The Exchanges

Q do agree. I do want to touch on one element though, again, that I've, I've heard you discuss before, and it's particularly passionate with me. And it's, you've said before that there's no shame in a hundred million dollar sales. Uh, so talk to me about that and the thought process around kind of The acceptable exit that many founders now hold in their minds and how you view that?

A Yeah, I mean, I think one of the things, and we're publishing some data on this in the coming weeks, but if you look across even the VC community, many entrepreneurs turned VCs have only, you know, only, I can't believe I used that word, but exits of, you know, 50 to a couple hundred million. There are a few billion dollar exits, but I think we've all had relatively good careers where Without building unicorn companies. That's the first point, which is, I think there's such obsession with these massive numbers that are really hard to attain and not necessarily the goal. I think the other thing is what people don't always ask is how much money went in and what was that multiple? Because, you know, for example, we invested in Periscope, which sold to Twitter and they didn't take much money before they sold. Same thing with, you know, skip the dishes, same thing with the company that Eric and I founded Bronte's technologies. So I think if you keep your fund small enough, which is something that we really believe in, we've kept the fund. Uh, the last fund was 75. This, the next fund is 75. We, we haven't grown it. You are able to return, you know, meaningful parts of the fund, meaningful multiples without billion dollar companies. As funds have gotten larger, that becomes harder and harder. But I think as an entrepreneur, one has to be very capitalist. And I think there is no quest…

AI assessment note: “there's such obsession with these massive numbers that are really hard to attain”

Q I'm intrigued, um, by, by one aspect. Uh, Jason Lemkin, uh, at Sasta, a good friend, uh, through Sasta podcast, uh, he always tells me that the best investors are those that know the Benchmarks for the next round and are then able to help the founders attain them. Do you think that is the characteristic of the best?

A You know, I don't know. I think I would take, uh, I think there's some wisdom there, but I would take some issue with it, which is the twofold. One, I think there's, you can become obsessed with what you need to achieve for the next round. And, you know, every board meeting then becomes, well, what are the, what are the series A guys want? And you're not really building the business. You're building the deck for the series A. You know, you're trying to get to a certain, you know, certain customers that may or may not be the right customers, but you want to get the logos, or you might hire certain people that you really don't need to hire, but you want to get them on the slide. So I think that logic taken to extreme is sometimes dangerous. I think the second challenge with that logic is that the goalposts keep moving. At the time of the seed investment, you think the company needs to get to get to an A. 18 months later, it turns out to be totally different. It's asked You know, a hundred K was the series a benchmark. And then all of a sudden it's 200 K or it was all about SMBs, but then, you know, it turns out enterprise is where you go and, and it's not even a SAS model. And so I guess my point is so much can evolve with the business and with the metrics that the series a and B guys want that. I think it's, it's hard to build your company just for the next round. I almost wish …

AI assessment note: “I think there's some wisdom there, but I would take some issue with it”

Q kind of, the best investors are those that have strong conviction, uh, Or strong opinions loosely held, and that you should have a red team to kind of stress test those in an adventure partnership to really ensure your conviction is as, as valid as you think it is. To what extent do you, do you kind of develop that conviction thesis and stress test it within, within Founder Collective?

A Yeah, I mean, I, I will say that before a Monday meeting, when I have a couple of deals that, or a deal that I have high conviction on, That I want to pitch or present to the group. I get a little butterflies. I know that I, I, I mean, this is probably, uh, extreme, but I'm, I'm an attorney making the case and I want the guys not, not to necessarily convince me to do it or not to do it, but I want to show my conviction and I want them to stress test my assumptions. And so, you know, I think that's exactly right. I think strong opinions loosely held. Like I go in and And I've done my diligence and have my point of view, but I want to, I want to see, you know, my blind spots. I want to hear, you know, are there people I haven't talked to that I should be? And then in the end, I still need to make my own decision. And that's how our process works. It's not a vote. It's not a majority. It's, it's conviction based. And I think because at the seed stage, two things, one, it's very human. At the end of the day, I met those founders. I spent the time in their office. I took a I got the sense of their culture and their, the fire in their belly. No matter how many times the other guys meet them, I'm the one who spent, you know, in the case of my stuff, spent the most time. I think that's the first thing. The second thing is there's only so much data to go through. There's only so much di…

AI assessment note: “I want them to stress test my assumptions.”

Q do agree. I do want to touch on one element though, again, that I've, I've heard you discuss before, and it's particularly passionate with me. And it's, you've said before that there's no shame in a hundred million dollar sales. Uh, so talk to me about that and the thought process around kind of The acceptable exit that many founders now hold in their minds and how you view that?

A Yeah, I mean, I think one of the things, and we're publishing some data on this in the coming weeks, but if you look across even the VC community, many entrepreneurs turned VCs have only, you know, only, I can't believe I used that word, but exits of, you know, 50 to a couple hundred million. There are a few billion dollar exits, but I think we've all had relatively good careers where Without building unicorn companies. That's the first point, which is, I think there's such obsession with these massive numbers that are really hard to attain and not necessarily the goal. I think the other thing is what people don't always ask is how much money went in and what was that multiple? Because, you know, for example, we invested in Periscope, which sold to Twitter and they didn't take much money before they sold. Same thing with, you know, skip the dishes, same thing with the company that Eric and I founded Bronte's technologies. So I think if you keep your fund small enough, which is something that we really believe in, we've kept the fund. Uh, the last fund was 75. This, the next fund is 75. We, we haven't grown it. You are able to return, you know, meaningful parts of the fund, meaningful multiples without billion dollar companies. As funds have gotten larger, that becomes harder and harder. But I think as an entrepreneur, one has to be very capitalist. And I think there is no quest…

AI assessment note: “there's such obsession with these massive numbers that are really hard to attain”

Q I'm intrigued, um, by, by one aspect. Uh, Jason Lemkin, uh, at Sasta, a good friend, uh, through Sasta podcast, uh, he always tells me that the best investors are those that know the Benchmarks for the next round and are then able to help the founders attain them. Do you think that is the characteristic of the best?

A You know, I don't know. I think I would take, uh, I think there's some wisdom there, but I would take some issue with it, which is the twofold. One, I think there's, you can become obsessed with what you need to achieve for the next round. And, you know, every board meeting then becomes, well, what are the, what are the series A guys want? And you're not really building the business. You're building the deck for the series A. You know, you're trying to get to a certain, you know, certain customers that may or may not be the right customers, but you want to get the logos, or you might hire certain people that you really don't need to hire, but you want to get them on the slide. So I think that logic taken to extreme is sometimes dangerous. I think the second challenge with that logic is that the goalposts keep moving. At the time of the seed investment, you think the company needs to get to get to an A. 18 months later, it turns out to be totally different. It's asked You know, a hundred K was the series a benchmark. And then all of a sudden it's 200 K or it was all about SMBs, but then, you know, it turns out enterprise is where you go and, and it's not even a SAS model. And so I guess my point is so much can evolve with the business and with the metrics that the series a and B guys want that. I think it's, it's hard to build your company just for the next round. I almost wish …

AI assessment note: “I think there's some wisdom there, but I would take some issue with it”

Q What's your biggest challenge in your daily role now with Founder Collective?

A You know, I think it's juggling new opportunities with the existing portfolio. I always err on the side of the existing portfolio, but it is a juggle. And you and I had this conversation before we started the podcast that One of my favorite lines that I'll give Eric credit for is that in venture, investing in helping companies is the only A activity. Everything else is a B activity. And yet, probably you can attest to this, there are a million B activities that come through your inbox every day. And it's tempting, and I think it's human nature to want to triage and deal with them all. A podcast here, a conference there, you know, a dinner, a lunch. And it's just, it's hard to be focusing and to prioritize the right stuff because There's no end to the fire hose adventure. And, and I, yeah, go ahead.

AI assessment note: “I think it's juggling new opportunities with the existing portfolio.”

Q kind of, the best investors are those that have strong conviction, uh, Or strong opinions loosely held, and that you should have a red team to kind of stress test those in an adventure partnership to really ensure your conviction is as, as valid as you think it is. To what extent do you, do you kind of develop that conviction thesis and stress test it within, within Founder Collective?

A Yeah, I mean, I, I will say that before a Monday meeting, when I have a couple of deals that, or a deal that I have high conviction on, That I want to pitch or present to the group. I get a little butterflies. I know that I, I, I mean, this is probably, uh, extreme, but I'm, I'm an attorney making the case and I want the guys not, not to necessarily convince me to do it or not to do it, but I want to show my conviction and I want them to stress test my assumptions. And so, you know, I think that's exactly right. I think strong opinions loosely held. Like I go in and And I've done my diligence and have my point of view, but I want to, I want to see, you know, my blind spots. I want to hear, you know, are there people I haven't talked to that I should be? And then in the end, I still need to make my own decision. And that's how our process works. It's not a vote. It's not a majority. It's, it's conviction based. And I think because at the seed stage, two things, one, it's very human. At the end of the day, I met those founders. I spent the time in their office. I took a I got the sense of their culture and their, the fire in their belly. No matter how many times the other guys meet them, I'm the one who spent, you know, in the case of my stuff, spent the most time. I think that's the first thing. The second thing is there's only so much data to go through. There's only so much di…

AI assessment note: “I want to show my conviction and I want them to stress test my assumptions.”

Q What's your biggest challenge in your daily role now with Founder Collective?

A You know, I think it's juggling new opportunities with the existing portfolio. I always err on the side of the existing portfolio, but it is a juggle. And you and I had this conversation before we started the podcast that One of my favorite lines that I'll give Eric credit for is that in venture, investing in helping companies is the only A activity. Everything else is a B activity. And yet, probably you can attest to this, there are a million B activities that come through your inbox every day. And it's tempting, and I think it's human nature to want to triage and deal with them all. A podcast here, a conference there, you know, a dinner, a lunch. And it's just, it's hard to be focusing and to prioritize the right stuff because There's no end to the fire hose adventure. And, and I, yeah, go ahead.

AI assessment note: “I think it's juggling new opportunities with the existing portfolio.”

Q And, and so how did that then transition from the mailroom, uh, in Hollywood to, to then VC with Founder Collective? I know it's a big jump to make, but what was the transition point?

A Because I had sort of an entrepreneurial streak in me, and I think I didn't Follow the path and didn't always look to career services or whatever to make the path for me while I was in Hollywood. And then I moved up to become an assistant to one of the agents. My roommate in LA was working on a startup and he was a dear friend. And one night a week, I'd help him then two nights a week, then a little bit in the afternoon and then weekends. And we, we pulled down all the posters we had in our cheap apartment and put up whiteboards. And all of a sudden we became a startup. And I didn't even, it wasn't Deliberate. It was just like, it felt like the thing to do. It felt like the thing that was grabbing me. And so we started a company called handshake.com, which ultimately got funded by ideal lab capital and ideal lab. I don't know if you remember, but ideal lab was the first accelerator pre YC pre, you know, all the, you know, the ones that we see today. So I really got an education in startups in the late nineties. And I just, I was enthralled. I mean, here I was, I was a With two of my closest friends, we were doing online scheduling of things like house cleaners and carpet cleaners, even black cars. And, you know, I think we just sort of, we went with it and were able to raise a lot of capital. It was the dot-com boom. If you had a pulse, you could raise money or it seemed that w…

AI assessment note: “My roommate in LA was working on a startup and he was a dear friend.”

Q And, and so how did that then transition from the mailroom, uh, in Hollywood to, to then VC with Founder Collective? I know it's a big jump to make, but what was the transition point?

A Because I had sort of an entrepreneurial streak in me, and I think I didn't Follow the path and didn't always look to career services or whatever to make the path for me while I was in Hollywood. And then I moved up to become an assistant to one of the agents. My roommate in LA was working on a startup and he was a dear friend. And one night a week, I'd help him then two nights a week, then a little bit in the afternoon and then weekends. And we, we pulled down all the posters we had in our cheap apartment and put up whiteboards. And all of a sudden we became a startup. And I didn't even, it wasn't Deliberate. It was just like, it felt like the thing to do. It felt like the thing that was grabbing me. And so we started a company called handshake.com, which ultimately got funded by ideal lab capital and ideal lab. I don't know if you remember, but ideal lab was the first accelerator pre YC pre, you know, all the, you know, the ones that we see today. So I really got an education in startups in the late nineties. And I just, I was enthralled. I mean, here I was, I was a With two of my closest friends, we were doing online scheduling of things like house cleaners and carpet cleaners, even black cars. And, you know, I think we just sort of, we went with it and were able to raise a lot of capital. It was the dot-com boom. If you had a pulse, you could raise money or it seemed that w…

AI assessment note: “My roommate in LA was working on a startup and he was a dear friend.”

Q Can I ask, with that in mind, and with the kind of slightly alternative investment approach, to what extent do you think, then, that the VC ecosystem that we are all so enraptured in, uh, very much subscribes to the herd mentality that we often hear about?

A Yeah, I think, you know, someone came to me and said, you know, I'm looking to start a new firm, and the way I'm going to get started is by Backing the bets of all the big VC firms and, and that'll give me the credibility to go out and raise a second fund. And I, and I said, you know, with all due respect, I think you have it all wrong. I think what gives you the respect and the credibility Is being able to lean into something that the herd is not leaning into. It's so easy to just back everybody's bets. I see it all the time. I'm sure you do. I think what's hard is when everybody's like, I let a deal about a year and a half ago in Brooklyn, now in New York called Dia and company with two women.

AI assessment note: “It's so easy to just back everybody's bets. I see it all the time.”

Q Can I ask, with that in mind, and with the kind of slightly alternative investment approach, to what extent do you think, then, that the VC ecosystem that we are all so enraptured in, uh, very much subscribes to the herd mentality that we often hear about?

A Yeah, I think, you know, someone came to me and said, you know, I'm looking to start a new firm, and the way I'm going to get started is by Backing the bets of all the big VC firms and, and that'll give me the credibility to go out and raise a second fund. And I, and I said, you know, with all due respect, I think you have it all wrong. I think what gives you the respect and the credibility Is being able to lean into something that the herd is not leaning into. It's so easy to just back everybody's bets. I see it all the time. I'm sure you do. I think what's hard is when everybody's like, I let a deal about a year and a half ago in Brooklyn, now in New York called Dia and company with two women.

AI assessment note: “It's so easy to just back everybody's bets. I see it all the time.”