Upfront Ventures

“Empirically, about six deals in any fund drive 80% of the returns.”

“Most markets are winner take most. Number one takes the majority. Number two takes the rest. And number three is a set of steak knives. And If you back three, four or five, you're just not going to make a lot of money. You need extreme success in the category.”

“So it's our job to invest in something that we believe is going to happen in five years and being correct. If it's going to happen in a year, you probably missed the trend and there's probably 10 other VCs that were investing four years ago. And if you invest …”

“Going public, if you don't have coverage, and you don't have an institutional base that wants to invest in you, like, is worse than being private. Because you now have a fixed market cap that doesn't go up. You don't really have liquidity.”

“There's a ton of companies that can acquire businesses for 100 to five hundred million dollars. There's not so many who can acquire it for two billion or five billion. So if you're disciplined as an investor, if you're disciplined as a founder, and you're fund…”

“That 2012 fund for us, I think is going to be a phenomenal success. By any measure, it'll, it should return north of five X capital cash on cash.”

“We sold 1.2 billion dollars worth of positions in 2021. When everyone was writing crazy checks, I sold six hundred million dollars that year.”

“So in 23, I started buying secondaries at discounts. We deployed almost fifty million dollars into secondaries in 23 at deep discounts at a time where other people were, like, scared about the market”

“Usually, in a run-up, I'll usually sell 33 to 40% maximum.”

“So our median valuation on entries between 11 to 12 pre”

“So we had zero SoftBank deals, we had zero Tiger deals, we had one Coatoo deal, one Insight deal.”

“We don't write right now upfront is not doing a lot of generative AI.”

“We're putting way more dollars into space right now.”

“Since 2009, if you take every one of our funds, they've been median between 3.2 to 3.5 million dollar first check in. And they've been median between 18 to 21% ownership.”

“So, we invest 40% of our fund, usually 42% of our fund, and we reserve 58%.”

“On average of our companies that take longer and that we had reserves for. On average, it took six years to raise a growth round. Okay. But those companies by definition are more capital efficient because they didn't have access to it. I have six deals that fi…”

“We were the seed investor in Ring. Everybody on Shark Tank passed on it. We wrote a check.”

“And so guys like Mike Jones, who runs science, Mark Suster, who had just gotten there that is, you know, running upfront, upfront. Yep. had, had all put money into my company. And it was the first time I'd ever taken on outside capital.”

“One of the things I was involved in helping guide one of the portfolio companies of which I'm involved through their single largest customer renegotiating their entire contract. And what we were able to do, sadly, you know, we cut, I don't know, 40% off the an…”

“We funded a company today. We submitted the term sheet two weeks ago, and I've never met the founder in person. We greenlit another term sheet last Monday. It'll fund early to middle of next week. I've never met the founder in person. We are going to our partn…”

“And we have two companies closing north of fifty million dollar rounds this month.”

“We're tending to fund a lot more, call it, three million dollar checks than ten million dollar checks in terms of new money right now.”

“So when we're looking at companies, we're looking at bright-eyed, bushy-tailed, we're going to build this for the next 10 years, we're in the first six to 18 months of our journey, as opposed to a company been around for six years and suddenly finds itself in …”

“I suspect it's going to be harder to raise funds for the next five years than it was for the last five.”

“So we're investing somewhere between 39 to say 42% Of our fund in first jacks, and we reserve the balance and then we pace ourselves.”

“And we've been religiously on three years since 2009. So our funds have been oh nine, 12, 15 and 2018.”

“So we do 89% over the last several funds has been about 89% in seed and A. And of that 89%, two-thirds of it is A, one-third of it is seed. So we're actually pretty sizable seed investors, but we are, as you said earlier in the show, A investors. We do 11% of …”

“Yes. In fact, I think it'll go up from 20%, not down.”

“I definitely think the picking is 50% or more, but I very much believe in the doing”

“We only invest in about two companies a year.”

“I think people who've kind of worked through and gotten themselves in a position to succeed in Probably have a greater likelihood of having a very successful outcome, and so those are some characteristics I look for.”

“What I quickly learned is I'm much better off reacting to strong entrepreneurs who think they can do something with a market versus my own point of view about a certain market.”

“But in general, I think the reality is I would take a great team in a very good market over a decent team in a great market. Cause I think at the end of the day, the great end of the day, the great team has a flexibility insight to really move into great marke…”

“My formula is a very large market opportunity that doesn't have multiple brand participants that can play in, let's say high margin categories that have reoccurring purchasing characteristics. Meaning this idea of I can build a direct to consumer brand in cate…”

“Our average check size is between three to three and a half million dollars. So what you're really talking about is, in terms of new investments, each partner doing between two to three deals per year maximum.”

“There's all these intangibles that I'm trying to judge because I'm a seed or a round investor. So I'm usually not betting specifically on traction, which tends to be more of a B round activity.”

“But probably the best known post I've ever done was a post I wrote saying I invest in lines, not dots. And the metaphor is an x-axis is time, and a y-axis is your performance. And on any given day, I'm judging your performance on that day. How well did you pre…”

“Like, you've got one company, and there's no divorce clause from investors, so I really think entrepreneurs need to take the time to get to know their investors, which is why I'm not a big proponent of demo days, or overhyping your company, or Waiting to meet …”

“Fast forward to today, I think that's a non-issue with people like, you know, Mark Suster and Upfront Ventures and Snapchat in LA.”

“A chip on your shoulder's good. I'm looking, it's why I like the idea of funding immigrants. I want to fund people who are not part of the establishment, who are not country club, If you grew up with all the golfing buddies at all your prestigious country club…”

“I always say the job of the CEO is chief psychologist. You need to be able to hire talented people, but then lead and manage them. The job of a VC, I think, is understanding the psychology of the people you're about to work with.”

“So my very clear goal is I want to have the largest IPO in Los Angeles. I want to back a company in LA that IPOs and has the biggest IPO in LA. My goal with that is not purely financial. My goal is to see an ecosystem form around that company that will cement …”

“We just agreed to sell Maker Studios to Disney for almost a billion dollars.”