Investing Billions - E312: The Power Law of Reputation in Venture Capital

Episode Date: February 25, 2026

Can ethics, generosity, and long-term relationships really outperform aggression in venture capital? David Weisburd speaks with David Hornik about why “nice guys finish first… eventually,” how power-law outcomes shape a venture career, and why reputation compounds more reliably than tactics. Hornik explains why backing unflinchingly ethical founders isn’t just moral—it’s a durable competitive advantage in an industry defined by uncertainty.

You have 25 years of venture experience from August Capital to now lobby capital. You've invested everywhere from C to pre-IPO. Do you find that the greatest founders are quote unquote good people, aggressive people? Is there a certain archetype that really comes through as correlated with the extreme power law outcomes? I will only back people who are unflinchingly ethical. and in fact, part of my process... How do you define that? There are definable truths,

and if you are willing to, you know, if you are willing to stretch the truth, you are not unflinchingly ethical. Is pushing somebody to work 100 hours a week? Is that ethical? Is telling somebody you're going to go and deliver something that you're not sure that you can deliver?

Is that ethical? Choosing how much and how hard you're going to push is not an ethics question. It's a culture question. And I do think that's an extraordinarily important question. I backed in a phenomenal entrepreneur. And in his first startup, one of the tenants of his company was work-life balance. And then I backed his second company.

And when he built his second company, he said, under no circumstances, is that going to be my tenant? Now, he remained an extraordinarily good human, a very devoted family man. but he realized that an emphasis on work-life balance suggested that the startup world was not an unimaginably rigorous thing that one had to engage with, you know, all of one's energy. I don't think he became any less ethical when he said work-life balance is not the thing we're focusing on. Selling something you think you can deliver, although you're not certain, is one question. Selling something you know you can't deliver or you know you don't have is another question.

And I would not back someone who is selling something that they know they can't deliver. That is dishonesty. Private equity, you invest. You have this plan to get to the two to four X return. You have this kind of very rigorous plan. And venture capital all relies on these outliers, these highly uncertain businesses. How do you, as a venture capitalist, build a career strategy around this uncertainty? Man, it's crazy.

I literally gave a talk this week about all the ways in which I've failed. You know, and I said, you know, venture capital is about disappointment because the reality is that I've invested in, let's call it, 50 companies over the last 25 years. And every single company in which I invested, I believed, could be a standalone public company. I don't invest in a company that I don't think has the capacity of a standalone, private, you know, independent company. because the best outcomes are a result of your capacity to do that, right? And so, and yet of those 50, four have gone public and been standalone businesses. I have a fifth, I think is a lot is the likely fifth.

So, you know, one in ten of those companies has done the thing that is that I hoped was true of the other nine and ten. And so, yeah, there's a whole lot of, oh, my gosh, I was wrong or that worked in a way I didn't think it was going to or the environment changed. But as long as you're backing, astonishing people who you think are doing the right thing and one time out of 10 it works, then the business model is a success and you get to continue to do it. Does this string of disappointments in nine out of ten companies not working out the way that you envisioned, does that get easier as you progress in your career? Meaning it's kind of becomes part of the expected ride that you have on a year-to-year basis? One of the hardest things of investing is seeing what's shifting before everyone else does. For decades, only the largest hedge funds could afford extensive channel research programs to spot inflection points before earnings and to stay ahead of consensus. Meanwhile, smaller funds have been forced to cobble together, ad hoc channel intelligence, or rely on stale reports from sell-side shops.

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the CEOs, the people who are building these businesses. And they are putting their entire lives into these things. And so for those things to fail is catastrophic and has a real human toll. And so there's no amount of time where I will feel better about that. You know, the people I care about experiencing something terrible, I will always feel terrible about that. Having said that, understanding the model, you can understand that that's the model that one in ten has to be successful. But if you're a new venture investor and you have yet to have that one and, You know, you start seeing these companies fail, and you don't know if you'll have the one.

It is an astonishing amount of stress. And, you know, the expression goes in venture lemons ripen early, which means the companies that aren't going to work are going to not work sooner than the companies that work. In my career, it took 11 years before Splunk went public. I had been the first investor in Splunk, three amazing entrepreneurs and a good idea. In year 11, it went public. and my firm made hundreds of millions of dollars, and I made the Midas list. But in year seven, I was like, wow, I wonder if I'm terrible at this, you know. And so once you've had a splunk, then it is a little easier to say, oh, I think this will be all right,

although my mantra immediately thereafter was one more splunk before I die, you know. So it is easier because people will give you the benefit of the doubt. But it is not easier in the sense that you have any greater certainty that you'll achieve it. It's like these unteachable lessons. Everybody on an academic basis understands this one in ten phenomenon when they go into venture capital. But they fail to really internalize both the one and the ten. One of the most common things that venture capitalists say over and over again is I fail to realize how important those power law outcomes are. like how singularly important they are.

I have four companies that I funded when they were a handful of people and, you know, double-digit millions in market cap and very little revenue. And those four all went public, traded up past to $10 billion in market cap. And each one produced, you know, hundreds of millions of dollars in profits. So those four really were the dramatic, you know, they had a dramatic impact on IRR. About half of the others sold for some amount of money. We made some money, broke even, et cetera, and then about half of the remainder went to zero. I interviewed a poor of a meta, who's a fun of fun guy, and he had over 500 investments,

and I believe five percent of them, 25 of them. it returned 77% of the fund. And I think a couple handful of them returned 50%. So like a small handful of companies at a 500 return 50, 25 return 77%, which is another way of saying the 475 return 23%. I was talking to an LPE before Uber had gone public. And he said that Uber reflected something like 80% of the total value of his entire portfolio,

which made him very nervous. He's like, I need it to go public, I need that to work. And it did. It worked out very well for him. That worked out fine. But at the time, that made him extraordinarily nervous. And that kind of concentration is unimaginable. Although now we have these companies that are worth, you know,

they're going public at $100 billion. And the next set may go public at hundreds of billions of dollars, right? Sex will likely be a trillion dollar outcome. Anthropic, hopefully will be somewhere close. I'm investor in both of those. But hopefully they'll both be over a trillion. But by the way, completely moronic as a multiple, right? I mean, I don't know when we stopped, when we abandoned multiples in these businesses. Like, why is either of those companies a trillion dollar company? Why is anything a trillion dollar company to tell you the truth? But if you look at the companies that are trillion dollar companies, there are many, many billions of dollars in revenue and many. many, many billions of dollars in profit, which neither Anthropic nor SpaceX are.

So why would they be a trillion dollar company except that, you know, these markets are not rational. That's my takeaway. But for you, I hope you, I wish you good luck because if they end up a trillion dollar company, that will be an astonishing outcome for you, almost where, no matter where you invested. And again, power laws, it will make up for a bunch of businesses you will. liked and thought we're going to be successful in our field. What's compounded the most over these 25 years?

Across the business. Across your career, across your funds, across your investing. Network and reputation, right? I mean, you know, you enter the business. You've worked with a set of people. You've involved in a fixed number of businesses, et cetera. And, you know, over 25 years, I have invested in a great number of companies. I've worked with a huge number of executives in those companies.

I've worked with an astonishing number of great lawyers, great bankers, great accountants. And then I started this conference called the lobby conference where I gathered together, 250 of the most thoughtful entrepreneurs and investors, to come together and just talk about the stuff that was important to them. And that was extraordinarily multiplicative because I would say to folks like you, hey, David, that was great that you participate in this. Who should I invite? Who else would be an amazing participant?

And I'd get the next set of extraordinary people. And so, you know, 2,500 people have been to some lobby conference or other. This year is the 20th anniversary. And so I feel like I've had the incredible fortune to, you know, to touch a huge number of people. And then it's up to you to have a reputation that makes that valuable, right? I mean, there's some people where the more people, they encounter the more people dislike them. Ben Horowitz publicly shared that he went on one call,

him and Mark, and Driesen went on one call to raise his last $15 billion fund. Obviously, you have to go upstream of that. Why did that happen? It's not because that one call was so exceptional. It's because of that reputation they've built over similarly two, three decades. Look at when they started their firm,

they understood that they had been company builders. And so one of their very first One of their very first partners, like general partners in the firm, was one of the best PR people in the country. And they built a media empire before they built an investing empire. So that's one way to do it. That's not how I did it. The co-founder of this podcast now runs this media empire, Eric Tornberg.

So it all goes full circle. Maybe an obvious question, but how have you been able to compound your reputation, what does that look like on a day-to-day basis? You know, I talk about this thing called the transitive property of reputation. And mostly I talk about in the context of trying to get to know people, etc., which is if I have a deep relationship with you, I have huge respect, I think you've done extraordinary work, et cetera, and you have a deep relationship with someone else, and you think they've done extraordinary work and they, and, um,

and are a fantastic human, then by the transit of property of reputation, I believe them to be an astonishing person until proven otherwise. And so, you know, when I returned to Silicon Valley, I'd been a Stanford undergrad, I met a bunch of amazing people. Jerry Yang, the founder of Yahoo, was in my freshman dorm. I came back to be a lawyer to represent startups, including Jerry. And the very first deal I worked on was Yahoo's acquisition of a company called Vioweb, which was started by Paul Graham.

So I had a relationship with Paul Graham before Paul Graham was Paul Graham. And then when he started Y Combinator, and he had his very first demo day in Boston in his backyard, I flew out from California. It was one of the 15 VCs in his backyard. So I think you have this opportunity to meet amazing people. So I came back to Silicon Valley.

I said, oh, I get networking. You just catch up with the people you thought were amazing. And then it very quickly became clear to me that that is a confined circle. You've met those people already. And so the only way that you can do that is to say, how can I meet the friends of the people that I think are amazing so that I can then expand that circle. And if you do that forever more,

you will end up with astonishing people in your lives. First time I heard your name was when you wrote this article in January 2012 called Nice Guys Finish First, dot, dot, dot, eventually. You still believe that today in 2026? 100%. And I have no interest in backing not nice guys. And why is it, dot, dot eventually? Well, this article was a reaction to a research paper

that had been written by professors at Harvard and Stanford Business School. And they had done some experiments where they tested outcomes by, are you a good person, are you a mean person? Are you an angry person, whatever? And they came back and said, there's a very clear conclusion that

the selfish being people are the more successful people in these negotiations. And my article said that this was that it was a failed experiment because it misunderstood the nature of business and certainly the nature of business in Silicon Valley. There is no such thing in our worlds as a one-off negotiation.

There's no such thing as a single transaction. action that does not influence and impact your reputation, your capacity to do other things. If you take the position that my job here is to help make you successful and I will pay it forward in a thoughtful way, that is a compounding asset that you have. And so even if in some early time someone, you know, took advantage of you by being just duplicitous or whatever, right? The word gets out that they're duplicitous, whereas over time, the word gets out that you are someone who can be trusted. And so negotiations are different when you're someone who can be trusted than when you're someone who's duplicitous. So I just think that because real

business value is created over time and through relationships, one cannot be a bad human, cannot be a duplicitous human, cannot be a tyrannical human, and create a, you know, a tyrannical human, and create long-term business value. The next Google comes out, and let's say it's Open AI andthropic, there is a competition just to get in the round, and it seems, at least in the short term, an incentive to do or say anything to get in that round. How do you marry that with this idea of these compounding relationship

and reputation games? I think it's an important question, and as I was raising my lobby capital fund, I had been at August Capital for 20 years. August had a reputation that built over that time, et cetera. It was a bigger firm, a bigger fund. I was raising a smaller fund, and the LP said, David, are you going to be able to win these deals?

It's a competitive world. Are you with your new brand and are you going to be able to win these deals? We just finished investing Lobby Capital One. And we did 21 deals in the fund. We issued 22 term sheets. We only lost one deal. And we beat out Sequoia and Dreson and, you know, big name firms. So how do you do it?

Well, the answer is, listen, I'm excited to fund your company. Here's a list of everyone I've worked with over the last 25 years. You should call them and understand what it means to work with me. And by the way, you should do the same for the other people who are interested in funding your company and have them give you a list of everybody, right? I dare them to give you a list of everybody. Because the way that my firm wins deals, the way I win deals is we are referred to great opportunities

by the people who trust us the most, who believe in us. And then when we are interested in funding a company, that extraordinary network of people who are all doing amazing things, then say, if you have the opportunity to work with these people, it would be in your interest. The founders that are most methodical, they're, of course, very methodical around who's on their cap table,

and they do the diligence, they do the hard work, and they surface truth versus the people that are a little bit laissez-faire about it. Oh, he seems nice. She seems nice. They tend not to build enduring franchises. Have you been waiting for the perfect time to upgrade your tech? Good news. The wait is over.

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Visit Northwest Registeredagent.com slash investfree and start using free resources to build something amazing. Get more with Northwest Registered Agent at Northwest Registered Agent.com slash invest free. Yeah, no, I think it's, I gave a term sheet to a founder once and he had six term sheets. from very good firms. And he ultimately said, he ultimately said, David, I'm going to take your money. I'm looking forward to it.

And I said, well, what was your process? And he said, I literally called references for each of these people and said, tell me about them. And he said, I kept going until I got to a negative reference, until I heard negative things about it. And then I compared the relative firms. And he said,

you would not probably be surprised, but there were a couple of these investors. I only need to make one reference call. And I heard, you know, based on where, yeah, and I heard really challenging things about them, you know. And so do the work, right? I think venture investors need to do the work. I think there is a lot of irresponsible investing going on right now where people are, you know, funding things based on reputation and hearsay, et cetera, and haven't done

the work themselves, and that will go poorly. and then entrepreneurs should do the work because, you know, Renee Lassert, who was the very first entrepreneur I backed, I've funded him across two companies and I'm on his board today after 25 years. He has been stuck with me for 25 years. Imagine if I was terrible. That'd be a lot of years. Whenever I look at these incentive mechanisms,

I like to take out the morality from them to, because I think a lot of times morality could cloud thinking and cloud judgment. and I very much like to seek truth and what's actually on the ground happening. And the way that I look at the bad reputation strategy or basically the zero sum strategy or the short-term strategy is that it actually could work. It's just highly unlikely to work because think of it as every time you invest your chip stack, you get less and less chips. Now, that doesn't mean you can't invest into the next Open AI and do really well.

but one is, you know, that's going to be your last bet, so you're not really creating franchise value. But two is you have a pretty, it's a very risky strategy versus the person that invest maybe under, undersells themselves and gains a reputation over time, things could go against them. You know, if they have a 10% hit rate, that still means, you know, you do 20 shots on gold. There's a 50-50 shot that you might not hit anything. but over time, the odds start to probabilistically favor you. Luck plays a big role in this business. You know, if you miss the one in 10, then, you know, you are a failed venture investor.

And if you get 2 in 10, you're an extraordinary venture investor. Like, that's an absurdity. My brother was on the MIT blackjack team, right? So they would, they were card counters. They went to play blackjack. and you'd sit and count until the count was up. And then you'd sit down and you'd bet big for a period of time. And it shifted the odds.

It used to be, you know, 51% in favor of the house. And by counting, it was 51% in favor of the team. And there were weekends that they lost hundreds of thousands of dollars because there's still luck involved. Through your article in 2020, 2012, you became good friends with Adam Grant, who I've heard so many great things about. He wrote this book, Give and Take. Tell me about the main lessons from the book and which part of it do you agree with and which part of it do you not agree with.

I agree with all of it, which was lucky because I only, I met Adam because of that article. He read the article. He was working on this book trying to determine scientifically who were more successful people who were givers or people who were takers. And he had read the article that I had written and he said, do you mind, can we talk about it? And he and I got on the phone. It was supposed to be an hour. We spent a couple of hours. It was a great conversation.

We caught up some more. And a story I told him about losing a deal ended up kind of the very first story in the book, give and take, which was amazing. Now, the reason he chose it is because I looked like an idiot. I had done all the right things. I'd been the good guy. I had a relationship with this founder. And then the founder said, look, my heart says I should go with you, but my head says I should go with this other investor. and so I'm not going to take your money.

And then what happened is I said to him, well, that's the wrong answer. You know, that can't be the answer. And you should reconsider it. We had a long conversation. He ultimately decided to let me in the deal because of my reputation as someone who had been a giver, quote unquote, giver. And that's been a long relationship. Companies doing great.

That's been fine. And that became the story in the book. What Adam discovered, as he did the research, Adam is a professor at Wharton. He's a psychologist. He literally has an encyclopedic memory for these studies that have been done to test these various propositions. What he determined was there are sort of three types of people. There are people who are takers.

They are trying to extract value from you. There are people who are givers. They are trying to insert value into the system. And there are people who are matchers who say, like, if you do this thing for me, I'll do this thing for you. And what he determined is that the givers are the most successful business people. What he also determined is that the givers are the least successful investment in business people. Right. And the reason for that is that if you just give without any concern for how it's affecting you, then people will take advantage of you, right? takers can spot a giver who is not worried about what they're giving away from a mile away

and it'll just take, take, take until you're, you know, a shell of yourself. And so Adam essentially came to the conclusion that best, you know, the best business people work that way, that the ones who say, how can I help you be successful because they want to see a universe in which the broader community is successful, those people, you know, the Bill Campbell's of this world are astonishingly successful. He's one of my heroes. He gave unendingly, and as a result, did better than everybody. Let's say I'm learning to be an elite giver.

And let's say I want to, on the margin, be helpful. Let's say some people pleasing tendencies. But I also want to be successful. What are some best practices? I teach. And so I encounter lots and lots of students over time. and I have many, many students reach out and say, hey, David, I'm thinking about this thing,

or I'm trying to make a choice or whatever. Do you have 15 minutes? Do you have a half hour? Can we catch up, et cetera? And I almost always say yes. Because it turns out that by and large, you know, students are, there may be some takers in that group, but they, you know, but they haven't,

they haven't operationalized taking yet. yesterday my morning was filled with these conversations, a former student of mine from Harvard Law, a former student of mine from Stanford, the brother of a kid on my daughter's soccer team, who's now a CS major. And my wife often says, like, oh, my God, how do you have time? Is that really good use of your time? And my answer is it 100% is because it makes the planet better. I meet a great bunch of young people, and some one of them is going to do something amazing or have a friend who does something amazing, et cetera. I recently heard from a student of mine who said, hey, one of my favorite people at Stanford

Business School is this person you should hear about his business. I said, oh, of course, that sounds amazing. Take my favorite student, transitive property of reputation. I meet with this friend of theirs. I think the friend is fantastic. I'm a huge fan of the friends, but I couldn't get my arms around the business. I turned down the business,

but I said, you should come to my conference. I think you'd enjoy it. That founder came to my conference. Was a great participant. People loved having him there. He added a lot to the conversation. And then a few months later, I got an email. This was this week saying,

hey, my smartest friend has started this new company that I think you'll find interesting. Are you interested? Here's some info. Do you interest? And I said, yeah, 100%. And then he introduced me, despite having turned him down, as David is my favorite venture capitalist.

Despite the fact that I didn't fund my company, you can't. There's no version where you can get to that outcome other than saying, how can I be helpful? Does that work for you? Because you're in this pool of Stanford Business School students and how could others apply this strategy? Yeah, I don't think that it's a unique pool,

and I think that you make your pool, right? There are entrepreneurs who've come out of all sorts of spaces, who have built all sorts of amazing things, and so I think the answer is, you know, you have to get in the pool. When I think about value at or helping, I think very much in compounding within a certain form factor. So I've learned this from many mentors with you.

Obviously, you have this conference. Every year you have these 250 people that are happy. They're introducing other people. You have a reputation and has its own brand, the conference itself. With me, I obviously have the podcast. To me, that's a much smarter way to give than to give one to one. I was the very first venture capital blogger. And my partner, Andrew, at the time, said, you know, nobody's blogging about venture.

Why is that? You know, it's not like we have these secrets. Like, why shouldn't? The venture police aren't going to arrest you. Yeah, exactly. So we started this blog. It was called Venture blog. Initially, it was written by me, Andrew Anchor, and Naval Ravacant, who were all at August

Capitol. We started this blog. Ultimately, Naval and Andrew sort of fell off. They were like, oh, that's a lot of work. work and we've got other things to focus on. And I wrote it for 10 years. And it was extraordinarily valuable because people really wanted to understand the venture world in a way that nobody was sharing.

If I were today that 33-year-old kid entering the venture business, I would be on TikTok. You know, like, I keep thinking, like, maybe I should be the TikTok VC. That's the platform that someone should be owning because it's, you know, from a media perspective, you a huge amount of leverage and opportunity. So I agree with you. You have to figure out what is going to be multiplicative, right? Because additive is too hard. So find that thing. And you've gone through thousands of startups. It's not over 10,000 to make those 50 investments.

And there's this age old question about EQ and IQ in the general business world. In the venture capital world, it seems to be settled that you want IQ over EQ. But is that really what you see in these $10 billion outcomes in terms of high IQ and EQ's, you know, way down. It's funny that you say it's well settled. I would absolutely not agree with that. And I would, and I do not invest that way. Well, just I think there are lots of very, you know, high clock rate people who could never convince someone to give them money.

You right? I mean, we see lots of entrepreneurs. You say I've seen 10,000 business. I see about a thousand business plans a year. So 25,000 businesses. I meet with about a hundred of them a year, so 2,500 companies. It got serious with 250 of them funded, 50. That's loosely, right?

So I've seen an unimaginable number of people. And what you learn over time is there are a bunch of characteristics that help make you a successful entrepreneur. If you can't articulate the opportunity that you're building, if you can't articulate the reasons in which the problem you're solving, how are you going to convince people to give you money? How are you going to convince entrepreneurs to join you? How are you going to convince? You know, right, there's just a huge range of things that you need to be able to do. But is it one of those things that's necessary on some level?

You can't be completely oblivious to it, but IQ is where you get your lift. If I look at the great companies I've funded and the amazing companies have turned down, the vast majority of them have not been built on IQ. I mean, certainly, you know, Bill Gates and Microsoft is a very good example of what you're describing. My partner, Dave Markort, who founded August Capital, and he hired me to be a venture investor, was the only private investor in Microsoft. And when I asked him, so why'd you fund Microsoft, he said, well, Bill Gates was like an 19-year-old, but when I asked him about everybody else's business,

he was smarter on their business than they were. He knew, you know, I was looking at all these companies. I'd say, what do you think of this company? And say, well, if they did this and this and this, they'd be successful, but they're not doing that because they're idiots. So clearly, and I think people viewed Gates as having more IQ than EQ, right? But like Twitter, like the founders of Twitter, they were perfectly smart, but I don't think that was an IQ thing.

I'm not sure it was an EQ thing either. Sometimes you find the zeitgeist and you get to ride the wave, right? Dylan Field, who I'm a huge fan of, I think, is an amazing young guy. Created Figma has had this astonishing outcome, and Dylan came to a class I taught, and he was chatting about it. And there was a near implosion of the company because his engineers were so mad at him at one point, because he had not exercised sufficient EQ to understand what would motivate them and keep them engaged.

And his board member, John Lilly, had to sort of come in and say, like, hey, I, you know, here's some EQ to rent. I'm going to help you work through this, right? I do that all the time with my companies. I spend a lot of time. I literally just had lunch with an astonishing founder, but he is working his team too hard. Like I said to him, the engine is running too hot. And even though you've had extraordinary outcome to date, at some point, you know, the engine blows. And so you, you know, I think it's always a balancing act.

But I would choose EQ before I choose IQ. If you could go back 25 years ago and you could give a younger David advice on what to avoid or what to do in order to accelerate his career, What piece of advice would you give them? To me, it is all about the people, right? I have said no to some of the bigger companies in the world. And of course I regret that because from an economic standpoint, that was a bad decision. But there's nothing I could have told myself in year one that would have gotten me to say yes to those companies that I think would have been good advice. Right.

The reason I didn't fund those companies was I had good reasons that were, and you know, I turned out to be that those things were not determinative, but it doesn't, wouldn't have changed how I'd behave, right? This people relationship-based style of investing, is it something that took a while to really prove itself? Did you ever have doubts that it might be the wrong strategy? I didn't care because it was the only way I was going to engage in the business. So I think every young venture investor, first early venture investor, first early venture investor, has stictodes. If you don't, you're crazy. You know, I had a moment, five years into the venture business. I came home. We had four kids, put the kids to bed, sat down with my wife, and I said to her, you know, I came to a realization today that five years into the venture business, it's not

obvious that I'm a good VC, but it is obvious that I'm no longer qualified to be an attorney. you know and she said wow shouldn't you have thought about that and I said yeah probably should have thought about that and she said well that's not my problem go be a good VC I was like on it you know I think you're the venture business when my partners hired me into the venture business they said David this is an extremely individualistic business we are a partnership will help you make good decisions but in the end you're going to live and die by your capacity to be successful and by the decisions you make and the information you bring us and the things you do. And so are you comfortable with that? Can you get comfortable with that?

And I was a cocky young guy and I said to this one particular investor, look, you've been wildly successful and so, and I don't mean any offense by this, but if I had to choose between betting on you or betting on me, I'd bet on me. And he laughed and was like, okay, whatever. And then he hired me, you know. I have made a few mistakes where I have invested. in people that I should have known to not invest in. And I did not show the discipline I should have to get to process to make sure I understood who I, you know, in whom I was investing.

And that's the biggest thing I would change and I change it today. Double click on that. I can tell you now that I will never fund entrepreneurs until I have had dinner with them. I won't. I can be as excited about your business. I can think you're a smartest human alive. I can think you're building great stuff. But until I have spent a couple or three hours with you,

just having some food with you and your co-founder or co-founders or whatever and understand you as a human, I may make a mistake about who you actually are, and I have. And I don't intend to do that again. Now, I could still be duped. I could still like me, but by and large, if you spend enough time with people, they reveal who they are. And you can determine whether you want to spend time with them. I like to say somebody that pretends to be an honest person for 20 years.

Eventually, they become an honest person. Taken to the extreme, you become who you pretend to be. I mean, look, if that's the case, great. By all means, if you want to pretend to be a giver. Somebody that pretends to be a bad person for 20 years at some point, you have to call them a bad person. On that note, David, it's been 14 years since I read that article about nice people. I do consider myself a nice person. It's an honor to have you on the podcast.

And thanks so much for making time. Really fun conversation. Thanks so much. That's it for today's episode of How I Invest. If this conversation gave you new insights or ideas, do me a quick favor. Share with one person in your network who'd find a valuable or leave a short review wherever you listen. This helps more investors discover the show and keeps us bringing you these conversations week after week. Thank you for your continued support.