Engineering Capital

“You know, relative to the value that you can create, and the amount of money that is available to a software company, it's still cheap. Bay Area is still cheap. That's why Bay Area still exists, is because relative to that, I mean, if you can actually get to a…”

“I have already been lucky that I've already, one fund is fully returned. One fund is more than half returned. And another fund is also, you know, some portion returned. So yeah, I've already received carry checks.”

“I don't do opportunity funds, I don't do SPVs, I don't do side funds, none of those things.”

“Obviously your risk is much higher in a partnership. In a partnership, by definition, there is someone who is a good investor and someone who's a little bit less good investor. So you're getting an average. So as it is, you're getting slightly lower. And then …”

“One of the very common failure modes of founders, especially technical founders, is what I call playing house. What I mean by playing house is that in any company, and this is related to that prioritization point, in any company, there's a large amount of work…”

“Again, I don't know the numbers. I don't track things like this. I would say 50%.”

“I don't keep an admin. I schedule my own calendar. my entrepreneurs hear from me directly, immediately when they reach out to me.”

“I typically leave the boards of my companies at the Series A. There's a couple of exceptions. I stayed on the board of Evinced. It's a Fund II company because, you know, it's a large board, and the company's doing very well, and the CEO wanted me to stay, but …”

“Engineering capital, the name comes from the fact that I invest in engineers who are going to solve interesting technical engineering problems, not science problems. So I don't do deep tech in the sense of science, but it can be technically very challenging.”

“And by definition, you maximize carry or you maximize multiple by making your largest investment first. And so that is very much the strategy of engineering capital. The first check is always the largest.”

“Menlo Security publicly, they cross a hundred million AR.”

“My portfolio construction is identical. Nothing has changed since then I started engineering capital. In fact, as we were chatting earlier, you know, I closed fund five late last year, and I use the exact same slides that I used in fund one, just in terms of d…”

“A better approach is to identify a very small problem, a very narrow problem that has a broad application, and then you can build a very big company. That is the ideal way for an entrepreneur to do a startup, and so what I recommend to people is even at the ri…”

“Many, many, many companies fail, not because the entrepreneurs don't work hard, or they don't have a good insight, or that they don't get financed, but because they have not estimated the market correctly.”

“Most technical insights are actually not good venture-backed opportunities. So it's really important to understand that a technical insight is a necessary, but not a sufficient condition to build an amazing technology company.”

“A technical insight means if I tell a good engineer what I'm doing, they will not know how I'm doing it. It will not be obvious to them how to build it, and that means you have an interesting technical insight.”

“I started engineering capital in 2015 because I noticed that even here in Silicon Valley, most of venture capital is actually focused on market insights or consumer insights. We had drifted away from our original roots, which of course was Silicon Valley.”