The Ledger, every show

“I spent most of my time trying to figure out how good is the technology, how good is the CTO. And it took me a few months to realize that that was probably just a waste of time for everybody.”

“Eventually, you have to get to consensus. If you're dependent on capital markets, it's very hard to keep the company alive if nobody wants to fund it.”

“Most of that, like most of the hot companies end up coming from the not hot batch, right?”

“We invested in defense a lot three, four years ago, and then we kept looking, we're basically paused for a year and a half or two, because after the Ukraine and Israel thing, you know, prices just went up like two, three, four times, but the company fundamenta…”

“I think we've invested in like 10 or 12 unicorns roughly. Maybe like a third of those or quarter of those had a series A investor at seed.”

“If you only meet people through introductions, you're going to be shutting yourself off from people who come from different backgrounds or spend time in their social groups or different settings.”

“Yeah, you know, I do believe, actually, that you make most of your money on the right initial bets, And the key is just to make those bets meaningful and trying to double down later helps, but I really think it's secondary.”

“I do believe price is important. I think everybody talks about if you invest in Uber, then the seed price doesn't matter. And I think if you invest in Uber, that's true. The seed price doesn't matter. But I think the challenge is that most investors think most…”

“There's a really great Fred Wilson quote where he talks about VCs making their money on their big winners, but the reputations on the companies that struggle. And I think building that good reputation is what gives you a chance to work with the next generation…”

“Whether you raise all of it on five, or you raise a little bit on four, seven, and 10, most people think that the four, seven, 10 approach is way better, because the valuations go up so much. But it turns out, I think it's within about half a percent of diluti…”

“It's very rare for me to see companies fail because of the technology. It's almost always the product market fit is not there, or the team isn't able to recruit as much as they'd like”

“I'm not sure an ex-unicorn founder would ever be, not consensus really.”

“Like if you're in like the best company of the year, I don't think like, I don't think ownership matters that much. I don't think like the price matters that much.”

“I think the truth is most intros aren't actually that warm.”

“If you only meet people via introduction, you're Almost never going to be the first person to talk to a founder, almost by definition, because, you know, you're waiting for somebody else to talk to them first”

“I think there's a sync that shows that you know how to pitch your product well, and you have a really good grasp of it. And if you need three pages, I think that means that you still aren't sure exactly how to do that. And you don't know how to engage, you kno…”

“And I will also say, I think following on is not a fantasy in my experience. I think if you're helpful and you work hard and founders enjoy working with you, they'll usually give you a chance to follow on, you know, not always, but usually.”

“I strongly disagree with this. The first reason is, and this is actually kind of a personal reason, but, you know, my fund, Sousa Ventures, we talk about the investors and founders in our fund being a little bit like a family, and I know it's kind of corny, bu…”

“I definitely think picking is more important, you know, because if you don't pick well, then it doesn't really matter if you get in or not, like you're not going to have a good portfolio, but if you can pick well, then access may or may not be important. And I…”

“VCs know a lot about businesses in general and sort of have a lot of knowledge across many companies, but it's very broad and not that deep. And they usually know very little about your specific business and industry.”

“So if you had a fund that just did that, where all you did was follow on to these other top funds, like that would be an amazing investment vehicle.”

“And the problem is, you know, if you overpay by 50 or a hundred percent for one deal or two deals in a 30 deal fund, that's not a big deal. But if you do it for all of your deals, or most of your deals, now your cost basis may be doubled. And now that means th…”

“I think most VCs are great and then a small number are not. And because there's no public repository of people, you know, saying what it's like to work with a specific investor, a lot of times, like both the good and bad investors will be able to get into roun…”

“I would say like for me, and maybe we invest like a tick earlier more like towards pre-seed and seed, but for me, a lot of my best investments have been more on the non-consensus side.”

“Once they get good, the valuation skyrocket so fast that like you could still get good multiples, but they're just much lower than it, you know, early stages.”

“E-commerce didn't, I think the fundamentals didn't change that much year to year, but like the valuations and the like appetite for investing and maybe starting companies changed a lot year to year.”

“For non-consensus companies, it's getting more efficient because the more investors there are, the more likely you are to find at least one or two that like what you're doing.”

“I think at least on my side, for a lot of the precedes and seeds I've done, I went back, I think over my top like 10 investments, maybe six or seven or eight took them months to raise a seed round.”

“At seed, it's very rare to see like, oh, there's an asset that's going to be working here at the series A. Cause usually the asset's still going to be like being developed at the series A or maybe series B.”

“In a purely consensus world, like it all just comes down to the cost of capital. Right. And so if my LPs want five X and yours want two X, you could pay two and a half times higher prices and the company's not better. It's just like, oh, like your cost of capi…”

“Where if it is a founder that previously built a business that exited for a hundred million and they're like in the space that they know super well, that's gonna get done at like 40 instead of 20 or 80 instead of 20 post. And chances are it's gonna be a multis…”

“Well, I think the reason that moats are important is that they basically determine your profit margin over time. So if you build something that no one else can build, you can make 20 or 50 or maybe even 90% margins. But if what you're doing is easy to copy, th…”

“You know, in the early days, I think unit economics, it's important that you're kind of in the right ballpark. So if it takes you a million dollars to acquire a customer that brings you 10,000 in revenue, like that's not good. But if it costs you 5000 dollars …”

“I really think it's important to think about moats from day one, and you might not actually develop a good moat until year two or year five or even year 10, but I think it's at least important to think about, you know, whether you could build a moat over time …”

“And I also think that most, like you mentioned, proprietary data and like data network effects, those things are not binary. So it's not like you don't have them on day 1000 and then you suddenly have them on day a 1001. And so they grow over time and the more…”

“And the truth is like, those are nice things to have and they'll help you get a headstart for a couple of months or maybe a year or two, but those are not sustainable competitive advantages. Like you can't outwork every company in the world forever.”

“And in my experience, it's best to send a thoughtful pass rather than disappear, and if you give constructive feedback about what you like about somebody's pitching company, and where are your hesitations, or where you see the risks, and you can give that feed…”

“And I've actually learned that this pushback happens pretty rarely. So I'd say maybe, you know, a couple of percent of the founders where I send them some feedback, you know, most of the time people just say, thank you.”

“And if instead their response is more like, well, I think you're dumb and you're just not seeing it, then it's a good signal that maybe this person would be a little bit hard to work with or that they don't take it back well. So that's, you know, that's a grea…”

“We're not religious about it. I think if we're off by 10 or 20%, it's not a big deal. But if it feels like the price is off by 70% or 200%, then we really evaluate, like, how much we actually want to invest in a company.”

“I'm not against being contrarian, but I definitely don't think it's the only path to success.”

“If I was thinking this should be a six million dollar pre and they said they're raising a twelve million dollar pre, that's usually when either I'll walk away or we'll try to have a negotiation and then see if we could make something work out.”

“I think the good bridges are the ones where you had a checklist of four things, and you hit three of them, and you need a little bit more money to prove that the fourth one is not a big risk either. I think the bad bridges are where somebody spent a million or…”

“Yes, I think it's probably 80% of how I view my role, in the sense that, you know, the ultimate goal is to help a founder build a huge company, and a lot of times the next milestone to get there is to figure out what you have to prove and prove it so you could…”

“At SUSE, we've made about 50 investments over the last four years. And Flexport was the only one where we made it, like, we basically made the call during the first meeting where we just said, okay, like, we want to be a part of this.”

“I think you can be a really good or really bad investor with either background.”

“I actually got this idea from Finn at first round where he started sending a survey to founders he met with to basically ask them what they thought of the meeting. So I've been doing that for the last year or two, and it's a really short survey.”

“And so I spent a couple of years there just when the engineering team was like five, six people most of the time.”