The Exchanges

Q What advice would you give to young people wanting to enter the world of VC?

A I think I have two advices. One, do the job I mean, it's actually possible for you to basically act like an analyst associate at a fund without getting a job. You can meet with founders. You can write market maps. You can basically do the job. You can send over these deals to VCs, and you'd be surprised how far that goes. The other one, I'd say, is win over founders. You know, I was in a position where I was interviewing at firms at one point or another, and a lot of these VCs won't reply to your emails. They're like, eh, who cares? It's another person looking for a job, and it just so happened I was close to a whole bunch of founders, and the moment the founder emailed a VC and said, hey, you need to meet with this guy, the VCs jumped. They're like, oh, hey, I was meaning to reply to this email, and I just heard from XYZ founder. And then they, VCs are in a service business, and we answer to founders first.

AI assessment note: “I think I have two advices. One, do the job”

Q What made your way into tech, though? Harvard Business School often leads to Morgan Stanley and Goldman Sachs. You seem to see the light.

A The great thing is that, you know, I actually owe it to the financial crisis in the United States. I was economics at Yale. Couldn't get a job in finance. I remember being devastated when, you know, Goldman turned me down, all those companies. You know, the big investment banking firms turned me down, but I actually ended up turning out better for me because I ended up going down the startup route because my first job out of college wasn't in finance. It was in retail strategy, doing a turnaround situation at Sears Holding Company, and that's where I met my co-founder, Castor Eunice, Sonny Dillon, and both those guys basically started TalkBend with me, and that's what really led to success I've had. At the time, TalkBend was the fastest exit YC had ever had.

AI assessment note: “I actually owe it to the financial crisis in the United States.”

Q What made your way into tech, though? Harvard Business School often leads to Morgan Stanley and Goldman Sachs. You seem to see the light.

A The great thing is that, you know, I actually owe it to the financial crisis in the United States. I was economics at Yale. Couldn't get a job in finance. I remember being devastated when, you know, Goldman turned me down, all those companies. You know, the big investment banking firms turned me down, but I actually ended up turning out better for me because I ended up going down the startup route because my first job out of college wasn't in finance. It was in retail strategy, doing a turnaround situation at Sears Holding Company, and that's where I met my co-founder, Castor Eunice, Sonny Dillon, and both those guys basically started TalkBend with me, and that's what really led to success I've had. At the time, TalkBend was the fastest exit YC had ever had.

AI assessment note: “I actually owe it to the financial crisis in the United States.”

Q Now, I'm interested though, because we've seen specialization emerge. As a differentiator amongst the plethora of micro VC funds. To what extent do you agree with specialization being a key differentiator?

A I do think it's a differentiator, and keep in mind, we're a generalist fund. I'm going to feel like I contradict myself sometimes. I do think it's one way that micro VCs are used to solve that. I have immense respect for, like, there's a whole bunch of Seth Bannon's, it's a president's capital who are just done a great job of that, but I usually push back against people, especially LPs, when they ask about it, it's like, look, What are the best funds of all time? Benchmark, lowercase, they're all generalist funds. And I say, look, no matter what somebody pitches you about being a specialist fund, if it comes down to it, and let's say there's a great founder that they've known for a while, is that fund going to back that founder or not, even if it's outside of their sort of sweet spot? If they do, I'm like, well, that just means your generalist fund is just what percentage of a generalist fund, right? So I say, we might as well be up front and just be like, let's just be a generalist fund.

AI assessment note: “I do think it's a differentiator, and keep in mind, we're a generalist fund.”

Q You mentioned there about kind of the desire to increase allocation on the LP behalf. I'm intrigued. Do you have the desire to increase the size of the fund and really scale this up as the next enduring fund, or do you want to be the micro VC fund?

A You know, I think it's a continual discussion. Definitely. I personally really like micro VC. I think that's when you can help the founder most. So in that sense, I think we want to stick around, around the size. I think we'll get slightly bigger just because we're surprised at the amount of founder trust we've gotten and their ability to say, hey, yes, we want you and follow on financing. We think you've added enough value. And so we're happy to be part of that. And I think that just means raising a little bit more money. But fundamentally, I think you make a choice of like, what, what do you think you're good at? And I think we're very good at seed and we want to stick with that. The more capital just has to do with supporting founders more, not fundamentally changing strategy.

AI assessment note: “I personally really like micro VC. I think that's when you can help”

Q to start today. I'm And before we dive into all things Liquid II, I want to start today on the micro VC market, more broadly speaking. So many are suggesting, and many have told me on the show, that there's simply too much cash chasing too few deals. I'm intrigued. To what extent do you believe and agree with this, having really operated in the market for a while now?

A I agree in general. Like, Silicon Valley Bank keeps sending out this list of micro VCs, and they just keep seeing it growing more and more. And the truth is, the amount of companies, it's It's growing, but it's not growing to the extent where the funds are growing at. It's still a great asset class, micro-receives in particular out of venture, but there's just a lot, a lot of people chasing the same deals, especially out here. So I do think that's, that is the case. Whenever I talk to LPs, I'm like, look, this is what I enjoy doing. I'm passionate about it. I'm going to keep doing it. It's up to you to decide how much allocation you really want. And micro-receives, I'm upfront about that might be an issue.

AI assessment note: “I agree in general. Like, Silicon Valley Bank keeps sending out this list”

Q What advice would you give to young people wanting to enter the world of VC?

A I think I have two advices. One, do the job I mean, it's actually possible for you to basically act like an analyst associate at a fund without getting a job. You can meet with founders. You can write market maps. You can basically do the job. You can send over these deals to VCs, and you'd be surprised how far that goes. The other one, I'd say, is win over founders. You know, I was in a position where I was interviewing at firms at one point or another, and a lot of these VCs won't reply to your emails. They're like, eh, who cares? It's another person looking for a job, and it just so happened I was close to a whole bunch of founders, and the moment the founder emailed a VC and said, hey, you need to meet with this guy, the VCs jumped. They're like, oh, hey, I was meaning to reply to this email, and I just heard from XYZ founder. And then they, VCs are in a service business, and we answer to founders first.

AI assessment note: “I think I have two advices. One, do the job... The other one... win over founders.”

Q Love it. And then for follow-on funding?

A For follow-on funding is one of the things that I think we're one of the weakest at, because when we started a fund, we didn't think we could get a lot of follow-on funding We. We're like, ah, let's not leave a huge amount of allocation. Like typically for micro-receives, I'd say in industry, it's like fifty-fifty, 50% out of fund, 50% on the back end. I'd say the best funds are doing like something like three to one with three being the follow on. I'd say first round poly is doing that. Like some of the best funds are doing that. We didn't think we could win these deals. We're like, you know, the A is going to own everything. So we didn't have a compelling strategy. Nowadays it's very similar where we try to do majority vote. Generally, we say we stay out of seat extensions and during the A, we think the lead is going to be the signal anyway. So that's when we'll come back in.

AI assessment note: “For follow-on funding is one of the things that I think we're one of the weakest at”

Q You mentioned there about kind of the desire to increase allocation on the LP behalf. I'm intrigued. Do you have the desire to increase the size of the fund and really scale this up as the next enduring fund, or do you want to be the micro VC fund?

A You know, I think it's a continual discussion. Definitely. I personally really like micro VC. I think that's when you can help the founder most. So in that sense, I think we want to stick around, around the size. I think we'll get slightly bigger just because we're surprised at the amount of founder trust we've gotten and their ability to say, hey, yes, we want you and follow on financing. We think you've added enough value. And so we're happy to be part of that. And I think that just means raising a little bit more money. But fundamentally, I think you make a choice of like, what, what do you think you're good at? And I think we're very good at seed and we want to stick with that. The more capital just has to do with supporting founders more, not fundamentally changing strategy.

AI assessment note: “I personally really like micro VC... we want to stick around, around the size.”

Q Well, I think it's the terrible nerdy British accent that does it, but I'd love to get started today by discussing your start in the world of tech, and how, with parents starting as immigrants with 300 dollars to you selling your company to Google as a YC alum, how did you make your way in?

A So I always like to start a little bit earlier than most people when I talk about my career, because I just owe my parents so much. It's just even beyond the story of my dad and mom coming to the U.S. with only a few hundred dollars. When growing up, they wanted the best educational opportunities. They're very Asian parents. They wanted, my sister and I had a great educational opportunities. Couldn't afford private school, so my parents actually rented a small apartment in Beverly Hills. Dad worked in Hong Kong because his English wasn't great just to support the family, and my mom slept on a sofa. Paul had sofa bed for four years, and things ended up working out. I ended up going to Yale and then Harvard Business School. My sister went to Duke and Harvard Law, so that's really where I got my start.

AI assessment note: “I ended up going to Yale and then Harvard Business School... where I got my start.”

Q No, absolutely. I agree with you. What would you most like to change in the world of startups and Silicon Valley?

A You know, I, I think there should be less hero worship around both startups and founders and VCs, and, and I think you'd see, like, less crashes there, too. You know, everybody's like, oh, Uber is taking on the cabinetry, and then immediately falls out of favor. I mean, I, I just don't think that's healthy for the ecosystem. You gotta, if you start off with the assumption that founders are humans from the start, you know, in a lot of ways, I look at them as very similar to, like, your local restaurant owners. You shouldn't necessarily, like, Put them in that hero class of like, okay, these are the next thing. They're trying to build a business. You know, there's a differentiator of having massive scale, but at the end of the day, they're actually not as different than you think from just a local guy who's running a small business.

AI assessment note: “I think there should be less hero worship around both startups and founders and VCs”

Q to start today. I'm And before we dive into all things Liquid II, I want to start today on the micro VC market, more broadly speaking. So many are suggesting, and many have told me on the show, that there's simply too much cash chasing too few deals. I'm intrigued. To what extent do you believe and agree with this, having really operated in the market for a while now?

A I agree in general. Like, Silicon Valley Bank keeps sending out this list of micro VCs, and they just keep seeing it growing more and more. And the truth is, the amount of companies, it's It's growing, but it's not growing to the extent where the funds are growing at. It's still a great asset class, micro-receives in particular out of venture, but there's just a lot, a lot of people chasing the same deals, especially out here. So I do think that's, that is the case. Whenever I talk to LPs, I'm like, look, this is what I enjoy doing. I'm passionate about it. I'm going to keep doing it. It's up to you to decide how much allocation you really want. And micro-receives, I'm upfront about that might be an issue.

AI assessment note: “there's just a lot, a lot of people chasing the same deals”

Q Love it. And then for follow-on funding?

A For follow-on funding is one of the things that I think we're one of the weakest at, because when we started a fund, we didn't think we could get a lot of follow-on funding We. We're like, ah, let's not leave a huge amount of allocation. Like typically for micro-receives, I'd say in industry, it's like fifty-fifty, 50% out of fund, 50% on the back end. I'd say the best funds are doing like something like three to one with three being the follow on. I'd say first round poly is doing that. Like some of the best funds are doing that. We didn't think we could win these deals. We're like, you know, the A is going to own everything. So we didn't have a compelling strategy. Nowadays it's very similar where we try to do majority vote. Generally, we say we stay out of seat extensions and during the A, we think the lead is going to be the signal anyway. So that's when we'll come back in.

AI assessment note: “For follow-on funding is one of the things that I think we're one of the weakest at”

Q I had Sean Rad at Tinder on the show recently, and he said that he always looks for founders to have a sense of a chip on their shoulder when, when kind of evaluating opportunities. I'm intrigued. Would you agree with this? And from seeing so many founders pass through the funnel now, what are the common character traits amongst the best founders that you've worked with and invested in?

A I do agree with that. I would also say because founders themselves are such an out, Liars isn't possibly like, oh, that's the one trait you need. The founders will always have a different trait. There'd be some that won't have a chip on their shoulder, and they'd be amazing. I do think one common trait is just founders have this will to succeed. And, you know, I think Paul Graham calls it grit. It shows off in a lot of different ways. Maybe they're super passionate about an idea, and that's the will to say. Maybe they do have a chip on their shoulder. Sometimes they think, hey, nobody else is going to do this. If I don't do it, so I have to do it. And they just end up just really into a space. That grit, that will... To do whatever it takes to be successful, I think is a very common trait. And they all, I would all say founders are very smart. They don't have to be geniuses, but I think they all hit the threshold when you talk to me like, this person is a smart person.

AI assessment note: “I do agree with that. I would also say because founders themselves are such an out”

Q You said that about being the advisor. I'm always stuck in the dichotomy of, can a founder be your friend as well as your portfolio company?

A You know, like one of our portfolio companies, I went to business school with them, known them for years. Yes, I think it's helpful. I would say the short of it, it's actually really helpful doing the process of valuing company if you've known a founder for a long time, because you actually know what they're like. When they're a portfolio company, I don't think we treat them any differently. It's not like, oh, it's just a friend, so I'm going to take a set of actions that are different. Because you end up being friends with people that you end up meeting through the fund, you invest in them, you end up being friends with them. And so you're very upfront about that. And it's a good thing. It's a good thing. I really enjoy working with a lot of founders, but we just don't try to do anything different because of that. You know, you always got to take yourself away from the personal relationship.

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

Q Now, I'm interested though, because we've seen specialization emerge. As a differentiator amongst the plethora of micro VC funds. To what extent do you agree with specialization being a key differentiator?

A I do think it's a differentiator, and keep in mind, we're a generalist fund. I'm going to feel like I contradict myself sometimes. I do think it's one way that micro VCs are used to solve that. I have immense respect for, like, there's a whole bunch of Seth Bannon's, it's a president's capital who are just done a great job of that, but I usually push back against people, especially LPs, when they ask about it, it's like, look, What are the best funds of all time? Benchmark, lowercase, they're all generalist funds. And I say, look, no matter what somebody pitches you about being a specialist fund, if it comes down to it, and let's say there's a great founder that they've known for a while, is that fund going to back that founder or not, even if it's outside of their sort of sweet spot? If they do, I'm like, well, that just means your generalist fund is just what percentage of a generalist fund, right? So I say, we might as well be up front and just be like, let's just be a generalist fund.

AI assessment note: “I do think it's a differentiator, and keep in mind, we're a generalist fund.”

Q Well, I think it's the terrible nerdy British accent that does it, but I'd love to get started today by discussing your start in the world of tech, and how, with parents starting as immigrants with 300 dollars to you selling your company to Google as a YC alum, how did you make your way in?

A So I always like to start a little bit earlier than most people when I talk about my career, because I just owe my parents so much. It's just even beyond the story of my dad and mom coming to the U.S. with only a few hundred dollars. When growing up, they wanted the best educational opportunities. They're very Asian parents. They wanted, my sister and I had a great educational opportunities. Couldn't afford private school, so my parents actually rented a small apartment in Beverly Hills. Dad worked in Hong Kong because his English wasn't great just to support the family, and my mom slept on a sofa. Paul had sofa bed for four years, and things ended up working out. I ended up going to Yale and then Harvard Business School. My sister went to Duke and Harvard Law, so that's really where I got my start.

AI assessment note: “I always like to start a little bit earlier than most people”

Q Incredibly modest of you there in terms of don't expect much from us, because I've spoken to many of your entrepreneurs who say you are exceptional, but I'm intrigued to ask then, do you, what's your thesis on board seats and taking board seats at seed, and when's the right time to construct the board?

A We don't take board seats on seed. I like to think of us as advisors in a lot of ways. We'll get involved, especially when you think about follow-on fundraising. We're very, very incentivized along with entrepreneurial. We've had entrepreneurs who have taken from really good seed funds, Who have a lot of capital deployed to follow on. They actually go to us first because we, we have very little to vote to follow on. So like, look, our incentives are aligned with you dramatically. And so that's been very helpful. I do think in a day, there's some expectation that when they graduate to series a, those guys will take the bulk of it. When they take a board seat, we haven't taken board seats ever, but we're not opposed to it. Like if the right founder came to us, like, we really need you. We're happy to do it. I think the key is that, look, you guys are still figuring things out. You're still getting no loss. Don't feel the pressure. To have us on your board, because a lot of founders actually don't want that.

AI assessment note: “We don't take board seats on seed.”

Q I often hear from VCs that one of the hard elements of value provision, it comes whether you provide it pre-investment or post-investment, and leaving enough post after you've given so much pre to get the deal done. How do you think about pre-investment value and post-investment value, and kind of getting enough, but also retaining enough to be a worthy candidate following on?

A I think in a perfect world, you wouldn't have to oversell. I think that happens a lot. They promise a lot of things, because It's a very competitive deal a lot of times, and other VCs are promising things, too. A lot of times, we're like, look, we're a small fund, don't have huge expectations, and we like to blow past those expectations. It's optimal. That doesn't always happen, in which case, we think we do about the same both sides. You know, we do some of the upfront, and then we do some of the backend, and it's not like we do way more upfront. I just don't think, as a fund, we have enough capital, enough resources to do all that upfront. So I think we still continue to do a lot on the backend.

AI assessment note: “we think we do about the same both sides. You know, we do some”

Q Incredibly modest of you there in terms of don't expect much from us, because I've spoken to many of your entrepreneurs who say you are exceptional, but I'm intrigued to ask then, do you, what's your thesis on board seats and taking board seats at seed, and when's the right time to construct the board?

A We don't take board seats on seed. I like to think of us as advisors in a lot of ways. We'll get involved, especially when you think about follow-on fundraising. We're very, very incentivized along with entrepreneurial. We've had entrepreneurs who have taken from really good seed funds, Who have a lot of capital deployed to follow on. They actually go to us first because we, we have very little to vote to follow on. So like, look, our incentives are aligned with you dramatically. And so that's been very helpful. I do think in a day, there's some expectation that when they graduate to series a, those guys will take the bulk of it. When they take a board seat, we haven't taken board seats ever, but we're not opposed to it. Like if the right founder came to us, like, we really need you. We're happy to do it. I think the key is that, look, you guys are still figuring things out. You're still getting no loss. Don't feel the pressure. To have us on your board, because a lot of founders actually don't want that.

AI assessment note: “We don't take board seats on seed. I like to think of us as advisors”

Q How do you look to scale the learning curve on kind of radically new industries so quickly when making such kind of fast decision-made deep tech investments?

A I think it's super helpful that Mike Miller is one of the general partners. I mean, I have so much respect for him as a PhD by training, worked at Just having that ability to really evaluate some of the deep tech companies. So the one is, look, you can always reach out to your network, and I'm not claiming, I, I think one of the bad things about being a generous is I'm not a particular expert in any space, and so I've seen some of your previous interviews, and I'm just, like, really surprised and really happy to hear some, some of what the VC said, because I'm like, wow, this person really knows what they're talking about when it comes to esports or marketplaces, and I'm not that Type of person. I've done a great job of knowing what founders are good. I think that is one thing you can continuously do. It's like, you see enough pattern recognition to know what kind of founders are great, and that takes you someplace to the right. The other one is reaching out to your extended network. I think that's what Michael Reese's are particularly good at, too. Understanding, like, look, this is a small partnership. You probably don't have any, like, analyst associates, so can you reach out to a stronger network and ask them for help?

AI assessment note: “having that ability to really evaluate some of the deep tech companies”

Q I often hear from VCs that one of the hard elements of value provision, it comes whether you provide it pre-investment or post-investment, and leaving enough post after you've given so much pre to get the deal done. How do you think about pre-investment value and post-investment value, and kind of getting enough, but also retaining enough to be a worthy candidate following on?

A I think in a perfect world, you wouldn't have to oversell. I think that happens a lot. They promise a lot of things, because It's a very competitive deal a lot of times, and other VCs are promising things, too. A lot of times, we're like, look, we're a small fund, don't have huge expectations, and we like to blow past those expectations. It's optimal. That doesn't always happen, in which case, we think we do about the same both sides. You know, we do some of the upfront, and then we do some of the backend, and it's not like we do way more upfront. I just don't think, as a fund, we have enough capital, enough resources to do all that upfront. So I think we still continue to do a lot on the backend.

AI assessment note: “we think we do about the same both sides. You know, we do some of the upfront”

Q No, it's not. I completely agree with you. I think strategy drift is so common, and they hide it so well, but, but you, you mentioned your general status there with liquid two, so I want to start then with that, and you said before that it was very different raising liquid two versus micro VC raising today. What are the key differences, do you think?

A I think there's a couple, you know, I would start off by saying that everybody has to say that, so keep in mind, I have to say, nobody's going to come and say, I would just like every other micro VC. I do think when I work, and I think it becomes obvious when you see us all working together, We are unique fun. I mean, a lot of credit goes to Joe Montana, our managing partner. He really could have done this himself, and you see a lot of celebrity types should do that themselves. And he said, no, let's put together a team that is differentiated. So we have a PhD in physicist who worked at CERN, started one of the first databases of service companies. Talking about my other partner, Mike Miller, Harvard MBA, myself, who started his company, Google, and a Super Bowl champion, all in one fund. And that, to me, is unique because We can offer value in very differentiated ways, because most of the times people tend to work together because they all are very similar, which I think is great because it just makes sometimes decision making easier because they all have the same views on things. With us, it's very different, and honestly, I think it made it easier for us to fundraise to have a GP quality team that's really high and very differentiated.

AI assessment note: “I do think when I work... We are unique fun.”

Q How do you look to scale the learning curve on kind of radically new industries so quickly when making such kind of fast decision-made deep tech investments?

A I think it's super helpful that Mike Miller is one of the general partners. I mean, I have so much respect for him as a PhD by training, worked at Just having that ability to really evaluate some of the deep tech companies. So the one is, look, you can always reach out to your network, and I'm not claiming, I, I think one of the bad things about being a generous is I'm not a particular expert in any space, and so I've seen some of your previous interviews, and I'm just, like, really surprised and really happy to hear some, some of what the VC said, because I'm like, wow, this person really knows what they're talking about when it comes to esports or marketplaces, and I'm not that Type of person. I've done a great job of knowing what founders are good. I think that is one thing you can continuously do. It's like, you see enough pattern recognition to know what kind of founders are great, and that takes you someplace to the right. The other one is reaching out to your extended network. I think that's what Michael Reese's are particularly good at, too. Understanding, like, look, this is a small partnership. You probably don't have any, like, analyst associates, so can you reach out to a stronger network and ask them for help?

AI assessment note: “reaching out to your extended network”