The Exchanges

Q know what, we can only, uh, we can only disappoint parents. Um, but I want to start with a story that Vinay at, uh, Loom told me, and he said That, uh, he encountered you one day in the street when you weren't with a home base, we should say, and, uh, you asked him if you could stay the night. Can you talk to me about our story, Sam?

A Yeah, it's, uh, from the perspective of Tom, who was, uh, on our growth team, I had just landed in New York to spend some time with him and other people, and he asked me where I was staying, and I said, I don't know, that's, uh, That's a like multiple hours from now problem. And he said, well, what, what do you think is going to happen? Like what normally happens in these situations? And I said, you know, I'll run into a friend and then I can stay with them. Worst case, I get a hotel. And then about 30 minutes later, I bumped into Vinay walking through Washington Square Park. He mentioned he had just arrived. He had an extra bedroom in his Airbnb. I asked him if I could stay there and that was it. And Tom I think is absolutely convinced that I staged that whole situation. But it always happens that way. I'm, I'm convinced that the universe is conspiring in my favor. These things just happen all the time.

AI assessment note: “I bumped into Vinay walking through Washington Square Park. He mentioned he had just arrived.”

Q I totally get you around that kind of commodification of role, especially in particularly sales and marketing with no disrespect there. But I do want to ask, you mentioned trust also quite a few times. Can trust be regained once lost in teams? Or is once trust gone, it's gone?

A I would say the answer of can, the answer is yes. Is it likely? No. I can give you a good example of how we rebuilt trust for a lot of these things. So in the early days, when we've had two cycles of transparency, the first one was sharing a lot more information publicly, sharing a lot more information within the team. This would have been in. And, uh, the two exceptions that we made were compensation and individual performance. So we kept those two secret. So one-on-ones were secret. Uh, if somebody was failing, it was secret. And when somebody would depart, they would write their own definition of why they were leaving, like leaving for personal reasons, leaving for whatever else. It actually created a tremendous amount of distrust within the organization. People would, people would be very skeptical of like, wait, why is so-and-so leaving? And they just didn't have enough information. It created a lot of distrust of our team and our culture by not being transparent about it. And then a couple of years later, We had this next cycle where we just increased transparency even more. One on ones are now shared. Our performance reviews are all shared. And like the. The risk that you run when all of these things are shared is if you have a culture where everyone is political and nobody trusts each other, it's all going to fall apart. But the nice thing about companies, as opposed to…

AI assessment note: “the answer of can, the answer is yes. Is it likely? No.”

Q Okay. So when you look at that, some of them just aren't good. Listen, you know, it always happens. You have people who you thought would add value and don't end up. What did you get wrong there?

A It's a question of how much time are you willing to invest in having a zero percent failure rate? And I think the answer is you're going to have some failure rate. We, we keep track of all of these things on how many emails we send, what the, Conversion rate is on those requests. And like, we have several people on the list that I've sent them 17 requests and they've converted on zero of them. You know, we set very clear expectations before they started and they're like, oh yeah, we're super engaged. We, we're gonna help you with all of these things. And as soon as they get allocation, they just ghost you, you know, some percentage of people are like that. In theory, I think what I could have done to verify that they would be value add Is I could have gone to other companies that they've invested in, and I could have asked, but is it worth it for a 25,000 dollar check? Probably not.

AI assessment note: “In theory, I think what I could have done to verify that they would be value add”

Q I agree. I just hate it when I see minimum check size and I'm like, you know what? The five K check is proportionally incredibly valuable to that software engineer. Who's a genius when it comes to whatever that specific thing is. And so do you know what I mean? Don't be too prescriptive.

A I find, I think it depends a lot on what your intention is. If your goal is strictly to raise the amount of capital that you think that you need to raise, then it's the minimum check size is absolutely the most relevant thing in terms of Uh, valuing your time, but if your goal is to build an army of angels and operators, The minimum check size is much less relevant. And I think exactly to your point, when we did some analysis on who our most ROI positive investors were, one of the biggest categories was early employees at post IPO companies. And these are people who have some amount of capital that they want to deploy, but maybe, you know, five, 10,000 dollars, but they also have a lot more capacity to help. And they also know more people That are on the front lines. They tend, if you need to hire somebody who is a really good designer, finding a design lead who is an early employee at a post IPO company probably knows. 10 or 20 really good designers, some of whom might even be looking for their next role. And so for a 5000 dollars slot in your cap table, you can get a tremendous amount of value from it, but it really only makes sense if you're able to extract the value from it and make a process around it.

AI assessment note: “if your goal is to build an army of angels and operators, The minimum check size is much less relevant.”

Q pushing back here. This is where I love the show because it's just like me just going off schedule. You're an optimizer in so many ways. You totally can go to Paris and have a beautiful time, but you won't have the optimized time of the right gallery on the right day with the right guide if you don't plan. Does it not go against your optimization frameworks in mind?

A I think it depends on what you're optimizing for. I think that's the ultimate answer. If what you're optimizing for is to go to certain galleries, and the only way to do that is to plan three months in advance, then by all means, that is the optimal way to do it. If what you're optimizing for is interesting new experiences that you wouldn't have had otherwise, or meeting new and interesting people, then it's actually really counterproductive to not allow space for that. When I was spending time in, uh, in Europe, I was in Estonia, and I made friends with some random people that were just at a bar, and I ended up going on a road trip with them for several days through like Serbia, Croatia, and like slept on their couch. That would not have been a thing that I would have had the capacity to do if I was super fixated on what plan I had already.

AI assessment note: “I think it depends on what you're optimizing for.”

Q Why, why is that? Is it the depth? Is it the breadth? Is it the, what is it that makes them so good?

A I think a big part of it is, at least within the health and bio vertical, they have a, A bio health hub, which is a notion doc that just has all of the services that they offer. And so they say, if you need to do an executive comp study, we can help you with that. If you want to put your general counsel on an email list with other general counsels in the category, add them to this list. If you want marketing leaders on a list, you can put them here. They have all of these services that are available to you that can prompt more discoverability on what they're able to do. First of all, they have a much larger operating team than other firms, but there are also some smaller firms that we've been able to get a ton of value from. So one is trust ventures. They're smaller and they're much more focused on regulatory. And so whenever we have a regulatory strategy question or something that's a little bit more nuanced and challenging, they've been incredibly valuable in thinking through these things.

AI assessment note: “a bio health hub, which is a notion doc that just has all of the services”

Q And the other is outbound sales prospecting. We can't miss anything, be it all the drinks parties, be it all the events, nothing gets missed. Um, those are the two types that I find. Can I ask on the operator side, How did you approach minimum checks? Sometimes people put in minimum check sizes. How do you feel about that? And what advice would you give given collecting the best?

A If there's one thing I would have done differently is I would have used a rollup vehicle of some kind to just make the collection easier. Those weren't as common when we did our seed round. It was the round that had the larger number of people in it. Um, having a rollup vehicle makes it much simpler when you need to get signatures and things like that. I think the reality is at some point, depending on the amount of money that you need to raise, there are only so many meetings that are worth the time. If you just do the math, say, if you want to raise a million dollars and you think you have X number of months to do it, you can work backwards from based on whatever conversion rate you expect. If the minimum check size is a thousand dollars, you're probably never going to get there. If the minimum check size is 25,000, you can do the math and say, yeah, you know, if I take this number of meetings, we can deliver this round in that amount of time. If we're raising twenty million dollars, taking even a 25,000 dollar check is probably not gonna be a high leverage use of time because you need to raise so much more capital.

AI assessment note: “If the minimum check size is 25,000, you can do the math”

Q What was the hardest thing about moving from technical co-founded to CEO?

A I'd say probably the hardest part was the lack of clear Feedback loops and deliverables. That was one of the strangest things was when you're a software developer, especially if you're a good one, you're shipping a lot and you can see the immediate impact of what you're shipping. You see people using it, you get feedback, you iterate on it, you improve it. There's just this constant delivery pipeline. When you're the CEO, you have a, you have a one percent impact on everything, but you have Almost nothing that you can actually point to as your own work product. I was reflecting on this with my co-founder, Josh, when we were talking about, we did a podcast on founder dynamics. That was a really interesting one. Really, it was from Josh's perspective more than mine. Just having this recognition that we have our Friday forum where we celebrate all of our wins. And I very rarely make an appearance as a person who has an attributable win. And so just realizing that My role is just not that anymore.

AI assessment note: “the hardest part was the lack of clear Feedback loops and deliverables.”

Q I agree. I just hate it when I see minimum check size and I'm like, you know what? The five K check is proportionally incredibly valuable to that software engineer. Who's a genius when it comes to whatever that specific thing is. And so do you know what I mean? Don't be too prescriptive.

A I find, I think it depends a lot on what your intention is. If your goal is strictly to raise the amount of capital that you think that you need to raise, then it's the minimum check size is absolutely the most relevant thing in terms of Uh, valuing your time, but if your goal is to build an army of angels and operators, The minimum check size is much less relevant. And I think exactly to your point, when we did some analysis on who our most ROI positive investors were, one of the biggest categories was early employees at post IPO companies. And these are people who have some amount of capital that they want to deploy, but maybe, you know, five, 10,000 dollars, but they also have a lot more capacity to help. And they also know more people That are on the front lines. They tend, if you need to hire somebody who is a really good designer, finding a design lead who is an early employee at a post IPO company probably knows. 10 or 20 really good designers, some of whom might even be looking for their next role. And so for a 5000 dollars slot in your cap table, you can get a tremendous amount of value from it, but it really only makes sense if you're able to extract the value from it and make a process around it.

AI assessment note: “if your goal is to build an army of angels and operators”

Q Okay. So when you look at that, some of them just aren't good. Listen, you know, it always happens. You have people who you thought would add value and don't end up. What did you get wrong there?

A It's a question of how much time are you willing to invest in having a zero percent failure rate? And I think the answer is you're going to have some failure rate. We, we keep track of all of these things on how many emails we send, what the, Conversion rate is on those requests. And like, we have several people on the list that I've sent them 17 requests and they've converted on zero of them. You know, we set very clear expectations before they started and they're like, oh yeah, we're super engaged. We, we're gonna help you with all of these things. And as soon as they get allocation, they just ghost you, you know, some percentage of people are like that. In theory, I think what I could have done to verify that they would be value add Is I could have gone to other companies that they've invested in, and I could have asked, but is it worth it for a 25,000 dollar check? Probably not.

AI assessment note: “In theory, I think what I could have done to verify that they would be value add”

Q What was the hardest thing about moving from technical co-founded to CEO?

A I'd say probably the hardest part was the lack of clear Feedback loops and deliverables. That was one of the strangest things was when you're a software developer, especially if you're a good one, you're shipping a lot and you can see the immediate impact of what you're shipping. You see people using it, you get feedback, you iterate on it, you improve it. There's just this constant delivery pipeline. When you're the CEO, you have a, you have a one percent impact on everything, but you have Almost nothing that you can actually point to as your own work product. I was reflecting on this with my co-founder, Josh, when we were talking about, we did a podcast on founder dynamics. That was a really interesting one. Really, it was from Josh's perspective more than mine. Just having this recognition that we have our Friday forum where we celebrate all of our wins. And I very rarely make an appearance as a person who has an attributable win. And so just realizing that My role is just not that anymore.

AI assessment note: “hardest part was the lack of clear Feedback loops and deliverables.”

Q What happens when things take longer, when emergencies happen? Because I do this too, but then fuck, there's a deal on, and that whole morning set for the investor update, that's diligence and reference calls.

A Yeah, for sure. I think the answer is you have to create some amount of extra space in your calendar that buffers any changes. There's nothing worse than One slight change happens and then you have this cascade of everything gets pushed out for like two months because you have one small change. I think it'll depend a lot on how variable your schedule is. I think in the investor world, it's more variable because it's like the hurry up and wait dynamic where it goes from nothing's happening to all of a sudden we have to sprint for three days. And so creating maybe 50%, maybe even 75% open space. In each given day. And then if you have time, it's way easier to pull something from tomorrow into today than it is to push things back multiple months. So, uh, that's probably the way that I would go about it.

AI assessment note: “you have to create some amount of extra space in your calendar that buffers any changes”

Q pushing back here. This is where I love the show because it's just like me just going off schedule. You're an optimizer in so many ways. You totally can go to Paris and have a beautiful time, but you won't have the optimized time of the right gallery on the right day with the right guide if you don't plan. Does it not go against your optimization frameworks in mind?

A I think it depends on what you're optimizing for. I think that's the ultimate answer. If what you're optimizing for is to go to certain galleries, and the only way to do that is to plan three months in advance, then by all means, that is the optimal way to do it. If what you're optimizing for is interesting new experiences that you wouldn't have had otherwise, or meeting new and interesting people, then it's actually really counterproductive to not allow space for that. When I was spending time in, uh, in Europe, I was in Estonia, and I made friends with some random people that were just at a bar, and I ended up going on a road trip with them for several days through like Serbia, Croatia, and like slept on their couch. That would not have been a thing that I would have had the capacity to do if I was super fixated on what plan I had already.

AI assessment note: “I think it depends on what you're optimizing for.”

Q Or I could just do a podcast. Exactly. No, I, I, I get you that. Should you speak to associates? It's the age old thing of like, oh, only speak to partners.

A I would like to believe that the answer is yes, you should. I, I have friends who are associates and principals at these firms, and, uh, I've tried to get a meeting with a partner through them, and I shared with the Principal a whole bunch of information and they got super excited. They shared it with the partner. The partner said no. And then like two weeks later, I meet with a partner and they have no recollection that the principal shared any of this information with them. And so I don't know even what role they play within these firms. So I think it would depend a lot on the firm. So it's, it's not a knock on the principals. It seems to be more a knock on the industry and how principals and associates function within them.

AI assessment note: “I would like to believe that the answer is yes, you should.”

Q What happens when things take longer, when emergencies happen? Because I do this too, but then fuck, there's a deal on, and that whole morning set for the investor update, that's diligence and reference calls.

A Yeah, for sure. I think the answer is you have to create some amount of extra space in your calendar that buffers any changes. There's nothing worse than One slight change happens and then you have this cascade of everything gets pushed out for like two months because you have one small change. I think it'll depend a lot on how variable your schedule is. I think in the investor world, it's more variable because it's like the hurry up and wait dynamic where it goes from nothing's happening to all of a sudden we have to sprint for three days. And so creating maybe 50%, maybe even 75% open space. In each given day. And then if you have time, it's way easier to pull something from tomorrow into today than it is to push things back multiple months. So, uh, that's probably the way that I would go about it.

AI assessment note: “you have to create some amount of extra space in your calendar that buffers”

Q I am, but, but for those that aren't maybe listening, can you explain it?

A Yeah, so the idea of the Dunning-Kruger curve is on the, it's a u-shaped curve on the far left, On the X axis is, uh, how much, you know, and on the Y axis is how confident you are that you know it. And so if you know very little, you tend to be very confident in how much, you know, if you know a little bit, you realize how little, you know, and then at some point you actually become an expert. And, uh, I would say during my last company, and this maybe ties into your hypothesis on this is it was the first moment. When I realized that I had maybe bottomed out when it comes to things like software development, that maybe my opinions are actually valid. And I don't need to just defer always to the loudest person in the room because it was a regular occurrence that we had a loud person in the room. We said, we should do it this way. And I said, well, and he seems to have very strong opinions on this. So we'll go with that. And then six months later, it's like, I knew it. This is a huge problem. Now we have to fix this and it's my fault. So I would say that was the first moment when I realized that I actually have some valid opinions. Another really big reflection, and this is something that I recognized while I was at the company, not just in retrospect, was I, I had really failed at an important value around ownership. There was a specific moment when I was Yanan, who is our CEO,…

AI assessment note: “the idea of the Dunning-Kruger curve is on the, it's a u-shaped curve”

Q I totally get you around that kind of commodification of role, especially in particularly sales and marketing with no disrespect there. But I do want to ask, you mentioned trust also quite a few times. Can trust be regained once lost in teams? Or is once trust gone, it's gone?

A I would say the answer of can, the answer is yes. Is it likely? No. I can give you a good example of how we rebuilt trust for a lot of these things. So in the early days, when we've had two cycles of transparency, the first one was sharing a lot more information publicly, sharing a lot more information within the team. This would have been in. And, uh, the two exceptions that we made were compensation and individual performance. So we kept those two secret. So one-on-ones were secret. Uh, if somebody was failing, it was secret. And when somebody would depart, they would write their own definition of why they were leaving, like leaving for personal reasons, leaving for whatever else. It actually created a tremendous amount of distrust within the organization. People would, people would be very skeptical of like, wait, why is so-and-so leaving? And they just didn't have enough information. It created a lot of distrust of our team and our culture by not being transparent about it. And then a couple of years later, We had this next cycle where we just increased transparency even more. One on ones are now shared. Our performance reviews are all shared. And like the. The risk that you run when all of these things are shared is if you have a culture where everyone is political and nobody trusts each other, it's all going to fall apart. But the nice thing about companies, as opposed to…

AI assessment note: “I would say the answer of can, the answer is yes. Is it likely? No.”

Q ahead of time, because generally investors look for reasons to say no. Ah, you know, it's gonna be a retention problem. Ah, it's gonna be this. And they come in with a preconceived notion of, oh, it's healthcare. Oh, it's consumer hardware. Let me just fucking sell you this pen, and I, I can bring you the energy that a slide deck can't do. Do you know what I mean?

A I hear you. I will say that the number of investors available is effectively infinite, and the amount of time that you have to pitch people is finite. And so if you can get them to say no before you have to spend any time with them, that's actually a win, not a loss. If you can send out enough information and the only meetings you take are the people who get it, who are the most excited and motivated to meet with you, who have already done the homework. So you don't have to repeat yourself and do all the stupid bullshit of like, Hey, what, what is your revenue? It's like, it's an, I already sent this. It's like, well, what's, what's the total addressable market? I sent you a whole memo on total. Did you not read it? I, I can just read out loud all of the material that I sent to you, or you could just read it. Like, it's up to you.

AI assessment note: “if you can get them to say no before you have to spend any time”

Q Or I could just do a podcast. Exactly. No, I, I, I get you that. Should you speak to associates? It's the age old thing of like, oh, only speak to partners.

A I would like to believe that the answer is yes, you should. I, I have friends who are associates and principals at these firms, and, uh, I've tried to get a meeting with a partner through them, and I shared with the Principal a whole bunch of information and they got super excited. They shared it with the partner. The partner said no. And then like two weeks later, I meet with a partner and they have no recollection that the principal shared any of this information with them. And so I don't know even what role they play within these firms. So I think it would depend a lot on the firm. So it's, it's not a knock on the principals. It seems to be more a knock on the industry and how principals and associates function within them.

AI assessment note: “I would like to believe that the answer is yes, you should.”

Q Do you worry that with someone like Jeff, You're, he has such weight to his words. He's seen so much. Bluntly, who are you to say, no, Jeff, I appreciate your opinion, but you're wrong, and I'm going to do something different. Do you worry that it's too easy to just succumb to what they say, even when they might be wrong?

A I think for maybe early stage founders, that is a very serious risk. I think once you've been around for long enough, you realize that Nobody knows anything. They don't know anything. You don't know anything. Like you're just making your best guess. And so you should always take, take what they say seriously, because they have a lot more exposure than you do, but don't take it like it's gospel because there's a pretty good chance they're wrong. There's also a pretty good chance that you're wrong. So you just need to figure out how to get those cycles as fast as possible. There are some investors who have different reputations, like, uh, Keith from founders fund is known for being pretty full contact. And I. Talk to some people who really did not like working with him, but they didn't like working him. They didn't like working with him for reasons that I would actually enjoy working with him, where he's very direct. He doesn't hold back. And some people don't like that level of just direct communication. I actually vastly prefer that over the more passive hands-off approach.

AI assessment note: “I think for maybe early stage founders, that is a very serious risk.”

Q Why, why is that? Is it the depth? Is it the breadth? Is it the, what is it that makes them so good?

A I think a big part of it is, at least within the health and bio vertical, they have a, A bio health hub, which is a notion doc that just has all of the services that they offer. And so they say, if you need to do an executive comp study, we can help you with that. If you want to put your general counsel on an email list with other general counsels in the category, add them to this list. If you want marketing leaders on a list, you can put them here. They have all of these services that are available to you that can prompt more discoverability on what they're able to do. First of all, they have a much larger operating team than other firms, but there are also some smaller firms that we've been able to get a ton of value from. So one is trust ventures. They're smaller and they're much more focused on regulatory. And so whenever we have a regulatory strategy question or something that's a little bit more nuanced and challenging, they've been incredibly valuable in thinking through these things.

AI assessment note: “I think a big part of it is, at least within the health and bio vertical”

Q What was the best first meeting you've had with an investor?

A I would say there are quite a few. The ones that go well are the ones where I can tell they immediately understand what it is that we're going for. There's, uh, I don't remember who said this, but, uh, when you're fundraising, you're a prophet, not a missionary. You have the vision and you're trying to get people who already get it and are already bought in. You're not trying to convert people to your religion. It is an uphill battle when you're trying to explain to an investor and they just don't, they just don't believe that there's a market. Trying to convince them that there is, is an uphill battle. It's probably never going to work and it's going to be a lot of toil. And so finding the ones who they've already done the research, they're not. They're not taking this meeting as like a random thing of, oh, well, you know, I got to fill up my nine AM slot. They're taking it because they're already looking for a company in this category because they've done their homework and they get it. And this is an interesting thing is we share a lot of material in advance of these investor meetings. What's so fascinating is you would assume that the people who have the most time to read through these things are like the principles at the lower tier investors, because they have, they have lots of time. The reality, when we did our series, a raise or our seed raise. We can tell because you …

AI assessment note: “The people who were most engaged was Mike Vernal at Sequoia and Jeff Jordan”

Q I am, but, but for those that aren't maybe listening, can you explain it?

A Yeah, so the idea of the Dunning-Kruger curve is on the, it's a u-shaped curve on the far left, On the X axis is, uh, how much, you know, and on the Y axis is how confident you are that you know it. And so if you know very little, you tend to be very confident in how much, you know, if you know a little bit, you realize how little, you know, and then at some point you actually become an expert. And, uh, I would say during my last company, and this maybe ties into your hypothesis on this is it was the first moment. When I realized that I had maybe bottomed out when it comes to things like software development, that maybe my opinions are actually valid. And I don't need to just defer always to the loudest person in the room because it was a regular occurrence that we had a loud person in the room. We said, we should do it this way. And I said, well, and he seems to have very strong opinions on this. So we'll go with that. And then six months later, it's like, I knew it. This is a huge problem. Now we have to fix this and it's my fault. So I would say that was the first moment when I realized that I actually have some valid opinions. Another really big reflection, and this is something that I recognized while I was at the company, not just in retrospect, was I, I had really failed at an important value around ownership. There was a specific moment when I was Yanan, who is our CEO,…

AI assessment note: “the idea of the Dunning-Kruger curve is on the, it's a u-shaped curve”

Q No need to show off. Okay, but on the fundraise itself, talk to me. How did you approach it and what worked and what didn't?

A The things that worked, we, we approached it by casting a very wide net. We spoke to a lot of people. I think one of the major mistakes that people make early on is they treat investor contacts like precious gems, and they're afraid to talk to an investor Until their idea is fully baked and provably the best thing ever. The reality is that you have more than one shot on goal. And there's actually, in my experience, there's nothing better than say you have a conversation with a growth investor and your retention is only 25%. And they say, you've got to get that number up. And then six months later you say, all right, it's now 40%. And they go, wow. Okay. That's real progress towards goals that matter. And I think, uh, it was Mark Suster who has the, the He's investing in lines, not dots.

AI assessment note: “we approached it by casting a very wide net. We spoke to a lot of people.”

Q ahead of time, because generally investors look for reasons to say no. Ah, you know, it's gonna be a retention problem. Ah, it's gonna be this. And they come in with a preconceived notion of, oh, it's healthcare. Oh, it's consumer hardware. Let me just fucking sell you this pen, and I, I can bring you the energy that a slide deck can't do. Do you know what I mean?

A I hear you. I will say that the number of investors available is effectively infinite, and the amount of time that you have to pitch people is finite. And so if you can get them to say no before you have to spend any time with them, that's actually a win, not a loss. If you can send out enough information and the only meetings you take are the people who get it, who are the most excited and motivated to meet with you, who have already done the homework. So you don't have to repeat yourself and do all the stupid bullshit of like, Hey, what, what is your revenue? It's like, it's an, I already sent this. It's like, well, what's, what's the total addressable market? I sent you a whole memo on total. Did you not read it? I, I can just read out loud all of the material that I sent to you, or you could just read it. Like, it's up to you.

AI assessment note: “if you can get them to say no before you have to spend any time”

Q Do you worry that with someone like Jeff, You're, he has such weight to his words. He's seen so much. Bluntly, who are you to say, no, Jeff, I appreciate your opinion, but you're wrong, and I'm going to do something different. Do you worry that it's too easy to just succumb to what they say, even when they might be wrong?

A I think for maybe early stage founders, that is a very serious risk. I think once you've been around for long enough, you realize that Nobody knows anything. They don't know anything. You don't know anything. Like you're just making your best guess. And so you should always take, take what they say seriously, because they have a lot more exposure than you do, but don't take it like it's gospel because there's a pretty good chance they're wrong. There's also a pretty good chance that you're wrong. So you just need to figure out how to get those cycles as fast as possible. There are some investors who have different reputations, like, uh, Keith from founders fund is known for being pretty full contact. And I. Talk to some people who really did not like working with him, but they didn't like working him. They didn't like working with him for reasons that I would actually enjoy working with him, where he's very direct. He doesn't hold back. And some people don't like that level of just direct communication. I actually vastly prefer that over the more passive hands-off approach.

AI assessment note: “I think for maybe early stage founders, that is a very serious risk.”

Q topic, but you mentioned that kind of the transparency around everything. I have another disagreement, but you're convincing me slowly, but fundraising transparency is a real challenge for me because teams get Caught up in it. Oh, we're going to raise around. And then if it takes longer, if it doesn't happen, it can create real morale challenges. How do you think about transparency on fundraisers and the challenges associated?

A If you've built up enough social capital internally, think of it like you've built up the trust bank with enough of, uh, enough credibility that people know that you're not lying to them, then it's totally fine. And it's never been an issue. If people get the sense that you're gaslighting them, Because you're selectively sharing information. That's when you run into real problems. It depends a lot on the type of culture that you've built. If it's type of culture where you're just, you don't share anything and you just say, keep out of it. This was really something that was aggressively pushed by somebody early on at levels where they were at a company that seemed to be doing extremely well on paper, but they never shared financials. They never shared anything. And then one day The company just died. And the CEO just announced like, yep, we ran out of money. Everyone's fired. And he said, I don't want to repeat that experience. People should know the financial state of the company. People should understand what's going on because people can contribute to these things. I always try to look at what is the best thing that can happen rather than I would, I would reframe maybe something to think about for these things is like, instead of thinking if everyone at the company is super political, And once the worst for the company and only what's best for them, if you have a bunch of dif…

AI assessment note: “If you've built up enough social capital internally... then it's totally fine.”

Q uh, the, the present for your little one's coming, so you can, you know, forgive me after this. Um, but, uh, my question is, like, at some scale, you cannot only have A players. 500, a 1200, whatever that is. The definition of an A player by definition is they're rarer. Um, when does quality begin to degrade, do you think? And how do you think about that looking forward?

A It's interesting to think that, like, the Keeper test is something that we got from Netflix, which is a much larger company, and I'm sure they developed that heuristic at some point beyond our current scale. I think in many ways there's also a U-shape to this, where in the very early days, sometimes you just hire the best person that you can get. Because you don't have a lot of choices. And then over time, as you see some amount of traction, you can attract really incredibly exceptional talent. And then at some point it does appear that the talent bar decreases. And I think some of it is just that you end up hiring effectively commodity roles where you're just like, we need a hundred engineers, as opposed to like, we need this specific person.

AI assessment note: “there's also a U-shape to this... at some point it does appear that the talent bar decreases”

Q No need to show off. Okay, but on the fundraise itself, talk to me. How did you approach it and what worked and what didn't?

A The things that worked, we, we approached it by casting a very wide net. We spoke to a lot of people. I think one of the major mistakes that people make early on is they treat investor contacts like precious gems, and they're afraid to talk to an investor Until their idea is fully baked and provably the best thing ever. The reality is that you have more than one shot on goal. And there's actually, in my experience, there's nothing better than say you have a conversation with a growth investor and your retention is only 25%. And they say, you've got to get that number up. And then six months later you say, all right, it's now 40%. And they go, wow. Okay. That's real progress towards goals that matter. And I think, uh, it was Mark Suster who has the, the He's investing in lines, not dots.

AI assessment note: “The things that worked, we, we approached it by casting a very wide net.”

Q And the other is outbound sales prospecting. We can't miss anything, be it all the drinks parties, be it all the events, nothing gets missed. Um, those are the two types that I find. Can I ask on the operator side, How did you approach minimum checks? Sometimes people put in minimum check sizes. How do you feel about that? And what advice would you give given collecting the best?

A If there's one thing I would have done differently is I would have used a rollup vehicle of some kind to just make the collection easier. Those weren't as common when we did our seed round. It was the round that had the larger number of people in it. Um, having a rollup vehicle makes it much simpler when you need to get signatures and things like that. I think the reality is at some point, depending on the amount of money that you need to raise, there are only so many meetings that are worth the time. If you just do the math, say, if you want to raise a million dollars and you think you have X number of months to do it, you can work backwards from based on whatever conversion rate you expect. If the minimum check size is a thousand dollars, you're probably never going to get there. If the minimum check size is 25,000, you can do the math and say, yeah, you know, if I take this number of meetings, we can deliver this round in that amount of time. If we're raising twenty million dollars, taking even a 25,000 dollar check is probably not gonna be a high leverage use of time because you need to raise so much more capital.

AI assessment note: “If the minimum check size is 25,000, you can do the math”