CoRecursive: Coding Stories - Story: From Code to Capital - Tim Chen's Journey from Engineer to VC

Episode Date: September 2, 2024

 What if your corporate job left you feeling empty, and you decided to leap into venture capital? Tim Chen, a software engineer, was disillusioned with corporate life at Microsoft. The 2008 market crash and layoffs deepened his dissatisfaction. Seeking more impactful work, Tim joined startups and contributed to open-source projects, like Kafka and Docker. Then after his own start-up, Tim found a niche bridging the gap between technical founders and venture capital. But could get into Venture Capital himself? Join me and Tim to hear his journey from a disillusioned software engineer to a successful venture capitalist, exploring the highs and lows of his unusual career move. Episode Page Support The Show Subscribe To The Podcast Join The Newsletter  

Hey, this is Code Recursive, and I'm Adam Gordon-Bell. Usually, each episode is a story of a piece of software being built. Today, something different. Our guest is a software engineer, but it's about his journey stepping away from coding, trying his hand at venture capitalism, trying his hand at being an investor. You know, imagine this.

You've spent years honing your skills as an engineer, and it's 2016, and you're at the forefront of the hottest of the hot areas, cloud infrastructure, cloud native computing. And then you decide to switch gears. You want to get a job at a VC. You want to do investing. But you're just met with some subtle jabs

about not really fitting in. Well, Tim, you look like a coding bro. Implying I don't look professional like a VC is supposed to be. And I still remember those comments from folks. I was like, wow, there are funds actually have dress code. It's not very obvious dress codes,

but there are dress codes. Or not even dress codes, but even like particular way they want you to talk. And that's why actually, that's actually I feel like there's like 30, 40% why I don't get any job in VC is I don't talk like the MBAs of the world, you know, that they're used to. I still too much feel like an engineer-ish guy.

So I do think that's one of the big reasons why more people should be VCs. Fundamentally, different GPs will end up believing different people and making different decisions. And that excludes certain people already, subconsciously or consciously. That's Tim Chen. You've probably used projects he's worked on, Kafka, Kubernetes, Spark,

various Apache projects. But today we're exploring why he wanted to jump into VC and why the VC world wasn't exactly welcoming to him. Today's episode is about seeing venture capital, seeing it through the eyes of someone who doesn't fit the usual mold. Why would someone like Tim, with a really solid career, want to jump into investing? Why leave coding behind for something that, as his friends asked him, feels a bit like banking? And it all starts when Tim, who is living in Seattle,

landed an internship at Microsoft. I was there back in about 07 to 2010. That was still the time where Microsoft still feels like it's the biggest company ever. Microsoft people feel like they're like gods, basically. Like everything we deliver is much better. Linux is just a joke, right? Whatever we do is always the top of the world, right? So it was really weird. If you work at Microsoft at that time, you will find a bunch of employees working there for 20 years. And they'll just tell you how, not just like how great it is to be there, just how better Microsoft everything is than anything else.

Like they don't even look at it. There was Hadoop. There's no SQL back in the day. Like none of them people even care. Oh, we have Microsoft SQL server. It'll just do everything. You know, we got everything and we do everything. Like the feeling like a superior to anybody.

That was the mindset. Unfortunately, things were changing for Microsoft. The 2008 market crash had shook everything up. I remember it was like 20,000 people got laid off or something like that. And a bunch of my teammates just got let go. And as big companies letting go people, it's like a box next to your cube in the morning.

Like you have no pre-notice. You don't know you're leaving. You thought you're going to retire at Microsoft. And then you just have boxes next to it and you have somebody watching you pack it up and watching you leave the building in a couple hours. In almost like a 25 years history company, like if you like work for so long,

your identity is completely wrapped up. One day you're just like out of there. Tim himself wasn't let go, but he struggled with his role, which was building internally facing web apps. It was really boring. So my day job was so boring that I have to like just find stuff I can code because the job, even as a software development SD1 in a in a microsoft job you barely code actually you write a bunch of xml's you do some c sharp here and there but it's very it's quite dry

so i think these open source projects uh yeah i was able to kind of jump here and there just learn a bunch of things really helped me to me to work on interesting stuff that keep me feel like I can actually do more because my day job was just like fix an ASP.NET website. That's quite boring. And so disillusioned with big company life but having fun contributing to open

source, Tim left to work at a startup. But once I joined a startup, I was like, holy, you can actually just code? Most of a startup, I was like, holy, you can actually just code most of your day. That was like, never, I never, never experienced that. Only one of the students, right? Working on like your coding assignments, but now you don't have like coding assignments all day long, right? You actually just need to build stuff and people actually just use it. That was never ever a feeling I ever felt like, which is so funny to hear that. Maybe when you work at large companies, you probably know what I mean. They spend so much longer at meetings and documents

and all that stuff, right? You barely even do anything in coding wise. But I was so hooked in this idea that, wow, I have more direct impact and actually work on fun stuff. So I was kind of basically telling myself, I just want to join startups. Even though the startup I joined first wasn't working out, I guess it wasn't so bad enough. I wasn't like, I'll just go back to a large company. I just like, I want to keep learning, keep doing something. So went to a search engine startup first, and then went to work on a gaming company as one of the only backend engineer. Then Tim joined VMware to work on Cloud Foundry. But after some internal reorgs, he found himself with nothing to do.

So he just doubled down on his open source work. I was basically spending full time working on Apache stuff. I started with Hadoop stuff and then went to work on Drill, which is one of those SQL and Hadoop projects, a query engine. So I had lots of fun becoming one of those SQL and how to do projects, a query engine. So I had lots of fun becoming one of the committers that's outside of this company called Mapbar that started this project. And that really was the starting point for me getting reached out. I'm getting reached out by a bunch of companies out of like the Valley. One of them was Databricks, right? Early

days before it was like only like eight to 10 people. The Kafka team also reached out as well on LinkedIn. And yeah, I actually, in every both places, decided to go join LinkedIn Kafka team. So Tim moved to California and his open source work started to draw a lot of attention. And funny enough, probably like the week, first week I started at LinkedIn working on Kafka, I started getting messages from the historical Mesosphere.

Tim had just started at LinkedIn, but the folks at Mesosphere were giving him the hard sell. So the CEO reached out, told me to join, got Marc Andreessen to call me, Pierre Levine to call me, like these big name investors trying to poach me out. And what does that look like? Like, tell me about Marc Andreessen phoning you. Well, it was really cool because my, prior to moving down to the Valley, even though I worked at two to three startups, I never met any investor, you know?

So literally the very first VC I ever talked to was Marc Andreessen in my life, which is really, really odd. I was like, I feel like I heard this name. I really don't know who this person is. When, when the flow, the CEO was talking to me, I'll get Mark to call you. Who's Mark? Uh, I literally Googled him. And I think the first result was a Wikipedia page. And I clicked on it. I was like, Oh, okay. NetSuite founder. Hmm. Oh, I started the Andreessen Horowitz Fund.

Oh, that sounds even more familiar. Like, I just so out of it. I have no idea about the magnitude of these people. But I realized, wow, I even like,

I think I sent that link and emailing some of my friends back in Seattle. Oh, I'm talking to Mark Andreessen. This guy seems to be a big shot or something. All I can remember really was he spoke like five times faster

than anybody I've ever met in my life. I was barely able to listen to what he was doing. What is he talking? Like he has so many words crammed together. You can feel like he's the smartest person you've ever met kind of feeling, right? All kinds of like,

I was asking him like, why mesos? Why mesosphere? Why flow and Toby? Whatever. It's just so funny that he's just giving a bunch of like, I was asking him like, why Mesosphere, why Flow and Toby, whatever. It's just so funny that he's just giving a bunch of like so much information about like the future. That experience is really interesting. This is my welcome to Silicon Valley moment is talking to Mark Andreessen. One of the decision making to join Mesosphere was I feel like that's one of the opportunities to join something that's, there's a wave and paradigm shift around it.

This is the wave of changes that will be eventually called cloud native, with Kubernetes and the CNCF being created later that year. But at this point in 2014, none of that stuff has happened yet. And it's funny enough, at Mesosphere, I joined probably like number nine employee, but like number third or fourth engineer working on Mesos. And all the Mesos engineer were busy working on security stuff. I was a new guy, leftover doing nothing. And it's like, hey, Tim, are you just joined?

Do some small patches here and there. Just get to code-based running. Oh, by the way, there's this Docker thing that seems to be taking like a lot more attention. We want to add Docker to Mesos. How about you come and help us do that? I was like, fine.

So I work with Ben Hyman to create a Mesos and that was really my first big project and just getting Docker to be added to Mesos. And lo and behold, once we did

and we just mentioned the word Docker, I remember we were even like announcing on our website, like Mes just mentioned the word Docker. I remember we were even like announcing on our website, like MesoSphere, we added Docker support. That single post got,

I think our CMO told us it got like 20 to 30x way more visits than any of the other posts ever got. Really, Docker was like the thing we're attached to. So being able to be part of that early ecosystem to have see Docker took off,

I become the container guy for Mesosphere for a period of time. And working with early Docker employees, doing work on Swarm, seeing the Kubernetes movements and all that kind of stuff. And I have started to have VCs reaching out almost like a bi-weekly to monthly basis.

Like, hey, Tim, I saw you work at Mesosphere. Can you come to our little dinner? Can you come to our little baseball game? And I think all of that helped me to start to get started on thinking what to do next. So some VC like hits you up on LinkedIn and says, come to a baseball game or? I don't know.

Yeah, they just found me on LinkedIn or some friends or like even a bunch of just found me an email and reached out like, oh, I saw you are part of the Messos committer teams. We're doing a piece comparing like yarn and Messos where can you help us give us some opinions? Tim, you're one of the interesting people, can you come join us at dinner? And we have, you know, Brian from Google or just people in that. And then VCs are also hunting down folks like me. It's like, hey, Tim, if one day you want to start a company,

we also have a list of co-founders for you. They say that at the dinner or like? Afterwards. Like dinner was just more like a mingo and a VC was like, hey, I want to reach out to you. And Tim, can you also be advisor for a couple of our startups

or doing container related stuff? Like Mesos is going to be quite crucial. So I remember when a VC wanted me to become like advisor and consultant for like a couple of companies and also able to work with early customers with people using Mesos also got me a lot of thoughts of companies and also able to work with early customers with people using Mesos also got me a lot of thoughts of how people are struggling to use this container thing.

Tim saw those container struggles as an opportunity, like a startup opportunity. So he left Mesos, he got a co-founder and they lined up meetings on Sand Hill Road where, you know, many VCs are based. This is pre-Zoom days, pre-COVID days. You literally had to pitch in person every single time, right? Get your sparkling water and just sit there waiting for these fancy suits people to be ready. And besides talking to like the big names, we also got introduced to some of these like smaller name VCs I never heard of. So I think that experience kind of like taught me that, hey, the VCs that stand out for me personally, was the ones more focused on a particular space as well. It wasn't your generic

fund, because I was building a very specific thing. That thing that Tim wanted to build was a tool addressing many of the problems he was hearing about from Mesos customers. So people using Mesos, the biggest problem after getting it set up was just like, how do I actually even figure out whether the right containers run next to each other? Because containers, the selling point of containers versus VMs is VMs, you can only run a couple, right? Seven to eight of them per physical machine, right?

There's a lot of overhead, it's slow, but you can literally run hundreds of containers on a machine. Like I remember like our large companies, customers are literally running like three digits of containers per machine, which is crazy because container doesn't have like such a strong isolation. So you can run into a bunch of noisy neighbors pretty quickly. How do you know which thing, which particular machine actually runs better? What container right next to each other actually is better? How do you get the visibility and the right settings to have all these trade-offs?

To be a founder, Tim needed to get VCs on board, yes. But he also had to get his wife on board. He had to talk to his wife about his plans and his career trajectory. And it's funny, this interest in me joining startups has never been, my salary had never increased, right? My salary just went down in time. We're supposed to go up, right? As a normal career progressing person, right? He's from college, SD1, SD2, senior engineer.

You want your salary to go up. You want your title to go up, You want your title to go up? Not flats or not down, right? Down has something really bad. And now he wanted to cut his salary again and to take a small seed stage CEO role. His wife didn't get it, but she wanted him to go after what he cared about.

And so he started Hyperpilot. After two years of hard work, Hyperpilot was acquired in 2016. It wasn't a huge acquisition. There'd be no shopping for yachts. But Tim suddenly had some cash on hand. We have acquisition posts we put out there. I had some friends reaching out to me.

Oh, Tim, congratulations on joining Cloudera. Can we catch up and make sure I have more time. And of course, my salary is nothing great, but better than paying my founder's CEO job of like small salary. So despite his general career trend, Tim now had more money than he was used to. And even though running his startup was tough, you know, he missed parts of it. He wanted to talk to other founders. He liked that experience. He wanted to stay connected to that world. To him, it was clear, right? If he found the right idea, he'd be back at it again, starting his own company.

And that's how he started talking to David. I met David, I think, at a conference or something like that before. So I really knew him. And I think I saw him starting a new company just randomly browsing LinkedIn and we're just chatting hey I'm gonna start a pre-seed round Tim you've been a founder can you help me out knowing what investors to talk to what's it feel like to fundraise I'm sure you know let's chat about it like also like hey I've been doing also like I've learned so much trying to sell to enterprises as well I've going through a lot of troubles. It was interesting helping the founder. I still remember everybody was having trouble

figuring out if this was going to be a big company or not. Because Flatfile every day was doing a small feature. It's like import your CSV, import JSON into your website. David listed Tim as a reference and soon other investors were calling. Because most investors are not technical.

I am. So they want to talk to somebody else who's not technical to help them learn more others' perspectives. So he put me out as a reference and I started talking to investors for him. Like why I think Flatfile has a chance to become something much bigger.

And I think I was doing a good enough job. Some folks do come in at the pre-seed. And anyway, that kind of exercises was interesting. And I realized the reason it was fun for me to talk to investors, because it's not just my engineer hat. Being a founder, especially being like a CEO, and I'm not a good CEO, like I was shitty at it, but you just have to learn enough to know what a product

is, what product marketing is. Why does a customer want to buy from you? There's a whole lot of exercises there and fundraising as well as all by selling your future. So at least I've gone through it once. So because he enjoyed it and because it felt impactful, Tim started spending a lot of time talking to these pre-seed founders, these founders who just have an idea who haven't really started or gotten funding yet. Hey, Tim, we love talking to you. You've always been friendly. You know, you just went in our shoes. We just want to work with you. Do you do angel investing? And I was like, I never tried it. How does this thing work? After talking to founders, what I realized,

they just want me to meet and be involved. They don't even care what amount. Tim's excited about this, but it's a family decision. And so he brings it to his wife. I was fortunate. I think she let me. Of course, we don't have that much money to burn. You know, having an ex, it definitely helps, right?

Because you suddenly have like some sort of infusion of some capital right and even though it's not big you can choose to kind of like do other things we don't have kids yet we're still young i guess we can still able to like do things and i i treat an angel investment not as like a spare money to like do hobby actually to me was almost like a way to like still get involved in a startup ecosystem because once you're in a big company even though i've been a founder before once you make a big company you know your your time energy is supposed to be consumed by whatever the big company things are doing and so i don't get to see what the startup world is like anymore so

it's almost like i know i never want to be here long-term and I know I want to either by searching for something else. Right. So this is almost like a way to help me network and be able to be still plug into other things that's happening. It wasn't like I have a budget, how much I want to spend on angel investing. I just started with one check first, right. Or one or two checks. It was like 5k, 10K. You can kind of try it out and see. It's impossible to know if I did the right choice or not. But one thing I definitely realized quickly after angel investing is like helping founders, that is a particular thing that can grow a reputation. Founders start to talk to other founders about me and also talk to their investors

about me. Just like with Flatfile, other investors want to know why Tim invested in a specific company. They see him as this technical expert, so he's already vetted these ideas, which is great for them because many of them aren't technical or they're just not familiar with this area. I think by seeing me being helpful to their founders and by seeing that I'm also adding value to their processes, they just want to sync with me. Like I have investors basically say, hey, Tim, can we just sync up every month or every two weeks or something like that? And they prompted it. And I was like, sure. And I was intrigued. And every discussion was so interesting. Right. You know, like, oh, we're looking at this company that's doing a graph thing, and it's doing a machine learning on networking.

And what do you think, Tim? Like from your engineer background, how hard this is, what is it? I just realized this is so cool. Getting to be plugged into like all these interesting things was so interesting. Of course, there's a big problem with Tim's new sideline in angel investing. The part that sucks is you're never going to see those money back

anytime soon. So we're all going to run out of some pool of money at some point in time. Because investing in a startup at the point where it's not even really a company, right? It's just a founding team. Even in the best case where it becomes a huge company and IPOs, like that might be in year 10. And this is year zero. So I can't recycle any money back from that pool of money I put in for a long period. I don't even know when it's ever going to come back or none of it will come back. So Tim had another idea. He's good at helping founders and he thinks he can spot promising ideas. So why not just get a job at a VC firm? And so I tried that. Probably tried like six months

or seven months. Talked to maybe like 10-ish funds. Yeah, nobody wants to hire me. It wasn't a thing. I wasn't a hot commodity whatsoever. What does that look like? I mean, one is like these VC,

no VC fund has a job opening called investor. Come apply here, right? Especially I was like thinking, if I want to join a fund, I want to join a fund like I feel like I can learn a lot from. So hopefully it's a name I heard of. So that even makes it even harder. I didn't realize how hard it is to join a VC fund.

I know it's like maybe not easy, but I didn't really have any idea how difficult it might be to do it. But just putting the word out there, like, hey, I am interested to join as a VC. Is there any opportunity opening? And some folks say, oh, maybe, let me ask some friends. And even somebody even referred me to a recruiter, because there are actually recruiters finding VCs roles as well. And so they also connected me to some VC that are looking for investors to join. It was all basically word of mouth to some degree. And, and these interviews are so weird too. It's like, come on, talk to us. Well, come talk, talk to this partner. Oh, come grab a coffee. Oh, maybe join a little founder pitching too.

And just invite me to things very ad hocly. There's no steps. There's no plan. There's no what you're looking for. I have no idea what they're looking for. It would just be a random text message or email. Hey, Tim, do you want to come join us? Grab some this and that.

And then just don't know what's happening afterwards. No, no next steps. No, no nothing. So yeah, that's like the process. It's just like completely abstract. What is happening here? What did you think you would get out of all of this? Well, I think the base level is I don't have enough money myself to back more founders.

I'm meeting more and more interesting people because people are saying good things about me. It's not like crazy amount, but definitely growing. But why do you care about backing founders? Like you must have got something out of it or... You mean like money wise or... Like whatever. Oh, I got a lot of satisfaction. Yeah.

I feel great like you know i think a lot of founders have a hard time being investors because being an investor you don't you don't you're not in the driving seat right and to be good founders you almost have to have this urgency you're willing to like change anything you have no patience almost like yeah i gotta make sure this thing is fixed as we like drive as much momentum as possible right on the flip side in you can't make any decisions for founders right of anything you want the founders to make all the decisions so i think i found an interesting way to influence without actually being their boss so So when I was able to help out a founder and I can see what I did makes a meaningful difference in their journey, that made me happy. Part of this, you know, is all about impact because in his day job as a big company developer,

positive feedback was just harder to come by. You know, why I enjoyed being a startup in the first place was I was coding, I can see my stuff compile and it runs right in production. That's fun and cool, right? You want that feedback, right? If I'm just doing something like in a large company, I'm building a little feature. It barely even get mentioned. It's no difference whatsoever.

Like, why the hell are you doing this anyways, right? But I guess maybe because I saw that feedback and I really feel so happy that I was able to make someone else more successful. And I was happy with it. And I think that made me like, you know what? If I can keep doing this, this actually might be fun. Some people, I mean, maybe most people want to be a VC because it feels like a path towards wealth and towards glamour. I didn't really care about any of that.

And I didn't really thought VC had any much glamour in the first place. It was really more just solving a problem because I don't have enough capital to keep backing companies. I just want to keep doing this. And the only way to keep doing this is to get paid because I do have a family and expenses and mortgages and stuff like that. It wasn't like I've sold my company for millions and millions of dollars, right? That's really like the only thing I was trying to solve. But Tim's strength as an investor was actually a weakness when it came to interviewing as a VC. Well, Tim, you look like a coding bro.

Like implying I don't look professional like a VC supposed to be. Or not even dress codes, but even like particular way they want you to talk. They feel it's professional. Tim wasn't an MBA. He didn't have a business background and it showed. He didn't feel like a cultural fit.

Sure, he could vet engineering ideas and he could bond with the coding bros. But to the VC firms, if there was a social event, it would feel like he just didn't click. And then his family grew. We have our first son. My wife and I, we really think Seattle is much better for us to raise our family.

So for family reasons, we moved back, not for anything professional. And I think I was fortunate. One of my good friends, he was a partner at AngelList. And I was just catching on with him. Like, hey, this is Jake Zeller. Hey, Jake, I have no idea what I am. Nobody wants to hire me. I'm having fun doing angel investing.

I really want to see if I can pursue this. And yeah, he just told me like, Tim, you should go raise a fund. I was like, dude, how do I do that? And he gave me like a pitch deck template first. Like, okay, write a deck first. You got to figure out what your fund is. Help me fill out some details,

like how big of a fund, how many investments you want to make, what is your thesis? Give me some examples. It's basically kind of like the seven, eight pages, like Google Doc template to start with, to fill in all some information. So Jake told me like, Tim, you've never been a VC. I don't think you even know if you like it or not, right? So don't raise too much, right? You're going to probably do this part-time so raise just one million uh uh see if you can just raise enough to just get started and see if you can you know figure out if you like this or not i was like fine that sounds like a good plan if i can do it like yeah like what is the thesis what what do you tell them besides i'm raising a fund

or well jake helped me narrow it down so So basically Jake told me, yeah, just do infrastructure, dev tools, that's it. And just do Amelia. So it wasn't me thinking about my thesis, really, of like narrowing down my area. It's just like Jake told me just this is the thing to do. I just did it. Eventually, Tim refined this even more. He wanted to invest in people that were like him, technical founders, building infrastructure, building dev tools. And while he didn't have much money to invest, he offered a lot of guidance because he was literally just that person, right? He had just been an infrastructure founder himself.

So with this clear focus, he took his idea and he took his slide deck out on the road. So went to Bain, they put 10% in first. And of course, Jake himself and his friends put another like 10%. Wow, now I have 20% of my 1 million

raised. I guess I could maybe raise a fund, right? It was a weird feeling. I have no idea what I'm doing. But just having that early confidence and momentum to start off with, let me start to just try it.

Jake tells Tim to just start talking to everybody he knows with money, right? As a fund manager, Tim will be the general partner. He'll be the GP. And now he has to find LPs, the limited partners. So raising LP money was so weird because I don't know who's the right people.

So I was just trying different friends and people and I quickly realized trying to convince all these like big company engineers that backing a fund makes any sense is almost like a futile exercise. A big company engineer, it turns out, has a hard time picturing how Tim writing checks could actually make money. And I don't have any good answers for how long it would take to make your money. Like, I don't know. Yeah. Raising, running for funds is quite interesting because your LPs are definitely not professionals, not even knowing this thing you're doing. They do have the capital and potential to be part of your journey, right?

Yeah. Versus like when you raise money as a founder, you're raising VCs. However you think VCs are bad or good, at least VCs know what you're doing. You don't have to teach them what a founding company means, right? They're already set.

You know where they are. They have a website. They're here to put money in you. Tim realizes he can only raise money from two types of people, those that believe in him or those that believe in one of his angel investments. Like remember Jake Seller or these VC funds. I think VC funds backing me was relatively easier because they can see my portfolio companies and they know them, right? They seeing them raising and they have their own judgment calls. Oh, wait, these are interesting ones. They're good ones, right?

Even the early that they know it, right? And they may not actually have the opportunity to go deep dive into it because they saw after announcement or whatever that got them interested. So meanwhile, while Tim's doing all this, he still has to pay the bills. A traditional VC fund, if it's like $200 million, they cover expenses with a 2% yearly management fee. So that would be $4 million for office and staff and networking dinners and so on and so forth.

And Jake also suggested like, hey, $1 million fund taking 2%, it's not going to pay much anyways. Yeah, don't bother doing it. So try and just take no fees. And so I took no fees. So I had to put my own money. I had to put 5% of my fund myself and pay myself nothing. And spending a lot of time doing this. So this is like, okay, I got to figure out how to get myself

paid. I have no health insurance. I got nothing. To keep the lights on and stay flexible, Tim starts consulting. And doing open source, the good news is like my resume is already on GitHub. So most of the time I don't even have to like come up with a way is like, hey, look up, I'm a committer for this. I work on Spark, I work on Kafka, I work on Docker, Kubernetes, all my patches are there. My talks are there. Let me go find some contracting jobs and work on a site. So that's kind of what I did. I started

finding some contracting jobs here and there. One of them turned into like really wanted me to join full-time, so I joined full-time. Actually, yeah, the CEO actually even asked me when to be their director engineer or something like that. Because previously I was VP engineer at a startup, right? I was like, hey Tim, you want to help? We have nobody actually who have experience leading teams. Do you want to help us lead a team? And I told him like, hey, just give me an engineer job.

I don't want to manage anybody. Being a VC, like logistically, one of the hardest things, beyond like the fundraising times, it's very difficult. But even after you're able to fundraise, the hardest part is really able to like sustain yourself. Like putting money in yourself and not getting much out of it. How do you actually have a job you can able to kind of get by while spending so much time on your fund it's quite difficult yeah so i literally had to figure out how to like maximize my time as much

as possible on both sides do my job in the most minimum amount of time possible trying to do as much as i can as a fun. So depending on the afternoon, it will probably be either a sprint planning meeting or a Zoom call or me trying to work on some feature with the Zoom call next to it. It'll be VS Code to right, Zoom Code to left. And I don't know. It's just like I have to spend my lunch meeting,

my night time after my kids are sleeping and some early morning spending time working on code. And then the rest of this, all the sprinkle time to do Zoom calls. Tim loves the Zoom calls with founders. That's what keeps him going, right? Finding ways to help them out. But now he's swamped with pitches and code to commit and PRs to review. And I originally, when I was just starting off, I had one hour Zoom calls, right?

And I realized I just can't get over talking to enough people. So I went to half an hour Zoom calls. I would start with 15 minutes Zoom calls. I think this is way too long. I can't really get anything done. But, you know, it's just like, yeah, yeah. The day is pretty much filled with VS Code and Zoom call on some overlapping frequency.

But Tim managed to keep that up. He managed to deploy the million dollars and still keep his job and still pay the mortgage. I was even investing in some interesting companies from FundOne. Looking at some of my, actually I have my FundOne portfolio in front of me. I backed like Warp.dev to develop a terminal company i was working on ready sets i've backed datafold sardine and metaphor and coils so these companies are like considered hot back in the day basically and seeing my name show up in tech crunch on a repeated basis was really interesting

just because I'm writing small checks, right? And somehow I was able to get into good companies over and over. Tim feels like it's working because he has all this insider knowledge and immediate feedback. A founder needs help and he helps him or her and that helps the company.

He sees the impact. And there's a long-term vision, which is pretty clear, right? He waived his 2% management fee. But if the fund makes a profit, he gets a 20% carry. That means once investors get their money back, he gets 20% of the profit. If $1 million turns into $2 million, he might get $200,000 in profit. But that's not going to happen for many, many years.

Not until all of these various investments are realized. And to outsiders, this can seem a bit made up, right? You take a million dollars, you turn it into checks at various super small, super new places, and then you hope on the other side, 10 years later, it's actually turned into more money. Tim's wife was super supportive, but she was skeptical. She's not an engineer, and she never worked in an engineer company, right? So she doesn't follow any of these startup things at all, right? She's not looking at TechCrunch.

All she sees is like Microsoft or OpenAI and some fun stuff like this. I'm excited, like, oh, one of our companies raised Series B, you know, and got into the news this way. And it's like oh that's great how much did we make nothing

still on paper I was like don't talk to me when we make at least something real cash right she's way more

DPI seeking than any of my LPs if you know what DPI means no so in VCs we're judged in the end by DPI seeking any of my LPs, if you know what DPI means. No, what is it? So in VCs, we're judged in the end by DPI, by real cash return to LPs. Because a lot of times when you have a new round, it's just on paper. Valuation worth $400 million, it raised $25 million out of this.

So on paper, it looks like a higher price per stock you own. But they haven't exited anywhere. They haven't sold it. You can't sell it easily, right? So it's all on paper. It's like playing Monopoly money. Virtual currency almost, right? Like to my wife,

this feels like virtual currency. Like I'm playing a video game with fake money, building like little buildings in some games. Like, oh, look at that monopoly building just went up to 10x you know look at i don't know jasper or or mother duck went into 10x like to her it's just like a fake thing like because she being a vc unfortunately be early

means you don't really get much capital back at all. The only capital is your management fees. But you also spend so much money to put into your fund. To her, it's like, it's just crazy. Like, you're spending so much time, spending all these things, doing meetups, dinners, all this stuff. And you're just getting like these fake money on paper. When are you actually going to actually get real money back? Like, hey, our friends next door working at Snowflake, the IPO, they bought three houses.

So anyway, she's, despite of all this, like completely not understanding what the hell is going on here, she still supports me, which is like, I think it's actually difficult, right? You know, supporting your partner, doing something you completely don't understand,

but it actually has meaningful impact on your family because it's your financial backbone, right? Takes a lot of like, faith, I guess. And yeah, also, it'll be 10 years before the results are in. But you can't do something like this partway. There's never a best time to do anything, I realize, in life.

And everything worth doing takes not just a lot of effort and money, but also a big amount of time. Do you have that much time? You have kids now. Why do you want to make this happen? Family has issues. So this has got to work. You don't know if it's going to work.

But you have to spend so much time and energy and things to potentially see it working. Or you can't just put half-assed in there. Like you actually do have so much time. So you have to really, really like it. But you also have to have optimistic and also bring optimism around you. It's usually, a lot of people don't choose to do this, not because it's not doable. It's rather like uncertainty of it.

Because you actually do need to put so much in and you might have nothing back. But yeah, for Tim, it's unknown if things will work out. But along the way, he's getting little hits of feedback, little dopamine hits because he's helping founders out. He's helping these founding teams with small tactical things. Maybe they will make it long-term and become the biggest thing, but medium-term, he's making a difference. And after fund one, even with uncertain returns,

Tim raised a second fund, $7 million, seven times larger. Much of this came from VC funds who were recognizing that a lot of his early bets were turning into valuable companies. Tim is gaining momentum. And because of that, I'm doing poor and poor on my job. So I know the time is coming, like a doom day of time is coming anyways, right? But I was trying to like prolong the insurance and the pay salary as much as possible. I was like, okay, I see this is not going to happen. So I have to leave. I wasn't forced out, but it's kind of getting there. After I raised maybe about six months or so, I quit. And just pretty much dedicated most of my time to do this. And then did you have enough?

Like, could you take a salary at that point? Was the fund big enough? Yeah, I was finally able to take some some salary but it wasn't a lot um seven million fund i take like small percentage of it to be my salary but yeah so i still i was trying to find a part-time job actually so best one was my investor before for my startup i was talking to like the gp there i was like oh i'm figuring out what to do i have to pay my insurance now it's not cheap at all and stuff like that. So, hey, well, maybe you'll figure out something. And they luckily did figure out a small role for me as a part-time job. So I was there about like six to eight months, almost a basic contractor, but they paid me some salary

doing stuff for them. It gave me a little taste of what does it feel like to work at the VC fund, actually. You finally got your in at the VC company. Yeah. Yeah. It gave me a little taste of what does it feel like to work at the VC fund, actually. You finally got your in at the VC company. Yeah, yeah. It was funny that there are times I need to reach out to other people as,

hey, I'm an investor out of Bessemer. We back Twilio and Pinterest. I was in partner meetings. I was in team meetings. I was able to see a little bit,

say more than half of what it feels like to be part of a larger fund. Now, Tim's on to fund three, and he's earning enough to support himself without needing side gigs. I would say now after six years in, I kind of went back and forth on how much faith and belief into what companies were back. Now I trust my instincts way a bit more than I even started with, funny enough. And we have our first biggest exit happened probably like a month or two ago. A company called Tabular sold Databricks. And it's not like made me rich or anything, but finally at least made us return some money. That seems like more than just a tiny bit, right?

So now at six years in, doing it full time, Tim no longer has to code during pitch meetings. But like any experienced developer who's seen many things go sideways, Tim is still a bit uncertain about some things. So on one side of the hand, like I actually do know I'm going to keep doing this because one, I already enjoy doing this for the most part, right? And am I really good doing this?

I hope so. I think so. It's just I have to really keep figuring out more things and keep learning as much as I can to make sure I am at the best position to return better things. So I don't know. It's just weird. This is a job. Like I still remember the days I can compile my code and push a production and see my high crazy logs flying left and right when I was working with Halo 5 back in the day, right? The game launches and everything is just crashing

and burning. And I was like, oh, Jesus Christ. Like, okay, this is clearly something that I code is not working here. I got to go fix it. And you kind of get to know if you're doing something good or bad to some degree

as a developer. But as a VC, your stock you pick can go anywhere. Things that seem to work may actually just crash and burn one day. Something that doesn't seem to be the most high-flying thing suddenly just blows up to be the biggest thing. So in the end, it's much more about believing the team has what it takes or has a relatively

higher chance than anything else we've seen to succeed. And you have to have that belief. Like, it's not obvious, but but we believe that and we just had to be right a few times every fun that's kind of it like i mean you came into this because you had your unique experience with like with like ops tools and dev tools and stuff how do you make decisions i assumed it was based on like the depth of your skill the real answer for sure is still based on belief unfortunately unfortunately. Because I learned that no matter how much work you do and how much groundwork and how much data you look at, at the stage of your backing, you can't really have enough data to convince you just purely on

paper. You have to believe and create this sort of like ecosystem of belief to continue to like make sure this can continue to be working and it's a self-fulfilling prophecy it's it's like it's really it's one of the most interesting job i ever see is being a venture capitalist and capitalists. That was the show. Thank you, Tim, for sharing your story. Tim, besides his VC firm, has a podcast about trends

and computing infrastructure called Yet Another Infra Deep Dive. You should check it out. But yeah, I still think it's wild that Tim spent years with his VS Code in one monitor and a Zoom call in the other, you know, cranking out work between company pitches

at the same time. Like, it sounds wild. When I think of a VC and I think what their days would look like, I never thought that, you know, between pitch meetings, they have to jump into a sprint planning meeting. They have to I never thought that, you know, between pitch meetings, they have to jump into a sprint planning meeting. They have to do PR reviews

amongst, you know, coming up with funding, doing whatever the legal paperwork is to make these deals work. It's really wild. And yeah, if you like this podcast, subscribe to my newsletter where I cover similar topics.

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