My First Million - #206 with Brianne Kimmel - How Venture Capitalists Make Money

Episode Date: August 4, 2021

In this episode Sam (@theSamParr) and Shaan (@ShaanVP) are joined by solo capitalist Brianne Kimmel (@briannekimmel). They talk about how Bri got started in investing, the pros and cons of her busy schedule, and discuss some of the unicorns she's invested in. They also discuss a cool use of deepfakes, how VCs make money, and whether or not college is worth the price of admission. --------- * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. --------- Show notes: * (1:00) Intro * (2:25) The Shake Up - a new podcast on the HubSpot Podcast Network * (6:52) GPT-3 and Anthony Bourdain * (11:40) A cool use of deepfakes * (13:31) Meet Brianne Kimmel * (16:14) Bri's crazy schedule * (21:39) How VCs make money * (37:33) Hot spaces Bri sees * (40:54) Is higher education worth it? * (50:31) Winners Bri sees in her portfolio

If you can get into a top 20 university and you have to go into a ton of debt, it is 100% worth it. If that's the case, it ain't broken. I think it's doing great. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On a road, let's travel, never looking back.

Okay. Finally. By the way, when you're listening to this, it's all going to sound smooth. but we've just recorded this like three times because remote work still sucks a little bit. But we have Brie here. Brie Kimmel is an investor in mostly, I think, work-related products. So maybe you could tell us why it's so hard. All right, let me just read three things off your little bio thing here that I think are interesting.

So solo capital, so you raised your own fund by yourself after never having worked in VC before that. Is that correct? That's correct. Okay, great. Another one. According to this, you have invested in seven unicorns already, which is kind of nutty. What are the seven? Yeah, so started work life about a year and a half ago, invested in Hoppin, Webflow, which was an angel investment from when I was at Zendesk, pipe, public, a bunch of interesting companies and sort of future workspace. Okay, wow, that's pretty impressive. Okay, and then another one that's on here that I think is kind of interesting that I think we should just jump in on.

I don't know, Sam, where do you want to start? You want to start with this? I want to start with this Anthony Bourdain story, but that's mine. I want to start with that. That's yours. That's mine. Bree, do you know what this podcast is about? I do know what this podcast is about.

I've actually listened to many episodes. I'm a big fan. Great. So we don't need to explain much to you. So, Bree, you and go ahead and plug your new. podcast you have coming out. What's it called? Oh, we're coming in hot. We're plugging the podcast already. I thought that was going to come in later. No, no, we do it now. And then people are like, no, I'm not going to click it. And then at the end, they'll do it. Yeah, so we're the first podcast after

this one to be part of the HubSpot podcast network. So myself and my best friend, Alexis Gay, she's a stand-up comedian. She makes a lot of tech parody videos. We decided to start a business podcast with the fine folks over at HubSpot who have been awesome. They've given us a team. We've interviewed interesting people. It's been cool for me because, you know, as you mentioned, I mostly do software investing. And we're actually interviewing a lot of direct consumer founders and people that I've never met before. And so we have this new podcast coming out called The ShakeUp, where we interview business leaders about very specific decisions that they've made that have changed the trajectory of their company. So, I'll be listening. Hang on. Is that like, is the

vibe like comedy because she's a comedian? Like is this called her daddy or is this like, you know, how I built this or what is this? It actually, that's a really great, that's a really great point. We're somewhere between the two. We wanted to make it interesting and educational and it is more of a business audience. I think in this new era of working from home, unless it's interesting and entertaining, people don't want to listen. And so it's not corporate. It's not boring. One of the most challenging parts of the podcast for me is that it's very hard to get business people off script. They've all gone through comms training. They all have, you know, their executive coach. To get them to really open up and share vulnerable moments or to be really open and

authentic has been surprisingly really hard. Sam is really good at it. He, I don't know how he does it, but he breaks through that every single time. But I got to ask, is it? Wait, Sean, I mean, I think you're good at you're pretty good at that too i think we both are you're good at getting them you're good at like getting people off the script really good at getting people off the script um because sam will do something like he'll like he'll like he'll see you and he'll be like he'll be like he's like you're good looking i mean like not traditionally but like you're you're good looking so what and then they're like talking about and it's like kind of a compliment but kind of an insult and then they're just trying to figure out like where do i take this and so then like something

natural comes out or he'll be like you know ask them about i don't know something something weird that's behind them in the room or something like that. And that usually gets people off. So I'm so, so bad at this that I had to bring a stand-up comedian to really like warm up the guest. I like as an investor, it's a little bit robotic and you tend to ask the same five to ten questions. And so that's Alexis's job.

She's world class at getting people, you know, maybe flattering them a little bit, maybe flattering herself, maybe complimenting the show, but then finding ways to get people to open up and to be a little bit less scripted. Is it hard to be on a podcast with somebody who's a professional comedian? Like I know Sam's struggle is just dealing with my level of humor, my prowess. Are you intimidated by your comedian co-host? You know, it has been fun. You know, now that we have a producer as well, you know, the producer is very clear at helping us define our roles.

And so, like, I know that I'm not funny. It's not my role to be funny on the show. It's my role to, like, bring in data and research. And I get to be the nerdy one, which is great. I don't attempt to be funny at all. Yeah, that's my strategy. By the way, Sean, they have, like, producers and shit and, like, had, like, she's mentioning all these resources.

They got, like, headshots. Right. I call the Alarna, the lady who runs the podcast network at Housbop. Like, wait, Bree and these folks are getting, like, producers and headshots. Like, I've been using, like, Eric on Fiverr, like, to, like, rig this stuff together. Honestly, it's, I don't even show up to the meeting. So they're probably like, yeah, of course you don't get anything. You don't show up to the fucking meeting.

Why would we give you any resources? So, Bree, you've listened to a couple podcasts. I want to just, so what we're going to do is we're going to brainstorm a little bit. I know that you've got a couple ideas here that I definitely want to talk about. I want to talk about your calendar because like when I see that, I just want to kill myself. I can't believe that that's your calendar. I'm embarrassed that you saw it, actually. I'm a little bit embarrassed.

Oh, my God. So, well, I want to talk about a bunch of stuff. But before we get into that, can I, can I, can I, tell you guys something that I've been obsessed with over the past week. So there's this new Anthony Bourdain documentary. I actually don't remember what it's called. You know, you guys know what I'm talking about? A roadrunner. It's called Roadrunner. Okay, so it came out last week. And it's basically about his last maybe three or four weeks of life or something like that and talks about, like, details his last four weeks of life and talks about his whole journey. And whatever, that's not the

point. The point is, is at the end, they have this amazing soundbite. So basically, right before he died, he wrote an email to someone. And it wasn't like a suicide note, but it was like, I'm sad type of thing. And you hear him read that email. Well, it's not actually him. It's AI. He never actually said that. He died. He wrote the email and then he died. And this company used this technology to read out the email. And it sounds just like him. If I wasn't like a nerd and researched it, I would have thought that it was him. And I started thinking about this. I started thinking about a few things. And the reason I kind of

in putting all this together is I read this story about this guy last week named Josh. And basically what happened was his girlfriend died. And he used GPT3 or GPT3. And he loaded up a ton of social media messages, like Facebook messages and tweets and Twitter stuff and text stuff that she had said. And he put it to the GP3 and he made a girlfriend

who knew she died. and he could talk to her and and like feel like he's still connected. A, do you think this is wrong and creepy? B, that Anthony Bordeaux day thing. That's obviously, that's going to happen. That's going to happen in the future how movies are going to come about. But three, when are we going to start talking to our dead moms? Came in hot at the end there.

Is this crazy? Like, the fact that Anthony Bordet did this, isn't it wild that we're going to be having these conversations? I don't hang around with the small. smart enough people to be to be to be who built this up. Did you ever see that episode of Black Mirror where they did this basically? So do you watch any Black Mirror Sam? No. It's all right.

It's a little bit depressing, but it's like too accurate also at the same time. So in Black Mirror, they take this to the extreme and basically this girl's living with her boyfriend and then by the middle or end of the episode, you realize that this boyfriend is not like real is basically like an AI robot that is just like kind of like he's not perfect. So it gives her companionship because it's like he's still here. He's doing all the things. It sounds like him and it looks like him. But he's not actually human.

So it's kind of like the uncanny valley. It doesn't seem it's not actually the real thing. And so it's kind of depressing for her to be with this kind of like shadow of her boyfriend or whatever. And so there's been a bunch of people trying to do this with GPD3. And somebody did it with our podcast. I don't know if you saw that. Somebody uploaded my a bunch of stories I told or something like that. Oh, I saw that.

And then he's like, look, you can ask Sean a question and then like it gives a pretty real, like, it's like me when I just bullshit some answer. It's like it bullshits it just as good as I can. I'm like, wow, this is kind of amazing. So I think we're getting, we're getting closer to where that's like, it's like the Anthony Bourdain thing where, of course, it's not going to be fully accurate. But damn, it's like, it feels like magic. It wasn't, this wasn't really a thing five, ten years ago. Brie, what have you seen in that space? Yeah, I mean, one point in that with the Bordain piece, I mean, what's interesting.

there is, you know, he, the question is, are you building a legacy and are you carrying someone's story forward? I think that's really cool. I think if there are sound bites or old songs or if you can take a book that was written a decade ago and then put it in the voice of someone who's already passed away, that can be really cool. I mean, that's really like a strong storytelling angle in a way to really continue their legacy. The kind of the gray area for me is, you know, the guy that's created a fake girlfriend that's using previous text conversations. Like, I'm a little bit concerned for him in the long term. You know, I think he's maybe staying in the past as opposed to like, you know, going through therapy or, you know, spending time with family

and friends and then like getting back out there again. And so it probably depends on the use case and some of the scenarios for these technologies. But I agree. I love Black Mirror. I've watched them all, binge watch them all. And it's really, creepy to see that a lot of these things are actually proving to be true. So then I was looking around at what other stuff is like this. There's this one called AIWriter.app. And what you can do is you can look at the variety of different dead authors and dead famous people that they have and they've uploaded all their personalities and you can ask Ben Franklin

a question. It's pretty amazing. Anyway, I just wanted to tell you all about that. I've been obsessing about this. So there's one that I'm going to tell you guys about, but I almost don't want to tell you until I lock in my full investment, but I want to invest in this company. I saw it. I haven't even had a chance to talk to them yet.

But what they're doing is they basically made a version of deep fake that you can do for yourself so you can thank customers personally for a purchase or for anything that they did. So basically you record yourself once sitting in a room like I'm here, right? And I say, oh, you know, thanks for leaving that review on iTunes for the podcast. Or thanks for tweeting out the podcast. And then what it does is it basically takes me in that scenario and it starts it off with, hey, Sam, you know, saw your review, just want to say, blah, blah, blah. But I don't have to record the Hey Sam part. The Hey Sam part, the personal touch gets basically deep faked in the video.

And then it can insert any of the variables. So like, let's say it's e-commerce. I could say, hey, blank name, right? So it'll be like, hey, Sam, you know, thanks for, thanks for shopping with us. I hope you love the Casper mattress that you just bought, right? and it'll make the whole thing sound pretty seamless and just input variables from a database, essentially, and just turn it into your voice.

So I think that's kind of amazing to add a, quote-unquote, personal touch that's going to be, you know, it scales something that was previously unscalable. My scout, Zach, found it, and he sent it to me. I'm really excited for that use case. I'm also really excited to see some of the bloopers. Like, I can't wait to see a person's face say, hey, first name, last name.

Right. How's your day go? Thanks for being a customer. Right. Hey, asshole. Thanks for. I find sometimes the automated stuff. I've tried some of these automated gifting services before.

And if the database isn't in a perfect form and first name, last name isn't spelled right, you end up looking like an asshole. But it can be pretty funny. So, Bree, I have to ask you a question. This is going to sound like an insult, which we just told you. I'm apparently known for it. He's doing the thing. This is not an insult.

This is not an insult. All right. So I'm looking at work-life ventures. So this is this firm you started in 2019. Before that, you worked at, I was looking at your LinkedIn. What was it? It starts with the ZZZ. The big software.

Zendesk. You had a normal, a good job there. So, like, you are a relatively normal person, but you are investing in, like, the most baller companies at the earliest times. How, like, the Latin compliment is, like, you're not really like a somebody, and yet somehow you already are a somebody. How on earth did you pull this off? How'd you go from nobody to somebody?

I think we can go even before Zendesk. You know, I'd worked at a big tech company. I was at Expedia. Went to a state school. Grew up in Ohio. I mean, we can cut the data anyway. I'm a very normal person. I love a very normal life.

Like, I'm not your like venture capitalists that's flying in private jets and, you know, doing all these crazy things. You might be now. Yeah, you might be now. I might be now. You said it sounds like you're about to make a killing. Well, going back to your point, thank you. That wasn't insulting. That's like very clearly something you can see from LinkedIn is like, you know, I started out as a marketer, started meeting startups on evenings, started hosting dinners. The interesting thing that I don't think a lot of people truly realize until you're on the ground in Silicon Valley is you just end up meeting a lot of people just by proximity. Like you walk into a dinner, you make one or two connections, you keep checking in with them, you stay in touch. And that's how you build your network. And, you know, everyone there is going somewhere.

Like, you don't move to the Valley, pay crazy, insane rent prices to not be, like, in the mix. And so I found that, you know, a lot of the things that I did early on as an angel, I was really intentional about, like, the angel investment in Webflow. I had organized a go-to-market workshop invited Webflow. So I had, like, you know, a whole day with the team, which was great. I hosted a couple of no-code dinners to spend as much time with them as possible. I try to find interesting ways to really build close relationships with a handful of companies. I know we talked about, you mentioned my calendar and how insane it is. I actually don't take that many meetings, and I rarely do one-on-one coffees with people,

which is really interesting and kind of a different strategy from other VCs. But I try to find interesting touch points that will give me enough of an angle to invest in a company that's starting to work. So Webflow. Can I just read your schedule, by the way, because nobody's looking at this. So let me just take, let's just take a Wednesday. Okay, here's Wednesday, just for people. You wake up 7 a.m., morning block.

What happens in morning block? Are you doing meditation here? Usually I go to the gym. Usually I go to the gym. During COVID, I wrote my Peloton, but I'm now back to going to the gym. Right, okay, exactly. So we're going up until about 830. So for 7 to 8.30, that's like, get ready to go to the gym, go to the gym.

It says Peloton 45. All right, great. Now we have Morning Block 2. What's happening in Morning Block 2? Morning Block 2, I send emails to portfolio companies and ask them for ways to help. Or sometimes there's specific, tangible projects I have to work on for a specific company. Cool. So 30 minutes there. Then, okay, where are we at? So team check-ins. We have a one-on-one with Neil. Great. Email processing. I love that. You're like an actual machine. I'm a little bit embarrassed right now. This is like you're reading my diary. It's like.

You put it on the Internet. I know, I know. I know. Hearing it out loud makes me sound insane. So thank you. Okay, prep. Pitch number one. That's 12-15 to 1.

Then we have pitch number one. So you do the research before the pitch. Then you take the pitch. Oh, that's interesting. Usually I start the call and then they see my eyes frantically going around the screen while I'm looking for like, oh, shit, who is this?

What is the deck? What is the name of this company? And I'll just be like, let's just, before we talk about your company, just tell me about yourself while I go look at what company you are. All right. So you're doing your research. You do your pitch.

Next step. So you do immediate follow-ups. You do your second pitch. Prep. Second pitch follow-up. Text triage. What's that? Like text messages?

Yeah. I am horrible at responding to text messages. I will read them. I will think that I responded. And then I'll reply like four days later. And so I actually block time in my calendar to go through all of the text that I'm getting throughout the day. Do you actually follow this?

I do. I do. And I will say for people that aren't. aren't in venture or aren't doing early, early stage startups, a lot of thing is done over text and over phone calls. It's a highly inefficient process. It's not like corporate where, you know, everyone's on email and everyone's on Slack. It's mostly through one-on-one text. So, all right, we'll just round it off. So we're going email processing part two. Then ad hoc strategy. What does that mean? Ad hoc strategy is, so part of the goal of work life is we help a lot on go-to-market.

And so typically we're working through various different go-to-market strategies for certain companies. Gotcha. Then you do a virtual dinner, amazing, life admin. So that's like, you know, what? Laundry? Is that code for laundry? When I published this, it was around the time I was, I had a crazy backlog of just like random things. Like, I woke up one morning and was like, my driver's license is expired.

My passport is expired. I haven't left my house in a year. Like, I need to get my life in order. And so that was the week that this was screenshot. I'm published. There you go. All right. Evening block from 8 p.m.

to 11 p.m. And then at bedtime, 11 p.m.? Yeah, usually. Okay. Do you think that's a day of life? Actually, we want to get weird. I have an 8th sleep as well. And so I could probably like throw in my sleep data if we want to get really weird.

Do you do? So I, um, I try like, I say no to everything. I think, Sean, you might be the same way. But for my, I try to have nothing on my calendar. I don't want to talk to anyone ever. And like a meeting to me is like a really big deal. Like, I just don't want to do it. At Twitch, they gave me an EA, and I was like, oh, so great, first time having an EA, what do you do?

And they were like, oh, like calendaring, I manage your calendar. If you want to book meetings, I'll book them for you. If people want to book you, I'll do it. And I was like, oh, okay, all right, look, you're going to love me. This is the easiest task ever. Somebody asked for a meeting. Just say, hey, he asked if you can slack him instead. And then if I ask you for a meeting, just say, are you sure?

And just delete all the group meetings in the next three weeks. Just delete them. and I'll add them back in if they were important. And so basically her job was just to make sure nothing gets on the calendar rather than taking things off or rather than putting things on. Do you think that this calendar has, being this discipline,

do you think it's helped you? Because it's, I mean, I'm looking at, like, I'm trying to find all the unfair advantages to how you kind of came up so fast. She's probably not going to say it sucks. I can tell you, I can tell you pros and cons. Pro pros to the insane calendar. is it did provide a lot of structure.

I felt that working from home, I am not the best at working from home, I will say that. And so the structure has been really helpful. It's been great. The reason for a lot of the new routines is because I do have a team now. So I have a team of five people behind the scenes. And so I need to make sure that the firm is running accordingly.

And so I think having that structure is really helpful. I also find it does help me say no. and to have specific moments throughout the day where I text founders or jump on a call just because I had talked to a lot of traditional venture capitalists. And if you ask them how they spend their week or if you ask like, you know, on Friday, Friday afternoon, like, what did you do this week? It would all be a blur because there's so much activity and so many things that are happening. And so I found that quantifying it a little bit was a nice way for me to at least establish

some of these routines. Like, well, I continue doing this forever? Probably not. But it's at least something that was helpful. when getting the firm off the ground. And Sam, we were looking at that spreadsheet of what do VCs make. I think we should talk about that. So this is what a VC's do.

Yeah, what does the solo capitalists do? So the reason why, go ahead, you find it, Sean, and then I'll talk. So, Bri, one of the reasons why I'm priding you so much is this whole VC world, it kind of, I just like, I can't tell if I'm just low IQ. you, I just, it's really hard for me to understand, like, how the money actually gets into Bree's pocket, you know, like how I understand you invest it. I understand you invest in, in startups and you wait 10 years to sell, but like, sometimes I'm curious, like, okay, but how much money can you actually make? And so we recently found, I have no idea how we, how our friend found it, a spreadsheet

that I think it's all user submitted salaries and carry numbers of maybe like a thousand, thousand different VCs. Do you want to read it read that off? Yeah, I'm trying to find it. It's a little bit hard to find here while we're live. But basically, I don't know if you could do it, Sam, if you could find it. But basically, it broke it down by fund size. So it's like, all right, if, so you were, people were volunteering their information. Here's what I make as my base compensation. Here's what I make as a bonus. And here's what my carry is. And it was like, you know, my fund is zero to 50 million, 50 million to 100 million, 100 to 200 million, and then like all the way up to a two billion plus fund. And, um, And it was, it's even there, there's like quite a lot of variety, right? Because not every partner has the same deal. But what it looked to me like was that for small funds, and you correct me if I'm wrong here, but this is my summary of like, you know, 500 rows of data, just eyeballing it. It looked like if you were going to small fund, let's call it under $100 million is your fund size.

The good news is, you know, you're taking 2% of let's call it $100 million. That's $2 million. And usually it's just one or two partners, maybe, you know, some, some admin people kind of behind the scenes. But you can, you can basically take a large salary and you have a large percentage of the carry. But you, but then on the other, so the small funds seem to do pretty well. And then the really large funds that were like a $2 billion fund, their, you know, their fees itself is insane, right? 2% of $2 billion every year that you're taking is a large number. and then their carry, you know, the multiple they're expecting to do on a $2 billion fund.

They may not 5x that fund. They may just 2x of the fund or 3x that fund. And so their carry expectations are different. It looked to me like this. Venture capitalists kind of have like a high paying job, maybe $400,000 or $500,000 a year. And then if they hit winners, like you seem to have hit some winners or you have some winners in your portfolio. It seemed like you've hit a lot of winners.

If those pan out, if Hopin truly does end up as a $5 to $10 billion company, then you know, you're going to have a big windfall, which might look more like $20 to $50 million can come your way if these winners pan out and go public and whatnot. So tell me how accurate that is, or like, put differently, what are your expectations on like how much you can make doing this thing you're doing now? Yeah. Great question. I wanted to touch on something that Sam said as well. What's interesting when you look at venture capital today is when I was a new, initially starting the firm. I went into this with a belief that venture is or traditional venture is on the decline. I saw angel investors that were getting into really great rounds. I saw solo capitalists

or super angels like I know Scott Belski has been on the show. Elad Gill is a close friend and someone that's deploying a lot of capital. I mean, a capital that looks like almost a large top tier firm. And so I saw that individuals were doing the work that, you know, a 20 to 30 person venture firm were doing. And so I think it's interesting to see, like, I'm a great case in point where I was in marketing. I went to a state school. I grew up in Ohio. Like, I'm by no means a pedigreed person. But I have been able to build a track record.

And I have been able to raise outside money. And I think this is just like the very, very early days for what's about to happen where there will be a lot more people that look like me. and there will be a lot more people that start their own firms because I think it's one of these things where like the nature of venture is changing. And my investors like smaller funds because you have one of those higher return profiles as opposed to some of the larger institutions that their multiples is coming down over time. And many of those LPs are having a hard time getting access to those funds at all. So a guy like What was the guy's name? Alad Gill

Is that you say his name? I've read a great book by him. I forget. Operators manual. I think it was called. No. High growth start-ups or something like that. High growth.

Handbook. Handbook. Manual, handbook. Yeah, it was good. That was a great book. I hadn't heard of this guy. But like I see him everywhere. And so is this just basically an incredibly high net worth liquid person who just

writes massive checks to. hundreds of startups a year. Is that just what, I mean, is it as simple as that? In a lot's case, it's a combination of personal capital plus outside money as well. I will say that a lot of the solo capitalists, I mean, even the, you know, my fund size is primarily my first check-in. I do a lot of SPVs and I do a lot of follow-on investing and that's with a handful of LPs. And so many of us, we kind of publish, here's our core strategy and then behind the scenes,

many of us have other playbooks that were running as well. And have you made, have you had any returns so far since you've started? I have. Those have mostly been on the SPB front. You know, I'm setting up special purpose vehicles where I have one or two LPs where they're, it's primarily their capital. I might write a small personal check or something small out of the fund alongside that. But I'm starting to see some returns in companies. However, I will say I'm holding on all of those positions.

What do you think is a real? Because this is what the thing me and Sam talk about, which is like, with investing, you have illiquidity for a long period of time right now, typically, right? You invest in a startup. It might take seven, 10 years for it to exit. And along the way, you're getting these paper markups. And so I guess like give us a sense of if you are, if you do go the solo capitalist route. And you've, I would say you're like the success case of going the solo capitalist route. There's a lot of people who could try it and may not have the same results as you, but let's say things work out. How do you? How do you? You you think about, because I think a lot of people are trying to decide, do I do this? Do I start a business? Do I take a job somewhere? Do I work at a fan company? What do I do? What do I do? What do you think's realistic expectations for if it works, this is what it looks like over like a seven-year period, right? The first five years, you're just taking kind of your salary, which might be 250,000, might be a little more, a little less. And then like, but you're hoping by year seven or 10, you're able to get this type of a personal win out of it, which makes your average over the 10 years look really good. I guess, can you walk us through the numbers?

Because I think for most people, this is just a black box. They don't really understand. They don't really understand how the money would, what the money could look like in this if things work out. Yeah. I'm hearing all sorts of variations to this model. I mean, I have friends who are running early stage startups and they've raised, you know, five to $20 million and they're deploying capital while they're operating.

I think that's the best case scenario. I mean, if you're ready to start a startup and you have CEO potential and you know exactly what you want to build, that is going to have a much higher, you know, you're building a legacy there. You have the ability to hire people. Like those people will even start startups. Like I just think there's so many great things when CEOs are active angel investors. That's why I chose to raise from a lot of founders and not traditional LPs or, you know, traditional financial institutions. I think they have a lot more access and they have the ability to, invest in startups opportunistically, not as their full-time thing, while they still have really great access and mindshare in the ecosystem. You know, for individuals like myself, like, you know, I had 10-ish years of tech company experience. I don't even want to say startup experience because I was at a big company and then I was at a second more medium-sized tech company. And those scenarios, you know, your investors are looking for your ability, you know, have you already built a track record? Do you have an ability to invest in really great companies?

And so that's one thing to consider. I actually spent about two solid years of blogging, tweeting, you know, really investing and building my personal brands so I could gear up to go and raise outside money. So I think you have to build a really strong case if you want to raise from outside investors. The one thing that I will say, you know, Angelus and Carta have made this incredibly easy. I think the forcing function and venture, which has caused, you know, the ability for anyone to become a VC or to raise their own fund is these platforms, which basically connect you with investors. They make it really easy to manage like your back office and, you know, you don't have to do with lawyers

and all that stuff. Right. That's the half. You dodged my question on how much money you can make, but that's okay. Maybe you don't want to answer that question. No, let's go into it. I think this is fun. I mean, this is the title of the podcast.

I think we should go into it. I would say so every solo capitalist does it differently. some people are purely one person. They're pocketing all the management fees. They're taking all the carry. I'm actually seeing today, you know, if you're raising a $5 to $10 to maybe even $25 million fund, if you're doing something on Angel List that's a true solo capitalist fund, you can actually take 2.5 to 3% management fees.

What I did for mine is I did 2% management fees the way that I thought about it because... And this is a... rolling fund? It could be a traditional fund or it could be a rolling fund. So the rolling fund means that structurally you're able to talk about your fund broadly. You're able to market your fund, which historically, you know, you weren't able to market your fund when you're actively fundraising. You know, if someone has distribution, if you have a podcast, you know, if you're an active angel investor and you already have great deal flow, or you're leaving a high growth startup and you have a great network, rolling funds are great because you can market it and you can constantly be

bringing in new LPs. It's not something where you go out, you raise money, you ask a bunch of people for money, you know, maybe a handful of people say yes, you do a first close, you go out and ask more people for money, you do a second close. Like, that historically has been a really time-consuming process. And as a solo capitalist, how you spend your time is your strategy. And so you don't want to spend the majority of your week meeting with investors and you're not meeting with startups. And so it can be something that really impacts the business model. And so I think that the rolling fund works well if you already have distribution. If you don't have distribution and you want to experiment with raising outside money, oftentimes the people that are doing this really well are individuals that

have a valuable network. I mean, maybe they're leaving Stripe or Airbnb or one of these companies where they have a very entrepreneurial culture and the people, you know, that used to sit across me at work are likely to go leave and start a startup and they're going to be able to raise from top tier funds. Like that's one of the strategy as well, where I've seen many of them go out and raise some outside money or, you know, there's a lot of the startups that have been really successful in the last generation, their alumni actually have WhatsApp groups and they've created their own syndicates where you can co-invest alongside the Airbnb Mafia or there's a stripe group or that's somewhere where I spend a lot of my time where I help a lot of the alumni groups build their first syndicate.

And that's been a ton of fun because you get to meet the whole company and you get to really, you know, understand who are some of the power builders, I guess I would call them. inside the company who are most likely to leave and start something. So what would you say the potential earning then is for a solo capitalist? To go back to Sean's question. Yeah, it depends on your goals. I mean, I'm seeing solo capitalists that are going out. Maybe you start with a $10 to $25 million fund one for how quickly the fundraising climate is moving today.

You know, in the next 12 months, you could go out and raise, you know, a $40 to $60 million fund, too. The interesting thing is, like, this isn't purely a new model. I think what's changed is that the types of people that are starting funds do look very different from the last generation. Like I look at Iden, Sancutt at Felis. You know, he was a super angel and then started Felices Ventures. Mike Maples, who's been on the show, you know, Mike was a super angel and then he started Floodgate. I think what's different today is how fast you can make money because there are SPVs and ways for individuals to invest. in later stage companies. Like early stage is one thing, but I think later stage is where a lot of

people are finding great returns in a short amount of time. So you have your $25 million fund as the operator. What do you expect your pay to be? It's a good question. I mean, as you said earlier, I mean, a lot of people are holding for the long term. And so I wouldn't bank on carry, you know, in the first, you know, seven to 10 years. But you do get a reasonable salary because many solo capitalists are taking 2.5 to 3% management fees. So 2.5% of 25 is what I don't even know. I can't do math in my head. So that's a great line on Pomp's podcast. Somebody asked him this question. They're like, wait, if somebody has 100,000 Bitcoin and Bitcoin goes to 750,000, how much does that worth? And he just goes, I don't do public math. They're like, what did you just say? He goes, I don't do public math.

You don't do math in public? He's like, yeah, I don't do public math. And I just was like, that's actually a great policy. I don't do public math. So 2.5 of 25 is, so you have $6,000 a year in salary off a $25 million fund. And then the carry, a fee, sorry. And then if that, and if you're solo, so yeah, that's a great living. And then what would you estimate you could do at your fund?

Three exit, four exit. Do you have like a target? Right now it's north of 5x. Damn. All right. So 5x. So that's 100 for 100, I kid. I don't think $125 million. $125 million. You pay back the $25 first. So now there's $100 million of profit of the $100 million of profit. You keep 20%. That's $20 million. So you might make $20 million at the sort of in the termination of the fund basically after 10 years. That sounds amazing, right? It's amazing. It's amazing. I also find, I mean, once you get into this world, typically you'll see that's that's the core fund and the core fund is like your v1 like that's the first thing you do to build a track record and to like get in the game where people start to make a

lot of money and make a lot of money in the short term is what I mentioned doing SPVs or even buying secondary one of the things that I've been doing a lot over the last year year and a half is one of the things that holds people back from starting a startup is the fact that they're illiquid and sitting on a lot of equity at their last startup. And so there are a lot of VCs that are exploring, like, what would it mean to buy shares from, you know, employees to then put them in business? And so that's another way to think about it as well. I think there's different playbooks that you can layer on top of each other. Once the fund is in a good place, then you can get more creative with SPVs or you can get more creative with even buying employee shares and companies that still

have a lot of upside, you know. And so I think that becomes pretty creative as well. well. Let's switch gears to ideas. So what spaces, what ideas do you have that you think people should be building in or you see interesting stuff? So give me a sense of like, it can either be a specific idea or it could be kind of like a trend you're noticing. What do you got? Yeah, it's interesting. I tend to look at what are the smartest people that I know thinking about or working on. I consistently see a lot of people are moving into crypto and into climate change. I think these are two areas that you can't really ignore. And I'm also seeing people leave very well-paying jobs that have a lot of equity to work on things like climate change. And so I do think that there are

trends that are starting to bubble up that have maybe been either underserved by venture, underfunded rather. And so it does seem like there's a lot of things that are happening, especially during COVID, I feel like during the pandemic, people started reexamining what matters. Like, you take away the fancy office, you take away all the perks, you take away the ability to, you know, physically see your team. And so I'm seeing a lot of people that are leaving to work on things that they actually care about, which is really interesting. Not to say that they won't make a lot of money, but to say that there are new opportunities and new types of companies that people truly want to build. And so that's been something that I've been thinking about.

So what's an example of some, yeah, I was going to ask about climate change and climate tech. That's interesting. Give us a cool idea in climate change that you've seen or you have. Yeah. I mean, today it feels like it's very early days. I'm seeing a lot of companies that are thinking about carbon offset or they're coming up with ways for corporations to be, think more, think in more sustainable ways. I will say, I mean, a lot of the stuff that's directly related to climate change, I probably

don't see because I do a lot of workplace and future of work stuff. I think a lot, I think we're going to see more specialized firms that are focused on climate change or that are focused on frontier tech. The cool thing about being a solo capitalist and having more of a perspective on like, this is my area of expertise and this is where I can add value means that when I get together for dinners with other new solo capitalists or new funds, they're specialized in their own way. And so I do like spending time with experts on climate change and frontier tech. Like there's so much happening in space right now. do I have the experience or the network to really dig in? Not at this time, but I love hanging out with people that are working on space tech. And what in the work life portfolio, so future of work, what's an idea that our company that you're excited about that's not already like well known?

It hasn't hasn't had that breakout moment where raises a huge round so people in tech find out or everybody's already using it like Slack or something like that. So what's an example of a company that you think is super cool? Give us one from your portfolio. Yeah, absolutely. One thing that's not obvious about the work life portfolios, I do spend a lot of time in education and re-skilling. I think this is a really important thing where even from your earliest days, like kids are brought up being asked by their parents, like, what do you want to be when you grow up? And I think this is sort of a question that historically, you know, kids have been taught to do very normal jobs. They're like, well, you should be a teacher, you should be a doctor, you should do like these very traditional things. There was an interesting study that I read when I was just

thinking about work life, building out the first version of the pitch deck, where kids today are, you know, kids would rather be YouTubers than they would be astronauts. Like maybe that changes today because we're now going to space and so space is very cool again. But what's interesting there is there isn't really education that aligns to that. I think the textbook education is you memorize something, you take the test and you forget about it. Like my recall from elementary school, middle school, high school is zero. Like I studied for a test as soon as the test was done. I didn't think about that topic again. But I am seeing new platforms and new styles of learning that kids are being taught based on the things they're interested in. I invested in a company called Primer,

which is essentially online education. I think we're thinking about, like, do we call it homeschooling? I think homeschooling tends to have a fairly negative or, you know, neutral connotation depending on who you are. But the concept is can, you know, eight to ten kids get together and can they learn video game design? Can they learn about, you know, certain types of writing? Can they build their own websites?

Like, what are these tangible skills that are aligned to the hobbies and interests of kids that they develop at a very young age? and can they build their own network or community of other like-minded kids so they actually care about school? When I've been thinking about this whole school thing. Both Sean and I have invested in a little bit of it. Sean teaches a course. I've taught a course before.

I've been thinking about school for a little while. And I've actually completely changed my opinion. It was one thing. Now it's the total opposite. The whole, like, I think that the, everyone talks about education is broken. It's broken. and this and that. I think only part of it is.

For the top 30 universities, I think are doing just wonderful stuff. And here's why. Sean, if, well, you're different. I didn't go to a fancy school. Bree, if you could have graduated, if you had to graduate with a quarter of a million dollars in debt, but you could have gone to Harvard, would you?

I actually think I would, to be honest. It's totally worth it. I completely agree. It's 100% worth it. It's 100% worth it. If you can get into a top 20 university and you have to go into a ton of debt, it is 100% worth it. In that, if that's the case, it ain't broken. I think it's doing great.

If someone's willing to like go into a crippling amount of debt and go ahead, Sean. Why? Why? Okay. Great. Why do you think it's worth it? Because you learned so much from those great Harvard classes? No, right?

That's not the reason why. You don't learn. The school is not about learning. Cool. So you get the stamp that says I went to Harvard. Yeah. So now every time a guy like Sam or me looks at you, we say, oh, Harvard, okay, yeah, you perk up a little bit. And then the second thing is you get the network, right?

So you're going to bump into, you know, the next Winkle Voss and Zuckerberg and whoever else that's on your campus at that moment, right? Those are the two reasons, the stamp and the network. Yes, the problem is that there's schools like Belmont University, where I went, that costs $50,000 a year. And then they're like, fuck Belmont. I mean, who's, no one knows what Belmont is. It provides zero value. Like there's no point. If you go to Belmont, you should quit right now. And basically, the only way that we should solve education, I think, is by letting those businesses just go out

of business and die and then keeping in the top 20s, the top 20-ish. I agree with that. I mean, the liberal arts schools are hurting a lot. I think the $40, $60,000 a year school, I mean, I grew up in Ohio and there's no shortage of like liberal arts colleges that have a beautiful campus. But, you know, is it the type of school that, someone's going to pull your resume and put it at the top of the pile, or in the era of today, we have AI that's scanning resumes and they're scanning specifically for Harvard, Stanford, MIT. Like, those are the people that have the one up. And so I do agree with that. Yeah. That's nice. Well, I think, but you're saying, you know, you change your opinion.

Did you think that before that Harvard was a waste of money? Did you really think that? Yeah, I was like, goodwill hunting. Like, you know, like, yeah, you go for like, $8 of late, You know, yada, yada, yada. Yeah, I mean, you want that romantic crap to be true, but it's not. My wife went to an Ivy League school. I was such a redneck when she said she went to Penn. I was like, oh, is that where that football rapist coach went? That sucks.

And then she was like, no, it's part of the Ivy League. I'm like, I really don't know what that means. I think I've heard about that in like a Harry Potter book. But, and like, then I met her friends. And I was like, well, this is totally worth it. 100% worth it. I agree with that. I actually, I have a bit of FOMO. I very rarely have FOMO, but going back to my crazy psychotic calendar, the virtual dinner on Wednesdays is with friends that are VCs that all

went to Stanford GSB together. And so I'm the only non-GSP here on this virtual dinner we used to meet and have dinner in person. We weren't always internet friends. But what's interesting there is once you start having dinner and getting to know them, you're like, shit, I could have been like hanging out with you for two years all the time, like grabbing lunch, hanging out, whiteboarding, coming up with startup ideas. Like, the whole concept to me makes a ton of sense because once you start spending time with friends that do have an Ivy League education, you just feel a little bit jealous because they got to hang out a lot more.

When I was at college, so I went to Duke, which is kind of like more like, more like what you're talking about, Sam. And I remember halfway through my freshman year or something, I called my dad and I was like, hey, you know, before I came here, we had been thinking, like, should I go to a state school? Like, I could go to University of Texas. Or should I go to Duke? And, like, you know, I'm not doing so great here. Like, I kind of like, you know, I'm like a B minus student type of thing.

And I was like, I'm at first I wasn't trying. Now I'm trying, but I'm still a B minus student even after trying because like the kids here are just like, everyone here is like the smartest kid from their high school. So, like, they're all smarter than me. And then they all already work harder than me. I'm just like learning to work hard. And so I told him, I was like, you know, I feel like if I stay here, I'm just going to kind of be like in the middle of the pack. And I started telling him, I was like, he's like, well, why do you like, you know, I think you're being hard on yourself.

And I was like, no, no, no, like my friend Tofique is like super genius. And like during the summers, you know, I go home and play NBA 2K. And he goes and drives like an ambulance on the war front in Palestine and like helps people. And like my other friend over here, he's doing this other thing. And so I was trying to say that as like, you know, I'm not one of them. I think you're wasting a lot of money sending me here like this. I'm not going to be a winner here. I'm going to be like average or below average as far as the rest of the kids here.

And he goes, you're not there for grades. You're there because Tofique is your friend next to you and that guy's your friend next to you and that guy's your friend over there. You being friends with these people, you're not even going to realize it. But your whole, what you think is normal is actually going to be excellent. It's just going to seem totally excellent will seem average to you just by spending four years with these people. So don't stress yourself out about the grades. Don't worry about all that. You're doing the right thing just by being like five feet away from all these other people.

And I was like, man, that was like, you know, that's like dad hits you with some wisdom. And I didn't even really realize it at the time. I was just like, okay, I guess I'm staying here. But now when I look back, I'm like, wow, that was actually like kind of a stroke of genius on his part. And so to bring it all back, whenever I hear people talk, about like the future of education. Education's broken. I'm like, maybe like it's broken in the sense of like I think people shouldn't pay for this stuff unless it is of this caliber. But also, I think that a lot of people approaching this, this market, they think like, well, I just need to

make like a better mouse trap or like I need to just like make it so you can learn more important stuff. And I'm like, I don't think that's actually the right way to go about this. The mistake is, oh man, the class, we're still teaching, you know, these classes, they're teaching it from textbooks. How boring. I'm going to teach it. I'm going to teach better subjects in a better way. And the problem is that people don't choose to go to college for the classes. They don't choose to go to college for the information. They go because they want the stamp and they want the social experience. And then they want, you know, the parents need that as an insurance policy. And, you know, so college does many things. And then they solve only the

information problem, but they don't have a credential. They don't have the social experience. they don't have the other five reasons that people actually go to these places. So that ends up being a big problem. Bree, what I'm looking at your portfolio right now. Of all these, what do you think is going to be the biggest hit? Right now, Hopin's the most obvious. This is a really special company. You know, when they initially raised their first round of funding,

I believe they had around four employees. I caught up with Johnny last week and they're at 880. So I invested a little over a year ago. They're now valued at 5.65B. And so they're really building a really disruptive platform. I say platform because initially they started out as a way for companies and festivals and publications to host conferences online. They've since then moved into streaming. They're moving into all forms of virtual collaboration and even hybrid.

collaboration where Hoppin is being used at in-person events as well. And so I feel like this is a company that has uncapped upside. They're making a lot of acquisitions. You know, they have only been around for two years. You know, Johnny was initially based in London. He built Hopin because he had an illness where he had a compromised immune system. He couldn't go to networking events. He was, you know, in his early-ish mid-20s. And so he built the technology because he needed it. And so the team itself is in it for the right reasons and moving really quickly. And so that's one that I'm super excited about.

But there are a couple of other ones where they're stealth. They don't have a website yet. They're building quietly behind the scenes. And I'm very excited for those companies to come out as well. But you can't talk about those right now. I can't talk about those ones. What are they doing? I will say two themes that I'm really excited about.

The first one is disrupting venture capital. And that's controversial because I myself am a venture capitalist, but a number of startups that I've invested in are non-dilutive ways for people to raise money. Like I think venture has a very, they look for very specific things. Typically it's more software-focused business models. You know, typically it's founders that are in an ecosystem where there are, a lot of VCs. I think that's changing, but it's going to take some time for that to change. What's interesting to see is I was a first money an investor in a company called Pipe.

Pipe is non-dilutive capital for software companies or now any companies with recurring revenue. That one's going to make you a bundle. How do you end up as the first money in Pipe? How does that happen? Yeah. I am excited to tell you this story because it's atypical. What happened was I was in L.A. for my birthday. So my birthday is September 12th. I heard about Pipe on September 10th, something like that.

I was at drinks with friends. They were like, you got to meet this guy, Harry Herssey. He's very charismatic. He's building something in SaaS. Like, you got to meet this guy. And so I had called a few investors. I was emailing people. I'm like, hey, you know, how do I get an intro to Harry?

Wasn't happening, wasn't happening. And then finally on my birthday, I tracked down his phone number. I text him. I'm like, hey, here's, like, here's who I am. here's what I do. I'm in L.A. and it's my birthday. Can I come to your office?

And so he, you know, we ended up meeting in the middle. He's like, okay, you don't have to come to our office. We can go to Soho House. And so we caught up on my birthday. I was super excited about what he's building. I committed on the spot. I, you know, started the process to wire the money from the parking lot. Like I'm sitting there on my birthday, late to my own birthday, laptop out,

doing all of the things to get ready to wire. money for this company because I knew if I waited, it wasn't going to happen. You know, founders are meeting so many angel investors and so many VCs through the process where sometimes I'll talk to founders and are like, yeah, we're so excited to work with you. Two days later, they're like, oh, I completely forgot because it's been a whirlwind. And so I wanted to make sure that that email was sent that we started the process and that I was going to keep bothering Harry. Like, frankly, we didn't have a relationship.

So I was bugging the shit out of him so I could invest in the company. But okay, so let's take it even a step further. Even though I lived in Silicon Valley in San Francisco for eight years, and I felt like you and I probably shared so many friends. Technically, I guess I was kind of part of it, but not really. But this guy, Harry, how did he even create this much hype for you to chase him down like that? There were a couple things. So Harry, it's a disruptive model.

I will say that, you know, we've seen new ways. for founders to raise money, but oftentimes there's misalignment because you'll have ways for founders to raise money, but it's on unfavorable terms. It's to like less sophisticated investors. And so for Harry, the initial concept was enough where investors were like, oh, we need to catch up with him and like learn what's going on here. It sounds like you were the first money in, but people were telling you, you got to meet with this guy. Who are those people? Why were they even saying that if they weren't already investors in the company, what was he, you know, Who are these people that were giving you this great tip that you were like,

okay, I got to meet this guy. And if they hadn't already invested, because that makes sense when somebody's invested. They say, hey, I just invested this thing. It's great. You should check it out. But that wasn't the case here. That wasn't the case. There were a lot of people that were trying to meet Pipe.

You know, I think a lot of ways when you're fundraising for a company, I always encourage founders, like many of them get discouraged in the beginning. They're like, no one cares. Like, no one cares until everyone cares. And that's how it always works. Like the last 12 hours of fundraising is always a mess because once people, once someone hears that someone else is investing or someone else is interested, it just all snowballs into like a huge amount of texts and phone calls and emails.

And so in Harry's case, he's a brilliant fundraiser. I mean, if you look at the cap table, he's raised from the CEO or, you know, one of the co-founders of every major SaaS company. And so I give him a lot of credit for that. From the earliest days, you know, he had a conversation with David Sacks. So, you know, David had started Yammer and David was very interested in it for the same reason that I was interested. For me, as a first money and investor, Pipe is a great resource where when a company hits a certain inflection point and they're thinking about raising more money, it's great for me. It's great for the founders.

It's great for anyone that's been involved from the very beginning to introduce options of, non-dilutive financing. It's more upside for us. It's better for employees, like all the way around. I'm like, I want to spend time with this company and ultimately get work-life companies to use it when it makes sense. And so that was part of it as well. So then it was basically, so did he know David?

I believe Harry met someone on David's team that's L.A. based. Just like a cold email or something. Something like that. So that's kind of interesting. So, like, I mean, it's just like, it's a huge game of telephone and it's fascinating. This is just a fascinating thing. What is pipe valued at? Two or three billion dollars?

North and two now. Yeah. Okay. So they don't have that much revenue. Like, everyone, it's just crazy that you could say that they're probably going to grow into that and become way bigger, but they created all this off of like a really good story and very strategically getting in the right years. And I think that's incredibly fascinating and really, really cool.

It also just speaks to the amount of capital that's available in the ecosystem right now. I think oftentimes these valuations are getting out of hand because there's so much demand from the last round or there is so much money where investors would rather pay a high, pay a premium to have exposure to the company and to share in some of that upside than waiting until, you know, a traditional milestone or metric or moment in time where historically they would have fundraised. like to give you context, and I don't say this as someone who wants to brag by any means, but when I invested in Pipe, it was at like a nine post, and now they're worth north of two billion. And so that's not saying, like, well, you're a world-class investor, like you've changed this company, but it's to say that when you have a big vision, you have a good team that's building it, when you have a founder that's exceptional at fundraising, like investors will come to you and they'll come to you even before, you know, the next financing round because they

want to get in. So how much you're going to make off that one? I'm holding. It's hard to say I'm holding. Just what's your stake worth? I don't know if I'm allowed to say that. Am I allowed? I'm not sure what the rules are. I don't know if I'm allowed to say that. What size checks you took? I believe I invested 150K and then I'm continuing to follow on. Well, so like there's a lot of math here that involves dilution, but you just told us the, you just told us the, you know, the variables that we could do the math. But we don't do public math, if you recall. We don't do public math. If we did, we could tell you the number, but we don't do public math. You could do like all this valuation. I'd be like, well, if it's worth two billion and you invested at 10, 10 million dollars, I mean, like, in 125 grand,

like, you know, you could do the math. It's a whole lot. I just don't know. You know, don't do math. So on paper, it has returned the fund. And so I have returned the fund in the first year and a half. Which is an interesting point. I think a lot of investors are very quick to scale the fund size. Like they want to go out and raise a hundred million dollar fund for Fund One to raise a little bit north of $10 million and to return it in the first year and a half. Like that's a pretty safe bet. And one where I didn't overextend myself in a way where it could impact my reputation. That's something that I do encourage people. I'm like, start with where you are today and find ways to keep building concentration over time, do SPVs, buy secondarily, do whatever it takes. to like hit that annual number that you need to make to be happy, don't necessarily overextend yourself and go out and try to raise $100 million fund.

I wouldn't have been able to raise $100 million fund, but I have been able to return it on paper very quickly. Right. Well, congratulations. And so we should wrap it up a little bit over time. And we saw her calendar so we know we're eating into like a Peloton class or like a pitch meeting or or email processing maybe. We don't know exactly which one. Texting triage.

Texting triage. Yeah, I'm behind on my text. All right, so we won't keep you any longer. All right, so Brian Kimmel, where should people find you and they should go, is the podcast live yet? Can they go subscribe on the feed? Yeah, subscribe to the video.