The Exchanges

Q you think about that? And I guess what were the vulnerabilities for you? Like for me, it was like, am I really good enough to be in the position that I am? Am I really good enough to be a board member? Do I, do I know what the fuck I'm doing? What were the insecurities and kind of, how do you think about that in relation to the drinking?

A Yeah, I mean, I would say there was a number of things going on. I think one was definitely imposter syndrome, for sure. I think the other was, I've had ADD my whole life, and so my mind is always going a thousand miles a minute, and so it was a way to really help me slow down and calm my nerves. And then the other, frankly, was anxiety. You know, I've also had anxiety most of my adult life, And what I found towards the end and something that Ryan said really landed was for me, the anxiety, like drinking and smoking actually ended up causing a lot more anxiety than it was reducing. And so for me, it almost flipped where I, at first I was using it as a way to like numb that anxiety. And then finally it was just like, okay, it's causing more to the point where it was becoming a real issue.

AI assessment note: “one was definitely imposter syndrome... using it as a way to like numb that anxiety”

Q What would you recommend to me to read then?

A I, I actually, there, there are three books that I, I just, Finished reading last week. One, uh, is called who, which is all around running a highly structured hiring process. The other is work rules by Laszlo Bach, who ran people at Google, um, that talks a lot about Google's philosophy around people and how they hire, train, and retain the best employees. And that, that was really important because I do think that, uh, hiring and firing decisions are what really, uh, Make or break a company. And then finally, I, I just finished reading leading by Alex Ferguson and Michael Moritz, which was just really phenomenal. And for those of you who don't know, Alex Ferguson, the manager of Manchester United for almost 30 years. And that to me was, was just an amazing book on leadership and what it takes not only to build a winning team in one season, but how to maintain success over a long period of time.

AI assessment note: “there are three books that I, I just, Finished reading last week.”

Q What would you recommend to me to read then?

A I, I actually, there, there are three books that I, I just, Finished reading last week. One, uh, is called who, which is all around running a highly structured hiring process. The other is work rules by Laszlo Bach, who ran people at Google, um, that talks a lot about Google's philosophy around people and how they hire, train, and retain the best employees. And that, that was really important because I do think that, uh, hiring and firing decisions are what really, uh, Make or break a company. And then finally, I, I just finished reading leading by Alex Ferguson and Michael Moritz, which was just really phenomenal. And for those of you who don't know, Alex Ferguson, the manager of Manchester United for almost 30 years. And that to me was, was just an amazing book on leadership and what it takes not only to build a winning team in one season, but how to maintain success over a long period of time.

AI assessment note: “there are three books that I, I just, Finished reading last week.”

Q you think about that? And I guess what were the vulnerabilities for you? Like for me, it was like, am I really good enough to be in the position that I am? Am I really good enough to be a board member? Do I, do I know what the fuck I'm doing? What were the insecurities and kind of, how do you think about that in relation to the drinking?

A Yeah, I mean, I would say there was a number of things going on. I think one was definitely imposter syndrome, for sure. I think the other was, I've had ADD my whole life, and so my mind is always going a thousand miles a minute, and so it was a way to really help me slow down and calm my nerves. And then the other, frankly, was anxiety. You know, I've also had anxiety most of my adult life, And what I found towards the end and something that Ryan said really landed was for me, the anxiety, like drinking and smoking actually ended up causing a lot more anxiety than it was reducing. And so for me, it almost flipped where I, at first I was using it as a way to like numb that anxiety. And then finally it was just like, okay, it's causing more to the point where it was becoming a real issue.

AI assessment note: “I think one was definitely imposter syndrome, for sure. I think the other was, I've had ADD”

Q as the VC, because we were chatting earlier, um, before the show about going with your gut. And so I'm intrigued to hear how much of a role your gut plays in the investment process for you. Like when you started in the seed and now with your position at RRE in the later stage series A style, how much of a role does the gut play for you investing?

A Yeah, I mean, I think at the seed stage, a lot of it is gut for me. This is a long-term business, so the reality is, is I'll know if I'm any good at this in, in another five years. If you look at the early data, it suggests that I have a pretty good gut when it comes to investing in seed stage companies. Time will tell if, if I have good gut with, with Series A, but I think seed is, is a very instinctual style of investing, and for me, Like, I think about the decisions that I've made around gut, just to give you a few examples, right? Uh, one of which, uh, Remotiv, which is now pivoted into a company called Zipline, that was a pure gut instinct on the founder, Keller, Renato, but that was one where I took, uh, uh, an hour, hour and a half phone call, and I'm just like, I absolutely love this guy. I remember him saying, Talking about the customer experience of when a kid sees Remotive, and it's the same experience that the food critic in the movie of Ratatouille had when he tasted the rat's Ratatouille. The way that he told the story, and I, I wanted to invest after that first meeting. Another example is Giphy, where I've known Alex for a while. We, we worked together. When I just saw Giphy for the first time, I'm like, I love this. Like, I love the product, and this was before they started plugging in to all the various apps, and I knew Alex, and it wasn't even like he came and…

AI assessment note: “at the seed stage, a lot of it is gut for me.”

Q as the VC, because we were chatting earlier, um, before the show about going with your gut. And so I'm intrigued to hear how much of a role your gut plays in the investment process for you. Like when you started in the seed and now with your position at RRE in the later stage series A style, how much of a role does the gut play for you investing?

A Yeah, I mean, I think at the seed stage, a lot of it is gut for me. This is a long-term business, so the reality is, is I'll know if I'm any good at this in, in another five years. If you look at the early data, it suggests that I have a pretty good gut when it comes to investing in seed stage companies. Time will tell if, if I have good gut with, with Series A, but I think seed is, is a very instinctual style of investing, and for me, Like, I think about the decisions that I've made around gut, just to give you a few examples, right? Uh, one of which, uh, Remotiv, which is now pivoted into a company called Zipline, that was a pure gut instinct on the founder, Keller, Renato, but that was one where I took, uh, uh, an hour, hour and a half phone call, and I'm just like, I absolutely love this guy. I remember him saying, Talking about the customer experience of when a kid sees Remotive, and it's the same experience that the food critic in the movie of Ratatouille had when he tasted the rat's Ratatouille. The way that he told the story, and I, I wanted to invest after that first meeting. Another example is Giphy, where I've known Alex for a while. We, we worked together. When I just saw Giphy for the first time, I'm like, I love this. Like, I love the product, and this was before they started plugging in to all the various apps, and I knew Alex, and it wasn't even like he came and…

AI assessment note: “at the seed stage, a lot of it is gut for me.”

Q With such an instinct-based approach, um, in certain cases, How does the decision-making process then look? You've spoken before about your time at RRE, you have partners. How does the decision-making process look for you when you find something like Giphy, and does that differ from the seed?

A Yeah, it's a good question. I mean, look, the beauty of RRE is we do have quite a bit of flexibility. Because our fund size is two hundred eighty million, each partner can invest in anywhere from three to five seed deals a year. The way that we think about our seed program is around founder, Market and product. We've done an analysis on what makes a successful seed investment for RE, and the things that always shine is first, like, founder, product, and market. So, like, when I brought Giphy in, look, there were some people that were just like, I don't get it. And Stuart Ellman, who sits on the board of Betaworks, which is where Giphy was incubated, you know, he and I were just like, look, we feel like there's something here. Like, we're seeing GIFs embedded in media, uh, We see that people are sharing them through text messaging more often. We're just like, we feel like there's something here. That's the purpose of our seed program is that it rewards those who have conviction around a specific theme or founder, but those companies aren't as far along yet.

AI assessment note: “our seed program is that it rewards those who have conviction around a specific theme”

Q Steve, I know I said last one, but I know you have one more misconception about giving up drinking. What's that final misconception?

A Another misconception is that it is possible to get sober all by yourself. Sure, there are plenty of people that have tried. But I think for the vast majority of people, it's pretty tough. Uh, there's a saying that I love that is the opposite of addiction is connection. I believe Johan Hari, the author of Chasing the Scream wrote that, but it's really so true. And for me, I had tried to, to quit. I mean, I, I, as I said earlier, endless amount of times, and it wasn't until I found a really amazing community of guys and gals that could support me. And not just on the drinking side, but, you know, all the different facets of life, and so, you know, I would absolutely say going at it alone is a lot more difficult than when you have a group of people on your side really wanting to see you succeed and thrive.

AI assessment note: “Another misconception is that it is possible to get sober all by yourself.”

Q level of drinking wasn't healthy and it needed to change, and so I want to start with the context of why did you stop, and what was that realization moment for you, and we've got one VC or kind of slash investor in the room, so let's start with Steve, and then let's Let's work our way down. So Steve, why did you stop and what was that realization moment?

A Yeah. Well, I would start by saying that I have addiction in my family. I have also had a number of friends pass away from the opiate crisis. And for me, even though I was a high performing executive leader and investor at the end of every day, I had to have a smoke or a drink just to sort of make me feel normal. And about six years ago, I started meditating daily, and just through the metacognitive process where I'm watching my thoughts, I started to realize that I felt like shit a lot, and that I didn't believe that I was going to be able to fully live up to my full potential. And for me, it's just, for better or for worse, I was a bit of a heat-seeking missile when it came to substances, even though I was highly functional. It was just like, I don't want to feel this way anymore. I want to, I just want to perform well, and I want to feel good. And so that's what ultimately led to me making a change.

AI assessment note: “through the metacognitive process where I'm watching my thoughts, I started to realize”

Q level of drinking wasn't healthy and it needed to change, and so I want to start with the context of why did you stop, and what was that realization moment for you, and we've got one VC or kind of slash investor in the room, so let's start with Steve, and then let's Let's work our way down. So Steve, why did you stop and what was that realization moment?

A Yeah. Well, I would start by saying that I have addiction in my family. I have also had a number of friends pass away from the opiate crisis. And for me, even though I was a high performing executive leader and investor at the end of every day, I had to have a smoke or a drink just to sort of make me feel normal. And about six years ago, I started meditating daily, and just through the metacognitive process where I'm watching my thoughts, I started to realize that I felt like shit a lot, and that I didn't believe that I was going to be able to fully live up to my full potential. And for me, it's just, for better or for worse, I was a bit of a heat-seeking missile when it came to substances, even though I was highly functional. It was just like, I don't want to feel this way anymore. I want to, I just want to perform well, and I want to feel good. And so that's what ultimately led to me making a change.

AI assessment note: “through the metacognitive process where I'm watching my thoughts, I started to realize”

Q How much responsibility do you think you have as a VC then, or not you, but like one has as a VC, to educate founders on the nuances and complexities of fundraising in terms of Raising too much, too high valuation with the potential for down rounds in the future. Is that your role, or is that something that needs to be intuitively learned by them?

A Anytime I'm sitting across the table from, from an entrepreneur, and we're discussing this topic, it's something I will educate them on. Now, that said, I always explain both sides of it, right? Like, if you're going to raise more money at a higher valuation than Then there are trade-offs. Sometimes you're taking more dilution. Sometimes you're taking more dilution in order to run faster, right? Sometimes you don't want it because you feel like you can hit those milestones without having to raise as much capital, and you can preserve more of the company. And so, so I try to help them at least think through it, but at the end of the day, we're minority investors in the company, and either, you The entire cap table is going to decide, or the founder is going to decide, especially if it's an earlier stage company, and so it ultimately rests on their, on, on their shoulders, but it's my job to at least share the different perspectives. Again, my, my job as an investor, what, what I realize is, and it's something I've been thinking a lot about lately, it's very hard to control an investment. I, I think as an investor, uh, The things that we can control is the decisions that we make, right? In terms of the entrepreneurs that we back in the markets that they're going after, right? And that, that are attractive to us. I think that those are the things that are really in our control. My…

AI assessment note: “it's something I will educate them on.”

Q And then let's do one final one before, and let's do, let's do frenemies. No, no, actually, let's do mentors. What is the best way then for people to gain a mentor, do you think? Is it a long-term relationship converted into a mentor? Is there a way to fast track this? How would you like to gain a mentor?

A It's a good question because it's something that, as I said, been top of mind. I think there's, there's two ways that I've done it. One is Just building relationships over long periods of time. Having people that I can trust and go to, and sometimes these are my peers in the business, and other times it's, uh, investors that have been doing this for 20 plus years. But I, I do think it's a blend. I have actually been more proactive in my outreach to, lately, uh, where I'm trying to actually land a more formal mentor. So this is someone that has been Uh, in the business for at least, uh, a decade, if not longer, general partner seen at least one cycle can, is willing to at least put in an hour a month and sort of walk through certain things, not just about what I'm dealing with on a daily basis, but also things that are more strategic at the firm level.

AI assessment note: “I think there's two ways that I've done it. One is Just building relationships”

Q How much responsibility do you think you have as a VC then, or not you, but like one has as a VC, to educate founders on the nuances and complexities of fundraising in terms of Raising too much, too high valuation with the potential for down rounds in the future. Is that your role, or is that something that needs to be intuitively learned by them?

A Anytime I'm sitting across the table from, from an entrepreneur, and we're discussing this topic, it's something I will educate them on. Now, that said, I always explain both sides of it, right? Like, if you're going to raise more money at a higher valuation than Then there are trade-offs. Sometimes you're taking more dilution. Sometimes you're taking more dilution in order to run faster, right? Sometimes you don't want it because you feel like you can hit those milestones without having to raise as much capital, and you can preserve more of the company. And so, so I try to help them at least think through it, but at the end of the day, we're minority investors in the company, and either, you The entire cap table is going to decide, or the founder is going to decide, especially if it's an earlier stage company, and so it ultimately rests on their, on, on their shoulders, but it's my job to at least share the different perspectives. Again, my, my job as an investor, what, what I realize is, and it's something I've been thinking a lot about lately, it's very hard to control an investment. I, I think as an investor, uh, The things that we can control is the decisions that we make, right? In terms of the entrepreneurs that we back in the markets that they're going after, right? And that, that are attractive to us. I think that those are the things that are really in our control. My…

AI assessment note: “Anytime I'm sitting across the table from, from an entrepreneur... it's something I will educate them on.”

Q Can I ask, why would you have markets second and product third when markets can be similar to product and So transient and evolving, ah, you know, ephemeral messaging five years ago didn't exist, you know, could you potentially overlook it then as a market?

A I think that's a great question, and I do think there are times where opportunities are overlooked. One thing I would say is I don't think it's in that priority around founder product market. Those are sort of the attributes around how we think about our seed program, so it's not based off of a stack ranking, but look, there are plenty of times where I've looked at a seed stage company, and I felt as if There was a fairly crowded market, or the market was just forming, and so it was really hard to separate signal from the noise, and I was completely wrong about it. It's not to say that we're deprioritizing market, like market's absolutely important, but I think our job as a VC isn't to get fooled into thinking that a market is small, because sometimes the best ones are the ones that appear small, but end up Becoming fairly meaningful.

AI assessment note: “it's not based off of a stack ranking”

Q a big one for me. We mentioned the social side earlier as kind of a misconception that, you know, social dies. Are there any other misconceptions that you hear from people when you say you don't drink or when you think about sobriety in front of the public's perception towards it? Are there any other core misconceptions that you think the public has that actually isn't true from your experience?

A Well, yeah, I mean, I think the biggest misconception is that alcohol is, not that it's healthy, obviously there are real severe health effects, but because it's a legal substance, I don't think people recognize that you're effectively ingesting a poison, right? Like it is, you know, it's ethanol in a lot of ways, which is like what powers vehicles, and that's what we're putting into our bodies. And so, I think there's a misconception that it's okay to ingest this, but like, at the end of the day, it's like, as my biology teacher in high school used to say, it's the greatest cellular poison. Like, it's poison. And so, you know, I think that's definitely a misconception that it's okay, that your body can tolerate it, where it's like, it's clear that there's a reason why people feel like shit when they ingest it.

AI assessment note: “the biggest misconception is that alcohol is, not that it's healthy”

Q Love that in terms of the change there. And, yeah, I think every day is fundamentally the same these days. Steve, final one. You've recently made the move to coach and investor from kind of pure play institutional VCs. Why the move? And how does that change the relationship versus just being a pure play investor?

A Yeah. So quickly, my wife is a founder and CEO. She's run her own company for almost a decade. And I have way more friends that are founders and operators. And what I found is I would have all these off the record conversations about their companies. And you know, what I like to say is like the interpersonal dynamics of running a company. And I found that I was way more charged having conversations Those discussions and frankly, having a much bigger impact over the discussions that were happening in the boardroom. And there's a real power dynamic between institutional investors and founders. And frankly, a big part of me deciding to quit drinking is devoting the next decade plus of my life to serving entrepreneurs and feeling like I'm not necessarily like working for big LP base and other partners that I can show up and just purely work for them and help them work through whether it's Issues in their company, or helping them perform at higher levels, or just, you know, have someone that's going to show up and not even judge them, and that they can just talk with. And so for me, I just felt like that was a much more rewarding place to be in the next phase of my life.

AI assessment note: “devoting the next decade plus of my life to serving entrepreneurs”

Q With such an instinct-based approach, um, in certain cases, How does the decision-making process then look? You've spoken before about your time at RRE, you have partners. How does the decision-making process look for you when you find something like Giphy, and does that differ from the seed?

A Yeah, it's a good question. I mean, look, the beauty of RRE is we do have quite a bit of flexibility. Because our fund size is two hundred eighty million, each partner can invest in anywhere from three to five seed deals a year. The way that we think about our seed program is around founder, Market and product. We've done an analysis on what makes a successful seed investment for RE, and the things that always shine is first, like, founder, product, and market. So, like, when I brought Giphy in, look, there were some people that were just like, I don't get it. And Stuart Ellman, who sits on the board of Betaworks, which is where Giphy was incubated, you know, he and I were just like, look, we feel like there's something here. Like, we're seeing GIFs embedded in media, uh, We see that people are sharing them through text messaging more often. We're just like, we feel like there's something here. That's the purpose of our seed program is that it rewards those who have conviction around a specific theme or founder, but those companies aren't as far along yet.

AI assessment note: “it rewards those who have conviction around a specific theme or founder”

Q Can I ask, why would you have markets second and product third when markets can be similar to product and So transient and evolving, ah, you know, ephemeral messaging five years ago didn't exist, you know, could you potentially overlook it then as a market?

A I think that's a great question, and I do think there are times where opportunities are overlooked. One thing I would say is I don't think it's in that priority around founder product market. Those are sort of the attributes around how we think about our seed program, so it's not based off of a stack ranking, but look, there are plenty of times where I've looked at a seed stage company, and I felt as if There was a fairly crowded market, or the market was just forming, and so it was really hard to separate signal from the noise, and I was completely wrong about it. It's not to say that we're deprioritizing market, like market's absolutely important, but I think our job as a VC isn't to get fooled into thinking that a market is small, because sometimes the best ones are the ones that appear small, but end up Becoming fairly meaningful.

AI assessment note: “it's not based off of a stack ranking”

Q Do you like markets where you invest in a massive incumbent in a smaller market, or a kind of decent-sized player in a huge market?

A Yeah, it's, it's a good question. I think it really varies. I mean, I, I sort of like opportunities. There's not a lot of people that are occupying the particular product set. I've invested in enough companies now where it really, it It spans the gamut. I, I've funded companies in very competitive spaces, uh, such as office services, right? There's, there's a lot of cleaning services, uh, managed by Q brought a very different offering to that market, but you could argue that it's, it's a fairly competitive and fragmented market, at least regionally. So that's an example where there's already an established market. We're betting on someone to come in and, and really, uh, Change the way that that service is delivered. But in the case of Giphy, there's not a market. It's, it's a brand new market.

AI assessment note: “I think it really varies. I mean, I, I sort of like opportunities.”

Q a big one for me. We mentioned the social side earlier as kind of a misconception that, you know, social dies. Are there any other misconceptions that you hear from people when you say you don't drink or when you think about sobriety in front of the public's perception towards it? Are there any other core misconceptions that you think the public has that actually isn't true from your experience?

A Well, yeah, I mean, I think the biggest misconception is that alcohol is, not that it's healthy, obviously there are real severe health effects, but because it's a legal substance, I don't think people recognize that you're effectively ingesting a poison, right? Like it is, you know, it's ethanol in a lot of ways, which is like what powers vehicles, and that's what we're putting into our bodies. And so, I think there's a misconception that it's okay to ingest this, but like, at the end of the day, it's like, as my biology teacher in high school used to say, it's the greatest cellular poison. Like, it's poison. And so, you know, I think that's definitely a misconception that it's okay, that your body can tolerate it, where it's like, it's clear that there's a reason why people feel like shit when they ingest it.

AI assessment note: “I think the biggest misconception is that alcohol is... effectively ingesting a poison”

Q Do you like markets where you invest in a massive incumbent in a smaller market, or a kind of decent-sized player in a huge market?

A Yeah, it's, it's a good question. I think it really varies. I mean, I, I sort of like opportunities. There's not a lot of people that are occupying the particular product set. I've invested in enough companies now where it really, it It spans the gamut. I, I've funded companies in very competitive spaces, uh, such as office services, right? There's, there's a lot of cleaning services, uh, managed by Q brought a very different offering to that market, but you could argue that it's, it's a fairly competitive and fragmented market, at least regionally. So that's an example where there's already an established market. We're betting on someone to come in and, and really, uh, Change the way that that service is delivered. But in the case of Giphy, there's not a market. It's, it's a brand new market.

AI assessment note: “I think it really varies. I mean, I, I sort of like opportunities.”