The Exchanges

Q I totally get you. And I do want to start on the platform, so to speak. You mentioned it earlier being AngelList. I always think it's the most undervalued startup when we think about, A, the incredible data it has that it's reserves, the hiring platform that it is, the funding mechanism that it is. But I'm interested. How's the platform been for you? Yeah.

A So AngelList basically made my career, and I have a, just a tremendous amount of loyalty, not only to the platform, but probably more importantly to the individuals, what AngelList calls the backers that are on the platform. So at this point, I have almost 1300 people who sign up to basically get emails from me and participate in my deals. 700 of them have put their own money at risk into deals with me, and those backers have proven to be just this Massively useful tool for me as an investor. On a number of occasions, I found a deal that I got really excited about. I sent it out to those guys, and they basically came back en masse and were like, this is a bad deal, and here's why. And so they've prevented me from making mistakes. Both of those deals, or actually two deals where that happened, I actually ended up canceling the deal because they're just such a great tool to sort of keep me out of my own stupidities. They send me a lot of deal flow, so I'd probably say 25% of the deal flow I get comes from that list. They help me with diligence, so if I'm working on a startup that I don't know very much about, I can send it out to them, and suddenly I'll have 20 really, really smart people in the space who basically are helping me work on a problem. It's almost like a superpower that I have as an investor. It's like, I have 1300 people who are on my team, and this is not just like…

AI assessment note: “So AngelList basically made my career, and I have a, just a tremendous amount”

Q I couldn't agree with you more. I have one final question before the quickfire. You mentioned really getting in the ring with the entrepreneurs in the early stages. Do you find commonalities in where entrepreneurs most need your help?

A No, not at all. So, I mean, you think about You know, Mike Katz, right? He's built bigger and will build bigger companies than I ever will. I mean, the only thing Mike Katz wants is an introduction to a customer. If I know them well, he doesn't need my help with anything else. He's great. You think about Alex over at branch, amazing entrepreneur. He wants help with things that he doesn't have deep knowledge about. He calls me up about ad tech stuff. You think about Kyle over at cruise. He doesn't need my help at all. That guy's good. Like I literally stay out of the way. I'm like, he's one of the best entrepreneurs I've ever seen. I mean, Versus some of the other entrepreneurs, you know, they want help with finding employees, or they want help with thinking through problems, or some of them want our shoulders to cry when things go bad. So every one of them wants something different. I'm there to basically be the, hopefully one of the first calls and try to be useful.

AI assessment note: “No, not at all... every one of them wants something different.”

Q Well, that is so kind of you. I will pay you a huge amount later, but I would love to start today with a little on you. So how did you make your move into the world of startup investing, and what was that entry point for you, Zach?

A I like to say that I'm a washed up entrepreneur, but I washed up on the beach, and the beer is cold, and I don't think I'm going to leave. I spent 20 years as an entrepreneur, never really had a real job, just always trying to build companies and do good stuff, and in 2015, we sold the company, and I was sort of a lost little puppy wandering around without something to do for the first time in a long time. Up until that point, I had been advising a lot of companies, and one of the companies that I had been working with Literally since day zero was a company called Branch Metrics, and I'd helped them raise their seed, and Series A was coming around, and that's when AngelList had first started their syndicate product, and I was like, hey, this looks pretty cool. Can I try it out? And they said, sure. So I put up a 200 K allocation on AngelList and emailed some of my friends, and 24 hours later, it was filled. And, uh, just this great aha moment. I was like, oh, look at that. I'm an investor. That's pretty cool. And so that year, while I sort of tried to regather myself and figure out You know, what and who I am. I spent a lot of time looking at other companies, and so got lucky to invest in. Branch was the first one. A company called OneSignal, which is doing really well, was my second. Cruise Automation was my third, and then a couple other companies in the remainder of that yea…

AI assessment note: “AngelList had first started their syndicate product... 24 hours later, it was filled.”

Q I couldn't agree with you more. I have one final question before the quickfire. You mentioned really getting in the ring with the entrepreneurs in the early stages. Do you find commonalities in where entrepreneurs most need your help?

A No, not at all. So, I mean, you think about You know, Mike Katz, right? He's built bigger and will build bigger companies than I ever will. I mean, the only thing Mike Katz wants is an introduction to a customer. If I know them well, he doesn't need my help with anything else. He's great. You think about Alex over at branch, amazing entrepreneur. He wants help with things that he doesn't have deep knowledge about. He calls me up about ad tech stuff. You think about Kyle over at cruise. He doesn't need my help at all. That guy's good. Like I literally stay out of the way. I'm like, he's one of the best entrepreneurs I've ever seen. I mean, Versus some of the other entrepreneurs, you know, they want help with finding employees, or they want help with thinking through problems, or some of them want our shoulders to cry when things go bad. So every one of them wants something different. I'm there to basically be the, hopefully one of the first calls and try to be useful.

AI assessment note: “No, not at all.”

Q What's been the biggest miss, and why did you say no?

A So I was at the beginning, literally at the very beginning of Airbnb, Dropbox, Uber, Meraki, I mean, Pinterest. I was playing at the poker table with Drew when Dropbox started. I had a massive argument with Travis about whether or not Uber would work, and at that point in time, I was not an investor. I didn't have my own capital, and so I was just there as a fellow entrepreneur, and all of those come back to remind me of, like, the biggest miss was just not Not being in this market, not figuring out a way early on to get access to capital so that I could be potentially in one or multiple of those companies. So my biggest miss was just not being an investor 10 years ago.

AI assessment note: “my biggest miss was just not being an investor 10 years ago.”

Q I totally get you. And I do want to start on the platform, so to speak. You mentioned it earlier being AngelList. I always think it's the most undervalued startup when we think about, A, the incredible data it has that it's reserves, the hiring platform that it is, the funding mechanism that it is. But I'm interested. How's the platform been for you? Yeah.

A So AngelList basically made my career, and I have a, just a tremendous amount of loyalty, not only to the platform, but probably more importantly to the individuals, what AngelList calls the backers that are on the platform. So at this point, I have almost 1300 people who sign up to basically get emails from me and participate in my deals. 700 of them have put their own money at risk into deals with me, and those backers have proven to be just this Massively useful tool for me as an investor. On a number of occasions, I found a deal that I got really excited about. I sent it out to those guys, and they basically came back en masse and were like, this is a bad deal, and here's why. And so they've prevented me from making mistakes. Both of those deals, or actually two deals where that happened, I actually ended up canceling the deal because they're just such a great tool to sort of keep me out of my own stupidities. They send me a lot of deal flow, so I'd probably say 25% of the deal flow I get comes from that list. They help me with diligence, so if I'm working on a startup that I don't know very much about, I can send it out to them, and suddenly I'll have 20 really, really smart people in the space who basically are helping me work on a problem. It's almost like a superpower that I have as an investor. It's like, I have 1300 people who are on my team, and this is not just like…

AI assessment note: “So AngelList basically made my career, and I have a, just a tremendous amount”

Q Can I ask, when you analyze the portfolio yourself now, and you look back at, say, like the 40 K check or the hundred K check and the ownership that you have, if it's a It still doesn't really do much for you and for the wider portfolio in terms of returns and multiples. So what are your thoughts on that then?

A I think that's another good thing that doesn't make a lot of sense in the common VC interest, which is that when I invest 40 K into a company, that's not the last 40 K I'm going to invest. That's in fact only the beginning. I look at that as an, I'm opening the door to get access to becoming an insider. So if you think about Like, let's say that MParticle walks in the door, and we both love MParticle. It's a great company. Mike Katz is an amazing entrepreneur, and you and I are both basically going to make an investment decision today. I have this incredible advantage because I've been an insider. Well, one, I've known Mike for, you know, almost a decade now, more than a decade, and I've been an insider in the company for many years, and so I've gotten to watch as they go. I've gotten to see, you know, board deck by board deck as the company has evolved. I've gotten to track sort of the decisions that get made, the mistakes that get made, I have a credible advantage as an insider in that situation. And so my ability to deploy capital is advantaged because I have inside information, legal inside information. That's tremendous. And so I think the venture capital industry generally makes a mistake by not taking advantage of that. Why is it that we get an inside position and then we let somebody else lead the round and take all the opportunity to deploy capital in subsequent rounds…

AI assessment note: “when I invest 40 K into a company, that's not the last 40 K”

Q Well, that is so kind of you. I will pay you a huge amount later, but I would love to start today with a little on you. So how did you make your move into the world of startup investing, and what was that entry point for you, Zach?

A I like to say that I'm a washed up entrepreneur, but I washed up on the beach, and the beer is cold, and I don't think I'm going to leave. I spent 20 years as an entrepreneur, never really had a real job, just always trying to build companies and do good stuff, and in 2015, we sold the company, and I was sort of a lost little puppy wandering around without something to do for the first time in a long time. Up until that point, I had been advising a lot of companies, and one of the companies that I had been working with Literally since day zero was a company called Branch Metrics, and I'd helped them raise their seed, and Series A was coming around, and that's when AngelList had first started their syndicate product, and I was like, hey, this looks pretty cool. Can I try it out? And they said, sure. So I put up a 200 K allocation on AngelList and emailed some of my friends, and 24 hours later, it was filled. And, uh, just this great aha moment. I was like, oh, look at that. I'm an investor. That's pretty cool. And so that year, while I sort of tried to regather myself and figure out You know, what and who I am. I spent a lot of time looking at other companies, and so got lucky to invest in. Branch was the first one. A company called OneSignal, which is doing really well, was my second. Cruise Automation was my third, and then a couple other companies in the remainder of that yea…

AI assessment note: “I put up a 200 K allocation on AngelList and emailed some of my friends”

Q I totally agree with you there in terms of the kind of the allocation within the round and it not derailing, so to speak, a fundraiser of sorts. I do have to ask, in terms of reasoning behind investing and not investing, often pricing comes into display a lot. I would love to hear, how do you think about pricing and price sensitivity today, Zach?

A Yeah, I mean, absolutely. Pricing is everything. At the end of the day, the only thing that matters in this business is price. In fact, I often think that the industry is a little bit swept up and not thinking about price because, yeah, we have winners. But at the end of the day, if you pay too much for your winners, they're not winners anymore. So yeah, I spend a lot of time on pricing, and it's, it's critical. I can write one check at a 20 pre, or I could write 10 checks at a two pre, and I can have a 90% loss rate on my 10 checks at two pre, and still end up basically in the same dynamic, as long as you had a comparable return. So yeah, pricing is everything.

AI assessment note: “Pricing is everything. At the end of the day, the only thing that matters”

Q Can I ask, when you analyze the portfolio yourself now, and you look back at, say, like the 40 K check or the hundred K check and the ownership that you have, if it's a It still doesn't really do much for you and for the wider portfolio in terms of returns and multiples. So what are your thoughts on that then?

A I think that's another good thing that doesn't make a lot of sense in the common VC interest, which is that when I invest 40 K into a company, that's not the last 40 K I'm going to invest. That's in fact only the beginning. I look at that as an, I'm opening the door to get access to becoming an insider. So if you think about Like, let's say that MParticle walks in the door, and we both love MParticle. It's a great company. Mike Katz is an amazing entrepreneur, and you and I are both basically going to make an investment decision today. I have this incredible advantage because I've been an insider. Well, one, I've known Mike for, you know, almost a decade now, more than a decade, and I've been an insider in the company for many years, and so I've gotten to watch as they go. I've gotten to see, you know, board deck by board deck as the company has evolved. I've gotten to track sort of the decisions that get made, the mistakes that get made, I have a credible advantage as an insider in that situation. And so my ability to deploy capital is advantaged because I have inside information, legal inside information. That's tremendous. And so I think the venture capital industry generally makes a mistake by not taking advantage of that. Why is it that we get an inside position and then we let somebody else lead the round and take all the opportunity to deploy capital in subsequent rounds…

AI assessment note: “I look at that as an, I'm opening the door to get access”

Q And then the final one here, Zach, the most recent publicly announced investment, and why did you say yes?

A So I have a fun one that I did recently. It's called Mud Water, which is a, it's a mushroom tea company, and it's super random story, but I had been advising the guys who started it when they were building an SDR as a service, self-development rep as a service company, and it wasn't working very well, and the designer, this guy Shane, is like, screw it, I'm going to Goa. So he goes to Goa, You know, he's kind of getting some space, and he gets into chai tea over there. India, they make proprietary chai teas, and so he's also really into mushrooms, so he starts blending his own mushroom, blend of four different types of really great mushrooms and chai tea to make this tea, and he starts drinking it. His friends start liking it. They're like, hey, just put it up online and start selling it. We want to buy some. So he sells like a thousand dollars of product in April of this year, and then 5000 in May, 10,000 in June. So he calls me up. He's like, hey, we got this thing. Can you help? And so I jumped in and started helping, you know, made some introductions, and like, and then it was like, 20,000 in July, and like, 40,000 in August, and they're like, uh, we need some money to like, build out this, we gotta, we can't keep up, and this is like, all direct, great margins, like, it's an amazing company, and I was like, okay, I don't know anything about this space, I don't know anythin…

AI assessment note: “growth rate is a hundred percent month over month, amazing margins, this amazing team”

Q value that it provides. I think, obviously, with Angel, it's to Naval, and he said before, when it comes to kind of value, that we might see the Unbundling adventure into capital, advice, and then kind of structuring and guidance with regards to kind of corporate structures. Would you agree with him on this potential unbundling adventure, given all that you've seen from enjoying the benefits of AngelList platform play?

A So, you know, Naval has done very well by being a outspoken spokesman for the crazy ideas at the extreme that tend to be right, and he's super smart, but I think it's more complicated than just to say that Venture is going to unbundle. I think there is a place for bundled venture. In fact, if you look at what Andreessen is doing and you look at what the number of the other big platforms are doing, they're taking venture to a whole even higher level of bundling where they're saying, look, we're going to basically use the sort of returns that come from our involvement in these sort of companies to build these amazing, really bundled, powerful platforms that will enable us to be highly differentiated. And I think that's not only not going to go anywhere, I think that's going to get stronger and bigger and more powerful and And you're going to see more bundling that happens in that part of the ecosystem. You know, on the other hand, there's this tremendous inefficiency in the market right now between professional VCs who either have worked their way up through the asset class as sort of associates and principals and whatnot, or have entered in because they've been highly successful entrepreneurs. There's a big inefficiency where there's that group of people who have access to traditional VC funds and the rest of the market where you have a whole bunch of really smart, Involved, con…

AI assessment note: “I think it's more complicated than just to say that Venture is going to unbundle.”

Q to you all day, Zach, Is the element of kind of tier ones returning to market at the early stages? We've seen the likes of Sequoia, Founders Fund, even Lightspeed, many, many of the tier ones returning to the kind of the earliest stages. How do you think about what it does in terms of the angel ecosystem and the seed ecosystem, and what do you make of that re-entrance?

A Ah, I mean, whatever. It's normal. They've always been there. They come in, they come out. At the end of the day, in order to basically be involved at the early stage, you have to help Build great companies. You have to put in the work. You have to make introductions. You have to tell the entrepreneur when they're being stupid. You have to be at the table and be involved. And, you know, if they want to run out into the ring and get dirty and build great companies, more power to them. You know, if they want to be tourists and throw checks in and think that that's going to get them to where they want to get to. Great. Hopefully they don't mess things up too much, but if they do the work, they're going to be great. And if they don't do the work, they're going to fail. It's pretty easy.

AI assessment note: “It's normal. They've always been there. They come in, they come out.”

Q I totally agree with you there in terms of the kind of the allocation within the round and it not derailing, so to speak, a fundraiser of sorts. I do have to ask, in terms of reasoning behind investing and not investing, often pricing comes into display a lot. I would love to hear, how do you think about pricing and price sensitivity today, Zach?

A Yeah, I mean, absolutely. Pricing is everything. At the end of the day, the only thing that matters in this business is price. In fact, I often think that the industry is a little bit swept up and not thinking about price because, yeah, we have winners. But at the end of the day, if you pay too much for your winners, they're not winners anymore. So yeah, I spend a lot of time on pricing, and it's, it's critical. I can write one check at a 20 pre, or I could write 10 checks at a two pre, and I can have a 90% loss rate on my 10 checks at two pre, and still end up basically in the same dynamic, as long as you had a comparable return. So yeah, pricing is everything.

AI assessment note: “if you pay too much for your winners, they're not winners anymore.”

Q Well, I can tell that you're not a VC because you're far too humble, but I would love to ask. I, as I said, I spoke to Mike at Amparticle before the show, and he really picked up on one element. He said, what did you learn in ad tech that you've applied to your investing style?

A I've actually now invested in quite a few fellow ad tech entrepreneurs, and I can say with certainty that the crucible that is ad tech, I mean, it is literally one of the hardest industries to compete in, is an amazing learning ground for entrepreneurs because you just get the crap beat out of you constantly. I mean, you have these giant competitors in Google and Facebook and, you know, every other major company in the world who basically are attempting to own the advertising in Google. The ecosystem at the same time as you have, it's a trillion dollar market. So you have just some of the best entrepreneurs in the world are competing to try to capture market share there. And I mean, it beats the crap out of you. I certainly have more scars and bruises than I will ever forget, but it did teach me a lot of good things. I would say pretty much every lesson I've learned as an entrepreneur was reinforced and reinforced and reinforced in ad tech. For instance, differentiation is key. I like to say, if you can't cold call a customer at nine o'clock at night, On their cell phone, while they're putting their kid to bed and describe what you're doing in one sentence, forget about it. You have no hope of them basically of selling a product unless they basically answer that call and say, Hey kid, shut up. I got to take this call. I mean, you really need to have that clear, crisp articulati…

AI assessment note: “looking for that sort of product market fit and that value and differentiation”

Q Can I ask, how do you approach the decision-making process when determining whether to deploy more and more and more? What does that look like for you having now done a significant number of checks?

A I mean, at the end of the day, I basically like to think of every investment decision as an isolated event where I have, I like my sort of sunk cost is deployed capital, but it's the sunk cost. I don't think about that relative to the decision to participate. I look at it like, okay, given the number of the opportunity cost I have here, Against the number of deals, and deal flow, and dynamic, and market positioning I have, and the inside information I have on terms of how well this company is doing, is this sort of a obvious no-brainer, or is my bias leading me to want to invest in this company? The way I look at it is like, the longer I'm with the company, the more inside information I get. It should be more and more obvious that I should be writing that check. In fact, it should be a no-brainer. I should be like, oh god, obviously I'm going to invest in this. This company is crushing it. And if I don't feel that, if I don't Think that. Then I attempt to pull back and write a smaller check or not participate in the following rounds. One of the great things about the way that my checks work is because I'm usually 10 to 20% of the round, I'm usually a minority in any given round. Nobody looks at my check as an important check. I'm just sort of also on check, and so in a lot of ways it gives me a lot of flexibility to go super pro rata in some cases and to pull back and to write …

AI assessment note: “think of every investment decision as an isolated event where I have, I like my sort of sunk cost”

Q to you all day, Zach, Is the element of kind of tier ones returning to market at the early stages? We've seen the likes of Sequoia, Founders Fund, even Lightspeed, many, many of the tier ones returning to the kind of the earliest stages. How do you think about what it does in terms of the angel ecosystem and the seed ecosystem, and what do you make of that re-entrance?

A Ah, I mean, whatever. It's normal. They've always been there. They come in, they come out. At the end of the day, in order to basically be involved at the early stage, you have to help Build great companies. You have to put in the work. You have to make introductions. You have to tell the entrepreneur when they're being stupid. You have to be at the table and be involved. And, you know, if they want to run out into the ring and get dirty and build great companies, more power to them. You know, if they want to be tourists and throw checks in and think that that's going to get them to where they want to get to. Great. Hopefully they don't mess things up too much, but if they do the work, they're going to be great. And if they don't do the work, they're going to fail. It's pretty easy.

AI assessment note: “Ah, I mean, whatever. It's normal. They've always been there.”

Q themselves with dollars behind them. I do want to dive kind of a layer deeper, though, now, uh, into a kind of portfolio construction investment stage and founder engagement. Taking them in turn, I've got to be honest, is that my favorite is portfolio construction, which is probably why I'm still single. But how do you think about portfolio construction today and really kind of the optimal number for diversification?

A Yeah, so I'm a weird fish here in that I actually think that portfolio construction as sort of a thought process tends to create a bunch of inefficiencies and The way I think about it is if you look at venture, the only two hard things that I can see in this business are basically deal flow and access. So if you don't have basically good deal flow and you don't have access, you're out of luck. You're not going to be successful. The more deal flow you have, the more access you have, the more likely you are to succeed and picking. So at the end of the day, you have to basically make a decision about what you're going to invest in and what you're not. And at the end of the day, anything that basically constrains deal flow and access is As far as I'm concerned is inefficient, right? And so a lot of basically VC funds and firms, they'll sit down ahead of time and they'll say, okay, let's, let's design our optimal portfolio. So their LPs think we're smart and let's put together all of this math. And let's think about what in a perfect sort of isolated world, what a portfolio would look like. And then basically like you go into battle and immediately you realize that's all BS because you meet companies and And there's a dynamic at play in that company. There's a certain sort of opportunity and the opportunity doesn't fit the sort of dynamic that you built in your sort of perfect white…

AI assessment note: “portfolio construction as sort of a thought process tends to create a bunch of inefficiencies”

Q Come on. Speaking of that, it's super interesting. In terms of your positioning, we chatted before, and you said you spent a lot of time thinking about differentiation and positioning versus the status quo VC market. Where do you land with this thought process yourself personally today?

A Yeah, I mean, so, I mean, all of what I do is differentiating from the VCs. I'm an entrepreneur. My job is to find a niche in the market where I'm differentiated, so almost every decision I make, so check size flexibility. Most VC firms, because of their LPs, don't have the ability to be flexible. I do. So I almost never get sort of left out of a deal because I can come in at any size. As long as the entrepreneur thinks I'm useful, they let me in. I don't get a lot of ownership. That's fine. I can get more ownership later. Speed. So for instance, I find it kind of weird. The VC market generally is a market that is driven by sort of outsized returns on weird companies that are out of norm. Non-consensus companies make most of the money, and yet we have a consensus-driven partnership structure for the vast majority of the ecosystems. That doesn't make any sense. Like, why do we have committees making non-consensus decisions? In almost every single other asset class, individual decision makers have proven to be the most effective way of basically deploying capital. So that's one of the reasons why I'm a solo GP. It's like, I find I can be faster and I can make more non-consensus decisions by myself. Certainly really interesting allocation decisions over stage. So a lot of funds are designed to be funds such that they have a certain return profile, a certain construction that delin…

AI assessment note: “all of what I do is differentiating from the VCs.”

Q on the show, who discussed the transition for him from angel to institutional investing, and he said that he became a lot more conservative with the move. I'm interested, for you, within your realm and within your mindset, have you found that you've become more conservative over Time with the expansion of your portfolio, or have you found actually on the opposite side, have you become more aggressive with time?

A Yeah, so I never was an angel. I never invested my own money, and so I don't know. I know that in the public markets, I traded and managed a portfolio for myself and for other people in the public markets for a while, and there I did find that I was massively more conservative with other people's money than I was with my own, so I suspect that if I was managing my own money and deploying it, I might be less conservative than I am now. Doing what I'm doing, but you know, I don't know. That's a good question. Something to think about, but I've always been managing other people's money. I mean, at this point, there's a hundred million AUM that I'm responsible for. So that's a big enough number that I don't want to mess that up. So I think very carefully about what I do.

AI assessment note: “I did find that I was massively more conservative with other people's money”

Q Well, I can tell that you're not a VC because you're far too humble, but I would love to ask. I, as I said, I spoke to Mike at Amparticle before the show, and he really picked up on one element. He said, what did you learn in ad tech that you've applied to your investing style?

A I've actually now invested in quite a few fellow ad tech entrepreneurs, and I can say with certainty that the crucible that is ad tech, I mean, it is literally one of the hardest industries to compete in, is an amazing learning ground for entrepreneurs because you just get the crap beat out of you constantly. I mean, you have these giant competitors in Google and Facebook and, you know, every other major company in the world who basically are attempting to own the advertising in Google. The ecosystem at the same time as you have, it's a trillion dollar market. So you have just some of the best entrepreneurs in the world are competing to try to capture market share there. And I mean, it beats the crap out of you. I certainly have more scars and bruises than I will ever forget, but it did teach me a lot of good things. I would say pretty much every lesson I've learned as an entrepreneur was reinforced and reinforced and reinforced in ad tech. For instance, differentiation is key. I like to say, if you can't cold call a customer at nine o'clock at night, On their cell phone, while they're putting their kid to bed and describe what you're doing in one sentence, forget about it. You have no hope of them basically of selling a product unless they basically answer that call and say, Hey kid, shut up. I got to take this call. I mean, you really need to have that clear, crisp articulati…

AI assessment note: “looking for that sort of product market fit and that value and differentiation in the companies”

Q themselves with dollars behind them. I do want to dive kind of a layer deeper, though, now, uh, into a kind of portfolio construction investment stage and founder engagement. Taking them in turn, I've got to be honest, is that my favorite is portfolio construction, which is probably why I'm still single. But how do you think about portfolio construction today and really kind of the optimal number for diversification?

A Yeah, so I'm a weird fish here in that I actually think that portfolio construction as sort of a thought process tends to create a bunch of inefficiencies and The way I think about it is if you look at venture, the only two hard things that I can see in this business are basically deal flow and access. So if you don't have basically good deal flow and you don't have access, you're out of luck. You're not going to be successful. The more deal flow you have, the more access you have, the more likely you are to succeed and picking. So at the end of the day, you have to basically make a decision about what you're going to invest in and what you're not. And at the end of the day, anything that basically constrains deal flow and access is As far as I'm concerned is inefficient, right? And so a lot of basically VC funds and firms, they'll sit down ahead of time and they'll say, okay, let's, let's design our optimal portfolio. So their LPs think we're smart and let's put together all of this math. And let's think about what in a perfect sort of isolated world, what a portfolio would look like. And then basically like you go into battle and immediately you realize that's all BS because you meet companies and And there's a dynamic at play in that company. There's a certain sort of opportunity and the opportunity doesn't fit the sort of dynamic that you built in your sort of perfect white…

AI assessment note: “portfolio construction as sort of a thought process tends to create a bunch of inefficiencies”

Q Do you think you would have invested if you had had the capital then?

A That is an amazing question, and I don't know. Travis and I argued about whether or not Uber would work, and I mean, obviously, that taught me a ton of lessons about recognizing companies that have really difficult sort of early barriers, but giant blue oceans behind those barriers, and have amazing product market Fit in terms of articulation. I mean, think about like the perfect example of that nine PM call on a cell phone. I'm like, Hey, I can give you a car to push in a button on your cell phone, or you can have a taxi. Every single person would be like, Hey kid, I got to take this call. I want that option. The power of what Uber provided. It just reminds me over and over again of like, that's just magic. And so, and that's what, it's something I look hope for. So it taught me amazing lessons. I don't know if I would have invested. I think today as an investor, I think I hope I'm smarter than I was at that point in time. And so maybe I'm more likely to have invested now than Then, I don't know. And the other companies, yeah, those were, none of those were slam dunks. They're non-consensus, weird deals, all of them at the time that they were done. Maybe Dropbox wasn't, but a lot of them were. And so, yeah, in order to make those bets, you have to basically think in weird ways, which is really hard to do. So I don't know. It's not clear to me.

AI assessment note: “I don't know if I would have invested.”

Q on the show, who discussed the transition for him from angel to institutional investing, and he said that he became a lot more conservative with the move. I'm interested, for you, within your realm and within your mindset, have you found that you've become more conservative over Time with the expansion of your portfolio, or have you found actually on the opposite side, have you become more aggressive with time?

A Yeah, so I never was an angel. I never invested my own money, and so I don't know. I know that in the public markets, I traded and managed a portfolio for myself and for other people in the public markets for a while, and there I did find that I was massively more conservative with other people's money than I was with my own, so I suspect that if I was managing my own money and deploying it, I might be less conservative than I am now. Doing what I'm doing, but you know, I don't know. That's a good question. Something to think about, but I've always been managing other people's money. I mean, at this point, there's a hundred million AUM that I'm responsible for. So that's a big enough number that I don't want to mess that up. So I think very carefully about what I do.

AI assessment note: “I've always been managing other people's money... I don't want to mess that up.”

Q one thing that does change that kind of loss ratio is insertion point. Often the later you come in, obviously, the more de-risked they are to a certain extent. Super interesting when I looked at your portfolio, because there are seeds and there are series C's. How do you think about insertion points today with the portfolio? And do you have preferences on where you really like to get involved?

A Yeah. So the first thing is I spend the vast majority of my time early. So I really like to find the companies when they're really young, get involved, try to like help them and be useful in the startup formation process. You know, I like to say that like a lot of ways sort of being an entrepreneur, sort of like being a gladiator, like you strap on your armor and your shield and you go out in the middle of the ring and you literally just fight and sweat and bleed until you exit or you die. It's just this never ending battle of beat one problem and they send two more. You beat those two, they send Four more. You beat them. They send elephants and tigers on chains. Like it's just this never ending fight with this brutality of being an entrepreneur and being an investor is we're up in the stands drinking a cold beer, sort of betting on who's going to live and die. I mean, it's, it's just tremendously easier doing what we do, but I love to sort of run out in the middle of the ring and pretend like I'm still a gladiator help out until I get tired to generally just try to be useful. And so I love to find the companies when they're as young as possible and then help out, be useful and sort of help deploy capital. But I My insertion point as an investor is, is very clear. What I look for is, it seems to me that there's a very interesting demarcation in the industry between the first te…

AI assessment note: “I spend the vast majority of my time early. So I really like to find”