The Exchanges

Q What are the biggest challenges for this year?

A Well, I mean, I think it comes back to, you know, uh, uh, what I talked about, which is at the end of the day, none of these companies make sense unless they're making revenues. Those revenues ultimately have to come through budgets from the DOD. Those budgets have to be approved by Congress. You know, the president, you know, sort of Congress, you know, have both said that we are freezing those budgetary levels. Now DOD is allowed to do some, uh, reprioritization and reallocation of that. It still has to reflect what, you know, sort of Congress and the president, you know, told them to prioritize. Um, but that's gonna be a real challenge for a lot of companies. There are a lot of companies that almost certainly had, you know, appropriations requests in for fiscal year 25 that now have gotten zeroed out. And so, um, you're having to navigate that. And so, yeah, I think whenever you see that there's a, um, Uh, huge mismatch between investor expectations and the inflow of capital, and then the end customer, which ultimately is the federal government, um, and their signaling. There's probably, you know, something that, you know, is a little, a little wrong there. And so the fact that you're seeing the most insane pricing that I've ever seen for defense tech deals, while Congress is literally saying, like, we are not giving people more revenue this year. We've got to think about th…

AI assessment note: “none of these companies make sense unless they're making revenues. Those revenues ultimately have to come”

Q topics to cover today, including lessons from your mentor, John Doerr, the race to a hundred million dollar ARR as the new key milestone for early stage companies, how long journey prices early stage rounds, and what metrics and signals you're looking for for follow-on financing. But to start, you've become famous for this winning founder theory called the Riz and the Tiz. Could you just unpack this for us?

A Uh, yes, of course. So this is kind of how we think about evaluating founders at Long Journey. Uh, literally in our investment committee meetings, uh, we talk about whether or not this founder has the right balance of Riz and Tiz. And what that means, Riz, is charisma, of course, which is, can this person recruit an amazing team? Uh, can they attract downstream funding? Uh, you know, are they gonna be a magnetic leader? We believe that neurodivergence is a superpower, and we look for people that live their lives differently, and I think it also represents an intensity and directness. So we want the balance of both, and we think it kind of takes both to be an amazing founder.

AI assessment note: “what that means, Riz, is charisma... We believe that neurodivergence is a superpower”

Q Are there any specific metrics that are associated with that? I know you said, like, a hundred X.

A That one, the, the proprietary, like that one I think is more vibes based, I will say. Like, what do we know that others don't know because we've had a longer standing relationship with the company? And like, what are others missing that we aren't missing or vice versa? So that's, that's what I mean by like, how proprietary is this? Um, then how de-risked is it? Like how, basically how much progress has the company made and in what areas have been de-risked, especially since Uh, our round of our previous round. Um, is this a public company founder? Like, can we see this founder being, you know, ringing the bell? Um, is this one of our breakout companies or is it, would we consider this a flagship deal or generational company? That's also kind of more vibes based. And then how do we think about downstream investor demand? Because, you know, compared to some other funds out there, we're a smaller fund. So we're not going to be able to capitalize the company throughout their entire journey. Uh, so what do we think the demand from our downstream peers will be?

AI assessment note: “like that one I think is more vibes based, I will say.”

Q One thing that Lee mentioned about you is that your building essentially An adult frat and sorority. So is this like how you're cultivating community? Like what does this mean?

A That I'm building an adult frat. That's a hilarious way to put it. Um, how do I put this? So I'm the youngest of four. I'm, I have three older siblings. So I was always like used to a lot of people being around. And as an adult, I don't know, I, and I'm an extreme extrovert. So I love being around people. I actually like don't like not being around people like being alone is like, you know, I'm like, when can I call my next friend to hang out? But, um, so I think I, you know, always kind of had a roommate when I, you know, I graduated college. I've had roommates and then I kind of just never stopped. So even like when my husband and I got married, we had a roommate and then, um, when she moved out, we got two more roommates. And then when they moved out, Uh, we actually invited another family to live with us. So we just always enjoyed having a lot of energy, a lot of different personalities and like living in community. And I think especially my husband's an introvert, and I think it's just a tall ask for your partner to be everything to you. I don't know. People are just relying so much on leaning so much on their partners for literally everything where if you live in community, you don't have to do that.

AI assessment note: “we just always enjoyed having a lot of energy, a lot of different personalities and like living in community”

Q As we think about where you started in high school, how are you thinking about expanding Saturn?

A Like, I mean, we're in 18,000 schools. Those schools continue to grow year on year. The high school market's very important to us because it's the first touch point with the user, and we want to build a relationship with them for the rest of their lives. So rather than pick a different tool, they start calendaring with Saturn when they're 13, and we want them, we want to build a personal calendar for the rest of their lives. So in college, there's no purpose-built calendar. When you graduate college, you, of course, will enter the workforce and use enterprise tools. We think those can be complementary. To the graph that Saturn is best, uh, you know, fit to, to serve, which is, uh, friends, family, the people closest to you. I joke. It's the people in the Apple share sheet, everyone who you care about, whether they go to your college or not. And it's probably a stronger tie graph than it is in high school, where you care about your 30 classmates in each room. Uh, you probably care about, I don't know, maybe five to eight people. It's like your find my friends list. We think that's that list for your calendar. And we are, our competitive advantage is we always build the edge case, extra mile tools that no one else would think to support. So in high school, it's your complicated schedule that you think only your school has, and you think no one else can explain. Kids struggle to e…

AI assessment note: “we want to build a personal calendar for the rest of their lives. So in college”

Q And what's the strategy, like, what kind of companies are you investing into?

A Yeah, so, uh, doing kind of this barbell where it's mostly these vertically integrated companies, I've written a bunch about these, we can, we can talk about them, um, but kind of thesis being, uh, companies that use both kind of hardware and software, build vertically integrated systems, uh, It can build better, faster, cheaper products than incumbents and beat incumbents. Uh, and so I guess like the shorter way of saying it is like SpaceX and Android for everything. Uh, and I think a lot of that SpaceX and Android thesis has turned into like, let's invest in space and defense. And I think those are super interesting, but I think what's more interesting is like that in every other kind of big category where there's incumbents that, that are, that are beatable. Um, and then there's a little bit of like, you know, there's 20% of the fund that's just like, I'm not Smart enough to know what really smart people are going to build. That's like mostly crypto, but, um, it's like mostly just meant to be people are going to come in and tell me like something that I didn't know was true, but that I, that I believe after I hear it from them. And so I want to keep a piece of it open for, for those kinds of opportunities.

AI assessment note: “doing kind of this barbell where it's mostly these vertically integrated companies”

Q And what do you mean by that you're right-sized?

A Meaning that the, the, the major part venture is a, is a hits business and you have to be able to have one or two really exciting companies in each portfolio and produce wonderful LP returns for our investors. And if you're, uh, either too small where you simply can't be in those great companies or too big where you need Basically, not dozens, but certainly five to 10 of those great hits to produce the same kind of multiple that emergence can produce. We like, we like kind of where we're sitting. We're certainly bigger than we were when we started, and we can talk about that history, but we like the size range, uh, that we're in today.

AI assessment note: “too small where you simply can't be in those great companies or too big”

Q of iconic emergence is an iconic enterprise investment fund. So I'm going to read off these names and these are all fund returners, I would assume, because this is really incredible. We have Salesforce, Doximity, Zoom, Box, Bill, Blend, Viva. Gordon, given your career experience and success with public markets, do you think the IPO markets will open back up in 2025 as much as people are hoping they will?

A So it's a great question. And, and, and again, I'm a venture capitalist, not a, uh, atomist, uh, of, of the global, uh, of the global world and what's happening in this world. But the comment from, you know, the bullpen here is, uh, there's been a huge run up in the market already, right? A lot of, of excitement about both how the, the economy has been doing and for the upcoming election and what's happened since. Um, so it's, uh, the, the market is actually probably less stable and has a less of an opportunity to kind of hit a new height in this year, I think, than it did in the past year. Markets love stability, and I'm not sensing we're gonna have tons of stability during this year. It doesn't mean it's not necessarily good for the long run, perhaps, but stability is important. Interest rates are probably not going down. My bet is that they're Either going to kind of stay where they are, which is fine for kind of absolute, you know, uh, levels, but we have some potential policies coming that could drive up interest rates and, and basically inflation, which is, uh, is a challenge. Those are some of the macro pictures that the micro is things like service Titan, which did go out and, um, hasn't performed as well as we all had hoped. It certainly hasn't been You know, a terrible offering, but it certainly is, has not been running up after the IPO. And, um, so I don't know, ther…

AI assessment note: “I'm not sensing we're gonna have tons of stability during this year.”

Q Day by day. So I want to talk about the overall arc of AI. Your team, you're experts. I know for a fact, Yaz, I've known you for quite some time. You're one of the most, like, intellectually Honest and smart and curious people I know, and you do a lot of research. Given your experience, how are you measuring the ROI on AI?

A Yeah, it, it's a great question, and it's, it's, it's a tricky one to measure for a lot of businesses. And really, like, the best way to do it is to go back to simplest terms, really. And when you talk to the end buyer of AI, it's really a function of three, maybe four things that they, they really care about. It's costs. How expensive is it to do said task or job that I need done? Is it faster with AI or not? And you take the Delta there pretty simple, but like going back to basics is really important here because instead of giving an empty promise, it's actually saying we can impact your bottom line. The next is just speed. Sometimes you're willing to pay the same price for something. You're not as keen on a cost advantage, but time to value has been the biggest bottleneck for you. And now you can auto like, Automatically do something far quicker, 10 X, a hundred times faster than if you had to use traditional software or if humans were doing this, uh, either in-house or outsource. And let's say the last of like the very basic framework is just quality. Is the job done better? Like if it takes the same amount of time, it costs the same amount of money, is it better than what the outcome would have been had I not had access to some of this new technology? The best companies are the ones that make improvements across all three of those things. Because I think when, when you thi…

AI assessment note: “it's really a function of three, maybe four things... It's costs... speed... quality”

Q I want to apply this to some of your portfolio companies. I, I love this topic and I think this is really interesting. Um, so Yaz, I know you've spent a tremendous amount of time looking at the AI app layer and also infrastructure. You've invested into companies like Together AI, RC, and some more. So how did you gain conviction here and how do they interplay with each other?

A Frankly, when, when we started seeing all the innovation happening around AI, the first place we went to was our portfolio companies. It's like, how are we existing software providers going to leverage a lot of this technology and power some of the new products and features that we're going to roll out? And in talking to them, we understood some of the challenges associated with actually building these things into production. And so in the early days of, of this big gen app, post gen AI, post chat GPT craze, We spent a lot of time actually at the infrastructure layer because we knew that in order to actually take advantage of these things, you needed fine tuning capabilities, the ability to train your own models. If they're, if you're not training your own model from scratch, being able to run human evaluations on the models that exist out there and leveraging that data that you're getting from your proprietary data set from those that are using your product and incorporating that back into your overall training, post training pipeline. So that was kind of the thought process behind backing companies like Together and RC, which are at the infrastructure, allowing enterprises that power both consumer and B to B apps, the B to B ones in our portfolio, and being able to take that and say, we can now push something out to our, our user base with control. With visibility. We know wh…

AI assessment note: “in talking to them, we understood some of the challenges associated with actually building these”

Q Would you say SAS as we know it, traditional SAS is dead?

A I would say SAS is a bit, SAS is like, what does SAS mean? SAS means you have a recurring per seat software business model. I don't think those are going away entirely. They're going to be new business models for software. There's going to be the AI enabled services. We can talk about one in our portfolio that we back that looks more at the outcome based pricing. So SAS as we know it, is it debt? Probably not, but every SAS business is going to have AI at its core, whether they price proceed or they price on outcome is really hyper dependent on the end market they're going after. But, but I don't think SAS is in its entirety is, is dead. I'm curious to get your take.

AI assessment note: “So SAS as we know it, is it debt? Probably not”

Q Because so much has changed in the last year and things are settling, what, what exactly do you see in terms of the kinds of profiles of founders that you, that you would expect to win in this environment?

A Yeah, this is, this is one I've been thinking a lot about, actually, and, and really what gets me excited are teams that are just willing to work their tail end off and seeing, like, what is going to change in this next, next iteration. It's, let me stay as close to the market as possible, and the teams that are honestly doing that, and, and I know this has been a little bit more of a provocative one, it's like, the younger teams are the ones that are growing the fastest right now. They're the ones that are willing to just break things, try new stuff, and sometimes they'll, they'll move away from some of, like, the, the commandments that people learned when, when building great software companies. They're doing things that don't necessarily scale in the early days. They're, they're putting things into contract, like opt-out periods, just to get their foot in the door because there's such a goldmine land grab opportunity to leveraging software. Some of these younger teams are, are kind of going, doing away with a little less discipline on those fronts. And saying, let's just go to market really quickly, and you push the risk away from pre-sales and being able to get your foot in the door, actually pushing the risk to post-sales. So the most important thing that, that we're thinking about for twenty-twenty-five, especially when we work with this type of profile of founders, how c…

AI assessment note: “the younger teams are the ones that are growing the fastest right now.”

Q Fantastic. And to close out, what are you both looking forward to most this year?

A For me, it's when you think about all of the new use cases that are popping up, all these new applications, uh, I think you alluded to it a little bit earlier, uh, during the conversation, which is right now security is going to matter. Trust and privacy is going to matter. Understanding who has what IP, who doesn't is going to matter. In a world where voice feels as authentic as speaking to a human, Where talking to a chat bot and they can help solve really complex user queries, there comes a lot of risk with that. And so right now we're spending time thinking about what's that next problem that organizations are going to face when they're rolling out some of these technologies. And there is a whole suite of new early stage opportunities that are going to detect malicious behavior, uh, on behalf of these orgs when rolling out this new scary technology. And that's something I'm really excited about. Finding the guardrails to make sure this doesn't become the complete wild, wild west, and making sure that people can do things, ah, in a controlled environment, and that doesn't take advantage of end users and consumers, ah, broadly.

AI assessment note: “And that's something I'm really excited about. Finding the guardrails”

Q And what do you mean by that you're right-sized?

A Meaning that the, the, the major part venture is a, is a hits business and you have to be able to have one or two really exciting companies in each portfolio and produce wonderful LP returns for our investors. And if you're, uh, either too small where you simply can't be in those great companies or too big where you need Basically, not dozens, but certainly five to 10 of those great hits to produce the same kind of multiple that emergence can produce. We like, we like kind of where we're sitting. We're certainly bigger than we were when we started, and we can talk about that history, but we like the size range, uh, that we're in today.

AI assessment note: “either too small where you simply can't be in those great companies or too big”

Q Day by day. So I want to talk about the overall arc of AI. Your team, you're experts. I know for a fact, Yaz, I've known you for quite some time. You're one of the most, like, intellectually Honest and smart and curious people I know, and you do a lot of research. Given your experience, how are you measuring the ROI on AI?

A Yeah, it, it's a great question, and it's, it's, it's a tricky one to measure for a lot of businesses. And really, like, the best way to do it is to go back to simplest terms, really. And when you talk to the end buyer of AI, it's really a function of three, maybe four things that they, they really care about. It's costs. How expensive is it to do said task or job that I need done? Is it faster with AI or not? And you take the Delta there pretty simple, but like going back to basics is really important here because instead of giving an empty promise, it's actually saying we can impact your bottom line. The next is just speed. Sometimes you're willing to pay the same price for something. You're not as keen on a cost advantage, but time to value has been the biggest bottleneck for you. And now you can auto like, Automatically do something far quicker, 10 X, a hundred times faster than if you had to use traditional software or if humans were doing this, uh, either in-house or outsource. And let's say the last of like the very basic framework is just quality. Is the job done better? Like if it takes the same amount of time, it costs the same amount of money, is it better than what the outcome would have been had I not had access to some of this new technology? The best companies are the ones that make improvements across all three of those things. Because I think when, when you thi…

AI assessment note: “it's really a function of three, maybe four things that they, they really care about.”

Q I want to apply this to some of your portfolio companies. I, I love this topic and I think this is really interesting. Um, so Yaz, I know you've spent a tremendous amount of time looking at the AI app layer and also infrastructure. You've invested into companies like Together AI, RC, and some more. So how did you gain conviction here and how do they interplay with each other?

A Frankly, when, when we started seeing all the innovation happening around AI, the first place we went to was our portfolio companies. It's like, how are we existing software providers going to leverage a lot of this technology and power some of the new products and features that we're going to roll out? And in talking to them, we understood some of the challenges associated with actually building these things into production. And so in the early days of, of this big gen app, post gen AI, post chat GPT craze, We spent a lot of time actually at the infrastructure layer because we knew that in order to actually take advantage of these things, you needed fine tuning capabilities, the ability to train your own models. If they're, if you're not training your own model from scratch, being able to run human evaluations on the models that exist out there and leveraging that data that you're getting from your proprietary data set from those that are using your product and incorporating that back into your overall training, post training pipeline. So that was kind of the thought process behind backing companies like Together and RC, which are at the infrastructure, allowing enterprises that power both consumer and B to B apps, the B to B ones in our portfolio, and being able to take that and say, we can now push something out to our, our user base with control. With visibility. We know wh…

AI assessment note: “we understood some of the challenges associated with actually building these things into production”

Q Because so much has changed in the last year and things are settling, what, what exactly do you see in terms of the kinds of profiles of founders that you, that you would expect to win in this environment?

A Yeah, this is, this is one I've been thinking a lot about, actually, and, and really what gets me excited are teams that are just willing to work their tail end off and seeing, like, what is going to change in this next, next iteration. It's, let me stay as close to the market as possible, and the teams that are honestly doing that, and, and I know this has been a little bit more of a provocative one, it's like, the younger teams are the ones that are growing the fastest right now. They're the ones that are willing to just break things, try new stuff, and sometimes they'll, they'll move away from some of, like, the, the commandments that people learned when, when building great software companies. They're doing things that don't necessarily scale in the early days. They're, they're putting things into contract, like opt-out periods, just to get their foot in the door because there's such a goldmine land grab opportunity to leveraging software. Some of these younger teams are, are kind of going, doing away with a little less discipline on those fronts. And saying, let's just go to market really quickly, and you push the risk away from pre-sales and being able to get your foot in the door, actually pushing the risk to post-sales. So the most important thing that, that we're thinking about for twenty-twenty-five, especially when we work with this type of profile of founders, how c…

AI assessment note: “the younger teams are the ones that are growing the fastest right now.”

Q Fantastic. And to close out, what are you both looking forward to most this year?

A For me, it's when you think about all of the new use cases that are popping up, all these new applications, uh, I think you alluded to it a little bit earlier, uh, during the conversation, which is right now security is going to matter. Trust and privacy is going to matter. Understanding who has what IP, who doesn't is going to matter. In a world where voice feels as authentic as speaking to a human, Where talking to a chat bot and they can help solve really complex user queries, there comes a lot of risk with that. And so right now we're spending time thinking about what's that next problem that organizations are going to face when they're rolling out some of these technologies. And there is a whole suite of new early stage opportunities that are going to detect malicious behavior, uh, on behalf of these orgs when rolling out this new scary technology. And that's something I'm really excited about. Finding the guardrails to make sure this doesn't become the complete wild, wild west, and making sure that people can do things, ah, in a controlled environment, and that doesn't take advantage of end users and consumers, ah, broadly.

AI assessment note: “And that's something I'm really excited about. Finding the guardrails”

Q So where exactly are we in terms of AI adoption? There's been lots of profile funding rounds over the last few years. Are companies actually delivering any value? Where are we at?

A I think one of the biggest adopt, various adoptions of AI is that is really expensive. The ROI in most cases is not there, but like you, so let's start with the consumer. Let's organize it. In the consumer world, I think AI adoption is taking off in a really big way. You look at like, uh, 18 to 24 year olds, something, the Verge ran a survey, 75% of, of those people default to generative search, uh, as, as a place to go. So that, that's already happening in a really meaningful way. I think you have like, uh, OpenAI announced three hundred million. I think MAU on ChatGPT. So you're, you're kind of approaching the billion user number in consumer AI. I think we'll definitely surpass that this year. And that's awesome, right? It means that Google search model is totally up for grabs. The ad dollars there, complete destabilization of the SEO, SEM market. That's really exciting. A lot of market cap, uh, is now becoming loose within the enterprise. I'd say it's earlier still. Uh, because the use cases within the enterprise are more challenging. Why is that? Well, the range of acceptable outcomes within the enterprise are much narrower, right? Um, I remember I generated this image of a Kitty cat on a fire truck, and it was a Tonka truck. It wasn't a fire truck, and the kitty cat was not, it was a little, you know, five toes or whatever it was, and that's okay for a consumer use case. M…

AI assessment note: “In the consumer world, I think AI adoption is taking off in a really big way.”

Q That's in the top one percent of the market, which typically is the percentage of the market that makes the most money. Um, with passes, you're, you're helping out creators from, like, All ends of the spectrum. So what, what does it take to make it to the one percent and how are you helping emerging creators get to that place?

A Yeah, so I think that content is king in this, uh, when it comes to making it to the top one percent, both on passes and on outside platforms. If you look at, like, the creators that are doing the best, uh, they're typically posting every single day on passes, but also every single day on Instagram Reels and TikTok. Uh, I would say that Instagram Reels and TikTok are probably the best for discovery, so if you're posting one Reel a day, um, or one TikTok a day, you really only need, like, one hit, for example, to suddenly go viral, and then you gain a bunch of new followers, which a percentage will convert into Super fans, and then you can monetize off them, um, with passes. Um, I would say, like, we actually try to predict creator earnings based off of, like, how much they're putting out on Instagram Reels and TikTok, and we weigh that more, because we know that, um, they're constantly gaining new subscribers, which means that even if their old subscribers churn, it's not as big of a deal, and we see that the creators that are putting out daily content are actually making more month over month, versus if you're not someone that posts content, like, you might get a wave of subscribers at first, But, um, you know, they churn, and then that sucks.

AI assessment note: “content is king in this, uh, when it comes to making it to the top”

Q So you are known for your parties and events. Um, Passes has thrown some big things. You've had big activations. I just saw that you guys did An event at the Jake Paul fight with better. How have you like, how have you managed to strategize at least brand activations and getting creators together and creating this flywheel of like hype and coolness?

A Yeah, so we try to not do big parties very often, because then it loses its, like, you know, magic to it, um, and the hype, but, uh, I've honestly given my marketing team, like, zero dollars, so a lot of, um, pretty much all our parties come out to break even, or, like, net positive, um, which is nice, and we can just do this based off of parties that, like, I've thrown by myself. I remember, like, our first party that, like, we actually You try to get sponsors for. It was because I had thrown a birthday party that I paid for by myself, and, um, we had insane guests, like insane musical performances, et cetera, and just based off of that, sponsors are willing to come in and do our next party, so every single party gets better, um, because we have more money to put into it, which is awesome, um, and then, yeah, like we just invite our creator friends, like usually you have special guest DJs, and that is enough to bring people out, um, I think that because we don't Throw a bad party, or we haven't thrown a bad party, um, people are just willing to show up, like, they beg to show up. Um, we've had people offer to pay, like, 10 grand for, to come. And they're not on the guest list.

AI assessment note: “sponsors are willing to come in and do our next party, so every single party gets better”

Q This might be a change in the subject, but What are the biggest misconceptions that you faced while building out passes? Is there like a narrative that you've been fighting against? What, like, what have you been trying to hold accountable to and like really strengthen so people don't miss, like there's no misconception around the brand?

A Yeah, I think that the main misconception around a brand is people think that you have to be a hot girl or a hot guy to like make tons of money on passes or that like you're doing like Nude content on passes to be able to make money, but, uh, I mean, like, that's just the biggest misconception, because we actually don't allow for any nudity, um, if you try to upload, uh, something, it will get taken down and flagged, and it's actually, like, the filters are maybe a little bit too strict. For example, um, we had a lot of creators have issues, because they were doing, like, cosplay outfits and bodysuits, and then that would get taken down, even though they were completely covered from head to toe. Um, people of, like, all different niches are making money, Right? Like, it's not just hot guys, hot girls. So, um, that's been a misconception that we have been fighting. Um, a lot of our creators will make money literally just doing, like, a neck up selfies, and they're still making, like, a 100,000 a month. Like, don't know what to tell everyone. Um, but we are working with, like, podcasters, musicians, athletes, etc. Like, we have universities signed to us, and we're working with their NIL programs. They're developing our own NIL fund with the university. Um, so there's so many different ways to make money on passes, and, uh, I think that, like, The message out there is just like, w…

AI assessment note: “the main misconception around a brand is people think that you have to be a hot girl”

Q Phenomenal. Okay, not bad. I can see that. Um, as we look back on your career, you're very well accomplished. You were a Teal Fellow, Forbes, 30 Under 30. You helped found Scale AI, and then you went on to found Backend Capital, HF Zero. You're now founding Passes. What are your long-term goals, and are you gonna continue building?

A I mean, my long-term goal right now, um, depends what you call long-term, but, like, for the next decade, I obviously want passes to go public, so working very, very hard on that. Um, I think long, long-term, I've always had this dream to start a non-profit, um, combating human trafficking, and, um, I go back and forth on whether it makes sense for, like, me to do it, or whether I should just do what I'm good at, which is making money and donating to it, because I think a lot of people, like, decide they want to start a non-profit, but they don't really know how to To do it, right? Um, but they do it out of ego, versus, like, um, other people realize, oh, like, this person might be doing it better than me, like, I should just donate, um, so I'm going back and forth on that, but, like, how I would want to do it is probably, like, use technology to help combat it, like, I read a story about how someone created a very simple website where you could just submit pictures of, like, hotel rooms, and they ended up collecting millions of images of hotel rooms, and, um, the police were able to use this, like, backtrack and find out which hotels, like, People were trafficked in, um, which is very cool and so simple, and I bet there's, like, a million other ideas that can be done, um, to help combat it.

AI assessment note: “for the next decade, I obviously want passes to go public”

Q So in those categories that you're going after, like what are the specific subcategories?

A So beverage is one of them. Uh, I can talk about beverage for, for days. A pet has historically been one of my favorite categories. Um, when you think about The enterprise software of consumer spend. Pet is it. I mean, yes, you'll have that initial maybe 40 to 60% drop off in the first year, but after that, you're retaining 80 to 90% of your customer, of your dollar spend year after year, and so it's a, you can apply very similar frameworks from software to growing a pet business. As I said, a lot of these fast casual restaurants that can scale really quickly with the limited capex is, is another area that we're spending a lot of our time on. We're continuing to look at digital healthcare and you know, there's a bunch of categories that we're looking at that as sports is another one. It's hard for me to just only talk at the surface level. I'm happy to pick one and I can go deep on it.

AI assessment note: “So beverage is one of them... A pet has historically been one of my favorite categories.”

Q So if it was LTV to CAC at Insight, what is it at left lane?

A LTV to CAC is still the North star metric. I mean, all of these businesses at the end of the day are engines of, we acquire a Paying customer, and we spend for that, the denominator, and then we get our gross profit of whatever service or product we're providing them over time. And we run that year after year, right? So they all at the end of the day, whether it's a business in the banking space or the virtual education space or the psychiatry space, when you come to RICs on Monday, they're similar slide templates and you're breaking them down to similar metrics. I would say on the newer kind of four wall stuff, there is this concept of LTV to CapEx that we've been adopting. That's kind of interesting or LTV to CapEx plus sales and marketing, which is essentially your cost to acquire customer is building that four wall unit and The sales and marketing required to get them inside of it and the LTV. So the numerator is the gross profit you generate from them over time. And so that framework and being able to kind of apply and retrofit somewhat of a similar framework that we had in the software days has been really helpful because when you look at a burger shop, which traditionally has not been something that, you know, our LPs would know us for, and you see that it can, you know, it costs, it can generate a hundred You realize that that payback and life after payback is really in…

AI assessment note: “LTV to CAC is still the North star metric.”

Q like you're just genuinely very passionate about what you do and all the different ideas you can come up with and you just have fun with it. So it's like, it's really refreshing. To close it out, since you're ahead of the curve on pretty much everything cool, you know, what's going to be cool before it's cool. What's the next big trend we should all know about or watch?

A The two main ones, which I'll, which I've said about continue to operate and invest against are The mass distrust of incumbent CPG brands, Coca-Cola and Pepsi and Doritos and Pringles having their, their cigarette moment. Um, you're going to see, you see what happens at Rayo's. You see, there's going to be many more businesses like that as people realize there's just a new consumer and new brands, same core needs, but new brands that they trust. The other is, is just, we're just in the early days of what's happening in sport. Um, And the, the, the disruption of linear TV and the kind of the, I mean, you've got backup guards in the NBA making hundreds of millions of dollar contracts over four or five years. It's, it's, it's nuts. Um, and, and the ability to better monetize the attention economy there is, is huge. And then don't sleep on D to C. Don't sleep on D to C. I think there's, you know, you see your losers before you see your winners and sure with, you know, all birds and handful of others, there's, there's been some, but There are certain, like pet food, there's certain categories that make an incredible amount of sense to go acquire shared, direct to consumer, and then build a digitally native business on the, off the backs of that, that then you maybe want to go omnichannel in the future. But I think we're, we've, we've kind of slept on, on some of those. And I think i…

AI assessment note: “The mass distrust of incumbent CPG brands, Coca-Cola and Pepsi”

Q from tab to tab and try things out. But you not only have different offerings of LLMs on the platform, but you have different kinds of AI agents for different tasks, which is so fun because I go between research mode and just general search. But I'd love to know, could you just share more on how you.com has evolved and what your vision is for AI powered knowledge work?

A Yeah. Uh, we actually started as a search engine, uh, years before, uh, ChatGPT came out. So the BC era, um, a lot of people kind of call that now that before ChatGPT era and somewhat, uh, forgotten times, but we started with search wanting to revolutionize and change what search is and actually summarize and give you answers. And we've done that for a while. And we realized that a lot of folks are very stuck with, with Google, even though Google has gotten worse and worse, But also there are a lot of normal people out there who have fairly simple informational needs. Uh, if you're have a very simple normal life and you're mostly asked Google, like, what's the score of this game? Uh, what's the weather tomorrow? What's the stock price? When was France founded? Like simple questions, then you're not going to be able to give a 10 backs, 10 X better answer than Google using some really sophisticated AI. You know, there's only so much you can tell people about the score of a game or the weather tomorrow, and we're the first to bring LLMs into the search engine space and have some exciting patents, uh, some already given some pending, uh, on that, uh, but we realized at some point when we charge people for the product, because it was getting expensive, and there are no really good advertisements, people don't want ads in their answers in the chat engine that they are hoping they can…

AI assessment note: “we actually started as a search engine... it turned out that... there's a lot of knowledge workers”

Q Got it. And maybe before we dive into some more questions on this, it would be good to define what an emerging manager is. So do you mean emerging manager by the Size of the fund by, you know, how many years, the vintage, how are you defining it?

A Yeah, it's actually a really good question because I don't think there's a industry definition. You know, I kind of think of it as being personally just like without applying too many guardrails, think of it as being a fund that was started in the last five years. That's probably on their second to third fund. Um, there's better definitions to be clear. And so I've heard like, I think it was Roger Enberg defined it as any fund that's returned one X DPI on all capital they've raised to date. And so you, you stop Being in an emerging manager, when you actually return every single dollar you've raised, you distribute back to your LPs, then you've graduated from emerging manager status. I don't know if that definition is what everyone thinks of, but it was just a way to apply some metrics to, to the idea of it. I think it's, for me, it's a newer venture fund that has come to market in the past five years. That's trying to become franchise. And so like, ultimately, I think that's the goal. If you're studying a firm is to, to really build a sustainable franchise and There's some point where that becomes a reality, and until you find that level of kind of business stability through your LP base and through kind of that foundation, you're, you're not, you're not quite there as a, as a franchise.

AI assessment note: “think of it as being a fund that was started in the last five years”

Q would work. So how would you structure something like that? How do you manage the incentives? Obviously as a solo GP, you have lots of carry, you have so much opportunity, you know, you have like pretty much like uncapped upside and then face music one way or another. How would you kind of mesh those incentives together, whether it's compensation or the actual culture and that kind of thing?

A Yeah, I think, I think like the longterm solution would be you would just eventually like effectively shut down whatever venture fund was being acquired and be a part of that platform in terms of where like it would start. It'd be more like it would look more on the surface, like a partnership with some shared carry and, and, and upside for the, GP who's being acquired within that multi-stage funds broader platform. So they're, um, all their fund vehicles, you'd get exposure to, and you'd be giving up some amount of your carry, probably a significant amount, maybe up to like half Your upside to that platform. Um, but I think it's, I think these were just creative ways, uh, for larger platforms to explore expanding their. Reach in teams. Especially in 20, 21, there was an arms race to grow amongst multi-stage funds. I think that was what was driving some of these conversations, but the structural piece is very hard to get right. And I think the harder piece to If you're managing a, uh, existing LP base would be to go to those LPs and get them really excited about, at least in the current fund, that being a great outcome for them, because if you're going through some M&A, effectively like an M&A process or some partnership with another venture fund and trying to deploy your fund, like something's probably gonna, gonna give, and you might also be, you might be tempted to, to deplo…

AI assessment note: “shared carry and, and, and upside for the, GP who's being acquired”

Q So we're going to end with LA. Jeff, how did you end up growing the fund in LA and what's your bull case? for venture here.

A Yeah, it was all like kind of an accident, but it wasn't like, hey, we want to build an LA venture fund. I had moved on here in 2015 when I joined Tinder and we started the fund in 2019. Actually, I was very close to moving back to the Bay Area because I grew up in the Menlo Park area, spent a lot of time in San Francisco as an operator. 2020 2021 happened and it was pretty clear that you didn't need to move back. We kind of, we built our team actually more distributed. So I have an investor, investor in London as part of our team, New York. So we're actually not a full LA venture fund. Why do I like to be here? Because I always like to be slightly outside the bubble. I grew up in the various, so I go up there a lot. My family still lives there, but I think it's really healthy to be in like the second or third market and still be a plane ride away because if, if two thirds of VCs live in Liberia. You kind of see, at least I see a lot of them competing for the same things and being in Los Angeles, like I just tend to like play a completely different game. It's not an LA only approach, but if you look at what's going on down here within deep tech space, gaming, consumer with folks like Tinder and Snap, like those networks, it's pretty clear there's huge venture scale companies and networks that really matter. So like The space X network, like those people aren't just leaving Los …

AI assessment note: “if you look at what's going on down here within deep tech space, gaming, consumer”