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Speaker 2: Megan Host of Alexander is Well. She's at one of
Speaker 2: the most successful VC firms of all time, Treacan Harwitz,
Speaker 2: and she leads the firm's Cultural Leadership Fund CLF, which
Speaker 2: is actually a very big deal. A lot of high
Speaker 2: profile people are in there. Yeah, and you know, she's just,
Speaker 2: you know, it's very interesting because there's not a lot
Speaker 2: of black people in VC, and there's not a lot
Speaker 2: of women in VC, so she's obviously a black woman.
Speaker 2: So it's it's already, you know, a legendary situation just
Speaker 2: to even be in her position, but just you know,
Speaker 2: somebody that has killed in the game and is a
Speaker 2: rising star in the world of VC. So I feel
Speaker 2: like we haven't had a venture capital conversation in a
Speaker 2: while since John Henry was on. Shout to John, who
Speaker 2: always you know, gives so much great insight. These conversations
Speaker 2: are very needed because you know, it's high level conversation
Speaker 2: with my god nineteen keys will say yep, and it
Speaker 2: kind of you know, gets people a information, but also
Speaker 2: thinking outside the box where we're not just talking about
Speaker 2: the same thing every single week, where it's like now
Speaker 2: you can start to thinking on a much higher level
Speaker 2: with talking about you know, billions of dollars and things
Speaker 2: of that nature. So welcome, thank you for joining us, appreciate.
Speaker 3: It, thank you for having me. I'm this is a
Speaker 3: big deal. I got to call my mom and let
Speaker 3: her know where I am.
Speaker 2: That sixty mon on YouTube. She's watching it, no word,
Speaker 2: hit the like one and if you're on YouTube, hit
Speaker 2: the like one. Sixty three hundred people. This is all
Speaker 2: the biggest show ever created when it comes to investing, fantastic.
Speaker 3: I'm listen. I need to I need you to say
Speaker 3: that number again so I can try to get on
Speaker 3: the plane. I need to put in a.
Speaker 4: I mean, we will be honest if you could be
Speaker 4: an investors.
Speaker 2: So oh yeah, you gotta be an investment.
Speaker 3: I'm gonna try really really hard to make it. It's
Speaker 3: a crazy weekend for flying stuff I gotta do, but
Speaker 3: I'm gonna try to squeeze in one day. I promise,
Speaker 3: I'm gonna trying real hard.
Speaker 2: It would be I got a ticket.
Speaker 3: I bought a ticket, not even knowing if I could come.
Speaker 3: But I already have a ticket, and if I can't
Speaker 3: make it, I'm going to give it to somebody can
Speaker 3: come for sure.
Speaker 2: Appreciate thank you, appreciate that. Okay, let's get into this conversation.
Speaker 3: Let's do it.
Speaker 2: I'm gonna jump right into it because I think you heard.
Speaker 2: We was talking to Don Peebles, and one of the
Speaker 2: things that he's said was, I don't want to quote
Speaker 2: the wrong number, but it's something like sixty billion dollars
Speaker 2: something like that. Venture capital money out there flowing on
Speaker 2: a crazy amount of sixty six billion, less than point
Speaker 2: like seven percent of one percent, like less than seventy
Speaker 2: basis points. Yeah, one goes to black and women, minority
Speaker 2: and women businesses combined. It's not even the number is
Speaker 2: not even big enough to just say black businesses. So
Speaker 2: they got to put women in there combined.
Speaker 3: So it's a fraction of a percent, you are career.
Speaker 2: A fraction of a percent. When from my understanding, also,
Speaker 2: black women percentage wise started the most businesses last year
Speaker 2: in America.
Speaker 3: So what we do black women? We just do it
Speaker 3: all everybody.
Speaker 2: That's a fact. So that's a disturbing number. That's an
Speaker 2: extremely disturbing number that nobody's talking about, because, like he
Speaker 2: told us, he was like, imagine if it was even
Speaker 2: proportional to the population where it's like, I think we're
Speaker 2: like twenty percent of the population. So imagine if twenty
Speaker 2: percent of that sixty six billion went to black businesses, Like,
Speaker 2: imagine how that would change the landscape of things overnight.
Speaker 2: Like the money's there, it's in circulation, it's just not
Speaker 2: getting to us. But nobody's talking about that. But everybody's saying, like, well,
Speaker 2: black businesses fell and different things in that nature. But
Speaker 2: I mean there's underlying issues on why this is happening. So, okay,
Speaker 2: how do we solve this problem with venture capital?
Speaker 3: So first, it's way more than sixty six billion and
Speaker 3: venture money out there working. I couldn't even tell you,
Speaker 3: but you know, in Drees and Horwitz alone, we've got
Speaker 3: about thirty billion under management. We're just one firm that's
Speaker 3: only been in operation for the last ten to twelve years.
Speaker 3: And so we're just one firm. There's hundreds of firms
Speaker 3: out there, multiple that are big kind of multi stage
Speaker 3: investment firms like ours. So so sixty six, I would say,
Speaker 3: is a low a low number.
Speaker 2: Maybe they think that every year, maybe sixty annually.
Speaker 3: But at work, there's a lot of dollars at work
Speaker 3: over time. But you're asking a big question and I
Speaker 3: think is really hard to solve. But one of the
Speaker 3: things that I've seen over the last few years is
Speaker 3: people just got to put the put the money out there,
Speaker 3: because you know, historically people have a way that they
Speaker 3: look at companies. It's like you have to have, you know,
Speaker 3: we want the founders to have a certain degree. We
Speaker 3: want the founders who have a certain amount of experience
Speaker 3: have worked at a certain set of companies. Right if
Speaker 3: we've worked at you know, X, Twitter, it's Facebook, it's
Speaker 3: you know, Yelp engineer, whatever the case may be. And
Speaker 3: the fact is that you don't need all those things
Speaker 3: to be a good founder. And so I think when
Speaker 3: we can open up the scope to who can be
Speaker 3: a good founder, we will likely get more dollars in
Speaker 3: the hands of black folks and black women specifically. At
Speaker 3: the same time, I think the other thing is really
Speaker 3: important is putting black investors in place so they can
Speaker 3: distribute the capital. Right because people a lot of times,
Speaker 3: like for our for kind of the industries that people
Speaker 3: like you usually can only like understand problems that like
Speaker 3: you know or that you've seen. And so when we
Speaker 3: ask white investors to understand black companies or black businesses,
Speaker 3: if they're in a particular space, they don't get it right.
Speaker 3: So then they get into the investment committee meeting and
Speaker 3: they got to do a vote, and they're like, well,
Speaker 3: I don't understand. I don't get it. And so if
Speaker 3: we have black investors that have dollars they can put
Speaker 3: into companies, that also, I think will increase the amount
Speaker 3: of dollars that go into black founders. At the same time,
Speaker 3: it's not like black founders only found black companies. We
Speaker 3: find you know, social media companies or consumer you know
Speaker 3: e commerce companies too. But we do need to have
Speaker 3: more folks in the room understand our community to make
Speaker 3: the decision. So I would say probably those two things.
Speaker 5: So VC is something that you know, it's not spoken
Speaker 5: about in a lot of our communities, and so I'm
Speaker 5: interested And what led you to the path of VC,
Speaker 5: it's for sure.
Speaker 3: So I just learned about VC in twenty sixteen, so
Speaker 3: about six years and I was on a completely different
Speaker 3: path in life. I went to Fark Atlanta undergrad shout.
Speaker 2: Out to the path.
Speaker 3: Shout out to the Panthers, and I was getting a
Speaker 3: sociology degree. I was like, ooh, I love learning about
Speaker 3: people and groups. And I had this idea that I
Speaker 3: wanted to be an academic. I wanted to do research
Speaker 3: full time and teach full time, dean of a school
Speaker 3: and the president of a college. And I went through
Speaker 3: this path, got my first masters, went to a PhD.
Speaker 3: Hated dropped out. I was like, I got to get
Speaker 3: out of here. This is this is not for me.
Speaker 3: Moved to California, and you know they say to be
Speaker 3: successful in Silicon Valley you got to have a good
Speaker 3: dropout store. So I got my drag out store, moved
Speaker 3: to Silicon Valley and it wasn't until I went to
Speaker 3: business school. So I went to business school at Stanford,
Speaker 3: and I didn't live on campus because by the time
Speaker 3: I went to business school, I was much older than
Speaker 3: you know, most of the people there, and I was like,
Speaker 3: I'm gonna save my house. I'm not gonna move on
Speaker 3: campus and all that stuff. So I was trying to
Speaker 3: be tracked. Okay, when I was picking my classes, I
Speaker 3: didn't want to be driving at nine o'clock in the morning.
Speaker 3: I'm the one I want. It is very hectic. And
Speaker 3: so there was a venture class that was like early afternoon.
Speaker 3: I said, perfect, sign me up and didn't know what
Speaker 3: it was. And so I get in there and it's
Speaker 3: actually with Eric Schmidt. So Eric Schmidt is former CEO
Speaker 3: of Google, former CEO chairman. Everybody calls to him, you know,
Speaker 3: the first adult in the room at Google, and I
Speaker 3: knew it. Got completely distracted by finance, that's the bottom line.
Speaker 3: Went into that class, read everything, just started doing extra stuff,
Speaker 3: extra reading. And one day we went for a walk
Speaker 3: with Eric after class and he may or may not
Speaker 3: remember this, but we did a little short walk around
Speaker 3: the GSP and he's like, you know, maybe you're one
Speaker 3: of my best students. I think you should try venture
Speaker 3: for real. And I said, play people don't do that.
Speaker 3: I said, now, why would you try to set me
Speaker 3: up for failure? Knowing that there are not people who
Speaker 3: look like me in this industry, and so I kind
Speaker 3: of just brush it off. But after a while, I said,
Speaker 3: you know what, mayan if Eric Schmiz says you should
Speaker 3: try something, maybe you should try it. So then the
Speaker 3: rest is kind of history. I spent my time running
Speaker 3: up and down sand Hill Road the rest of my
Speaker 3: time at business school, started doing internships. You're supposed to
Speaker 3: do like one internship between year one and year two
Speaker 3: in business school, and I think I did a total
Speaker 3: of like four all throughout the year I was working
Speaker 3: during school turned into a full time role, and I've
Speaker 3: been doing it ever since.
Speaker 6: Cool question for you for those who are interested in
Speaker 6: getting into the VC space, what are some of the
Speaker 6: most innovative ways you've seen people that look like us
Speaker 6: breath into the industry.
Speaker 3: Yep, So I would say that there's two ways, and honestly,
Speaker 3: the most innovative that I think most successful thing I've
Speaker 3: seen people do is start their own In the last
Speaker 3: two or three years, we've seen more black founded venture
Speaker 3: funds and firms than I've ever seen. It's been an
Speaker 3: explosion and I love it. If you're looking for the
Speaker 3: more traditional path, there's a couple of ways you can
Speaker 3: do it. So working at a startup, people love seeing
Speaker 3: that you've spent time on a product team, that you've
Speaker 3: spent time in engineering or spent time in marketing, because
Speaker 3: you have insight into what to look for in a founder,
Speaker 3: right you understand like, oh, they need to set up
Speaker 3: this piece of the company or this vertical. You have
Speaker 3: insight into kind of what the needs are in the space. Also,
Speaker 3: going to business school and kind of just getting an
Speaker 3: extra business edge and how to think about you know,
Speaker 3: technology and think about business and to think about startups
Speaker 3: is important. But I say one of the easy ways
Speaker 3: is going to a startup and actually spending some time
Speaker 3: in it because you get kind of an extra edge.
Speaker 3: And then actually probably the most important thing is having
Speaker 3: a perspective about the future. So VC is a long game.
Speaker 3: It is very different from the public market. It is
Speaker 3: not like oh, I'll buy some stocks and the next
Speaker 3: year I'm gonna cash out, or in two years I'm
Speaker 3: gonna cash out, or in five years I'm gonna catch
Speaker 3: cause I tell my I tell my investors in CLF.
Speaker 3: You know, venture is an eight to ten year game.
Speaker 3: Like it is a long view game. I say, if
Speaker 3: you're gonna come to me in two years and ask
Speaker 3: me where your money is, I don't have I don't
Speaker 3: have it. And so investors you have a perspective on
Speaker 3: what they think is going to happen in the future, like, oh,
Speaker 3: I think you know, people are going to want to
Speaker 3: start communicating through I don't know, bird calls it by
Speaker 3: you know, by twenty thirty, right, And so you start
Speaker 3: looking for companies in that space. You they just really
Speaker 3: want people who are kind of thinking beyond the way.
Speaker 3: So if you can kind of formulate, you know, an
Speaker 3: idea around that, I think you're likely setting yourself up
Speaker 3: for success.
Speaker 2: Let me let me ask you this, ask me this. Okay,
Speaker 2: how do you get the money? So if how do
Speaker 2: companies position themselves to attract venture capital money?
Speaker 3: Mm hmm. So different vcs like different things. All vcs
Speaker 3: are not the same. And the first thing is that
Speaker 3: people would You're gonna put yourself in a good position
Speaker 3: if you find the vcs that are looking for what
Speaker 3: you have. So, if you're building a consumer product, a
Speaker 3: social app, necessarily going to talk to enterprise investors or
Speaker 3: fintech investors or the biotech investors that's not going to
Speaker 3: serve you. You're gonna waste everybody's time, your time and
Speaker 3: their time, and neither you know, neither party is gonna
Speaker 3: like that. So identify who the investors are that are
Speaker 3: in your space and not just like your vertical, but
Speaker 3: you're your size range, right, So are you raising a
Speaker 3: pre c round?
Speaker 4: Right?
Speaker 3: Are you raising five hundred thousand dollars? You're raising five
Speaker 3: hundred thousand dollars. You don't want to go to a
Speaker 3: growth fund, right. They're looking for companies that are much later,
Speaker 3: have a ton of revenue. You have a ton of
Speaker 3: you know, staff already. So make sure you're not only
Speaker 3: in the right vertical, but also in the right size
Speaker 3: range of you know, what you're trying to raise. You know,
Speaker 3: early stage vcs tend to be looking for folks who
Speaker 3: great ideas. What it's you know, it's usually pre traction,
Speaker 3: sometimes pre products before you have anything. So if you're
Speaker 3: your early stage, it's really about the team that's building it, right,
Speaker 3: what is your background? Why are you the best person
Speaker 3: to build this particular company? And then as you grow
Speaker 3: it kind of changes, Right, how much traction do you
Speaker 3: have if you have an app? What's the engagement looking
Speaker 3: like you know, how often are people on your app
Speaker 3: and for how long? So whatever the kind of key
Speaker 3: performance indicators are for your business, that's really what you
Speaker 3: should lean named you.
Speaker 5: I think this conversation is extremely important. We all have children.
Speaker 5: I have a daughter, and Megan, obviously you are somebody
Speaker 5: that is extremely It's inspirational, right, And so I wonder
Speaker 5: what the experience is like coming into the space obviously
Speaker 5: that we're not familiar with in our community a lot
Speaker 5: of times as a black woman coming into the space,
Speaker 5: what has that experience been like for you over the
Speaker 5: past six or seven years?
Speaker 3: Totally? So first, I have two kids. You're you, You're
Speaker 3: getting mom life right now. Because here's a crib. You
Speaker 3: see the paw Patrol.
Speaker 2: Been there, Chase is on the case.
Speaker 3: Okay, in the chat, I need you to say something
Speaker 3: if paw Patrol has a choke hold on your child
Speaker 3: like it for two years for two right, it's a thing.
Speaker 3: But for me as a mom, I'll say And I
Speaker 3: think venture in general has a long way to go
Speaker 3: when it comes to women in our role in this industry.
Speaker 3: And I think there's a lot of learning to do
Speaker 3: and a lot of role to do. But what I
Speaker 3: can say is that you know, at Andres and Horwitz,
Speaker 3: I've had a really fantastic experience as my own. I'm
Speaker 3: actually on maternity right now. I have a two months
Speaker 3: those I have a two month hole, and I am
Speaker 3: a technically not you know, technically not working. But I
Speaker 3: really do love, you know, my role, and I love
Speaker 3: my firm so much that I'm happy to share about
Speaker 3: them any any chance I get. But I think the
Speaker 3: key is people making sure that they have really great
Speaker 3: maternity policies, people making sure that women feel supported in
Speaker 3: the workplace. And it's not like, oh, if you have
Speaker 3: kids and you can't work until two am and you
Speaker 3: can't drop everything and get on a flight in Whateur
Speaker 3: that that doesn't mean you're any less committed to your role.
Speaker 3: And I think one of the things, and I hope
Speaker 3: this is okay for me to share, one of my
Speaker 3: favorite things about our firm is our leadership has been
Speaker 3: really phenomenal from a maternity le perspective and just supporting
Speaker 3: women at work. And when the pandemic first started, you know,
Speaker 3: everybody was like, oh, we're going remote, but we think
Speaker 3: we're going to come back. We might do hybrid like no,
Speaker 3: like companies were really trying to figure her out what
Speaker 3: they were going to do. And I'll never forget Our
Speaker 3: founder Ben Horwitz got on our all hands and told us,
Speaker 3: you know, it just happens every Friday. And he says,
Speaker 3: you know, I was talking to lots of staff about
Speaker 3: what they want to do, and you know, trying to
Speaker 3: get opinions on like what should happened first. That's the
Speaker 3: first sign of a good leader, is like asking people
Speaker 3: what they actually want to do. And he said, I
Speaker 3: was speaking to a woman and she said, this pandemic
Speaker 3: has been the first time that I felt like I
Speaker 3: could be a good mom and a good employee. And
Speaker 3: he said, I'm not taking that away from people. I
Speaker 3: can't take it away. So he said, we're not going back,
Speaker 3: you know, no matter what we do, we're not going
Speaker 3: back to you know, fully in office culture because I
Speaker 3: can't do that to the moms. And I'm just like,
Speaker 3: sign me up, you know. So I really really appreciated that.
Speaker 3: But I think overall the industry does have a really
Speaker 3: really long way because it's not a lot of women.
Speaker 6: Yeah, to tell in to what you were talking about, Like,
Speaker 6: as a parent, I have won seven year old. He's
Speaker 6: in there playing Fortnite. Now, how do you balance everything?
Speaker 6: So being a woman, African American woman and the super
Speaker 6: competitive space, how do you manage that family life while
Speaker 6: trying to be the best at your craft in this
Speaker 6: VC space.
Speaker 4: I don't.
Speaker 3: I don't balance it here. I'm gonna be agree with you.
Speaker 3: I don't balance it here with I do my best,
Speaker 3: but I try to put like a couple of little
Speaker 3: rules in play. So for me with my first son
Speaker 3: was I have a three year old and two months old.
Speaker 3: I was like, he's he's coming everywhere with me. I
Speaker 3: don't care if it's work, I don't care if it's
Speaker 3: for play. Up until he's two, I'm gonna takehim with
Speaker 3: me because if I'm traveling for work, even if I'm
Speaker 3: on for two nights, I'm all stressed out, like I
Speaker 3: miss him and I gotta FaceTime. But if he's if
Speaker 3: he's with me, I can stay somewhere for two weeks
Speaker 3: and not be worried about it because whenever I get
Speaker 3: off for I'm going to be back with him. So
Speaker 3: that's kind of the first thing that I do. And
Speaker 3: I think that having women kind of food have been
Speaker 3: my superiors over time when they have children, they really
Speaker 3: lean into two women who are in the same position.
Speaker 3: So I try to provide that for people who are
Speaker 3: on my team as well as much as I can, Like,
Speaker 3: you need flexibility, your child is sick, un feel bad
Speaker 3: about your childhood and sick? Why should Why should be
Speaker 3: scared to tell your boss? Right? And so I try
Speaker 3: to create that type of environment for everybody around, and
Speaker 3: I hope that people try to do it for me too.
Speaker 3: And we just gotta stop explaining ourselves like, oh, I
Speaker 3: gotta leave early because I gotta take my kids to
Speaker 3: the you know, the they gotta basketball game, and just
Speaker 3: say I gotta go leave early, don't you know. We
Speaker 3: don't have to do all of explaining and hoping that
Speaker 3: people will like say, okay, it's all right saying what
Speaker 3: you never do.
Speaker 4: You think that's an African American thing or a woman thing?
Speaker 2: Yeah?
Speaker 4: Both?
Speaker 3: Both? Both?
Speaker 2: Yeah? Yeah, all right, So let's let's talk about this.
Speaker 2: How do you pitch yourself to companies with VC, Like
Speaker 2: if you if, what what should what should? Like, what's
Speaker 2: the uh one on one kit that somebody should have
Speaker 2: if they're interested in getting VC money? And at what
Speaker 2: point should somebody even entertain trying to get VC money.
Speaker 3: Yeah, so REASONA. People can disagree, but I think that
Speaker 3: it really just depends on how ready you want to be.
Speaker 3: But venture tech startups is very much a fail fast
Speaker 3: type of mentality. You rather try early figure out what
Speaker 3: you're doing wrong, and then come back again after you've
Speaker 3: fixed all your mistakes. If you're trying to get every
Speaker 3: being perfect, like, oh, my company has to be perfect
Speaker 3: and we have to have all these details right, et cetera,
Speaker 3: you're probably gonna spend too much time trying to get
Speaker 3: that right and actually not know what you need to
Speaker 3: fix because you haven't shown anybody right. You're building in
Speaker 3: secret and you're like, oh, this has to be perfect,
Speaker 3: and then at the end of the day you go
Speaker 3: do your pitch and they're like, oh, all these things
Speaker 3: are wrong and you could have fixed them far earlier.
Speaker 3: So again, if you want to raise at the pre
Speaker 3: seed level, a lot of people don't have a product.
Speaker 3: It's just an idea and a pitch dick and you're
Speaker 3: walking somebody through what you think it can be. A
Speaker 3: lot of investors on the VC side are just we
Speaker 3: care about magnitude, right. It's like how big can this
Speaker 3: idea get? Have you identified a really really big market?
Speaker 3: Is it a really really great team, and do I
Speaker 3: think that they can execute and you can get money
Speaker 3: with nothing?
Speaker 2: Well, so let's let's let's let's break this down a
Speaker 2: little bit. Yeah, So, because I want to talk to
Speaker 2: people that that's not really familiar with the space. So
Speaker 2: the team is the team is very important, right, So
Speaker 2: putting together a team like senior leadership, all the people
Speaker 2: that have already had success in the space, that's going
Speaker 2: to be helpful, right, And then like putting together like
Speaker 2: the pitch deck of the idea of kind of like
Speaker 2: you said, just even if it's not fully there yet,
Speaker 2: like yeap what it can potentially do, and convincing somebody
Speaker 2: that you have the capability of actually making this happen.
Speaker 3: Right for sure? For sure? And I would say even
Speaker 3: beyond getting to senior leadership, when you're at the really
Speaker 3: really early stage, it's about the founding team, right, who
Speaker 3: are the people who are founding this company.
Speaker 7: If it's like, oh, say it's an education tech company
Speaker 7: and it's about teaching kids how to xyz whatever, and
Speaker 7: you're a former teacher, right, that's really interesting to investors
Speaker 7: because you know the space, you understand what the need is,
Speaker 7: or you're a former principal or a school board member,
Speaker 7: and then you partner.
Speaker 3: Up with say an engineer who was at whatever other
Speaker 3: ed tech company. Right, we're looking at are these puzzle
Speaker 3: pieces in place for this idea and this team to
Speaker 3: actually work.
Speaker 5: So you're leading the Cultural Leadership Fund. Can you talk
Speaker 5: about what it is it's important and how unique it
Speaker 5: is to the tech space.
Speaker 3: I can, I can so Cultural Leadership Fund, So it
Speaker 3: probably starts. Let me started what Inreas and Horwitz is
Speaker 3: because that will make Cultural Leadership Fund make even more sense.
Speaker 2: So do it.
Speaker 3: In Treason Horowitz, we are a venture capital firm. We've
Speaker 3: got again about thirty billion dollars under management, and we
Speaker 3: do early stage and growth stage investing, so the full
Speaker 3: kind of scale of a venture capital h and we
Speaker 3: do so through a number of funds. So we've got
Speaker 3: a venture funds, We've got crypto fund, we've got growth
Speaker 3: we have a biotech fund. So all of those funds
Speaker 3: exist at our firm. And then Culturallyadership Fund is this
Speaker 3: other fund that is a strategic co investment vehicle inside
Speaker 3: of Injuries and World with so we invest alongside those
Speaker 3: other ones that I just mentioned. But the thing that
Speaker 3: is really interesting and really cool about what we do
Speaker 3: at CLEFT is that we do those co investments with
Speaker 3: two main missions in mind. So the first is connecting
Speaker 3: the world's greatest cultural leaders to the best new technology companies,
Speaker 3: and the second is getting more young African Americans into technology.
Speaker 3: So that first mission, you guys actually kind of talked
Speaker 3: about it earlier. When we say getting cultural leaders into
Speaker 3: technology companies, we mean the world's greatest athletes, entertainers, musicians,
Speaker 3: cea level executives, all of whom are excited about technology.
Speaker 3: They're interested in innovation, they want to play a role
Speaker 3: in the things that are being built across this industry.
Speaker 3: And c LEFT gets to be an on ramp for that.
Speaker 3: And I think for so many you know, we call
Speaker 3: them cultural leaders. You know, in the past it's been
Speaker 3: about like getting a sponsorship deal with a company after
Speaker 3: they've gotten big, or figuring out how to monetize on
Speaker 3: X platform. But for us, it's about getting ownership on
Speaker 3: the cap table of these companies. And again, these are
Speaker 3: companies kind of pre public, so before the average retail
Speaker 3: investor can get into a company, we're taking it back
Speaker 3: to the private space and making sure that we get
Speaker 3: black dollars onto the tables of these companies.
Speaker 6: Cool question for you, So what are like three or
Speaker 6: four key traits that an entrepreneur can have that will
Speaker 6: make your fund or one similar to it go crazy
Speaker 6: like once you see their pitch deck or presentation.
Speaker 2: Yep.
Speaker 3: So the important thing to know there's CLF is a
Speaker 3: co investment vehicle, so we don't do direct investments. We
Speaker 3: invest alongside the other fund. But I think that's an
Speaker 3: important piece to bring up though, because in this concept,
Speaker 3: I think about black generational wealth and I think there's
Speaker 3: a few really key ways to do it. When we
Speaker 3: think about technology and technology companies. The first is obviously
Speaker 3: investing in black founders, right, It's making sure you put
Speaker 3: dollars in their hands so they can put into their
Speaker 3: companies and grow. The second is getting black dollars on
Speaker 3: cap tables, so getting black investors into whatever tech companies
Speaker 3: that are out there. And then the third is getting
Speaker 3: black talent into tech companies, so being an employee at
Speaker 3: the seed or the Series A or the Series B stage,
Speaker 3: because that early employee equity can potentially be very very
Speaker 3: valuable down the road. Right, We've all heard the stories
Speaker 3: of Facebook or Twitter making people millionaires overnight, and so
Speaker 3: I think those are the three ways to really build
Speaker 3: generational wealth for the black community. I think technology has
Speaker 3: proven that time and time again. And see A Left
Speaker 3: focuses on those last two. We focus on black investor
Speaker 3: dollars on the cap table, and we focus on black
Speaker 3: talent into technology companies.
Speaker 2: Dame Dash on the FaceTime call during Mark on Monday,
Speaker 2: A man, A man, what's up? Bro? Look say what's up?
Speaker 4: Everybody?
Speaker 2: One of the most powerful people in in venture capital,
Speaker 2: this is Dame Dash. Say that we're only doing a
Speaker 2: live show right now.
Speaker 3: Bro, you're on the live show.
Speaker 2: What did you say? Is that the cara skills you're
Speaker 2: showing me as a curtain? Yo, We're on a live show.
Speaker 2: I'mnna call you. I'm gonna call you right back. Yeah, Man,
Speaker 2: Actually make an announcement.
Speaker 3: Actually, what do you think about? Bring him?
Speaker 2: Let's dang, dang. I wasn't you gotta break the good?
Speaker 2: I wasn't good. I wasn't planning on this. But everything
Speaker 2: happens for a reason. So Dame Dash is one of
Speaker 2: our favorite people on Earth. A cultural icon. He reminds
Speaker 2: us every single time he speaks to us how much
Speaker 2: he's helped our program, how important he is to us.
Speaker 4: Without I remind you.
Speaker 2: How much I have to help my program. That's too
Speaker 2: so so, Dame I called you the other day. I said, look,
Speaker 2: we got this big thing invest Fest. We need you there.
Speaker 2: And after about five minutes, Dame Dash will be out
Speaker 2: in Vestfest. Confirmed.
Speaker 4: You better not let me get around Dames. You think
Speaker 4: I am crazy?
Speaker 8: Now, boy, Dave Dash, Ladies and Jail will be in
Speaker 8: Atlanta August seven.
Speaker 2: I'm gonna make sure you that I must. I'm gonna
Speaker 2: call you every single day to make sure you that
Speaker 2: that's a fact that.
Speaker 5: This episode is brought to you by P and C Bank.
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Speaker 9: Buying a car and Carvana was so easy. I was
Speaker 9: able to finance it through them.
Speaker 1: I just, oh, wait, you mean finance.
Speaker 9: Yeah, finance, got pre qualified for a Carvana auto loan,
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Speaker 1: That's cool that financing through Carvana.
Speaker 9: Was so easy, financed, done, and I get to pick
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Speaker 6: Right, That's what I said.
Speaker 9: You can spend time trying to pronounce financing or you
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Speaker 9: financing subject of credit approval.
Speaker 3: Additional terms and conditions were apply.
Speaker 2: Fact yes, breaking bread, Dame, I'm gonna call you. I'm
Speaker 2: gonna call you after this is over. Brother, You got
Speaker 2: your bedline.
Speaker 6: Oh it's uh always always, always got jokes, jokes.
Speaker 2: Truth and true, challeng killing alright, Uh, Dame Dash will
Speaker 2: be at investments ladies and gentlemen. Yes, market Monday's exclusive.
Speaker 2: I was gonna wait till till next week to drop that, but.
Speaker 3: Yeah, I'm glad I'm on this episode because all the
Speaker 3: big announcements are coming in these episodes, is the fact,
Speaker 3: right At first, it's funny. I I think we were
Speaker 3: supposed to do a different day, but I ended up
Speaker 3: on the biggest announcement.
Speaker 2: That is true. That's true, Tyler Perry, ask it just
Speaker 2: it just keeps getting bigger and bigger, and we're not done.
Speaker 4: Yeah.
Speaker 2: I'm sorry. I'm sorry to interrupt, but I couldn't resist
Speaker 2: myself Dan. Anytime Dan calls that's what you know, that's
Speaker 2: a legendary moment we grew up on, like music like Rockefeller,
Speaker 2: like you know. So it's still kind of weird to
Speaker 2: me that Dan Dash calls me FaceTime like it's blessings.
Speaker 2: It's surreal. It's weird. Yeah, you know what I'm saying.
Speaker 5: Like the numbers that come through. I'm like, yeah, okay, yeah,
Speaker 5: this is our life now.
Speaker 6: Yeah, and ask any question real quick?
Speaker 2: Yes please.
Speaker 6: So Ben is one of my favorite entrepreneurs of all time.
Speaker 4: Can you share maybe like three or four big.
Speaker 6: Lessons you've learned from him since being there?
Speaker 3: Oh, take the time. Yes, that's a good question. You
Speaker 3: put me on the spot. I have learned actually a
Speaker 3: lot of lessons from being my favorite. I'll give you
Speaker 3: my favorite. So our firm is really active venture firm,
Speaker 3: doing a life of stuff all the time, and I
Speaker 3: think there are a lot of opportunities that come our
Speaker 3: way that could be quick and easy. But then as
Speaker 3: this phrase and we have this value at the firm
Speaker 3: that says we take the long view on relationships. And
Speaker 3: what that means is is we're we're in a relationship business.
Speaker 3: But what that means is that we don't sacrifice relationships
Speaker 3: for a quick book. You don't have to when people
Speaker 3: come into our firm. You don't have to worry about
Speaker 3: us going and running and tell somebody else about your
Speaker 3: business or all your secrets, or you know that we'll
Speaker 3: steal something or switch up something up like, we are
Speaker 3: very loyal to the relationships that we build, and that
Speaker 3: is just dangerously critical to me because I think that
Speaker 3: loyalty is really important, and I think trust is really important.
Speaker 3: But we take the long beyond relationships. Nobody had forever
Speaker 3: has to worry about us, you know, flipping and dipping
Speaker 3: for a million here or five million there or ten
Speaker 3: million here. We are we really try to be about it.
Speaker 2: Let me ask you that you spoke about the series
Speaker 2: a series BB here like seed round. We just spoke
Speaker 2: to Pinky from Floody Big and she just got twenty
Speaker 2: five million dollars in her seat.
Speaker 3: Pinky my heart. That is my bag.
Speaker 2: Oh yeah, yeah, thinky.
Speaker 3: That's my bag. We went to college together. She is
Speaker 3: my Sto Roars. She brought me into Delta. She was
Speaker 3: Miss the Au the year before me, and then I
Speaker 3: was Miss c Au but she was Miss Junior and
Speaker 3: I was missing. We've been living up on each other
Speaker 3: for a long time for a long time. She's everything
Speaker 3: and I'm always following in her footsteps. So this is.
Speaker 8: Old.
Speaker 2: She has a one week old.
Speaker 3: Yeah that is my sister for sure.
Speaker 2: Shout out to Pinky. But yeah, can you kind of
Speaker 2: talk about that like seed rounds, round a round, Like
Speaker 2: what does that mean?
Speaker 4: Yep.
Speaker 3: So that's just about the stage that you are in
Speaker 3: the company. And I tell people to think about fundraising
Speaker 3: rounds as like a step function. It's not like a
Speaker 3: lot a linear you know, relationship like this, it just
Speaker 3: goes to It's not like that where it's like you
Speaker 3: do your valuation grows and it doesn't work like that.
Speaker 3: It's like this right, And what that means is like
Speaker 3: if you're at a seed round, there's all the stuff
Speaker 3: that you need to do before you can raise a
Speaker 3: series series A, and then when you raise a series A,
Speaker 3: you just stay flat. There's all the stuff you need
Speaker 3: to do and accomplish and achieve from attraction and a
Speaker 3: profit and a revenue perspective before you can raise a
Speaker 3: series B, and then you jump up to the next round.
Speaker 3: It's not kind of this like constant ticking, but essentially
Speaker 3: usually like a seed round is maybe you've got a
Speaker 3: rough version of your product. You are, you know, working
Speaker 3: on a beta. Maybe you've got a couple of people
Speaker 3: testing it out. By series A, you you found a
Speaker 3: little bit of product market fit you're starting to think
Speaker 3: about you know, you've got a repeatable process for acquiring
Speaker 3: customer or users. Right, there's all these kind of uh
Speaker 3: T traction and benchmarks that that firms are looking for.
Speaker 3: And every firm is different. Right, Some firms might say, well, no,
Speaker 3: let seed that you said is more of a serious
Speaker 3: age to me, and for other people like, oh, that's
Speaker 3: totally a serious be So every firm is different. But
Speaker 3: the idea is that there's kind of these benchmarks that
Speaker 3: you have to meet to get to each ground.
Speaker 5: So obviously the fund, you've had a lot of people
Speaker 5: invest You've had obviously celebrities, you've had cultural leaders You've
Speaker 5: had athletes. I'm wondering from your side, how encouraging it
Speaker 5: is to see this type of diversity coming into the space,
Speaker 5: or if it's not at the pace that you you
Speaker 5: know that is fulfilling to you, What can we do
Speaker 5: to encourage people to look at this as a way
Speaker 5: to actually put into your portfolio as a way to
Speaker 5: generate generational wealth, Like, yeah, what are your thoughts on that?
Speaker 3: Yep, for sure, so I we The insight that kind
Speaker 3: of started Cultural Leadership Fund was this idea that when
Speaker 3: it came to the things that were cool, what people wore,
Speaker 3: what people liked to do, what they talked about, it
Speaker 3: was black Twitter and Instagram and in black TikTok. It
Speaker 3: was black people and what we were doing that everybody
Speaker 3: wanted to do. So but again, so often we weren't
Speaker 3: capturing any of the value of these companies right Again,
Speaker 3: we'd be real popping on there and then maybe get
Speaker 3: a sponsorship later or whatever the case is. It came
Speaker 3: to owning the company as they grew and your kind
Speaker 3: of relationship growing proportionately, you know, and your wealth growing
Speaker 3: proportionately to the company, it just didn't exist. So Cleft
Speaker 3: was created in order to kind of alleviate that, where
Speaker 3: it's like, Okay, these black culture creators, people shaping, shifting,
Speaker 3: creating culture. If we can get them on the cap
Speaker 3: tables early, then they can really truly capture the value
Speaker 3: of what it is that they're bringing to the platform.
Speaker 3: And so I love it because our investors have become
Speaker 3: some of the most savvy, thoughtful, you know, investment partners
Speaker 3: in these companies that that I've ever seen. So this
Speaker 3: whole concept of like a dumb athlete, this whole concept
Speaker 3: of like a spacey you know, actress or whoever business leader,
Speaker 3: it's those days are over. These are some of the
Speaker 3: most thoughtful and kind of intricate people that that I've
Speaker 3: ever met in portfolio company like working with them. They
Speaker 3: don't want to work with people who are just going
Speaker 3: to drop a couple of dollars and disappear. That's that's
Speaker 3: completely useless because money is abundant when it comes to
Speaker 3: the venture capital space. It's like they don't have to
Speaker 3: save your money. They don't have to take your money.
Speaker 3: They're getting money from you know, entries and Horrwitzer's choir
Speaker 3: or whoever else. If you're you know, when you're a
Speaker 3: coach or leader, it's not about your money. It's about
Speaker 3: the value that you can help bring to help the
Speaker 3: company succeed. And so I've seen people really come into that,
Speaker 3: you know, into their own as investors through through the cleft,
Speaker 3: and I think that's only going to grow. I think
Speaker 3: it's an insight that other people are starting to catch
Speaker 3: on to and try to create kind of similar similar vehicles.
Speaker 3: But we're really proud that we get to be the
Speaker 3: first you you.
Speaker 4: Talk about the impact is.
Speaker 3: It?
Speaker 6: Can you talk to us about the impact that attending
Speaker 6: c AU had in your life, because sometimes I think
Speaker 6: is after the Americans, we think HBCU isn't as good.
Speaker 6: But the guy who actually uh introduced me to investor
Speaker 6: went to Clark.
Speaker 2: You mentioned why would you not?
Speaker 3: Why would he go anywhere else?
Speaker 4: Shout at him? Doctor pleasant? Right?
Speaker 6: Can you talk about how important and what an impact
Speaker 6: Attendant Clark had on you in your career?
Speaker 3: Was everything? Again, I was from I'm from Alabama, Montgomery.
Speaker 4: Wow, I got a family in Midway.
Speaker 3: You've been over there, come on family in Bidway. Yeah, Okay,
Speaker 3: that's the.
Speaker 2: Country, country country, but it's okay.
Speaker 3: My people are from Pigeon Creek and Greenville and yeah,
Speaker 3: and people try to let me. I'm gonna come back
Speaker 3: to your question. But people try to play me because
Speaker 3: all the people from California and New York be like,
Speaker 3: I'm from New York, I'm from California, and like where
Speaker 3: do your grandma from? Where's your grandmother from? And they'd
Speaker 3: be like, Mississippi, Ala, all these othern states. You're welcome,
Speaker 3: You're welcome, drinking out of a mason jar, like it's
Speaker 3: my life, it's my life. But remind me really quickly,
Speaker 3: what was the question of Clark Atlanta. Yes, but I
Speaker 3: think when it came to experiencing people from lots of
Speaker 3: different places, it's I think places like Clark Atlanta that
Speaker 3: bring together students, particularly because it's it's a private aheb
Speaker 3: see you, it's really small, and so people come from
Speaker 3: different states, which I really enjoyed. Our whole model find
Speaker 3: a way or make one. It is on my whiteboard
Speaker 3: I live by every day. I learned that I have
Speaker 3: a choice in the way that I respond to things
Speaker 3: and when I want to give up and when I
Speaker 3: want to keep going, really really good at just figuring
Speaker 3: stuff out, figuring it out. And I think this concept that,
Speaker 3: like people say it all the time, so I don't
Speaker 3: mean to sound cliche, but like, it's a lot of
Speaker 3: types of black people out here. We are not all
Speaker 3: the same, we are not all We don't talk the same,
Speaker 3: we don't dress the same, we don't think the same.
Speaker 3: And I think I learned to appreciate the full diaspora
Speaker 3: of of black folks and who we are, you know,
Speaker 3: regardless of where we're from. But Park Atlanta is not
Speaker 3: We are hustlers also music, everybody's working on something. Listen,
Speaker 3: you can't go to Caalculanta. There's musician, somebody's producing, doing
Speaker 3: hair wrapping, it's popping, and everybody wants to come hang
Speaker 3: out on cak Atlanta's promenade and we we It just
Speaker 3: really is a beautiful space of community. And I'm so blessed.
Speaker 3: And I'm because I come from a family of just
Speaker 3: HBCU people and I'm I'm praying, I'm hopeful that my
Speaker 3: kids will go to an HBC they go wherever they
Speaker 3: want but it is a beautiful, beautiful experience.
Speaker 2: Shout all the HBCUs. We might have something social HBCUs
Speaker 2: to the city Atlanta. Let me ask you this as
Speaker 2: far as the VC world is concerned, Yeah, what is
Speaker 2: what's the rate of returns that you guys look for,
Speaker 2: like when you're investing, like in your portfolio, like what
Speaker 2: the you know ten years like down the line you say, okay, this,
Speaker 2: this was good. It's a two part question, but that's
Speaker 2: the first part.
Speaker 3: So first you're trying to get it go to jail.
Speaker 3: Then SEC is gonna be after me. I got about
Speaker 3: what I say. I don't want them knocking on my door.
Speaker 3: But I'll actually point to something that Steve Harvey said
Speaker 3: when he was on with you guys. He talked to
Speaker 3: you guys about banning average, and I remember y'all being like, ooh,
Speaker 3: that's the first time we heard that this, friends, Dang it.
Speaker 3: So I can't brand that is Like the VC metric
Speaker 3: that we love talking about is VC is about batting averages.
Speaker 3: But the piece that I would add to what Steve
Speaker 3: said was batting average is important, but also even more
Speaker 3: important is your slugging percentage. Right, So what is the
Speaker 3: magnitude of the hits that you're making, because your batting
Speaker 3: average could be X. Right, you hit three out of ten,
Speaker 3: But I think everybody would rather, you know, hit a
Speaker 3: home run with you know, bases loaded and knock it
Speaker 3: out of the park. And so we think a lot
Speaker 3: about what is the magnitude of the investments that we're making.
Speaker 3: We love, you know, we can hit a single or
Speaker 3: a double, but we really, really really love home runs,
Speaker 3: you know, whether we get ten X or fifty X
Speaker 3: or one hundred X or a thousand X. We really
Speaker 3: do try to make investments into companies that we think
Speaker 3: are we're going to return the fund.
Speaker 2: So let me let me ask you this if I can.
Speaker 2: The second part of that question is the harsh reality.
Speaker 2: Chris Lyon, somebody who you're familiar with.
Speaker 8: Y if I know that guy, shout out to our guy.
Speaker 2: So I was talking to him in l A. Mike went, low,
Speaker 2: you hear me? Now? Yes here you are back in business,
Speaker 2: all right? So he was talking. I was talking to
Speaker 2: him in l A a few a few a while ago,
Speaker 2: and he was saying that the greatest wealth opportunity in
Speaker 2: history is happening right now and will be happening for
Speaker 2: like the next decade in tech startups, and he was like,
Speaker 2: the vast majority of black people is not going to
Speaker 2: be able to benefit from it and then not going
Speaker 2: to be able to make any money from it. And
Speaker 2: we talked about this show is about stock market investing
Speaker 2: right public trumpets, but we understand that massive amounts of
Speaker 2: wealth is made on the private side VC before companies
Speaker 2: go public yep. So like that's where you get a
Speaker 2: ten thousand x return and that's when you can turn
Speaker 2: fifty thousand to five million. Of course those that doesn't
Speaker 2: happen every day, but it's possible, yeh's. But you need access,
Speaker 2: you need relationships, you need money. So that's something that
Speaker 2: nobody's talking about because billions of dollars are being generated
Speaker 2: with these tech startup companies and it's going to continue
Speaker 2: to be generated. But not only do black people hardly
Speaker 2: get any money from venture capital, they don't really they
Speaker 2: don't have the opportunity or the resources actually invest in
Speaker 2: venture capital. So that's a whole another set of problems.
Speaker 2: So how do we get more people into actually the
Speaker 2: opportunity to invest in the private market as opposed to
Speaker 2: only investing in public markets.
Speaker 3: Yep, so who there's a lot there. So, first, private
Speaker 3: market investing and specifically venture capital is dangerously risky. It
Speaker 3: is the riskiest asset class that you can get involved in.
Speaker 3: And I say that knowing that in the public market,
Speaker 3: by the time a company goes public, let me just
Speaker 3: tell you what going public means. Going public means that
Speaker 3: you've already got a board in place. It means you've
Speaker 3: got a certain amount of revenue, you've got compliance things,
Speaker 3: but you've got all these systems in place in order
Speaker 3: to go public and sell your stock to a retail investor.
Speaker 3: That it's already been adjusted for risk. It's already been
Speaker 3: checked for risk. When you are betting on two guys
Speaker 3: in a garage and I'm gonna say Montgomery, Obama. Just
Speaker 3: from two guys in garage and Montgomery, you know they
Speaker 3: could be complete total clowns, right, there's a huge amount
Speaker 3: of risk that you're taking that is just simply not
Speaker 3: there in the public market. And so, and the reason
Speaker 3: why it's so risky again, it's because venture is a
Speaker 3: long game and it's eight to ten years before a
Speaker 3: company will go public or be bought. So that's ten
Speaker 3: years of risk you're taking up front, and we all
Speaker 3: know and investing, the people who take the biggest risks
Speaker 3: are the ones that are going to get the biggest reward.
Speaker 3: And so that's why venture returns are so huge or
Speaker 3: can be really huge, because we're paying pennies on the
Speaker 3: dollar for you know, a stock that's you know, thirty
Speaker 3: dollars when it goes public. Most VC firms you know,
Speaker 3: six years later, seven years later before, sorry, sixty seven
Speaker 3: years before paid a dollar and fifty cents for sure, right,
Speaker 3: So but we had to wait you know, ten years
Speaker 3: for it to go public and to actually get liquidity,
Speaker 3: so your money is locked up for a really, really
Speaker 3: long time. So with that being said, it's very, very risky,
Speaker 3: and the government doesn't want people taking that kind of
Speaker 3: risk as individuals, right because you know, that's why we
Speaker 3: got those classifications of accredited and and unaccredited investor, And
Speaker 3: that's because they don't want people to spend in their
Speaker 3: you know, retirement on some random idea that they heard
Speaker 3: from a person to be an investor. So it started
Speaker 3: as a means of protection, but I do think it
Speaker 3: needs to be loose in because I think there's a
Speaker 3: lot of you know, well qualified, very able people who
Speaker 3: can make investment decisions, but it's really tough and people
Speaker 3: need to be protected from that. So there has to
Speaker 3: be some balance around private and public investing. And the
Speaker 3: last thing I'll say is, yes, black people haven't historically
Speaker 3: been involved, but like the firms that are coming up
Speaker 3: the last couple of years with these black general partners.
Speaker 3: I know you mentioned John Henry earlier and the guys
Speaker 3: that he works with there are I mean, I've known
Speaker 3: of at least twenty to thirty, you know, black lead
Speaker 3: or black GP funds in the last two years. So
Speaker 3: I'm really really optimistic about it. And like I said,
Speaker 3: the other way that I think people are going so
Speaker 3: black black people investing is one way to get money.
Speaker 3: And I'll actually talk about like how we make money
Speaker 3: because I think that's probably important to describe to people
Speaker 3: black people investing the dollars is when you invest the dollars,
Speaker 3: you get the money back. Black people on the cat
Speaker 3: tables at either as the GP or as an investor
Speaker 3: in a GP, and then black people working at the
Speaker 3: tech companies. Right, Entrepreneurship is not for everybody. I say
Speaker 3: that all the time, and I have one thing that
Speaker 3: I'm trying to get people to stop saying, is that,
Speaker 3: like people who work at companies aren't betting on themselves.
Speaker 3: What that's crazy, Like that's ridiculous, Like just to leave
Speaker 3: the company and bet on yourself. I don't want to
Speaker 3: be an entrepreneur, Like I have no desire to build
Speaker 3: a company, right, So for the people who are interested
Speaker 3: in a particular you know, problem that they want to
Speaker 3: work on or company they want to be a part of,
Speaker 3: getting in at the early stage is really important. How
Speaker 3: you can cash in on that that will.
Speaker 5: Yeah, so one of the I'll just add to well
Speaker 5: what what Shad said from it, that's from an investment standpoint,
Speaker 5: but sometimes you know, having the educational process is even
Speaker 5: more beneficial when your hands on you're actually in the space.
Speaker 5: And so what are some of the opportunities and roles
Speaker 5: that come within being in a VC firm, Like how
Speaker 5: do people even apply or what are the qualifications that
Speaker 5: they need to even be in a firm right, and
Speaker 5: what are the roles because like obviously you're you're leading
Speaker 5: a role, but there's other opportunities for people to be
Speaker 5: employed inside of it, right where they can get hands
Speaker 5: on knowledge.
Speaker 3: So there's space for employing and inventure and employee intake.
Speaker 3: So inventure, if you're you know, firms like Indres and Horowitz,
Speaker 3: you know, we we need all kinds of people, right,
Speaker 3: We need investors, we need marketing people and Dreas and
Speaker 3: Horowitz has been a huge kind of marketing and content
Speaker 3: you know machine for the last several years. One of
Speaker 3: the things where most is our content, right, so editors,
Speaker 3: podcast people. We have to go to market folks. So
Speaker 3: if you've done sales and customer success, we support our
Speaker 3: portfolio companies with those things. So we need folks who
Speaker 3: have those those skill sets. And so I think at
Speaker 3: the larger stage firms or the larger you know size firms,
Speaker 3: there's like a range of jobs that you could do,
Speaker 3: similar to tech. To be in tech, you don't need
Speaker 3: to be technical, you don't need to know how to code.
Speaker 3: You could be in HR, you can be in marketing,
Speaker 3: you can be in sales. So it really is just
Speaker 3: about making that transition into the technology space because like
Speaker 3: you said, I agree with Chris one thousand, technology is
Speaker 3: the biggest wealth driver that we have today. And so
Speaker 3: we were very very like hardcore about it. And I'll
Speaker 3: say it over and over again that it is one
Speaker 3: of the clearest largest ways to build wealth over a
Speaker 3: period of time.
Speaker 6: What are the three books and three conferences you think
Speaker 6: people should attend or read to learn more about angel
Speaker 6: or venture capital?
Speaker 3: So our founder Ben Horwitz has a book called The
Speaker 3: Hard Thing About Hard Things. I think it was a
Speaker 3: great book about company building and the whole space. And
Speaker 3: actually Scott Cooper, Scott Cooper does not get the shine
Speaker 3: you know he deserves. Scott Cooper is one of the
Speaker 3: four managing directors at Injuries and Horwitz, and he has
Speaker 3: a book called The Secrets of sand Hill Road. And
Speaker 3: for the folks who don't know, sand Hill Road is
Speaker 3: considered kind of VC land, right, All of the largest,
Speaker 3: kind of most active VC firms at least from years past,
Speaker 3: are on sand Hill Road. It's in Menlo Park. All
Speaker 3: of them are, you know, kind of side by side
Speaker 3: all down this road. And it's called Secrets of sand
Speaker 3: Hill Road. And you can get the insight into what
Speaker 3: it's like, how people think about investing in companies, how
Speaker 3: the firm thinks about it. It's one of my favorite books.
Speaker 3: That's a solid one. And then one of the first
Speaker 3: ones that I read it's like a little sin book.
Speaker 3: It's called breaking the VC. And I'm sure y'all can
Speaker 3: agree one of the when it comes to things you
Speaker 3: don't know about, if you get the vocabulary downpack, you're
Speaker 3: probably seventy to eighty percent there if you just learn
Speaker 3: the language that people are speaking and it breaks down
Speaker 3: the words like investment and like carried interest and you know, arr,
Speaker 3: whatever the case may be, just so you can get
Speaker 3: knowledgeable about about the space and how it works. And actually,
Speaker 3: can I go back? I mean, I sorry, go head
Speaker 3: a shot. I was gonna say, I brought up careed
Speaker 3: interest again, and I feel like I should probably tell
Speaker 3: people about what that is and how vcs make money,
Speaker 3: because I think this show is about how it all
Speaker 3: works and how to get people to make more money.
Speaker 3: So the way that venture firms make money is we
Speaker 3: take money from outside investors. They're call it limited partners,
Speaker 3: and their hope essentially is that will flip it. They
Speaker 3: hope to give us money and then we'll flip it.
Speaker 3: And you know, we have feed carried interest. And I
Speaker 3: think it actually comes from like old schools like shipping,
Speaker 3: like actual ships, where it's like, well, carry your load
Speaker 3: from one place to the next. But we're going to
Speaker 3: keep twenty percent of either whatever it is you're shipping
Speaker 3: or the money that you make off of shipping or
Speaker 3: get carried over to venture capital and investing. And essentially,
Speaker 3: so say we raised, you know, get one hundred million
Speaker 3: dollars from outside investors, and we three exits, So three
Speaker 3: hundred million dollars we've made from the investments that we
Speaker 3: made with that original hundred million. One hundred million dollars
Speaker 3: is going to go back to the investors, right, you
Speaker 3: get your money back first, and then at the two
Speaker 3: hundred million dollars it's left, we're going to divide that out.
Speaker 3: Some firms take as little as twenty percent. Some firms
Speaker 3: take thirty percent if they you know, at least three exit.
Speaker 3: Like if there's a range, let's just say thirty percent,
Speaker 3: So one hundred goes back to you, and then the
Speaker 3: two hundred million you get to keep seventy percent, and
Speaker 3: then the venture capitalist keep thirty percent. So if there's
Speaker 3: two hundred million dollars of profit, will keep sixty million.
Speaker 3: And that's how we make money.
Speaker 2: Yes, very important.
Speaker 3: So when we get when we get our black investors
Speaker 3: on the cap table, that one was it one additional
Speaker 3: goes to.
Speaker 2: Them And I think I had to ask you this before,
Speaker 2: but the ultimate goal for you guys is investing in
Speaker 2: a company, and the company either has to go public
Speaker 2: on a stock market like Uber or one of these,
Speaker 2: or it has to be purchased acquired like Ring which
Speaker 2: got acquired by Amazon.
Speaker 3: Ye.
Speaker 2: Those are like the two way two main ways that
Speaker 2: you guys would make money, right.
Speaker 3: Yeah, those are called liquidity events, So our money is
Speaker 3: locked up until the company goes through a liquidity event
Speaker 3: of going public or being purchased. And like when you
Speaker 3: when you think about like the batting average, slugging percentage,
Speaker 3: et cetera, when it comes to like how many companies
Speaker 3: really do fail? Right you said earlier like, oh, I've
Speaker 3: heard or a lot of people, a lot of other
Speaker 3: people were saying that black women companies fail or black
Speaker 3: companies sail. Most companies fail. You don't have any lack,
Speaker 3: you know, like I want to say, like eighty to
Speaker 3: ninety percent of startups fail because it's a tough it's
Speaker 3: a tough industry. It's a really tough thing to do,
Speaker 3: and founders have to be really resilient and have a
Speaker 3: great idea and build the right team and get the
Speaker 3: right coade. Like there's all these pieces that need to work,
Speaker 3: and so it venture a lot of times. If you
Speaker 3: invest in ten companies, maybe you know, probably seven of
Speaker 3: them are going to go to zero and then two
Speaker 3: might be singles or doubles, but you're praying that one
Speaker 3: of them. Right. Is that one hundred x that you
Speaker 3: talked about with shy yea or more?
Speaker 2: Yeah? I like that percentage? Yeah yeah, yeah, let's go
Speaker 2: before go ahead. Yeah yeah.
Speaker 6: My final question, what's the one piece of advice that
Speaker 6: you wish you would have known sex years prior when
Speaker 6: you entered into the venture space.
Speaker 3: The power of relationships. I didn't know if that was
Speaker 3: as important as it is, and it's probably more important
Speaker 3: than it should be. So even from applying to jobs
Speaker 3: to you know, building your house to what get it
Speaker 3: sending your kids to school, like who you know and
Speaker 3: and the relationship that you can build is just really important.
Speaker 3: And when it comes to like finding new companies and
Speaker 3: sharing deals and spending time with each other, like networks
Speaker 3: are just really really important. And I learned that the
Speaker 3: hard way because I used to you know, really think
Speaker 3: that like if I just I used to think I
Speaker 3: could do everything on my own, and you just can't.
Speaker 3: You cannot, And that is into so many different ways,
Speaker 3: in different parts of life that you just can't do
Speaker 3: it all on your own. So building networks is really
Speaker 3: really important.
Speaker 2: It's the most it's actually the most important thing in
Speaker 2: the world. Relationships is I agree to everything.
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