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Speaker 1: I'm Will Lucas and this is black tech dreen money.

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Speaker 1: Aaron Samuels his founder and managing partner at Calli Capitol,

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Speaker 1: the sixty six million dollar fund so far, which is

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Speaker 1: the first VC fund simultaneously backed by Amazon, Alphabet and Twitter.

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Speaker 1: He's also co founder and served as COO at Blavity,

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Speaker 1: the largest global black media company for millennials in gen

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Speaker 1: Z and afro Tech, the largest black tech conference in

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Speaker 1: the world. He began his career as a spoken word

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Speaker 1: artist before working at Banne and Co. As a strategy

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Speaker 1: consultant and tell A Sign as a product manager. Iaran

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Speaker 1: has had a successful professional career, and I wonder how

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Speaker 1: he tells the story to limited partners, to people who

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Speaker 1: put money into VC funds, how his career as an

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Speaker 1: operator signals that he might win at investing their money.

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Speaker 2: I think that there's many paths that people take in

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Speaker 2: order to break into benric capital. I think there's three

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Speaker 2: primary paths that people take, which is one being a

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Speaker 2: former operator, which is which is my path and happy

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Speaker 2: to dig into that a little bit.

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Speaker 3: So this is either.

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Speaker 2: You've you founded a company or you rose through the

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Speaker 2: ranks to become a senior operator. At a company, you

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Speaker 2: learn how to how to do the company building fundamentals,

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Speaker 2: and then ultimately that teaches you how to identify that

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Speaker 2: type of talent, that type of support for other companies. Right,

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Speaker 2: So I think that's path number one, And how do

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Speaker 2: people break into venture Path number two is you go

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Speaker 2: through the investor funnel. So oftentimes people will work in

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Speaker 2: investment banking, work in private equity, maybe work at you know,

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Speaker 2: some smaller venture capital shops, and then work their way

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Speaker 2: up to the larger, the larger firms, and then and

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Speaker 2: then maybe one day start their own, right, but you

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Speaker 2: kind of have the career as an investor. And I

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Speaker 2: think number three is I think actually the most common

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Speaker 2: version of becoming a venture capital venture capital practitioner, which

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Speaker 2: is that you are just born rich and.

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Speaker 1: You just have the best the most and that's the

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Speaker 1: most common.

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Speaker 2: That's actually how the industry, that's how the industry got started.

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Speaker 2: The industry got started as a cottage industry where wealthy

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Speaker 2: people effectively just made angel investments as long shot bets

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Speaker 2: that had very low probability of success. But if they hit,

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Speaker 2: they hit super big, and it's it's only over the

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Speaker 2: last you know, twenty to thirty years that that venture

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Speaker 2: capital as an industry has really started to solidify.

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Speaker 3: And so I say that because I think it's.

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Speaker 2: Important to remember that for the for the majority of

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Speaker 2: the history of venture capital, this was a game that

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Speaker 2: that rich people played by taking taking huge bets that

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Speaker 2: were of less consequence because they could they could afford

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Speaker 2: to lose the money that they were playing with. Ye,

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Speaker 2: And it's only it's only recently that that the that

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Speaker 2: the asset class has has become formalized. And so uh so,

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Speaker 2: if you want to become a venture capitalist, the easiest

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Speaker 2: way to do that is to just be rich for

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Speaker 2: for those of us, for those of us that don't

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Speaker 2: have that option, I recommend one of the former two paths,

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Speaker 2: which is to be to be an operator or to

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Speaker 2: be or to be an investor. And and my my

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Speaker 2: way was to be an operator. So now that now

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Speaker 2: that we're grounded, I had a I had I had

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Speaker 2: a I had a great career path that led me

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Speaker 2: to this moment.

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Speaker 3: And you know, and I.

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Speaker 2: And I clipped from all of my experiences from from

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Speaker 2: being a spoken word artist to being a consultant, to

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Speaker 2: being a product manager to being a CEO.

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Speaker 3: But but I think that.

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Speaker 2: I think it's important to say for for all your listeners,

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Speaker 2: because there might be people that that walk different paths,

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Speaker 2: that that.

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Speaker 3: Want to find a way to get into venture and

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Speaker 3: you don't have to just do it my way.

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Speaker 1: Yeah that I want to talk about that first way

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Speaker 1: for a second. The people who are on a career

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Speaker 1: trajectory and they say, you know what, I want to

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Speaker 1: find my way here. They're an operator today, what are

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Speaker 1: the things along the operational journey that are necessary to

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Speaker 1: be good at this till I have learned?

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Speaker 3: Yeah?

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Speaker 2: Yeah, yeah, I mean it's a good question. In many ways,

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Speaker 2: I'm still figuring it out myself. The hard thing about

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Speaker 2: about venture and a way that it's very distinct from

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Speaker 2: being an operator, is the feedback loops are way way longer.

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Speaker 2: So you know, when I was COO at Blavity, you know,

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Speaker 2: I put in a solid week's worth Monday, Tuesday, Wednesday, Thursday, Friday.

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Speaker 2: On Friday afternoon, you could walk into my office and

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Speaker 2: ask me straight up, Hey, Aaron, did you do a

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Speaker 2: good job this week?

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Speaker 3: Yes or no?

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Speaker 2: And I could look you dead in the eye and

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Speaker 2: give you an honest answer, Yeah, I crushed it this week.

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Speaker 3: This week, not not so well. It didn't go as well.

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Speaker 2: Ye. In the world of venture capital, you don't have that. Yeah,

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Speaker 2: you know at the end of the year, at the

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Speaker 2: end of the week on Friday, ask me, yeah, yes, me,

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Speaker 2: oh well I did I have no I have no idea,

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Speaker 2: and I won't I won't know, as you pointed pointed out,

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Speaker 2: I won't know for seven.

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Speaker 3: To ten years. I'm if I'm good at this.

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Speaker 2: You're making very very very long term, high risk bets.

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Speaker 2: And you know, the successful firms are going to be

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Speaker 2: the firms that invest in twenty to fifty companies and

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Speaker 2: have one or two huge winners. Even if the rest

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Speaker 2: completely go to zero. It's hard to call it. And

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Speaker 2: so the things that you do on your journey as

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Speaker 2: an operator in theory should help you do one of

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Speaker 2: two things, which is, either help you become a better picker.

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Speaker 2: It help you help you pick winners, help you identify

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Speaker 2: the characteristics the attributes of founders, of markets, of operating teams,

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Speaker 2: of business model ideas that will help increase the likelihood that.

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Speaker 3: You that you pick a winner.

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Speaker 2: And two learning how to support your portfolio the things

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Speaker 2: that you do post investment, which is where I think

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Speaker 2: operators really shine is you know, after you've made the

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Speaker 2: financial commitment to a company, what else can you do?

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Speaker 2: Can you help them build their CRM? Can you connect

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Speaker 2: them to operational leaders, Can you connect them to customers?

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Speaker 2: Can you connect them to hires? And that not only

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Speaker 2: will help support the portfolio company after you've invested, but

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Speaker 2: if companies believe that you're going to be able to

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Speaker 2: provide that type of support, it might make you more

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Speaker 2: attractive as a firm to begin with, which might then

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Speaker 2: help you select or help you have access to better

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Speaker 2: top of funnel for the investments that you make.

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Speaker 1: Now you've raised some really interesting questions for me, And

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Speaker 1: I've heard plenty of black founders on this podcast, and

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Speaker 1: many who are wildly successful talk about how there are

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Speaker 1: so many vcs who want to be in on their deals,

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Speaker 1: and we always we tend to because there are so

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Speaker 1: few of us. There's a growing number, but so few

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Speaker 1: still that you know, just want anybody to give them

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Speaker 1: a check. But there's a certain segment of black founders

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Speaker 1: who have checks thrown at them, and they can get

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Speaker 1: they get to be selective, and so then the VC

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Speaker 1: is then ultimately trying to pitch themselves. So can you

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Speaker 1: talk about what it's like to be on both sides

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Speaker 1: of that to where you're on the blavity side where

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Speaker 1: people want to give you money, then you're on the

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Speaker 1: VC tie where you might have to pitch yourself to

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Speaker 1: some really really interesting startups.

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Speaker 2: Yeah, I mean, look this, this game, if anything, will

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Speaker 2: will help keep you humble. And look, I think I

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Speaker 2: think that's a good thing. Like it for in some way,

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Speaker 2: you're kind of always you're always pitching yourself.

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Speaker 3: You're always you're always selling something.

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Speaker 2: And I think, you know, the older that I've gotten,

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Speaker 2: the more that I've realized that when you make it

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Speaker 2: to the top of any field, ultimately you're a seller.

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Speaker 2: You know. I have a good friend of mine, he's

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Speaker 2: a climate scientist with a PhD from Harvard. I ask

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Speaker 2: him how he spends most of his days. He spends

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Speaker 2: his days right in grants, which you know, it means fundraising,

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Speaker 2: which means he's raising money for, you know, to support

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Speaker 2: the projects. I think that's the same thing. If you

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Speaker 2: become a great founder, become a great investor. At the

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Speaker 2: end of the day, once you get to the top,

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Speaker 2: you're raising money, which means that you're selling yourself. You're

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Speaker 2: pitching yourself, and you're pitching yourself to as a VC,

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Speaker 2: you're pitching yourself to you know, your LPs to invest

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Speaker 2: in your fund, just as much as you're pitching yourself

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Speaker 2: to the founders that you potentially want to invest in.

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Speaker 2: And so what it means is that you can't take anything.

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Speaker 2: You can't take anything as a given, you can't take

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Speaker 2: anything for granted. Understand what your strengths are, and you

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Speaker 2: need to You need to let the founders know why

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Speaker 2: it's going to be differentiated to receive a check from

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Speaker 2: you as opposed to you know, any other lookalike, you know,

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Speaker 2: small emerging manager or you know, they might be comparing

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Speaker 2: you to a big box shop. And then I need

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Speaker 2: to convince them why taking my money is better than

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Speaker 2: taking money from a twenty two billion dollars Silicon Valley,

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Speaker 2: you know based firm.

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Speaker 1: Yeah. I know you're very passionate about your spoken word poetry,

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Speaker 1: and I wonder the connections you might see if you

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Speaker 1: can describe those for us from that sort of creativity

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Speaker 1: and the business creativity that you have to endure.

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Speaker 2: Yeah, I think I think my time my time traveling

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Speaker 2: as a as a performance poet for for about a

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Speaker 2: decade I was. I was heavily traveling around the country,

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Speaker 2: and I learned a lot about a lot about passion,

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Speaker 2: and a lot about kind of this this notion in

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Speaker 2: the in the poetry world that we we we call

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Speaker 2: speculative fiction, uh, this idea of dreaming, uh, dreaming a

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Speaker 2: better world and writing it into existence. And I think

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Speaker 2: that in many ways there are strong commonalities between my

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Speaker 2: favorite artists and my favorite founders in that both of

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Speaker 2: them are.

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Speaker 3: Are dreaming a better world, identifying.

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Speaker 2: A way that the world can be happier, healthier, more efficient,

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Speaker 2: you know, but improved in some way, and then building

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Speaker 2: that and speaking it into existence. If you can't, if

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Speaker 2: you can't dream it first, then then you can't then

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Speaker 2: build it. And for me, that attribute of passion is

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Speaker 2: something that is probably the number one characteristic that I

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Speaker 2: look for in founders. I'm looking for a founder that

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Speaker 2: is identified a hole in the universe that they uniquely

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Speaker 2: are qualified to fill.

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Speaker 3: And I think that that's so important. You know, as we.

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Speaker 2: Mentioned earlier in the conversation, you know, the feedback loop

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Speaker 2: is long. You know, it takes seven to twelve years

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Speaker 2: for a venture backed startup to get to exit I

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Speaker 2: need to know that the founder is going to be

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Speaker 2: just as passionate on year seven as they are on

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Speaker 2: year one.

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Speaker 3: And that doesn't happen if you're just in it for

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Speaker 3: the money.

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Speaker 2: It doesn't happen if it's just a pet project that

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Speaker 2: you're doing in a classroom. It only happens if if

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Speaker 2: you're obsessed with the idea, if you're obsessed with the

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Speaker 2: problem that you're trying to solve, and you really believe

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Speaker 2: that you will make the world a better place or

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Speaker 2: at least a more interesting place, if you're able to execute.

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Speaker 1: You just spoke to something about you know, founders who

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Speaker 1: have you know, recognized the void and they can something

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Speaker 1: that they can uniquely feel how dialed in to the

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Speaker 1: details of what that future looks like are the most

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Speaker 1: successful founders, Like, can they talk about the intricacies or

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Speaker 1: just the concept?

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Speaker 3: No, No, they should be they should be really dialed there.

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Speaker 2: You know, I think that that the best founders that

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Speaker 2: I've seen, they can they can paint you, They can

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Speaker 2: paint you a very very detailed picture of what the

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Speaker 2: world will look like if their product, service, business model,

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Speaker 2: you know, serves as a as a disruption to the

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Speaker 2: status quo.

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Speaker 1: To a VC, what do you need to hear in

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Speaker 1: those details that give you the confidence site this this lady,

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Speaker 1: this guy is going to go do it.

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Speaker 2: Yeah, I mean, I think there's a few things that

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Speaker 2: I'm looking for, So, you know, and this is true

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Speaker 2: for a lot of vcs, But you know, one of

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Speaker 2: the things that we first listen for is is this

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Speaker 2: problem a big enough problem that if the founder succeeds,

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Speaker 2: it will create a billion dollar company. You know, they

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Speaker 2: might be they might be right about the problem, and

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Speaker 2: they could be super passionate, you know, about it. But

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Speaker 2: if it's a small problem, then it doesn't necessarily return

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Speaker 2: enough capital for me or from my LP base.

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Speaker 3: For it to move the needle.

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Speaker 2: And that's that's kind of where we get into the

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Speaker 2: concept of is this a venture backable company versus is

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Speaker 2: it a small business or a large business. That's a

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Speaker 2: good idea, but maybe not a great idea for a

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Speaker 2: venture because we need to have those scaled returns. So,

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Speaker 2: you know, firsts is this problem a big enough problem?

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Speaker 3: You know?

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Speaker 2: The second thing that I'm usually asking is what about

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Speaker 2: this founder's background leads me to believe that they are

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Speaker 2: going to be able to execute on this solution. So

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Speaker 2: they might be right that it's a great problem and

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Speaker 2: it would be awesome if somebody solved it, But why

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Speaker 2: do I believe that you're going to be able to

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Speaker 2: do it? Have you have you been thinking about this

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Speaker 2: problem for the last fifteen years? Have you have you

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Speaker 2: worked on versions or iterations of this problem over the

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Speaker 2: course of your career? Have you built prototypes, test models,

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Speaker 2: do you have a PhD in the subject matter?

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Speaker 3: Et cetera.

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Speaker 2: It doesn't have to be all of those things, but

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Speaker 2: we're looking for some version of what we call founder

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Speaker 2: market fit, which is, you know, do we believe that

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Speaker 2: that this founder has you know, done the things in

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Speaker 2: their career to you know, to give you strong indication

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Speaker 2: that they'll be able to solve this problem. Yeah?

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Speaker 3: I would, And you know, go go ahead, No, no,

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Speaker 3: go ahead.

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Speaker 2: No.

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Speaker 1: I was going to say, like, because I know you

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Speaker 1: invest at different levels, you know, ceed pre seed, like

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Speaker 1: you know, one hundred K to the three million I've

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Speaker 1: read in my research, and I want you to speak

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Speaker 1: to along the lines that you're already on. But at

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Speaker 1: how deep are do you expecting them to be in

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Speaker 1: at each stage? So if if I'm asking for one

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Speaker 1: hundred k. I'm assuming that you're not expecting as much

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Speaker 1: as you would if I was asking for three million.

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Speaker 2: It's a good question, and I would say, no, that

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Speaker 2: that's that's not true. You know, for me, the the

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Speaker 2: dollar value doesn't correlate to the level of.

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Speaker 3: Dialed in that I should see with the founder.

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Speaker 2: You know, if we're giving you money, it's more correlated

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Speaker 2: to what the stages of the business and making sure

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Speaker 2: that you know that we own a significant enough percentage

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Speaker 2: of the company to match with our portfolio construction. But

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Speaker 2: if you know, if we're investing, we.

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Speaker 3: Usually don't go as low as one hundred k these days.

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Speaker 2: But say we're investing a five hundred k check into

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Speaker 2: a founder, you know, that oftentimes means that the stage

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Speaker 2: of the business is such that if we invested more

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Speaker 2: than that, it would dilute the founders too much. And

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Speaker 2: so you know, we typically don't want to take you know,

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Speaker 2: more than twelve ownership with the first check. That being said,

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Speaker 2: will happily invest more at the next round, you know,

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Speaker 2: at a higher evaluation if the company continues to perform well.

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Speaker 2: And so you know, I would not say that the

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Speaker 2: amount of capital is correlated to you know, to our

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Speaker 2: conviction level of the founder. Rather, it's just correlated to

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Speaker 2: the stage of the business and how how early or later,

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Speaker 2: how far along the kind of business trajectory the company's the.

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Speaker 1: Company is, Yeah, you spoke to something that I'd like

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Speaker 1: to bring back up, and you talked about the other

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Speaker 1: value you bring to a startup, whether that's a network,

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Speaker 1: whether that's you know, CRM experience, et cetera. And can

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Speaker 1: you speak to holding that in one part of your

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Speaker 1: mind in this other idea which I'm a believer of.

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Speaker 1: And I remember recently hearing a big Finance guide to

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Speaker 1: say it it's as hard to build a small successful

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Speaker 1: business as it is a big successful business. And so

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Speaker 1: if you think about that concept, most of us don't

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Speaker 1: think that way. They think, if I'm going to build,

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Speaker 1: you know, a one million dollar business, you know, that's

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Speaker 1: going to be hard, but it's not going to be

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Speaker 1: as hard as I was trying to do one hundred million.

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Speaker 1: But it's hard as hard, you know. So it's how

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Speaker 1: big do you want to scale your hard how much

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Speaker 1: do you want to take on? But can you speak

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Speaker 1: to those concepts of you know, what you believe you

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Speaker 1: can bring to a business and the level of which

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Speaker 1: effort you have to put in first, not as much

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Speaker 1: reward on the back or much on the outside, or

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Speaker 1: I might as well put my effort toward something that

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Speaker 1: could be a bigger windfall.

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Speaker 3: Yeah.

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Speaker 2: No, I mean, I think it's it's a great point,

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Speaker 2: and I completely wholeheartedly agree with you. Sometimes it's way

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Speaker 2: harder to build a small business and to build a

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Speaker 2: big business. And I think the reason that that is is,

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Speaker 2: you know, the success of the business isn't just about

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Speaker 2: the outputs.

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Speaker 3: It's also about the inputs.

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Speaker 2: Right. So you know, if if I raise forty million

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Speaker 2: dollars and I create a business that is a ten

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Speaker 2: million dollars a year business, you know, some say that

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Speaker 2: that's successful, but other people say, well, no, you raised

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Speaker 2: forty to get to ten.

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Speaker 3: You know that you've lost a bunch of money doing that.

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Speaker 2: Versus, if I raise five million dollars and I get

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Speaker 2: to a ten million dollar annual business, I would consider

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Speaker 2: that significantly more successful. And so I think not everybody

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Speaker 2: always factors in both the inputs and the outputs when

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Speaker 2: they're looking at things. I think that that's especially important

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Speaker 2: when you when you kind of observe the world through

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Speaker 2: a racial equity lens, because you know, for the most part,

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Speaker 2: black founders, Latin founders, founders who are women or have

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Speaker 2: women on the founding team oftentimes are significantly undercapitalized relative

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Speaker 2: to their straight white male peers, and oftentimes they're judged

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Speaker 2: based on the same output metrics. So oftentimes they'll say, oh,

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Speaker 2: look at these two types of business models, they seem similar,

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Speaker 2: but this company is, you know, generating five x the revenue.

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Speaker 2: And you know, the first thing that I often ask is, okay,

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Speaker 2: but they did they raise ten x the amount of capital?

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Speaker 3: Because if so, it's.

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Speaker 2: Actually it's actually less impressive to get where they got,

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Speaker 2: and in the long run, ultimately it won't return actual

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Speaker 2: money for investors because investors have invested in so much

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Speaker 2: that business needs to not just you know, outperform their

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Speaker 2: peer set, it needs to outperform their peer set at

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Speaker 2: a multiple of the amount of dollars that were invested

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Speaker 2: into the business. And so I think oftentimes it's important

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Speaker 2: to look at what has this founder done with the

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Speaker 2: resources that they have.

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Speaker 3: Therefore, do I believe that if.

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Speaker 2: I put more resources into the business that it will

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Speaker 2: continue scaling?

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Speaker 1: That's really good? And so you brought up, you know,

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Speaker 1: racial equity into these things, and it makes me think

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Speaker 1: about the landscape, the legal landscape of trying to support

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Speaker 1: black founders, women founders, LATINX founders, and even when you're

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Speaker 1: talking about major capital, where you're talking about college admissions,

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Speaker 1: colleges can't ask what your background is anymore, you know what,

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Speaker 1: talk about your thoughts on the efforts to support black

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Speaker 1: founders intentionally with venture capital, faced with the issues that

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Speaker 1: we now are presented with.

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Speaker 2: Yeah, I mean, these are these are trying times, and

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Speaker 2: you know, it's it's hard as as someone that's worked

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Speaker 2: you know, in many ways in the black empowerment space

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Speaker 2: for the majority of my career, whether as an artist.

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Speaker 3: Or you know, with you know, with my time you know,

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Speaker 3: founding Blavity.

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Speaker 2: We've seen the we've seen the pendulum swing back and

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Speaker 2: forth a few times. You know. I remember when we

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Speaker 2: when we started Blavity back in twenty fourteen.

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Speaker 3: In many ways, it.

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Speaker 2: Was a you know, it was a direct response to

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Speaker 2: you know, what was happening in Ferguson, you know, in

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Speaker 2: response to the murder of Mike Brown.

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Speaker 3: And you know then you.

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Speaker 2: Know, there was interest in supporting these the initiatives, that

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00:20:01,040 --> 00:20:04,679
Speaker 2: interest winds down, and then it ramps up again with

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Speaker 2: the murder of George Floyd, and then again we see

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Speaker 2: a lot of racial equity initiatives permeate throughout corporate America

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Speaker 2: and the investing world in twenty twenty, twenty twenty one,

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Speaker 2: twenty twenty two, and then again now we're seeing the

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Speaker 2: pendulum swing back with a pushback against critical race theory,

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Speaker 2: a pushback against affirmative action.

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Speaker 3: But for those of us that are practitioners in the space,

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Speaker 3: this is not new.

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Speaker 2: Sometimes it's in vogue to support racial equity, and sometimes

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Speaker 2: it's very much not in vogue. I think that the

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Speaker 2: important thing for founders to look at is the people

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Speaker 2: that have staying power, the folks that have said that

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Speaker 2: they care about this work and have continued to do

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Speaker 2: this work whether or not it's popular. And I think

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Speaker 2: that you know, there are companies like Blavity that you

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Speaker 2: know will support black people whether or not it's cool

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Speaker 2: to support black people. And I think that there's a

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Speaker 2: lot of firms that have demonstrated track records in venture

409
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Speaker 2: you know, of investing in people of color corporations that

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Speaker 2: have done this.

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Speaker 3: And I think the most important thing.

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Speaker 2: To look for is look at people's track records over

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Speaker 2: a longer time horizon. Don't just say, you know, do

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Speaker 2: you have a new initiative or have you do you

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Speaker 2: have a good press release, you know where you've made

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Speaker 2: some type of dollar commitment, which, by the way, many

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Speaker 2: firms made dollar commitments that didn't actually execute on those

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Speaker 2: dollar commitments, right, So don't look at that, look at

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Speaker 2: the actual track record of work and say, okay, over

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Speaker 2: the last ten years, over the last twenty years, you know,

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Speaker 2: have you you know, how many black founders have you

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Speaker 2: actually invested in, how many programs have you actually created?

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Speaker 3: What were the actual dollars that were deployed versus the

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Speaker 3: dollars committed?

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Speaker 2: And I think that you know, folks rise to the

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Speaker 2: top in terms of who actually has a track record

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Speaker 2: of supporting women, in people of color in the space.

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Speaker 1: There's this line of an article I read about you,

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Speaker 1: where the line is Samuels is a believer that the

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Speaker 1: best endings to store are both surprising yet inevitable. And

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Speaker 1: I'm gonna allow you to pick which you want to

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Speaker 1: talk about with just that statement alone. But I think

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Speaker 1: about how that can be directly related to so many things.

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Speaker 1: Number One, you know you talk about black people. I

435
00:22:14,080 --> 00:22:19,160
Speaker 1: believe black people ultimately find true generational wealth and success

436
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Speaker 1: in our country and around the world. We will find

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Speaker 1: our way to not be the minority. We will be

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Speaker 1: the I mean that's just numbers, will be the majority

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Speaker 1: or not a minority. In less than ten years or

440
00:22:30,880 --> 00:22:34,600
Speaker 1: about eighteen years. We will find success where we have

441
00:22:34,720 --> 00:22:38,040
Speaker 1: not historically found it. People who are gonna win in

442
00:22:38,080 --> 00:22:41,440
Speaker 1: startups and business and etc. You can probably find indicators

443
00:22:41,480 --> 00:22:43,840
Speaker 1: that said that person's gonna win regardless whether or not

444
00:22:43,920 --> 00:22:46,760
Speaker 1: I invest in them, because that's a winner. So that

445
00:22:47,040 --> 00:22:49,760
Speaker 1: person's gonna win. Aaron Samuels is going to win, Jeff

446
00:22:49,800 --> 00:22:52,200
Speaker 1: Nelson is going to win, Morgan is gonna win whether

447
00:22:52,280 --> 00:22:55,959
Speaker 1: or not pick a thing. And so talk about what

448
00:22:56,000 --> 00:22:57,879
Speaker 1: you want to talk about with just that statement, like

449
00:22:57,920 --> 00:23:00,000
Speaker 1: what do you get? What do you derive from that? Stay?

450
00:23:02,080 --> 00:23:04,439
Speaker 2: Yeah, I mean, I think I think that the clip

451
00:23:04,480 --> 00:23:07,359
Speaker 2: that you're you're pulling that from is actually where I

452
00:23:07,400 --> 00:23:13,200
Speaker 2: was talking about evaluating founders and and helping founders tell

453
00:23:13,240 --> 00:23:15,119
Speaker 2: their story to other investors.

454
00:23:15,520 --> 00:23:18,600
Speaker 3: And I think that when you know, when you're pitching

455
00:23:18,600 --> 00:23:19,120
Speaker 3: a deck.

456
00:23:18,920 --> 00:23:23,800
Speaker 2: When you're pitching a company, I think that subtly, that's

457
00:23:23,840 --> 00:23:27,440
Speaker 2: what moves That's what moves the needle on getting somebody

458
00:23:27,440 --> 00:23:32,359
Speaker 2: else to be convicted in you, is be surprising yet inevitable.

459
00:23:33,359 --> 00:23:36,120
Speaker 2: I think if if somebody walks away from your pitch

460
00:23:36,160 --> 00:23:40,080
Speaker 2: as a founder and they say, oh, that called me

461
00:23:40,119 --> 00:23:46,040
Speaker 2: off guard, but also yeah, that's definitely gonna happen, I

462
00:23:46,080 --> 00:23:49,000
Speaker 2: think that that that makes me more likely to invest

463
00:23:49,040 --> 00:23:51,359
Speaker 2: in you, because I believe the world is naturally going

464
00:23:51,400 --> 00:23:54,560
Speaker 2: there anyways, but you surprised me because you're going to

465
00:23:54,600 --> 00:23:56,479
Speaker 2: get there first, or you're going to get there differently,

466
00:23:56,560 --> 00:23:57,720
Speaker 2: or you're going to get there better.

467
00:23:58,600 --> 00:23:59,040
Speaker 3: Of course.

468
00:23:59,080 --> 00:24:02,760
Speaker 2: I think that that's true more broadly, you know, than

469
00:24:02,880 --> 00:24:05,240
Speaker 2: just founder stories. I originally kind of pay per clipped

470
00:24:05,240 --> 00:24:07,440
Speaker 2: that expression from something that we used to say a

471
00:24:07,480 --> 00:24:10,359
Speaker 2: lot in the poetry world in terms of an ending

472
00:24:10,400 --> 00:24:12,720
Speaker 2: to a poem or an ending to a story and

473
00:24:12,800 --> 00:24:15,080
Speaker 2: surprise and get inevitable. But I think that that's what

474
00:24:15,240 --> 00:24:17,480
Speaker 2: leaves you at the end of a presentation or the

475
00:24:17,560 --> 00:24:19,760
Speaker 2: end of a story, like the wind is sucked out

476
00:24:19,800 --> 00:24:21,560
Speaker 2: of you a little bit. And I think it's that

477
00:24:21,560 --> 00:24:27,160
Speaker 2: that emotional feeling oftentimes that drives a lot of investing decisions.

478
00:24:27,119 --> 00:24:29,639
Speaker 1: Is you talked about something in that statement there that

479
00:24:29,680 --> 00:24:33,160
Speaker 1: you know you can invest that you know, Series ABC potentially,

480
00:24:33,200 --> 00:24:35,400
Speaker 1: and you're talking about investing your seed and pre seed.

481
00:24:36,080 --> 00:24:38,200
Speaker 1: Is that ability to do because a lot of people

482
00:24:38,480 --> 00:24:40,520
Speaker 1: in the venture capital space pick one of those or

483
00:24:40,560 --> 00:24:44,880
Speaker 1: maybe two of those. But is that particularly because you write,

484
00:24:44,880 --> 00:24:46,800
Speaker 1: I mean you raised a big round, I mean your

485
00:24:46,800 --> 00:24:50,200
Speaker 1: first one of the largest black owned first time funds

486
00:24:50,200 --> 00:24:54,400
Speaker 1: of sixty six million. Is that ability to invest as

487
00:24:54,440 --> 00:24:57,399
Speaker 1: such a wide category purely reflective of the amount that

488
00:24:57,480 --> 00:24:58,000
Speaker 1: you raised?

489
00:25:01,800 --> 00:25:04,480
Speaker 2: Not purely I mean I think I think, you know,

490
00:25:04,600 --> 00:25:06,439
Speaker 2: the amount that you raise has something to do with

491
00:25:06,480 --> 00:25:09,120
Speaker 2: your strategy, but it's not the it's not the entire thing.

492
00:25:09,560 --> 00:25:11,200
Speaker 3: I would actually, you know, flip the order.

493
00:25:11,600 --> 00:25:13,160
Speaker 2: We knew that we wanted to invest at the seed

494
00:25:13,200 --> 00:25:16,800
Speaker 2: stage first, and so then we raised a fund that

495
00:25:16,880 --> 00:25:19,560
Speaker 2: we thought would be appropriate for the stage that we

496
00:25:19,600 --> 00:25:21,639
Speaker 2: wanted to invest in. You know, we we had a

497
00:25:21,640 --> 00:25:24,520
Speaker 2: proof of concept fund. We did thirty five companies. You know,

498
00:25:24,600 --> 00:25:26,400
Speaker 2: now we're running Fund one. We're going to do thirty

499
00:25:26,400 --> 00:25:28,680
Speaker 2: five companies in that fund. Then we're going to raise

500
00:25:28,680 --> 00:25:31,640
Speaker 2: another fund, probably going to do around thirty five companies again,

501
00:25:31,840 --> 00:25:33,639
Speaker 2: you know, and so we think that kind of playing

502
00:25:33,680 --> 00:25:36,160
Speaker 2: in the you know, sixty to one hundred million dollar

503
00:25:36,640 --> 00:25:39,679
Speaker 2: fund size window is appropriate given the amount of companies

504
00:25:39,720 --> 00:25:41,600
Speaker 2: that we want to back over the you know, three

505
00:25:41,640 --> 00:25:43,520
Speaker 2: to four year time horiz, then we want to invest

506
00:25:43,520 --> 00:25:44,640
Speaker 2: in them.

507
00:25:45,080 --> 00:25:48,400
Speaker 1: So when you're talking about the LPs that you deal with,

508
00:25:48,520 --> 00:25:51,000
Speaker 1: and you know, there's you know, if you picked the

509
00:25:51,080 --> 00:25:56,200
Speaker 1: category that you're in, of the level of VC firm

510
00:25:56,240 --> 00:25:58,520
Speaker 1: that you have, you know, let's say around one hundred

511
00:25:58,600 --> 00:26:02,800
Speaker 1: million dollars, there's a lot of them. There's what is

512
00:26:02,840 --> 00:26:06,920
Speaker 1: the LP thinking about, I'm gonna invest in collide versus

513
00:26:07,520 --> 00:26:12,480
Speaker 1: ACME firm? What is the differentiating factors that they're looking for?

514
00:26:14,119 --> 00:26:15,600
Speaker 2: I mean, I think they're looking for a lot of things,

515
00:26:15,600 --> 00:26:18,040
Speaker 2: you know, I think most LPs are looking for, first

516
00:26:18,080 --> 00:26:21,200
Speaker 2: and foremost history of strong performance. So they're going to

517
00:26:21,240 --> 00:26:24,119
Speaker 2: want to know, how did your previous funds perform? Have

518
00:26:24,240 --> 00:26:30,000
Speaker 2: you consistently returned money to your other LPs. Outside of that,

519
00:26:30,160 --> 00:26:32,680
Speaker 2: oftentimes they're looking for some type of competitive edge or

520
00:26:32,680 --> 00:26:37,439
Speaker 2: competitive advantage. Usually that means you either have access to

521
00:26:37,520 --> 00:26:39,760
Speaker 2: the unique communities that they don't don't have access to,

522
00:26:40,359 --> 00:26:42,639
Speaker 2: or you have some type of expertise that makes you

523
00:26:42,680 --> 00:26:45,040
Speaker 2: a better selector. You know, have you spent time in

524
00:26:45,080 --> 00:26:47,720
Speaker 2: an industry, do you have you know, a specific level

525
00:26:47,760 --> 00:26:50,560
Speaker 2: of training or education in a particular way of thinking?

526
00:26:51,760 --> 00:26:53,560
Speaker 2: You know, but do you know, do you have access?

527
00:26:53,880 --> 00:26:55,280
Speaker 2: Are you going to be a great picker, and do

528
00:26:55,320 --> 00:26:58,120
Speaker 2: you have a history of performance?

529
00:26:59,480 --> 00:27:02,199
Speaker 1: In my Saying article, they had this phrase, nails call it.

530
00:27:02,240 --> 00:27:06,320
Speaker 1: You like to invest in people building generational companies and

531
00:27:06,400 --> 00:27:09,720
Speaker 1: so is there a balance between, hey, this is a

532
00:27:10,040 --> 00:27:12,679
Speaker 1: just a great financial play, but it's probably not going

533
00:27:12,760 --> 00:27:15,000
Speaker 1: to be here in twenty years, or we want to

534
00:27:15,040 --> 00:27:16,760
Speaker 1: be along for the long haul.

535
00:27:19,080 --> 00:27:21,720
Speaker 2: Absolutely, And look, there's a lot of different business models

536
00:27:21,840 --> 00:27:24,200
Speaker 2: in kind of venture in the broader kind of private

537
00:27:24,200 --> 00:27:28,040
Speaker 2: equity space. If I invested later stage, if I invested

538
00:27:28,080 --> 00:27:31,159
Speaker 2: a Series D, Series E, Series F companies, you know,

539
00:27:31,200 --> 00:27:32,960
Speaker 2: I wanted to be along for the ride for three

540
00:27:33,040 --> 00:27:35,120
Speaker 2: years and then they go public and then I cash out.

541
00:27:35,960 --> 00:27:37,960
Speaker 3: That is a very different type of business model.

542
00:27:38,560 --> 00:27:41,320
Speaker 2: And of course, you know, there might be opportunities to

543
00:27:41,359 --> 00:27:44,400
Speaker 2: participate in projects like that in a one off basis,

544
00:27:44,840 --> 00:27:47,360
Speaker 2: But the reality is when you invest at the seed stage,

545
00:27:47,640 --> 00:27:50,960
Speaker 2: or when you invested the pre seed stage, you're signing

546
00:27:51,040 --> 00:27:53,359
Speaker 2: up to be with these companies for a you know,

547
00:27:53,480 --> 00:27:56,720
Speaker 2: seven to twelve year journey on average, sometimes longer. You know,

548
00:27:56,880 --> 00:27:59,919
Speaker 2: I know seed stage managers that have held positions in

549
00:28:00,040 --> 00:28:03,680
Speaker 2: companies for twenty years before you know, before cashing out.

550
00:28:03,920 --> 00:28:05,560
Speaker 3: And if if you're thinking about the.

551
00:28:05,480 --> 00:28:08,240
Speaker 2: World that way, I mean twenty years, twenty years is

552
00:28:08,280 --> 00:28:10,920
Speaker 2: a generation, you know, like that, you know, you could

553
00:28:10,960 --> 00:28:15,000
Speaker 2: see full turnover of team, of culture, of product even

554
00:28:15,080 --> 00:28:17,159
Speaker 2: just you know, think about what you were doing.

555
00:28:16,920 --> 00:28:21,639
Speaker 3: Twenty years ago. The world was completely was completely different.

556
00:28:21,720 --> 00:28:24,280
Speaker 2: You know, we were we were listening, we were listening

557
00:28:24,320 --> 00:28:28,440
Speaker 2: to you know, to Nelly, you know, performed videos on

558
00:28:28,440 --> 00:28:31,560
Speaker 2: one oh six in park. You know, we were you know,

559
00:28:31,640 --> 00:28:36,040
Speaker 2: people were slapping POGs. You know, Instagram didn't exist, Buying

560
00:28:36,160 --> 00:28:40,479
Speaker 2: didn't exist. People were playing with Tomagotchi's, you know, like

561
00:28:40,480 --> 00:28:43,840
Speaker 2: like the world was a different place. And so when

562
00:28:43,880 --> 00:28:46,560
Speaker 2: I say that though, just as a reminder, the founders

563
00:28:46,560 --> 00:28:49,560
Speaker 2: that I'm backing today are potentially going to be building

564
00:28:49,560 --> 00:28:52,840
Speaker 2: companies that'll play in a world twenty years from now.

565
00:28:53,160 --> 00:28:54,320
Speaker 3: So if we imagine.

566
00:28:53,920 --> 00:28:56,800
Speaker 2: How how different we are now than twenty years ago,

567
00:28:57,200 --> 00:28:58,720
Speaker 2: you really taking a.

568
00:28:58,640 --> 00:29:00,480
Speaker 3: Big bet on the future.

569
00:29:00,920 --> 00:29:05,680
Speaker 2: And I believe that the only way to successfully invest

570
00:29:06,080 --> 00:29:08,840
Speaker 2: at the seed stage is to have that long deal.

571
00:29:24,280 --> 00:29:27,040
Speaker 1: Black Tech Green Money is a production the Blavity, Afrotech

572
00:29:27,240 --> 00:29:29,880
Speaker 1: on the Black Effect Podcast Network and I Hire Media

573
00:29:30,080 --> 00:29:33,040
Speaker 1: and it's produced by Morgan, Debonne and me Well Lucas

574
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Speaker 1: with the additional production support by Sarah Ergan and Love Beach.

575
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Speaker 1: Special thank you to Michael Davis and Kate McDonald. Learn

576
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Speaker 1: more about my guest of Other Tech. This rub is

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579
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