Like we do this show in 10 years time. What is Radbreed?

A So I love this question because I'm going to build the next NEA, the next Greenspring Associates, the next top tier firm, and I use those two firms very specifically because what I don't think many people recognize is both of those are Baltimore-based firms. Two of the three founders of NEA are from Baltimore. They used to have, originally, NEA is a Maryland-based firm. One of the founders of Greenspring is the son of one of the founders of NEA. And those are people who are my mentors, my advisors, the folks who will help me in my career. And so I am built on the shoulder of giants. And so you're going to look up 10 years from now, and we're going to be building the next top tier multi-stage firm based out of Baltimore. And that's what it's going to be.

AI assessment note: “we're going to be building the next top tier multi-stage firm based out of Baltimore.”

Q Do you think the traditional fundraising process is fucked up? You raising your funds so successfully on Twitter, do you think it's like, fuck, why don't we do it the way we do?

A A hundred percent, but that's how I feel about half the stuff in venture. Like, one of the things that happened for me as I was raising my fund was, I had this career, and I learned all this stuff, I had gone through these trainings, I've read these books, and it was like, venture's done in this, like, specific way, and like, this is all the rules. And then I started raising my fund, I was like, I don't care about any of these rules. Like, fuck the rules. Like, these are all just legal structures. They can be changed. So like most people, they close, they say, you should have like 30 or 40% of your fund close for your first close. My first close was at 10%. Right. People like, you know, you should only have this many closes. No, I do a rolling close every three weeks. Like I bring my LPs and batches. Like I want to access the capital so I can start deploying. Cause I need, I want it to build up some momentum. You know, um, you need to do traditional capital calls because you don't want to mess up your IRR. No, I gave my LPs three options. You can do a hundred percent upfront, 50% each year over two years or 33%. Over each year, over three years, with the minimum being 10 K per year. So if you gave me a 10 K check, you gave it a hundred percent upfront. And it's like, I'm just gonna hold the money in escrow and get it when I need. I'm not chasing anybody down for 10 K checks. Um…

AI assessment note: “A hundred percent, but that's how I feel about half the stuff in venture.”

Q I mean, to be fair, I think your first check is always going to be a bad one. I mean, I know mine fucking was. Um, but I, I do, I do want to ask you. I said about the challenge there. What about the biggest surprise?

A The biggest surprise has been Twitter. Like, I've been on Twitter since 2010. Last June I had 2500 followers, right? Like 10 years. 2500 people. I went from 2500, I think I just crossed 50,000, like yesterday. And it's been surreal. Um, having done the Twitter thing and, and interacted with so many folks over a short amount of time, I would have folks I'd be meeting with Telling me how all these people in their firm are talking about me. I'm like, But you work at like a top tier firm. How do they even know who I am? Why do people care what I have to say? I've gotten on calls and like, I've had people like burst into tears because they're meeting me. You probably have, you probably had some of this before. It's like, I'm just another emerging manager trying to do good work. Like, I ain't special. I ain't a celebrity. Nothing like that. That's been kind of, and then, you know, because of that, I've now gotten to have a podcast with inside And I've had like four or five different people reach out to me about doing TV shows. It's just like, just because I got people to listen to me on Twitter, like my whole life is changing. That was like a crazy surprise.

AI assessment note: “The biggest surprise has been Twitter.”

Q It's hilarious. I do want to ask, you know, we spoke about Rare Breed and the structure and the strategy. A lot of people are talking about rolling funds. How do you feel about the rise of rolling funds, and why did you decide not to do a rolling fund?

A I think rolling funds are another sign of the lack of innovation in our industry, right? Like Angel's List took something that had been around before that people weren't really using. They took a designation of five or six, which had been around since 2013 that nobody was really using and kind of pushed it together and made a product to help emerging manager or give another structure for fundraising. And it's like, everybody's like, oh my God, this is so world changing. It's like, Well, should we be doing stuff like this on the regular? Should we be thinking about how to come up with stuff like this often? Like, if this is the biggest innovation we can point to, that's sad, right? But then the other thing for me was, I looked at rolling funds. I thought they were really interesting. They allowed, they would allow me to take advantage of like my, my growing Twitter following and such. But what I didn't like about rolling funds with the way they do LP returns, like LPs have to continuously buy in the quarters to make sure they get allocation to the companies you invest in. So if you're not an LP in the specific quarter and that's the quarter I make my best investment in, but you're an LP in the quarter before the quarter after, You don't get access to that deal or to those returns. And I knew for me that a lot of my earliest LPs were just going to be people who truly supported me…

AI assessment note: “What I didn't like about rolling funds with the way they do LP returns”

Q the feelings of inadequacy side, I've had a team, I have no idea how to figure out a spreadsheet. I mean, Jesus, whenever I open Excel, it says sign in or register, and I'm like, ooh, don't like this. Um, but my question to you is, What helped you get over that? Was it the Twitter accreditation? Was it the support from GPs? What allowed you to break that barrier?

A It was, it was a little bit of all that. You know, the Twitter thing was very reassuring. Meeting with other GPs and, you know, talking, shopping, realizing, like, I can go toe to toe with everybody here. But I also think, um, in August, 2019, I went through, uh, 500 startups, uh, VC Unlock program. It's based in Stanford, and it's basically, you know, for two weeks, you and a bunch of peers are learning from these Stanford professors about venture. And while I was there, I recognized very early on, like, I knew most of this stuff. You know, I, I, I could do all of this. I'm having conversations with these professors far beyond what we're doing in the class, and you know, one of the professors, Trevor, pulled me to the side one day. He's like, man, you can do this. He's like, you know, you're as good, you can do this as well as I can. You know all this material. He's like, if you want to raise a fund, I don't understand why you haven't already. And that, that validation in those moments, It was so impactful, right? Having somebody who I look up to and respect, and it's already been an adventure for years, being like, yeah, you can do this. Like, you know this. Like, and being in these classrooms, I'm like, oh yeah, I understand all these concepts. It reminded me of the time I actually went back to school. Like, there was a time I went back to school, and I went to Strayer Unive…

AI assessment note: “It was, it was a little bit of all that.”

Q I think it's a lot cheaper than my therapist. Uh, he then tells me I'm fucked up and I'm like, yeah, I just paid you a hundred dollars to tell me I'm fucked up. Thanks man. Um, tell me, uh, what's the hardest element of your role with Rare Breed today?

A The hardest element with my role in Rare Breed today is figuring out how to be present for my family. This job is so all consuming. Um, and once you decide you're going to start a firm, you're basically making a 20 year commitment, right? Fund one's 10 years. Two, three years later, you're going to raise fund two. That's another 10 years. Two to three years after that, you'll raise fund three. You're now 17 years in that you're dedicated, and it's a hard job. It takes a lot of time and a lot of effort, and so it makes it hard to be present at home when you have a family, you have a significant other, when you have children, and so trying to be a Trying to make sure I give them the highest quality of time because I know I can't give them the quantity of time. That's been a struggle.

AI assessment note: “The hardest element with my role in Rare Breed today is figuring out how to be present”

Q Okay, so you've listened to the show before. What's your favorite book and why?

A Favorite book and why? Why should white guys have all the fun? Because Reginald F. Lewis being a black man from Baltimore who created a private equity firm and was a billionaire is somebody who I look up to and respect. And just last, earlier this week, I got to speak at the Harvard Club where he was a member. And it was like a full circle moment to be in the same hallways that he walked and where he celebrated his wins. And even more cooler than that was afterwards, I tweeted about it and his daughter posted about it on Instagram. Which is like, kind of surreal for me. So, why should white guys have all the fun? Because Reginald F. Lewis was a pioneer.

AI assessment note: “Why should white guys have all the fun? Because Reginald F. Lewis”

Q Do you think the traditional fundraising process is fucked up? You raising your funds so successfully on Twitter, do you think it's like, fuck, why don't we do it the way we do?

A A hundred percent, but that's how I feel about half the stuff in venture. Like, one of the things that happened for me as I was raising my fund was, I had this career, and I learned all this stuff, I had gone through these trainings, I've read these books, and it was like, venture's done in this, like, specific way, and like, this is all the rules. And then I started raising my fund, I was like, I don't care about any of these rules. Like, fuck the rules. Like, these are all just legal structures. They can be changed. So like most people, they close, they say, you should have like 30 or 40% of your fund close for your first close. My first close was at 10%. Right. People like, you know, you should only have this many closes. No, I do a rolling close every three weeks. Like I bring my LPs and batches. Like I want to access the capital so I can start deploying. Cause I need, I want it to build up some momentum. You know, um, you need to do traditional capital calls because you don't want to mess up your IRR. No, I gave my LPs three options. You can do a hundred percent upfront, 50% each year over two years or 33%. Over each year, over three years, with the minimum being 10 K per year. So if you gave me a 10 K check, you gave it a hundred percent upfront. And it's like, I'm just gonna hold the money in escrow and get it when I need. I'm not chasing anybody down for 10 K checks. Um…

AI assessment note: “A hundred percent, but that's how I feel about half the stuff in venture.”

Q I love that. I do have to ask, you know, when you had Rare Breed in your mind, and you would think about what it would be like, what's the biggest challenges, and what have been the biggest surprises?

A The biggest challenge was getting over my own Getting over my feelings of being inadequate, right? Again, like I don't have a college degree. I don't have a finance background. You know, I got into this in a really unconventional way. And so for a long time, I was concerned about whether or not I could do this or if people were going to respect me or if people were going to care about my firm and I could get follow on funding from my companies. And that was just me inside my own head. The other thing that was a challenge was, like, finding LPs. Like, I didn't have a network of LPs, so, like, thank you, Twitter, and thank you, Five-O-Six-C. Like, if not for Five-O-Six-C and my ability to publicly solicit, like, I don't know if this happens. And I think the last thing was, I mentioned being a broke VC. I figured that if you gave me 24 months and I could talk to enough people, I could figure out a way to raise ten million. Like, give me enough time, I figured it out. But one of the issues that held me back early on was I didn't have the money to do the traveling to raise a fund. Like, like, you know, COVID being what it was and everybody being stuck in the house actually helped me. I had all my meetings over Zoom. I didn't have any in-person meetings, so I didn't have to travel. So I got to save that money. If it wasn't for that, I actually wouldn't have had the money just to go t…

AI assessment note: “The biggest challenge was getting over my own Getting over my feelings of being inadequate”

Q It's hilarious. I do want to ask, you know, we spoke about Rare Breed and the structure and the strategy. A lot of people are talking about rolling funds. How do you feel about the rise of rolling funds, and why did you decide not to do a rolling fund?

A I think rolling funds are another sign of the lack of innovation in our industry, right? Like Angel's List took something that had been around before that people weren't really using. They took a designation of five or six, which had been around since 2013 that nobody was really using and kind of pushed it together and made a product to help emerging manager or give another structure for fundraising. And it's like, everybody's like, oh my God, this is so world changing. It's like, Well, should we be doing stuff like this on the regular? Should we be thinking about how to come up with stuff like this often? Like, if this is the biggest innovation we can point to, that's sad, right? But then the other thing for me was, I looked at rolling funds. I thought they were really interesting. They allowed, they would allow me to take advantage of like my, my growing Twitter following and such. But what I didn't like about rolling funds with the way they do LP returns, like LPs have to continuously buy in the quarters to make sure they get allocation to the companies you invest in. So if you're not an LP in the specific quarter and that's the quarter I make my best investment in, but you're an LP in the quarter before the quarter after, You don't get access to that deal or to those returns. And I knew for me that a lot of my earliest LPs were just going to be people who truly supported me…

AI assessment note: “what I didn't like about rolling funds with the way they do LP returns”

Q I mean, I absolutely love that. There's a couple of points I have to unpack there. On the DM strategy, I love it. How many responded and how many didn't? Like, what was the ratio? And were there certain people who went out of their way to really help?

A It was like, 70, 75%, because at the end of the day, in the world of venture, we're all happy to meet each other, because everybody's looking for deal flow, right? So, if you see a name, Mac the VC, you assume I'm an investor, so you'll try to take that meeting. Um, so that worked out. People who reached out, you know, like, Elizabeth was really helpful. Niv from Strug Capital was really helpful. Marlon Nichols from Mac Ventures. He's like a mentor of mine. That, that dude has been great. Like, I've known him for years. Um, Low Tony at Plexo has been amazing. Um, Hunter Walk early on, you know, really helps. Um, Jason from Sastr, the first guy who, like, really looked at my deck and beat it up and was honest with me about it, like, I don't know if he understands, like, how impactful that was in my journey. Just a lot of people helped.

AI assessment note: “It was like, 70, 75%... Niv from Strug Capital was really helpful.”

Q How did you afford legal fees? Because this is the other thing that frustrates me. It's like, one is legal fees are expensive, and two, GP commits, like, I mean, it's a, it's a lot of money.

A So remember when I said, fuck the rules? So I have no GP commit. I didn't have the money for it. I wasn't even an accredited investor when I started raising my fund, right? Legal? I actually, this is, remember now, like, I'm getting popular on Twitter, I'm tweeting a lot, My lawyer actually found me on Twitter and chased me down and said, what do I gotta do to be your lawyer? He's never charged me. He's been my lawyer for over a year. He's never sent me a bill. I'm like, yo, hey, Jason, I love you, brother. Like, you can send me a bill down. Like, we raised some of this money. I could pay you. He's like, no, no, no, no, we'll get to it one day. I was like, alright. So, like, it's just all kind of fell, fell, fell together for me.

AI assessment note: “My lawyer actually found me on Twitter... He's never charged me.”

Q I, I totally get you. Can I ask, man, but Rare Breed, Rare Breed One, what does that, you know, you, you've listened to the show, you know, I love kind of portfolio construction. What does that look like for you? You've got ten million for the fund. How do you want to allocate this? How diverse in terms of, you know, concentration? How do you think about check size?

A Yeah. So, checks are two 50 to a hundred. Really, the strategy was really doing just two 50 K checks, because really my strategy is around doing larger checks at pre-seed. And when people ask me about ownership, I tell them it's not so much about ownership as it is about multiples. What we know is you get the highest multiples at pre C to C, and then every round after that, the multiples go down. So you need to put larger dollar amounts to get higher returns. So really what we're trying to do is put in the largest check reasonable as early as possible so that we have the potential to get a large enough return to return the fund every, in every investment we do. Um, and so really we're going to do somewhere between like 40 to 45 companies. Um, And, you know, we're going to probably, you know, I'm trying to be the next lower case, so we'll see how those returns come out.

AI assessment note: “checks are two 50 to a hundred... somewhere between like 40 to 45 companies.”

Q the feelings of inadequacy side, I've had a team, I have no idea how to figure out a spreadsheet. I mean, Jesus, whenever I open Excel, it says sign in or register, and I'm like, ooh, don't like this. Um, but my question to you is, What helped you get over that? Was it the Twitter accreditation? Was it the support from GPs? What allowed you to break that barrier?

A It was, it was a little bit of all that. You know, the Twitter thing was very reassuring. Meeting with other GPs and, you know, talking, shopping, realizing, like, I can go toe to toe with everybody here. But I also think, um, in August, 2019, I went through, uh, 500 startups, uh, VC Unlock program. It's based in Stanford, and it's basically, you know, for two weeks, you and a bunch of peers are learning from these Stanford professors about venture. And while I was there, I recognized very early on, like, I knew most of this stuff. You know, I, I, I could do all of this. I'm having conversations with these professors far beyond what we're doing in the class, and you know, one of the professors, Trevor, pulled me to the side one day. He's like, man, you can do this. He's like, you know, you're as good, you can do this as well as I can. You know all this material. He's like, if you want to raise a fund, I don't understand why you haven't already. And that, that validation in those moments, It was so impactful, right? Having somebody who I look up to and respect, and it's already been an adventure for years, being like, yeah, you can do this. Like, you know this. Like, and being in these classrooms, I'm like, oh yeah, I understand all these concepts. It reminded me of the time I actually went back to school. Like, there was a time I went back to school, and I went to Strayer Unive…

AI assessment note: “It was, it was a little bit of all that. You know, the Twitter thing”

Q Be very bold. What do you want to build with Radbreed? Like we do this show in 10 years time. What is Radbreed?

A So I love this question because I'm going to build the next NEA, the next Greenspring Associates, the next top tier firm, and I use those two firms very specifically because what I don't think many people recognize is both of those are Baltimore-based firms. Two of the three founders of NEA are from Baltimore. They used to have, originally, NEA is a Maryland-based firm. One of the founders of Greenspring is the son of one of the founders of NEA. And those are people who are my mentors, my advisors, the folks who will help me in my career. And so I am built on the shoulder of giants. And so you're going to look up 10 years from now, and we're going to be building the next top tier multi-stage firm based out of Baltimore. And that's what it's going to be.

AI assessment note: “I'm going to build the next NEA, the next Greenspring Associates, the next top tier firm”

Q Okay, so you've listened to the show before. What's your favorite book and why?

A Favorite book and why? Why should white guys have all the fun? Because Reginald F. Lewis being a black man from Baltimore who created a private equity firm and was a billionaire is somebody who I look up to and respect. And just last, earlier this week, I got to speak at the Harvard Club where he was a member. And it was like a full circle moment to be in the same hallways that he walked and where he celebrated his wins. And even more cooler than that was afterwards, I tweeted about it and his daughter posted about it on Instagram. Which is like, kind of surreal for me. So, why should white guys have all the fun? Because Reginald F. Lewis was a pioneer.

AI assessment note: “Why should white guys have all the fun? Because Reginald F. Lewis”

Q Do you think the traditional fundraising process is fucked up? You raising your funds so successfully on Twitter, do you think it's like, fuck, why don't we do it the way we do?

A A hundred percent, but that's how I feel about half the stuff in venture. Like, one of the things that happened for me as I was raising my fund was, I had this career, and I learned all this stuff, I had gone through these trainings, I've read these books, and it was like, venture's done in this, like, specific way, and like, this is all the rules. And then I started raising my fund, I was like, I don't care about any of these rules. Like, fuck the rules. Like, these are all just legal structures. They can be changed. So like most people, they close, they say, you should have like 30 or 40% of your fund close for your first close. My first close was at 10%. Right. People like, you know, you should only have this many closes. No, I do a rolling close every three weeks. Like I bring my LPs and batches. Like I want to access the capital so I can start deploying. Cause I need, I want it to build up some momentum. You know, um, you need to do traditional capital calls because you don't want to mess up your IRR. No, I gave my LPs three options. You can do a hundred percent upfront, 50% each year over two years or 33%. Over each year, over three years, with the minimum being 10 K per year. So if you gave me a 10 K check, you gave it a hundred percent upfront. And it's like, I'm just gonna hold the money in escrow and get it when I need. I'm not chasing anybody down for 10 K checks. Um…

AI assessment note: “A hundred percent, but that's how I feel about half the stuff in venture.”

Q It's hilarious. I do want to ask, you know, we spoke about Rare Breed and the structure and the strategy. A lot of people are talking about rolling funds. How do you feel about the rise of rolling funds, and why did you decide not to do a rolling fund?

A I think rolling funds are another sign of the lack of innovation in our industry, right? Like Angel's List took something that had been around before that people weren't really using. They took a designation of five or six, which had been around since 2013 that nobody was really using and kind of pushed it together and made a product to help emerging manager or give another structure for fundraising. And it's like, everybody's like, oh my God, this is so world changing. It's like, Well, should we be doing stuff like this on the regular? Should we be thinking about how to come up with stuff like this often? Like, if this is the biggest innovation we can point to, that's sad, right? But then the other thing for me was, I looked at rolling funds. I thought they were really interesting. They allowed, they would allow me to take advantage of like my, my growing Twitter following and such. But what I didn't like about rolling funds with the way they do LP returns, like LPs have to continuously buy in the quarters to make sure they get allocation to the companies you invest in. So if you're not an LP in the specific quarter and that's the quarter I make my best investment in, but you're an LP in the quarter before the quarter after, You don't get access to that deal or to those returns. And I knew for me that a lot of my earliest LPs were just going to be people who truly supported me…

AI assessment note: “what I didn't like about rolling funds with the way they do LP returns”

Q How did you afford legal fees? Because this is the other thing that frustrates me. It's like, one is legal fees are expensive, and two, GP commits, like, I mean, it's a, it's a lot of money.

A So remember when I said, fuck the rules? So I have no GP commit. I didn't have the money for it. I wasn't even an accredited investor when I started raising my fund, right? Legal? I actually, this is, remember now, like, I'm getting popular on Twitter, I'm tweeting a lot, My lawyer actually found me on Twitter and chased me down and said, what do I gotta do to be your lawyer? He's never charged me. He's been my lawyer for over a year. He's never sent me a bill. I'm like, yo, hey, Jason, I love you, brother. Like, you can send me a bill down. Like, we raised some of this money. I could pay you. He's like, no, no, no, no, we'll get to it one day. I was like, alright. So, like, it's just all kind of fell, fell, fell together for me.

AI assessment note: “He's never charged me. He's been my lawyer for over a year.”

Q Okay, so you've listened to the show before. What's your favorite book and why?

A Favorite book and why? Why should white guys have all the fun? Because Reginald F. Lewis being a black man from Baltimore who created a private equity firm and was a billionaire is somebody who I look up to and respect. And just last, earlier this week, I got to speak at the Harvard Club where he was a member. And it was like a full circle moment to be in the same hallways that he walked and where he celebrated his wins. And even more cooler than that was afterwards, I tweeted about it and his daughter posted about it on Instagram. Which is like, kind of surreal for me. So, why should white guys have all the fun? Because Reginald F. Lewis was a pioneer.

AI assessment note: “Why should white guys have all the fun? Because Reginald F. Lewis”

Q I totally, I'm totally with you on the hot deals not always being good deals. What else is up? I'm too interested, man. This is great.

A I mean, we talk about diversity in venture, right? And everybody saw after the killing of George Floyd, there was all this conversation around, you know, we're going to invest in minority founders, we're going to invest in black founders, we're going to invest in black GPs. All this stuff came out. But I always tell people, when you go back to that time period, you look at it, Pay attention who didn't say anything. Institutional LPs. Name one pension fund that said anything. The first people to say something was really Yale, like five, six months later. And even then nobody else said anything because they don't have to say anything because nobody knows who they are. So if you want to talk to me about diversity, let's talk about the top of the food chain in this industry. They didn't say anything. I don't know how much they actually care about diversity. I know what they do care about. They care about good returns. And so that's what I'll focus on. And if it just so happens that 77% of my portfolio are underrepresented founders, it just happened that way. At the end of the day, I'm a unicorn hunter, so I'm looking for returns all day, every day. But if you want to talk to me about diversity, let's start at the top.

AI assessment note: “we talk about diversity in venture, right?”

Q to a couple of your founders before the show, and they said that, you know, when it comes to the conversations they can have with you, um, they're a lot more real and honest than they are with other members of their cap table. What do you think it is that basically allows you to have that relationship of depth and intimacy with founders that maybe other investors don't have?

A I mean, the fact that I'm a former founder helps, but I think it's more just, I'm okay having any and every conversation with them because we're people. Right? Like, I'm a people person. I'm somebody that people can talk to, and I'm, I want to be a true supporter because, like, I remember as a founder just like how hard it was, how lonely it could be. Like, yeah, I had a team, but as a CEO, I'm still lonely. Right? Like, the arguments me and my teams would get into after pitch competitions because I didn't talk enough about their background and didn't point them out enough. Like, you know, I remember these arguments and these issues and, like, just How hard it was, and then also, like, when I got started, like, I was like a twenty-four-year-old black guy in Baltimore who was an engineer who didn't know anything. Like, I didn't know what startups were, I didn't know what VCs were, I didn't know what networking was, right? Like, like the first time somebody told me I was networking, I thought they thought, I thought they were talking about me running wires, right? Like I was so confused. And it's a really vulnerable place when you're in an ecosystem like this and you don't know. And so for my founders, I want them to feel like they have somebody they can come to and they can come to me for anything, right? Because We're all just human, right? So just the same way, like, a good fr…

AI assessment note: “the fact that I'm a former founder helps, but I think it's more”

Q I've failed many times, you know, I failed to get jobs when I was early. I got rejected by many venture firms, which not many people know, but we are going to have an open conversation today. So this is going to be a fun one. When you failed with the startup, how did you manage that? And how did you deal with that person? It's such a tough time.

A Um, I didn't deal with it well, right? Um, I basically Got burnt out. Told my investors, hey, thanks, but no thanks. Um, here's what little money we have left. You can all have it back. And I basically hid in my house for six months cause I didn't want to see anybody or talk to anybody. Um, and I was basically depressed because to fail in such a public way, when you got all these people and supporters around you, everybody's telling you how great you are, how smart you are, how you're going to be the next this, the next that. And then it doesn't work out. It felt terrible. Like, I spent all this time networking and being around people to, like, not wanting to see anybody, because I didn't ever have, I didn't want to have to explain what happened. I didn't want anybody to ask me, like, how's your startup doing? And me being fake about it, did the smile, like, ah, we're doing ok. And so, um, I was, I was just stuck in my house, and then something incredible happened. I recognized that the people who truly cared about me and loved me, Didn't care. Like whether or not I succeeded in that startup didn't change the way they thought about me or change how smart they thought I was or how much they respected me. Like love and respect from your friends and your family members can truly be unconditional. And so when I looked up and everybody was like, yeah, so what? Like you've done all t…

AI assessment note: “I didn't deal with it well, right? Um, I basically Got burnt out.”

Q How did you afford legal fees? Because this is the other thing that frustrates me. It's like, one is legal fees are expensive, and two, GP commits, like, I mean, it's a, it's a lot of money.

A So remember when I said, fuck the rules? So I have no GP commit. I didn't have the money for it. I wasn't even an accredited investor when I started raising my fund, right? Legal? I actually, this is, remember now, like, I'm getting popular on Twitter, I'm tweeting a lot, My lawyer actually found me on Twitter and chased me down and said, what do I gotta do to be your lawyer? He's never charged me. He's been my lawyer for over a year. He's never sent me a bill. I'm like, yo, hey, Jason, I love you, brother. Like, you can send me a bill down. Like, we raised some of this money. I could pay you. He's like, no, no, no, no, we'll get to it one day. I was like, alright. So, like, it's just all kind of fell, fell, fell together for me.

AI assessment note: “He's never charged me. He's been my lawyer for over a year.”

Q So what, what needs to change? Is the investment committees and the decision makers at institutions like pension funds, like corporates?

A A lot of that stuff needs to change. And then also we need more There needs to be more allocators along the asset class, right? Because when you think about it, if you're going to raise a fund, and you're a first-time GP, you're raising, say, a ten million dollar fund, those institutional LPs can't even write a check small enough to invest in your fund, right? And so, even if a large institution comes out and says they want to be about diversity, well, most of us diverse emerging managers are raising micro funds. And they can't write checks that small. So it's like, what can you do to support us? You probably should have a division of a fund to fund divisions just for emerging managers that write smaller checks. You can write, like if you're an LP and you don't have the ability to write a one, some, somewhere between like a one to five million dollar check. And you might miss out on some things, right? Like, you're just hoping that when I get the fund three or fund four, if I'm doing really well, that you'll get a chance to get allocation, or you're going to have some consultant who's going to meet me at a conference, who's going to then tell you that I'm great, and that's how I'm going to get in front of you. Like, I get it, right? Like, the deal flows crazy on the LP side, just like it is on our side. But there needs to be more creativity around how we get money to emerging m…

AI assessment note: “There needs to be more creativity around how we get money to emerging managers.”

Q I, I totally get you. Can I ask, man, but Rare Breed, Rare Breed One, what does that, you know, you, you've listened to the show, you know, I love kind of portfolio construction. What does that look like for you? You've got ten million for the fund. How do you want to allocate this? How diverse in terms of, you know, concentration? How do you think about check size?

A Yeah. So, checks are two 50 to a hundred. Really, the strategy was really doing just two 50 K checks, because really my strategy is around doing larger checks at pre-seed. And when people ask me about ownership, I tell them it's not so much about ownership as it is about multiples. What we know is you get the highest multiples at pre C to C, and then every round after that, the multiples go down. So you need to put larger dollar amounts to get higher returns. So really what we're trying to do is put in the largest check reasonable as early as possible so that we have the potential to get a large enough return to return the fund every, in every investment we do. Um, and so really we're going to do somewhere between like 40 to 45 companies. Um, And, you know, we're going to probably, you know, I'm trying to be the next lower case, so we'll see how those returns come out.

AI assessment note: “really we're going to do somewhere between like 40 to 45 companies.”

Q to a couple of your founders before the show, and they said that, you know, when it comes to the conversations they can have with you, um, they're a lot more real and honest than they are with other members of their cap table. What do you think it is that basically allows you to have that relationship of depth and intimacy with founders that maybe other investors don't have?

A I mean, the fact that I'm a former founder helps, but I think it's more just, I'm okay having any and every conversation with them because we're people. Right? Like, I'm a people person. I'm somebody that people can talk to, and I'm, I want to be a true supporter because, like, I remember as a founder just like how hard it was, how lonely it could be. Like, yeah, I had a team, but as a CEO, I'm still lonely. Right? Like, the arguments me and my teams would get into after pitch competitions because I didn't talk enough about their background and didn't point them out enough. Like, you know, I remember these arguments and these issues and, like, just How hard it was, and then also, like, when I got started, like, I was like a twenty-four-year-old black guy in Baltimore who was an engineer who didn't know anything. Like, I didn't know what startups were, I didn't know what VCs were, I didn't know what networking was, right? Like, like the first time somebody told me I was networking, I thought they thought, I thought they were talking about me running wires, right? Like I was so confused. And it's a really vulnerable place when you're in an ecosystem like this and you don't know. And so for my founders, I want them to feel like they have somebody they can come to and they can come to me for anything, right? Because We're all just human, right? So just the same way, like, a good fr…

AI assessment note: “the fact that I'm a former founder helps, but I think it's more”