1 00:00:00,240 --> 00:00:03,800 Speaker 1: Charles Ulson is the managing partner at Precursor Adventures, a 2 00:00:03,920 --> 00:00:08,320 Speaker 1: classic ced stage investment firm based out of San Francisco, 3 00:00:08,600 --> 00:00:12,159 Speaker 1: and he seeks to invest in companies first rounds. So 4 00:00:12,200 --> 00:00:15,240 Speaker 1: if you are you've never gotten a check before, Charles 5 00:00:15,440 --> 00:00:17,000 Speaker 1: is the guy you want to talk to, and if 6 00:00:17,000 --> 00:00:19,360 Speaker 1: you're building something special, he's for sure. 7 00:00:19,280 --> 00:00:20,560 Speaker 2: The guy you want to talk to. 8 00:00:21,280 --> 00:00:24,760 Speaker 1: He gives you that first round of institutional investment if 9 00:00:24,760 --> 00:00:26,680 Speaker 1: he likes what you got going on and any things 10 00:00:26,720 --> 00:00:28,560 Speaker 1: that you are the founder to make the thing happen. 11 00:00:28,880 --> 00:00:30,760 Speaker 1: And he focuses on investments in the B to B 12 00:00:31,040 --> 00:00:35,960 Speaker 1: software applications, B two C software and services, and connected hardware. 13 00:00:36,080 --> 00:00:38,080 Speaker 1: Welcome Charles Huston to this show. 14 00:00:38,720 --> 00:00:40,680 Speaker 3: Thank you for having me. This is so fun. 15 00:00:40,640 --> 00:00:43,199 Speaker 1: Absolutely, thank you. Thank you for making the time. And 16 00:00:43,240 --> 00:00:45,600 Speaker 1: so I want to start here, you know, because we 17 00:00:45,680 --> 00:00:50,800 Speaker 1: talk so much about how successful, how startups can find 18 00:00:50,800 --> 00:00:55,000 Speaker 1: success and hopefully very quickly, and I've heard a lot 19 00:00:55,040 --> 00:00:57,720 Speaker 1: of vcs say, you know, you really don't even know 20 00:00:57,760 --> 00:00:59,720 Speaker 1: if you're a good VC until like ten years in, 21 00:01:00,240 --> 00:01:02,640 Speaker 1: because it takes a lot of really that time to 22 00:01:02,880 --> 00:01:05,080 Speaker 1: you know, for your stuff to turn a. 23 00:01:05,040 --> 00:01:07,120 Speaker 2: Profit or to exit or et cetera. 24 00:01:07,280 --> 00:01:09,760 Speaker 1: So you make in bets and you don't really know 25 00:01:09,840 --> 00:01:13,040 Speaker 1: for a good number of years whether you've made good ones. 26 00:01:13,480 --> 00:01:16,600 Speaker 1: So how can you reconcile? How should we reconcile the 27 00:01:16,720 --> 00:01:21,000 Speaker 1: difference in how vcs and investors, you know, deploy capital 28 00:01:21,040 --> 00:01:24,440 Speaker 1: and go to LPs to raise it, and how founders 29 00:01:25,080 --> 00:01:28,440 Speaker 1: deploy capital, hire people, put products out in the wild 30 00:01:28,800 --> 00:01:29,960 Speaker 1: and also raise money. 31 00:01:31,200 --> 00:01:34,199 Speaker 4: You know, the feedback cycles for a venture are really long. 32 00:01:35,800 --> 00:01:39,119 Speaker 4: Just to put in perspective, we raise we started investing 33 00:01:39,160 --> 00:01:42,480 Speaker 4: out of our first fund in twenty fourteen. We invested 34 00:01:42,480 --> 00:01:46,319 Speaker 4: in eighty three companies. Eighteen of them are still alive. Wow, 35 00:01:47,319 --> 00:01:50,400 Speaker 4: that's like eleven years later. And you know the trigger 36 00:01:50,440 --> 00:01:53,920 Speaker 4: thing is inventor you get also false signals. You'll get 37 00:01:53,960 --> 00:01:56,320 Speaker 4: some companies to get out of the gates really hot 38 00:01:56,600 --> 00:01:58,440 Speaker 4: and it turns out that the thing they were building 39 00:01:58,520 --> 00:02:01,360 Speaker 4: is ephemeral or it wasn't as they thought. You have 40 00:02:01,400 --> 00:02:03,720 Speaker 4: other companies that are a bit more of a slow build. 41 00:02:04,040 --> 00:02:06,320 Speaker 4: And I think in this AI era, everyone assumes that 42 00:02:06,360 --> 00:02:08,480 Speaker 4: you should go from zero to ten million in ARR 43 00:02:08,600 --> 00:02:10,480 Speaker 4: in two weeks, and if you don't, it doesn't matter. 44 00:02:10,880 --> 00:02:13,600 Speaker 4: I don't believe that And the thing I missed though 45 00:02:14,320 --> 00:02:16,799 Speaker 4: about being a founder is when I was a founder, 46 00:02:16,840 --> 00:02:18,160 Speaker 4: I was like, every day there. 47 00:02:18,040 --> 00:02:19,000 Speaker 3: Was something I could do. 48 00:02:19,720 --> 00:02:22,359 Speaker 4: I could maybe win a customer, I could maybe hire 49 00:02:22,400 --> 00:02:25,800 Speaker 4: a new person, I could maybe sign a partnership. In venture, 50 00:02:26,200 --> 00:02:30,440 Speaker 4: you only really get market feedback on your companies every 51 00:02:30,760 --> 00:02:33,000 Speaker 4: twelve to twenty four months when they go to fundraise 52 00:02:33,480 --> 00:02:36,160 Speaker 4: and people judge them. So a lot of times you 53 00:02:36,160 --> 00:02:38,560 Speaker 4: don't actually know if what you're doing is working. And 54 00:02:39,320 --> 00:02:40,920 Speaker 4: you're going to have companies that you think are great 55 00:02:40,919 --> 00:02:43,680 Speaker 4: companies that are doing great work, and if nobody else cares, 56 00:02:43,760 --> 00:02:44,760 Speaker 4: you're like, well, who's right? 57 00:02:45,280 --> 00:02:46,720 Speaker 3: Am I right? Because I'm looking at. 58 00:02:46,600 --> 00:02:49,920 Speaker 4: The internal performance of this company it's good. And I 59 00:02:49,960 --> 00:02:52,040 Speaker 4: have other companies in my portfolio that investors love, and 60 00:02:52,080 --> 00:02:54,600 Speaker 4: I'm like Candlee, I have questions about that company and 61 00:02:54,639 --> 00:02:58,160 Speaker 4: this long term prospect. So it takes a very long 62 00:02:58,200 --> 00:03:01,799 Speaker 4: time to get real feedback about whether the investments you've 63 00:03:01,800 --> 00:03:02,480 Speaker 4: made will work. 64 00:03:02,919 --> 00:03:05,240 Speaker 1: I like what you just said about you know, you 65 00:03:05,320 --> 00:03:07,880 Speaker 1: believe in something, but the market may be saying something different, 66 00:03:07,919 --> 00:03:11,560 Speaker 1: at least in the immediate And how do you gauge 67 00:03:11,600 --> 00:03:13,960 Speaker 1: whether to lean on your gut and like this thing 68 00:03:14,000 --> 00:03:16,440 Speaker 1: should exist. There's got to be an opportunity here, and 69 00:03:16,520 --> 00:03:19,680 Speaker 1: we maybe need to strategize something different or just listen 70 00:03:19,720 --> 00:03:21,840 Speaker 1: to what's happening and do something different. 71 00:03:23,080 --> 00:03:25,800 Speaker 4: I think it's important to understand why people aren't paying 72 00:03:25,840 --> 00:03:30,520 Speaker 4: attention to the company. Sometimes it's the founder archetype doesn't 73 00:03:30,520 --> 00:03:32,919 Speaker 4: match what they're looking for or what they think successful 74 00:03:32,960 --> 00:03:35,120 Speaker 4: founders look like, so they might the person might not 75 00:03:35,160 --> 00:03:37,080 Speaker 4: have gone to the right school, might not have the 76 00:03:37,160 --> 00:03:40,840 Speaker 4: right connections. Sometimes it's a category that people just don't 77 00:03:40,880 --> 00:03:42,960 Speaker 4: find that interesting. So I'd say, you know right now, 78 00:03:43,480 --> 00:03:46,240 Speaker 4: if you had a great business that isn't levered to AI, 79 00:03:46,960 --> 00:03:48,600 Speaker 4: a lot of people would just say, I'm only doing 80 00:03:48,640 --> 00:03:50,480 Speaker 4: things that touch AI. I don't care how great your 81 00:03:50,520 --> 00:03:53,120 Speaker 4: business is if it's not on trend or on theme. 82 00:03:54,680 --> 00:03:57,600 Speaker 4: And so we're an early stage fund and I'm the 83 00:03:57,640 --> 00:04:00,520 Speaker 4: only partner, So for better or for worse, there aren't 84 00:04:00,560 --> 00:04:02,920 Speaker 4: really a lot of safety checks. If I decide that 85 00:04:02,960 --> 00:04:04,840 Speaker 4: something's a good idea and I want to continue to 86 00:04:04,840 --> 00:04:07,760 Speaker 4: back it, we can, and we will if it turns 87 00:04:07,760 --> 00:04:10,280 Speaker 4: out that I was right, great, And we have examples 88 00:04:10,320 --> 00:04:12,760 Speaker 4: of cases where we stuck with companies that weren't popular. 89 00:04:13,520 --> 00:04:16,000 Speaker 4: The flip side is there been some things where people 90 00:04:16,040 --> 00:04:18,160 Speaker 4: don't like the business and I like it, and then 91 00:04:18,240 --> 00:04:20,240 Speaker 4: after a year you start to see the things that 92 00:04:20,279 --> 00:04:22,520 Speaker 4: they saw. Maybe the founder is not as great as 93 00:04:22,560 --> 00:04:24,760 Speaker 4: you thought, maybe the opportunities not as big as you thought. 94 00:04:25,200 --> 00:04:25,600 Speaker 3: But I don't know. 95 00:04:25,640 --> 00:04:28,560 Speaker 4: I'd rather win or lose based on my own conviction 96 00:04:29,120 --> 00:04:31,880 Speaker 4: and thought process than outsource that judgment to other people. 97 00:04:32,920 --> 00:04:35,800 Speaker 1: You know, in doing more research about you, I think 98 00:04:35,839 --> 00:04:39,680 Speaker 1: Imagy interviews you for the first time, like six years ago. 99 00:04:40,480 --> 00:04:42,599 Speaker 1: It was a long long time ago, and maybe we've 100 00:04:42,640 --> 00:04:45,159 Speaker 1: done one in between that time. Well, you know, the 101 00:04:45,240 --> 00:04:48,400 Speaker 1: difference between then and now is, you know, black people, 102 00:04:48,520 --> 00:04:51,840 Speaker 1: black founders particularly weren't getting the attention. 103 00:04:51,640 --> 00:04:52,640 Speaker 2: That they may be today. 104 00:04:52,640 --> 00:04:55,000 Speaker 1: There's still a gap, but it's not as wide as 105 00:04:55,040 --> 00:04:57,440 Speaker 1: it used to be. And you talked about how black 106 00:04:57,480 --> 00:05:01,400 Speaker 1: founders are getting better advice and particularly what is VC 107 00:05:01,560 --> 00:05:05,479 Speaker 1: fundable and what a VC fundable pitch looks like. Can 108 00:05:05,560 --> 00:05:11,080 Speaker 1: you talk about how the where does the gap still exist? Like, 109 00:05:11,279 --> 00:05:13,159 Speaker 1: is it there is still a gap? What does it 110 00:05:13,200 --> 00:05:15,640 Speaker 1: look like though today versus when we first met. 111 00:05:15,680 --> 00:05:18,400 Speaker 4: Then? I think I want to talk about some of 112 00:05:18,400 --> 00:05:20,320 Speaker 4: the things that I think have changed for the better. 113 00:05:21,080 --> 00:05:24,359 Speaker 4: I think there are now because of sort of twenty 114 00:05:24,480 --> 00:05:27,640 Speaker 4: nineteen through twenty twenty two and the explosion of new 115 00:05:27,640 --> 00:05:31,120 Speaker 4: funds and funding, there are actually now more black founders 116 00:05:31,160 --> 00:05:36,040 Speaker 4: who have first hand experience raising money from venture capitalists. 117 00:05:36,080 --> 00:05:39,080 Speaker 4: And I think prior to that it was the same 118 00:05:39,160 --> 00:05:41,880 Speaker 4: five or six people on every podcast panel as. 119 00:05:41,760 --> 00:05:45,320 Speaker 3: Like the only people who actually raised any money. 120 00:05:44,560 --> 00:05:46,400 Speaker 4: And my view was like, your mileage may be very 121 00:05:46,400 --> 00:05:49,200 Speaker 4: compared to that person. And now it's like, one of 122 00:05:49,240 --> 00:05:51,480 Speaker 4: the great things is there are so many more people 123 00:05:51,480 --> 00:05:54,640 Speaker 4: who've had that experience that if you're a founder trying 124 00:05:54,680 --> 00:05:57,200 Speaker 4: to get some perspective on what does it mean to 125 00:05:57,279 --> 00:05:59,520 Speaker 4: raise money from ventric capitalists, there are many more people 126 00:05:59,520 --> 00:06:02,279 Speaker 4: you could talk do and many more people who have 127 00:06:02,800 --> 00:06:06,240 Speaker 4: viewpoints that I think are useful and helpful, and that's 128 00:06:06,279 --> 00:06:10,560 Speaker 4: a huge plus, a huge plus. I also think there 129 00:06:10,600 --> 00:06:15,200 Speaker 4: are more because of the attention plaid to black founders 130 00:06:15,200 --> 00:06:18,200 Speaker 4: in twenty twenty. I think there are also now more 131 00:06:18,320 --> 00:06:22,000 Speaker 4: vcs who've met black founders, and so the idea of 132 00:06:22,040 --> 00:06:26,080 Speaker 4: funding a black person, I hope, is less foreign to them. 133 00:06:26,720 --> 00:06:29,000 Speaker 4: The numbers would suggest that we haven't made as much 134 00:06:29,080 --> 00:06:31,960 Speaker 4: progress as we'd like, but I feel like I meet 135 00:06:32,080 --> 00:06:35,160 Speaker 4: more black founders today who understand the VC business, who 136 00:06:35,240 --> 00:06:37,400 Speaker 4: understand the problems I'm trying to solve as a venture 137 00:06:37,440 --> 00:06:41,560 Speaker 4: capitalists and present their businesses in ways that actually feel fundable. 138 00:06:41,680 --> 00:06:43,400 Speaker 4: Whereas before I felt like there were a lot of 139 00:06:43,480 --> 00:06:46,280 Speaker 4: businesses I saw it didn't meet the party and the 140 00:06:46,360 --> 00:06:48,239 Speaker 4: last thing I'll say it and I think is very helpful. 141 00:06:49,040 --> 00:06:53,720 Speaker 4: I think the post George Floyd sort of reset has also, 142 00:06:53,760 --> 00:06:56,240 Speaker 4: I think reminded people that venture capital is only one 143 00:06:56,320 --> 00:07:00,040 Speaker 4: of many ways to fund your business. It really works 144 00:07:00,080 --> 00:07:03,800 Speaker 4: for high growth companies that have like big ambition, but 145 00:07:03,839 --> 00:07:05,640 Speaker 4: there are lots of other ways that you can fund 146 00:07:05,720 --> 00:07:09,039 Speaker 4: businesses that have different trajectory. And I don't know, I 147 00:07:09,040 --> 00:07:12,080 Speaker 4: think I think I'm excited about what the future holds 148 00:07:12,080 --> 00:07:13,000 Speaker 4: for black founders. 149 00:07:13,560 --> 00:07:16,160 Speaker 1: Yeah, I'm only making one correction because I actually interviews 150 00:07:16,240 --> 00:07:17,320 Speaker 1: you like ten years. 151 00:07:17,080 --> 00:07:22,240 Speaker 2: Ago doesn't definitely longer. 152 00:07:22,760 --> 00:07:24,600 Speaker 1: Yeah, it as long as it's like ten years ago, 153 00:07:24,680 --> 00:07:27,160 Speaker 1: I was doing of ten podcasts and you raised that, 154 00:07:27,400 --> 00:07:30,040 Speaker 1: uh that microphone then, so, yeah, it's been a while, 155 00:07:30,080 --> 00:07:34,720 Speaker 1: it's been a while. Yeah. So also you've described noticing 156 00:07:34,800 --> 00:07:37,480 Speaker 1: like a persistent gap at the bottom of the fundraising 157 00:07:37,520 --> 00:07:41,200 Speaker 1: pier like founders who want to raise less or can 158 00:07:41,280 --> 00:07:45,040 Speaker 1: only raise less to get started, and nobody's willing, you know, 159 00:07:45,120 --> 00:07:48,880 Speaker 1: to write them checks. You know, most most vcs that 160 00:07:49,120 --> 00:07:51,640 Speaker 1: you know, big firms simply won't take you know, that 161 00:07:51,840 --> 00:07:55,160 Speaker 1: route and won't even say that out loud, but they'll 162 00:07:55,200 --> 00:07:57,760 Speaker 1: you know, listen, but they won't even say yes or no. 163 00:07:58,760 --> 00:08:02,480 Speaker 1: They just you're going to avoid. I guess you know 164 00:08:02,920 --> 00:08:05,280 Speaker 1: what made you willing to take those beds and bet 165 00:08:05,320 --> 00:08:08,880 Speaker 1: your career on a gap that others in VC were 166 00:08:08,920 --> 00:08:11,200 Speaker 1: actively ignoring, you. 167 00:08:11,160 --> 00:08:14,840 Speaker 4: Know, I I think in many ways, the size of 168 00:08:14,840 --> 00:08:16,800 Speaker 4: the fund that you raise has a big impact on 169 00:08:16,840 --> 00:08:20,800 Speaker 4: how you spend your time. If you raise a big fund, 170 00:08:20,960 --> 00:08:22,880 Speaker 4: which you know, ironically, ten years ago he would have 171 00:08:22,880 --> 00:08:24,640 Speaker 4: said a billion dollars is a big fund. Now a 172 00:08:24,640 --> 00:08:26,800 Speaker 4: big fund is ten billion dollars, So we've ten xt 173 00:08:27,160 --> 00:08:28,360 Speaker 4: in ten years what it means. 174 00:08:28,200 --> 00:08:29,360 Speaker 3: To be a big venture fund. 175 00:08:29,920 --> 00:08:32,160 Speaker 4: And if you just do the math, if you're trying 176 00:08:32,200 --> 00:08:34,400 Speaker 4: to return a ten billion dollar venture fund, you need 177 00:08:34,440 --> 00:08:38,320 Speaker 4: companies that will return money to you in billion dollar chunks, 178 00:08:39,640 --> 00:08:41,480 Speaker 4: and given that you won't own one hundred percent of 179 00:08:41,480 --> 00:08:43,840 Speaker 4: those companies. To get money in billion dollar chunks. You 180 00:08:43,880 --> 00:08:46,959 Speaker 4: need companies that are worth tens of billions of dollars, 181 00:08:48,000 --> 00:08:50,400 Speaker 4: And so every meeting you go into you've got to 182 00:08:50,440 --> 00:08:51,959 Speaker 4: be thinking, is this going to be a company that's 183 00:08:52,000 --> 00:08:54,520 Speaker 4: going to be worth ten to twenty five billion dollars 184 00:08:54,520 --> 00:08:58,000 Speaker 4: in the future. And for some vcs it's hard to think, well, Gee, 185 00:08:58,000 --> 00:09:00,360 Speaker 4: how can a company that's raising five hundred thousand dollars 186 00:09:00,400 --> 00:09:03,080 Speaker 4: to day be worth ten to fifteen billion dollars in 187 00:09:03,120 --> 00:09:06,360 Speaker 4: the future. Don't those companies need more ambition in terms 188 00:09:06,360 --> 00:09:07,000 Speaker 4: of the fundraise? 189 00:09:07,440 --> 00:09:08,280 Speaker 3: Or gee, how can. 190 00:09:08,160 --> 00:09:10,320 Speaker 4: This person who didn't go to any of the schools 191 00:09:10,400 --> 00:09:13,000 Speaker 4: or work in any of the companies that I associate 192 00:09:13,040 --> 00:09:15,560 Speaker 4: with as producing these big companies, how can that person 193 00:09:16,160 --> 00:09:17,960 Speaker 4: be someone who create one of these? And I was like, 194 00:09:18,000 --> 00:09:21,480 Speaker 4: what a limiting way to live. Which isn't to say 195 00:09:21,520 --> 00:09:24,080 Speaker 4: that people who worked at open Ai and Google and 196 00:09:24,640 --> 00:09:26,200 Speaker 4: all these great companies, it's not to say they won't 197 00:09:26,200 --> 00:09:29,800 Speaker 4: be successful. It's to say that the totality of success 198 00:09:29,880 --> 00:09:33,120 Speaker 4: will not come from people in those from those environments. 199 00:09:34,440 --> 00:09:35,400 Speaker 3: And I don't know. 200 00:09:35,400 --> 00:09:37,520 Speaker 4: I'm an optimist and I'm a big believer that there 201 00:09:37,520 --> 00:09:41,600 Speaker 4: are tons of people who can build great companies and 202 00:09:41,640 --> 00:09:43,719 Speaker 4: My experience at Precursor has been a lot of our 203 00:09:43,720 --> 00:09:47,040 Speaker 4: best founders were people who were ready to start companies, 204 00:09:47,679 --> 00:09:50,560 Speaker 4: and putting them in the big chair of leadership just 205 00:09:50,720 --> 00:09:53,200 Speaker 4: unlocked and unleashed to all of these talents that were 206 00:09:53,240 --> 00:09:56,680 Speaker 4: already in them. Yeah, and if they'd stayed a product 207 00:09:56,720 --> 00:09:59,560 Speaker 4: manager or a director at some big company, they would 208 00:09:59,559 --> 00:10:00,920 Speaker 4: have never don to use those skills. 209 00:10:02,600 --> 00:10:03,360 Speaker 3: And so I don't know. 210 00:10:03,360 --> 00:10:05,640 Speaker 4: I'm a big believer that you learn a lot about 211 00:10:05,679 --> 00:10:08,320 Speaker 4: people as founders and leaders when you put them in 212 00:10:08,320 --> 00:10:10,880 Speaker 4: the position to lead. And so I'm like, why not 213 00:10:11,040 --> 00:10:14,199 Speaker 4: just like, give more people who you think are qualified 214 00:10:14,200 --> 00:10:15,040 Speaker 4: that opportunity. 215 00:10:16,120 --> 00:10:17,560 Speaker 2: Don't like it, you know? 216 00:10:17,559 --> 00:10:21,280 Speaker 1: I remember I remember Magic Johnson doing this interview where 217 00:10:21,320 --> 00:10:23,400 Speaker 1: he said, you know, people come to him with these 218 00:10:23,440 --> 00:10:27,200 Speaker 1: smaller deals, these smaller opportunities, and he's like, look, man, 219 00:10:27,240 --> 00:10:29,439 Speaker 1: I love you, bro, I love you because I love 220 00:10:29,480 --> 00:10:31,679 Speaker 1: you fan, but I can't do that. And it's not 221 00:10:31,760 --> 00:10:33,720 Speaker 1: that he doesn't like the idea, but it's too small 222 00:10:33,760 --> 00:10:35,120 Speaker 1: for him. And he was like, you know, it takes 223 00:10:35,200 --> 00:10:37,640 Speaker 1: him as much work and as much energy to do 224 00:10:37,720 --> 00:10:40,640 Speaker 1: a million dollar deal as it does a billion dollar deal. 225 00:10:40,720 --> 00:10:42,959 Speaker 1: So he's going to go for the billion dollar thing, 226 00:10:43,600 --> 00:10:46,480 Speaker 1: And I just want your take on that kind of 227 00:10:46,520 --> 00:10:49,480 Speaker 1: thinking for you know, people like us who are who 228 00:10:49,520 --> 00:10:52,440 Speaker 1: are doing that five hundred thousand, should we be thinking bigger. 229 00:10:53,840 --> 00:10:59,160 Speaker 4: I think there's two different things embedded in what you said. 230 00:10:59,480 --> 00:11:02,840 Speaker 4: One is what are your starting conditions, like how much 231 00:11:02,880 --> 00:11:04,599 Speaker 4: money do you need to get started in like what 232 00:11:04,920 --> 00:11:05,800 Speaker 4: would enable. 233 00:11:05,520 --> 00:11:09,240 Speaker 3: You to provide proof? And then what is the terminal. 234 00:11:08,880 --> 00:11:12,480 Speaker 4: Scale of the thing you want to build. I agree 235 00:11:12,520 --> 00:11:15,480 Speaker 4: with Magic that like, working on something that can only 236 00:11:15,520 --> 00:11:18,000 Speaker 4: be worth a million dollars is not as fun as 237 00:11:18,040 --> 00:11:20,600 Speaker 4: working on something that can be worth a billion. And 238 00:11:20,679 --> 00:11:23,200 Speaker 4: I agree with the sentiment that the my speriens has 239 00:11:23,200 --> 00:11:25,920 Speaker 4: been the amount of energy that you need to spend 240 00:11:26,000 --> 00:11:28,920 Speaker 4: supporting companies is the same independent of ambition. 241 00:11:30,280 --> 00:11:32,360 Speaker 3: So if it's the same, go after the more ambitious stuff. 242 00:11:32,760 --> 00:11:33,600 Speaker 3: I do think. 243 00:11:33,600 --> 00:11:36,480 Speaker 4: Sometimes there is this feedback loop where people don't see 244 00:11:36,520 --> 00:11:39,000 Speaker 4: as many examples of black founders going out and raising 245 00:11:39,240 --> 00:11:43,240 Speaker 4: ten million dollars just for an idea. So sometimes it's 246 00:11:43,240 --> 00:11:45,920 Speaker 4: a self limiting belief that like, that's not available to me. 247 00:11:46,760 --> 00:11:49,600 Speaker 4: In other cases it's people who who really can get 248 00:11:49,600 --> 00:11:52,480 Speaker 4: to meaningful outcomes and meaningful proof points. 249 00:11:52,760 --> 00:11:54,280 Speaker 3: On five hundred k or a million bucks. 250 00:11:54,880 --> 00:11:57,760 Speaker 4: So my general belief is if you have something that's 251 00:11:57,800 --> 00:12:00,200 Speaker 4: at the idea stage that needs to be built and 252 00:12:00,320 --> 00:12:01,960 Speaker 4: you need to show people that it works and that 253 00:12:02,000 --> 00:12:04,319 Speaker 4: there's an audience for it, a million dollars might be 254 00:12:04,440 --> 00:12:07,439 Speaker 4: enough to get you to that stage. It won't get 255 00:12:07,440 --> 00:12:08,679 Speaker 4: you to the end point, but it can get you 256 00:12:08,679 --> 00:12:11,120 Speaker 4: to that stage. But it's also only worth getting to 257 00:12:11,160 --> 00:12:14,920 Speaker 4: that post million dollar endpoint if the terminal value of 258 00:12:14,960 --> 00:12:16,280 Speaker 4: what you're building could. 259 00:12:16,120 --> 00:12:16,760 Speaker 3: Be really large. 260 00:12:16,800 --> 00:12:18,600 Speaker 4: So I spend a lot of time talking to people 261 00:12:18,679 --> 00:12:21,600 Speaker 4: about at scale, what does this look like, and we 262 00:12:21,640 --> 00:12:23,600 Speaker 4: can work backwards from the big company what are all 263 00:12:23,600 --> 00:12:24,840 Speaker 4: the things you have to do along the way to 264 00:12:24,840 --> 00:12:27,439 Speaker 4: get there. But I sometimes meet people where I'm just like, well, 265 00:12:27,440 --> 00:12:30,040 Speaker 4: the ultimate vision for what you have is a five 266 00:12:30,120 --> 00:12:33,120 Speaker 4: or ten million dollar company, which is by no means 267 00:12:33,280 --> 00:12:35,920 Speaker 4: something to sneeze that it just doesn't move the needle 268 00:12:35,920 --> 00:12:36,520 Speaker 4: for VCS. 269 00:12:39,400 --> 00:12:41,840 Speaker 1: Has there been a time where you've had to open 270 00:12:41,920 --> 00:12:45,000 Speaker 1: up the aperture for a founder who was thinking too small? 271 00:12:46,920 --> 00:12:47,120 Speaker 3: Yeah? 272 00:12:47,440 --> 00:12:48,080 Speaker 2: Talking at times? 273 00:12:48,720 --> 00:12:51,360 Speaker 4: Yeah, So a couple of times I've talked to people 274 00:12:51,480 --> 00:12:52,800 Speaker 4: and they've told me what they want to build. 275 00:12:52,800 --> 00:12:55,280 Speaker 3: I'm like that's great, But why would we stop there? 276 00:12:56,360 --> 00:12:59,080 Speaker 4: If the thing you're describing is really as important as 277 00:12:59,120 --> 00:13:01,719 Speaker 4: it is, why would you only serve that audience, or 278 00:13:01,720 --> 00:13:03,760 Speaker 4: why would you only serve that geo, or why would 279 00:13:03,760 --> 00:13:09,320 Speaker 4: you limit the company's ambition to this very modest goal. 280 00:13:09,880 --> 00:13:13,600 Speaker 4: I think the tricky thing I've found is it's very 281 00:13:13,600 --> 00:13:16,040 Speaker 4: hard as an investor to sometimes get people to think 282 00:13:16,080 --> 00:13:20,200 Speaker 4: bigger than their own ambition. So I've in a few 283 00:13:20,240 --> 00:13:23,199 Speaker 4: cases helped people see that the thing that they're building 284 00:13:23,760 --> 00:13:27,640 Speaker 4: is bigger and more useful than maybe they thought. Exante, 285 00:13:28,320 --> 00:13:30,760 Speaker 4: I've also found it's easier to work with people whose 286 00:13:30,880 --> 00:13:34,600 Speaker 4: natural ambition causes them to always want to see a 287 00:13:34,640 --> 00:13:37,440 Speaker 4: bigger opportunity for the thing that they're building. And so 288 00:13:37,880 --> 00:13:41,079 Speaker 4: there's this tension between working with people who I think 289 00:13:41,120 --> 00:13:45,120 Speaker 4: are smart and if they saw the ambition was puzzle 290 00:13:45,160 --> 00:13:47,240 Speaker 4: that they had grow into it, versus people who come 291 00:13:47,280 --> 00:13:49,840 Speaker 4: to the table with this like genuine hunger to build. 292 00:13:49,720 --> 00:13:52,280 Speaker 3: Something big and can already see the big picture in 293 00:13:52,280 --> 00:13:52,800 Speaker 3: big vision. 294 00:13:52,920 --> 00:13:55,400 Speaker 4: So I probably only you know, we've made five hundred investments, 295 00:13:56,160 --> 00:13:58,240 Speaker 4: I'd say there's probably only a handful of cases where 296 00:13:58,280 --> 00:14:00,840 Speaker 4: I've worked with someone and helped them see the bigger picture, 297 00:14:01,000 --> 00:14:02,640 Speaker 4: see a picture that was bigger than they came to 298 00:14:02,640 --> 00:14:05,640 Speaker 4: be with in the first place. Uh. 299 00:14:05,679 --> 00:14:09,480 Speaker 1: You talked about there being two seed markets right now 300 00:14:09,520 --> 00:14:11,240 Speaker 1: in some of your writing, and like one for a 301 00:14:11,320 --> 00:14:14,680 Speaker 1: high signal, you know, pedigree founders, people who you know, 302 00:14:14,720 --> 00:14:17,360 Speaker 1: we're employee number five at Stripe, you know, or something 303 00:14:17,440 --> 00:14:20,160 Speaker 1: like this, like obviously those are bets, you know, VC's 304 00:14:20,160 --> 00:14:23,400 Speaker 1: clamor for you know, those things, and then there's a 305 00:14:23,440 --> 00:14:26,400 Speaker 1: market for everybody else, you know, And a lot of 306 00:14:26,400 --> 00:14:30,240 Speaker 1: investors won't even publicly say that there are two categories, 307 00:14:30,240 --> 00:14:32,200 Speaker 1: but it's you know, the proof is, you know, it 308 00:14:32,320 --> 00:14:32,960 Speaker 1: just exists. 309 00:14:33,800 --> 00:14:35,440 Speaker 2: How do you How did. 310 00:14:35,360 --> 00:14:39,680 Speaker 1: You recognize that that split, you know, shaped your entire 311 00:14:39,760 --> 00:14:42,120 Speaker 1: model and what does that mean for a founder who's 312 00:14:42,120 --> 00:14:43,520 Speaker 1: sitting on the other side of it. 313 00:14:44,240 --> 00:14:46,480 Speaker 4: I think the thing I started to realize is, you know, 314 00:14:46,520 --> 00:14:49,840 Speaker 4: I've been in the bear for thirty years. I started 315 00:14:49,840 --> 00:14:52,520 Speaker 4: to realize. I had friends and people are like, what's 316 00:14:52,520 --> 00:14:53,960 Speaker 4: it like to raise money? I'm like, well, it depends 317 00:14:54,000 --> 00:14:56,040 Speaker 4: on who you are, and like, what do you mean. 318 00:14:56,080 --> 00:14:58,400 Speaker 4: I'm like, well, if you're if you went to Stanford 319 00:14:58,440 --> 00:15:00,920 Speaker 4: and you were at Google and you know, a bunch 320 00:15:00,920 --> 00:15:03,920 Speaker 4: of vcs and they think you're a generally smart person. 321 00:15:04,000 --> 00:15:06,480 Speaker 4: Your process raising money for a front scratch idea is 322 00:15:06,480 --> 00:15:07,080 Speaker 4: going to be different. 323 00:15:08,200 --> 00:15:09,480 Speaker 3: You may not even need a deck. 324 00:15:10,000 --> 00:15:11,800 Speaker 4: You're probably going to get money on the strength of 325 00:15:11,840 --> 00:15:14,400 Speaker 4: that relationship and those people's trust in your ability to 326 00:15:14,400 --> 00:15:20,280 Speaker 4: build something. If you don't have all those attributes, you 327 00:15:20,400 --> 00:15:23,680 Speaker 4: have to kind of show more or be more compelling. 328 00:15:24,400 --> 00:15:27,800 Speaker 4: It's more work for people. And I quickly realized, like 329 00:15:28,520 --> 00:15:30,240 Speaker 4: I hate to say it, in a lot of cases, 330 00:15:30,320 --> 00:15:31,560 Speaker 4: like people will opt. 331 00:15:31,360 --> 00:15:35,120 Speaker 3: For the low friction option. So given the choice between. 332 00:15:34,800 --> 00:15:36,320 Speaker 4: I could meet Will I don't know him, I'm going 333 00:15:36,360 --> 00:15:38,680 Speaker 4: to like get to know you, get to know your background, 334 00:15:38,760 --> 00:15:43,080 Speaker 4: your story. Or I could invest in my freshman roommate 335 00:15:43,120 --> 00:15:46,160 Speaker 4: from Stanford who's a computer scientist who worked at Apple. 336 00:15:46,280 --> 00:15:50,280 Speaker 4: I've known this person for ten years and because of 337 00:15:50,320 --> 00:15:52,280 Speaker 4: their resume, if it doesn't work out, no one's going 338 00:15:52,360 --> 00:15:53,960 Speaker 4: to ever ask me a question about why did you 339 00:15:53,960 --> 00:15:57,280 Speaker 4: invest in that Stanford Apple person who is your roommate. 340 00:15:57,640 --> 00:15:59,120 Speaker 4: A lot of people are just like, well, why shouldn't 341 00:15:59,120 --> 00:16:02,240 Speaker 4: I just do the easy thing? And if you live 342 00:16:02,240 --> 00:16:03,520 Speaker 4: in the valley, or if you live in New York, 343 00:16:03,600 --> 00:16:05,680 Speaker 4: or if you're in the tech ecosystem long enough, the 344 00:16:05,840 --> 00:16:09,120 Speaker 4: really obvious easy stuff becomes easier to do because you 345 00:16:09,160 --> 00:16:11,680 Speaker 4: know more people. And I was like, well, that stuff 346 00:16:11,720 --> 00:16:13,920 Speaker 4: is easy, that doesn't mean it's better. And I think 347 00:16:13,960 --> 00:16:18,480 Speaker 4: sometimes we conflate and venture familiarity with quality, Like the 348 00:16:18,520 --> 00:16:21,480 Speaker 4: person you know and the relationship you have that's familiar, 349 00:16:21,560 --> 00:16:23,600 Speaker 4: that doesn't mean that person is the best person equipped 350 00:16:23,640 --> 00:16:25,520 Speaker 4: to pursue that opportunity. 351 00:16:25,600 --> 00:16:27,520 Speaker 1: You know, you just made me think about something I'd 352 00:16:27,560 --> 00:16:31,640 Speaker 1: asked a couple other founders about, is like, the geography 353 00:16:31,800 --> 00:16:35,720 Speaker 1: of startup fundraising has kind of distributed, you know a bit. 354 00:16:35,800 --> 00:16:38,280 Speaker 1: You know, Miami is you know, really hot right now? 355 00:16:39,560 --> 00:16:43,320 Speaker 1: Do you feel like we should be spending still time 356 00:16:43,360 --> 00:16:44,160 Speaker 1: in the Bay Area? 357 00:16:44,680 --> 00:16:45,040 Speaker 4: I do. 358 00:16:45,520 --> 00:16:49,040 Speaker 3: I do because for a couple of reasons. 359 00:16:49,080 --> 00:16:52,200 Speaker 4: So we bring founders in our portfolio out here to 360 00:16:52,400 --> 00:16:56,480 Speaker 4: work in our office. And I think there are three 361 00:16:56,520 --> 00:16:59,080 Speaker 4: things that happen when you come to San Francisco if 362 00:16:59,080 --> 00:17:01,440 Speaker 4: you don't li, if you're one, you get a sense 363 00:17:01,680 --> 00:17:04,679 Speaker 4: for the pace at which the very best startups in 364 00:17:04,720 --> 00:17:08,119 Speaker 4: the world are operating, And almost everybody who comes to 365 00:17:08,200 --> 00:17:11,159 Speaker 4: visit is like, we're working really hard in Dallas or 366 00:17:11,200 --> 00:17:13,520 Speaker 4: we're working really hard in rally, I'm like, I don't 367 00:17:13,560 --> 00:17:14,000 Speaker 4: doubt that. 368 00:17:14,640 --> 00:17:16,080 Speaker 3: I want you to come here and see what. 369 00:17:17,160 --> 00:17:18,959 Speaker 4: And they get here and they're like, oh, we were 370 00:17:19,000 --> 00:17:21,320 Speaker 4: working hard, but we didn't realize, like these guys are 371 00:17:21,359 --> 00:17:21,960 Speaker 4: a different level. 372 00:17:22,840 --> 00:17:24,800 Speaker 3: So that's like one second. 373 00:17:24,920 --> 00:17:28,480 Speaker 4: I think there's a lot of serendipity that happens being 374 00:17:28,480 --> 00:17:31,119 Speaker 4: in San Francisco and like going to random dinners with 375 00:17:31,280 --> 00:17:34,640 Speaker 4: founders and meeting people, and everybody who comes here is like, Wow, 376 00:17:34,680 --> 00:17:36,560 Speaker 4: I got more done in the week I worked out 377 00:17:36,560 --> 00:17:38,880 Speaker 4: of your office than I did in a month at home. 378 00:17:38,920 --> 00:17:42,159 Speaker 4: And I'm like, because you met the people here. And 379 00:17:42,160 --> 00:17:43,600 Speaker 4: I think the other thing is that a little bit 380 00:17:43,640 --> 00:17:47,120 Speaker 4: of familiarity goes a long way. And I think fundraising, 381 00:17:47,440 --> 00:17:49,679 Speaker 4: when you you know you're here and you're a founder, 382 00:17:49,720 --> 00:17:51,920 Speaker 4: you're gonna make frinds of other founders, and when it's 383 00:17:51,920 --> 00:17:53,919 Speaker 4: time to get in front of vcs or raise money, 384 00:17:54,240 --> 00:17:56,600 Speaker 4: those other founders who become your friends and your network. 385 00:17:57,000 --> 00:18:00,640 Speaker 4: They're a really good entry point to VC the introts 386 00:18:00,840 --> 00:18:03,720 Speaker 4: and getting in front of people, and so all of 387 00:18:03,760 --> 00:18:07,159 Speaker 4: these good things happen from simply being here that are 388 00:18:07,200 --> 00:18:10,639 Speaker 4: hard to replicate if you're not here. So I tell people, like, 389 00:18:10,960 --> 00:18:13,360 Speaker 4: it's not that you can't build a great company anywhere 390 00:18:13,400 --> 00:18:15,760 Speaker 4: you can. I just think it's easier in differences GOO 391 00:18:15,800 --> 00:18:18,159 Speaker 4: and like building the startups already hard, Like why I 392 00:18:18,160 --> 00:18:20,200 Speaker 4: take something that's already hard and make it even harder 393 00:18:21,200 --> 00:18:24,440 Speaker 4: by changing your geography unless they are like legitimate reasons 394 00:18:24,480 --> 00:18:25,560 Speaker 4: for you to be somewhere else. 395 00:18:26,520 --> 00:18:30,320 Speaker 1: Yeah, you know, I asked this question to another investor 396 00:18:30,520 --> 00:18:35,280 Speaker 1: just just recently about how the dynamics of fundraising have 397 00:18:35,480 --> 00:18:39,719 Speaker 1: shifted where you got AI now and I may not 398 00:18:39,800 --> 00:18:41,520 Speaker 1: need to raise as much as I would have had 399 00:18:41,560 --> 00:18:43,639 Speaker 1: to do a year ago, and I mayn't need to 400 00:18:43,720 --> 00:18:46,080 Speaker 1: raise at all, you know, So, but can you talk 401 00:18:46,119 --> 00:18:48,640 Speaker 1: about how you're seeing this play out. 402 00:18:49,200 --> 00:18:52,919 Speaker 4: I think the biggest thing I've seen is companies in 403 00:18:53,000 --> 00:18:57,080 Speaker 4: some level are swapping headcount for compute and serves, Like, oh, 404 00:18:57,160 --> 00:18:59,080 Speaker 4: these companies are smaller. I'm like, they don't feel that 405 00:18:59,160 --> 00:19:03,240 Speaker 4: much cheaper to right, because in many cases you're replacing 406 00:19:03,400 --> 00:19:06,120 Speaker 4: a human full time employee, or some of the. 407 00:19:06,080 --> 00:19:08,640 Speaker 3: Work that we've been done by a human with a machine. 408 00:19:08,640 --> 00:19:13,399 Speaker 4: But you know, tokens aren't free yet, and computees expensive, 409 00:19:13,760 --> 00:19:17,160 Speaker 4: and a lot of the infrastructure around compute is expensive, 410 00:19:17,760 --> 00:19:21,080 Speaker 4: so I certainly have seen people get to prototype much 411 00:19:21,119 --> 00:19:24,760 Speaker 4: faster and get to revenue generating phases for their business 412 00:19:24,920 --> 00:19:28,520 Speaker 4: much faster. But I still think scaling a company usually 413 00:19:28,560 --> 00:19:30,879 Speaker 4: takes still a lot of people. 414 00:19:32,400 --> 00:19:33,240 Speaker 3: And you know, the. 415 00:19:33,200 --> 00:19:37,200 Speaker 4: Irony also is like salaries are really high right now, 416 00:19:37,240 --> 00:19:39,760 Speaker 4: particularly in San Francisco, particularly if you're looking at the 417 00:19:39,760 --> 00:19:42,879 Speaker 4: world of AI. So while you might need fewer people, 418 00:19:42,920 --> 00:19:45,280 Speaker 4: I'm not sure that the people you need are less expensive. 419 00:19:45,359 --> 00:19:47,960 Speaker 4: So you know, if you have one four hundred thousand 420 00:19:47,960 --> 00:19:51,399 Speaker 4: dollars engineer doing the work of three one hundred and 421 00:19:51,440 --> 00:19:56,080 Speaker 4: fifty thousand dollars engineers, you didn't really you saved that HEADCOUMP, 422 00:19:56,080 --> 00:19:59,359 Speaker 4: but you don't really save that much on salary. And 423 00:19:59,400 --> 00:20:01,080 Speaker 4: so I think they're is a certain amount of this, 424 00:20:01,119 --> 00:20:04,960 Speaker 4: which is substituting really experienced senior people or people who 425 00:20:04,960 --> 00:20:09,600 Speaker 4: are really good with the actualing with average people. I'm 426 00:20:09,640 --> 00:20:12,199 Speaker 4: seeing companies get further with fewer people, but maybe not 427 00:20:12,280 --> 00:20:12,960 Speaker 4: with plus. 428 00:20:12,680 --> 00:20:16,720 Speaker 1: Bad I'm really interested in this take because I really 429 00:20:16,800 --> 00:20:19,359 Speaker 1: want to ask you this specifically because I think so 430 00:20:19,560 --> 00:20:22,919 Speaker 1: many of us, our own people take for granted that 431 00:20:23,000 --> 00:20:25,800 Speaker 1: there are founders building real things, and I don't want 432 00:20:25,800 --> 00:20:28,879 Speaker 1: to take you I should say real, but like things 433 00:20:28,880 --> 00:20:33,399 Speaker 1: that can hyper scale. And so because historically, not that 434 00:20:33,480 --> 00:20:37,400 Speaker 1: we weren't ambitious, not that we didn't have the ideas 435 00:20:37,480 --> 00:20:39,600 Speaker 1: and even have the skill to building, but we didn't 436 00:20:39,600 --> 00:20:41,840 Speaker 1: have the opportunity to build a lot of these things, 437 00:20:42,000 --> 00:20:44,840 Speaker 1: or the belief that the belief from someone who could 438 00:20:44,840 --> 00:20:46,439 Speaker 1: write us a check to go build these things. 439 00:20:46,760 --> 00:20:48,679 Speaker 2: Can you set a landscape. 440 00:20:48,119 --> 00:20:50,720 Speaker 1: Because you just talked about you know how if you're 441 00:20:50,720 --> 00:20:54,880 Speaker 1: building AI, those people are not inexpensive to hire. Can 442 00:20:54,920 --> 00:20:57,520 Speaker 1: you talk about what the landscape is like of black 443 00:20:57,600 --> 00:21:03,360 Speaker 1: founders building that need real expertise, where it causes them 444 00:21:03,400 --> 00:21:06,520 Speaker 1: to need that high level of labor personnel Spand. 445 00:21:07,080 --> 00:21:10,200 Speaker 4: I think one of the other challenges I've seen is 446 00:21:10,240 --> 00:21:14,560 Speaker 4: related to what you've said, is I think people who've 447 00:21:14,560 --> 00:21:19,320 Speaker 4: worked in really successful companies that have scaled understand what 448 00:21:19,400 --> 00:21:23,320 Speaker 4: it takes and understand what greatness looks like. And I 449 00:21:23,359 --> 00:21:26,840 Speaker 4: think because there were a lot of structural reasons that 450 00:21:26,880 --> 00:21:28,840 Speaker 4: black people didn't get those opportunities. 451 00:21:29,240 --> 00:21:31,080 Speaker 3: Many of us weren't. 452 00:21:30,800 --> 00:21:34,639 Speaker 4: At Google during the hyperscaling period, weren't at Meta, weren't 453 00:21:34,640 --> 00:21:37,840 Speaker 4: at Open AI or Anthropic, And I think to some extent, 454 00:21:38,480 --> 00:21:41,679 Speaker 4: but this isn't even just like for our community. If 455 00:21:41,720 --> 00:21:43,800 Speaker 4: you haven't seen what one of these companies looks like 456 00:21:44,040 --> 00:21:45,800 Speaker 4: and what it takes to grow it, it's very hard 457 00:21:45,800 --> 00:21:47,160 Speaker 4: to envision that it's possible. 458 00:21:48,560 --> 00:21:49,560 Speaker 3: And I think as. 459 00:21:49,520 --> 00:21:53,879 Speaker 4: More people from our community are in these companies that 460 00:21:53,920 --> 00:21:57,440 Speaker 4: are wildly successful, they're going to learn the same lessons 461 00:21:57,440 --> 00:21:59,720 Speaker 4: that everybody else has. But just like, this is possible, 462 00:22:01,119 --> 00:22:03,760 Speaker 4: It's really hard, but it's possible. And if you surround 463 00:22:03,760 --> 00:22:06,800 Speaker 4: yourself with great people, you two can build one of these. 464 00:22:07,359 --> 00:22:09,719 Speaker 4: And I think there are more people from our community 465 00:22:09,760 --> 00:22:12,600 Speaker 4: on the inside of these companies now, maybe not in 466 00:22:12,600 --> 00:22:13,480 Speaker 4: a percentage. 467 00:22:13,080 --> 00:22:14,440 Speaker 3: Basis, but on an absolute basis. 468 00:22:14,880 --> 00:22:17,040 Speaker 4: More people are seeing the way this is done, and 469 00:22:17,080 --> 00:22:18,760 Speaker 4: I believe a lot of people will say, now that 470 00:22:18,800 --> 00:22:21,879 Speaker 4: I've seen this done, I believe I can do this too. 471 00:22:22,040 --> 00:22:23,120 Speaker 3: I have some of the. 472 00:22:23,040 --> 00:22:25,720 Speaker 4: Playbooks and secret sauce about what it takes to do it. Yeah, 473 00:22:26,160 --> 00:22:29,280 Speaker 4: I also have people that I can bring to the 474 00:22:29,280 --> 00:22:33,040 Speaker 4: table for my time here who also have the same DNA, 475 00:22:33,480 --> 00:22:35,960 Speaker 4: who could help me building scale in ways that weren't 476 00:22:35,960 --> 00:22:36,680 Speaker 4: possible before. 477 00:22:37,960 --> 00:22:38,520 Speaker 3: I love it. 478 00:22:39,640 --> 00:22:42,320 Speaker 1: I was reminded of something you had said at afro Tech, 479 00:22:43,160 --> 00:22:45,280 Speaker 1: and I found the quote is you said this whole 480 00:22:45,320 --> 00:22:48,320 Speaker 1: ecosystem would work better if people just told the truth. 481 00:22:48,760 --> 00:22:53,160 Speaker 1: And you're talking about investors giving founders real feedback versus 482 00:22:53,200 --> 00:22:57,960 Speaker 1: just polite passes. And so how much of the disadvantage 483 00:22:58,000 --> 00:23:02,280 Speaker 1: of underrepresented founders, black founder as women founders, how much 484 00:23:02,320 --> 00:23:05,360 Speaker 1: do we face specifically just because of a feedback deficit 485 00:23:05,480 --> 00:23:08,400 Speaker 1: people are not telling, you know, the blunt, actionable critique 486 00:23:08,480 --> 00:23:12,680 Speaker 1: that that honestly be helpful. It positioned right A lot. 487 00:23:13,160 --> 00:23:15,080 Speaker 4: A lot, I think, and you know, I've talked to 488 00:23:15,080 --> 00:23:18,400 Speaker 4: some of my friends and I think some of them 489 00:23:18,480 --> 00:23:24,520 Speaker 4: are afraid of potential blowback or consequences if direct feedback 490 00:23:24,560 --> 00:23:27,960 Speaker 4: to a founder of color or black founder or a 491 00:23:28,000 --> 00:23:30,000 Speaker 4: women founder, Like what if. 492 00:23:29,880 --> 00:23:31,000 Speaker 3: I say the thing wrong? 493 00:23:31,760 --> 00:23:34,040 Speaker 4: And they go on X and they're like, this guy 494 00:23:34,160 --> 00:23:38,000 Speaker 4: said this thing, and I'm like, what kind of things 495 00:23:38,040 --> 00:23:41,560 Speaker 4: are you saying that You're like, that's your immediate concern. 496 00:23:42,760 --> 00:23:44,359 Speaker 3: And I think what ends up happening is. 497 00:23:45,920 --> 00:23:48,000 Speaker 4: A lot of founders that meant, who are more experienced 498 00:23:48,160 --> 00:23:51,480 Speaker 4: know how to filter VC feedback, and if someone says 499 00:23:51,520 --> 00:23:54,840 Speaker 4: it's the market, they're immediately like, oh, maybe maybe you 500 00:23:54,840 --> 00:23:57,560 Speaker 4: don't like me maybe something else. They don't take the 501 00:23:57,600 --> 00:24:01,280 Speaker 4: feedback as literally, and I feel like we don't have as. 502 00:24:01,119 --> 00:24:02,560 Speaker 3: Many black funders. 503 00:24:02,560 --> 00:24:04,239 Speaker 4: You've had enough funders in the experience to know how 504 00:24:04,280 --> 00:24:07,080 Speaker 4: to parse feedback. And so I'll talk to people and 505 00:24:07,080 --> 00:24:08,840 Speaker 4: they'll just say, well, this person told me it was 506 00:24:08,880 --> 00:24:10,840 Speaker 4: the market, and this person said it was our margins, 507 00:24:10,880 --> 00:24:13,879 Speaker 4: and this person said it was the category. And I'm like, 508 00:24:15,480 --> 00:24:18,399 Speaker 4: maybe none of them are telling you the truth, and 509 00:24:18,480 --> 00:24:20,639 Speaker 4: the danger is it's one of You're just like, I 510 00:24:20,720 --> 00:24:22,600 Speaker 4: assume no one's telling me the truth, and the pass 511 00:24:22,680 --> 00:24:25,080 Speaker 4: is a pass. The reason why that are passing isn't 512 00:24:25,160 --> 00:24:29,800 Speaker 4: really that important. It's far more dangerous if you're like, Wow, 513 00:24:29,920 --> 00:24:33,200 Speaker 4: this really important famous VC person told me that I'm 514 00:24:33,280 --> 00:24:34,359 Speaker 4: in a bad category. 515 00:24:34,440 --> 00:24:36,239 Speaker 3: I'm going to go pivot into a new category. I'm 516 00:24:36,240 --> 00:24:36,800 Speaker 3: like that person. 517 00:24:37,600 --> 00:24:40,640 Speaker 4: I always tell our portfolio founders will most vcs will 518 00:24:40,640 --> 00:24:42,560 Speaker 4: tell you something that's true, but that's not the same 519 00:24:42,600 --> 00:24:45,879 Speaker 4: as the truth. So there could be a business that 520 00:24:45,920 --> 00:24:48,920 Speaker 4: there's five reasons I don't like it. Reason one could 521 00:24:48,920 --> 00:24:51,000 Speaker 4: be the founder. Reason two could be the co founder. 522 00:24:51,040 --> 00:24:53,080 Speaker 4: Reason three could be the market. If you tell that 523 00:24:53,119 --> 00:24:56,800 Speaker 4: person it's the market, you've kind of done them a disservice. 524 00:24:57,600 --> 00:24:59,560 Speaker 4: But the trick is for there to be more truth, 525 00:25:00,160 --> 00:25:01,879 Speaker 4: it has to be. It has to go both ways. 526 00:25:01,960 --> 00:25:04,720 Speaker 4: Founders have to be in a place where they're open 527 00:25:04,760 --> 00:25:07,480 Speaker 4: to hearing it. So I've given some founder's stroke feedback. 528 00:25:07,119 --> 00:25:08,080 Speaker 3: But only with permission. 529 00:25:09,320 --> 00:25:10,959 Speaker 4: I feel them like, Hey, I have some other things 530 00:25:11,000 --> 00:25:13,320 Speaker 4: to say about your pitch or your company that are 531 00:25:13,359 --> 00:25:16,439 Speaker 4: maybe less comfortable. I'm happy to share them with you, 532 00:25:16,480 --> 00:25:19,439 Speaker 4: but only if you want that input. 533 00:25:20,680 --> 00:25:22,040 Speaker 3: I'll give you one specific example. 534 00:25:22,080 --> 00:25:26,520 Speaker 4: I met a founder who had two co founders, and 535 00:25:26,560 --> 00:25:29,160 Speaker 4: he pitched me on his business. He talked for twenty 536 00:25:29,200 --> 00:25:32,520 Speaker 4: eight of the thirty minutes, and his other two co founders, 537 00:25:32,600 --> 00:25:36,040 Speaker 4: even on paper, were impressive, but didn't feel relevant to 538 00:25:36,080 --> 00:25:39,199 Speaker 4: that business. And I called the guy after and I said, like, 539 00:25:39,280 --> 00:25:41,000 Speaker 4: do you have a few minutes. I have something It's 540 00:25:41,119 --> 00:25:43,040 Speaker 4: really awkward to say an email, but I'm happy to 541 00:25:43,080 --> 00:25:44,760 Speaker 4: share it with you on the phone because it's probably 542 00:25:44,760 --> 00:25:47,440 Speaker 4: a better conversation. And we talked and I just said, 543 00:25:47,480 --> 00:25:50,480 Speaker 4: I don't understand what those other two people are doing 544 00:25:50,520 --> 00:25:51,240 Speaker 4: in your company. 545 00:25:51,960 --> 00:25:52,639 Speaker 3: He's like, what do you mean? 546 00:25:52,720 --> 00:25:55,720 Speaker 4: They go like they didn't seem to have very significant roles. 547 00:25:56,320 --> 00:25:58,520 Speaker 4: They didn't really have like, like the things are doing 548 00:25:58,560 --> 00:26:01,280 Speaker 4: in the company don't seem like today problems. They didn't 549 00:26:01,280 --> 00:26:03,000 Speaker 4: really have speaking roles. 550 00:26:02,680 --> 00:26:04,480 Speaker 3: In our meeting or conversation. 551 00:26:04,680 --> 00:26:08,240 Speaker 4: And my takeaway is like, I'm way more interested in you, 552 00:26:08,440 --> 00:26:10,800 Speaker 4: and I'm like way less interested in them, And I'm 553 00:26:10,840 --> 00:26:13,280 Speaker 4: walking away from this meeting and wondering, like why you've 554 00:26:13,280 --> 00:26:14,920 Speaker 4: included these people in your company? 555 00:26:15,119 --> 00:26:15,479 Speaker 1: Wow? 556 00:26:16,200 --> 00:26:18,920 Speaker 4: And he's like, oh, I didn't realize that. So I'm 557 00:26:18,920 --> 00:26:21,640 Speaker 4: like either like and he had like a really good 558 00:26:21,680 --> 00:26:23,040 Speaker 4: answer when we got into it. 559 00:26:23,640 --> 00:26:24,480 Speaker 3: He explained it to me. 560 00:26:24,520 --> 00:26:31,399 Speaker 4: He was like, this is like, this is why, and 561 00:26:32,560 --> 00:26:34,480 Speaker 4: I don't think anyone ever told them that. And I 562 00:26:34,480 --> 00:26:36,600 Speaker 4: got the sense that this was an issue. I could 563 00:26:36,600 --> 00:26:38,560 Speaker 4: see the wheels turning in his head. I was like, 564 00:26:38,720 --> 00:26:43,720 Speaker 4: I think you've experienced this before and did know how 565 00:26:43,720 --> 00:26:46,000 Speaker 4: to put your finger on it. But that was only 566 00:26:46,080 --> 00:26:48,600 Speaker 4: because if he had said, like, you know what, thanks, 567 00:26:48,600 --> 00:26:50,600 Speaker 4: but no thanks, I got what I needed out of this, 568 00:26:51,400 --> 00:26:54,360 Speaker 4: appreciate the p I wouldn't have like forced the information 569 00:26:54,480 --> 00:26:58,280 Speaker 4: on him. 570 00:26:58,600 --> 00:27:02,000 Speaker 1: You know, you talk a lot about investing in people. 571 00:27:01,800 --> 00:27:03,960 Speaker 2: Over product at the early stage. 572 00:27:03,640 --> 00:27:06,320 Speaker 1: And I want you to kind of walk us through 573 00:27:06,320 --> 00:27:09,960 Speaker 1: that like that decision architecture, because like, what does the art, 574 00:27:10,000 --> 00:27:14,080 Speaker 1: what does the evaluation look like? If there's no real product, 575 00:27:14,119 --> 00:27:17,920 Speaker 1: no product market fit for sure, no traction, no eminal pedigree. 576 00:27:18,160 --> 00:27:19,240 Speaker 1: They didn't work at Google. 577 00:27:20,440 --> 00:27:23,480 Speaker 4: Yeah, it's even harder than that because seventy percent of 578 00:27:23,480 --> 00:27:27,120 Speaker 4: the people we fund are first time founders, so you 579 00:27:27,200 --> 00:27:29,800 Speaker 4: don't even so we're doing mostly first. 580 00:27:29,520 --> 00:27:31,560 Speaker 3: Time founders pre product market fit. 581 00:27:33,960 --> 00:27:37,320 Speaker 4: Basically, we're trying to assess is this person going to 582 00:27:38,040 --> 00:27:43,520 Speaker 4: thrive in a heavily unstructured environment. And it's interesting, like 583 00:27:43,640 --> 00:27:48,360 Speaker 4: one of the biggest predictors of success. It's not perfect, 584 00:27:48,440 --> 00:27:51,760 Speaker 4: but it does help us. Has this person worked in 585 00:27:51,800 --> 00:27:54,080 Speaker 4: a company with twenty five or fewer employees at the 586 00:27:54,080 --> 00:27:59,280 Speaker 4: time when they joined that and I don't actually care 587 00:27:59,400 --> 00:28:01,919 Speaker 4: how good of it can have been a disaster of 588 00:28:01,920 --> 00:28:05,320 Speaker 4: a company. But it doesn't have to be Google or 589 00:28:05,320 --> 00:28:08,720 Speaker 4: open Ai or It's like, if you've been in a 590 00:28:08,760 --> 00:28:11,719 Speaker 4: small company and you've done it for a while, you 591 00:28:11,840 --> 00:28:14,600 Speaker 4: know what it's like to be in that environment, and 592 00:28:14,640 --> 00:28:17,199 Speaker 4: if you choose to go back into that environment, you 593 00:28:17,240 --> 00:28:18,720 Speaker 4: don't have any illusions. 594 00:28:20,040 --> 00:28:22,320 Speaker 3: Probably the most frustrating. 595 00:28:21,680 --> 00:28:25,800 Speaker 4: Companies I invest in are ones where the people have 596 00:28:25,880 --> 00:28:30,200 Speaker 4: been very successful in a much more structured environment. Could 597 00:28:30,240 --> 00:28:32,560 Speaker 4: be consulting, could be invested in banking, could be a 598 00:28:32,560 --> 00:28:37,960 Speaker 4: corporate job. But they've never been in a small company, 599 00:28:38,760 --> 00:28:41,120 Speaker 4: and they get into a small company and I'll never forget. 600 00:28:41,120 --> 00:28:43,760 Speaker 4: I had these two guys who we invested in who'd 601 00:28:43,760 --> 00:28:47,760 Speaker 4: worked at Facebook together, they were good friends. They shut 602 00:28:47,760 --> 00:28:49,920 Speaker 4: their company down. It just didn't work. And I said, 603 00:28:49,920 --> 00:28:52,959 Speaker 4: what is your big takeaway? And he said, you know, 604 00:28:53,160 --> 00:28:56,080 Speaker 4: many of the things that made me successful at Facebook 605 00:28:56,480 --> 00:28:59,920 Speaker 4: are a little to no value in this new company. 606 00:29:00,560 --> 00:29:01,720 Speaker 4: I was like, what do you mean. It's like the 607 00:29:01,760 --> 00:29:05,520 Speaker 4: ability to manage up, the ability to like get resources internally, 608 00:29:05,600 --> 00:29:09,120 Speaker 4: the ability to like, you know, be influential on these teams. 609 00:29:09,120 --> 00:29:10,560 Speaker 4: Like all these things that helped me get promoted and 610 00:29:10,600 --> 00:29:14,720 Speaker 4: made me successful at Meta are like not my job 611 00:29:15,360 --> 00:29:23,560 Speaker 4: in this new company. And like, correct, Yeah. 612 00:29:22,040 --> 00:29:25,840 Speaker 1: You know you talked about the emotional ups and downs 613 00:29:25,840 --> 00:29:28,440 Speaker 1: the startup life just now, and you know a lot 614 00:29:28,440 --> 00:29:31,200 Speaker 1: of people, particularly investors, don't like to talk about that 615 00:29:31,200 --> 00:29:33,400 Speaker 1: because it feels soft. You know, I need those uses 616 00:29:33,440 --> 00:29:35,200 Speaker 1: like this is about dollars and cents at the end 617 00:29:35,240 --> 00:29:38,120 Speaker 1: of the day. You know, what's the hardest version of 618 00:29:38,160 --> 00:29:40,800 Speaker 1: that tests and what does it look like to for 619 00:29:40,880 --> 00:29:43,920 Speaker 1: a founder who fails it in practice? 620 00:29:44,000 --> 00:29:44,959 Speaker 2: Like, what does that look like? 621 00:29:50,480 --> 00:29:53,440 Speaker 3: I kind of take the opposite view of most people. 622 00:29:54,200 --> 00:29:56,800 Speaker 4: I actually think the mind state of the person running 623 00:29:56,840 --> 00:30:01,800 Speaker 4: the company is the single most important, very like the 624 00:30:01,880 --> 00:30:06,360 Speaker 4: founder and CEO's mind state, mental health, the general outlook 625 00:30:06,360 --> 00:30:09,520 Speaker 4: on the business. It's hard to make good decisions about 626 00:30:09,520 --> 00:30:12,239 Speaker 4: your company when you're negative about your co founder, when 627 00:30:12,240 --> 00:30:14,560 Speaker 4: you're negative about yourself, when you're negative about the market. 628 00:30:14,640 --> 00:30:15,920 Speaker 3: That it's hard. 629 00:30:17,000 --> 00:30:19,960 Speaker 4: And because I'm a big believer that like startups, they 630 00:30:20,040 --> 00:30:28,360 Speaker 4: just magnify your own personal idiosyncrease increases, and so getting founders' 631 00:30:28,440 --> 00:30:30,600 Speaker 4: heads in the game and getting them a healthy place 632 00:30:30,880 --> 00:30:34,320 Speaker 4: plays huge diffidends for the company. That doesn't mean your 633 00:30:34,400 --> 00:30:37,960 Speaker 4: VC should be your therapist by any means. It does mean, though, 634 00:30:37,960 --> 00:30:40,320 Speaker 4: that I do take an active interest in the health 635 00:30:40,360 --> 00:30:43,000 Speaker 4: and well being of our portfolio company founders, and not 636 00:30:43,080 --> 00:30:45,320 Speaker 4: just because it impacts dollars and cents, because they're human 637 00:30:45,400 --> 00:30:48,880 Speaker 4: beings and I want the best for them, and if 638 00:30:48,920 --> 00:30:50,720 Speaker 4: their companies are going to thrive, they have to thrive 639 00:30:50,720 --> 00:30:51,360 Speaker 4: as people too. 640 00:30:52,480 --> 00:30:55,040 Speaker 3: So I've also. 641 00:30:54,840 --> 00:30:58,560 Speaker 4: Found a lot of the problems we run into in startups, 642 00:30:59,360 --> 00:31:03,280 Speaker 4: are you know, founders lose confidence in their judgment, they 643 00:31:03,280 --> 00:31:05,680 Speaker 4: get a setback, a competitor raises a lot of money, 644 00:31:05,680 --> 00:31:07,960 Speaker 4: and it makes them nervous. And I think my hope 645 00:31:08,000 --> 00:31:10,720 Speaker 4: is I can build relationships with founders where we can 646 00:31:10,760 --> 00:31:14,560 Speaker 4: talk about feelings and that that isn't perceived to be weakness. 647 00:31:14,680 --> 00:31:17,400 Speaker 4: But like, we're talking about your feelings about this big 648 00:31:17,440 --> 00:31:20,560 Speaker 4: announcement your competitor made because it's going to influence the 649 00:31:20,560 --> 00:31:24,080 Speaker 4: way you run the business, And of course it feels scary, 650 00:31:24,120 --> 00:31:26,040 Speaker 4: but we should talk about it and couple the plan 651 00:31:26,080 --> 00:31:27,520 Speaker 4: to deal with it because it's going to impact the 652 00:31:27,520 --> 00:31:28,840 Speaker 4: way you make decisions. 653 00:31:30,280 --> 00:31:34,400 Speaker 1: How has aid changed how you evaluate founders and their 654 00:31:34,440 --> 00:31:35,640 Speaker 1: ability to extend. 655 00:31:38,200 --> 00:31:41,400 Speaker 4: I think my baseline expectation for what can be done 656 00:31:41,720 --> 00:31:44,600 Speaker 4: per unit of time and per dollar of investment has 657 00:31:44,640 --> 00:31:45,040 Speaker 4: gone up. 658 00:31:46,960 --> 00:31:48,040 Speaker 3: So if someone tells. 659 00:31:47,880 --> 00:31:49,280 Speaker 4: Me, hey, we're gonna raise a preceed round and we're 660 00:31:49,280 --> 00:31:51,280 Speaker 4: gonna launch a product in the year, and it's not 661 00:31:51,400 --> 00:31:56,200 Speaker 4: some complicated hardware thing on like a year that seems 662 00:31:56,320 --> 00:31:59,520 Speaker 4: very slow to get a product out, you should have 663 00:31:59,560 --> 00:32:02,160 Speaker 4: something out much sooner, not tomorrow, but not a year 664 00:32:02,200 --> 00:32:09,360 Speaker 4: from now. And also, like with AI, touoling. You should 665 00:32:09,360 --> 00:32:12,960 Speaker 4: be able to iterate on stuff much faster now. I 666 00:32:13,040 --> 00:32:16,360 Speaker 4: think one of the challenges is now that it's much 667 00:32:16,360 --> 00:32:20,160 Speaker 4: easier to build. Building isn't the problem. Knowing what to 668 00:32:20,240 --> 00:32:22,800 Speaker 4: build is the problem. And having the judgment to build 669 00:32:22,880 --> 00:32:25,280 Speaker 4: the right things in the right way for your customers. 670 00:32:25,280 --> 00:32:26,400 Speaker 3: Is I think the new skill. 671 00:32:26,920 --> 00:32:28,520 Speaker 4: And I haven't come up with like a pithyway to 672 00:32:28,520 --> 00:32:30,920 Speaker 4: describe it, but in a world where you can build everything, 673 00:32:30,960 --> 00:32:34,200 Speaker 4: knowing what not to build is actually a really important skill. 674 00:32:34,600 --> 00:32:36,320 Speaker 4: Otherwise you end up with this product with a bunch 675 00:32:36,320 --> 00:32:37,600 Speaker 4: of features that no coherence. 676 00:32:38,120 --> 00:32:40,320 Speaker 2: Yeah, yeah, you know. 677 00:32:40,600 --> 00:32:43,200 Speaker 1: I look at you, and I've seen you at conferences, 678 00:32:43,280 --> 00:32:46,280 Speaker 1: and I've seen people like Michael Seibel at conferences, and 679 00:32:46,320 --> 00:32:52,720 Speaker 1: I wonder how you manage personally, particularly when you're a 680 00:32:52,760 --> 00:32:55,080 Speaker 1: black VC like yourself, and there are so few still 681 00:32:55,320 --> 00:32:58,120 Speaker 1: that actually have the power to write checks. How do 682 00:32:58,200 --> 00:33:00,160 Speaker 1: you personally manage. 683 00:33:00,160 --> 00:33:01,880 Speaker 2: The weight if you feel it at all? 684 00:33:01,960 --> 00:33:05,600 Speaker 1: Of like you're one of very few investors who look 685 00:33:05,760 --> 00:33:07,640 Speaker 1: like us and can write a check. And now you 686 00:33:07,680 --> 00:33:10,800 Speaker 1: get off stage and there's a line of eighty people waiting. 687 00:33:10,520 --> 00:33:11,080 Speaker 2: To talk to you. 688 00:33:14,160 --> 00:33:19,000 Speaker 4: I take I've learned a few things one is I think, 689 00:33:19,280 --> 00:33:24,880 Speaker 4: in general, the highest expectations founders I meet are black founders. 690 00:33:25,360 --> 00:33:27,680 Speaker 4: They have the highest expectations of what they're going to 691 00:33:27,680 --> 00:33:32,200 Speaker 4: get out of the meeting for me, and I get it. 692 00:33:34,800 --> 00:33:37,960 Speaker 4: I think in order to stay in business, I have 693 00:33:38,040 --> 00:33:43,600 Speaker 4: to make good investments, which means I have to sometimes 694 00:33:43,600 --> 00:33:45,920 Speaker 4: say no to things that I want to say yes too, 695 00:33:45,920 --> 00:33:48,560 Speaker 4: because I think they're not quite at the bar we want. 696 00:33:49,520 --> 00:33:52,160 Speaker 4: And I think it's this duality. On the one hand, 697 00:33:52,960 --> 00:33:55,080 Speaker 4: I want to be as available and accessible to black 698 00:33:55,080 --> 00:33:57,400 Speaker 4: founders as possible because I know for most of them 699 00:33:57,400 --> 00:33:59,840 Speaker 4: the experience of raising money and dealing with vcs sucks, 700 00:34:00,920 --> 00:34:02,719 Speaker 4: and I want to give them an experience that hopefully 701 00:34:02,720 --> 00:34:05,600 Speaker 4: does not suck. Also, the reality is that they, like 702 00:34:05,680 --> 00:34:07,480 Speaker 4: most people I talk to, are going to get a no. 703 00:34:09,360 --> 00:34:13,080 Speaker 4: But I think the unkind no from us, my experience, 704 00:34:13,120 --> 00:34:17,439 Speaker 4: has been hits harder than the unkind no from someone else. 705 00:34:18,160 --> 00:34:19,799 Speaker 4: And so as a general rule, I tell our team 706 00:34:19,840 --> 00:34:22,239 Speaker 4: you never know what founders are going through. A lot 707 00:34:22,239 --> 00:34:24,560 Speaker 4: of the people who pitch us are dealing with a 708 00:34:24,560 --> 00:34:27,759 Speaker 4: lot of rejection, a lot of negativity, and let's not 709 00:34:28,040 --> 00:34:30,719 Speaker 4: create the circumstances where we're the straw that breaks the 710 00:34:30,760 --> 00:34:34,440 Speaker 4: camel's back in terms of how we treat people. And 711 00:34:34,520 --> 00:34:37,600 Speaker 4: so I feel like part of my job, whether I 712 00:34:37,640 --> 00:34:41,000 Speaker 4: choose it to choose to be or not, is to 713 00:34:41,040 --> 00:34:44,480 Speaker 4: perform well enough that I keep the door open for 714 00:34:44,560 --> 00:34:47,640 Speaker 4: the people behind me, but also to make sure that 715 00:34:47,680 --> 00:34:50,799 Speaker 4: the great black founders in our portfolio get funded. We 716 00:34:50,880 --> 00:34:54,040 Speaker 4: have some good ones like Yuman from Incredible Health. We've 717 00:34:54,440 --> 00:34:57,200 Speaker 4: we've got today from campus. I could go on. We 718 00:34:57,640 --> 00:35:03,240 Speaker 4: have like legitimate top ten percent of our portfolio founders 719 00:35:03,239 --> 00:35:05,640 Speaker 4: who are black people. And I was like, the way 720 00:35:05,680 --> 00:35:08,360 Speaker 4: I'm going to keep the door open for other people 721 00:35:08,440 --> 00:35:10,640 Speaker 4: is to find great black founders and make sure that 722 00:35:10,719 --> 00:35:12,280 Speaker 4: they get funded. 723 00:35:13,040 --> 00:35:15,239 Speaker 3: And they're out there. 724 00:35:15,680 --> 00:35:18,319 Speaker 4: I have no doubt they're out there, and we're trying 725 00:35:18,320 --> 00:35:20,320 Speaker 4: to find them every day. 726 00:35:20,719 --> 00:35:24,120 Speaker 1: And I've got a quick five rapid fire for you. 727 00:35:24,200 --> 00:35:28,200 Speaker 1: The first is the one thing most founders get wrong 728 00:35:28,239 --> 00:35:31,440 Speaker 1: about precede investors in a sentence or two. 729 00:35:31,920 --> 00:35:35,640 Speaker 4: I think most founders think that like, traction is the 730 00:35:35,680 --> 00:35:38,440 Speaker 4: most important thing. And I'm not saying traction isn't important. 731 00:35:39,000 --> 00:35:41,520 Speaker 4: I think traction is about where were you and where'd 732 00:35:41,520 --> 00:35:44,200 Speaker 4: you get? And vcs tend to think about what does 733 00:35:44,239 --> 00:35:47,680 Speaker 4: this business look like at scale? So if you've got 734 00:35:47,960 --> 00:35:49,880 Speaker 4: five hundred K and mrr, but I think it's a 735 00:35:49,880 --> 00:35:52,839 Speaker 4: two million in arr business. At the end of the day, 736 00:35:52,960 --> 00:35:55,360 Speaker 4: like you're twenty five percent of the way towards the total, 737 00:35:55,960 --> 00:35:58,600 Speaker 4: and so traction doesn't doesn't matter as much as I 738 00:35:58,640 --> 00:36:01,759 Speaker 4: think founders wish got it. 739 00:36:02,400 --> 00:36:05,240 Speaker 1: The most important question a founder should ask a potential 740 00:36:05,320 --> 00:36:14,000 Speaker 1: investor before accepting the money. 741 00:36:10,880 --> 00:36:12,719 Speaker 4: How do you like to work with the founders that 742 00:36:12,800 --> 00:36:16,920 Speaker 4: you fact The number of times I've seen mismatches, and 743 00:36:16,960 --> 00:36:19,399 Speaker 4: I think people talk a lot about this mismatch of like, oh, 744 00:36:19,400 --> 00:36:22,080 Speaker 4: I emailed my VC and they never emailed me back. 745 00:36:22,800 --> 00:36:26,080 Speaker 4: I'm not convinced that the alternative of like this person 746 00:36:26,120 --> 00:36:28,520 Speaker 4: wants to do a weekly forty five minute check in with. 747 00:36:28,520 --> 00:36:29,560 Speaker 3: Me every Friday. 748 00:36:30,400 --> 00:36:33,640 Speaker 4: I think that's actually tends to create more problems than absence. 749 00:36:36,000 --> 00:36:38,879 Speaker 1: One belief you hold about early stage investing that most 750 00:36:38,920 --> 00:36:40,680 Speaker 1: of your peers would strongly disagree with. 751 00:36:41,880 --> 00:36:44,760 Speaker 4: We are not nearly as good at predicting which founders 752 00:36:44,800 --> 00:36:49,480 Speaker 4: will be successful as we think we are good. 753 00:36:50,040 --> 00:36:53,120 Speaker 1: Well, what do you know now about building precursor that 754 00:36:53,160 --> 00:36:54,880 Speaker 1: you wish you'd known? Infund one. 755 00:37:00,239 --> 00:37:00,479 Speaker 3: Time? 756 00:37:00,600 --> 00:37:04,759 Speaker 4: I trust my gut on a founder person we're going 757 00:37:04,800 --> 00:37:09,200 Speaker 4: to add to the company, initiative or project. I'm generally 758 00:37:09,200 --> 00:37:12,360 Speaker 4: happy with the outcome. Anytime I get over the analytical 759 00:37:12,440 --> 00:37:15,719 Speaker 4: or override my instincts, it usually ends poorly. And I 760 00:37:15,760 --> 00:37:18,480 Speaker 4: wish I had like internalized that sooner. 761 00:37:19,440 --> 00:37:24,400 Speaker 1: Yeah, last, rapid fire is a piece of conventional venture 762 00:37:24,400 --> 00:37:28,440 Speaker 1: wisdom that you think is actively harmful to founders. 763 00:37:31,960 --> 00:37:38,640 Speaker 4: Wow, that you need a co founder to get started, 764 00:37:39,480 --> 00:37:45,280 Speaker 4: that's a good one. I would rather have in the hierarchy, 765 00:37:46,000 --> 00:37:48,640 Speaker 4: two great founders who understand each other and are in 766 00:37:48,760 --> 00:37:52,440 Speaker 4: great partnership is the ideal. I would much rather have 767 00:37:52,560 --> 00:37:57,000 Speaker 4: a solo founder than two people that are not properly yoked. 768 00:37:57,840 --> 00:37:59,440 Speaker 2: That's good. That's really good. 769 00:38:00,000 --> 00:38:02,279 Speaker 1: All Right, This is not a rapid fire, but it 770 00:38:02,400 --> 00:38:05,040 Speaker 1: is the final question. And I thought a lot about 771 00:38:05,080 --> 00:38:08,040 Speaker 1: this one. And really interesting in your take is you've 772 00:38:08,040 --> 00:38:12,919 Speaker 1: invested in people before products, you know, and you've done 773 00:38:12,920 --> 00:38:16,840 Speaker 1: it five hundred times. When you look back at the 774 00:38:16,880 --> 00:38:19,560 Speaker 1: people who made it, the ones who beat the odds, 775 00:38:20,360 --> 00:38:25,239 Speaker 1: what's like one quality that separates them consistently? Yeah, And 776 00:38:25,880 --> 00:38:28,000 Speaker 1: something that you might not have even appreciated when you 777 00:38:28,040 --> 00:38:29,239 Speaker 1: first started writing. 778 00:38:29,000 --> 00:38:29,839 Speaker 3: These checks. 779 00:38:31,840 --> 00:38:36,680 Speaker 4: There's this like combination of urgency and focus that the 780 00:38:36,719 --> 00:38:38,719 Speaker 4: best founders in our portfolio have. 781 00:38:39,400 --> 00:38:41,080 Speaker 3: And if you told me, I think you talk a 782 00:38:41,080 --> 00:38:42,480 Speaker 3: lot about speed. 783 00:38:42,960 --> 00:38:48,720 Speaker 4: Or you know, I've come to believe that like, actually 784 00:38:48,719 --> 00:38:51,560 Speaker 4: the ability to prioritize and focus and identify the things 785 00:38:51,600 --> 00:38:55,680 Speaker 4: that are actually of highest importance. All of our best 786 00:38:55,680 --> 00:38:59,200 Speaker 4: founders are good at that. They're very good at like 787 00:38:59,280 --> 00:39:01,839 Speaker 4: keeping the main thing the main thing. And I think 788 00:39:01,960 --> 00:39:05,759 Speaker 4: it's increasingly difficult in a world where your attention to 789 00:39:05,880 --> 00:39:10,080 Speaker 4: under constant assault. Like I tell people right now, if 790 00:39:10,120 --> 00:39:13,319 Speaker 4: you're building an AI, it's actually really important to understand what 791 00:39:13,360 --> 00:39:15,520 Speaker 4: things should you ignore and what things should you pay 792 00:39:15,520 --> 00:39:18,680 Speaker 4: attention to, because every day somebody's announcing something and you 793 00:39:18,719 --> 00:39:21,759 Speaker 4: could get yourself into a tailspin trying to figure out 794 00:39:21,840 --> 00:39:23,120 Speaker 4: what is this new Gemini announce? 795 00:39:23,239 --> 00:39:24,960 Speaker 3: Mean, what is this thing? What is this? 796 00:39:25,480 --> 00:39:27,480 Speaker 4: And then like the truth is like not that many 797 00:39:27,520 --> 00:39:30,960 Speaker 4: things matter, And the best founders in our portfolio have 798 00:39:31,000 --> 00:39:35,600 Speaker 4: this very unique ability to keep the company focused on 799 00:39:35,800 --> 00:39:38,319 Speaker 4: ever is the single most important thing to work on, 800 00:39:38,960 --> 00:39:41,200 Speaker 4: and to stick with that thing for probably longer than 801 00:39:41,239 --> 00:39:43,439 Speaker 4: most people, and to keep that the number one thing, 802 00:39:44,280 --> 00:39:46,000 Speaker 4: and a lot of the combodies that don't work out. 803 00:39:46,080 --> 00:39:48,480 Speaker 4: It's not that they didn't work hard. It's either the 804 00:39:48,520 --> 00:39:51,399 Speaker 4: founders worked hard on the wrong thing or could never 805 00:39:51,440 --> 00:39:54,440 Speaker 4: figure out the most important thing to work on, and 806 00:39:54,520 --> 00:39:58,440 Speaker 4: so like they never they never broke through. It's hard, though, 807 00:39:58,480 --> 00:40:01,200 Speaker 4: if you ask people up front, what are you gonna do. 808 00:40:01,239 --> 00:40:03,600 Speaker 4: I'm gonna identify the most important thing I'm gonna work out, 809 00:40:03,640 --> 00:40:05,399 Speaker 4: Like no, like, there isn't a great way to figure 810 00:40:05,440 --> 00:40:07,560 Speaker 4: out how good people are at doing that and to 811 00:40:07,680 --> 00:40:10,200 Speaker 4: be put them in the role. Unfortunately, I'm open to 812 00:40:10,280 --> 00:40:13,400 Speaker 4: ideas if you have ideas about how that seems this. 813 00:40:13,480 --> 00:40:17,080 Speaker 2: Time for me, it's fantastic. Charles Asy, thank you so 814 00:40:17,239 --> 00:40:17,640 Speaker 2: very much. 815 00:40:17,640 --> 00:40:19,239 Speaker 3: This was fantastic. Thank you for having me man, this 816 00:40:19,280 --> 00:40:21,759 Speaker 3: is great. Appreciate you