The Wisdom Wall

“If you fund a generational company and the outcome is insanely enormous, you should say yes to whatever that number is at the, at the seed stage.”

“The company's either going to work or not work. And you are not the reason for either of those two things. If anything, you're the reason it's not going to work.”

“The valuation to me is the investor's problem. And I just don't like, I don't believe that my sympathy sits for all the VCs that overpaid on things that they did. Like, everybody could, again, back to this, like, you could have said no. If you thought something was too expensive, you could have said no.”

“telling founders, like, put your head down, build a product. Don't worry about fundraising. It's like distracting and annoying. The CEO specifically, their job is to become great at fundraising, and they need to be, like, view that as a core competency that they should take responsibility for, getting better at,…”

“Every VC's math works if you fund great companies. And so it's not about this, like, ownership threshold.”

“And so the idea that a diverse portfolio is amongst the VC can deploy this value add and company building at scale. I just haven't seen that happen over my 10 years doing this.”

“Every VC's math works if you fund great companies. And so it's not about This, like, ownership threshold. If anybody owned one percent of Facebook, one percent of Uber, .1% of Coinbase, your math works. Your math works really well, and it scales.”

“I think at the end of the day, for the most part, all VCs offer the same product. We are giving money and we are taking equity. What comes after that is obfuscated in a sales pitch.”

“I don't think you can index seed, and I don't think you can aggregate seed into a low margin product.”

“I think, I think venture is two different, venture is two different jobs. There's the, the pre-series B job, and there's the post-series B job, and I don't think they have any relation to each other. I think at, at pre-series B, you are doing more art, and at post-series B, you are doing more math.”

“The best firms in venture have the highest probability of being the best firms in the future, because brand matters, the quality of investors at that brand matter, and they're going to see and win better than the challengers are.”

“The, the path from zero to one billion Is impossible. The path from one billion to five billion is more predictable, and it's more easy to see at a given moment”

“I think the, the space I have conviction that there will never be efficiency in is the seed market. Because starting something is not efficient. Starting something is messy.”

“I think it is important to be price aware on a portfolio basis, and I don't think on a deal-by-deal basis, price is a determinant of making a decision. Pretty simple. If you love a company and And you want to invest, and the deal is what the deal is, you make a decision to invest or not invest. I don't control price.…”

“So if I'm going to take a three million dollar check from you, you know that you're in the bottom quartile of money allocated from that fund. So assuming that you're going to get this magical attention allocation from the fund is a mistake.”

“Don't pass on a deal because it's overpriced. If it's going to be a great company, that's the cheapest it will ever be. So you should probably invest.”

“If you pass on something and it works and you pass because of market size, they have expanded and created the market that you thought was too small.”

“The best companies will make all the math work, no matter what your check size, no matter what your entry point. And obviously that sort of stops at some scale, but if you are an early investor in one of the sort of unique once in a decade, once every five year breakout companies, the math works itself out.”

“I think building ownership after your first check is probably hard as a seed investor because series A, series B is just so competitive and And the idea of increasing ownership in those rounds feels like a false hope most of the time or adverse selection.”

“the barrier, I think, to be successful is you, you need to be great from the minute somebody gets you, and that could be either this magical utility, could be this magical happiness you bring to a user, or it could be an incredibly polished product with a clear path as to where you're going. So I don't necessarily…”

“It is important to be price aware on a portfolio basis. And I don't think on a deal by deal basis, price is a determinant of making a decision.”

“I think best is this, what did they do? What, like, name the things that they did for you. Favorite is, I would work with them in a heartbeat because I like them, and they are a friend. They are somebody that we go to when we want to talk to, to an investor without the sort of parent in the room. We want to be the…”

“And the cost of omission at seed is so much more expensive than the cost of commission. And if you say no to the wrong company, you blow your returns. If you say yes to the wrong company, it's a rounding error in your model.”

“And so the more that you allow for negativity to creep into conversations amongst the firm, I think less variance you will have in outcomes and the safer you will play, and I don't think that that model works at Seed.”

“I truly don't believe in pattern recognition at scale. I think there's nuanced pattern recognition, but I view each one of those companies as an individual relationship, as an individual journey”

“So when I think about reserves, I would say over-reserving is the bigger mistake than under-reserving.”

“Our job is to say yes, not to say no. And our job is to, uh, communicate that decision to a founder in a transparent and quick way. And our job isn't to waste people's time and our job isn't to, um, mislead people. And I think as I've looked at this business, um, for years, there's, there's people that come and go that…”

“I think there's a power law dynamic in venture that is very hard to break. And I think the best firms will continue to be the best firms until they are suddenly not, mostly on internal errors and unforced errors.”

“If you have a multi-stage firm on your cap table that can lead your next round, and a new multi-stage firm shows up to explore your next round, very rarely are they like, will you get the answer from the other firm?”

“The success of a company is dependent upon employees one through 10, 10 through a hundred, and the founders. Like, that is what will make or break a company. The investors, the outsiders, the advisors, the mentors, the coaches, that part of a company building is an amplification of what's naturally being built…”

“So I, I don't obsess over the ownership and the portfolio construction in a way that I think it matters on a deal by deal basis. I think it matters on a portfolio basis.”

“the macro change in the, in the environment impacts our prior investments much more so than our future investments.”

“And that's the, like, venture gets viewed as an asset class, and it's not. These are all very small businesses with independent investment styles and independent investment beliefs.”

“It is important to be price aware on a portfolio basis, and I don't think on a deal-by-deal basis, price is a determinant of making a decision. Pretty simple. If you love a company, and you want to invest, and the deal is what the deal is, you make a decision to invest or not invest. I don't control price. The market…”

“Do I think the only way to buy up in a company is to start by investing in the company? Yes. And the only way to buy up in a company is if you are worthwhile of the founder prioritizing you going forward.”

“So if I'm getting as much money as I want at a price that I want from a person that I want, it's a no brainer. You take the money.”

“I generally think that, and your podcast is probably helping this in many ways, in a good and bad way, there's too much focus on the venture capitalists. There's too much focus on the investors. At the end of the day, why companies are successful is because a amazing founding team has a dream. They go out and they…”

“So I think you see great firms with amazing returns just stay incredibly disciplined. Whether that's Harrison Metal or an IA Ventures, it feels like they don't change their playbook. And then there's other firms that are totally adaptive to a market condition on a week-to-week basis. I think just being in the middle is…”

“I think very few founders want the radical transparency of why somebody passed, and at the end of the day, a lot of the early passes are around teams.”

“trying to, to sort of assume you have it and have figured it out this soon, uh, I think is, is probably a mistake.”

“The, the 20th employee at a company is exponentially more valuable than, uh, you know, a seed stage investor, um, when a company's taking off.”

“And if you as the human investor Aren't aligned with that journey on the down and on the other side, aligned with the journey on the up as a human. I don't think you're going to be in this business for very long.”

“If we, instead, every fund cycle changed our strategy, changed how we operate, where we invest, like the style of investing, you have no ability to actually get better and to try to find that zone of clarity To make investments.”

“I just don't believe in evaluating venture, especially seed venture on a minute to minute, year to year basis. It is an incorrect use of energy and mind.”

“if your series A lead is not doing their pro rata in your B, that is a material data point.”

“Cause if you're funding facts at the seed stage, you're going to be looking for facts all day.”

“it's incredibly hard to be public about bad experiences, because as an entrepreneur, as a founder, you at some point will need to go back to market, and if you're viewed in any way as a risk, that just lowers the probability that you're going to get the outcome from the market that you want.”

“in this current market that we're in, this speed that rounds are happening, it is very hard to get to know people on either side. For us as an investor to get to know a founder very well, and as a founder to get to know an investor.”

“if you're simply asking an investor for a set of references, and sometimes you can say, can you introduce me to a founder that hasn't worked and a founder that has, you're still getting a biased pick there.”

“I think if your ambition is to build a profitable business, these early on, obviously later on, everybody should, but VC isn't the right weapon. It's VCs to go fast and big”

“But if you're dependent upon paid acquisition, you're Better be magical, and your conversion rates better be magical as well. Otherwise, the math will break pretty quickly if you can't keep funding that top of the funnel.”

“Entrepreneurship is about betting on yourself, and anytime you start hedging that bet, I think you're lowering the probability of success”

“I think the first feedback loop you get is actually Something that goes all the way up and then all the way back down. And so I think that that's where you are able to find the rational side of this business. So if you for two years, see a company go all the way up and then it doesn't work out, you are suddenly unable…”

“I think, I think the key to being an early stage, uh, investor is that every day, and every company you invest in, you need to be more excited about than the last one. Otherwise, it's hard to keep your energy up.”

“I think a deck or a product is a way that a founder can articulate the thing in their head. And it, it takes the idea and puts some picture around it. And I think it's really valuable to understand thinking.”

“Everybody can ask for whatever they want, and everybody can say yes or no. That's the way this business works. If somebody says yes, that's the price.”